8-31-15; IL WC Arbitrators are Getting More Business-Oriented--Can We End Phony Job Searches?; New Law Requires Collateral for High Deductible WC Insurance ; How to Stupid-Proof IME Letters and more

Synopsis: IL WC Arbitrators Get More Business-Oriented--Can We Please, Please Get Rid of Phony Job Searches?

Editor’s comment: We have a reader call last week to confirm she was a CEO in the construction industry and completely fed up with IL WC wage loss differential claims. Her point was simple and crystal-clear—she either had to bring back any injured worker and keep them employed for life or the worker would be coached by a claimant lawyer to start a “never-ending-non-job-search.” In her view, not actually finding a job while appearing to look for them is fairly simple to do. Here are more thoughts for our readers on this issue.

Lots of New Arbitrators in IL WC—They are a Solid and Well-Educated Bunch!

We note the following Arbitrators were reappointed by Governor Rauner with the announcement hitting the web last week: Molly Dearing, Maria Bocanegra, Ketki Steffen, George Andros, Maureen Pulia, Gerald Granada, Nancy Lindsay, Jeffrey Huebsch, Stephen Friedman and Jessica Hegarty.

As we reported last week, Governor Rauner has appointed Douglas Steffenson as a new member of IL WC’s arbitration staff. Our sources tell us a final newbie Arbitrator has been selected and she is a central Illinois defense attorney with some background in a Petitioner firm earlier in her career—we expect her to be announced shortly.

You will note all the new IL WC Arbitrators are veteran litigators and educated attorneys. Many of them but not all come from defense litigation backgrounds representing Illinois businesses and government bodies. On a related note, while it hasn’t been formally announced, it has been informally noted former Arbitrator Peter O’Malley isn’t handling any further IL WC claims. We wish him the best in his new ventures.

So What is The Top of Our Wish List for These Newly Appointed or Reappointed Arbitrators?

As we outline above, one thing driving the IL business community nuts and driving high WC costs in this state are “never-ending-non-job-search” claims! We agree employers should first try to return an injured worker to work with accommodations within their company whenever possible. We also agree that comes with its own challenges as some injured workers blame their injuries or disabilities on their employer and then actively or passively want special treatment or accommodation. When/if the employer gets sick of a whining worker and lets them go, gigantic WC exposure kicks in.

Assuming an injured worker with restrictions can’t return to work at the same company for whatever reason, what we are seeing is lots of Petitioners firms that readily put any claimant with any kind of work restriction into a weekly and never-ending-non-job-search. The systems for that concept appear to be duplicated in too many pending claims to be a coincidence. The overall goal is to allow the Petitioner/Plaintiff attorney prove the worker has applied and applied and applied some more but mystically can’t find work within restrictions.

We consider IL WC rulings like these to be hotly controversial:

·         We saw an IL WC Appellate Court ruling where a worker supposedly looked for work with the continuing assistance of two different professional vocational counselors for four years without finding a job—please note the workers’ restrictions were medium-duty.

·         Last week, we reported a claim where a worker who also had medium-duty restrictions supposedly applied for a new job with over 1,000 employers without finding work. The Arbitrator and Commission awarded lifetime permanent and total disability benefits and the worker will get as much as $74,759.73 annually on a tax-free basis plus lifetime COLA increases paid by the IL WC Rate Adjustment Fund.

In other states outside Illinois, the word for such behavior is “malingering.”

Please note all workers who are participating in post-injury vocational counseling are also receiving what is called “maintenance” and is the equivalent of temporary total disability. In our view when a worker is participating in a never-ending-non-job-search, they may be accused of stealing that money from their employer or the insurance carrier/TPA.

Why Do We Feel IL WC Arbitrators Have to Pull The Plug on Such Controversial Claims?

Well, they are the first level in managing WC status calls and hearings and thereby uniquely positioned. To some extent, they can easily control how the whole litigated claim will develop. If they allow a claimant to fiddle-fool around in not-actually-voc-rehab for months and years, claimants are certain to do so. If the Arbitrators tell claimants and their lawyers to stop the shenanigans and actually find jobs or their maintenance benefits are going to be cut after a full hearing, benefits may be stopped. Petitioner attorneys are going to tell their clients to actually find jobs or file appeals of the Arbitrator’s ruling and wait for the administrative review process at the IWCC to run its course. Or the claims will settle somewhere in the middle.

What we feel happens when Arbitrators don’t take strong action to stop months and years of malingering and phony job searches is they become part and parcel of the fake process. It is our hope the Arbitrators can set pre-trials and talk to all parties—the attorneys on both sides along with Claimant and representatives of the employer or insurance carrier/TPA. We want our newly reappointed and just-appointed Arbitrators to push hard for folks to actually locate work and get off the dole.

