3-13-12; Post Dis!!! Please don’t shoot the messenger but you are going to have to pay for and then post new union-organizing posters in your workplace

While U.S. employers have fought and fought this invasive concept, private employers subject to the parameters of the National Labor Relations Act (“NLRA”) (which is just about every private employer in our country from hot dog stands to General Motors®) will be required at the end of April 2012 to post written notice to all employees about their rights to organize and potentially form labor unions.

On March 2, 2012, a Federal District Court judge in Washington, D.C. ruled the National Labor Relations Board or NLRB has the authority to promulgate and enforce a rule requiring most private employers to display the new poster entitled “Employee Rights Under the National Labor Relations Act.” The ruling was issued in National Association of Manufacturers v. NLRB.

The rationale behind this tactic by the NLRB centers on its belief employees are somehow tragically unaware of their rights under federal labor law and U.S. employers should be forced by our government to inform them. The Board created its own rule on the subject under its statutory authority to adopt “such rules and regulations as may be necessary to carry out the provisions of [the NLRA].”

Fortunately for employers, the Board’s attempt to sanction employers who fail or refuse to post the required posting notice was declared unlawful by the Federal District Court. The NLRB attempted to sanction employers who failed to display the poster by way of finding failure to post the required notice to be an unfair labor practice (i.e. holding such conduct would be deemed unlawful interference with, restraint, or coercion of employees in the exercise of their rights under the law); and tolling the standard 6-month statute of limitations for filing unfair labor practice charges against employers who fail to post the notice.

The Federal District Court did not rule out the possibility of finding failure to post these new documents could be considered and used as evidence of an unfair labor practice:

[N]othing in this decision prevents the Board from finding that a failure to post constitutes an unfair labor practice in any individual case brought before it. But the ruling does mean that the Board must make a specific finding based on the facts and circumstances in the individual case before it that the failure to post interfered with the employee’s exercise of his or her rights.

Forewarned is forearmed, folks. While other legal challenges remain pending, this recent new decision is almost certain to require you to have to be ready to post these dopey posters on or before April 30, 2012. If you need the website to get the posters, send a reply.

We appreciate your thoughts and comments. Please do not hesitate to post on our award-winning blog.

3-13-12; The 7th Circuit reverses and remands a case following a jury verdict based on a single improper jury instruction! This Illinois-based employer is now facing renewed exposure after...

In Cook, Deborah v. IPC International Corp., the 7th Circuit’s ruling can only be described as frustrating from a business perspective. After what appears to be a situation where Plaintiff had argued their way into a corner and suffered a failure of proof, a jury heard the facts and denied her claim. The 7th Circuit reversed and remanded for a new trial based on an arguably confusing application of law in a jury instruction.

Plaintiff Cook was a mall cop—a security guard at a southern Illinois mall. She alleged she was fired because of her gender. Her employer argued she was not terminated until after and because she had refused a mandatory transfer to another facility. During the proceedings at trial, the issue of the "Cat's Paw" theory came into play, but in a somewhat obfuscated manner. The Cat’s Paw theory of liability takes its title from one of Aesop’s fables. In this ancient tale, a monkey who wants his chestnuts roasted persuades a cat to fetch them, in the process the cat burns its paw. In the context of the 7th Circuit case, the monkey represents Cook's supervisor, and the cat was the regional manager who came in and arguably put forward the transfer offer. If the supervisor, with discriminatory motives, manipulates the higher-level manager into firing the employee, the company can still be liable for sex discrimination, according to the law. However, this theory was not argued at trial.

At all times Plaintiff argued her supervisor was the individual who terminated her employment several days after she was given a transfer offer by the regional manager. Based on Plaintiff’s assertion this was not a Cat’s Paw situation where the supervisor had a singular influence over the regional manager, but a straightforward termination where the supervisor made the decision to terminate her, the trial court issued a jury instruction requiring the jury, if they wanted to find for Plaintiff, to find the supervisor was the sole decision maker for the Defendant. Judge Posner wrote for the unanimous three judge panel, “[t]his is all a dreadful muddle, for which we appellate judges must accept some blame." He described the Cat’s Paw metaphor as "judicial attractive nuisance," and added "[v]ague judicial terminology... confuses judges, jurors and lawyers alike."

