12-17-12; PART 1: Did IL WC Litigation End on 12/6/12?; The Madison County Multi-Billion Tobacco Litigation Is Over; Be Prepared for Ramped-Up OSHA and much more

Synopsis: Did IL WC Litigation End on 12-6-12? Should We Send the Lawyers, Arbitrators and Commissioners Home and Start 24-Hour Coverage of Most IL WC Claims?

Editor’s comment: If you read our KCB&A Update last week, you read about the shocking and sweeping IL WC Appellate ruling in The Venture-Newberg Perini Stone and Webster v. Illinois Workers' Compensation Commission. We want our readers to understand we consider this ruling a seminal change, a veritable tsunami when it comes to defending WC claims in this nutty state moving forward and another reason you need to always get the best defense attorneys available.

Understanding What Just Hit Both Sides of the IL WC Industry

Well, the forces of ITLA have tried to take advantage of their political advantage to make our WC system more and more liberal. The problem with doing so is, at some magical point, you won’t have “litigation” anymore because there are even more limited WC disputes which can be fought and defenses become much more difficult. When everything is potentially globally compensable, you don’t need as many hearing officers or court reporters and only the best lawyers survive because more cases being flatly compensable mean less plaintiffs who need a lawyer. We feel the majority of Illinois workers now have arguable WC claims under the “traveling employee” doctrine as our State is implementing it.

This became clear to us and our readers after the controversial ruling above was issued on December 6, 2012--we are shortening the case name above to Venture-Newberg. We want our readers to understand the case contains what we feel is an aberrant workers’ comp focus/analysis unlike any in the entire world. If you understand the logic of this legal concept, Claimant Daugherty would have been covered for choking on a hot dog in a snack, for playing softball in a game with his buddies and for rolling off the bed in his sleep. Everything he did while “traveling” the entire time he was in Cordova, IL would have been covered. The majority opinion in Venture-Newberg holds two new game-changing legal concepts are present in the WC system in this state:

1. If a worker is scheduled/assigned work that isn’t on the “premises” of their employer, they magically become “traveling employees.”
2. An employer is fully responsible under workers’ compensation for any injury or disease suffered by the worker while they are on the way to or from and/or engaged in any activity most of their day that is “reasonable and foreseeable” to the employer.

While those two sentences don’t seem to be challenging, trust us, they are an unbelievable and massive change to WC benefits, insurance, self-insurance, underwriting and claims handling. If you aren’t sure, Claimant Daughtery in Venture-Newberg was not on the clock or soon to be on the clock—he was in a car crash but still miles away while going to work. Like all union workers, the jobsite wasn’t on the “premises” of their employer. Most union companies have relatively small offices and limited office staff. Yes, you may think that is how construction companies work—they build, maintain and erect construction on someone else’s land and “premises.” If you adhere to the legal standard in Sentence 1 above, all construction workers are now “traveling employees.”

How Many IL Workers Are Now Legally Transformed Into “Traveling Employees”—Short Answer, A LOT!

Several million Illinois workers don’t work on the “premises” of the employer, if you define “premises” as not being the job site, if that property is owned by someone else, as it was in Venture-Newberg. Our research indicates there are about 5.5 million people working in this state. By this new and unprecedented definition, we feel most of them are now going to be “traveling employees.” As we outline above, all construction workers are now in that status.

These workers magically become “traveling employees”:

v  Traveling Salespeople and Related Occupations                              595,820

v  Transportation and Material Moving Occupations                             439,130

v  Construction, Demolition and Extraction Occupations                      201,230

v  Installation, Maintenance, and Repair Occupations                           188,520

v  Building/Grounds Cleaning and Maintenance Occupations               185,200

v  Healthcare Support Occupations                                                       159,410

v  Protective Service Occupations                                                         141,550

v  Computer and Mathematical Occupations                                        128,460

That list above covers over 40% of the workers in our state. Lots of other workers will fall into an odd mix where some folks will be working on the premises of the employer and some folks won’t. For one simple example, most Hospital Emergency Room personnel seem to be working for the hospital that employs them—in fact, lots of them are under contract with a different company that leases them to the hospital. Many hospitals, university and schools also have food/culinary staff that appear to be employed by the hospital or school when in fact they are employed by an off-premises provider that does so. All such individuals are now “traveling employees.”

We also wonder about school teachers and related personnel who basically work on the “premises” of the school but occasionally take the children on school outings/field trips. Are they now globally “traveling employees” or only when on a trip? Do we really need expanded WC coverage for school teachers on their morning trip to work because they are later taking kids to a local museum?

Actually, probably several hundred thousand workers across our state work for and are paid by PEO’s, logistics and staffing companies. None of those workers work on the “premises” of their PEO/staffing/logistics employer who locates/hires and pays them. By the Venture-Newbergdefinition, all staffing employees are now “traveling employees.”

