March 23, 2015

Notices and more

March 23, 2015/ Eugene Keefe

Synopsis: Government Refusal to Offer Light Work Under IL Work Comp – A Secret Scandal for Springfield to Address

Editor’s comment: Before we start raising taxes, someone please tell us we are going to first run all IL government(s) better.

In brief, we ask legislative action be taken in Springfield to investigate this secret scandal and draft/pass legislation requiring all IL government bodies to have light work programs immediately put into place. Please also note these government bodies are large employers, so the State’s overall workers’ compensation premium measurements are skewed due to their continued mismanagement—on a national level, this projects a poor business environment. Please further note ITLA can’t blame these high WC payouts on “greedy insurance companies”—these monies are misspent by government workers mismanaging return to work issues on accepted WC claims.

Right now, the State of Illinois, City of Chicago, Chicago Park District and Chicago Transit Authority are paying literally hundreds of millions of dollars in workers’ compensation benefits. The State has to be paying over $150M a year in workers’ comp benefits. The City is paying over $100M each year and the Chicago Transit Authority and Chicago Park District are paying over $50M per year. It is not a coincidence all those government bodies are awash in red ink. If light work programs were required for all state and local gov’t bodies by our IL General Assembly we assure our readers the savings to taxpayers would be immense. We further assure you with all the conviction possible, other than California, no U.S. State Government or City the size of Chicago pays anything like the amount we routinely waste on workers’ compensation benefits.

Our sources indicate none of those government bodies are providing light work for their injured employees. To our understanding, Cook County started a light work program under their current chairperson—she had to argue with some of the elected county officials to do so. To our further understanding, the long-time alderman in Chicago who runs the City’s WC “defense” system will not provide light work for City employees unless legislation in Springfield requires it. The Chicago Tribune has asked and asked him about this issue and they are routinely ignored.

Should Your Tax Dollars Be Used for Funding of Political Work by Former Gov’t Workers Now on TTD and Lifetime TPD?

One reason light work isn’t offered to state and local government workers is to insure the workers are indebted and forever beholden to their political patrons. Once on never-ending TTD or lifetime TPD, the workers remain loyal political hacks for the folks endlessly giving them our tax dollars. Would you do sporadic political work for someone who would insure you are paid for years and years not to have to perform real day-to-day work? Could this be a reason there hasn’t been a Republican Party in Chicago in several generations? How can you have a two-party system if the party-in-power can pay former workers the rest of their lives to perform political tasks when the occasional elections occur?

There is No Question Light Work is a Major WC Money-Saver; How Can Anyone Dispute That?

Light work as a path to return workers to some work and progressing back to their former jobs is an unquestioned money saver in workers’ comp claims across the globe. We know of no reason a business or government wouldn’t provide light work or early return to work for their injured employees—it is a complete no-brainer. As taxpayers, we assure you our money is being thrown away by the barrel. Thousands of articles and books on the topic are out there on the web. If you want samples, send a reply.

We also feel light work programs are, to some extent, mandated by the Americans With Disabilities Act—every injured worker we are talking about in this article has permanent restrictions and is kept out of the workplace on an indefinite basis. The ADA requires “reasonable accommodation for qualified individuals with a disability.” An injured worker with restrictions precisely meets that definition but none of these governing bodies offer “reasonable accommodation,” they simply continue to pay tax-free weekly TTD and, as you will read below, weekly total and permanent disability benefits indefinitely. The government workers don’t file EEOC charges because they are being paid so well to do nothing.

Here is How This IL Gov’t Workers’ Comp Catastrophe is playing out:

For example, a City Streets and Sanitation worker gets injured—let’s say they have a routine shoulder surgery. They are given a 40lb lifting restriction. They are allowed to stay off work and on temporary total disability (TTD) indefinitely, even though there are numerous well-paid administrative, dispatch or “no touch” truck driving jobs they could be switched to perform. There are workers still on TTD for 3, 5, even 10 years—they are no longer receiving any medical care, they are simply allowed to stay off work and keep getting paid. Light-duty jobs open up and are filled by other workers when the folks on TTD could be put into such work. In many settings, temporary workers are used in open positions instead of the injured worker on restrictions.

After several years on TTD, the governments above then will make a decision on:

1. Total and permanent disability under the goofy “odd lot” theory. This concept was judicial legislation that comes from an IL Supreme Court ruling named E.R. Moore v. Industrial Commission. The main reason we call it judicial legislation is the words “odd lot” don’t appear in the IL WC Act and they are not defined in any legislation. The Supreme Court said an “odd lot” total and permanent disability is someone who is injured at work with restrictions, hasn’t returned to work and can’t find an alternative position anywhere else. When those three factors are present, it is incumbent on the employer to either offer an alternate job or demonstrate the availability of alternate work. The State of Illinois, City of Chicago, Chicago Park District and CTA, never do that. We assure you all governments outlined above have numerous positions open up every year. They could take folks off TTD/TPD, train them and put them in such jobs to save taxpayers money and get their people back to gainful employ. They almost never, ever do so. We are told the State of IL is paying several million in weekly T&P benefits that could be stopped right now, if the workers being paid lifetime benefits with COLA increases were brought back to available light jobs.