In writing for the majority, Judge Posner went on to state the case was legally, if not factually, simple, and should have been presented to the jury in a simple manner. Plaintiff alleged her supervisor fired her because she was a woman. Her employer argued she wasn't fired but quit voluntarily by not accepting a transfer. This is not entirely accurate, as the employer actually asserted Plaintiff was terminated after her refusal to accept the transfer. According to the Judge Posner, a jury only had to choose between those two competing narratives. The ultimate ruling of the 7th Circuit was the question of whether the supervisor was the sole decision maker was not a fact which needed to be found for Plaintiff to prevail upon her case, and therefore the instruction was improper.

A thorough review of the underlying case confirms a confusing collection of arguments, but what is clear is there was an honest question as to what actually happened to Plaintiff at or around the time of her alleged termination. She admitted she was offered a transfer but the circumstances of that transfer were in dispute. All the testimony presented indicated Plaintiff was contacted on multiple occasions after her locker was cleaned out in reference to her decision regarding the transfer offer, and that Plaintiff refused to return phone calls from the regional manager. Combined with the argument Plaintiff was not arguing constructive discharge, her claim becomes very ephemeral at best.

Regardless, as Plaintiff maintained the argument she was terminated by her supervisor, when she admitted she was offered a transfer by the regional manager, it appears she simply painted herself into a corner and suffered a failure of proof. If her supervisor were only carrying out the orders of her employer, the claim would not appear compensable as the only inference would be the supervisor was complying with the transfer ordered by the employer. In order to win under the conditions Plaintiff set up, her supervisor had to be a lone actor, deciding on his own to terminated her employment. Even if the instructions were bad, and unnecessary, we must ask whether they constituted reversible error, given the admission she was offered a transfer.

As stated above, this decision came down just last week, and may still be subject to reconsideration. To fully disclose, we are handling this matter and we have no intention of affecting any future legal or factual outcome—the goal is to cover this legal occurrence from an academic perspective. This article was researched and written by Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com. Please feel free to email him for questions or comments, or post them on our award winning blog.

3-13-12; ZZZapppp!!!—dealing with ex-spouse, Medicare requirements and CMS stings Illinois man twice. Here are some thoughts from our resident MSA guru, Shawn R. Biery

For all of the consternation with regard to protecting future medical interests when dealing with a potential for Medicare payments in the future, one Illinois court decided a Medicare Set-Aside trust is a marital asset and subject to division in the divorce proceeding. One concern is what might happen if the parties agreed to split the MSA on a 50/50 basis and claimant used all of the remainder to cover future medical expense? Could claimant then look to Medicare to pay future medical bills when only have of the required MSA amount was exhausted? To the extent this ruling appears to potentially contravene federal law, we respectfully side with the dissent but we would love to hear your thoughts. We are going to have to continue to watch how property rights related to MSA’s are dealt with in our courts.

In the case of In re MARRIAGE OF CHRISTOPHER WASHKOWIAK and ROSANA WASHKOWIAK 2012 IL App (3d) 110174, Christopher Washkowiak appealed from the trial court’s order awarding his ex-wife Rosana Washkowiak, $12,250, a figure which represented 17.5% of the portion of his workers’ compensation settlement that was placed in a Medicare Set-Aside trust account and the Illinois Appellate Court, Third District affirmed.

By way of further background Christopher had been injured at work and in divorce agreed to pay Rosana 17.5% of the net proceeds of his WC claim which was defined as award amount less attorneys fees and reasonable and customary litigation fees and expenses. Christopher eventually settled the claim for the following terms:

·         Total amount of settlement $365,000 (this figure does not include a $70,000 Medicare Set-Aside Trust)

·         Deduction: Attorney’s fees $67,903.35

·         Deduction: Medical reports, X-rays $766.60

·         Amount employee will receive $296,330

The settlement agreement also contained a provision noting  “The parties agree that Centers for Medicare Services approval of the MSA is not required under CMS policy. The parties agree that of the total settlement amount of $435,000, the amount that is allocated to the MSA is $70,000. In entering into this Agreement, it is not the intentions of the parties to shift responsibility of the Claimant’s future medical treatment and/or prescription drug treatment to the Federal government. The allocation of $70,000 is intended directly for payment of Claimant’s future treatment related to the work injury that would normally be covered by Medicare so that the parties are in compliance with the Medicare Secondary Payer Act (42 U.S.C. § 1395(b)) and applicable Medicare rules and regulations.”