By doing so, the Illinois workers’ comp system can get rid of fake “odd-lot” total and permanent claims that our legislature never created, as the words “odd-lot” aren’t in the IL WC Act. We also hate to see sky-high wage loss differential claims and settlements. We assure our readers these sorts of claims are making the cost of constructing any road, building, bridge or other structure very expensive in our state. Rather than get TPD or high wage loss differential awards and settlements, workers with any modicum of intelligence, motivation and a medium or even light duty capabilities can and should be working in decent jobs. Most logistics jobs are seated work but the employers have headsets and other devices to allow workers to stand up and sit down during the course of the work shift.

Illinois and Chicago is a National Logistics Hub and Logistics is Where There are Lots of Light and Medium Duty Jobs

Chicago is a leader in logistics and is an excellent base from which businesses can ship their goods. We are also well-placed for businesses dependent on getting products delivered to them on a timely basis. Chicago first established itself as a major transportation hub in the first half of the 20th century when it was the undisputed railroad center of the United States. Although railroads have lost ground to other forms of transportation in the intervening years, they remain an important component of the overall intermodal equation. Chicago’s transportation assets also go far beyond the railroads. Our biggest city’s location on the shores of Lake Michigan and along the banks of the Chicago and Calumet rivers give Chicago easy access to a network of inland waterways, as well as access to world markets via the Great Lakes and St. Lawrence Seaway. Chicago’s O’Hare Airport ranks among the top US airports in terms of cargo throughput, and the metro area’s extensive highway structure makes it a major center for over-the-road trucks and other transportation. An additional factor in Chicago’s logistics primacy is a solid intermodal network that makes it easy to move goods seamlessly from one mode of transportation to another.

We point out trucking logistics jobs are open right now all across our region and pay very well. Ambulance logistics jobs are a step up from trucking logistics in terms of pay and continually open The highest paid logistics jobs for seated work with about four months of training are 911 call-in desks. Logistics jobs are constantly opening all the time, as they are 24/7/365 occupations and have regular turnover. After a short period of training, an injured worker can start part-time and build up to full time.

Summary—Where We Are Going From Here?

The defense team at KC&BA is going to start watching and we hope our readers will join with us in stopping never-ending-job-search claims. What we are looking for are claims where an IL worker has medium or light restrictions and is searching for and not finding work for over six months.  If you see such a claim, please send it along and we will let our other readers know about it. While we don’t know if they actually read it, please note Governor Rauner and his staff are among our readership.

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

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Synopsis: New IL Law Now Requires Collateral To “Insure” Large-Deductible WC Insurance Policies

Editor’s comment: IL Senate Bill 1805 is the country’s first law requiring collateral for large or high-deductible WC insurance policies. The law may be the first in the nation of any type to rein in the risks of policies with deductibles as high as $2 billion. The main concern is staffing or PEO companies who handle functions like

·         Human resources for other businesses

·         Do the hiring/firing of workers and

·         Obtain and manage workers’ compensation insurance and claims coverage.

If such companies become insolvent, they leave the state’s guaranty fund to pay and then assess insurance companies for the losses. It is also possible companies with a net worth over $25M could get stuck with such uninsured costs.

This new legislation requires insurance companies that are rated below A- and do not have at least $200 million in surplus to require the policyholder to post collateral to cover the deductible should it become insolventThe insurer must either post a surety bond with sufficient financial strength, an irrevocable letter of credit from a financial institution with an office physically in Illinois or a combination of cash and securities held in trust for the express purpose of securing the policyholders under a large-deductible agreement. The assets of the trust cannot be comingled.

In Illinois, the collateral requirements will kick in for deductibles far less than seven digits—they may apply to deductibles as low as $100K. A spokesman for the Illinois Department of Insurance indicated they will publish a bulletin shortly setting out their new policies under the law. The spokesman said the new Illinois law leaves those specifics to the state Department of Insurance. The spokesman indicated the need for tighter regulations is particularly acute for the workers’ compensation industry where claims are sometimes paid out over decades. The protection must remain in place even if the employer goes out of business.

Governor Rauner liked and supported Senate Bill 1805 according to his staff. Their official statement is SB 1805 protects consumers and insurance companies from the actions of insurance companies who write policies without sufficient collateral for the full exposure of those claims.

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

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Synopsis: How to Stupid-Proof IMEs in Illinois and Everywhere Else in the U.S.

Editor’s comment: When we have authority, we set lots of independent medical exams or what are also called in IL WC “Section 12 exams”, as do our clients/adjusters and others. In litigated claims, as attorneys with ethical restrictions, we can’t reach out directly to Claimants/Petitioners so the IME scheduling letters are sent to opposing counsels with appropriate mileage expense and confirmation of the date/time of the exam.

When a Claimant fails to show for the IME, the standard form response from all Petitioner/Plaintiff lawyers is “we-didn’t-know-about-that-exam-you-never-told-us.” When you then send your fax or email confirmation documenting the correspondence was transmitted via snail mail and electronically, some lawyers will still maintain they didn’t get it. Either way, you are then faced with a whopping no-show fee to battle over and an expert physician who may be wondering why they have to put up with all the tomfoolery of handling IMEs.

