8-13-12; Attacking FMLA abuse—Joseph F. D’Amato, J.D. analyzes an important federal ruling summarily dismissing a questionable FMLA beef

In this significant decision the Federal Appeals Court held an employer can refuse to reinstate an employee returning from FMLA leave if it has an “honest suspicion” the employee misused his federally required unpaid leave time. We feel the ruling provides a game plan to safely terminate employees who misuse their federal rights.

Under the Family Medical Leave Act (FMLA), an eligible employee is entitled to as many as twelve weeks of leave per year for a variety of reasons, including “to care for the spouse, or a son, daughter, or parent of the employee, if such spouse, son, daughter or parent has a serious health condition.” 29 U.S.C. §2612(a)(1)(C).

We understand the majority of folks taking FMLA leave due so for the precise reasons outlined in the statute. However, what remedies does an employer have if it has suspicions an employee might be abusing his or her FMLA leave? The United States Court of Appeals, Seventh Circuit faced this situation in the case of Scruggs v. Carrier Corporation, 2012 WL 3140113 (C.A.7 Ind.).

Plaintiff Scruggs, a brazier for Defendant Carrier Corporation (Carrier), took intermittent FMLA leave from 2004 through 2007 in order to help care for his mother who had been moved to a nursing home. In 2006, Carrier implemented a program to combat employee absenteeism and suspected FMLA abuse. Part of the program included placing employees suspected of abuse under surveillance in order to determine if they were abusing FMLA leave. Plaintiff was a Carrier employee suspected of FMLA abuse.

Carrier placed Plaintiff under surveillance four times between 2006 and 2007. On the fourth occasion, July 24, 2007, video surveillance demonstrated Plaintiff did not leave his home the entire day, save for one trip to the mailbox. Plaintiff previously completed FMLA paperwork advising Carrier he would be taking the entire day off on July 24th to shuttle his mother between her nursing home and doctor appointments. Surveillance documented claimant didn’t shuttle anyone anywhere on that day—he was at home all day.

Carrier later confronted Plaintiff about its concerns he was abusing FMLA leave. When given an opportunity to explain his absence, Plaintiff advised Carrier he could not recall the events of July 24, 2007, but was certain he was helping his mother and was not abusing his FMLA leave. He subsequently produced documentation from his mother's nursing home and doctor's office, which only raised further questions for Carrier, as the documents produced were facially inconsistent and conflicted with Carrier's internal paperwork. Plaintiff was eventually terminated and he filed suit against Carrier for interference and retaliation under FMLA.

To prevail on a claim for FMLA interference, an employee must prove that: (1) he was eligible for FMLA protections; (2) his employer was covered by the FMLA; (3) he was entitled to leave under the FMLA; (4) he provided sufficient notice of his intent to take FMLA leave; and (5) his employer denied him FMLA benefits to which he was entitled. Family and Medical Leave Act of 1993, § 105(a)(1), 29 U.S.C.A. § 2615(a)(1). To defeat a claim for FMLA interference in the territories covered by the Seventh Circuit, an employer need only show it refused to reinstate the employee based on an “honest suspicion” that he was abusing his leave.

Carrier filed a Motion for Summary Judgment, which was granted by the District Court and upheld by our Seventh Circuit Court of Appeals. Both courts held the inconsistencies between Plaintiff’s story and the events captured during video surveillance were enough to raise an “honest suspicion” Plaintiff was abusing FMLA leave. Thus, Carrier was not liable for interfering with Plaintiff’s statutory FMLA rights.

If you have concerns about absenteeism or abuse of FMLA leave by your employees, our vote is to institute a companywide program similar to the one put in place by Defendant Carrier. KCB&A is happy to assist in putting this process into place for and with you. We feel the best evidence of fraudulent behavior is video documentation of fraudulent behavior. It is also the best defense in the event interference or retaliation claims are brought against you.

This article was researched and written by Joseph D’Amato, J.D. He can be reached at jdamato@keefe-law.com.

8-13-12; Can a Plaintiff file a complaint and maintain a lawsuit or Application for Adjustment of Benefits under a fake name? In a hotly divided ruling, our IL Supreme Court says yes

Like much of our country, Illinois has lots of folks who are using fake ID’s and phony names to get along. The problem is what to do when they come to our court system to redress wrongs and use the same fake names in sworn pleadings? In our view, this situation is a litmus test for the willingness of our courts to protect Plaintiffs and their attorneys. We assure our readers ITLA and the Plaintiff bar want such lawsuits to remain active and withstand motions to dismiss so they get paid.