Further, the vast majority of government workers for the state, counties, townships and cities/villages don’t work in City Hall—they go out into the field and work to protect/maintain/inspect businesses/buildings/workplaces that clearly aren’t owned by the government body. For a simple example, firefighters don’t put out a lot of fires in government buildings, they are called to homes and commercial properties that aren’t government-owned properties. In our view, thousands of such IL government workers are now “traveling employees.”

Okay, So There Are A LOT of Traveling Employees in Our State—How Does That Affect WC Coverage?

Well folks, as you read this, Illinois employers are now globally responsible under IL WC for almost all illnesses and injuries of any nature from the moment such workers walk out the door of their homes to go to work until they are back home. Actually, workers who work in their homesare also “traveling employees” because they aren’t working at their employer’s premises, as this ruling mandates.

By “almost all” the limiting language is no longer “arising out of” and “in the course of” employ—please remember Claimant Daughtery in Venture-Newberg unquestionably wasn’t on the clock and wasn’t doing anything for his employer other than coming to work like millions of other workers. We aren’t aware of any state in the U.S., other than maybe Crazy California, where benefits would be payable to such a worker. To make this event compensable, the IL Appellate majority stuck the employer with Sentence 2 above—if the employee can attain “traveling employee” status, the employer is responsible for any behavior, incident or illness felt to be the result of “reasonable and foreseeable” activity.

What does that mean? Well, we feel it means Illinois employers are now responsible for literally anything that happens to a worker other than for the worker’s insane, criminal or psychotic behavior. Please note the person driving in Venture-Newberg appears to have been going too fast for conditions and the vehicle slid on ice, causing injuries to claimant. Obviously, the Appellate Court majority ruled it “reasonable and foreseeable” for someone to drive too fast for conditions, despite the fact that is arguably criminal behavior. Painting with a very broad brush, this major IL employer is now on the hook for over a million in medical bills, lost time and permanency.

Traditional IL WC Accident Defenses/Limitations are Gone With This Wind

Please note our view the IL Appellate Court has completely replaced the statutory requirement for “arising out of” and “in the course of” employ with this new “reasonable and foreseeable” standard for millions of workers. This new legal standard creates an indefensible situation where just about any and every activity can be work-related. In our view, all traditional accident defenses are gone. We provide this quick list of traditional defenses:

ü  Arising out of

ü  In the Course of

ü  Risk Common to the Public

ü  Idiopathic/Unexplained Falls

ü  Aggressor in a Fight

ü  Frolic and Detour

ü  Horseplay

ü  Intoxication

We feel they are all gone and swept under an Illinois WC rug. For example, “traveling employees” will still get WC benefits if they fall for no apparent reason—how can you say falling without any reason isn’t “reasonable and foreseeable.” As we advised last week, a traveling employee engaged in horseplay, like the firefighter wrestling in a hotel room received benefits, as his childish antics were “reasonable and foreseeable.” Claimant Daugherty could have fallen in the bathtub taking a shower on a weekend and such injuries would now be compensable.

Do you get it? Are you starting to see this theory is the Royal Straight Flush???? for the claimant bar and their clients? Well, they have to be careful what they wish for—if a claim is much more likely to be compensable, it is much more likely to simply be accepted so no plaintiff lawyer will ever be needed.

The Problem with Judicial Legislation Is It Isn’t Legislation

If you aren’t sure what judicial legislation might be, it is judges moving on a case-by-case path to create new rules, concepts and, in this case, benefits not outlined in the laws provided by to all of us by our legislature. Judges/Justices don’t hold legislative hearings or truly take comment from the groups affected. They don’t balance interests other than the interests of the parties litigating the claim. We assure our readers Venture-Newberg and its progeny Cox v. IWCC are random judicial legislation of the worst sort. We also point out the same Appellate Court justice wrote both majority opinions—in Venture-Newberg the majority opinion adhered to the “manifest weight of the evidence” standard to award benefits while in Cox they reversed the Commission’s denial as against the “manifest weight” of the evidence to award benefits. Does anyone see a trend there—basically, we feel the IL Appellate Court is effectively mandating the term “traveling employee” equals global WC benefits.

The traditional or historic workers’ comp concept of “traveling employee” is outlined in Professors Arthur and Lex Larsen’s compendium on workers’ compensation. The term “traveling employee” was supposed to be someone whose employment sent them to a wholly foreign place for work. In a foreign country, the worker faces challenges in coping with foreign language, customs, diseases and dangers. It makes sense to globally cover a worker in such a setting. The expansion of WC coverage and limited defenses for workers traveling out of the country provides appropriate protection to most businesspeople who face extraordinary risk and the impact on insurance costs/premiums/underwriting are miniscule.

But to the extent the “traveling employee” concept has expanded from probably a couple of thousand workers who would travel abroad for work for major Illinois employers to millions of workers for businesses large and small who perform routine work within the boundaries of our state and face the same risks “common to the public” that we all face, you have to stop and consider what happened. Looking at our legislation, we assure you that you can look and look all day; you won’t find the term “traveling employee” outlined in the IL WC Act or Rules. There is no “source of law” or definition of the concept. In contrast, unlike Illinois, several states codified “traveling employee” and provide guidance.

