11-21-11; One reason IL WC insurance rates are going up and not down despite the 2011 Reforms—the expansion of the “traveling employee” concept in this nutty state. Do we really want WC rates...

NCCI recently recommended a 3.5% increase in IL workers' compensation insurance premiums, despite what was calculated to be $300-600 million in workers' compensation cost reductions as a result of the 2011 Amendments to the IL WC Act. NCCI has been asked to explain this apparent inconsistency at the next combined advisory boards meeting to be held on November 30. 2011 at 9:00 a.m. in Room 9-040 of the Thompson Center at 100 W. Randolph Street, Chicago Illinois 60601. This is a public meeting and our readers may be interested in attending this important session which may influence Illinois workers' compensation reform efforts in the future. There has been allotted time after the presentation for questions. This is a link to an article about the rate hikes:

http://www.businessinsurance.com/article/20111014/NEWS08/111019935?tags=%7C309%7C305%7C87%7C304%7C92

              What is NCCI and Why Are They Coming to Chicago?

If you don’t know, NCCI is a privately owned workers’ comp rating service headquartered in Boca Raton, FL. They are basically “stat-rats” for the workers’ comp insurance industry and provide metrics that are considered by lots and lots of folks to properly set WC insurance rates in each of these United States. When they talk, lots of WC people listen.

NCCI looked at the 2011 Amendments to the IL WC Act and initially promulgated a 8.8 per cent decrease in rates. Understanding the total bill for IL WC for state businesses and government bodies is around $3 billion each year, an 8.8 per cent cut would represent several hundred million in savings for all of us. Jubilation was heard in many quarters to hear the business environment in “the People’s Republic of Illinois” might be improving.

However, almost as fast as that advisory rate cut was published, we learned NCCI reversed itself and were now trumpeting a rate increase. When that was announced, the “harrumphing” across the IWCC and ITLA and the forces of Illinois labor was easy to hear. The next thing we knew, the NCCI was called to the carpet to let the “powers-that-be” know what just happened.

Did We Actually “Reform” Anything in IL WC in 2011?

Well, we want to give all of you a hot tip from the defense trenches in this state—we are still concerned to see the three Commission panels are still staffed with the identical political mix we started the year with. On each of three panels, there are two pro-Plaintiff/pro-labor Commissioners with one pro-Defense Commissioner who is allowed to write pithy dissents. In our view, these panels remain liberal to very liberal in their view of the coverage of the Act and when and how much workers should receive when injured. Liberal means more money for injured workers and higher WC insurance rates.

Along with the liberal make-up of the IWCC, as we have advised, the Appellate Court, Workers’ Compensation Division still hasn’t written what most defense observers consider a defense ruling since Airborne Express v. IWCC was signed by a majority about a decade ago. In fact, we think recent rulings appear to strip back the savings initially provided IL business in the Airborne Express ruling. We also note the five-member Appellate panel doesn’t have a strong, moderate or minimally conservative member—in our view, they all typically join each other in writing pro-Plaintiff rulings. For the most part, they don’t waste their time writing dissents to confirm there is an opposing legal concept to a majority ruling.

Why is the panel so uniformly pro-Plaintiff? Well, we recently reported ITLA and its millionaire members just spent about $4 million in campaign donations to retain Illinois Supreme Court Chief Justice Thomas Kilbride. Those folks didn’t donate that much money to have moderate jurisprudence in the personal injury legal industry in this state. Justice Kilbride and his colleagues on the Supreme Court control the make-up of the five-member Illinois Appellate Court, Workers’ Compensation Division. From our view, these facts combine to create a liberal to very liberal appellate panel for most WC claims in this state.

We want our readers to understand there is nothing illegal or the slightest bit unethical about any of it—that said, our main problem is the ability of Plaintiff lawyers to donate literally millions to the judicial campaigns of justices and judges across the state. It is impossible to conceive a judicial candidate can possibly be fair and impartial when they basically owe their position, perks and pensions to the lawyers who got them their jobs.

From an administrative perspective, NCCI has to also be closely watching our state and noting the IWCC and Illinois Department of Insurance are stuck in an administrative quagmire in providing final approval of PPP or preferred provider programs that were supposed to be the cornerstone of the new 2011 Amendments. The reform bill was passed May 28, 2011 and signed into law June 28, 2011. There were PPP’s involving workers’ compensation care for the last several decades in this state. What is the hold-up on providing approval?

So How Does Any of This Relate to so-called “Traveling Employees” in IL WC?

