10-14-13; Did Rising WC Costs Kill Dominick's Finer Foods; What the Credit Default Might Mean to WC and You; Important PSEBA Ruling, analysis by Nathan Bernard, J.D. and more

Synopsis: Did Rising IL WC Costs Kill Dominick’s Finer Foods?

Editor’s comment: Our readers were saddened to hear Safeway, the parent corporation of Dominick’s grocery stores pulled the plug on 72 grocery stores and approximately 8,000 workers who all had generally excellent union jobs in our state with pensions and other benefits. One concern voiced by a reader is whether their climbing WC claims and costs took them out of business.

Dominick DiMatteo was born in Sicily and founded the grocery chain in 1918. In 1950, the DiMatteos opened their first supermarket, a 14,000-square-foot store. By 1968 the chain had reached 19 stores. The DiMatteos continued to operate the chain under the financial backing of Fisher Foods. The DiMatteos continued to expand and acquired both Kohl's Chicago area locations and Eagle stores. In 1993, Dominick DiMatteo, Jr. died from lung cancer. News sources indicate his daughters and son did not have the same passion for the supermarket business. Safeway bought Dominick's in 1998 and kept it open until right now.

Supermarket chains live in a business with fierce competition and razor-thin margins. Dominick’s would have had numerous employees who are truck drivers and transportation workers of various sorts. They also have managers and other workers that provide support for more than one location and visit several stores, when needed. Following current IL WC law, all such workers are now “traveling employees” and would be covered as a matter of law for non-work-related risks, like falling in your own driveway or getting into a motor vehicle accident miles away from your job. You don’t have to be “traveling” to be covered; you just have to establish “traveling employee” status and have any injury or illness. Such workers are now covered in a global and no-fault fashion while workers who don’t “travel” or only work at one store are limited to only work-related risks. With respect to the members of our judiciary who created this unsustainable concept, we are certain it is going to result in skyrocketing WC costs, particularly for cash-strapped municipalities and government bodies, as most of their workers are now “travelers.”

As we have advised, no other state in the U.S. provides such coverage but Illinois employers are currently being forced to do so while we await a ruling from our IL Supreme Court in The Venture-Newberg-Perini, Webster and Stone v. IWCC decision. Their ruling is expected next month. It is the hope of all business observers that our highest court will reject the judicially created concept and return our state to traditional principles of WC law.

On the IL WC front, Dominick’s Finer Foods has lots and lots of pending IL WC claims. Most of the claims are for actual work injuries. Their WC claims and defense team has been appropriately fighting the IL workers’ comp claims that didn’t “arise out of and in the course of” employment. Now, that limit-switch no longer applies and such claims have to be automatically accepted and paid for their “travelers.”

In our view, the managers at Safeway, their parent corporation are watching our state continue to get more and more business unfriendly. We are seeing our Illinois legislature fighting and kicking to keep unfunded government worker “pensions” in place that is certain to cost billions for our kids, grandkids and great-great-grandkids. Our favorite government “pension” tidbit is the recent news confirming the highest “pension” in our state is held by Dr. Leslie Heffez who was a professor at the U. of IL Hospital in Chicago. Reports indicate he is now being paid $516,413 per year from our state government “pension” program. Dr. Heffez doesn’t appear to need the taxpayer cash, as he is still working at not one but two different medical offices in Chicago and Highland Park. His “pension” will continue to receive compounded COLA increases at over $15K per year. In 23 years, his annual “pension” payout will exceed $1M per year.

One reason we put “pension” in quotes is 60% of the money or more than $300,000 per year Dr. Heffez is currently receiving isn’t from personal contributions, matching state funds or interest on his “pension” investments—the money is “unfunded” which means he is being paid by you and me with our current tax dollars! Over the next 23 years, Dr. Heffez is certain to receive at least $15-25 million dollars from Illinois taxpayers in exchange for what had to be a fraction of that amount in pension contributions. Please don’t focus solely on this great physician; thousands of other former state workers are getting billions from us in the same fashion. And we don’t and can’t blame Dr. Heffez for taking the tens of millions of taxpayer dollars to which he is clearly entitled—our criticism is focused on those who created, didn’t properly fund and are fighting to keep this unsustainable mess intact.

On another front, our judiciary remains the highest paid in the United States and they are guaranteed 3% annual raises in the IL Constitution. Cook County Board Chair Toni Preckwinkle noted the 432+ judges and justices in this county were paying less than $1 per month for family healthcare contributions that cost the county as much as $1,700 per month! One has to wonder if the effectively free benefits shouldn’t be subject to income taxes. Someone noticed the bailiffs and clerks who worked for the judges/justices were paying over 100 times more for their healthcare share than their judicial bosses! We applaud Ms. Preckwinkle for working to change that anomaly and get “fair share” contributions from our judges. On a similar front, after only eight years of service, all IL judges and justices could retire and get “free” or taxpayer-paid lifetime family healthcare coverage. Governor Quinn passed a law requiring them to make reasonable contributions and four class actions were filed by our judiciary to try to block any contributions. That matter is now moving directly to our IL Supreme Court for their ruling.