For example, Florida Statutes, Title XXXI, Chapter 440 § 440.092 state

(4) TRAVELING EMPLOYEES—An employee who is required to travel in connection with his or her employment who suffers an injury in travel status shall be eligible for benefits under this chapter only if the injury arises out of and in the course of employment while he or she is actively engaged in the duties of employment. This subsection applies to travel necessarily incident to performance of the employee’s job responsibility but does not include travel to and from work as provided in subsection (2).

As Illinois doesn’t have such statutory language, in our state the “traveling employee” status/designation is as clear as mud—once an employee reaches “traveling employee” status, we have no way to know if they maintain it while traveling, while assigned to a single jobsite for a specific term or for their entire career with that employer? To be more precise, are all truck/bus/cab drivers “traveling employees” whenever they start out for any work or is it while they are “traveling” or in movement? Do we have to take claim after claim to the Appellate Court to get their piecemeal outline of coverage?

Further, what is the reason for this newly expanded WC coverage? Do we want cab drivers and construction workers to have additional protection and coverage for silly but “reasonable and foreseeable” things they might do away from work and on the way home? And if you compare Florida law cited above to the facts of the Venture-Newberg ruling our Courts could have ruled this event non-compensable in about six different ways. Does anyone feel this new, unnecessary and overbroad legal concept has an unconstitutionally vague definition?

We Need/Demand Clarity Or We Are Looking At The End Of Our System of Workers’ Comp Litigation In IL?

Right now, we feel ITLA and its forces are trying to quietly and slowly “spring” the traveling employee concept on the defense industry in selected claims. Basically, we feel they are using it as an “ace in the hole” to guarantee the toughest claims are winning hands for Plaintiffs/Petitioners. They are hoping everyone keeps it hush-hush and we assure our readers they don’t like to read articles like this one that let everyone know what is happening. The problem we have is our conviction this unparalleled concept isn’t good for anyone in the workers’ compensation system other than folks like the fellow in Venture-Newberg who unfortunately got seriously hurt while NOT working along with his lawyer who will get hundreds of thousands in unexpected attorney fees.

We consider this to be the sort of chicanery we are used to from the claimant bar in this state. If we are truly going to mystically make several million workers “traveling employees,” we feel IL WC insurance companies and more important, their underwriters have to know it. We truly feel the main way they may adapt is to start charging greatly increased premiums based on expanded and basically universal coverage of all such WC claims. Basically, we feel the IL WC insurance concept may soon be acutely expensive “24-hour WC coverage” for all such workers.

Under this new ITLA legal model, IL WC risk managers and adjusters aren’t going to let some claims go to either side because they can’t be defended on the issue of accident. They may start to treat many WC claims like group health claims—“you have a job and a problem, you are covered; fill out these forms and we may start paying.” Please also remember IL WC accident disputes sometimes come with hefty penalties and fees for not paying benefits—the next ironworker, trucker or school teacher who alleges an injury going to or coming from work or wrestling like a school kid in a bar between shifts might cause unforeseen penalties/fees if unsuspecting IL WC adjusters don’t rapidly accept/pay. While there are other legal issues in IL workers’ comp claims requiring solid defense attorneys, we don’t feel our IWCC and reviewing courts should greatly expand WC coverage and strip out accident defenses.

If/when that happens, there may be little need for lawyers, hearing officers or litigation because it will be a major challenge to defend “traveling employee” status and a bigger challenge to defend “reasonable and foreseeable” as a limiting factor. We also feel these increased WC insurance costs aren’t going to be well-received by major employers like Caterpillar, Nestlé, United Airlines and the rest. Greatly increased WC premiums may kill many small and mid-sized employers.

Where Is the Traveling Employee Concept At Right Now and Where Is It Going?

Well, we are asking our clients and readers to keep fighting and using KCB&A to lead this crucial fight. Please don’t move your worksites and employees out of Illinois just yet. Please let this situation advance and watch this space for developments. We are fairly sure the two dissenting Justices in this Venture-Newberg Appellate Court ruling may certify it for further appeal to the IL Supreme Court. If they certify it, we hope IL Supreme Court Chief Justice Thomas L. Kilbride and the other members of the Supreme Court accept and then hear the appeal. We assure our readers we will be asking everyone to consider joining us in writing an amicus curiae or “friend of the court” brief to let our highest Court know the challenge we will all face if this unprecedented situation “sticks” and WC benefits and coverage expand to become global coverage for accidents/illnesses both at and away from work for millions of IL workers.