Well, if you have been reading this KC&A Update on a regular basis, we have advised the Blagojevich appointees to the IWCC who are still around did two things to expand the IL WC Act way past its former scope. One of things was to make work itself into an “accident” by expanding “repetitive trauma” to everything a worker does because work is repetitive and aggravates everything, right? Due to space and time constraints, we aren’t going to review that mess in this article.

The second thing we noticed was the enthusiastic expansion of the “traveling employee” doctrine in Illinois. If you aren’t sure what a “traveling employee” is in other states, it was supposed to be:

• A worker who is sent by the employer on a trip—typically an overnight trip;
• The trip is supposed to be to a foreign and possibly dangerous work environment to which they aren’t accustomed;
• The “traveling” worker therefore faces lots of unexpected challenges due to the demands of the trip and the foreign place.

Other states typically extend expanded WC coverage for workers in such settings, due primarily to the hidden dangers of foreign travel—they are covered basically “portal-to-portal” during such a trip for all risks they face. In our view, that makes common sense. If you didn’t know there were holes in the pavement on a business trip to Guadalajara or Saigon and wanted to take a relaxing stroll and walked into one, we think you ought to be covered even if you aren’t actually “working” as you are on a mission to a foreign and dangerous port for your employer.

However, there are members of the IL WC Commission and Appellate Court who adhere to a view of the “traveling employee” concept in a way no other state in the union or actually on this planet views it. We actually consider two aspects of this crazy concept to be constitutionally vague and impossible for veteran WC observers and academics to comprehend.

Please remember workers’ compensation benefits are supposed to be simple and easy to understand for working men and women—if you get hurt at work, you are owed medical care, lost time and maybe a settlement, right? Well the new and expanded “traveling employee” concept is blurring all of that in this state.

From a definitional perspective, we have no idea what these administrators and justices now feel a “traveling employee” might be. They have issued rulings we have reported in which a police officer walking his regular beat is considered to be “traveling” and therefore entitled to WC coverage for anything he/she might do from the moment they leave the door of their home until they go to work, complete their shift and then return all the way back inside their home. Sounds pretty cool, right? From the upshot of this ruling, basically everything any Illinois cop does all day, even before putting their uniform on and after taking it off but not yet home would be covered under WC! Trust us, no state provides such coverage and it is expensive to do so.

The proponents of this impossible-to-understand-but-massively-expanded theory of WC coverage has one other limiting factor—the injury has to come from conduct somehow felt to be “reasonable.” We want our readers to understand there is an IL WC ruling involving two firefighters who “traveled” to what cannot possibly be a foreign and dangerous place—DisneyWorld® in Orlando, FL. In a hotel room, they started to wrestle like school boys and one of them strained his shoulder. Please note the wrestling match had nothing to do with their work as firefighters. Without regard to that undisputed fact, the hearing officers and reviewing justices ruled they were “traveling employees” and their conduct was magically “reasonable” in the Magic Kingdom and thousands in benefits were awarded.

We recently reviewed an IWCC decision where a garbage-man, oops, we mean environmental services worker finished his shift and went out into a public parking lot. He was cleaning ice and snow off his personal vehicle and slipped/fell and broke a bone. The employer and its carrier denied the WC claim and the Arbitrator agreed.

In every state of the United States other than ours, such a worker wouldn’t be “in the course of” employment because he had clocked out and wouldn’t be entitled to benefits. In every state of the United States other than IL, the risks facing such an employee who was cleaning ice and snow off his personal vehicle wouldn’t “arise out of” the employment—it is his own vehicle and lots of us have to seasonally clean snow off our cars, trucks and SUVs, right? Please note the legal reasoning used by the Commission in this claim would also have applied if he/she was in their own driveway at home cleaning their personal car to drive to work.

How did the IWCC reverse such a simple ruling and award thousands in benefits? Well, they brought out their handy “everything-is-compensable-in-IL” concept—they found claimant to be a “traveling employee.” They did that despite the fact he wasn’t “traveling” in an unfamiliar place and his “trip” didn’t take him away from home or keep him overnight. Having made the determination he was a traveling employee, everything he did from the time he left the door of his home until he went back into the home was “in the course of” employment and all “reasonable” risks he faced now mystically “arise out of” the employment.

Last year, we defended, lost and paid a claim where a trucker was off work, in a hotel room and fell taking a shower. He admitted he fell simply because he wasn’t paying attention and stepped on soap out of his own inattentiveness. We pointed out we didn’t pay him to take a shower and provided no training on “safe showering.” Claimant admitted he had taken literally thousands of showers and there was nothing unusual about where he was and what he was doing. If you aren’t aware, lots of folks get hurt taking showers when they aren’t careful. That claim cost that U.S. trucking company thousands of dollars they would not have had to pay in other states.