Our suggestion is to add a sentence to your IME confirmation letters when sent to opposing counsel:

Please confirm receipt of this correspondence and your contact with your client to confirm they are aware of the IME setting and will attend. We need this confirmation on [insert date] or we will cancel the exam and treat this as a failed appointment and potentially terminate benefits.

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

8-25-2015; Will IL WC Lawyers Get Aced Out By Their Own Actions?; Join Jay Shattuck in His Grass Root WC Reform Efforts; New Arbitrator Douglas Steffenson Selected by Governor Rauner and much more

Synopsis: Will IL WC Lawyers Get Aced Out by Their Own Actions?

Editor’s comment: We are seeing shocking developments on many fronts that are scary to longtime WC veterans. We are worried some sectors of the Petitioner’s bar want any work problem to be globally covered under workers’ compensation regardless of what the legislation might say. As we have told our readers there are two things that come with global coverage of anything that happens as work, if you call it all an “injury.”

Ø  The first thing that comes from global and indefensible coverage under workers’ comp of any medical problem that occurs at work is staggeringly high claim costs. If there is one thing that will drive every major and minor business from our state, it is global WC coverage of every sore [insert body part].

Ø  The second thing that comes from global coverage under work comp of any medical problem that occurs at work is going to be the end of lawyers on either side, hearing officers and any litigation. There is very little need for lawyer to litigate anything in such a nutty system—insurance carriers and TPA’s will simply set up payment schedules then accept, price and pay everything, like they do in group health claims.

On the Legislative Front:

IL Senate Bill 162 has been passed by the IL Senate and is pending before the IL House as you read this. We assume this bill was designed to scare the business community and, sadly that concept is working. We assure our readers Senate Bill 162 provides global and indefensible coverage of anything a worker does when the worker is off the premises of their employer and is acting “reasonably.” What in tarnation does that mean?

In our view, a flight attendant who becomes lonely while on the road and has a romantic encounter and becomes pregnant would have a work-related pregnancy and be entitled to full WC benefits during the pregnancy and perhaps after under the provisions of the new and poorly thought-out IL Senate bill. A truck driver who smokes cigarettes like a chimney and gets lung cancer from the bad habit would clearly be entitled to all care under work comp. If you send your admin to get both of you lunch across the street and he/she trips on their own feet, you would be on the hook for WC benefits.

We vote with sticking with the traditional analysis of AOO/ICO or “arising out of and in the course of” already in the IL WC Act. Please note Senate Bill 162 is not yet law—it has been passed by one of the two houses of our IL General Assembly.

On the Judicial Front:

When did turning in a chair or walking on a normal staircase or putting on a winter coat become an IL WC “accidental injury?” The answer to this sad IL WC trivia question is—last week.

In their controversial ruling in Adcock v. IWCC, the Illinois Appellate Court, WC Division reversed the IWCC denial (and in our view, years of IL Supreme Court precedents) and ruled a welder who felt pain in his knee rolling on a wheeled stool was entitled to IL WC benefits. The ruling noted moving around on a wheeled stool is a "neutral risk of daily living" that anyone might encounter anywhere. The decision indicated “work” caused the welder to confront a greater risk of harm than an ordinary member of the general public would because of the various times he had to perform his job duties during a normal shift. The majority ruled it "should not award benefits for injuries caused by everyday activities like walking, bending, or turning, even if an employee was ordered or instructed to perform those activities as part of his job duties, unless the employee’s job required him to perform those activities more frequently than members of the general public or in a manner that increased the risk."

In our view, this ruling creates global and indefensible WC coverage for “repetitive working” claims. We don’t feel lawyers will be needed to litigate such claims and Arbitrators won’t be needed to conduct hearings for such claims and we won’t need reviewing courts to hear appeals. We agree with most readers our term “repetitive working” is intentionally redundant. Please note anyone who has a job performs normal activities at work more than in their daily lives. Duh! That is one of the reasons we call it “work” because you do some things over and over again. Work by its definition involves repetition.

From an academic perspective, please note the nomenclature used by almost all of our hearing officers at every level of this tortuous claim refer to the event of unexpected knee dysfunction as an “injury.” In our view, once you characterize “repetitive working” problems as an “injury,” the employer has lost and global WC coverage is present. We again assert global coverage of any event of physical dysfunction as a work-related injury strips out all defenses to any claim of accident. If there are no defenses, lawyers, hearing officers and judges aren’t needed.

