10-31-11; Subrogation, indemnification, contribution--is there a distinction in relation to Illinois Workers’ Compensation Act?

If it means possibly defeating the purpose of the Illinois Workers’ Compensation Act then “no” as found by the Illinois Appellate Court, 5th District in Enterprise Leasing Company of St. Louis v. Hardin, 2011 IL App (5th) 100201 (September 8, 2011). Defendant collided with a median while driving a rental car in Kentucky during business trip; her two passengers, who were her co-workers, were injured.

The Appellate Court found the rental car company's claim is barred by the IL Workers' Compensation Act, which gives employees immunity from liability for negligence that injures their co-workers. The Court ruled co-worker immunity bars indemnification claims by third parties.  

Plaintiff Enterprise argued their indemnity claim was not barred by the Illinois Workers’ Compensation Act because it is a claim sounding in indemnification and not subrogation. The Illinois Appellate Court 5th District disagreed, citing factual similarities with both Ramsey and Kotecki rulings noted Section 5 of the Illinois Workers’ Compensation Act provides co-workers with immunity that prevails over the right to contribution and it is a bar to third party contribution claims against co-workers.  

What continues to be confusing is the Court at first admits contribution, subrogation and indemnification are distinct causes of action yet by contrast, both indemnification and subrogation place the entire burden for a loss on the party ultimately liable or responsible for it and by whom it should have been discharged. So are they distinct causes of action?

We think the Appellate Court’s own words sums up this confusing topic:

Requiring the Defendant to bear the cost of the claims paid by the Plaintiff for which she would have been immune from liability if sued directly would shift the burden of these work related injuries from the employer to the co-worker and we also note that claims could exceed the limits placed on the employer’s liability by the Illinois Workers’ Compensation Act which would defeat the purpose of the Illinois Workers’ Compensation Act just as surely as allowing a third-party contribution claim under similar circumstances.

This article was researched and written by Michael J. Danielewicz, J.D. If you would like to discuss this article further Michael can be reached at mdanielewicz@keefe-law.com or office 312-756-3703 or cell 312-907-8220.

10-31-11; Why the Illinois judiciary in workers’ compensation and basically everything remains so wildly pro-Petitioner/Plaintiff. While we are certain the legislature just made lots of...

We were stunned, dazed and amazed to learn our Appellate Court, Workers’ Compensation Division recently flipped not one but two rulings, finding the decisions of the IL Workers’ Compensation Commission were “against the manifest weight of the evidence.” If you aren’t sure, the last statement of the Illinois Supreme Court on this topic was to rule the reviewing courts were not to do this, ever. In these two confusing rulings, dissents were filed pointing out there were facts supporting the Commission’s rulings below and asserting the decisions should have been quickly affirmed.

How does judicial fund-raising affect Illinois workers’ compensation? Well, Justice Kilbride and the members of our highest court select the five members of the Appellate Court, Workers’ Compensation Division. By leaving members on this division of the Appellate Court for years and years, it is possible for those appellate justices to focus their campaign fund-raising efforts on the claimant bar. If you aren’t sure, lawyers on the claimant bar will repeatedly donate lots and lots of money to the justices before whom they appear. Yes, it remains our opinion justice is for sale in this state.

We caution all of our readers to understand all of it is perfectly legal. One thing we truly hate and will continue to hate about Illinois law and jurisprudence is the fact a claimant lawyer who gives thousands of dollars to a justice has no duty to divulge such contributions to anyone before or after a ruling is issued. The problem with changing any or all of it is the justices affected have to support such changes—we still laugh about a state law which tried to limit judges and justices to working until age 75; once it passed, the judges found it unconstitutional!!!

We have now learned there is a striking report on the web from three nonpartisan legal reform groups who did the research and note Illinois Supreme Court Chief Justice Thomas Kilbride's November 2010 retention race was the nation's costliest retention election in 25 years. This report "The New Politics of Judicial Elections 2009-10" by the Justice at Stake Campaign, the Brennan Center for Justice at NYU School of Law and the National Institute on Money in State Politics confirms the retention election cost almost $3.5 million, with Justice Kilbride raising $2.8 million.