2. The other theory is “fake” wage differential settlements. Under Section 8(d-1) of the Act, an employer is required to provide lifetime wage loss differential benefits to someone who can return to lower-paid light work. When a worker is left off work for years, at some point, the government agency or its outside WC administrator agree the employee could locate a minimum wage job and will provide a significant lump sum settlement by discounting the overall lifetime liability. The reason we call it a “fake” wage diff settlement is the worker doesn’t have to actually get a job, the government agency will just assume they can only get a minimum wage job. We were advised the City of Chicago is paying such settlements in amounts like $250K-$350K to workers who haven’t had a single surgical intervention and have been receiving years of TTD. Once the worker settles and gets the giant check, they return to work outside city gov’t wherever they want at the highest pay they can find.

Please note this scandal is not common to almost all Illinois governments, just the biggest ones. For a single and exceptional municipal example, the City of Naperville has a very aggressive return to work program and does everything they can to get an injured worker back into some sort of position as soon as they are medically able to do so. Here is a shining example of their long-time and great focus on this issue: http://www.usfa.fema.gov/pdf/efop/efo28156.pdf

To investigate and develop the extent of this continuing and secret scandal, we would suggest someone send a FOIA request to the various government agencies to ask:

· How many pending workers’ compensation claims do you have?

· Do you mandate a light work/return to work program for all agencies? If not, why not?

· How many of your workers have been on TTD for over a year?

· How many of your workers are receiving weekly lifetime “odd lot” total and permanent disability benefits?

· How many new workers were hired by you in the last year?

· What new or open jobs were filled?

· Were the injured workers considered for any of the open positions?

· What current efforts are being made to return all injured workers to modified or limited duty, and/or retraining for other available positions?

· How many WC settlements over $200,000 were made by your government in the last two years? What was the basis for such settlements?

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

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Synopsis: IL Appellate Court nails another one in confirming IL WC Commission is the proper and exclusive venue to determine questions with regard to workers’ compensation benefits in Illinois. Analysis by Shawn R. Biery, J.D., MSCC.

Editor’s comment: The 5th District Appellate Court ruled the Illinois Workers' Compensation Commission, not the Circuit Court, has exclusive jurisdiction to decide whether a claimant who settled a third-party lawsuit resulting from a work related accident may also pursue workers' compensation benefits from his employer after resolving the initial lien.

In Bradley v. City of Marion, http://www.state.il.us/court/Opinions/AppellateCourt/2015/5thDistrict/5140267.pdf Plaintiff Bradley had been injured in an automobile accident while working for the City of Marion and initially sought recovery from the motorist who arguably caused the accident. He settled that case for $650,000 and as part of the settlement Bradley reimbursed Marion $190,112.89 for their current workers' compensation benefits it had paid and voluntarily dismissed his workers' compensation claim after Marion and its insurer, the Illinois Public Risk Fund, released the existing lien in writing. Bradley then filed a new workers' compensation claim after the City and its insurer released their lien and the City argued Bradley waived his right to further workers' compensation benefits when he settled the third-party suit and received the lien release.

Bradley filed a complaint for declaratory judgment at the Williamson County Circuit Court with his argument there was no waiver or closure of workers' compensation benefits without approval by the Workers' Compensation Commission—and the IWCC had not approved any waiver.

Marion/Public Risk filed a counterclaim and requested declaratory judgment for breach of contract and also argued Bradley waived his right to benefits. The trial court decided there was no jurisdiction to consider the disputes since benefits under the Workers' Compensation Act were the sole function of the Commission who had exclusive jurisdiction and the Appellate Court affirmed there was no jurisdiction for the same reason.

Both sides of the bar can understand the frustration of a case where there is a third party issue, and with a settlement for $650,000 which included reimbursement of $190,112.89 for benefits for WC benefits paid, it seems reasonable for Marion and its defense counsel would have considered the WC claim ended with the voluntary dismissal. Realistically, in hindsight they would have been much better with a $1 WC settlement contract along with return of the lien amount. The Act is very clear in Section 23 in noting a claimant “cannot waive the amount of compensation which may be payable to the employee except after approval by the Commission”. 820 ILCS 305/23.

There appears to be a strong argument the lien release “contract” has a substantial issue and no proverbial “meeting of the minds” occurred based upon the significant amount achieved over the lien amount and lack of incentive for Marion to leave additional benefits open and it would appear the best result for each party would be for rescission of that agreement and either some final settlement approved by the IWCC or ongoing benefits to be credited at 75% until the third party settlement value is exhausted. We will report on the outcome of the claim as it is determined.

One final thought—there have been a plethora of new actions in Circuit Courts in Illinois attempting to circumvent the IL WC Act and directly sue industry components with attempts at

Ø “Assignment of rights” (which is specifically not allowed for certain portions of WC claims) or

Ø Interest on unpaid medical bills.