Business leaders see these sorts of shenanigans in our state and shake their heads and wonder how it could get much worse. If you don’t feel the “traveling employee” expansion was the sort of thing that caused Safeway to drop their interest in doing business in our state, you don’t know much about business. We hope the secret-powers-that-be that run the Illinois Workers’ Compensation Commission start to understand the “traveling employee” idea, like government worker “pensions” and the freebies accorded to our well-paid judiciary, are brought into line with other states.

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

            ----------------------------

Synopsis: The United States at the Precipice of Global Financial Disaster—What Does It All Mean for Workers’ Comp?

Editor’s Comment: If you have been reading about the “government shutdown” at the federal level, you might not understand the brinkmanship going on has little or nothing to do with you, as our readers—we aren’t truly affected by government workers being furloughed with or without pay for several months. What might be coming October 17, 2013 (or in four short days) is truly ominous and dangerous. At that time, it is possible our heavily leveraged federal government that is now almost $17 trillion dollars in total debt may default or not timely pay some of what it owes to borrowers. If you aren’t sure, very few people across our globe like to even think of the massive financial tsunami that might follow. We aren’t trying to scare anyone but we do think you should at least know the battlefield in which you may soon be deployed. Basically, what has to happen is the U.S. President and legislature have to negotiated and agree to timely pay our debts or we may be, for lack of a better term, smoked.

We Have Actually Defaulted in the Past, Contrary to Popular Belief

·         The U.S. first “defaulted” on what they owed in 1790, when our newly formed nation deferred until 1801 interest obligations on debt it assumed from the states. We did make the late payments when due.

·         In 1933, our country suddenly refused to make payments in gold to redeem bonds that gave holders the option of requesting gold in payment. While investors were paid on time and in full with cash, many argued it was a “default” because bondholders weren’t paid in the fashion to which they were entitled.

·         In 1979, the U.S. was late on about $122 million of bills, in part because of “severe technical difficulties” the Treasury Department claimed was due to a word-processing failure.

If you recall what the popular movie Despicable Me called the Bank of Evil, i.e., Lehman Brothers Holdings Inc. and their collapse about five years ago meant, you might understand the global financial disaster that lies before us this Thursday. A U.S. government default could be a worldwide economic calamity unlike any in recorded history. Failure by the United States, the world largest borrower to timely pay its massive debt will

      Devastate stock markets around the globe;

      Halt an erstwhile $5 trillion lending mechanism for investors who rely on U.S. Treasury bonds;

      Immediately skyrocket borrowing/mortgage costs for billions of people and employers large and small;

      Decimate the U.S. dollar along with many other countries’ currencies; and

      Throw U.S. and world economies into a recession that probably would become a depression.

The $12 trillion of currently outstanding U.S. government debt is 23 times the $517 billion Lehman Brothers owed when it filed for bankruptcy Sept. 15, 2008. The U.S. stock market lost almost half its value in the five months following Lehman’s collapse. The country had its worst recession since the Great Depression that our fathers and mothers lived through, taking the global economy down with it. In 2008-9, U.S. unemployment surged to the highest levels in three decades. If those things happen, starting this Thursday, our personnel, workers’ compensation and human resource systems are certain to be strained. Massive layoffs and other nasty things may happen in the coming months, if our politicians can’t get their acts together.

In 2008, the Second Great Depression was prevented only by unprecedented action by the Federal Reserve, which again borrowed the money and recycled $3 trillion into the financial system. The U.S. Treasury provided about $300 billion of capital for the nation’s banks to put them back on their feet.

What is on the line

The U.S. Treasury Department has $120 billion of short-term bonds coming due in four days on Oct. 17, 2013. An additional $93 billion of bills are due in ten days on Oct. 24. On Halloween, $150 billion needs to be paid to bondholders, including two-year and five-year notes that mature. The total due from Oct. 17 through Nov. 7 is $417 billion. The President and Congress have to agree to pay it. We also hope they start to see

What does all this mean to Workers’ Comp?

In short, remember the government shutdown is boring and has almost nothing to do with anything other than for the furloughed federal government workers who can all catch up in their normal, snail-like fashion. In contrast, a U.S. credit default will be a financial cataclysm of historic proportions.

From a workers’ comp perspective, a credit default will insure rapidly rising interest rates for companies borrowing cash and folks taking out mortgages. If it happens, it is going to cost jobs, jobs and more jobs. Expect and plan ahead for layoffs—consider using our KCB&A pre-layoff disclosure report to have your employees confirm they aren’t injured, don’t know any other worker that is injured and don’t need accommodation for injuries, other than as outlined. We are happy to provide our form for your review and consideration; send a reply.

Finally, our advice to all of our readers is to consider writing a NastyGram to your U.S. Senator and Congressman and then basically hold your breath. We feel we owe it to you to tell you this is looming financial catastrophe is out there and may affect your lives in a very significant way. We are certain if our leaders in Washington can’t get their ducks aligned, things are going to go badly in lots of directions starting this Thursday. If you have one, you might want to talk to or at least email your stock broker for their thinking. Either way, there isn’t a whole lot you or I can do about it, so hang in there while hoping for the best and prepare for the worst.

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

            ------------------------------------

Synopsis: Moving Loose Asphalt Chunks is an “Emergency” if Our Courts Say So. We Feel Such Rulings Have a Major Financial Impact in Providing Lifetime Healthcare for Police Officers/Firefighters Employed on the “Highway to the Danger Zone!” Analysis by Nathan S. Bernard, J.D.