The report indicates Justice Kilbride was the "target of the nation's costliest retention fight since Rose Bird and two fellow justices were forced off the California Supreme Court in 1986." The report notes several business groups were angered by Justice Kilbride's vote to help strike down a ceiling on Illinois medical malpractice awards--they financed a $688,000 challenge to his retention. Those defense groups included the U.S. Chamber of Commerce, the American Justice Partnership (affiliated with the National Association of Manufacturers) and the American Tort Reform Association.

In response to the monies raised by the business side of the matrix, the report indicates the Illinois Trial Lawyers and the Illinois Democratic Party accounted for half of the $2.8 million raised by Justice Kilbride, according to the report with Justice Kilbride receiving contributions by major plaintiffs' law firms routed through the party. The $1.5 million donated by those law firms "almost identically matched the $1.4 million that the party gave to Kilbride," the report states. The report indicates  Justice Kilbride's own contributions "showed almost no money from plaintiffs' lawyers, enabling him to avoid direct links to special-interest money." Please note the monies raised by Justice Kilbride to remain in office were about four times the amount raised by the defense groups. In this ongoing battle, ITLA and its millionaires almost always win.

The report’s Executive Summary states:

State judicial elections have been transformed during the past decade. The story of America’s 2000–2009 high court contests—tens of millions of dollars raised by candidates from parties who may appear before them, millions more poured in by interest groups, nasty and misleading ads, and pressure on judges to signal courtroom rulings on the campaign trail—has become the new normal. For more than a decade, partisans and special interests of all stripes have been growing more organized in their efforts to use elections to tilt the scales of justice their way. Many Americans have come to fear that justice is for sale. Unlike previous editions, which covered only the most recent election cycle, this fifth edition of the “New Politics of Judicial Elections” looks at the 2000–2009 decade as a whole. By tallying the numbers and “connecting the dots” among key players over the last five election cycles, this report offers a broad portrait of a grave and growing challenge to the impartiality of our nation’s courts. These trends include:

??The explosion in judicial campaign spending, much of it poured in by “super spender” organizations seeking to sway the courts;

?? The parallel surge of nasty and costly TV ads as a prerequisite to gaining a state Supreme Court seat;

?? The emergence of secretive state and national campaigns to tilt state Supreme Court elections;

?? Litigation about judicial campaigns, some of which could boost special-interest pressure on judges;

?? Growing public concern about the threat to fair and impartial justice—and support for meaningful reforms.

It can be located on the web at: http://www.brennancenter.org/content/resource/the_new_politics_of_judicial_elections. We appreciate your thoughts and comments.

10-31-11; AN Employers’ Scariest Nightmare!!!—Late Accident Reporting. In this Federal Ruling, the Court Ruled Late Reporting Justified Termination. Should you consider ramping...

One tough concept for all U.S. employers to consider is heightened accident reporting rules. What may be mildly misleading is Illinois and many states have wildly lax reporting rules when it comes to the time an employee can report an accidental injury and still be entitled to workers’ compensation benefits. In Illinois, that period is 45 days which means one of your workers could be injured today and keep it a secret from you until the middle of December and then let you know. The monster problem that causes is your ability to investigate and learn from what happened to him/her is just about negated. It is also a Nightmare to set reserves accurately. Accident investigation has to be conducted within 24-48 hours to have a ghost of a chance at effectiveness.

The Ghoulish question risk managers and HR folks have to ask is whether an employer require employees to report their workers compensation injuries more quickly than required under state workers’ comp laws? Please note late or delayed reporting may be a new and Scary Illinois WC phenomenon as injured workers seek to sidestep the impact of the new Amendments to the IL WC Act which makes refusal to take a blood test into a Frightful presumption the employee was intoxicated. No one knows if intentionally late accident reporting will be treated as a refusal to test.