This is generating anti-business and anti-insurance carrier/TPA litigation outside of the IL WC Commission jurisdiction. For those reasons, it is good to see the Appellate court confirm the exclusive jurisdiction of the Commission for benefits under the IL Workers' Compensation Act.

This article was researched and written by Shawn R. Biery JD, MSCC who can be reached at sbiery@keefe-law.com with any comment or question.

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Synopsis: IL WC Housekeeping News and Notices.

Editors’ comment: Effective April 1, 2015 Arbitrator Friedman will take over the docket previously assigned to now-IWCC-Chair Fratianni in Zone 5 and Arbitrator Hegarty will take over the docket previously assigned to new Commissioner Luskin in Zone 6. All documents and correspondence related to these dockets should be forwarded to their attention effective immediately.

Please be advised New Lenox Village Hall will be closed on April 3, 2015 in observance of Good Friday. The status call scheduled for Friday, April 3rd will be moved to Monday, April 6th. All trial dates will remain unchanged. Notices will be mailed to all interested parties.

Please be advised the Woodstock hearing site will be closed on April 3, 2015 in observance of Good Friday. The status call will remain on Wednesday, April 1st, and there will be an additional trial day on Thursday, April 2nd.

March 16, 2015

3-16-15; We Now Need Anti-Assignment Clauses in IL WC Settlement Ks by Brad Smith; Legal Update on Release/Resignations by Brad Smith; Dan Boddicker on Iowa Bad Faith Decision and more

March 16, 2015/ Eugene Keefe

Synopsis: Head Off the Latest IL WC “Sneak Attack” on Settlement Contract Finality—You Now Need an Anti-Assignment Clause! Analysis by Bradley J. Smith, J.D.

Editor's Comment: We recently saw a revoltin’ development where a self-insured IL employer settled a fairly simple IL WC claim for less than $1,000. Having settled the matter, everyone assumed the claim was paid and closed. The next thing we saw was a Circuit Court lawsuit by a medical provider in the settled WC claim for thousands of new dollars against the employer and third party administrator. The medical provider claimed they have “standing to sue” because the patient signed an “assignment of their rights” to allow the provider to try to collect directly from the employer and outside the IL WC system. In our view, on the first office visit, the “pro-assignment” medical providers are giving the patient a bunch of documents to complete and sign like a medical history, HIPAA-GINA release and they sneak in an assignment of the rights of the employee to collect the medical bills in Circuit Court if they remain unpaid at the time of WC settlement. We would assume very few injured workers would have the slightest idea of the legal nature of the document they are signing.

When we first saw this new phenomena, the defense team at KCB&A was able to extricate our client, the TPA from the Circuit Court mess. We understand the employer settled with the medical provider for a substantial amount of money but much less than the actual medical bills being claimed. Their general counsel is a very solid and veteran attorney who immediately understood defending the claim would cost more than the eventual settlement amount. Please note the company still had to pay the Circuit Court appearance fee and other court costs, along with obtaining counsel to defend—we assume there is no one in the IL WC defense industry who would like to defend such a claim after you think you have put the WC claim completely to bed via settlement. We also aren’t sure how the insurance industry is going to handle/cover such claims, as they are only supposed to be insuring for WC exposure at the IL WC Commission and not this new and odd liability in the Circuit Courts.

But the fact the litigation started at all is what we want the IL WC defense community to understand, anticipate and take steps to prevent. In our view, these recent developments should require you to explicitly include a clear anti-assignment clause in your IL WC settlement contracts to protect against direct civil lawsuits by workers’ compensation benefit providers in a post-settlement setting.

We feel all IL workers’ compensation defense attorneys have to become vigilant and insure they are using “air-tight” workers’ compensation settlement contracts. Particularly, the recent issues with Petitioners putatively assigning (whether knowingly or unknowingly) their workers’ compensation benefits has come to the forefront. In our view, these purported assignments of benefits are clearly in violation of the intent and purpose of Section 21 of the IWCA. Nonetheless, to fully protect our clients, KCB&A is now incorporating language in our workers’ compensation settlement contracts confirming there has been no assignment of any workers’ compensation benefits by Petitioner and further requiring an explicit agreement there will be no assignment of any potential current or future payments in violation of the IWCA.

Under Section 21 of the IWCA, “[n]o payment, claim, award or decision under th[e] Act shall be assignable or subject to any lien, attachment or garnishment….” Obviously, due to the clearly delineated provision of the IWCA, workers’ compensation benefits are ostensibly non-assignable. Regardless, it has recently come to light in Illinois the liberal Circuit Court Judges are outlining differing opinions related to the non-assignability of workers’ compensation benefits. Although some Judges agree, others are allowing civil claims from private medical providers to continue against employers, insurers, and/or Third-Party Administrators.