Editor’s Comment: The Illinois Appellate Court in Springborn v. The Village of Sugar Grove, 2013 IL App (2d) 120861 (issued September 25, 2013), considered a claim for pension and healthcare benefits out of Kane County, confirmed the employer of a full-time law enforcement officer must pay the entire lifetime premium of the employer’s health insurance plan for that injured employee suffering a “catastrophic” injury. Please note for a young or middle-aged officer, lifetime healthcare benefits could cost several million dollars for taxpayers.

In the case at bar, the critical issue was whether an “emergency” component was met in a given situation. Specifically, the Court concluded an officer attempting to clear a two-lane highway in traffic of 15 chunks of 20 pounds of asphalt a piece which fell into the roadway was improperly denied benefits under Section 10. The officer requested assistance from the village public works department for assistance in removing the asphalt but their reply was the Illinois Department of Transportation (IDOT) had responsibility for clearing the road. Instead of waiting for IDOT to arrive and believing the asphalt in the roadway presented an “emergency” and an “immediate safety hazard,” the officer took it upon themselves and activated his lights, positioned his vehicle in the roadway, then attempted to remove the asphalt by hand, and sustained a strain injury that will disable him from such work for life.

Additionally, in a different scenario, an officer responded to a traffic accident with potential injuries and arrived to find a 10-15 foot traffic signal light pole lying across the road after it appeared to have been struck by a vehicle. Instead of waiting for a tow truck to arrive and believing the pole with live wires presented an “emergency” and an “immediate safety hazard,” two officers assisted in removing the pole manually and one sustained injury.

Section 10 of Public Safety Employee Benefits or PSEBA provides in relevant part:

“(a) An employer who employs a full-time law enforcement, correctional or correctional probation officer, or firefighter, who, on or after the effective date of this Act suffers a catastrophic injury or is killed in the line of duty shall pay the entire premium of the employer’s health insurance plan for the injured employee, the injured employee’s spouse, and for each dependent child of the injured employee

b) In order for the law enforcement, correctional or correctional probation officer, firefighter, spouse, or dependent children to be eligible for insurance coverage under this Act, the injury or death must have occurred as the result of the officer’s response to fresh pursuit, the officer or firefighter’s response to what is reasonably believed to be an emergency, an unlawful act perpetrated by another, or during the investigation of a criminal act. Nothing in this Section shall be construed to limit health insurance coverage or pension benefits for which the officer, firefighter, spouse, or dependent children may otherwise be eligible.”

Accordingly, the injury or death must have occurred as the result of the officer’s response to what is reasonably believed to be an emergency, an unlawful act perpetrated by another, or during the investigation of a criminal act.

In each scenario, both officers were ostensibly concerned for both the public’s safety and their own safety while positioned on the road. Additionally, they were concerned with vital resources being improperly allocated and prevented from being used elsewhere while they provided traffic direction waiting for other village services. The taxpayers are going to pay for lifetime duty disability pay—should they also have to pay healthcare benefits, as if these relatively innocuous events were a true “emergency.”

The Appellate Court noted Section 10 requires a determination of

(1) whether there was a subjective belief that they were facing an emergency and

(2) whether that belief was objectively reasonable.

The subjective component was met by testimony whether they felt they were in an emergency. The objective component was met if a reasonable person would find an instance involving imminent danger to a person or property requiring an urgent response. It also requires an unforeseen circumstance or event requiring that immediate action. The requirement of an unforeseen event is shown by the illustration stating, “they were far from help when the emergency overtook them.”

Although in both the above mentioned scenarios, the officers conceded it would have been possible to wait for assistance, the Court noted it would not have been “appropriate” given the hazards of the situation. In each case, manual removal was the most readily available means and so the most suited to the pressing need to clear the roadway of both the obstruction and the squad car. From the defense side, it is hard to understand how it is an “emergency” if the officers involved had lots of options and are calmly making calls and asking when appropriate assistance to arrive. We ask what a police officer or firefighter might do in the course of their work that might result in injury but isn’t an “emergency.” From our view, our Courts are bending over backwards to insure such workers always receive lifetime healthcare coverage, paid by the taxpayers.

Please contact expert defense attorneys at Keefe, Campbell, Biery and Associates, LLC for an analysis on whether a specific example of a catastrophic injuries or death sustained to a full-time law enforcement, correctional or correctional probation officer, or firefighter is applicable to Section 10 of Public Safety Employee Benefits requiring payment of the entire lifetime premium of the employer’s health insurance plan. Upon receipt of complete file materials, we can determine whether aggressive handling of the claim is appropriate, or acceptance preventing unnecessary litigation expenses.

This article was researched and written by Nathan S. Bernard, J.D. who can be reached at nbernard@keefe-law.com or 312-756-3726.

            ------------------------------------------

Coming events from KCB&A:

REBEX 2013  

REBEX 2013

The Westin Chicago North Shore, Wheeling, IL
Preliminary Program
REBEX 2013 - The Regional Risk Management Conference and Exhibition, Sponsored by the Chicago and Wisconsin Chapter of RIMS
You are invited to register for REBEX 2013, the Midwest's premier learning environment for risk managers.