On the legislative side, we know Senate President Cullerton and House Speaker Madigan have staff who read this KCB&A Update every week. Both of them wanted things to calm down and they both supported a “haircut” for all sides in lowering WC benefits with the 2011 Amendments to the IL WC Act. We can’t believe they want things in the WC arena to go wildly higher and they may take action to stop what is happening. We are certain they don’t want Illinois to become less business-friendly in this economy. It is possible they will get our message and consider legislation to rein in the courts and limit the whole “traveling employee” thing. We also hope IL State Chamber President Doug Whitley and his legislative team ask their other WC defense gurus to find out what just hit their membership. Their input and support in seeking legislative reform may also help. Finally, we hope the bipartisan IL Workers’ Compensation Lawyers Ass’n steps up and seeks to return things to the IL WC system we have had for over 100 years.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

12-17-12; PART 2: Did IL WC Litigation End on 12/6/12?; The Madison County Multi-Billion Tobacco Litigation Is Over; Be Prepared for Ramped-Up OSHA and much more

Synopsis: Has the Madison County IL Tobacco Litigation finally ended?

Editor’s comment: We were chagrined to see former Illinois-Workers’-Compensation-Commission-Chairman-Now-Madison-County-Circuit-Court-Judge Dennis Ruth not allow reopening of a class-action lawsuit that once won a $10.1 billion judgment against tobacco giant Philip Morris (now Altria) but was overturned on appeal to the IL Supreme Court. Judge Ruth said Plaintiffs failed to show information revealed in subsequent cases involving “light” cigarettes would have changed the outcome of this one. Lawyers argued in a hearing in August 2012 over reinstating the case. At that time, Ruth ruled out a request that he simply reinstate the $10.1 billion award amount.

Judge Nicholas Byron, now retired, ordered huge compensatory and punitive damages in 2003 after a two-month trial over whether Defendant violated Illinois law by marketing “light” and “lowered tar and nicotine” cigarettes as safer options. The case originally was filed in 2000. It was the first time a tobacco company lost a consumer fraud suit.

In 2005, the Illinois Supreme Court reversed the trial court’s judgment, based on a defense claim the Federal Trade Commission authorized wording for cigarette descriptions. The suit was dismissed the next year, after the U.S. Supreme Court refused to review the verdict. Plaintiff’s firm sought to revive it in 2008, after the U.S. Supreme Court ruled in a different suit, involving Philip Morris parent company Altria Inc., the FTC never authorized use of the terms “light,” “low” or “reduced.”

The Madison County case sat inactive for several years with both sides arguing over whether the IL Supreme Court decision in 2005 or the local court’s dismissal in 2006 started the time period on a two-year appeal deadline.

If you aren’t aware, Circuit Court Judge Byron awarded Plaintiff’s counsel a $1.1 BILLION dollar attorney fee. It is hard to understand/comprehend how much money that is. For example, if they had 10,000 hours of work in the case, that attorney fee would have worked out to over $100,000 per hour. If they had 100,000 hours in the case, that fee would have been $10,000 per hour. Either way, to our knowledge, that is the highest attorney fee ever awarded in the history of this planet.

The main reason we felt the whole thing fell through is the State of IL gets $500M from this tobacco defendant every year. Our State needs the money big time. If these Plaintiffs were to get $10.1 billion, it would bankrupt the tobacco companies and the State would no longer get their annual settlement money.

The last odd thing about the case is the appeal bond earned Madison County nearly $17.7 million in interest, according to Carol French, chief finance officer for the Madison County Circuit Clerk’s office. That was enough money not only to finance a criminal justice center on Vandalia Street but also to pay off debt on the Madison County Administration Building and purchase new radios and other state-of-the-art computer technology for their sheriff’s department. The County also paid off about $2 million in early retirement obligations for its employees.

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Synopsis: OSHA will continue to vex U.S. business under this Administration. Here are some thoughts from KCB&A on how to be prepared.

Editor’s comment: During the first Obama administration, OSHA became increasingly aggressive in enforcement in every employment sector. They routinely rejected efforts to work with or get along with employers to improve and enhance workplace safety in favor of blunt enforcement with higher citation classifications and enhanced penalties.

With the recent reelection of our sitting President and the understanding Dr. David Michaels, Assistant Secretary of Labor, will remain the head of the OSHA for the next term, employers across the board can expect more of the same from OSHA moving forward.

There is no question OSHA has moved to enhanced classifications with higher penalties. OSHA classifies alleged violations of its standards as either

ü  “Serious” meaning the agency believes there is a substantial likelihood of serious injury or death as a result of the violation, or

ü  “Other than Serious” meaning, although a violation may have occurred, OSHA does not consider it likely to result in serious injury.

OSHA’s preliminary finding that a violation is “Serious,” comes with a much steeper monetary penalty. This trend has been on a steady upward spiral over the last term. Between 2010 and 2011, the last year for which penalty information is available, the per-citation penalty for Serious classifications more than doubled.

Between issuing more citations as Serious and increasing the penalties for such citations, a U.S. employer could easily find itself facing monetary liability well into six figures or more, without any true accident or employee injury in your workplace. We feel this demonstrates a punitive and anti-business focus of this administration.

OSHA has also become more aggressive in placing employers into the Severe Violators Enforcement Program, or SVEP. SVEP was created by the agency as a means of focusing on and heavily penalizing employers whom the agency believes have shown indifference to safety and health obligations by issuing repeat or willful violations. An employer in SVEP can expect increased and more comprehensive inspections, substantial penalties and other abatement enhancements if violations are found. Between July 2011-2012, the number of U.S. employers placed into SVEP doubled. OSHA has showed no signs of reducing the pace.

