1-4-2016; KCB&A Litigation Management Secrets Exposed!; Shawn Biery on WC Setoffs and Lien Recovery; LIlia Picazo on new and scary OSHA Ruling and more

Synopsis: Keefe, Campbell, Biery & Associates Litigation Management Secrets Exposed!! Learn How We Close WC and GL Claims Faster than Other Defense Lawyers.

Editor’s comment: We get asked and asked—we want our readers to understand our best approach to closing all WC and GL claims much faster than our competition. These simple steps are the optimal path for smoothly and rapidly close current and future assignments.

Part One—Closing Workers’ Comp Claims This Week, Part Two--General Liability/Motor Vehicle/Employment Law/Food Claims Next Week

In the work comp arena, claims handlers need to work with defense counsel on two preliminary issues.

a.    Is It Compensable?

If it is not compensable, in non-litigated claims, our KCB&A defense team are happy to provide you case law or citations to the WC Act and Rules to let you tell claimant why the issues are not covered under work comp. In litigated claims, you want the KCB&A team member to start the war and win it—we are happy to highlight the evidence needed to prevail in front of the hearing officer/arbitrator.

b.    If Compensable, How Do We Get Claimant to MMI?

If the claim is compensable, we assume you have accepted it and you are paying benefits. In Illinois and the other four states we cover, you main goal has to be getting medical care to a close so claimant is at MMI. It is very, very hard to close WC claims with treatment, disputed or not, still ongoing. Our favorite tools to cut medical care are utilization review (or UR) and/or independent medical exams (or IMEs). While IMEs have their role in managing litigation, we consider UR to be faster and a stronger tool to have claimant reach MMI because the process directly reaches out to a treater to confirm care is being denied and lets them “appeal” denial to a medical specialist. Either way, if you need help on getting a claimant to MMI, send a reply.

Having Worked to Get Claimant to MMI, What is the Next Step to Rapid WC Claim Closure? Our Vote Never, Ever Wait for the Other Side to Make a Demand, Evaluate/Cogitate/Work Up for Settlement and Make a Fair and Reasonable Offer

We feel many of our competitors make a seminal mistake to tell you they are asking the other side for a demand. The other side of the WC lawyer matrix isn’t always interested in closing cases. Their goal is to have a large book of business where existing claimants send them other business/claimants. If you ask them for a demand, they may view that as a sign of weakness and routinely ask you for the moon, sun and stars. Once they ask for way-too-much, you now have to rein them in to less. Why start out in that fashion?

In our view, you are way better to do your homework and figure out a fair middle-ground that we can justify to one of Illinois’ very sharp, professional and reasonable WC Arbitrators or an Indiana Hearing Member. If the other side won’t take the settlement based on an email from your lawyer, consider telling/authorizing your defense lawyer to set up a pre-trial before an Arbitrator or Hearing Member who may tell the Claimant attorney to take it or ask your defense attorney to bump it up a little but either way, the hearing officer will try hard to get the claim to close. Most IL WC Arbitrators or IN Hearing Members don’t want to hear the boring/whining claim and will drive hard to bring the parties together in a favorable middle-ground settlement.

Please Also Remember—Don’t Have Defense Counsel Simply Make a Written Offer, Send Draft Settlement Contracts to Push Hard to Close

If the offer is fair and reasonable, when your defense attorney writes it up and puts it on contracts, you get to see it to confirm your authority and insure everything is in order. The devil can be in the details. When you approve and the draft lump-sum contracts are sent to Claimant’s counsel, the other side can deduct their fees and costs and send them to Claimant for signature. The great advantage to doing so is Claimant can tell precisely what they will receive and sign off on it. This is a win-win for all sides and brings many WC claims to rapid closure.

The defense team at KCB&A has other various tactics and concerns to bring litigated WC claims to closure. If you have questions or concerns, send a reply or post it on our award-winning blog.

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Synopsis: Important Ruling for Decision Makers Regarding Setoffs and Lien Recovery…or when making decisions while implementing cross coverage policies.
Analysis by Shawn Biery, J.D., MSCC.

Editor’s comment: While not new information, this can guide those who need to determine settlement when a lien or other causes of action are still in play. In Acuity v. Decker, 2015 IL App (2d) 150192 issued December 23, 2015, Plaintiff Decker was injured in motor vehicle accident while working for his employer and received workers' compensation benefits through the employer's worker's compensation carrier. He eventually also reached settlement with insurer for third-party tortfeasor (other driver), for full policy limit, and Plaintiff paid worker's compensation insurer fromthat settlement the amount required to satisfy workers' compensation lien. Plaintiff also filed UIM claim with his employer's auto insurance carrier which also had coverage and since employer's auto policy did not treat workers' compensation as an element of loss under a "Liability Coverage Form", Plaintiff was allowed to present all elements of loss in UIM arbitration, including those elements paid through workers' compensation with the employer auto carrier only having those elements subject to the set off for the amount Plaintiff actually recovered on his workers' compensation claim and on his claim against other driver.