The soon-to-be-ex-wife Rosana argued the MSA belonged with the “net proceeds” so she should be entitled to 17.5% of the $70,000 set aside in the MSA because the MSA did not fall under the excluded category of “attorneys’ fees and usual and customary litigation fees and expenses,” as provided in paragraph 10 of the judgment of dissolution. The trial court held that the $70,000 set aside in the MSA was to be included in the net proceeds for purposes of calculating respondent's 17.5% share and thus ordered Christopher to pay Rosana $12,250. The court noted while Christopher argued the nature of the MSA precludes the funds in the MSA from being part of the “net proceeds” of the settlement and normally a trial court’s determination that an asset is marital or nonmarital is reviewed only for an abuse of discretion. However, in cases such as this where the determination is one of law and does not involve credibility determinations, their review is de novo.

The Illinois Appellate Court noted the MSP statute precludes Medicare from providing payment for services to the extent the payment in question has been made or can reasonably be expected to be made promptly under the applicable workers’ compensation act. See 42 U.S.C. § 1395y(b)(2)(A) (2006). This exclusion is also embodied in the Code of Federal Regulations (the Code), which expressly embraces workers' compensation as payment subject to reimbursement to Medicare. The Court noted the MSP is not an ‘act’ or legislation in the traditional sense but, rather, a series of amendments related to the Medicare Act and similar statutes. The court further noted the workers’ compensation settlement in this case included an MSA whereby the parties to the workers’ compensation claim allocated $70,000 of the total $435,000 settlement value provided for future medical expenses resulting from the work injury. Thus, Medicare will pay for covered medical services only after the exhaustion of the $70,000. Under their view, since the MSA was for the sole purpose of paying the ex-husband’s future medical bills; the settlement is reimbursing him for his future medical costs and was noted by the court to “fall squarely under the definition of ‘net proceeds’ contained in the dissolution agreement.”  The Court ruled since the money did not actually go to Medicare, it was a proceed since Christopher could use it to pay future medical bills which would otherwise be paid by Medicare and further noted Petitioner could provide the 17.5% of the entire proceeds and still place $70,000 into the MSA from his portion of the remaining 82.5% and concluded they were simply enforcing the agreement Christopher had entered into with Rosana.

The dissent by Justice McDade makes a compelling argument the funds were not part of the proceeds as they were set aside for the SOLE purpose of satisfying Medicare’s interests. Justice McDade further noted the MSA arose from the separate workers’ compensation action which was approved by the IWCC and stands as created and cannot be attacked collaterally so the only question should have been if wife was entitled to the 17.5% portion of the MSA as part of the net proceeds and correctly points out the MSA was not included as a net proceed per the settlement contracts. The majority dismissed the dissent with specific response noting Petitioner would get to keep the money if he never had medical issues under which he would have to pay with the MSA.

This case appears to potentially open more issues with MSA issues in concluding settlements as the ruling appears to potentially open the door for attorneys fees being deducted from MSA values (under the above case, this fits the “contractual” argument theory since in many states the WC settlement is contingent on a percentage of the amount of settlement).

We feel this ruling also appears to allow individuals to use in contract portions of the MSA and could open the door for individuals to use the MSA as collateral even though the funds are technically only to be used to protect Medicare’s interests since they funds don’t move directly to Medicare. Could this be the first step to lead to a change in which MSA proceeds are sent directly to the federal government upon completion of settlements?  We will provide updates as these sort of legal issues continue to further muddy MSA issues. For a copy of the case or with any other CMS related questions or questions regarding these ongoing cases, please email Shawn R Biery JD, MSCC at sbiery@keefe-law.com or call him directly at 312-756-3701.