Isn’t This Global WC Coverage of Everything Everyone Does Every Day They Have a Job? How Would an Employer Defend Such Claims that Clearly Don’t Involve Work-Related Risks?

Yep. The only reason we don’t feel this phenomenon is killing the practice of WC law and litigation in this state is very few people understand how wildly liberal it is. We also think the “powers-that-be” don’t like to rely on it too much and try to sprinkle in other obtuse reasons to find challenging claims compensable to confuse attorneys, adjusters and risk managers. If this view of the “traveling employee” concept reaches broad acceptance, we assure our readers you will never, ever be able to fight any WC accident claim on AOO/ICO (arising out of and in the course of). If every worker is going to be routinely treated as a traveling employee, all technical defenses are over and out.

We also consider the concept of defining a trucker, police officer, firefighter-at-a-conference and environmental services worker to be “traveling employees” to be impossibly vague. We make that statement to assert just about every worker in every profession “travels” as part of their work. Police officers, firefighters, attorneys on both sides, all hearing officers at the IWCC, school teachers/administrators/aides, politicians, truck drivers, construction workers, bus drivers, Indian chiefs, ministers, rabbis, claims adjusters, risk managers, maintenance workers, street cleaners, salespersons, nurses, doctors, translators, photographers, professional athletes, coaches and trainers--literally everyone in Illinois with a job does a lot or a little traveling as a part of their work. We challenge any of our readers to describe a job that doesn’t ever involve traveling. We are all “traveling employees” in some fashion—how much “traveling” is needed to strip out AOO/ICO as a defense and include all injuries coming to and going from work? Does anyone have a clue?

The point we are making is there is no limit to the “traveling employee” concept—if the IWCC is going to radically provide global WC coverage to everyone who ever travels in the slightest way for any risk they face whether at or off work, workers’ compensation benefits in this state will be uniformly available to everyone with a job and an injury.

And the concept of “reasonableness” in analyzing accident risk for such workers is similarly impossible to define or understand. We ask the rhetorical question, “reasonable” in relation to what? In our view, that supposed limiting factor is locked deep within the hidden vault of the brains of the “secret-powers-that-be” because it wasn’t “unreasonable” for firefighters wrestling like school children in a hotel room so as to block benefits. We don’t feel that is reasonable behavior as it relates to their actual jobs of putting out fires. We also don’t think routine and arguably “reasonable” acts of daily life, like cleaning snow off personal cars before driving to or from home has anything to do with work. Is “reasonable” defined as negligent, reckless, intentional, shocking behavior?—where would one go to learn what it might mean? None of this is in the IL WC Act or the Rules—the words “traveling employee” and “reasonableness” are not defined anywhere. Should the Commission hold hearings and make recommendations to the legislature to let us know where this is all going or are we left to guess while they make up the rules as they go along?

We note our legislature recently amended the legislation to specifically state the burden of proof is on the injured worker to show their accidental injury “arose out of” and occurred “in the course of” employment. If that legislative change merely requires them to show they traveled in the last year as part of their job and therefore whatever they “reasonably” do all day is now covered under workers’ comp, the IL WC system hasn’t reformed anything. WC benefits/costs are certain to rise. On behalf of our many defense clients, KC&A is reluctant to go back to the State Chamber, Manufacturers Association and plead for them to restart the WC reform process at the next legislative session but we feel we may have to do so unless and until someone at the IWCC makes sense of this crushing anti-business problem. All we have to do is simply apply the law as written, folks. If we don’t, WC insurance rates are going to keep spiraling.

Our vote for the IL Workers’ Compensation Advisory Board, the IWCC Commissioners, the Appellate Court, Workers’ Compensation Division is to return to sanity and predictability in evaluation of compensability of work-related injuries. In our view, the “traveling employee” concept as currently being implemented is impossibly vague and so overbroad as to be patently ridiculous.

And finally, if the members of the IWCC and reviewing courts disagree and want to continue to provide WC coverage that broad, please don’t complain too loudly to NCCI on November 30, 2011 because the only direction WC insurance rates are going to go is UP!!! We truly don’t think IL WC underwriters and other stat-rats are specifically aware of why or what may be happening but they have to see it in the numbers.

11-14-11; You can’t be too cautious! New 7th Circuit Ruling confirming statements made by a non-decision makers can make a difference!

This case should serve as a reminder to all employers, you can never be too careful! Remember, you cannot prevent litigation 100% of the time, but you can make sure you have the best case possible in settings that could give rise to litigation. You have to be careful of what your team members say, as those statements could come back to haunt you.