Despite the ostensible invalidity of any procured assignments, we feel language has to be included in IL WC settlement contracts delineating the non-assignability of any past or present benefit, and further to obtain confirmation from Petitioner that they have not and will not assign any of their workers’ compensation benefits in aberration and contradiction of the IWCA. Clearly, as a workers’ compensation settlement is generally reached to close an open claim, or to lock-in any further benefits solely for Petitioner, something must prevent them from assigning their rights under the IWCA. Although it is highly likely Illinois courts will eventually catch on to these arguably subversive tactics, to anticipate and counteract them, your defense attorneys must understand and implement certain provisions into the workers’ compensation settlement contract to seek to protect against these types of collateral civil claims.

Moreover, to properly protect against any purported assignments in violation of the incorporated anti-assignment clause, there should be further language that in the event an invalid assignment was made and any claim is brought against the employer, insurer, and/or Third-Party Administrator under the arguably void assignment, Petitioner and/or his attorney should have the duty to indemnify, hold harmless, and defend the Employer/Respondent if a Circuit Court claim is filed. These indemnification clauses may help to allocate risks of future lawsuits for the workers’ compensation benefits that were supposedly settled within the workers’ compensation litigation. We have sample language for the IL WC industry to consider.

The research and writing of this article was performed by Bradley J. Smith, J.D. Bradley can be reached with any questions regarding this article, workers’ compensation, employment law, and general liability defense at bsmith@keefe-law.com.

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Synopsis: Getting Rid of Trouble-Makers 101. More Great Legal Analysis by Bradley J. Smith, J.D.

Editor’s comment: We are concerned your Release/Resignation Agreements May Not Be Compliant with OWBPA. Many of our defense clients want us to settle the WC claim and simultaneously make sure Claimant

· Leaves their employ and

· Doesn’t file any other claims against the client at the EEOC, Illinois Department of Human Rights, Circuit Court retaliatory discharge claims, union grievances or anything else.

One growing concern as our working population keeps aging are the additional rights and benefits that may be due to workers who are over 40 years of age. Such workers can file age discrimination claims if they feel they were canned/let go due to their age. To obtain a valid release of an age discrimination claim you must comply with certain requirements under the OWBPA. In 1990, Congress amended the Age Discrimination in Employment Act (ADEA) by passing the Older Workers Benefit Protection Act to establish specific requirements for a “knowing and voluntary” release of ADEA claims. Particularly, the OWBPA requires seven factors be present within the release/resignation agreement to be considered a “knowing and voluntary” release of any cognizable ADEA claims.

Those factors are:

1. A waiver must be written so it can be clearly understood by individuals at the level of comprehension and education of the average individual eligible to participate. In addition, the waiver must not mislead, misinform, or fail to inform participants and must present any advantages or disadvantages of agreeing to the waiver.

2. A waiver must specifically refer to rights or claims arising under the ADEA by name.

3. A waiver must advise the employee in writing to consult an attorney before accepting the agreement.

4. A waiver must provide the employee at least 21 days to consider the offer. The 21-day consideration period runs from the date of the employer’s final offer. If material changes are made to the final offer, the 21-day period starts over.

5. A waiver must give an employee 7-days to revoke his or her signature. The 7-day revocation period cannot be changed or waived by either party for any reason.

6. A waiver must not include rights and claims that may arise after the date on which the waiver is signed.

7. A waiver must be supported by consideration in addition to anything to which the employee is already entitled.

Unfortunately, if a waiver of an ADEA claim fails to meet any of the aforementioned requirements, it is invalid and unenforceable. Consequently, it is recommended to include appropriate language in the release/resignation agreement compliant with the requirements of the OWBPA so that you can obtain a full release of a claimant’s potential ADEA claims. Unfortunately, an individual cannot waive his or her right to file a discrimination charge with the EEOC or to participate in an EEOC investigation. Consequently, an executed release/resignation agreement cannot validly prohibit an individual from exercising his or her rights to file a charge or to participate in the investigation.

Even when the release/resignation agreement is acquiescent with the OWBPA, a waiver of ADEA claims, like waivers of Title VII and other discrimination claims, will be invalid and unenforceable if an employer used fraud, undue influence, or other improper conduct to coerce the employee to execute the waiver. Numerous courts have found ADEA waivers invalid for failing to meet just one of the many statutory requirements, especially when groups or classes of employees are involved.

The professionals at Keefe, Campbell, Biery & Associates, LLC recommend our clients consider OWBPA compliant language when seeking a release/resignation agreement. Missing one of the 7 factors outlined above could be fatal to obtaining a valid waiver of any potential age discrimination claims. The research and writing of this article was performed by Bradley J. Smith, J.D. Bradley can be reached with any questions regarding employment law and general liability defense at bsmith@keefe-law.com.

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Synopsis: Iowa WC Insurers take notice! Multi-Million Dollar Bad Faith Verdict Resulting from an Iowa Workers’ Compensation Denial. Analysis by Daniel J. Boddicker, JD. who is open for our KCB&A defense business across the great State of Iowa!