The facts of the claim are simple. Petitioner Adcock worked as a welder for Knaak Manufacturing. After he initially injured his right knee on the job, his doctor imposed limitations on his ability to twist, kneel or walk extensively. In order to accommodate his restrictions, Knaak provided him with a wheeled stool so he could move about his workspace in a seated position. Basically he had to stand before he started work and arise when he stopped. Claimant testified he was constantly moving along the length of the workstation on the stool, swiveling from side-to-side, as he worked. We salute him for describing his work but don’t view such work activities as physically dangerous or obviously injurious.

Claimant asserted he was unable to maneuver the stool using his right leg because of his knee injury to that leg, so he always had to use his left leg to propel the chair. Petitioner said he felt his left knee "pop" while he was twisting at his work station in May 2010. His doctors later determined he had torn the meniscus in his left or opposite knee. We do not see the torsion turn of the joint in this record that would cause a meniscal rupture.

The Arbitrator ruled the event was compensable. The Workers' Compensation Commission reversed the Arbitrator, specifically finding "(t)he act of turning, even in a chair, is an activity of everyday life," so it was "a hazard to which the employee would have been equally exposed apart from the employment." The Commission ruling is consistent with the landmark decisions in Board of Trustees of the University of Illinois; Greater Peoria Mass Transit District; Hansel & Gretel Day Care Center by our Supreme and Appellate Courts.

The IL Appellate Court, WC Division reversed on the “manifest weight of the evidence” standard. We point out the last high court ruling on this area of law was Sisbro v. IWCC where our IL Supreme Court cautioned this interim reviewing court not to reverse the IWCC on the manifest weight of the evidence and supplant the IWCC’s decision with their own view of the facts. Since the Sisbro ruling was issued by our highest court we have seen 7-10 WC appellate rulings that reverse IWCC denials to insure benefits are awarded. We have yet to see a single appellate ruling where benefits awarded by the IWCC were reversed to see a denial by our penultimate reviewing court.

In our view, this new ruling sets out the “activist” judicial plan to make any and every action at work into an “injury” and thereby compensable—all you have to do is say you did the “activity of daily life” twice or maybe three times a shift. When that evidence is in the record, the claim becomes magically and indefensibly compensable. Our overall point is clear—work isn’t supposed to be an “injury.” If we are going to make “work” into a compensable injury, we are going to see skyrocketing workers’ comp costs and a greatly decreased need for lawyers and hearing officers.

On the Administrative Front:

We caution our new Governor and all our readers we may be looking at the first salvo in a new battlefield. The IWCC is getting mildly conservative or somewhat business friendly, as indicated by their own statistics in their most recent annual report. In contrast, the IL WC  Appellate Court remains strongly supported by and amenable to the theories espoused by the Illinois Trial Lawyers Ass’n. We may see lots of IWCC rulings reversed moving forward by the “activist” five-member panel composed of Appellate Court justices from the five appellate districts in this state. We may also see them judicially dismantle and disintegrate the concept of “major contributing cause” currently espoused by our Governor and his supporters as an IL work comp reform.

Our thoughts for our Governor and everyone who is concerned about an Illinois “turnaround” is to point out our IL Supreme Court designates who sits on the IL Appellate Court, WC Division. The Supreme Court isn’t composed of all Democrats. Our highest court has three Republican members. In contrast, the IL Appellate Court, Workers’ Comp Division has no justice who has filed a single dissent on behalf of the interests of Illinois business in several decades. Most corporate CEO’s and government leaders have no idea how these justices are selected and get to make these crucial decisions that have a lasting impact on the IL WC matrix.

We suggest our Governor reach out to IL Supreme Chief Justice Rita Garman and discuss these issues and see if there can be a member or two on this appellate panel who match the WC goals currently being presented to our legislature. If something like that doesn’t happen, we assume some ITLA member may come up with some sort of constitutional challenge to any WC reform legislation and such a challenge may fall on friendly ears and go nowhere for years to come.

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Synopsis: if You Truly Care about WC Reform in IL, Consider Joining the IL State Chamber and Their Grass Roots Efforts, As Outlined by Jay Shattuck.

Editor’s comment: Shattuck & Associates Consulting, Inc. has helped develop a grassroots guide for Illinois businesses that want to contact their legislators and urge them to approve meaningful workers' compensation reform. A copy of the Illinois Workers' Compensation Reform Action Packet is available by contacting Jay Shattuck at the phone number or email address below. If you care about rising IL WC costs, contacting your legislator takes about 5 minutes, and this packet provides all the resources you will need to make the call.

Jay points out since 2005, the Illinois General Assembly has jacked up workers' compensation costs giving Illinois the 7th highest workers' compensation costs in the country which has helped drive companies and families out of Illinois. He wants you to take five minutes and let your legislators know that:

·         Workers' compensation should only cover injuries that are primarily caused by your workplace; and

·         Ask your legislators why they require IL employers to pay for 100% of an injury that was only 1% caused at work.