Registration

Online Registration - Follow this link to register today.
Questions?
Contact Brenda Howe at REBEX 2013 Headquarters at +1-847-480-9712.

10-7-13; If You Need Ethics for Adjusters CEU's, Let Us Know!; Subcontractor Off the Hook on Defending General Contractor, Analysis by Chris St. Peter, J.D.; Stat...

Synopsis: Continuing Education Units—Does Your Claims Team Need Presentations on Ethics for Adjusters 2013-2014? Do You Want the Needed CEUs This Year??

Editor’s comment: We had a reader approach us at the recent smash presentation by Accelerated Rehabilitation Centers® about the need for adjusters to get CEUs, particularly on Ethics. In response to her suggestion, we have worked hard and developed Ethics for Adjusters 2013-2014. Our goal was to touch on all the ethical issues important for your claims staff. As you read this, we have sent a draft of the presentation to a number of clients and claims managers for their final review, comments and suggestions. Our goal is to provide an entertaining and informative presentation that will meet your CEU requirements.

Some of the topics we will cover include:

·         Defining Ethics for Claims Handlers;

·         Who’s On First--No Side Deals or Dealings;

·         Ethics in Handling Medicare Set-Aside Accounts;

·         Ethical Considerations in Dealing with Resignations;

·         How Do You Insure You Are Talking to an Attorney?;

·         What If a Lawyer Starts to Act Unlike a Lawyer?;

·         Understanding HIPAA in Handling Personal Injury/WC Claims;

·         Avoiding Conflicts of Interest;

·         Always Tell the Truth;

·         Be Clear and Open about Important Claims Decisions;

·         Don’t Leave Your Defense Attorney Dangling;

·         Be Crystal-Clear about Settlement Demands and Offers;

·         Keep Your Claims to Yourself, Account and Company;

·         Bad Faith Claims Handling;

·         You May Be Responsible for Vendors Acting in Bad Faith;

·         Attack Claims Fraud When You are Sure of It;

·         And more!!

We are happy to present these comprehensive and thoroughly researched materials in a lunch and learn at your offices. We can tailor the time involved to your needs. If you want that presentation communicated to claims staff across the country in a webinar, we are happy to assist to set that up. Our presentation team includes your editor, Shawn R. Biery, J.D., M.S.C.C. and John P. Campbell, Jr., J.D. who all teach Workers’ Compensation Law and Ethics at The John Marshall Law School in Chicago.

If you have interest in a presentation, please reply. Please feel free to post comments and thoughts on our award-winning blog.

            --------------------------------------------

Synopsis: The Illinois Appellate Court rules a subcontractor’s liability carrier had no duty to defend the general contractor from a negligence claim brought by the subcontractor’s injured employee alleging the general contractor alone was directly negligent. Analysis by Chris St. Peter, J.D.

Editor’s comment: We feel the Illinois Appellate Court correctly applied the plain language of the policy to the facts alleged in the original underlying complaint—and not to additional facts in the general contractor’s third-party complaint—to hold there was no duty to defend where there were no allegations of vicarious liability. Any other result would allow a party seeking coverage to plead additional “self-serving” facts in a third-party complaint for the sole purpose of obtaining coverage.       

By way of background, in November 2009, R. A. Cullinan & Son, Inc. (“Cullinan”) became the general contractor of a construction project for the Illinois Department of Transportation in Peoria, Illinois. Cullinan entered into a subcontract agreement with Durdel & Sons Tree Service & Landscaping, Inc. (“Durdel”) to clear trees and logs at the work site. In June 2010, one of Durdel’s employees, Charles Hill, Jr., was injured when the equipment he was operating struck a live overhead power line.

In May 2011, Hill filed a two-count negligence complaint in Peoria County against Cullinan and another defendant alleging both defendants were directly negligent in supervising, maintaining, and/or providing warnings regarding the live overhead power lines near the work site. Of note, Hill’s complaint did not contain any allegations that his employer, Durdel, was negligent in any manner. In April 2012—nearly a year after the original complaint was filed—Cullinan filed a third-party complaint alleging Durdel was solely negligent for Hill’s injuries. Cullinan then contacted Durdel’s liability carrier, Pekin Insurance Company, Inc. (“Pekin”), claiming it had a duty to defend Cullinan as an additional insured under Durdel’s policy. Pekin refused to represent Cullinan, claiming Durdel’s policy did not cover Cullinan when the complaint alleged Cullinan was directly negligent for Hill’s injuries, and not vicariously liable for Durdel’s negligent actions. Pekin sought declaratory relief asking the court to find Pekin had no duty to defend Cullinan. However, the trial court ruled against Pekin and held it did, in fact, have a duty to defend Cullinan under the terms of the policy.

In Pekin Insurance Co. v. United Contractor Midwest, 2013 IL App (3d) 120803 (Sept. 18, 2013), the Illinois Appellate Court, Third District, reversed and remanded the trial court’s ruling. The Appellate Court first looked to the plain language of the insurance policy and noted it only provided coverage for vicarious liability proximately resulting from Durdel’s “ongoing operations performed for that Additional Insured during the Policy Period.” In interpreting this provision, the court noted the general rule that a person who employs an independent contractor is not vicariously liable for the acts or omissions of an independent contractor except under very specific circumstances where the general contractor retains control over the independent contractor’s work.