Factually, Defendant Decker suffered personal injuries in an automobile accident while working for his employer, Groot Industries, Inc. (Groot) and Decker received workers’ compensation benefits totaling $350,942 from plaintiff, Acuity, which was Groot’s insurance carrier. Decker settled his claim against USAA, the insurer for Carol Hunter, the third-party tortfeasor, for the full policy limit of $50,000, and Decker paid Acuity the portion of that settlement required for satisfaction of the workers’ compensation lien totaling $37,067.48. Decker filed an underinsured motorist (UIM) claim with Acuity who was also Groot’s automobile insurance carrier. Acuity filed a declaratory judgment action against Decker and Groot, contending that it was entitled to a set off for the entire amount it paid to Decker on the workers’ compensation claim, plus the entire amount that Decker received from USAA, and that certain elements of loss for which Decker had been compensated through workers’ compensation were precluded under Groot’s automobile insurance policy.

The parties each filed motions. In its declaratory judgment complaint, Acuity sought a judgment that the UIM coverage from which Decker sought compensation precluded certain elements of loss for which Decker had already been compensated. Acuity contended that Decker was not allowed to make a claim for lost wages, past medical expenses, and future medical expenses on his UIM claim. Acuity also contended that it was entitled to a set off for the full settlement that Decker received from USAA, including the $37,067.48 Decker paid Acuity from the settlement, plus the full amount paid for the workers’ compensation claim. Acuity sought a total set off of $400,942. Decker argued there should only be credit for the amounts remaining after the repayment of $37,067.48 was taken into account and credited to the lien and Decker argued he should be able to seek damages for all elements subject only to the remaining set off.

Acuity’s motion was denied, but Decker’s was granted with the court finding that (a) Decker was allowed to present all elements of loss in his UIM claim, even though he had already been compensated for certain elements through workers’ compensation, and (b) Acuity was not entitled to a set off for the full settlement with USAA, because Decker was statutorily required to pay 75% of the settlement toward the workers’ compensation lien. The trial court concluded that the total set off that Acuity was entitled to was $363,874.52. After Acuity timely appealed, the court here affirmed for the following fairly simple reasons:

1)    COVERAGE:  Where ambiguous, insurance coverage is construed liberally in favor of coverage.                  

a.    Pertinent to the present case, the policy noted “No one will be entitled to receive duplicate payments for the same elements of loss under this Coverage Form or any Liability Coverage Form.” However the policy also later stated “Except in the event of a settlement agreement, the Limit of Insurance for this [UIM] coverage shall be reduced by all sums paid or payable:

                                          i.     (a) By or for anyone who is legally responsible, including all sums paid under this Coverage Form’s Liability Coverage.

                                        ii.    (b) Under any workers’ compensation, disability benefits or similar law.

                                       iii.     

2)    SET OFF:  The Court noted that the Illinois Supreme Court has noted the underlying purpose of UIM coverage is to “place the insured in the same position he would have occupied if the tortfeasor had carried adequate insurance. ”  

a.    UIM coverage was not designed to give either the injured party or the insurer a windfall and if they were to provide set off for more than the statutory lien amount, Acuity would be essentially allowed to count the $37,067.48 twice as part of the “sums paid” under Acuity’s UIM policy or the “amounts actually recovered” under the statute.

It appears Acuity takes issue with any reduction in the $50,000 however in actuality, the full $50,000 was set off because in receiving the $37,067.48 from Decker, it no longer had paid that $37,067.48. (As noted—placing each in the position he or she would have occupied).  Since Acuity’s policy does not treat workers’ compensation as an element of loss under a “Liability Coverage Form”, their position was not well founded. It appears the court rightfully concluded Decker should be allowed to present all elements of loss in the UIM arbitration, including those elements paid through workers’ compensation. However, those elements will be subject to the set off for the amount Decker actually recovered on his workers’ compensation claim and on his claim against Hunter.—that total now being $363,874.52.  

It would appear that the biggest takeaway after revisiting case law on lien reimbursement under Section 5 of the IL WC Act is that when one chooses to obtain multiple elements of insurance coverage, it would be wise to include language in all policies that recovery under one policy precludes recovery under the others—and frankly including language which verifies the exclusivity of the WC remedy for employees should also be  a consideration if possible. This article was researched and written by Shawn R. Biery, J.D. MSCC. You can reach Shawn via email at sbiery@keefe-law.com or via phone at 312-756-3701 with any questions regarding this case or general questions regarding workers' compensation liens, discussion on obtaining coverage or overall litigation coverage.

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Synopsis: A Slippery Slope Around Due Process! OSHA Administrative Law Judge issued a precedential ruling that allowed a claim for enterprise-wide abatement beyond specified violations in OSHA citations. Analysis by Lilia Picazo, J.D.

