11-28-11; EEOC Intake, Relief Obtained and Charges Resolved Hit Record Highs in 2011—please consider KC&A to defend your company in EPLI claims at hourly rates that are lower than you might expect

The U.S. Equal Employment Opportunity Commission (EEOC) finished it fiscal year 2011 with a ten percent decrease in its pending charge inventory—this is the first such reduction since 2002 and achieved the highest ever monetary amounts through administrative enforcement, and received a record number of charges of discrimination, the agency reported in its annual Performance and Accountability Report filed today. Under the current administration, they have the funding and drive to punish/penalize U.S. business whenever possible.

The EEOC received a record 99,947 charges of discrimination in fiscal year 2011, which ended Sept. 30, 2011. This is the highest number of charges in the agency’s 46-year history. At the same time, EEOC staff also delivered administrative enforcement—they obtained more than $364.6 million in monetary benefits for victims of workplace discrimination. This is also the highest level obtained in the Commission’s history. Their fiscal year ended with 78,136 pending charges—a decrease of 8,202 charges, or ten percent. In previous years, the pending inventory had increased as staffing declined 30 percent between fiscal years 2000 and 2008. Due to EEOC’s enforcement programs in both the private and federal sectors, 5.4 million individuals benefitted from changes in employment policies or practices in their workplace during the past fiscal year.

The agency continued to build a national systemic enforcement program. At the end of the fiscal year, there were 580 systemic investigations involving more than 2,000 charges under way. EEOC field legal units filed 261 lawsuits—23 of which involved systemic allegations affecting large numbers of people; 61 had multiple victims (less than 20); and 177 were individual lawsuits.

The EEOC’s private sector national mediation program also achieved historic highs, obtaining more than $170 million in monetary benefits for complainants, and securing the highest number of resolutions in the history of the program—9,831.

At Keefe, Campbell & Associates, we are proud to advise our clients we have a strong focus on defending your rights before the growing imprimatur of this federal agency and its Illinois counterpart, the Illinois Department of Human Rights. What we see over and over are companies who hire very expensive corporate counsels at rates from $350-1,000+ per hour. Those defense attorneys run up a monster bill and then tell you to settle the dispute for a fraction of the legal fees they have already charged you.

In contrast, our hourly billing is at rates under $200 per hour and we get right to the point—our goal is to find out what, if anything, went wrong and how to fix it. We don’t need to take statements and depose everyone in your company for every imagined slight. We don’t run up massive bills and then tell you there is a problem and you need to settle. We will also do everything to use our experience and expertise to assist you to avoid claims in the future.

Please feel happy to reply or contact Gene Keefe at ekeefe@keefe-law.com to set up a meeting and discuss your overall EPLI or employment practices defense program at any time.

11-28-11; IL WC insurance-defense industry beware! Our IL Appellate Court, Workers’ Compensation Division issues a painful (and hefty) penalty/fee award for non-payment of TTD and TPD benefits...

Editor’s Comment: In Jacobo v. Illinois Workers’ Compensation Commission, 2011 IL App (3d) 100807WC (Nov. 16, 2011) the Workers’ Compensation Division of our Appellate Court reversed the Circuit Court’s denial of penalties/fees and asserted a new and very strict rule regarding the timely payment of benefits when there is no longer a pending dispute regarding the entitlement to such benefits.

This case involved a serious back injury whereupon 203 weeks of TTD was awarded, along with total and permanent disability benefits. The employer initially disputed the TTD, based on an IME. The Arbitrator awarded benefits. On the employer’s appeal, the Commission affirmed and adopted the Arbitrator's decision concerning the substantive award, except the Commission panel awarded the employer section 8(j) credit. The Commission also reversed the Arbitrator’s award of penalties/fees.

What is significant to this case thereafter is that, once the Commission decision was rendered, the employer did not file any further factual or legal challenges to the Commission's decision concerning medical expense, TTD, and PTD benefits. While the claimant appealed the Commission's decision, the only issue she contested on appeal was the Commission's denial of penalties/fees.

Therefore, all of the proceedings in the case moving forward concerned the separate issue of penalties/fees and did not concern the Commission's benefit award. After April 10, 2007, the amount of benefits to which the claimant was entitled was no longer contested. The undisputed nature of the benefits awarded was evidence by emails to and from the respective attorneys after the Commission award as well. The employer, however, did not pay the claimant’s award until June 24, 2009, asserting the claimant’s further appeal (in pursuit of penalties/fees only on the original case) meant the decision was not yet “final” and therefore, not due and owing while the claimant’s appeal proceeded.