Next, the Appellate Court looked to the underlying allegations of Hill’s negligence complaint to determine whether it alleged sufficient facts that the injuries occurred during Durdel’s “ongoing operations performed for that Additional Insured during the Policy Period.” In doing so, the Court noted the complaint did not allege any facts identifying a negligent act performed by Durdel which resulted from the directives of the general contractor. Instead, the court noted the complaint alleged Cullinan, acting alone, negligently failed to supervise and warn Hill of the dangers posed by the live overhead power lines on the work site. Accordingly, the Court held that the failure to specify a negligent act committed by Durdel not only failed to trigger coverage to an additional insured in Durdel’s insurance policy, but also defeated a theory of vicarious liability.

Of note, the court further declined to consider Cullinan’s “potentially self-serving, third-party complaint” for allegations of Durdel’s negligence, as such a complaint filed after declaratory relief was sought could be used “to supply the missing allegations from the original complaint in an attempt to gain coverage as the additional insured under the policy.”

As noted above, we feel this is the correct result. The allegations of the original underlying complaint contained no facts that would trigger coverage as an additional insured under the theory of vicarious liability. Simply stated, if the insurance policy does not cover an additional insured’s direct negligence, then there is no duty to defend in an action alleging the additional insured was directly negligent. Moreover, an additional insured should not be able to plead additional “self-serving” facts as an end-around to obtain coverage.

This article was researched and written by general liability and employment practices liability law specialist Chris St. Peter, J.D. Contact him at cstpeter@keefe-law.com or (312) 756-3714 and ask him to review your insurance policies and other contracts.

            -----------------------------------------------------

Synopsis: The Fun Bunch at NCCI Provide More WC Statistics Than You Can Shake a Stick At.

Editor’s comment: If you can’t sleep some night and want to do some in-depth analysis of how the IL WC system compares to the rest of the country, take a look at this excellent statistical treatise from NCCI that is online at: https://www.ncci.com/documents/SAF_IL.pdf

Titled Illinois State Advisory Forum and dated September 13, 2013, the report is lengthy, detailed and challenging to fully comprehend. We do note our solid and hard-working IWCC Chairman Michael Latz participated in creating and presenting this analysis. Illinois highlights are listed as:

·         Approved loss costs are 14% below their level prior to the 2011 IL Workers’ Compensation Reforms—we consider this very positive news;

·         Despite lagging economic recovery, increases in payrolls are contributing to workers’ compensation premium increases;

·         Our Combined Ratio is below 100% for the first time in more than a decade.

The report confirms when many businesspeople already know about our state—job losses in the past two recessions greatly exceeded the national average and show no signs of lessening. Further, the IL unemployment rate and lack of growth in recovery is well over the U.S. average—there is a pronounced and growing gap we feel is due to the miserable way our State and City of Chicago governments are run.

We were mildly aghast to see IL State Rep. Barbara Flynn Currie attacking long-time Illinois-based agri-processor Archer Daniels Midland for seeking tax incentives from State government—she specifically characterized it as “blackmail” in a fashion we consider ludicrous. Obviously, she could just stand opposed and avoid the hysterical attack on this major IL employer. We are certain how elated other states and cities might be to have ADM move their HQ there. As the vast majority of IL taxes are now going to fund and pay what some people call “government pensions” for folks that no longer work for our state, certainly State government can’t lose any tax dollars to keep major businesses here or have them expand their operations in our state. One has to wonder how long our government unions can continue to block “pension” reform in Springfield and whether that might occur before the hollow house of cards falls into the same dark hole in which the City of Detroit’s pensions are currently sitting.

The NCCI report also provides clear documentation of the industries in IL that continue to struggle. Construction employment is down over 30%--this may be exacerbated by the silly new court-created “traveling employee” rule that extends WC coverage of non-work-related accidents/illnesses to all construction workers in our state. Manufacturing jobs are also down more than 13%. We were mildly surprised to see jobs in the information industry demonstrate a 13.7% loss, as it seems that job sector continues to grow. Trade/Transportation and Utility jobs showed an almost 5% loss—again this sector is certain to continue to show more job losses as the “traveling employee” concept takes hold.

Other statistical metrics of note include:

      Illinois lost time claim frequency is down 35.2% for the period from 1997-2011 (we feel this is one of the main reason overall WC claims are down);

      Average claim frequency in IL is down and remains under the level of our sister states;

      IL Permanent Partial Claim Frequency is higher than all of our bordering states and close to double the national average;
Indemnity benefits in IL are dramatically higher than medical benefits—we pay so much for PPD and lost time compared to other states and the national average;

      Indemnity severity in IL has noticeably declined since 2008.

All of it continues to change and morph as we move into the rest of this decade. We are sure most of the current IL Arbitrators/Commissioners are greatly improved and are doing their best to keep Illinois in line with other states.

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

            ----------------------------------------------

Synopsis: Chairman Latz and the IWCC announce the 2014 Arbitration Assignments.