We agree with Jay and have reported the Illinois General Assembly has been discussing ineffective, short-sighted changes to Illinois' workers' compensation reform all session. As we report above, some of these changes aren’t “reforms” at all but will even further boost IL WC costs. Governor Bruce Rauner has been promoting real reform to Illinois' workers' compensation system that would actually drive WC costs down and still protect injured workers whose injuries were primarily caused by their work.

We assure you IL legislators are seeking examples of how the workers' compensation system has been unfair to your business. If you have an example of a claim that you believe was unfair to your company, and you would like to have it shared as information on the House or Senate floor, please pass them on to Jay Shattuck. He will maintain the confidentiality of your company and not release the name of the company or worker, just the facts of the workers' compensation claim.

If you have any questions about contacting your legislator, the WC Reform Action Packet, or would like to pass on an example of an unfair WC claim, contact Jay Shattuck at either 217-544-5490 or email jaydeeshattuck@gmail.com

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Synopsis: Illinois Gov. Bruce Rauner has appointed Douglas Steffenson, a workers' compensation defense attorney as the newest arbitrator with the IL Workers' Compensation Commission.

Editor’s comment: It is mildly unusual to hear this news from a national news source and not from the IWCC’s otherwise informative website. Mr. Steffenson was an attorney with a major Chicago-based workers' compensation defense firm and worked with the firm for 15 years and has more than 24 years of legal experience. He was also an assistant state’s attorney for Cook County from 1991-97. It appears from our research he was also licensed to practice in Iowa. Aside from workers' compensation law, Steffenson has experience with employer liability law. He holds a law degree from DePaul University.

We are confident new Arbitrator Steffenson is expected to be a business-friendly hearing officer but we will have to see. We are told there may be at least two more Arbitrators appointed in the near future.

8-18-15; Our IL Courts Demand IL WC Arbitrators Rule on WC Fraud--Will They?; Win! Win! For IL Employers--Employer’s Settlement Agreement is Good to Go; If You Go Voc, Go Real Voc and much more

Synopsis: Our Illinois Courts Demand IL WC Arbitrators Rule on WC Fraud—Will They??

Editor’s comment: In a controversial ruling that is a bitter pill to any IL WC risk manager or claims handler, it now appears the Illinois 3d District Appellate Court joined with the First District to determine there is no civil remedy for unquestioned workers’ comp fraud and theft of such benefits. The Appellate Court was divided on the question of whether a trial judge or jury had jurisdiction to decide whether an injured truck driver became ineligible for temporary total disability benefits by lying about physical limitations and abilities.

Presiding Justice Mary McDade wrote a biting dissent indicating she found that idea "untenable and unjust." As the IL WC Commission regularly denies having jurisdiction to decide if WC fraud was committed where there are alleged misrepresentations coming from an employer against an injured worker, Justice McDade complained the majority ruling leaves ABF Freight and other major and minor Illinois employers without any civil remedy in claims involving clear evidence of WC fraud.

Defendant Fretts was a tractor-trailer truck driver for Plaintiff ABF Freight. In 2009, Fretts filed two IL workers' compensation claims for alleged injuries to his right shoulder. The treating physician provided permanent lifting restrictions, and Fretts told ABF the restrictions would not allow him to work as an over-the-road driver. Relying on Fretts’ representations, ABF innocently paid Fretts substantial temporary total disability benefits. In September 2011, ABF learned Fretts was secretly working as a long-distance truck driver for Havener Enterprises. When ABF got the tip, they hired an investigator to conduct surveillance.

As part of a global investigation, the operative took startling videotape of Defendant Fretts lifting heavy weights at a local gym with his supposedly disabled arm and shoulder—at one point, Fretts was seen curling a whopping 55lbs. with each arm. An orthopedic surgeon who viewed the videotape confirmed Fretts fully recovered and appeared capable of exceeding the “permanent” lifting restrictions placed upon him by his treating doctor.

Using the video and the opinion of the orthopedic surgeon, ABF brought a motion for determination of workers' compensation fraud before the Illinois Workers' Compensation Commission. ABF contended Fretts made knowing misrepresentations regarding the extent and nature of his shoulder injuries, his asserted disabilities/recovery and his alleged inability to work. One week later, ABF filed a civil complaint against Fretts, stating claims for insurance fraud, work comp fraud and common-law fraud. In short, ABF wanted their money back from paying a fraud.

ABF's motion for determination of WC fraud was heard before an IWCC Arbitrator in August 2012. At the hearing, Fretts admitted he worked for Havener, driving a flatbed and a pickup truck from IL to Louisiana, but he claimed he was unable to locate other work. The Arbitrator determined a limited amount of driving work was not a basis to end Fretts' continued TTD benefits, and she found ABF failed to prove Fretts had intentionally or fraudulently acted in relation to the work admittedly performed for Havener Enterprises.

After the Arbitrator issued her decision, Fretts moved to dismiss ABF's civil complaint. Kankakee County Circuit Court Judge Wenzelman granted his motion, finding the doctrine of collateral estoppel or issue preclusion barred ABF from relitigating the same theories of fraud presented to and decided by the Arbitrator.