Editor’s Comment: On December 7, 2015, Administrative Law Judge Carol A. Baumerich issued a ruling reasoning a provision in the OSHA Act authorizing “other appellate relief” permits the U.S. Department of Labor grounds to seek enterprise-wide abatement to proceed to trial on said issues. With respect to ALJ Baumerich, we disagree.

On November 2014, OSHA cited Central Transport, LLC for 14 workplace safety and health violations at a shipping terminal in Billerica, Massachusetts. In its complaint, OSHA alleged Central Transport failed to comply with agency standards for the safety of industrial trucks at all of its locations. OSHA requested an order compelling Central Transport to comply with safety standards at each location and proposed a fine of $330,800.

On December 2014, Central Transport filed a notice to contest the motion with the OSHA Review Commission asking it to strike OSHA’s claim on the basis the OSHA Act did not permit enterprise-wide abatement. Judge Baumerich denied Central Transport’s motion and held a provision in the OSHA Act authorizing “other appellate relief” permitted the Department of Labor to lodge claims for enterprise-wide abatement.

OSHA’s ruling is the first decision to allow enterprise-wide abatement beyond the specified violations mentioned in the issued citation. Put simply, OSHA can now seek to require a company abate hazards that may be present at a site or multiple sites that have not yet been inspected.

This ruling is troubling for business observers in many respects. First, it does not pass the “smell test” for complying with Respondent’s due process rights. In fact, it allows OSHA to blindly lodge claims without actual knowledge of any violations. Generally, OSHA issues citations, which advises an organization of the specific violations OSHA claims it violated. With this ruling, OSHA can proceed on one violation and request a trial on company-wide abatement, despite the fact it has not inspected any other facilities. Second, it subjects Respondent to additional discovery without any allegations of what specific violations there are at other unrelated facilities.

Some important lessons from OSHA’s ruling:

1.    Review and stay up to date with your company’s or industry’s most common violations;

2.    Communicate all health and safety patterns or challenges throughout all facilities; and

3.    Implement and provide continuous up-to-date training to all levels of management and employees to regularly inspect in order to avoid a future violation.

With OSHA’s new ruling, we would not want to see companies get hit with hefty fines over violations that could have been prevented had the proper protocols been set in place.

This article was researched and written by Lilia Picazo, JD. You can reach Lilia 24/7/365 for questions at lpicazo@keefe-law.com.

12-28-15; How Can The IL WC Business Community Disagree More?; Shawn Biery & Matt Ignoffo on SMART Act Change; New IRS Mileage Rate for IL WC IME's and more

Synopsis: Another IL WC Appellate Court “Activist” Stunner—How Can the IL WC Business, Gov’t and Insurance Community Disagree More?

Editor’s comment: In Oliver v. Illinois Workers' Compensation Comm'n, issued December 18, 2015, Claimant worked for an IL construction employer for only three days. His supervisor saw him on all three days and noticed nothing unusual about Claimant during the entire time he worked for the company.

Several days after being laid off, Claimant called his supervisor and surprised the supervisor to tell his boss he was seriously injured while working for the company. As a business observer, one would start to smell the WC equivalent of the proverbial “rat.”

The matter was tried before former Arbitrator Kinnaman who awarded about 12 weeks of lost time, about $20K in medical bills and 20% LOU arm. She also imposed penalties and fees against the employer, asserting there was no basis for disputing the claim. With respect to former Arbitrator Kinnaman who still receives this KCB&A Update, we disagree with the award of penalties/fees.

The matter was then administratively appealed to the IWCC and former Commissioner Dauphine headed the three-member panel who affirmed the award of lost time, medical bills and permanency. They carefully considered the claim and reversed the award of penalties/fees.

The Cook County Circuit Court judge re-imposed section 19(k) penalties and Section 16 attorney's fees against employer for what the Court felt was a deliberate refusal to pay TTD solely based on Petitioner Oliver having reported work accident 6 days after accident rather than on date of accident, as the employer required. The Court noted our IL Worker's Compensation Act allows employees 45 days to report an accident. As we report above, the 5-member Appellate Court, WC Division unanimously affirmed.

The Circuit and Appellate Court indicated their sole focus was on the employer's policy to not pay TTD benefits if a work accident is not reported on day it occurs is unreasonable, given Act's allowance of 45 days to report and also given their view some injuries do not manifest themselves until some point after the alleged accidental event occurs.

As veteran defense attorneys and commentators on behalf of IL business, insurance and employers community, we strongly object to the imposition of penalties/fees in a claim such as this one. In our view, there are so many question marks and uncertainties in this claim we consider it a liberal ruling to award Claimant a dime. We do not know if the defense firm that handled this claim did a solid job at hearing because there are many issues that arise from our review of the Appellate Court’s order.

Here are just a few of our concerns:

1.    Claimant testified he was working on a small barge welding when injured. The work was being performed above the water in Belmont Harbor—from the description, we are sure he was over navigable water while working. It appears this claim isn’t an IL workers compensation claim but a federal Longshore Harbor & WC Act claim—a motion to dismiss should have been brought for that reason. Actually, a motion to dismiss for lack of subject matter jurisdiction by our IWCC can be made right now.