Normally, statements made by employees who are not a decision maker in a Title VII suit would be hearsay, not admissible in a court of law, and not an admission. In Makowski v. SmithAmundsen, LLC, et al., the Seventh Circuit Federal Appellate Court found a human resources director's comments about an employee's termination can be considered a party admission, and thereby get around the hearsay classification in settings where that individual is involved in the “process leading up to the decision to terminate.”

In Makowski, Plaintiff Makowski sued her former employer alleging both pregnancy discrimination and violations of the FMLA. Apparently, while Ms. Makowski was on FMLA leave following birth of her child, her employer decided to terminate her employment. The COO of the company was directed to consult with outside counsel about the potential termination but the officer delegated that task to the company’s HR Director.

Defendant SmithAmundsen later terminated only two persons – Makowski and one other individual in another department. SmithAmundsen alleged the positions were being eliminated due to organizational restructuring. When Makowski came back to the office to collect her personal effects at a later date, the HR Director involved in the outside counsel consultation allegedly told Makowski her termination was due to the pregnancy and because she took her FMLA leave following the birth. The HR Director also allegedly told Makowski her termination was labeled a reduction in force based on the outside counsel's recommendation.

The Federal District Court initially ruled the HR Director's statement was inadmissible hearsay because the Director's "job responsibilities were not related to the decision to terminate Makowski, and because [the Director] was not involved in the decision-making process." The Seventh Circuit reversed, finding although the HR Director was not involved in the decision to terminate, "she was involved in the decision-making process leading up to that action due to her consultation with outside counsel regarding the termination and her job duties, which include ensuring the [employer's] compliance with federal anti-discrimination laws." The Seventh Circuit stressed the "involvement in the process leading up to the employment action at issue is enough to make an employee's statement an admission."

What does this mean for employers? The number one goal is to only terminate people for legitimate reasons. Keep your files updated, keep your personnel reviews honest, and keep a record of all infractions in case you need them later. After that, make sure the people you trust to help you come to these types of decisions understand the need for discretion, and know the old adage “loose lips sink ships.” Again – we stress, termination should be for valid cause, but even in such settings, a stray comment can give rise to a litigated claim, and juries often feel an emotional connection to a plaintiff in situations where they see a pregnant woman getting what looks like a very bad deal.  

This article was researched and written by our resident Blog Administrator, Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com. Please feel free to direct any questions to him, or post them on our award winning blog.

11-14-11; Appellate Court, Workers’ Compensation Division again flips the IWCC on “manifest weight.” Are they becoming a “Super-Commission” that will now second-guess every factual ruling below?

In Shafer v. Illinois Workers’ Compensation Commission, 2011 IL App (4th) 100505WC (October 28, 2011), the Appellate Court, Workers’ Compensation Division was confronted with a case where basically every factual ruling was challenged by the side of the claim that didn’t like it. The five-member panel went to great lengths to carefully analyze all of the facts and find most of them to be “within the manifest weight of the evidence.” As we have repeated advised our readers in the last statement of the Illinois Supreme Court on this issue in two exhaustive rulings in Sisbro and Twice Over Clean, our highest Court sternly advised this panel they weren’t supposed to reverse rulings of the Commission on the facts and should limit their focus to proper adherence to Illinois law. The rulings were so clear, it appeared one might get hit with sanctions for filing an appeal simply to seek reversal on the facts.

Now, in the last ninety days or so, we have seen the Appellate Court, Workers’ Compensation Division reverse all or parts of three claims on the facts. As we have advised our business readers, we don’t recall such an appellate reversal ever resulted in denial of benefits—they always seem to reverse to insure benefits are awarded.

In this claim, the Workers’ Compensation Commission found the Arbitrator's finding claimant was temporarily totally disabled for about one month "not supported by the record." The IWCC panel noted the treater released claimant to light duty work. Under oath, claimant candidly admitted she applied for unemployment benefits. To do would mean claimant averred to the Illinois Department of Employment Security she was “ready, willing and able to work.”

 In light of those facts, the Commission ruled claimant was "capable of working" for a time period of 23 days. The Commission majority did note she could only work at light duty. The Appellate Court’s ruling reversed that determination:

[T]he fact that the employee *** has the ability to do light work does not necessarily preclude a finding of temporary total disability. `Total disability,' as that term is used in the Act, does not mean total physical and mental incapacity. Rather, an employee is considered totally disabled when, because of a work-related injury, he or she is able only to perform services which are so limited in quality, dependability, or quantity that a reasonably stable labor market for them does not exist. Thus, the fact that an employee can do some light duty work or other useful tasks does not mean that she is ineligible to receive TTD benefits. Moreover, the fact that an employee applies for or receives unemployment compensation does not preclude or diminish her eligibility to receive TTD benefits. Thus, the Commission's reduction of TTD benefits was based on an erroneous legal premise.