Editor’s Comment: On February 11, 2015 a Pottawattamie County, Iowa jury returned a verdict including $25 million in punitive damages in a bad faith claim. In Thornton v. American Interstate Insurance Company, Plaintiff Toby Thornton (“Thornton”) filed to recover damages against American Interstate Insurance Company (“American”) for bad faith and abuse of process following American’s actions in defending Thornton’s Iowa workers’ compensation claim. Thornton was working as a truck operator for Clayton County Recycling on June 25, 2009 and he was injured when his truck rolled and crushed the cab with him inside. Among his injuries Thornton suffered several vertebral fractures, leaving him paralyzed from the chest down, entirely without the use of his left hand and with only minimal use of his right hand. Soon after the date of accident American set aside a lifetime reserve based on permanent total disability (“PTD”) for Thornton’s claim. American calculated maximum statutory weekly benefits and began weekly payments dating back to June 26, 2009. Weekly payments continued until June 6, 2014, when American paid Thornton’s partial commutation in a lump sum.

In Iowa an insurer acts in bad faith when it (1) has no reasonable basis for denying an insured’s claim and (2) knew or had reason to know its denial or refusal was unreasonable. The parties disagreed over whether Thornton’s claim was denied. American accepted the claim and paid weekly benefits, without designating Thornton as a PTD, and without agreeing to stipulate to a partial commutation of Plaintiff’s benefits. Before the Commissioner in the workers’ compensation claim, American denied Thornton’s PTD petition, moved to reconsider the adverse finding, and later denied a partial commutation of Thornton’s benefits was in his best interests.

Thornton identified four different instances of denial: (1) failure to classify Thornton as permanently totally disabled even while providing weekly payments, (ii) failing to agree to a partial commutation of benefits, (iii) denying both PTD and a partial commutation at the workers’ compensation trial, and; (iv) moving for reconsideration of the Commissioner’s adverse finding. On summary judgment the court found American took a course of action which first challenged and ultimately denied Thornton’s PTD status and eligibility for partial commutation, and if successful would have reduced or cancelled Thornton’s benefits. The court held Thornton’s claims were denied.

On the issue of whether a reasonable basis existed for denying Thornton’s claims, the court noted to avoid bad faith liability an insurer may only challenge those claims that are “fairly debatable,” and may only delay commencement of benefits for a period that is “necessary for the insurer to investigate the claim.” The court noted either will establish a reasonable basis for denial or delay, but that reasonable basis must exist at the time of the denial. American contended its denial of Thornton’s claim for PTD benefits was reasonable because: it paid weekly benefits while investigating and later challenging the claim; it had a right to file an answer; it was investigating the possibility of vocational rehabilitation for Thornton; no bad faith penalty benefits were awarded at the underlying workers’ compensation trial and it wished to force a reasonable settlement. The Court held none of the arguments established a reasonable basis for challenging Thornton’s claim.

The court took notice American was made aware of the nature of Thornton’s catastrophic injuries almost immediately. American investigated whether its liability could be offset by training Thornton to perform new or modified job tasks. American sought the advice of three practitioners none of whom indicated Thornton was a candidate for vocational rehabilitative services. The court further noted American was informed by its counsel Thornton was both clearly eligible for PTD benefits and a partial commutation of his benefits would very likely be found to be in his best interests. Prior to trial, American learned Thornton would not be released for vocational rehabilitative services by his insurance-assigned physician. American chose to go to trial because it “wanted its day in court” in order to make a favorable settlement more likely. The court held American put off granting Thornton’s PTD and partial commutation requests as long as possible in order to force a settlement at less than the full policy amount despite knowing Thornton’s claim was not “fairly debatable”. The Court held there was no reasonable basis for denying Thornton’s claims.

The Court also held given the severity of Thornton’s injuries and the lack of any factual basis in the record upon which “reasonable minds could differ,” American knew or had reason to know it had no reasonable basis to deny Thornton’s claim for PTD and partial commutation once its counsel advised it of such. After granting summary judgment on liability, the Court returned the matter for trial on damages only. The Iowa jury in Pottawattamie County gave a resounding message to Iowa insurers the actions taken by American are not welcome, finding $284,000 in compensatory damages and $25,000,000.00 in punitive damages.

It is important to follow this and other similar rulings that affect Iowa insurers. We recommend contacting our firm to discuss your potential liabilities and/or defense of any litigation. This article was researched and written by Daniel J. Boddicker, JD. Dan can be reached with any of your questions or concerns regarding Illinois or Iowa workers’ comp, municipality defense and or general liability defense at dboddicker@keefe-law.com. Our new Iowa office address is 1103 Buckeye, Suite 104, Ames, IA 50010.

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Synopsis: With Our Deepest Respect to a Great Jurist, Here is Our Answer to Your Pension Question, Justice Thomas.

Editor’s comment: We listened to the arguments made before the IL Supreme Court last week about the viability of government pension reform. Our Attorney General is trying to keep the government pension reforms in place to protect IL taxpayers and avoid chaos. Justice Robert Thomas appropriately asked how there could be an “emergency” about our spiraling gov’t pension problem when our state income tax just decreased.

