7-7-2011; U.S. Court of Appeals, Seventh Circuit, grants Defendant Employer’s Motion for Summary Judgment in action alleging Defendant terminated Plaintiff from his job in retaliation for filing...

In Smeigh v. Johns Manville, Inc., No. 10-3388 (June 29, 2011) S.D. Ind., Defendant was sued for retaliatory discharge and civil conversion. Plaintiff alleged Defendant terminated his employment for filing a workers' compensation claim and unlawfully retained his personal property after his termination.

On September 20, 2008, Plaintiff was injured at work when he severed the tip of his finger. White waiting for an ambulance, Plaintiff’s s supervisor advised him he would have to submit to a drug test due to Defendant’s policy mandating drug testing in the event of workplace accidents.

Both parties stipulated Plaintiff advised his supervisor he did not use drugs and had no objection to taking the test. Plaintiff admitted he might test positive for marijuana because he was at a recent party with friends who were using the drug.

A second Defendant employee testified Petitioner admitted he personally used marijuana on the days prior to his accident. Plaintiff denied the conversation took place. Plaintiff later passed a drug test and a workers’ compensation claim was filed.

Despite the negative drug screening, Defendant investigated Plaintiff to determine whether he violated Defendant’s substance abuse policy. After a review of the event, Defendant’s human resources department determined Plaintiff did violate the company’s substance abuse policy, primarily because he admitted he might not pass a drug screening following the accident.

Rather than terminate Plaintiff, Defendant demanded he enroll in an employee assistance program (EAP). They also insisted he sign a stipulation, which required Plaintiff to consent to additional drug screenings and personally pay for treatment. Plaintiff refused to execute the stipulation, even though he was aware failing to do so would likely result in his termination. Plaintiff was subsequently fired and brought suit for retaliatory discharge (for being terminated after filing a workers’ compensation claim) and civil conversion (due to the fact Defendant allegedly retained some of Plaintiff’s possessions post termination)

Defendant moved for summary judgment on Plaintiff’s claims and the District Court granted the motion. The District Court’s ruling was affirmed on appeal.

The Seventh Circuit held Plaintiff did not present sufficient evidence upon which a reasonable jury could conclude he was fired in retaliation for filing a workers’ compensation claim. The Court reasoned although he was terminated shortly after his workplace injury, the evidence indicated he was terminated for his post-accident statement he might not pass a drug test and subsequent refusal to sign an agreement presented by Defendant requiring him to undergo counseling and random drug testing to retain his job. The Court found Plaintiff made no showing Defendant’s proffered reason for terminating him was a lie to cover up retaliation.

The District Court’s summary judgment ruling in Defendant’s favor on the conversion claim was also upheld.

7-7-2011; Vacationing in Cancun may not be the best idea if you are utilizing FMLA for the time off and company policy frowns on such siestas

In Pellegrino v. CWA (W.D. Pa. No. 10-0098, May 19, 2011), Plaintiff Pellegrino requested leave to undergo a medical procedure on Aug. 12, 2008. In response to the request, her employer, Communications Workers of America (CWA), sent her a letter informing her of her eligibility for Family and Medical Leave Act (FMLA) leave and that, under CWA’s sick leave policy, she would be required to substitute paid leave for the period of time she qualified for FMLA benefits. Important information she appears to have missed in the sick leave policy was a provision for filtering FMLA abuse, requiring any employee who was receiving wage replacement benefits (even while on FMLA leave) to remain in the immediate vicinity of his or her home during periods of the leave. Exceptions to this rule were only provided if the employee (1) needed medical treatment, (2) needed to attend to “ordinary and necessary activities directly related to personal or family needs,” or (3) received written permission from CWA.

Plaintiff Pellegrino underwent surgery on Oct. 2, 2008, and both her FMLA leave and sick leave time/pay commenced that same day. She then went to Cancun on October 16, 2008 without permission from her employer and was subsequently terminated for violating the paid sick leave provisions in CWA’s policy when the employer learned of the trip. Thereafter, plaintiff brought a civil action against CWA for interference with her FMLA rights, which required plaintiff to show that: (1) she was entitled to benefits under the FMLA, and (2) CWA illegitimately prevented her from obtaining those benefits.

The Court acknowledged she was entitled to FMLA benefits to undergo her medical procedure, the court addressed only whether CWA improperly prevented her from obtaining those benefits when it terminated her during the course of her leave. However the Court also noted CWA did not interfere with plaintiff’s FMLA leave since FMLA does not shield an employee from an employment action an employer would have taken irrespective of the employee’s status under the FMLA which included enforcing a restriction on unapproved travel that would have applied whether the employee had been out on FMLA leave or non-FMLA covered sick or disability leave. Because CWA’s decision to enforce its sick leave policy was a “legitimate exercise of its prerogative separate from plaintiff’s use of her FMLA leave,” the court in dismissed Pellegrino’s FMLA interference claim as a matter of law.