2.    Petitioner Oliver only worked for this employer for three days. As any staffing risk manager will tell you short term workers are much more likely to file questionable claims than long-term workers.

3.    The supervisor was present on the job site all day on the date of claimed loss. The supervisor testified under oath he didn’t notice any medical issues with Claimant at all during the entire day. Petitioner admits he didn’t say a word about the event to his supervisor on the job site on that day. By themselves, these facts clearly presented a basis to deny the claim-it is our view, the Circuit and Appellate Court rulings completely disregard and discount these undisputed facts.

4.    Claimant asserted he smashed his elbow and arm when he recoiled and hit his elbow on a steel wall—despite claiming he yelled in pain, he asserted he didn’t want to report every bump and bruise. He admits he had no demonstrable outward indication of an injury while on the work site.

5.    Claimant also admits he received no first aid, emergency or other medical care on the date of loss.

6.    Petitioner admits he performed his normal job in a normal way without any restriction, job change or assistance.

7.    Petitioner claims this disputed event occurred on a day he knew the job was shutting down and he would be out of work—similar to number 1 above, there are lots more questionable claims filed on the eve of a layoff.

8.    Claimant testified to a supposed witness—the testimony about the witness was clearly hearsay. We are not sure if any objection was made at the time the testimony was offered before the Arbitrator. If an objection was made, the testimony should have been stricken and not considered by any hearing officer or judge/justice.. If no objection was voiced, the defense attorney should be criticized for not making it. Either way, such testimony about “what someone else saw or heard” is not reliable or supportive of an accidental injury.

9.    Petitioner had an undisputed and longstanding pre-existing condition in his arm. There is no question he filed an earlier IL WC claim for the same condition alleged in this claim. He received a hefty settlement from that earlier claim.

10. Because of the pre-existing and longstanding problems with his arm and elbow, it is possible Claimant suffered a failure or tear in his elbow at an earlier date during normal work.  Having felt that problem arise, he became the WC equivalent of a “ticking time bomb” wanting to take advantage of his malady to get the problem repaired and benefit from IL WC PPD values. The best way to “create” such a claim would be the fashion in which this claim unfolded.

The Last Statement by the IL Supreme Court to the Lower Courts—Don’t Flip IL Work Comp Commission Outcomes

We remember Sisbro and Twice Over Clean which comprise two definite legal statements from our highest court that bounced around the IL reviewing courts for years. In those rulings, the Supreme Court made it clear the reviewing courts are not supposed to reverse or “flip” an IWCC outcome simply because the reviewing judge/justices feel there might be a better outcome with their view of the facts.

Actually, since the Supreme Court issued the rulings above, we have yet to see a single award of IL WC benefits reversed to impose a denial. Instead we have seen numerous Circuit and Appellate Court rulings where denials are reversed to maximize awards and benefits, like this ruling.

Please note Claimant Oliver received approximately $75K in IL WC benefits. He received that money after the IWCC ruling came out years ago. His lawyers did a solid job in getting him the monies due. We feel our “activist” courts should have left well enough alone and let Claimant Oliver

·         Pay his own legal fees and

·         Not received the “bonus” of two different types of IL WC penalties, as the IWCC turned those down.

The Clear Message to U.S. Risk Managers from This Ruling—Don’t Rely on Same-Day or 24-hour Accident Reporting as the Sole Basis for Denial

We have a number of clients and readers who have same-shift or 24-hour accident reporting requirements for all workers. There are unions who support this concept and will allow disciplinary actions including suspensions and terminations for failure to report any event involving pain or medical problems. You don’t want anyone to say they tried to “tough it out” to then bring a major WC claim.  As most folks have cell phones, they can and should be required to text or call with any medical issue of any kind. We support what we feel is state of the art accident reporting protocols. If you want thoughts and guidelines on how to best implement same-shift or 24-hour reporting, send a reply.

The mistake this employer, or at least the one supervisor made and for which they have to be cautioned is the supervisor’s refusal to take a statement or allow a report of the event due to the lateness of reporting. In our view, they did the “ostrich in the hole” approach to accident investigation—they refused to allow the claim to be reported or investigated due to the lack of timeliness in reporting. The opposite approach should have been taken.

A late reported event should put up a giant red flag to your managers. Such an work accident report needs to be completed with follow-up inquiries to all supervisors and co-workers. Witness statements should be obtained. Surveillance or security camera footage should be sought and preserved. Management review should be completed.

The only thing you don’t want to do is what happened in this claim. Refusal to record or investigate a work injury claim because it was late reported is a crucial mistake that needs to be avoided. The work injury claim doesn’t “disappear” because you don’t investigate. Actually, it will probably come back to bite you. Don’t get bit!!