Editor’s comment: Whoever the Arbitrator might be that is currently handling your downstate claims right now is almost certainly going to change. Most business observers feel the changes are relatively reasonable—please remember you can’t pick 30 Arbitrators that I might like and I can’t pick 30 Arbitrators that you might like—we are all human and the nature of litigation is resolving differences fairly and amicably. We again assert the IL WC Arbitrators are dramatically honest, generally fair and professional. They are much more sensitive to WC fraud by claimants than in years past. We encourage all business representatives to attend pretrials and hearings and meet our hearing officers to insure you are getting solid value from our state WC administration that you pay for.

2014 IL WC Arbitration assignments announced

Effective January 1, 2014, these IL WC Arbitrators will have the following assignments:

Zone 1:   Collinsville, Herrin, Mt Vernon: 

Lee, Lindsay, Zanotti

Zone 2:   Springfield, Quincy, Urbana: 

Dearing, Gallagher, Pulia

Zone 3:   Bloomington, Peoria, Rock Island: 

Erbacci, Holland, McCarthy

Zone 4:   Geneva, New Lenox, Ottawa:  

Granada, Mathis, O'Malley

Zone 5:   Rockford, Waukegan, Woodstock:  

Andros, Falcioni, Fratianni

Zone 6:  Chicago, Wheaton:  

Cronin, Doherty, Luskin

Zone 7:  Chicago:  

Black, Carlson, Dollison, Flores, Huebsch, Kane, Kelmanson, Mason, Simpson, Steffen, Thompson-Smith, Williams

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

            -----------------------------------------------

Synopsis: Dr. Steven Delheimer, rest in peace

Editor’s comment: Dr. Steven C. Delheimer, MD, 64, of Peru died last week in his home. He was a longtime participant in the IL WC system and testified in numerous hearings and reported decisions. He was a positive and healing force in many people’s lives.

Dr. Delheimer was born in Streator, IL. He earned his undergraduate degree from the University of Illinois at Urbana-Champaign and earned his doctorate in medicine from the University of Illinois Rockford School of Medicine. He completed a surgical internship at Dartmouth College in New Hampshire and a neurosurgical residency at Mayo Clinic in Rochester, Minn. After finishing his studies, he was a practicing neurosurgeon in Rockford for several years then in La Salle-Peru and Bloomington. In lieu of flowers, memorials may be directed to the charity of the donor’s choice or the family of Steven C. Delheimer. Online condolences may be directed to the family at duffyfuneralhome.com.
 

            ______________________________

9-30-13; Should IL Employers Manage "Travelers" Away From Work?; New IL WC Rule for Company Vehicles; Two or More Accidents = Two or More Awards, Analysis by Tim O'Gorman and much more

Synopsis: If Illinois Employers Are Responsible under WC for "Traveling Employees," Can/Should They Supervise Them During Non-Work-Related Travel? How Much Do You Feel The Wildly Expanded WC Coverage Will Cost Us???

Editor's comment: As we have advised the IL WC System has newly expanded WC coverage for millions of workers who can be called "traveling employees" to cover risks, injuries and illnesses on the way to and from work and during breaks. We again emphasize a "traveling employee" doesn't have to be "traveling" to get WC coverage. Non-work-related injuries have unquestionably been swept into Illinois’ very generous workers comp and occupational disease coverage. This is going to cost Illinois employers billions once it becomes widely known and workers start to sign up and make claims for this new coverage. No state or country provides such expanded WC coverage for some of the reasons we outline below.

Allowing Motorcycle Use To and From Work for Traveling Employees Now Expands WC Risk/Costs

So here is another test question and fact situation--we have a short-haul truck driver who would qualify for "traveling employee" status, as an essential element of his work is traveling. There is an IL Appellate Court ruling that specifically finds such workers to be TE's or traveling employees. If you aren't sure, such workers are now covered when they leave their homes until they return. If he carelessly spills hot coffee on himself on the way to work at a Wendy's®, the employer would owe for medical care, lost time and any disfigurement or disability that might ensue.

Our concern is the driver mentioned above has an aching back. He is claiming it is due to driving in our trucks. This is what we characterize as a "repetitive working" claim. To defend such claims, we point out the truck seats are truly state of the art--they cost about $15,000 per seat to insure they are the most ergonomic and spine-friendly seats in the world. Our bio-engineers confirm you can't get a bad back or sore spine riding in such seats. Illinois Arbitrators will carefully weigh such evidence in hearings and make a solid call on whether the condition is or is not related to work.

What our truck driver also drives when he isn't in our super-truck-seat at work is his personal motorcycle. Everyone at the truck dock knows he drives a full-dress Harley® to and from work every day. Our expert physician indicates such a worker, at his age and girth, is almost certainly going to have spinal dysfunction from vibration, twisting and bouncing around on a motorcycle riding an hour to and from work every day. Motorcycles may be the least spine friendly means of personal transportation. Motorcycles are also one of the most dangerous conveyances on the planet; thousands of such drivers are injured and killed in statistical comparison to folks that drive cars and trucks.

As we told you in the first several paragraphs at the top of this article, it would appear the employer is now responsible for any problems or accidents this truck driver has riding his motorcycle while going to and from work. We don't see any current method to defend such a claim based on the four "traveling employee" Appellate Court rulings applicable to such facts. You don't and will never again need an Arbitrator or lawyers on either side to deal with such a claim--the money is owed for all WC benefits, as a matter of law, according to our Courts.

