8-20-12; City of Chicago’s Workers’ Comp Defense Program now facing Federal Subpoenas

The Chicago Tribune reports the City of Chicago’s $115 Million-Plus-Per-Year WC defense program is going to be the subject of a federal investigation. We assert there is no municipality on the planet that pays $115M per year in WC benefits—if you know of one, please send it along and we will donate $100.00 to your favorite charity. The Feds have asked for six years of records to try to find out why Chicago is paying triple or more of what the rest of the similar-sized cities across the U.S. pay for their annual WC tabs.

The federal grand jury subpoenas demand access to the municipal WC program's database and a host of other records, including injury records, medical assessments and claim investigation records dating to January 2006. They also call on the Finance Committee to turn over records showing the duties of staff members who run the program.

We note six years ago, the U.S. attorney's office subpoenaed similar records, but that probe has not resulted in any charges. The problem we have with all of it is the way the feds do everything in secret and sometimes nothing comes from such investigations. Everyone is giggling to see the Finance Chairman has been able to keep the records from the City of Chicago’s Inspector General by deferring it to his “Legislative Inspector General” who has no WC training or background and is certain to start his investigation in a year or three with a nebulous report to issue right before the next ice age.

We are asking our readers for your thoughts on what the feds should be looking for:

1.    Is it okay for the Finance Chairman to legally accept political contributions from attorneys on both sides of the City’s WC program?

a.    Wouldn’t it be fascinating to see whether there is a strong correlation between Plaintiff/Petitioner firms that split the lion’s share of Plaintiff/Petitioner work coming from City of Chicago with how much those firms legally donate to the political war chest of the Finance Committee Chair?;

b.    Similarly, on the defense side, some of our readers feel it might be interesting to see how much some City of Chicago outside WC defense firms legally donate to the same political war chest, who also happen to win referral of the hundreds, if not thousands of defense referrals each year;

c.    Why doesn’t the City’s outside WC defense work go to open bidding or an RFP process like other governmental bodies routinely do? How are their WC defense firms selected?

2.    Our readers feel someone should ask why does the City of Chicago WC program have no pro se settlements?—is it their goal to have all workers go to a lawyer? Why don’t they ever hold a WC “settlement day?”

3.    On the defense side, our readers and other observers also wonder why the City of Chicago outsources legal defense work limited to emergency petitions only and why such work is sent out to private defense firms but not supervised in any way like all other outsourced defense work for the City of Chicago—by the Corporation Counsel’s office;

4.    Our readers have asked how many City of Chicago workers are having indefensible “non-accident accidents” for claims like

a.    “Repetitive working” where there is no event of trauma;

b.    “Traveling employees” who are laughingly covered for any activity from the minute they leave their homes until they return again—this odd theory covers such workers for injuries occurring when they are off the clock and not being paid by the City at the time of the injury;

c.    “Mental trauma” or California-type mental stress claims arising from non-physical injuries but without sudden shocking events.

5.    We are wondering how many City workers are “odd-lot total and permanent disability claimants” who have the wonderful situation of being paid tax-free workers’ compensation benefits with COLA increases for their entire life by the City of Chicago because the City will not bring them back to work with reasonable accommodations as required by the Federal ADA. No employee is beefing about lack of accommodation under federal law because they are getting Illinois generous tax-free T&P awards! All such claimants could be returned to work today and WC benefits terminated, if the City would have the guts and brains to do so. Please note we have been advised the State of Illinois has about 700 such “odd-lot total and permanent disability claimants” who are costing state taxpayers about $7 million every year. Please further note this is the coolest possible “pension” in a state full of questionable government “pensions” because every City worker is eligible to be an “odd-lot T&P” the first minute they start work, there is no waiting or “vesting” period.

6.    How many City of Chicago workers are off all work and being paid TTD every day of every year? We have been advised there are departments that have 10-30% absentee rates with almost all of the workers off due to “injuries” the City doesn’t investigate, doesn’t manage, let’s go to attorneys with protracted litigation and then settles for high values; all to the detriment of taxpayers.

7.    Is it possible the City of Chicago has one WC adjuster for 3,000 pending claims? Is it possible the City of Chicago has one in-house defense lawyer for the same number of claims?

Inquiring minds want to know. If you have questions or concerns you think the feds should be asking, send a reply or post it on our award-winning blog.

8-20-12; Shots fired! Illinois Appellate Court invokes the Workers’ Compensation Act’s exclusive remedy provision to bar Widow’s Common Law Negligence claim against Employer for workplace shooting

In Rodriguez v. Frankie’s Beef/Pasta and Catering, Decedent had a disagreement and then an altercation with a co-worker over circumstances of the work. The next day, the other worker shot and killed Decedent. The widow of Decedent filed a negligence claim against his employer for negligent hiring and retaining the erstwhile nonviolent but later homicidal coworker. For reasons not clear in the record, it appears the widow or her counsel didn’t file a WC death claim for the passing of Decedent.

The Circuit Court of Cook County granted the employer’s motion for summary judgment reasoning the exclusive remedy provision of the Workers’ Compensation Act, Section 5(a) applied to bar Plaintiff’s negligence claim. Please note this motion was granted despite the fact no workers’ compensation benefits were paid.

Section 5(a) provides

No common law or statutory right to recover damages from the employer…for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided, is available to any employee who is covered by the provisions of this Act,…or otherwise entitled to recover damages for such injury.

According to our Supreme Court, the IL WC act prohibits employees from bringing a common law cause of action for negligence resulting in injury against an employer unless the employee can show the injury

(1) Was not accidental;

(2) Did not arise from employment;

(3) Was not received in the course of employment; or

(4) Was not compensable under the Act.

It was undisputed Decedent was injured in the course of employment—he was on the job and working when shot. And, as several witnesses testified the altercation leading to the shooting involved the coworker’s demotion, the Circuit and Appellate Courts deemed the otherwise unforeseen criminal attack to arise from employment. Last, Decedent’s injuries were compensable under the IL WC Act as his verbal taunting of the coworker did not make him the initial aggressor.   

Regarding whether the shooting was “accidental,” the Court noted the employer did not direct or expressly authorize the shooting and was unaware of tensions prior to altercation. Thus, according to the IL Appellate Court, Second Division, the employee’s death was "accidental" and Decedent's sole remedy against the employer was under the IL WC Act. Please note the failure of Plaintiff’s counsel to proceed under the IL WC Act to get appropriate death benefits under Section 7 of the IL WC Act did not protect the widow from the motion to dismiss the common law action. Unlike the odd anti-business ruling in Country Insurance and Financial Services v. Roberts, the IL Appellate Court did not rule the IWCC has sole and primary jurisdiction to determine compensability.

Please note the WC death claim would have had a value to the widow of approximately $600,000. When we teach law students, we are careful to point out a diligent Plaintiff/Petitioner’s attorney investigates and proceeds on all potential avenues of relief to avoid malpractice concerns and criticism. This ruling is on the web at: http://www.state.il.us/court/opinions/AppellateCourt/2012/1stDistrict/1113155.pdf

This article was researched and written by Sean C. Brogan, J.D. Please feel free to contact Sean about it at sbrogan@keefe-law.com.

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.