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

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Synopsis: Conditional Payment Process for Medicare In U.S. WC Gets Easier ??? Thoughts and analysis from Shawn Biery, JD, MSCC and Matt Ignoffo, JD, MSCC.

Editor’s comment: As part of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act), the MSPRP will be modified to include Final Conditional Payment process functionality by January 1, 2016. This new functionality will permit authorized MSPRP users to notify CMS that a recovery case is 120 days (or less) from an anticipated settlement and request that the recovery case be a part of the Final Conditional Payment process. After January 1, 2016, settling parties will be able to obtain a Final Demand prior to settlement if CMS is notified 120 days or less that settlement is anticipated. It should also be noted that the SMART Act provides that CMS must be given at least 65 days’ notice prior to the settlement, judgment or award.

As far as the nuts and bolts go, it will be triggered when the Final Conditional Payment process is requested, any disputes submitted through the MSPRP will be resolved within 11 business days of receipt of the dispute. Once all disputes have been resolved, and the case is within 3 days of settling, the beneficiary or their authorized representative will be able to request a Final Conditional Payment Amount on the MSPRP.

Once calculated, this amount will remain the Final Conditional Payment Amount as long as:

·         The case is settled within 3 calendar days of requesting the Final Conditional Payment Amount, and

·         Settlement information is submitted through the MSPRP within 30 calendar days of requesting the Final Conditional Payment Amount.

You can probably see that a number of problems arise specifically when you consider the inability to meet with a sitting Arbitrator in many venues within 3 calendar days, so in practice this does not appear to be a significant help in WC Claims—however it certainly gives a better option to lock in certainty in value if you can move so quickly. We consider it ironic that CMS has such a narrow time period for completion of settlement—especially when you consider that this last piece of the SMART Act to be implemented was supposed to be available 9 months after the SMART Act’s implementation (October 10, 2013).

Overall, we hope this development will be helpful in finding certainty in settlements where conditional payments are an issue. As for the dispute process, an 11-day resolution window by CMS is a quick turnaround time and should help to expedite settlement. However, you should note there is a limitation in that only disputes based upon relatedness can be submitted via the portal and all other disputes must be in writing so for a fair number of disputes (legal or statutory arguments), the disputes have to be submitted outside of the portal, and it is difficult to see how the 11-day turnaround time can apply in real life practice.  

On another note, once you get within the 3 days of settlement, you can simply request another Final Conditional Payment Amount to obtain another time and date stamped Final Demand when ready to settle as we are not aware of any limitation on the number of times you can download a Final Demand.

This may sound like old news to anyone who reads the updates—if not, or for any questions regarding Medicare Set-Asides, CMS review thresholds or other Medicare related issues with regard to your settlements, you can reach Shawn R Biery, J.D. MSCC  via email at sbiery@keefe-law.com or via phone at 312-756-3701 or you can also contact our other MSA certified attorney Matt Ignoffo, J.D. MSCC via email at mignoffo@keefe-law.com or via phone at 312-756-3729.

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Synopsis: IRS Mileage Rates for IL WC IME’s Announced.

Editor’s comment: Based on IL WC case law, The Internal Revenue Service issued the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business purposes.

Beginning on January 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

·         54 cents per mile for business miles driven (57.5 cents in 2015)

We suggest all IL WC Practitioners note the change.

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Synopsis: KCB&A is Looking for a Paralegal and a Michigan WC Defense Lawyer with three to five years’ experience. The positions are open right now. Need resumes.

12-21-15; "Dependent Contractor" WC Ruling in Death Claim by Arik Hetue; John Karis on New EEOC Guidance on HIV/AIDS; Add'l Insurance Coverage ruling by Lilia Picazo and more

Synopsis: IL Appellate Court Confirms Our State Follows “Dependent Contractor” Concept Sometimes Creating an “Employee” for WC purposes. Analysis by Arik Hetue.

Editor’s comment: This article is intended to explore what IL employers, including logistics companies and municipalities/local governments can do to prevent or avoid such an unexpected and expensive legal finding in your future. Lots of smaller government units are trying to “job-out” some tasks or whole departments to what they think are independent contractors to avoid the much higher costs of benefits, pensions and yes, work comp insurance for full-time employees. The classic issues of Independent Contractor vs. Employee become more burdensome when our reviewing courts may bend the facts to fit a classification system not contained in the IL WC Act, and dealt with only in caselaw. We truly feel at this point the “Independent Contractor” status is being relegated to only those classic examples of hiring a professional to perform a specific one-time task.

If you have an ongoing relationship with a “non-employee” contractor, unless you require them to have their own WC coverage, it may be nigh impossible to escape WC liability. In our respectful view, if a municipality, logistics provider or other employer is going to claim a worker who provides regular services for your company or government unit, they have to have their own WC coverage or you are at risk for multi-million dollar IL WC awards. We recently saw a posting on the RIMS website indicating employers/municipalities want to see either MOI’s meaning Memorandum of Insurance or COI’s meaning Certificates of Insurance for all “independent contractors.” The IL WC Appellate Court has once again confirmed they are widening the definition of “employee” when there is no such WC insurance and we believe they have effectively outlined the role of “dependent contractor” in one of their latest rulings. .