Our answer is there wasn’t a true “emergency” when the RMS Titanic hit an iceberg. By that we mean, the contact with the large iceberg didn’t cause any injuries or require anyone to get immediate care. What actually happened when the iceberg struck the side of the ship was to set things in motion so the great ship and many of its passengers and crew would be on the bottom of the ocean in rapid course. That was the true emergency.

Right now, IL taxpayers have awoken to learn our State Government is on its way to the bottom of the financial ocean. We pay lots more to our state workers after they are done working for us than when they were actually doing their jobs. No government or business can do that—it is a financial model that is certain to sink and it is just a matter of time for that to occur. IL government pensions are similar to a Ponzi scheme—they are doomed to fail. Please note we owed about $52B in debt in 2009 and the amount has more than doubled to what is now a shocking $110B in debt. Like other credit card junkies, we now owe both enormous principal and interest and still have to keep borrowing to make payments. As our leaky financial boat keeps taking on more debt, the State may soon be over $150B, $200B, $250B or more in debt in five more years. At some point, someone in the financial markets is going to “pull the plug” on more borrowing. That is what happened to the City of Detroit where they borrowed and borrowed until their ship sank. Unless we change IL law either through the legislature or by amending the Constitution, that is where IL Government is certain to go. We consider that state of affairs an awful future for every Illinois citizen to contemplate.

We don’t think our legislators can tax their way out of this looming financial cataclysm. The fake government pension system has to be changed and we hope our highest court allows the changes to stand. We appreciate your thoughts and comments. Please post them on our award-winning blog.

March 09, 2015

3-9-15; Retirement Ends TTD Entitlement--Big Win by Jim Egan; Lots of WC and Other Goings On in Springfield;; Please Act to Stop the Use of Pot in Your Workplace and Why and much more

March 09, 2015/ Eugene Keefe

Synopsis: Undisputed Retirement Ends Entitlement to Temporary Total Disability in Illinois Workers’ Comp—Big Win by Jim Egan, J.D.

Editor’s comment: In a case tried and argued on appeal by KCB&A partner Jim Egan, J.D., the Illinois Appellate Court, WC Division ruled a municipal worker wasn't entitled to temporary total disability benefits after he voluntarily retired from his job, nor was he entitled to permanent total disability benefits because he failed to prove his inability to work.

In a decision published on February 27, 2015, the Court in Sharwarko v. Illinois Workers' Compensation Commission, No. 12-L-51346 carved out what may be an exception to Interstate Scaffolding, a decision that has vexed the defense industry. The Court also affirmed prior decisions that in order to attain “odd-lot” permanent total benefits a claimant must show diligent but unsuccessful attempts to find work or by showing he/she will not be regularly employed in a well-know branch of the labor market because of age, skills, training and work history.

Petitioner Sharwarko worked for the Village of Oak Lawn as a water and sewer inspector. He injured himself when he banged his elbow against a concrete wall while installing a water meter in April 2006.Petitioner was diagnosed with right median and ulnar nerve neuropraxia. While undergoing physical therapy Sharwarko was given medical restrictions on use of his right hand, which the Village accommodated. After conservative treatment failed Petitioner underwent a right carpal tunnel release and a right cubital tunnel release in August 2006. He was again to return to work, subject to restrictions on use of his right hand, in late September. The following month, in response to an offer which was made to all employees, Petitioner elected an early retirement in October/November. The Village paid him temporary total disability benefits from the date of his surgery, until the date of his retirement. Sharwarko continued to receive medical treatment after his retirement, and he continued to complain of pain. He underwent a second surgery in May 2007, but he continued to report pain, tingling and numbness. Doctors placed him at maximum medical improvement in August 2011.

An Arbitrator found Sharwarko suffered an injury to his right elbow and ulnar nerve in April 2006, which entitled him to 188-3/7 weeks of temporary total disability benefits. The Arbitrator also awarded him permanent partial disability benefits for an 80% permanent loss of use of his right arm. The parties filed mutual appeals, the Village asking for reversal of the TTD award, Petitioner seeking reversal of the permanency award and other issues. The Workers' Compensation Commission modified the arbitrator's decision by reducing the Sharwarko's TTD award to 10 2/7 weeks of benefits – having them end on the date Sharwarko retired. The Circuit Court confirmed the Commission's decision.

The Appellate Court held that by retiring, Sharwarko had told the Village he had no intention of returning to the workforce. The Court agreed with the Commission's finding that his retirement was the equivalent of refusing the accommodated duty which the village had provided before his first surgery and it had said it was willing to continue to provide. The Court also said it agreed Sharwarko wasn't permanently and totally disabled. Although his vocational expert opined that Sharwarko wouldn't be regularly employable in any well-known branch of the labor market, the Court said the Commission didn't need to accept this opinion just because the Village didn't present a vocational expert of its own.