We are certain the most aggressive accident reporting model is “end-of-shift” reporting—we have one client who will terminate a worker if they aren’t told about the “accidental injury” or claim of repetitive trauma during the shift where it happens or appears. What is Shocking is their union supports this aggressive approach. We are happy to consult with any of our readers on how to put more aggressive accident reporting models into place.

A ruling from the U.S. Court of Appeals for the Sixth Circuit may be illustrative on the law. Please note this is the federal level just under the U.S. Supreme Court and is therefore a pretty strong statement by our judiciary in relation to U.S. law on the issue. The time period for the U.S. Supreme Court to consider the claim is still pending.

In Geronimo v. Caterpillar, (No. 09-6401, Opinion issued September 7, 2011 and we didn’t make the name up!!!) claimant was a female employee who worked for a large corporation as an at-will employee for approximately seven years. In June 2007, the company transferred the employee from her position as a machinist to an assembler position. The employee alleged she began to experience pain in her hands while completing the tasks required in her new position. The employee explained she experienced pain akin to “a muscle strain” in her palms, upper arms, and fingers each time she pressed down on the clutch plates on the assembly machine. She noted after she let go of the machine pain would stop. The employee claimed she experienced tightness in her muscles at end of her first day and stiffness in her muscles when she awoke the next morning. These pains continued over the next two weeks. After approximately four weeks on the job, the employee began experiencing numbness and tingling while performing everyday non-work tasks with her hands and arms which she attributed to her tasks at work.

By Aug. 1, 2007, the employee began to suspect she had carpal tunnel syndrome she related to work. After doing some internet research, the employee spoke with a company nurse for the first time about her pain on Aug. 14, 2007. By this time, the employee stated pain had become almost unbearable and was causing the employee to lose sleep. When the nurse asked why the employee had not reported her pain earlier, the employee explained she wanted to “try to work through it” because she was afraid she had no “other options than to do the job.” She also stated she didn’t tell her supervisor because “she didn’t want him to think she couldn’t do the job.”

The nurse informed the employee she would try to set up an appointment for the employee to see a doctor. The next day, the company fired the employee for “not meeting expectations” because of her “failure to communicate an injury in a timely manner.” Specifically, the employee was cited for failing to abide by the company’s stated policy requiring employees to report the occurrence of injuries immediately or, if the injury was gradually occurring, to report it as soon as an employee realized they are injured and suspects it is work-related.

The employee filed a complaint alleging the company unlawfully terminated her in direct retaliation for making a claim for benefits and/or asserting her right to benefits under the applicable state workers’ compensation act. The Federal District Court dismissed the employee’s claim finding the company’s policy did not violate state workers’ compensation law, and the employee appealed.

In affirming the dismissal of the employee’s claim, the Sixth Circuit noted although the employee was correct state WC law allowed employees a lengthy period in which to report a gradually occurring injury for the purpose of filing a claim of workers’ compensation, the statute does not expressly prohibit or establish a public policy prohibiting an employer from imposing a separate notice requirement for workplace injuries. In our opinion, the IL WC Act also provides 45 days for reporting an event but it does not prohibit an employer creating a shorter requirement for accident reporting and investigation.

It is also vitally important to note this Federal Appellate Court noted the employer had not disputed the employee’s workers’ compensation claim filed after her termination. We feel this decision effectively stripped out any monetary damages in the termination dispute--the employer and/or its TPA already paid for the employee’s surgery to correct a carpal tunnel problem. Thus, the court felt it was clear the company was not retaliating against the employee for having a medical problem or reporting her injury, but rather the employer was enforcing its own well-promulgated safety and accident reporting policy. Accordingly, the Sixth Circuit dismissed the employee’s claim.

We appreciate your Conjuring-up thoughts and comments. Please feel free to post them on our Eeeerie award-winning blog. If you want the web cite to the ruling above, send a reply.