Last week, the Third District Illinois Appellate Court of Illinois ruled as a matter of law dismissal was proper because the Circuit Court lacked jurisdiction to even consider the case. The majority ruling indicated the IL WC Commission and the circuit courts have concurrent jurisdiction to decide workers' compensation cases, however the IL Supreme Court has said the IWCC "should be given wide latitude in resolving factual issues," while "questions of law are more appropriately answered by the circuit court." The majority outlined ABF's claims presented "questions of fact, such as the extent of Fretts' injury and his representations to medical personnel regarding his injury both before and during the workers' compensation proceedings." As such, the majority felt the IWCC was "in a better position" to address the allegations being raised.

Appellate Court Justice Schmidt wrote separately, saying he agreed ABF's complaint was properly dismissed, but he was not persuaded the IWCC had any sort of "special expertise that equips it better than the circuit court to deal with issues of fraud." He also said he believed ABF's fraud claim should have been barred by principles of res judicata or issue preclusion as opposed to an absence of jurisdiction.

As we outline above, Justice McDade was the lone dissent, arguing there is no tribunal in Illinois to resolve ABF's justiciable claim of fraud under the majority's reasoning, because the IWCC has repeatedly ruled it won't decide fraud cases. In 2010, the IWCC handed down a ruling in Leviege v. Ford Motor Co. in which the Commission panel expressly indicated it can make findings regarding credibility of witnesses and weight of evidence but "(it) does not have jurisdiction to determine what, if any, fraud was committed." That issue, the IWCC said, "is the jurisdiction of another tribunal." Thus, Justice McDade contended, "if the majority is correct in stating our courts do not have jurisdiction to rule on issues of fraud in workers' compensation benefits cases and the commission is also correct in concluding it too lacks jurisdiction," then ABF is left without a tribunal from which it can seek a remedy. Justice McDade suggested the more prudent course of action when the commission has already clearly stated that it is not the proper forum for determinations of fraud, is for the courts to step up.

We point out WC fraud is stealing. If someone stole a tractor-trailer from ABF, we assume SWAT teams might be called and every judge and justice would be quick to put the stop to theft or fraud. We remain completely baffled how and why our judiciary seem confused about WC fraud. We ask our readers the question—if you innocently paid an injured worker a million dollars in IL WC benefits to then learn the claimant was a liar and cheat and made the whole thing up—don’t you feel our courts should be a place you could go to get your money back? In our view, the IWCC would simply deny the claim and not award anything—that doesn’t get you a penny in return.

Please also note there are lots of WC issues that are decided in our circuit courts:

1.    In Kelsay v. Motorola, claims for retaliatory discharge for filing a workers’ comp claim are to be brought in the civil courts. Please note the proscription against such retaliation is contained in the IL WC Act.

2.    Claims to adjudicate a workers compensation lien under Section 5 of the IL WC Act can and are typically brought in the civil courts. While the IWCC could adjudicate a “set-off” of benefits in this setting, most of the time such issues are handled by our circuit court judges.

3.    In their ruling in Illinois Graphics v. Nickum, the civil courts ruled when WC benefits were paid in error, the litigation to recover such monies had to be brought in the circuit court.

The IL WC Commission Can’t Decide All Claims of WC Fraud Because All WC Claims Aren’t at the IL WC Commission

Please also note our courts seem to presume all WC benefits arise from litigation—in fact the opposite is true. The vast majority of IL WC claims are medical only or medical only-lost time claims. The IWCC may only get involved in such claims at the very end, if there is a settlement. There is no current method for the IWCC to handle WC fraud claims in non-litigated settings because the only proper party Petitioner in an IL WC claim is the worker—there is no provision for an employer to file an Application for Adjustment of Claim to seek redress for fraud or anything else.

In a similar vein, we assure our readers workers’ comp litigation in this state is driven by the Petitioner’s bar. If they won’t want to go to hearing, cases are very rarely heard. If a Petitioner was caught red-handed creating a claim for a fake accident or working while on TTD, all they would have to do is stall, stall and stall some more until all the witnesses for Respondent have disappeared or died.

Where Is IL WC at Right Now With WC Fraud Remedies?

      This ruling has nothing to do with criminal investigation and prosecution of WC fraud in this state—that concept hasn’t changed at all;

      Our Governor is trying to move the initial WC fraud investigation from the minimally active IL Dep’t of Insurance to the IWCC—we strongly support that concept to bring some accountability to WC fraud investigations;

      In the right case with clear evidence of WC fraud, our readers, clients and the WC defense industry should present Petitions for WC Fraud before the Arbitrator assigned consistent with above ruling and the First District ruling in Country Financial Services v. Roberts.

We hope the judges and justice in this state start to understand the extent of the WC fraud problem caused by miscreants such as the one who is the subject of this article. IL WC managers want to pay injured workers what is due but they do not want to be misled or stolen from.