We Don’t Feel There is Much to Litigate about the “Foreseeability” of Accidents, as Foreseeability Is In the Eye of the Beholder

The radical lawyers at ITLA who we feel may be behind this new and unprecedented legal expansion of the “traveling employee” concept are suggesting lawyers on both sides and Arbitrators will be able to litigate “foreseeability” of an accident. The IL Appellate Court, WC Division identifies this as a source of needed litigation in the most recent ruling in Admiral Mechanical v. IWCC where they write:

We further disagree with respondent’s overstated fear that the traveling-employee doctrine threatens to turn the Act into a strict-liability statute. The burden remains with the employee to prove causation (Hoffman, 109 Ill. 2d at 199), and the employee fulfills this burden by showing that the conduct he or she was engaged in at the time of the accident was reasonable and foreseeable. Respondent’s protestations to the contrary notwithstanding, this standard has provided employers with viable defenses in various situations. See, e.g., Jensen, 305 Ill. App. 3d at 280-81 (holding that manner in which the claimant used an ATV was not reasonable or foreseeable); Howell Tractor & Equipment Co. v. Industrial Comm’n, 78 Ill. 2d 567, 575-76 (1980) (holding that an employee’s “late-night excursion through an unfamiliar and potentially hazardous area” of a town was not reasonable or foreseeable.”); U.S. Industries, Production Machine Division, 40 Ill. 2d at 475 (“Claimant's action in undertaking a midnight pleasure drive in unfamiliar, mountainous terrain was, in our judgment, a clearly unanticipated, unforeseeable and unreasonable activity not normally to be expected of a traveling employee.”).

In our view, all of the cases mentioned could just as easily been determined to be foreseeable as not foreseeable—it was clearly up to the whim of the courts in making that determination. The reason we say it is clearly up to the notion or caprice of the finder of fact is there is no defined legal standard for “foreseeability” of an unexpected occurrence. Most accidents are to some extent the result of bad judgment or error by someone—how “bad” does bad judgment have to be to reach the magical level of being “unforeseeable?” In stark contrast, lots of accidents, like the one involved in Venture-Newberg-Perini didn’t involve any failure or error on the part of the injured worker—in that claim, his co-worker was driving the vehicle, slid on ice and hit a bridge, causing injuries to the claimant. Nothing about that claim by a passenger in a motor vehicle has anything to do with “foreseeability” and from the perspective of the IL WC Appellate Court’s ruling, foreseeability was clearly a “given” and could not have been viewed as a defense. Please also note Mlynarczyk, Kertis and Admiral Mechanical, the other new and controversial “traveling employee” Appellate rulings were completely indefensible, as all the accidents and injuries were locks on the issue of “foreseeability.”

4,609 Americans died on the job in 2011. About 40 percent of work-related fatalities were roadway incidents involving motor vehicles. Smaller numbers of work-related fatalities involved slips, trips, and falls, workers struck by objects and equipment and workplace violence which included 458 homicides. Illinois has now expanded coverage for fatalities to non-work-related risk for TE’s. We ask the rhetorical question—what is there to litigate about the “foreseeability” of a motor vehicle accident going to and coming from work? What is there to litigate about the “foreseeability” of an unexplained slip/trip, fall-down or homicide making the trek to or from your job? Isn’t all human error, poor judgment and/or bad luck arguably “foreseeable?” Illinois used to provide workers’ comp benefits with concerns to litigate what is an "accident" have been swept away by these unprecedented, judicially created and Illinois-only rulings and ill-defined legal standards.

Please understand in the IL WC setting if the truck driver mentioned above with a personal Harley-Davidson needs a spinal fusion and later can't drive a truck due to non-work-related motorcycle vibration, jostling and bouncing, the reserves for such a claim could be well over $1 million for the surgery, post-surgical care, TTD and the expected wage loss differential claim. Our client, his employer will owe such benefits "as a matter of law" under current rulings—in our view, the IL Appellate Court has stripped out all defenses for TE's. What they haven't addressed is how Illinois employers can possibly control these shocking new exposures and costs.

The risk management question we ask our readers is simple--if we owe for his pain and problems due to motorcycle riding, can we order him to stop riding his hog to and from work? Should we start vehicular safety training to address safety while traveling? Can/should Illinois employers inspect and approve all conveyances that bring traveling employees to and from work? If there are lots of injuries and accidents, are they OSHA-recordable? Will OSHA start to supervise safety protocols in this setting? Going further, can we order such workers not to make personal or recreational stops for any reason on the way to and from work? Can we ask them to sign forms/releases confirming if they do make such stops, they will be sanctioned leading to termination?

What Do You Think This Expansion of the Traveling Employee Concept Will Cost? Please Give Us Your Thoughts.

The total cost of workers’ compensation insurance to U.S. employers is more than $95 billion annually. We estimate the IL WC Commission handles about $3-5 billion in WC benefits each year. According to the U.S. Bureau of Labor Statistics, 3 million nonfatal workplace accidents occurred in the United States in 2012. Most of these cases, almost 95 percent, involved occupational injuries while workplace illnesses accounted for the other five percent. Try to imagine our IL WC system adding the cost of non-work-related injuries/illnesses going to-from work and during lunch/coffee breaks.