We feel the only reason a claimant would file a suit in a fake name is either passive stupidity or to actively hide something in their past. If the defense can prove the claim was filed in a fake name to actively hide something, it might not turn out well for Plaintiff, even after this ruling. Our strong practice tip for the Plaintiff bar in the GL, EPLI and WC arenas is to file suits or Applications in every name a Plaintiff/Petitioner has ever been known. We still believe you are taking a major risk/chance not to follow that practice. If you carefully read this hotly divided ruling, the Illinois courts retained the ability to dismiss a claim when Plaintiff files an action in a faked name. The IL Supreme Court just better outlined what would be needed to do so.

In Santiago v. E.W. Bliss Company, et. als., claimant filed suit in the phony name “Juan Ortiz.” He later admitted his given name was Rogasciano Santiago. Upon learning of the fake name, Defendants moved to dismiss as a sanction for Plaintiff intentionally filing a complaint using a fictitious name without leave of court. Defendants also argued the original complaint was a nullity, because it was filed in a fake name. When it was later amended to substitute Plaintiff’s real name, Defendants argued the later amendment, after the statute of limitations, could not “relate back” and the matter was therefore time-barred.

The Circuit Court denied Defendants’ motions to dismiss but certified their order, pursuant to Supreme Court Rule 308, to resolve the issues on an expedited basis. The Appellate Court held:

(1) The Circuit Court has discretion to dismiss such a claim as a sanction, and

(2) The Circuit Court must dismiss the matter because the original complaint was a nullity and the amendment after the limitations period expired cannot relate back to make the claim viable.

On review, the IL Supreme Court reversed in part and remanded the matter. The majority opinion held the Circuit Court had discretion to dismiss with prejudice under these circumstances.  However, it held dismissal was justified only when

(1) There is a clear record of willful conduct showing deliberate and continuing disregard for the court’s authority; and

(2) There is a finding lesser sanctions were inadequate to remedy both the harm to the judiciary and the prejudice to the opposing party.

Our highest state court disagreed with the Appellate Court as to the nullity issue. It held the use of a fictitious name, without court approval, did not automatically render the original complaint a nullity and an amended complaint correcting the name may relate back to the initial filing to avoid the effect of the statute of limitations.

The decision brought a special concurrence by Justice Karmeier who defined the difference between a “fictitious person or party” and a “fictitious name.” The decision brought the concurrence by Justice Karmeier, a special concurrence by Justice Ann Burke, and a strong dissent by Justice Thomas, joined by Justice Garman that also discussed the interplay of “misnomer” under Code of Civil Procedure section 2-401.

The decision is on the web at: http://www.state.il.us/court/opinions/SupremeCourt/2012/111792.pdf. We appreciate your thoughts and comments.

8-13-12; As the IWCC turns…will the dust settle before the clamor for more “reform”? Shawn R. Biery, J.D., MSSC notes AMA guides are finally appearing in IL Arbitration decisions with some...

In our view, the effect of the recent changes to the Illinois WC Act will still take years to fully develop as potential defense savings with the exception of the reduction in the medical fee schedule which appears to have lowered medical costs already. We now have the first decisions which consider the changes implemented with regard to setting permanency or PPD in Section 8.1b of the Act.

To recap, Section 8.1b (820 ILCS 305/8.1b) covers the determination permanent partial disability for accidental injuries which occur on or after September 1, 2011.

Permanent partial disability shall be established using the following criteria:

(a)  A physician licensed to practice medicine in all of its branches preparing a permanent partial disability impairment report shall report the level of impairment in writing.

                               i.       The report shall include an evaluation of medically defined and professionally appropriate measurements of impairment that include, but are not limited to: loss of range of motion; loss of strength; measured atrophy of tissue mass consistent with the injury; and any other measurements that establish the nature and extent of the impairment.

                               ii.       The most current edition of the American Medical Association's "Guides to the Evaluation of Permanent Impairment" shall be used by the physician in determining the level of impairment.