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

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Synopsis: Win! Win! For IL Employers--Employer’s Settlement Agreement is Good to Go and No Need to Pay 25% Attorney Fees For Suspended Future Medical Payments. Analysis by Bradley J. Smith, J.D.

Editor's Comment: In Bayer v. Panduit Corporation, the Illinois First District Appellate Court affirmed the circuit court judge’s entry of a good-faith finding related to Area Erectors, Inc.’s (Area) direct settlement with Plaintiff Bayer. Simultaneously, the Appellate Court reversed the circuit court judge’s award of attorney fees to Bayer’s attorneys to be paid by Area. On June 20, 2007, Bayer, an employee of Area, was working as an ironworker on a construction site when he allegedly fell and sustained injuries. As a result of those injuries, Bayer became a quadriplegic. Bayer filed a workers’ compensation claim against Area.

Similar to any other construction jobsite, there were multiple parties involved. Panduit was the general contractor on the jobsite.  Panduit hired Garbe Iron Works, Inc. (Garbe) for the expansion of Panduit’s warehouse facility. Garbe then hired Area, to “[f]urnish all labor and equipment (including supervision) to upload and erect” structural steel, in exchange for $520,485.00. The purchase order specified Area would name Garbe and Panduit as additional insureds on a $2 million insurance policy.

On September 19, 2007, Bayer filed a civil lawsuit against Panduit alleging negligence. In turn, on April 30, 2009, Panduit filed a third-party complaint for contribution against Bayer’s employer, Area, contending Area was also negligent in failing to ensure the safety of its employees, including Bayer. On October 1, 2012, Area and Bayer filed a joint motion for a good-faith finding and approval of a settlement agreement between Bayer and Area. The motion for a good-faith finding alleged that Bayer had filed a workers’ compensation claim against his employer, Area; that Area has honored Bayer’s workers’ compensation claim and Bayer had been paid and continued to be paid temporary total disability and medical expenses; that the amount of workers’ compensation lien to date totaled $5,275,585.57; that Bayer and Area, through area’s insurer Arch Insurance Company, have entered into a settlement agreement through an arm’s length bargaining process; and the settlement agreement was supported by consideration. Routinely, the motion for a good-faith finding also attached a copy of the settlement agreement.

Shortly after the finding for good-faith settlement, Garbe also settled with Bayer leaving only Panduit for trial. At trial, a jury awarded Bayer $80 million dollars in damages, but reduced it by 20% for Bayer’s own contributory negligence, for a total of $64 million verdict against Panduit.

Panduit argued the settlement agreement was not made in good faith. Specifically, Panduit contended the settlement agreement lacked consideration. The Appellate Court reviewed the circuit court’s finding on an abuse of discretion standard lending discretion to the circuit court’s decision. In order to prove whether a settlement agreement was negotiated in good faith, the settling parties carry the initial burden of making the preliminary showing of good faith. Once that showing is made, the burden of proof shifts to the non-settling party, who challenges the good-faith settlement. The standard of proof is by a preponderance of the evidence. Area made the initial showing by attaching its settlement agreement to the motion. The Appellate Court found Panduit failed to demonstrate—by a preponderance of the evidence—any showing of bad faith by the settling parties

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The Appellate Court cited multiple consideration contained within the settlement agreement supporting the good faith finding. The essential element of consideration is a bargained-for exchange of promises or performances that may consist of a promise, an act, a forbearance, or the creation, modification, or destruction of a legal relation. There were multiple contingency lien waivers in the settlement agreement, which were sufficient consideration. Additionally, the agreement not to suspend workers’ compensation payments to Bayer at any time prior to the final resolution of the litigation against all of the parties also qualifies as adequate consideration. Accordingly, the Appellate Court affirmed the circuit court’s good-faith finding.

Also, on appeal, was the circuit court’s entry to a 25% attorney fees award to Bayer’s attorneys from Area. The motion for attorney fees, citing section 5(b) of the Workers’ Compensation Act (IWCA) and the holding in Zuber, requested the circuit court enter an order compelling Area to pay attorney fees in an amount representing 25% of future workers’ compensation benefits for Bayer that had been suspended by statute as a result of the underlying settlements in the negligence action.

As the issue required the interpretation of provisions under the IWCA, which is a question of law, the Appellate Court considered the issue under the de novo standard of review. The Court reviewed the language of Section 5(b) of the IWCA, to find the IWCA does not require an employer to pay attorney fees for suspended future medical payments. Further, the Court reasoned had the legislature intended for fees under section 5(b) to include future medical expenses, the legislature could easily have drafted section 5(b) to say that the employer’s right to reimbursement included the amount of compensation paid or to be paid by the employer to or on behalf of the employee, which would have encompassed the medical expenses paid “to the provider on behalf of the employee” under section 8(a) of the IWCA. Consequently, the Appellate Court reversed the circuit court’s entry awarding Bayer’s attorney 25% attorney fees on future suspended medical payments.