Much of this decision was based upon manifest weight of the evidence and isn’t a true “legal” ruling. Petitioner failed to provide evidence that he was taken off work by any of his doctors after his early retirement and because they failed to provide any job search after he was placed at MMI. Petitioner’s counsel relied upon one doctor who took Petitioner off all work. The Appellate Court ruled the Commission’s decision’s were not against the manifest weight of the evidence. The Court further held the Commission’s decision to rely upon the opinions of at least three other doctors who opined Petitioner could work with limited use of the right arm/hand as well as the testimony of the employer that work was available within the restrictions, had Sharwarko not retired.

The decision on TTD is actually a very narrow exception. It is not often an employer can offer its’ entire work force an early retirement option and there was no evidence offered that Petitioner was held off work at any time after the retirement. It is very likely some TTD would have been awarded. Regarding odd-lot PTD benefits the decision was instructive on both sides of the bar. Respondent employers have to be able to show through testimony and vocational reports/job studies that work is/was available. Petitioners cannot just roll out a vocational assessment that does not consider all of the medical evidence and does not consider a job search at all.

We applaud the Court’s ruling as a common sense approach to these simple facts. This article was researched and written by Jim Egan, J.D. He can be reached at jegan@keefe-law.com.

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Synopsis: Whole Lotta Shaking Goin’ On In Springfield and Elsewhere in State Pensions and Workers’ Comp This Week.

Editor’s comment: Here are a myriad of concerns for Illinoisans from our State Capitol.

First, on Wednesday, the IL Supreme Court is going to hear debate on three of the five IL State fake pension programs. If you aren’t sure, Illinois has a miserable worst-in-the-country credit rating because our State leaders have borrowed over $110B, yes Billion to keep up with the lavish fake pensions and lifetime taxpayer-funded healthcare money for anyone lucky enough to get vested in these three state fake pension plans.

We caution our readers to also note nothing, absolutely nothing is being done about the legislative or judicial fake pension plans. These two plans provide insanely-high lottery-winning-level benefits to the participants who don’t have to contribute even one year’s pay to then get all their contributions back in a year and actually will get more fake pension money annually than they made while working. To our readers who complain the State didn’t “fund” the pensions as promised, we assert the pensions can’t be fully funded due to the huge amounts of money needed to provide the benefits to which judges and legislators are entitled.

· If you think we are making this up, please understand Judy Baar Topinka, may she rest in peace, was a state legislator for only six years. Her highest salary was $60K. When she passed, she was receiving $150K a year from that fake pension plan—how can you possibly contribute enough money to annually pay someone 2-1/2 times their highest salary with annual increases for life? If Judy has lived to 90, she would have gotten around $4M from IL taxpayers in return for her total fake pension contribution of about $36K.

· Judges/justices get a similar deal. They can retire after only nine years. They make $203K a year and would first get around $170K from the fake pension annually with 3% compounded increases—in less than five years, they would get more than they made when they were working. Lots of judges and justices are starting to note there is no reason to endure the stress and continue to sit behind the bench after they are vested. We feel the cost to IL taxpayers to fully fund judicial fake pensions would require annual fake pension contributions for each judge of about $400-500K a year—this would be over and above an annual salary that pays judges more than our Governor. They can receive $9M over their lifetimes for just nine years of wearing their robes—if you want that math, send a reply. We again emphasize this fake pension and the legislative fake pension aren’t being reformed or debated on Wednesday.

Please always remember the “pension clause” protecting fake pensions in Illinois that will be debated on Wednesday is a “stick-it-to-the-taxpayer” clause that puts you and me and everyone who pays taxes on the hook for the fake pensions. No one thought to pass a “taxpayer-protection” clause requiring our corrupt politicians to fund the fake pensions from actual income and not borrow billions to now have to demand “the wealthy” pay higher taxes to cover all of it. We are mildly shocked to hear “the wealthy” don’t want to pay millions in new taxes for legislators and judges who won’t contribute anything close to a fair share and are also doing fairly well financially.

Switching gears, we saw several articles out on the web that are now being debated in Springfield. An organization named ProPublica and NPR are presenting a whiny new series with “real-life stories” about injured workers in North Dakota and Oklahoma they assert were mistreated by their state’s WC comp system. If you want the link for the series, send a reply. What we dislike about the series is the implicit extrapolation of the problems of these workers to every injured worker in the rest of the country. Another recent and similarly whiny study is from OSHA where they claim, among other things that 80% of workers’ comp costs aren’t paid by business or insurance carriers, the injured workers have to go on the dole and taxpayers have to pick up the costs. If you want a link for the OSHA article, send a reply. In our view, the OSHA article publishes similar logical fallacies as the ProPublica/NPR thesis—they pose the theory that if one worker got a poor claims outcome, thousands of workers much be in the same situation.