In the recent Bridgeport v. Illinois Workers' Compensation Commission decision the Appellate Court, Workers Compensation Division upheld a hefty award of $605K in benefits for the death of an independently contracted municipal water meter reader. The WC coverage of the death are certainly at issue in addition to the independent contractor/employment issue. Decedent Jacqueline Harvey, contracted to begin performing water meter readings for the City of Bridgeport, IL in March 2011. According to the facts as outlaid in the decision, Harvey spent the first two months on the job in training with another trained contractor working with her to educate her on how to do the job. Harvey began reading meters on her own in May 2011, following the end of her training period. Apparently, Harvey was suffering from a seizure disorder which caused grand mal seizures and loss of consciousness. There is no indication in the record the City was advised of her medical condition.

On May 19, 2011, Harvey suffered a seizure while reading a water meter which happened to be in a flood plain, and during the seizure, she fell face down in a standing pool of water some 8 inches deep and drowned. The Coroner’s report of death listed drowning secondary to clinical seizure as the cause. Harvey’s surviving spouse filed a claim at the IWCC, and a hearing was had before an Arbitrator, with the City arguing Harvey was not an employee. The Arbitrator ruled Harvey was in fact an independent contractor and benefits were denied.

On appeal to the IL WC Commission, the Arbitrator’s decision was reversed – despite the agreement to the contrary, the Commission ruled Harvey was actually an employee and found the accident arose out of employment and occurred in the course of the work performed. The Commission asserted there is no “bright line” rule, and instead alluded to what it called a “multi-factor control test” without specifically using that language. They did however rule “the single most important factor being whether the purported employer has the right to control the actions of an employee.” We ask the obvious question—doesn’t every employer have the “right to control” an independent contractor? While consistent with case law, we would point out a possible superseding factor following the brief history of the issue noted below.

The law Bridgeport v. Illinois Workers' Compensation Commission is based upon is not contained in the IL Workers Compensation Act or Rules Governing Practice. The Act has the following to state about independent contractors-- nothing. IL WC case law from the 1960s through the 1990s truly fleshed out the law on this issue. It was then, and remains now, clear this question of employment status is the primary initial decision which determines whether a claimant is entitled to compensation under the IL WC Act. As created by our courts, the “control test” is based upon the following issues:

·         The right to control the manner in which the work is done;

·         The nature of the work performed as it relates to Respondent’s business;

·         The method of payment;

·         The right to discharge;

·         The skill required in the work to be done;

·         Who provides tools, materials, or equipment;

·         The label given to the contractor by the parties in a written agreement;

·         Whether the claimant provided their own workers' compensation insurance.

The Illinois Courts have consistently held the right to control the manner in which the work is being done is the paramount factor to be considered in determining whether a worker is an employee. As employers “control” both employees and independent contractors in a variety of ways, we consider that post-accident legal analysis wholly unpredictable and a very poor guide for our readers to implement. Either way, the Commission used that factor in Bridgeport to reverse the Arbitrator and make an award. We note there are legal scholars who have argued against that nebulous factor being given such weight, and the primary factor should be the distinction of whether the work being performed by the contractor is of a type and nature similar to that done by the purported employer. In any case, both of these issues are substantial factors in the supposed multi-factor control test. The issues of payment, discharge, skill and materials are relevant but not as weighty as the first two factors. The issue the label the parties give to the relationship is the least important, and oftentimes not of any relevance, but we note it here as in a close case the label may swing the balance by confirming the intent of the parties at the outset of their relationship.

In their Bridgeport decision, the IL Appellate Court correctly stated Illinois has no "rigid rule of law" to determine whether a worker is an employee or an independent contractor, and they also noted this is "a vexatious question" to resolve which has been an oft quoted line in this series of cases. We couldn’t agree more, as noted in the variety of issues outlined above. We also note the question comes up frequently in municipal claims, as our municipalities have found the crushing costs associated with providing the myriad of employment benefits for which our Public Sector Unions have successfully negotiated. This has required an outsourcing of sorts, to curb the costs the local governments are facing as we also see declining tax bases and a population migrating to greener pastures as it were. Please remember, the local communities, towns and villages all the way up to the big city governments of Chicago, Cook County, and the State itself, are broke. B-R-O-K-E. They have no money, operate on shrinking credit, and are facing enormous unfunded or underfunded liabilities in the future. Taxes continue to spiral and taxpayers are starting to fight back or move away. Cities/counties and others are looking for any means necessary to staunch the monetary hemorrhaging they are looking at, if only to salve the pain of the future monies they see flowing out, and with the knowledge there is no new money coming in.