Pellegrino also made an argument that the employer’s sick leave policy didn’t apply to her because the Collective Bargaining Agreement governed, but that also failed since the CWA sick leave policy and the CBA terms did not conflict and the Court noted that because the CBA was silent on the issue of travel restrictions when employees took leave, this silence did not make the employer’s policy inapplicable to her.

Summer is here. It may be a good time to review your policies to ensure that your workforce is keeping the company productive or legitimately recuperating rather than simply recreating. This article was written by Shawn R. Biery, J. D. who can be reached at sbiery@keefe-law.com. Feel free to post comments on our blog at: http://keefe-law.com/kcablog.html

7-7-2011; Effective dates on the 2011 Amendments to the Illinois Workers’ Compensation Act for your calendar and ours

It may be important to put in an Outlook appointment into your system to keep track to the extent this will effect overall claims handling.

·         The Amendment to Section 1 require an employee to bear the burden of showing, by a preponderance of the evidence, they have sustained an accidental injury arising out of and In the course of employment.

·         The Amendment went into full effect last Tuesday, June 28, 2011.

·         The Amendments to Section 1.1 of the Illinois Workers’ Compensation Act implements Standards of Conduct for Commissioners and Arbitrators, who shall conduct hearings in a fair manner without bias or prejudice. Portions of the canons of the Code of Judicial Conduct have been adopted and are to apply to the Commission and Arbitrators. We also note that pre-trials are specifically addressed as a practice that is permitted as long as the pretrial is performed in accordance with the rules of the Commission.

·         This Amendment went into full effect last Tuesday, June 28, 2011.

·         The Amendment to Section 4(a)(2) of the Illinois Workers’ Compensation Act specifically defines Employee Leasing Companies under the Act and compels them to provide the Commission with proof any client company of the Employee Leasing Firm is listed as an additional named insured on their policy.

·         This Amendment went into full effect last Tuesday, June 28, 2011.

·         The Amendment to Section 4(d) of the Illinois Workers’ Compensation Act allows an investigator with the Illinois Workers' Compensation Commission Insurance Compliance Division to issue citations to employers that are not in compliance with their obligation to establish workers’ compensation insurance under the Act. Fines range from $500.00 to $2,500.00 for violations.

·         This Amendment went into full effect last Tuesday, June 28, 2011.

·         The Amendment creating Section 4b (not to be confused with section 4(b), which is a subsection of 4) of the Workers’ Compensation Act is an entirely new section. It creates a collective bargaining “pilot program” which applies only to businesses involved in “construction.”

·         This Amendment went into full effect last Tuesday, June 28, 2011.

·         The Amendment to Section 8(a) of the Illinois Workers’ Compensation Act clarified medical bill payment shall fall within the fee schedule even where the accounts receivable of the provider are sold to a third party (e.g., the Med-Finance-type groups). This went into full effect last Tuesday.

·         The Amendment creating Section 8(a)(4) of the Illinois Workers’ Compensation Act outlines when an employer has an approved “preferred provider program” pursuant to Section 8.1(a), the employer shall, in writing on a form promulgated by the Commission, inform the employee of the preferred provider program and then subsequent to the report of injury, the employee may choose in writing at any time to decline the preferred provider program in which case that would constitute one of the two choices of the medical providers to which the employee is entitled.

·         We have requested the “form promulgated by the Commission” mentioned in the Amendment above and will continue to ask on a weekly basis until they promulgate it. When that form is in existence, this Amendment will be in full effect.

·         The Amendment to Section 8(a) Temporary Partial Disability Computation alters the existing computation to hold employers liable for payment to Petitioner of two-thirds the difference between the average amount the employee would be able to earn in his regular employment and his/her gross earnings at the modified employment position. The Act in its existing form requires payment of temporary partial disability at two-thirds the difference between the average amount the employee would be able to earn in his/her regular employment and the net earnings at the modified employment position.

·         This Amendment went into effect last Tuesday, June 28, 2011.

·         The Amendment to Section 8(d)(1) of the Illinois Workers’ Compensation Act confirms any award for wage differential for accidents occurring after September 1, 2011 shall be effective only until the employee reaches the age of 67 or five years from the date the award becomes final, whichever is later.