We were advised there are Illinois House hearings and testimony will be taken from various sources this week about the IL WC reforms of 2011. If any of our readers want our summary of the impact of those changes, send a reply and we are happy to forward them. At present, we don’t see a strong chance there will be 2015 legislative changes but we are sure the business community will keep pushing to “reverse” the controversial decisions by the IL Supreme Court and Appellate Court in Interstate Scaffolding and Forest Preserve District of Will County. We feel there is a much stronger chance for new IWCC Chair Fratianni-Atsaves and the other Commissioners to keep making progress in making IL WC claims move more fluidly through the system and insure reasonable and fair benefits are provided to injured workers while keeping a sharp eye out for WC fraud.

While the IL House and Senate are at it, we assure our readers the ruling we reviewed last week by the IL Appellate Court, WC Division in Nee v. IWCC has to be given legislative consideration. In this ruling, the employee was provided “traveling employee” status from his actions in walking across a city street and stepping over a curb when Claimant Nee hurt his knee. This “activist” ruling implicitly reverses every fall down denial in IL WC history because everyone who falls down is also typically walking. It also covers such “travelers” for personal actions, like sitting in a restaurant on a break and spilling hot coffee on themselves. In our respectful view, the decision can’t be made to make sense—a worker doesn’t take on “traveling employee” status when they are walking to then magically lose that legal status when they stop walking or sit down. Either way, the term “traveling employee” isn’t in the IL WC Act and maybe it should be more specifically defined, as the Florida legislature did.

On another front, we were advised by a reliable source long-time Chicago Alderman Ed Burke still will not allow City of Chicago workers to return to work at light duty. This obvious instance of what we feel is WC claims mismanagement is causing the City to have to pay millions upon millions in wage loss differential settlements. There is literally no conceivable reason not to bring workers back to work at the earliest opportunity. We assume Alderman Burke and the other members of the City Council are going to want to “tax the wealthy” which appears to be the constant mantra to cover-up government fumbling and kleptocracy.

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

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Synopsis: Employers Can and Should Screen for Pot. We Consider This a Workers’ Comp No-brainer, Folks.

Editor’s comment: We saw an article in the Chicago Tribune from Gina Tron titled Employers Should Stop Screening for Pot. We want to be sure to advise our readers this article is wishful thinking and doesn’t match up with the risks you will face by allowing your workers to use pot in your workplace.

Our main concerns are safety, safety and more safety. If you allow your workers to start using medicinal marijuana they are a health and safety risk to themselves and those around them. Illinois law is the same with respect to employees who are injured while under the influence of drugs as it is for those employees who under the influence of alcohol. In 2009, the Appellate Court, Third District upheld a compensation award for an employee who had marijuana in his system. In Lenny Szarek, Inc. v. Illinois Workers’ Compensation Comm’n, Petitioner filed a claim pursuant to the Workers’ Compensation Act alleging he was injured while employed by Szarek, Inc. Petitioner was working as an apprentice carpenter for Szarek when he fell through a 9 x 9 foot hole in the middle of the floor. He fell two stories to the basement level and is now a paraplegic.

While being treated at the hospital, Claimant’s urine was tested with results showing cannabis. He admitted prior use of drugs, but denied any recent use. The defense retained an expert to review the medical records and testify as to the petitioner’s possible intoxication at the time of the accident. The expert testified the amount of cannabis in Daniel’s system was “consistent with impairment due to marijuana.” The expert also testified cannabis intoxication would result in visual deficits, perceptional abnormalities, coordination problems, impaired judgment and increased reaction time. In his ultimate opinion, the expert testified the use of the cannabis “might or could” have caused Daniel’s fall due to the vision and reaction changes attributable to marijuana intoxication. The medical expert testified marijuana intoxication definitely caused an increased risk of injury.

This worker was born in 1980 and is 35 years of age. He might live another 50 years so the total and permanent award could go well into seven figures. He received over $200K in medical care, as part of the award—medical care and other duragble medical equipment could also be in the millions. There are other published IL WC rulings involving deaths and serious injuries due to marijuana use in the workplace—if you want more, send a reply. No safety manager should incur such risk when it can be easily avoided by acting now.

In our view the only way to minimize this exposure is to start an Alcohol and Drug-Free Workplace program asap. Don’t take anything for granted and take a million dollar risk. We have a free program for our readers—if you want it, simply send a reply.

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Synopsis: Come to Dallas with KCB&A for Hoops for Hope at the Rustic on March 26, 2015.

Editor’s comment: We are one of the sponsors for this great event—if you have interest, please send a reply.

Hoops for Hope - Dallas

Join your industry colleagues at your local 2015 NCAA Men's Basketball post season networking fundraiser! Admission includes access to the appetizer buffet, beverages and the chance to win some incredible prizes in support of City of Hope’s innovative research and treatment programs. We are expecting 150+ industry members to gather for this fun event at each location – Los Angeles, San Francisco, Des Moines, Philadelphia and, NEW for 2015, Dallas, TX!

March 26, 2015 - Sweet Sixteen

DALLAS, TX

The Rustic
5 - 9:30 P.M.

REGISTER NOW!

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