Since 25% of any future award of medical payments—in this case—is a significant recovery, we are continuing to monitor Bayer’s request for a petition for certiorari to appeal the issue to the Illinois Supreme Court. We will update you once we are aware whether or not the petition for certiorari is granted or denied.

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

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Synopsis: Catalyst RTW Might Not Be the Answer for the IL WC Return to Work Challenge. Thoughts and analysis by John A. Karis, JD.

Editor’s comment: In Perkins v. Turner Industries Group (issued June 19, 2015), Petitioner was a carpenter for 29 years and was injured at work. An FCE released Petitioner to medium physical demand level position. Petitioner began vocational rehabilitation with Coventry from April 2011 to January 2013. Petitioner allegedly applied for 1000 jobs but claimed he was unable to secure employment. We consider it comical for anyone to claim they have looked for 1,000 jobs without success—in our view, claimant had to be doing something to avoid locating medium-level work, as there are literally hundreds of available jobs that fit that description in this state.

In January 2013, Respondent Turner obviously decided to take action about ongoing TTD. Petitioner received a letter from a national company named Catalyst RTW offering him at home-based employment through a company called AllFacilities. The website for this company is http://www.catalystrtw.com/. According to Petitioner he never applied for this position—it was given to him. On March 25, 2013 Petitioner began working for AllFacilities. However, on July 10, 2013 Petitioner was terminated from AllFacilities due to his failure to produce enough “A leads.”

Catalyst RTW's purpose in cases such as the one at bar is to assist companies in saving money on workers' compensation claims and markets itself as providing lower workers' compensation settlements when they have been involved in a case. Catalyst specifically markets that if an individual is non-cooperative, declines the offer of work or is terminated for cause they will document those facts and be available to testify for Respondent. Their witness testifies about 25 to 30 times per year, or more than twice every month according to testimony by a Catalyst RTW employee. Catalyst RTW takes difficult cases, a case such as this and then usually refers them to AllFacilities which provides them with at home employment within their restrictions.

The Arbitrator noted the insurance company paid Catalyst RTW to arrange the interview, paid AllFacilities to hold the interview, paid Petitioner's wages while at AllFacilities, paid an administration fee to AllFacilities to allow Petitioner to perform this activity, and would have gotten a refund of their initial costs if AllFacilities had not offered Petitioner work.

The Arbitrator in his decision stated a review of the testimony and evidence in this case revealed the at-home work positions with AllFacilities were not found to be competitive or “real” employment. The record indicated of the 661 referrals from Catalyst RTW only three unsubsidized workers were still employed there. The Arbitrator further noted it was clear a referral to AllFacilities through Catalyst RTW has a nearly non-existent chance of turning into long-term employment. The Arbitrator reasoned less than ½ of 1% of the individuals referred to AllFacilities from Catalyst RTW in the last three years continue their employment with AllFacilities after their subsidized work period has ended.

Additionally, a review of the testimony of two vocational counselors led the Arbitrator to the conclusion the system in place between Catalyst RTW and AllFacilities was not a legitimate attempt to return the injured worker into the job market. The vocational counselor explained in her testimony Petitioner was “doomed” to fail at this position. Therefore, the Arbitrator awarded permanent total disability benefits. We consider that a very challenging decision.

Although Catalyst RTW sounds like a tool to assist in difficult IL WC cases involving return to work, our IL WC readers may want to carefully consider using their services and possibly choose more bona fide vocational counselors. As we have advised our readers, there are lots of claimants out there who try to appear to look for work while never actually finding work. It is our understanding some attorneys coach them to do so. Our vote is to push reluctant claimants into trucking, ambulance or 911 dispatch jobs that are seated positions and actually pay solid money. If you have interest in this approach, send a reply.

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Synopsis: Congrats from the U.S. Workers’ Comp Community to Beau and Mary Claire Spreck!!

Editor’s comment: Last weekend at the Drake Hotel in Chicago, Beau and Mary Claire Spreck were united in matrimony. Beau and Mary Claire both attended Lyons Township High School and lived just down the street from each other in the Arrowhead Farm subdivision. In the summer of 2006, they started officially dating. They remained a couple through college and finally tied the knot!

More information on their wedding can be found online at: http://www.weddingwire.com/weddings/3304726/wedding_new_website#!/website/2429769 We note both sides of the IL WC matrix were present with Jim and Mary Marszalek present for the Petitioner side and Shawn/Debbie Biery and Gene/Angela Keefe holding down the fort for the defense side.

Beau is with EagleOne CMS, a leading solutions-based independent medical case management company in the United States providing workers compensation case management services since 1991. You may see him at national, regional and local events.

We wish this great couple the very best as they continue a wonderful relationship and start to build a family.