·         This Amendment only affects “accidents occurring after September 1, 2011” and doesn’t affect existing claims. You do not have to re-reserve any current claims to reflect the coming change.

·         The Amendment to Section 8(e)(9) the Illinois Workers’ Compensation Act specifically delineates hand injuries involving carpal tunnel syndrome due to repetitive or cumulative trauma be returned to their pre-2005 scheduled amount of 190 weeks, and places a disability limit of 15% loss of use of the hand in such cases, unless clear and convincing evidence can show an award should exceed this amount. In such cases the award should not exceed 30% loss of use of the hand.

·         This Amendment goes into effect for CTS claims occurring on or after last Tuesday, June 28, 2011. You do not and should not re-reserve claims prior to that date.

·         The Amendment to Section 8.1(b) of the Illinois Workers’ Compensation Act delineates the determination of permanent partial disability. For all accidents occurring on or after September 1, 2011, permanent partial disability shall be established by a licensed physician reporting on the level of impairment in writing.

·         This Amendment only affects “accidents occurring after September 1, 2011” and doesn’t affect existing claims. You do not have to re-reserve any current claims to reflect the coming change.

·         Section 8.2 of the Illinois Workers’ Compensation Act contains medical fee schedule modification which is the major cost-saving mechanism in the 2011 Amendments. The changes are as follows:

o    Out of state providers shall be reimbursed at the lesser of that state’s fee schedule or the State of Illinois fee schedule. In the event there is no fee schedule in the outside jurisdiction, the lesser of the actual charge or the Illinois Fee Schedule shall apply. This applies as of last Tuesday, June 28, 2011.

o    The Commission is to maintain schedules for procedures and services including ambulatory surgical treatment centers, facilities and prescriptions filled and dispensed outside of a licensed pharmacy.

o    Beginning January 1, 2012 the fee schedule amount shall be grouped into geographic regions which are consolidated from the present geographic breakdown. These include 1) Cook County, 2) DuPage, Kane, Lake and Will County 3) Bond, Calhoun, Clinton, Jersey (and other downstate counties) 4) any counties not delineated in the Act specifically. In the event any fee schedule regions overlap, the Commission shall average the two fee schedule amounts.

o    If a fee schedule amount is in place, effective September 1, 2011, the charge shall be no more than 70% of the fee scheduled amount. If a fee schedule amount cannot be determined, the default reimbursement shall remain at 76% until September 1, 2011 at which time a 53.2% reimbursement rate shall apply.

o    Prescriptions filled outside a licensed pharmacy shall be reimbursed at a rate that does not exceed the Average Wholesale Price, plus $4.18 as a dispensing fee.

o    Implants shall be reimbursed at 25% above the manufacturer’s invoice price, less rebates.

o    Please note that the timeline for prompt payment has been reduced from 60 days to 30 days whereupon a provider provides a substantially all data required to pay the bill. This imparts an obligation on the insurance companies or self-insureds to promptly identify the basis for non-payment within a 30-day period rather than the prior 60 day window.

o    Of particular relevance, providers may no longer bill or attempt to recover from an employee the difference between the provider’s charge and the amounts paid by the employer for treatment determined by the Commission to be excessive or unnecessary. This is significant to the extent that any denied treatment which has been deemed excessive by the Commission will prohibit those providers from alternatively seeking payment directly from the claimant.

o    The effective dates of these changes are various.

·         The Amendments to Section 8.7(i) of the Illinois Workers’ Compensation Act creates a new section on implementation of UR for treatment after September 1, 2011.

·         This relates to care for any injury but doesn’t start until September 1, 2011.

·         The Amendment to Section 11 of the Illinois Workers’ Compensation Act provides an intoxication defense, however, this was greatly limited. The new section confirms no compensation shall be payable if an employee’s intoxication is the proximate cause of the employee’s accidental injury at the time of the accident, or if the employee was so intoxicated the intoxication constituted a departure from the employment.

·         This went into effect last Tuesday, June 28, 2011.

·         The Amendments to Sections 13 and 14 ended the terms of the Illinois Workers’ Compensation Advisory Board and all sitting Arbitrators.

·         To our knowledge a lot of the Advisory Board members and Arbitrators have reapplied and, as we indicated in the first article above, we are awaiting the decision of the Governor on all of them

·         The Amendment to Section 16 created an odd gift ban relating to lawyers and took effect on June 28, 2011.

·         Section 25.5 of the Illinois Workers’ Compensation Act addresses WC fraud and delineates unlawful Acts and penalties for various violations.

·         The Amendment went into effect on June 28, 2011.