The ultimate ruling in Bridgeport was based upon some of the following facts – while the City provided Claimant with her equipment and a vest, they specifically did not provide transportation. While on the job, Decedent was expected to dress presentably; be personable and able to work with angry or difficult customers; read meters on route, record readings, and make the necessary calculations; read the meters between the twentieth and twenty-sixth day of each month; be trained by qualified City water department personnel; identify water meter equipment problems and report defects to city hall; report violations of rules and regulations governing water consumption; maintain assigned tools and equipment; and if using a vehicle to drive the route, Claimant was expected to provide the City with her driver's license and vehicle insurance information. Claimant was paid monthly with no taxes or benefits dues taken out of her check, differently from actual city employees who received bi-weekly checks and had all taxes and benefits dues removed. The IWCC ruling found Decedent was an employee of the City for workers’ comp purposes—a “dependent contractor.”.

The Commission’s reversal of the Arbitrator noted the primary factors most illustrative of the existence of the employer/employee relationship were the City's directing claimant to read the water meters only during a one-week period each month during daylight hours, the intersection between her job duties and the City's business interests, and the similar manner in which Decedent and recognized City employees could have their employment terminated. We caution our readers – this is essentially turning the classification into what we have styled a “dependent contractor” – an independent contractor who must depend on this sole employer for the ability to do this type of work – here the City provided the locations to read, the equipment and training to read the meters, and put limits on the times and dates during which meters could be read. This begs the question, was Harvey truly an independent contractor – as the court noted, this case could have gone either way – and it did! As evidenced by the Arbitrator’s denial and the Commission’s reversal, this was no slam dunk. However, following the Commission review, this issue would not be reversed again unless it was against the manifest weight of the evidence.

The Commission also found Decedent's accident arose out of and in the course of her having to work in conditions that included an eight-inch pool of rainwater, a hazard it found was not confronted by the general public. We note this is an odd ruling and not truly addressed by the reviewing courts, as anyone who lives in a flood plain is potentially presented with just this hazard on a daily basis. We ask our readers the rhetorical question of how standing rainwater outside an area’s homes isn’t a risk common to the public?

You may have noticed our discussion of the factors above did not address the issue of potential personal WC policy coverage. On a possibly brighter note, our review of case law indicates while the Courts have consistently held the control issue and the nature of the work to be the paramount considerations, in actuality, WC coverage appears to be the true deciding factor in close cases for the Commission. If that issue is not raised by the parties, the Commission will default to the blurring “multi factor” test outlined above, but the Commission has consistently held when claimants have their own WC coverage, they are found to be independent contractors. The Appellate Court and other reviewing courts have upheld Commission decisions under the manifest weight standard – with respect to facts, if there is a basis for a ruling, that ruling will not be overturned unless the opposite ruling is clearly evident.

We caution this coverage issue should not be used as a panacea – if the purported contractor is beholden to significant control by the Respondent, this issue would not sway the Courts. However in close cases, as in the case detailed here, where only a modest or minor amount of control were applied and the other factors weighed in both directions, it would likely be enough to swing the decision in favor of independent contractor status. If such were the facts, as in Earley v. Indus. Comm'n, a 1990 ruling by the Appellate Court, it would appear a denial of benefits based on a determination claimant was an independent contractor would be upheld on review, as it is a factual question and as long as there are facts in support of the finding, it would not be overturned on review.

Please note the claim may still be certified for review and then accepted by the IL Supreme Court. Either way, we would appreciate your thoughts and comments, feel free to reply to ahetue@keefe-law.com or ekeefe@keefe-law.com or post them on our award winning blog.

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Synopsis: EEOC Finally Offers Guidance for Employers to Accommodate Employees with HIV/AIDS. This guidance provides significant value to Human Resources professionals and other management decision makers in regards to accommodation requests for any medical condition. Analysis by John Karis, J.D.

Editor’s Comment: On December 1, 2015, in conjunction with World AIDS Day, the EEOC issued new guidance documents addressing the legal rights available to employees with HIV/AIDS under the Americans with Disabilities Act (“ADA”).

Although the guidance is about HIV/AIDS and is not specifically directed to employers, this guidance describes in great depth the basic considerations employers must make when evaluating issues that may involve ADA-protected rights. The guidance makes clear employers must base employment decisions, including decisions on hiring, termination, and whether to grant reasonable accommodations, on objective evidence, not medical myths or stereotypes. Employers are not permitted to speculate or guess on matters relating to how a medical condition affects an employee’s job performance. The guidance goes into detail on what an employee is to expect from the employer when asking for a reasonable accommodation. The guidance notes if more than one accommodation would work, the employer can choose which one to give to an employee.

The EEOC provides excellent detail in terms of what information an employer can require from a health care provider in the context of an employee’s reasonable accommodation request. That requested information can include descriptions of how the employee’s condition functionally limits his or her performance of job functions and major life activities, and how the condition makes a particular change at work or a certain accommodation medically necessary.