Top Ten Most Violated OSHA Standards

The following is a list of the Top 10 most frequently cited standards following inspections of worksites by federal OSHA. OSHA publishes this list to alert employers about these commonly cited standards so they can take steps to find and fix recognized hazards addressed in these and other standards before OSHA shows up to cite and then penalize. If you haven’t reviewed your work sites with this list in mind, it can be a great starting point.

Ø  1926.451 –  Scaffolding

Ø  1926.501 –  Fall Protection

Ø  1910.1200 – Hazard Communication

Ø  1910.134 –  Respiratory Protection

Ø  1910.147 –  Lockout/Tagout

Ø  1910.305 –  Electrical, Wiring Methods

Ø  1910.178 –  Powered Industrial Trucks

Ø  1926.1053 – Ladders

Ø  1910.303 –  Electrical, General Requirements

Ø  1910.212 –  Machine Guarding

Like the Scout motto: “Be Prepared.”

We can expect and anticipate this agency will focus on pet OSHA projects, including:

·         Dealing with Whistleblower Statutes--OSHA has primary investigatory responsibilities for twenty-two different whistleblower statutes, from Sarbanes-Oxley to the Federal Aviation Act to the Affordable Care Act. The number of whistleblower claims and cause findings rose dramatically in 2012 and are expected to continue in 2013.

o   Our vote is to stay ahead of them and insure you have a path or pipeline for reporting.

·         Ergonomics--OSHA is focused on industry-specific and task-specific guidelines to reduce and prevent workplace musculoskeletal disorders that are commonly the result of repetitive, forceful, or prolonged exertions of the hands or the frequent or heavy lifting, pushing, pulling, or carrying of heavy objects.

o   A prudent step for safety and risk managers is to review OSHA Logs and workers comp data.

o   Identify repetitive or cumulative trauma stressors, and

o   Figure out approaches to reduce repetitive stress.

·         OSHA Logs--OSHA has also toughened up on its recordkeeping requirements including OSHA Logs, written compliance programs and certifications. Although typically classified as “Other than Serious” violations, OSHA has been increasing the instances in which it has found recordkeeping violations to be “Repeated” or “Willful,” which carry with them a potential 10x penalty enhancement.

o   Confirm required records are accurate and up to date, particularly if you have been cited by OSHA in the past.

o   Employers should have a proper records retention policy in place—if you need help, send a reply.

·         Workplace Violence--While this hazard has attracted attention in the media, OSHA has been particularly focused on the retail industry to ensure employers have policies in place and have properly trained their employees to recognize potential situations and seek assistance.

o   Have a Workplace Violence Prevention Program in place to advise employees violence or threatening behavior will not be tolerated

o   Outline reporting procedures for future instances of workplace violence and

o   Directs employees to a defined path for situations where they feel unsafe or threatened.

KCB&A has several OSHA experts on staff. We charge lots less than the national law firms and do very solid defense work and consulting—give us a call or send a reply for further assistance.

12-10-12; Home Away From Home = Big Bucks in IL WC; HR Strategies to Limit WC Repeaters; Long-Range Plans to Anticipate Obamacare; Government Ghost Payroller Double-Dip and much more

Synopsis: Home Away from Home Now Equals Big Bucks in IL WC. Shouldn’t a Worker Be Working to Get Workers’ Comp Benefits? Costs Are Certain to Again Soar.

Editor’s comment: We sadly announce another unprecedented, gut-wrenching and controversial appellate ruling for Illinois business and the whole defense industry. A problem with the wild expansion of the “traveling employee” concept is we don’t see any true “cure.” We also assure everyone all trades-workers including plumbers, pipefitters, electricians and anyone else who arguably “travels” has complete WC coverage of everything they do on and off work during the pendency of any work assignment. We don’t think that wild expansion of the IL WC Act was warranted or makes any sense in this current economy.

In The Venture-Newberg Perini Stone and Webster v. Illinois Workers' Compensation Commission, 2012 IL App (4th) 110847WC (December 6, 2012), claimant was a pipefitter. If you don’t know it, many pipefitters live something of a vagabond existence, happily traveling to wherever there is highly paid and specialized work. When they get there, they make a lot of money but they usually either take and live in trailers, RV’s or choose to live in low-cost but slightly more expensive motels/hotels during the work. When the work is over, they are laid off and move on to the next job in Illinois or wherever there is similar work.

In this claim, Claimant came from a Springfield union hall. He was provided work on a temporary assignment in beautiful Cordova, IL which has the oldest drag strip in the United States along with its nuclear power plant where we assume claimant was on assignment. For those of you that don’t know, Cordova, IL is near the Quad Cities or about 180 miles north and west of Springfield. Claimant went up there and our research indicates he moved by his own choice and expense into the Lynnwood Lynks & Lodge in Thomson, Illinois, 25 miles northeast of Cordova. For reasons we can’t tell, the Appellate decision calls this facility the Lynwood “Resort.” There is no question claimant moved in and was staying at this location for the duration of his temporary assignment.