There is no evidence in the record suggesting that the claimant was able to do more than light duty work. (TTD period omitted). In  fact, as noted above, the claimant's testimony and the medical records establish that the claimant was in a great deal of pain and severely limited in her physical activities during that time period. Accordingly, we find that the Commission's refusal to award the claimant TTD benefits for that time period was against the manifest weight of the evidence. We therefore reverse that aspect of the Commission's decision. (Citations omitted).

With respect to the members of this august and veteran appellate panel, we completely disagree. We are certain hundreds, if not thousands, of our readers on the business side of the IL WC matrix vehemently disagree with the premise of these rulings. A release to light work is a release to work. If such work is available, there is no conceivable basis to award TTD. In our view, U.S. law requires reasonable accommodation to allow such workers to return to work.

As to the claim for unemployment compensation, if claimant is “ready, willing and able to work” as she is required to assert, we feel it ludicrous to rule she is unable to perform any work and is therefore entitled to “temporary total disability.” In our view, the Appellate Court, Workers’ Compensation Division’s eminent members are again interposing “legal” meanings/interpretations that don’t match the “English language” version of the legislation. As we have advised our readers, they clearly have the power to do so and we have to respect their rulings. But we also feel they should be subject to a modicum of criticism when John Q. Public is challenged to understand how and why they divine these arcane legal concepts.

 In simplest terms, if a claimant is released to light work and the employer can demonstrate light work is available, TTD should not be due. Claimant is healthy enough. In our view, the Appellate majority simply replaced the factual findings of the Commission with their own.

Why is the Appellate Court, Workers’ Compensation becoming a “Super-Commission” a bad idea for the IL WC system? In our view, this is not a complex or intricate claim. It involves a pair of garden-variety soft-tissue strains. Despite its simplicity, please note:

v  These accidents occurred more than four years ago in 2007

v  This claim was heard by the Arbitrator and decided in 2008, more than three years ago.

v  The IWCC issued its ruling over a year ago.

v  The claim is now being remanded to the IWCC and their final ruling will probably be five years or more after the occurrence.

v  The only true change to the Commission’s ruling is a reversal on 23 days of TTD that our reviewing court reinstated.

v  After four years of litigation, the amount changed by this Court was about $750!

We don’t think it is a great idea for simple cases such as this drag out with legal fees and costs expended on both sides to have matters litigated at four levels. If you think that is a solid idea, please let us know your thoughts.

We also feel this is the sort of ruling that appears to be a “slam dunk” for claimant’s counsel. In making that statement, the cross-appeal resulted in reversal so as to award an additional $750 in TTD. We simply don’t feel the Appellate Court needs to be involved in matters that small. These sorts of decisions also don’t give one the impression things are “transparent, fair and impartial” when every part of the ruling appears to focus on giving claimants’ counsels whatever they seek.

On another odd issue, claimant and her counsel argued the Commission erred as a matter of law when it found it had jurisdiction to address the employer's Petition for Review. Claimant maintained because the employer did not include the correct case number on its Petition for Review, no timely appeal of the Arbitrator's decision was filed with the Commission, and the Commission therefore lacked jurisdiction to address the appeal.

The Appellate Court disagreed. The Court held

..from the time the petition was filed, both the parties and the Commission acted as if case number 07-WC-56127 was properly before the Commission for review. The claimant has cited no case (nor have we found any) suggesting that a clerical error in a timely and otherwise properly drafted petition for review strips the Commission of jurisdiction to hear the petition, particularly where, as here, the petition adequately notifies the opposing party and the Commission regarding which case is being appealed. Such a rule would improperly elevate form over substance. (Citations omitted).

Our view is at the end of the day, Respondent received a mulligan on this issue. We all make mistakes, but we firmly believe properly captioning and filing a Petition for Review is not a difficult endeavor. In a mildly rare turn of events, the Appellate Court, Workers’ Compensation Division, handed the employer a gift this time in not summarily dismissing the review. We urge practitioners on both sides, please pay attention to detail; we assure you Santa only comes down the chimney once a year.

This article was researched and written by Joseph F. D’Amato, J.D. Please feel free to forward thoughts and comments to Joe at jdamato@keefe-law.com or post them on our award-winning blog.