Right now in the IL WC system, we are certain all construction workers, staffing and transportation workers are TE’s; the IL Courts have clearly defined them as such. Similarly, most all government workers are TE’s. We don’t know how to “cost out” what this new WC coverage will cost our clients and readers.

Right now, our law partners are debating what the new “traveling employee” expansion is going to cost you. Some of us feel it will be a complete monetary disaster for all industries affected by these rulings. In contrast, one of our law partners feels it may be only a 5% bump. It is the consensus of most of the defense attorneys in our firm the biggest catastrophe about the newly expanded concept is going to be in government. Other than the few people who only work at a single desk in a given City/County Hall, basically all other government employees are now “travelers.” For example, police/firemen/EMTs all “travel” as an essential part of their work. All building/electrical/plumbing inspectors and streets workers “travel.” We think the WC costs for IL counties, townships and municipalities can be expected to at least double.

We are asking our readers—what do you think? What is this going to mean for your organization to have to include non-work-related injuries with work injuries? We appreciate your thoughts and comments. Please feel free to post them on our award-winning blog.

            ---------------------------

Synopsis: IL Employers Now Have to Revisit Company Vehicle Provision/Maintenance/Use.

Editor’s comment: We want our readers to also understand a related and new IL WC coverage expansion--if you allow workers to use company vehicles when off work, two Appellate Court rulings confirm you are now a guarantor under IL WC of their health and safety for all activities they do with the vehicle during, after and before work. We aren’t making this up, folks.

If you let them use the company or government vehicle for personal, off-work use, we assure you that you now owe

·         IL WC benefits if they are injured driving their children to a ball game;

·         If they are injured at a grocery store buying groceries and get hit in the parking lot;

·         For all risks, injuries and illnesses using company vehicles on weekends and holidays.

Our further suggestion is to consider requiring/ordering workers to limit personal use for trips going to and coming from work. You might want them to use the work vehicle only to go to and from work sites. Try to insure they have alternate personal vehicles so they aren't using your car or truck on weekends and holidays. Make sure company vehicles are kept in safe condition and regularly inspected.

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

                -------------------------------

Synopsis: Illinois Appellate Court rules a change in pathology or nature of an injury constitutes an intervening accident, unless you’re talking about an award for permanency. Analysis by Timothy J. O’Gorman, J.D.

Editor’s Comment: Petitioner in National Freight Industries v. Illinois Workers’ Compensation Comm’n suffered two injuries involving his low back while working for two separate employers. The first occurred in 2006 while pulling boxes of freight off a truck, Petitioner experienced a “pop” in his low back and felt sharp pain radiating into his right leg. Petitioner was working at Fischer Lumber at the time of his first injury. Petitioner continued to treat for this injury and went back to work for National Freight in 2007. While working as a driver for National Freight, the second Respondent, Petitioner was involved in a motor vehicle accident in 2008.

At hearing, the Arbitrator found Petitioner’s 2008 incident proved to be an intervening and superseding event at which point Fischer Lumber’s liability was cut off. The Commission affirmed the decision of the Arbitrator seemingly placing the bill at the feet of whichever employer a Petitioner works for last in regard to TTD/medical benefits. The IWCC also affirmed the decision that since no MMI date had been established on the first accident, permanency could not be determined regarding the first injury. According to the Commission, National Freight Industries would have to pay the full brunt of Petitioner’s remaining benefits for both indemnity and medical.

Petitioner appealed and the case was affirmed by the Madison County Circuit Court which resulted in three consistent opinions. Petitioner appealed to the Illinois Appellate Court, Workers’ Compensation Division—their ruling went contrary to all three lower court decisions and overturned the decision of the Commission on the issue of permanency. The Appellate Court found Petitioner was able to maintain his claim to permanency against both Respondents National Freight & Fischer Lumber whereas the three previous decisions only allowed for a permanency determination against National Freight.

The reason the three previous panels disallowed a permanency determination against Fischer Lumber is because Petitioner was not yet at MMI at the time of what we feel should have been intervening and superseding accident. Typically, no one can make a determination of how permanent a condition will affect someone’s ability or disability until a doctor finishes treatment and declares Petitioner as good as they are going to get. After that, the parties and the judge/Commissioners can make a determination as to how the injury will affect their life. Until that point, no one knows how much or little a person will improve with more treatment.

The decision of the Appellate Court now creates a scenario where an interim permanency determination will be left to what we feel is speculation which, by definition, is typically not allowed to be taken into account. Our penultimate reviewing court apparently will not allow the concept of “intervening and superseding” event to apply in our state—it is almost as if two or more injuries to the same body part have to mystically result in two or more permanency awards, as a matter of law.

IL Employees and employers may now have to fight over how disabled someone “could have been” at the end of treatment for an initial accident without any medical evidence pointing one way or the other. The IL Appellate Court has changed the way employers will now have to view an employee’s course of treatment and the goal to bring Petitioner’s back to MMI is more important than ever.

If any of our readers have questions regarding this or any workers’ compensation matter, please feel free to call Tim O’Gorman at (312)-756-3724 or email him at togorman@keefe-law.com.