Claimant's accident occurred while traveling from this motel to the power plant to work as a pipefitter. He wasn’t on duty and wasn’t being paid a dime while driving or being driven to work. There is no indication claimant was performing any work in the vehicle—he was “going to and coming from” work at the time of injury. The vehicle in which he was riding apparently skidded on ice on a public highway and he suffered injuries. The Commission’s ruling awarded 71+ weeks of TTD so claimant was off all work for over a year following the occurrence. The Springfield Arbitrator assigned denied the claim—while we don’t have access to his written ruling, we feel confident he accurately found claimant wasn’t working at the time of injury, wasn’t on the clock and wasn’t afforded WC benefits for those reasons. We strongly agree with him.

The IWCC reversed in a split decision. The Commission majority implemented what we have told our clients and readers is the magic term “traveling employee” to find any action claimant was performing starting with his trip to the Cordova area until his return to his home near Springfield was globally covered under our IL WC Act. In reversing the Arbitrator, the Commission asserted it was “reasonable and foreseeable” claimant would travel a direct route from his lodging to the plant—we have literally no idea why that finding makes any legal or factual difference of any kind. We are certain it was similarly “reasonable and foreseeable” claimant would eat, sleep, bathe, breathe and comb his hair most days. So he and his compadres drove straight to work that day. Who cares? Take a look for the “hidden meaning” of these words below.

The Circuit Court reversed and reinstated the award of the Arbitrator denying the claim. The matter moved to the IL Appellate Court, Workers’ Comp Division.

In a 3-2 split ruling, the Appellate Court reinstated the decision of the Commission awarding substantial benefits. The Appellate majority did not include the member of the panel from the appellate district in which Springfield sits, Justice John Turner. We assume this is why the majority opinion was written by Justice Thomas Hoffman of Chicago. We assure our readers Justice Hoffman has a great intellect but has authored many controversial rulings both within the WC arena and outside our issues. Justice Hoffman penned the ruling in Metropolitan Water Reclamation District of Greater Chicago v. IWCC where “street risk” first came into our lexicon to award benefits in an unexplained street fall-down for what we feel were risks common to the public.

Please remember like the terms “street risk” and “odd-lot total and permanent,” the word “traveling” doesn’t appear and isn’t defined in the Illinois Workers’ Compensation Act or Rules Governing Practice. Like other extralegislative judicial devices or nomenclature in the IL WC field, once one moves to define terms like “street risk,” “odd-lot” and “traveling employee” outside the Act and Rules, you can literally do whatever you like because there are no rules, law or “stars to guide” your trip. If one court ruling says something outside the legislation and rules, other court rulings can pick up and expand the concepts at their whim because there are no boundaries on what one can conjure up if one becomes inclined to do so.

Therefore, relying on a 2010 ruling he wrote named Cox v. IWCC, Justice Hoffman and this appellate majority ruled a “traveling employee” is any worker “who travels away from the employer’s premises.” Well, folks, that is just about everyone but office and factory workers working at their posts. All trades-workers, lawyers, truck drivers, police officers, firefighters, garbage collectors, home healthcare workers; basically everyone at some point in their work can reach the hallowed status of “traveling employee” because most of us work outside an office or fixed work site. Please also remember 99% of all staffing workers work “away from the employer’s premises.” Actually, a worker working from home is a “traveling employee” by that definition and injuries working in one’s home should be covered.

As we feel the Illinois courts are operating wholly outside the legislation and rules, we don’t know if Justice Hoffman and the majority feel “traveling employee” is a transient or permanent status—by that we mean, are you only a traveling employee when you are on a “travel” or if you ever travel, do you attain and then remain a “traveling employee” as a workers’ comp status for your whole career? Only the shadow knows, folks because we don’t have any definition other than what our courts tell us.

Please note the status of “traveling employee” should provide global coverage of any and every injury from the minute the worker walks out of their door until they get to work, start getting paid, go off work and then walk back into their home. Justice Hoffman and the majority in Coxruled “as a general rule, a traveling employee is held to be in the course of his employment from the time that he leaves home until he returns.” So even though you aren’t being paid and your employer has literally no control over what you are doing before and after being at work until you reach home (if you go home), the employer still “owns” full liability for your personal and non-work-related actions and decisions.

However, while it appears to us our reviewing courts are conjuring, calling up and creating this expanded body of WC coverage, there is another requirement. Citing a 1980 ruling named Howell Tractor v. IC, the Appellate majority indicates “the test of whether a traveling employee's injury arose out of and in the course of his employment is the reasonableness of the conduct in which he was engaged at the time of his injury and whether that conduct might have been anticipated or foreseen by [the employer].” We want our readers and everyone to understand this “legal standard” means basically any action by a human that isn’t completely insane or wholly unexpected from the moment they leave their home to go to work until they return is now covered by workers’ comp in this state. We consider that to be a gigantic expansion of WC coverage—for the vast majority of workers, we have no true accident defense or limitation of “arising out of and in the course of” employment as the Act appears to require. Please remember between the Cox ruling and this current decision, the Illinois legislature again restated the need for accidents to “arise out of and occur in the course of” employ—perhaps this majority missed that restatement of the limits in our law or perhaps we again need the legislation to again be clarified.