(b)  In determining the level of permanent partial disability, the Commission shall base its determination on the following factors:

(i) the reported level of impairment pursuant to subsection (a);

(ii) the occupation of the injured employee;

(iii) the age of the employee at the time of the injury;

(iv) the employee's future earning capacity; and

(v) evidence of disability corroborated by the treating medical records.

The IL WC Act specifically states that “No single enumerated factor shall be the sole determinant of disability. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in a written order.”

Arbitrator Lynette Thompson-Smith has now issued what appear to be the first two decisions which directly address Section 8.1b permanent partial disability.

(1)  In Frederick Williams v Flexible Staffing, 11WC46390, Arbitrator Thompson-Smith was presented with an October 2011 injury to a 45-year old welder who suffered an undisputed distal biceps tendon rupture with surgery and eventual full duty release despite ongoing complaints. Dr. Mark Levin provided an impairment rating of 6% to the upper extremity or 4% of the person. The Arbitrator, in a detailed decision, confirmed that rating—factor (i)—and noted factor (ii) would increase PPD since his occupation was medium to heavy so the impairment would have more affect than someone who worked lighter work; noted factor (iii) would increase PPD as a younger individual would have to live with the PPD longer; noted factor (iv) future earning capacity would be undiminished due to the full duty return however the lack of job to return to would negatively affect future earning capacity so it appears this also increased PPD. Finally the Arbitrator confirmed factor (v) included evidence in treating records of loss of range of motion, as well as pain, numbness and tingling so there was evidence of disability in treating records. The Arbitrator awarded 30% loss of use of the right arm.

(2)  In Zachary Johnson v Central Transport, 11WC41328,  Arbitrator Thompson-Smith was presented with an October 2011 accident (causal connection was disputed at hearing with the Arbitrator confirming causal connection existed based partly on the opinion of reviewing MD Dr. Vender) to a 28-year old truck driver who suffered a right small finger metacarpal neck fracture with no surgery and eventual full duty release and return to work. Dr. Michael Vender provided an impairment rating of 7% finger/1% hand or 1% person. The Arbitrator, in another detailed decision, confirmed that rating—factor (i)—and noted factor (ii) appeared to have no effect since he returned to regular job; noted factor (iii) may not be as extensive as he was a younger individual and it would not impact him as much as it would an older person; noted factor (iv) future earning capacity would be undiminished due to the full duty return and likely long career ahead. Finally the Arbitrator confirmed factor (v) included evidence in treating records of being susceptible to cold and some pain & numbness in records provided evidence of disability in treating records however full duty return in 8 weeks minimized PPD. The Arbitrator awarded 10% loss of use of the right hand.

Based upon some research, this writer was able to locate prior decisions both lower and higher than the above awards in claims with similarity although with no claims which had perfectly matching fact patterns—in part because prior claims did not have the detailed analysis included in the above claims and now likely necessary in all claims of accident after September 1, 2011. It should be noted we have settled two recent biceps tendon ruptures with surgery for well under 30% of the arm, however there are multiple awards over 35% of the arm for similar injuries. On balance, both awards look to fall lower than a number of similar awards in the last 5 years so the guidelines (or possibly the simple need to detail factors in determining PPD) appear to have some lowering effect with the arm award being approximately 15% to 25% lower than the 35/40% awards located. This writer would still argue that an effective negotiation by a stellar attorney with a legitimate impairment rating is likely to provide more benefit to an Illinois employer than presenting for hearing and leaving the decision solely in the hands of even the most competent Arbitrator.

On a side note, Arbitrator Thompson-Smith has unwittingly quieted some of the chatter at the IWCC on several fronts and we should never again hear a Petitioner attorney argue “Dr. Vender would not find causal connection if it was water and he was falling out of a boat” since Dr. Vender is specifically cited by name in the causal connection section of the Johnson decision.

Our overall impression is that the changes to the Act with regard to PPD are providing Illinois employers some additional ammunition to control costs and initially appear to have a bit of a leveling effect on PPD values—If AMA ratings are obtained and used appropriately. It is likely to continue to take time for the full effect to be determined. This article was researched and written by Shawn R. Biery. For a copy of the decisions, please email Shawn at sbiery@keefe-law.com. We welcome and appreciate your thoughts and comments. Please feel free to email Shawn or post them on our award-winning blog.