The Appellate Court strongly disagreed with the employer’s position on this issue, citing its own prior ruling from 2002. In Zitzka v. Industrial Comm'n, the employer argued that it was not obligated "to pay any part of an award where there is a legitimate dispute over some portion thereof, in order to avoid 'piecemeal' payment of awards." The Commission rejected the employer's argument and granted the claimant's penalty petition. In upholding the penalty award, the Appellate Court found Respondent had “no legitimate reason to withhold payment of the undisputed awards." Likewise, in the present case, the Appellate Court found the employer had improperly withheld payment of the undisputed portion of the arbitrator's award, explaining Zitzka plainly established claimant's appeal of an issue unrelated to the substantive awards is not a "legitimate reason to withhold payment of the undisputed awards."

As further justification for its delay, the employer also argued claimant's appeal from the Commission's award did not specify the only issue on appeal concerned the Commission's denial of penalties. However, the record establishes the employer knew the penalties were the only issue on appeal at least by April 28, 2008, when claimant filed her brief in the Circuit Court, raising only the issue of penalties. Furthermore, the claimant never contested the award amount before the Commission, and that portion of the arbitrator's decision was affirmed and adopted by the Commission. It is a well-settled rule failure to raise an issue before the Commission results in its waiver following Greaney v. Industrial Comm'n. Therefore, the Appellate Court reckoned the employer knew full well the claimant could not seek any review of the substantive awards and the only issue she could raise on appeal was the issue of penalties/fees since she did not raise any issues with respect to the substantive awards before the Commission. Upon issuance of this ruling, the Appellate Court offered a sharply-worded criticism of the employer’s argument, asserting “the employer's feigned ignorance of what issues were contested in the claimant's appeal is not a reasonable justification to delay the payment of undisputed benefits.”

In an effort to leave no doubt about the rule, the Court concluded with these mildly chilling words; “We want to be clear on this point. Any portion of a claimant's benefits which are undisputed must be promptly paid or the employer will be subject to penalties and attorney fees under the Act.” It is our strong suggestion this statement be repeated during training, used as screen-savers, put on office posters—whatever it takes to indelibly highlight these important words from our esteemed justices for all members of your Illinois WC claims-handling staff, risk managers and defense attorneys, lest they suffer the same fate as the employer in this case. Even where appeals continue to be taken on one or more issues of a claim, the employer must make timely payment of any benefits that are no longer in dispute after each stage of litigation.

If you want the cite for the ruling on the web, send a reply. If you want to listen to oral arguments before the Appellate Court, they are on the web on October 19, 2011 here: http://www.state.il.us/court/Media/Appellate/Workers_Comp.asp

This article was researched and written by John P. Campbell, Jr. J.D. Please forward your thoughts and comments to John at jcampbell@keefe-law.com.

11-21-11; Scheduled Overtime included in Average Weekly Wage and “Bonus” that is part of regular compensation also included

In Arcelor Mittal Steel v. Illinois Workers' Compensation Commission, 2011 IL App  102180WC (November 7, 2011), a maintenance technician filed a workers' compensation claim for injuries to his right arm sustained while carrying 300-pound piece of steel. The Arbitrator awarded TTD and PPD, which included scheduled overtime earnings and production bonuses.

The Appellate Court ruled the Workers’ Compensation Commission did not err by including overtime earnings in calculating average weekly wage, as evidence established the employee was required to work scheduled overtime as a condition of his employment. Academicians note there is nothing in Section 10 of our Ac that says anything about scheduled or unscheduled overtime.

The IWCC also included production bonuses in calculating average weekly wage, as bonuses were in consideration for work performed pursuant to collective bargaining agreement and the employer had no discretion in paying bonuses when earned. Basically, it appeared to the Commission and reviewing courts the “bonuses” were part of the regular compensation of these workers.

In our view, this decision did not change the seminal ruling of the Appellate Court in Airborne Express, it appears to merely have supplemented the decision. Case law and the Act have long held mandatory overtime wages earned in the 52-weeks prior to the injury are included in the AWW calculation. Questions have developed and been decided over the years regarding overtime and resulting decisions have hinged on “regular and mandatory”.

Bonuses that are not part of regular compensation are supposed to be excluded based on the language of Section 10 of the IL WC Act. This dispute appears to have based upon the semantics of how the bonuses were defined by the parties and Respondent sought clarification. The collective bargaining agreement call the production bonuses “the incentive plan” and the employer called them “a production plan”. What is undisputed is the fact the bonuses were calculated and paid based upon the prior year’s production. The bonuses complained of were non-discretionary and part of the CBA. While the employer attempted to argue the bonuses were tied to production, safety and attendance; it was uncontroverted the bonuses were based upon the prior year’s production, safety and attendance, and the employee in question clearly worked and earned the bonuses in the prior year.

This article was researched and written by James F. Egan, J.D. Please do not hesitate to contact Jim about issues relating to calculating the average weekly wage at jegan@keefe-law.com.