What does this truly mean? Is there a bottom line? Well, if we are all magically “traveling employees” in this state and everything we might reasonably and foreseeably do is covered, falling on ice walking down your own stairs at home would now be covered by IL WC. The woman from New South Wales who had a light fixture strike her on the head during romance in a hotel room would be covered if she were from this state. A firefighter at a convention who was wrestling like a schoolboy and tore his shoulder got IL WC benefits as a “traveling employee.” A street cop turning to give directions was covered when he claimed he strained his back. Do we truly want to cover all activities of off-duty truck drivers in truck stops under IL WC? Global WC coverage of any and all accidents be they personal or professional is global coverage—once we expand beyond the parameters of the legislation and rules, you lose any thresholds, limits or boundaries. Illinois appears to have gone that route to the detriment of us all.

Claimant in this Venture-Newberg-Perini Stone and Webster v. IWCC ruling was staying at a temporary home on a temporary assignment. He was traveling “to and from work” which is a status that should never be covered under workers’ compensation—you drive to work however you drive and you pick your route and take your own risks in doing so. Unless the IL Supreme Court takes and reversed this ruling, claimant has already been awarded over $70K in TTD for we feel should be a non-work-related occurrence. He will probably receive several hundred thousand dollars more in WC benefits that no state should award.

Skip the WC legislative “hair-cuts” we were discussing last week. In our view, if we keep expanding WC coverage in this fashion, we may move past California, Montana and Alaska to Number 1 in the whole country in WC costs. Underwriting WC risk in this state is going to be almost impossible to do. If you don’t think the folks at major Illinois employers like Caterpillar, Nestlé, Boeing, United Airlines and others are looking at what we are doing and shaking their heads in disgust and thinking of moving elsewhere, you aren’t paying attention.

As a final note, we have been brainstorming to try to find a “cure” or path out of this mess. One thought we had was to follow the trucking industry for “owner-operator” coverage. A union employer like this one might tell the workers they can’t start work unless and until they pay for their own WC coverage. We aren’t sure if there are any other paths out of this interesting predicament—if you have any thoughts, please let us know.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Dealing with and Blocking Repeat WC Claimants.

Editor’s comment: Thoughts from our HR experts at KCB&A.

      Safety policy approaches to block/terminate WC “repeaters” are

·         One-strike—Start/promulgate a global safety policy providing workers can only suffer a single “at-fault” injury and receive a written warning.

o   Thereafter, if they suffer a second “at-fault” injury, you will pay the benefits if the claim is accepted but the employee is terminated when the “at-fault” decision is reached.

o   In union environments, your unions have to sign up for this challenging approach. We have had success in getting some unions to cooperate.

·         Three-strike—Same as “one-strike but two “at-fault” events are allowed and termination occurs with the third such event.

·         Be sure to post/promulgate this safety policy in your workplace and in your employee/personnel manual.

·         Please remember it is arguably harder to “manage” return to work if you have terminated the worker.

·         It is also harder to avoid wage loss differential claims if you terminate workers because you can’t bring them back to the same position.

      No lump sum settlements for “at-fault” events.

·         Some clients will not settle or provide a lump sum on WC claims where the employee was found to be “at-fault.”

·         These clients will require any WC claim to be tried in that setting and pay out any permanency on a weekly basis, as appropriate.

      Getting release/resignation on all WC settlements.

·         Some of our clients now refuse to ever settle a WC claim without the employee leaving their current job.

·         It is possible claimant may get more money if you try the claim but lots of folks will take fast money and quit, if that is what you require.

·         KCB&A has a global release/resignation—if you have interest, send a reply.

      Another concern you might consider is 24-hour or “same-shift” accident reporting. This doesn’t directly address repeaters but it is another aggressive HR tool.

·         One of our clients requires same-shift or 24-hour accident reporting—they terminate for late-reported accidents. They may pay WC benefits but the employee is terminated.

·         This approach does make everyone safety-conscious and if something goes wrong, all workers know they need to be sure you know about it quickly or face termination.

·         Unions have to back up the concept. Signs about reporting requirement have to be posted everywhere about the requirement.

The aggressive defense experts at KCB&A can assist with any and all of these HR approaches—if you have interest, send a reply. We appreciate your thoughts and comments.

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Synopsis: Mark your calendar—Obamacare and Its New Punitive Costs Are Coming at U.S. Business in One Year. What Can/Should You Do Now to Be Ready?