The EEOC identifies common reasonable accommodations as follows: altered break and work schedules (e.g., frequent breaks to rest or use the restroom or a change in schedule to accommodate medical appointments); changes in supervisory methods (e.g., written instructions from a supervisor who usually does not provide them); accommodations for visual impairments (e.g., magnifiers, screen reading software, and qualified readers); ergonomic office furniture; unpaid leave for treatment or recuperation; and permission to work from home. If the patient has been working successfully in a job but can no longer do so because of a disability, the ADA also may require reassignment to a vacant position the patient can perform.

This guidance gives clear insight into the approach the EEOC is likely to take when it receives a discrimination charge that alleges ADA violations. Employers should give careful consideration to this guidance in advance of making any decision on an employee’s request for an accommodation, and before taking any employment action that may relate to an employee’s medical condition.

Another important takeaway from these documents is employers should be aware the EEOC has long considered HIV/AIDS to be a disability protected by the ADA. Employers should go through the same analysis and interactive process as with any disability covered by the ADA or applicable state disability law to determine whether any reasonable accommodation can be made.

We highly recommend taking a look at these documents; please see the below for links to them:

“Living with HIV Infection: Your Legal Rights in the Workplace Under the ADA”

“Helping Patients with HIV Infection Who Need Accommodations at Work.“

This article was researched and written by John Karis, JD. You can reach John 24/7/365 for questions about EEOC compliance, general liability and workers’ compensation at jkaris@keefe-law.com

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Synopsis: Oral Agreement for GL Additional Insured Coverage Prior to Issuance of Certificate of Insurance Was Binding. Analysis by Lilia Picazo, J.D.

Editor’s comment: On December 16, 2015 the United States Court of Appeals for the Seventh Circuit in Cincinnati Insurance Co. v. Vita Food Products, Inc. et al, issued a decision that reversed and remanded the decision of the District Court for further proceedings consistent with its opinions regarding ambiguous contract language.

Facts: On January 15, 2011, the Cincinnati Insurance Company ("Cincinnati") issued a one-year general liability insurance policy to Painters USA (“Painters”). The policy covered bodily injuries caused by an “occurrence” for which the insured was legally liable to an injured party. The policy also included an additional insured provision, which allowed the insured to add an “additional insured” by oral agreement so long as the oral agreement preceded the “occurrence” and a certificate of insurance was issued confirming the additional party’s status. The policy did not require Cincinnati’s permission so long as the relationship between the insured and the potential additional insured was consistent with the intentions of the policy.

While the policy was in effect, Vita Food Products, Inc. (“Vita Foods”) hired Painters to paint on its premises. The parties orally agreed to add Vita Foods as an "additional insured" under the insurance policy. Before Painters requested a certificate, one of its employees slipped and fell while working on Vita Foods' premises. Painters immediately requested a certificate adding Vita Foods as an additional insured. The certificate was issued the next morning.

The employee subsequently filed suit against Vita Foods for injuries sustained while on its premises. Cincinnati filed a separate suit asserting Vita Foods was not covered under its policy because a certificate naming Vita Foods as an additional insured did not exist until after accident. Cincinnati contended despite the oral agreement made between Vita Foods and Painters before the accident, a certificate confirming Vita Foods’ status was not timely prepared as required by the terms of the policy.

The District Court agreed with Cincinnati and granted its motion for summary judgment. The Court noted that Vita Foods was not insured as an “additional insured” under the Policy until a certificate was prepared and signed.

Decision of the United States Court of Appeals for the Seventh Circuit: The Appellate Court found summary judgment in favor of Cincinnati premature. Under the terms of the policy, an oral agreement was sufficient to establish a party’s status as an additional insured and must precede an occurrence. A certificate of insurance would subsequently be issued as an informational document. However, the certificate would not confirm rights upon the certificate holder, or affirmatively or negatively amend, extend, or alter the terms of the policy. More importantly, the certificate would not constitute a contract between the insurer, Cincinnati, and the certificate holder, Vita Foods. The Court noted that while the insurance policy clearly stated an oral agreement must precede an accident, it did not clearly state when the certificate had to be issued. The Court reasoned that if a certificate of insurance was in fact a precondition to insuring a party, the certificate would ultimately amend the terms of the policy, which was not the case with the policy drafted by Cincinnati. Thus, the Court reversed and remanded the case for further proceedings consistent with its opinion.

We agree with the Appellate Court’s decision to reverse and remand the case based on the ambiguous contract language. However, we note this could have been avoided had the oral agreement been memorialized from the get go. When in doubt, memorialize an oral agreement to avoid messy court battles such as the one in this case.

This article was researched and written by Lilia Picazo, J.D. Please feel free to direct comments and questions to Lily at lpicazo@keefe-law.com.

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Synopsis: KCB&A is Looking for a Paralegal and a Michigan WC Defense Lawyer with three to five years’ experience. The positions are open right now. Need resumes.