Editor’s comment: The Play-or-Pay-Penalties provisions of Obamacare will become effective in one full year on January 1, 2014. You may want to anticipate that challenge and take steps/make decisions about it right now. At that time, U.S. employers with at least 50 full-time employees, including full-time equivalents, will be required to pay a significant per-employee penalty to the U.S. Government if they fail to provide legislatively defined health coverage to full-time employees. For example, a company with 50 employees that doesn’t provide healthcare coverage will owe $150,000 in penalties, starting on 1/1/2014! Specifically, the employer will have to provide minimum essential coverage (MEC) to all full-time employees and dependents in order to avoid that penalty if a single full-time employee receives a tax credit or cost-sharing reduction. In addition, the MEC has to be affordable and must provide minimum healthcare value.

If you have concerns about the possibility of a per-employee penalty, consider these options right now:

1. Opt for “Play and/or Pay”

If you want to avoid per-employee penalties, you will have to offer the requisite affordable MEC. Alternatively, you may decide to not offer coverage, pay the applicable penalty, and redesign compensation arrangements for full-time employees.

2. Opt for Hybrid Approach.

In between offering affordable MEC and not offering any healthcare coverage, there are "hybrid" approaches where a U.S. employer can offer healthcare coverage to a portion of its population and pay the applicable penalty for the remainder. For example, you could structure employee contributions so low-wage earners qualify for a subsidy and then pay the $3,000 penalty for those employees who elect coverage through a healthcare exchange.

You may also create a healthcare plan for a select group of employees and pay a $2,000 penalty for all full-time employees, provided the arrangements meet federal nondiscrimination rules.

3. Hire/Retain More Part-Time Employees.

Although part-time employees are included in determining whether you are a large employer with at least 50 full-time employees or full-time equivalent employees, employers do not have to provide health coverage for part-time employees. Employers who do not cover part-time employees, however, must be careful in categorizing these employees each measurement period.

4. Hire Less Employees or Split Up Your Business Groups into Smaller Units.

We are confident some companies may be better served and save millions to become smaller. If you have 195 employees today, we feel some employers may split into four independent companies with less than 50 workers each. The companies are going to have to be truly “independent” and we are sure there will be federal watchdogs snooping into how the companies are operated. If you want to consider this option, we vote you do it last week and not wait until next year when it will appear more obvious and potentially create heightened scrutiny.

5. Call/write/email Your Healthcare Broker.

We are confident your broker is going to be on the point with developments and what you are going to need. All solid healthcare brokers should be able to do the “math” on what is best for your business in this new challenging and potentially business-disruptive environment. If you aren’t getting the right answers from your broker, send us a reply and we can make solid recommendations for Midwest healthcare brokers who know these concerns.

To Do List

Your "To-Do List" may vary. Here are planning tips/thoughts:

• Set up HR systems/documentation to classify new and ongoing employees as full-time, part-time, variable or seasonal.
• Clearly define independent contractors as such—watch out for employee misclassification issues; if you need help on the topic, send a reply.
• Insure independent contractors are not common law employees and have their own healthcare coverage—we urge you to confirm that fact in any agreement with an independent contractor.
• Identify measurement and stability periods.
• Make sure healthcare/benefit plan documents cover all employees who are determined to be full-time employees within the applicable measurement period throughout the stability period.
• Amend plan documents to insure employees who switch from full-time to part-time don't lose coverage until the end of the stability period.
• Consider providing employees with information about total compensation, including the total cost of health benefits to include both employer and employee contributions.
• For collectively bargained or union workers, insure full-time employees are, provided with affordable MEC under the terms of the CBA and future bargaining agreements contain language that will allow you to redesign plans as needed.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Government Ghost Payroller Double-Dipping to Stay at Work and Get Both Pension/Regular Pay?

Editors comment: The IL Supreme Court just took this case so we will have to wait and see what they do with it.

In Prazen v. Shoop, No. 115035, 4th Dist., Claimant was ordered by his Pension Board to return $307,100.50 in early retirement incentives where he hadn’t retired!! After taking retirement, Plaintiff self-incorporated and returned to the same municipal job from which he “retired” and was receiving both pension and salary at the same time.

Our Illinois Appellate Court, in reversing the Pension Board found the IL legislature did not grant the Pension Board the power to “pierce the corporate veil” to find Plaintiff’s corporation was a sham device to circumvent the return-to-work restrictions under Section 141.1(g) of the IL Pension Code. If this decision stands, every municipal worker may be able to retire, incorporate and legally “double-dip” if their government employee will allow it.

If that isn’t completely clear, this guy took early retirement in a gov’t pension system that is unbelievably badly funded and rapidly running out of money. He was the Peru, IL Electrical Department head and ostensibly took a buyout and early retirement.

Despite receipt of early retirement benefits and his pension, he then started a corporation composed of himself, his wife and a daughter.

Operating with the City mayor’s knowledge, he continued to work as the Peru, IL Electrical Dep’t head as an “independent contractor” and continued to be double-paid well over $100K in pension and salary for the next 12 years before he or his corporation finally stopped working for the City and actually “retired.”

We not only think these actions should be reversed, we feel this should be against the law and future situations should have criminal implications. We appreciate your thoughts and comments.