8-29-2016; $1.6 Million Retaliatory Discharge Verdict Vacated But GPP Rewarded by IWCC; Epi-Pen Controversy--Do Risk Managers Still Need Them?; BPCIA Hosts WC Teaching Lunch with Keefe/Campbell

Synopsis: Employee’s Retaliatory Discharge Action Dismissed As There Was No Evidence Manager Knew of Plaintiff’s WC Claim; $1.6 million Verdict For Plaintiff Reversed--Before We Start to Worry About Plaintiff, Note He is a Well-Paid GPP or Ghost Pension Payroller.

Editor’s comment: A former City of Chicago employee’s Illinois Workers’ Compensation Act retaliatory-discharge claim failed as a matter of law because there was no evidence the official who made the decision to terminate Plaintiff (and many others) had any knowledge Plaintiff filed a workers’ compensation claim. Instead, the evidence tended to show the decision to terminate Plaintiff was part of a reduction in force or RIF that affected some 300–400 city jobs. Evidence indicated Plaintiff had not been singled out; everyone who held his job position was similarly laid off. Because an employee lacked evidence the decision-maker who included him in a budget-crisis-based reduction in force knew of his workers’ comp claim and he likewise failed to link his termination to his disability, neither his workers’ compensation retaliation claim nor his ADA claim should have gone to trial, ruled the federal Seventh Circuit Court of Appeals ruled, reversing in part a split judgment in this almost never-ending case.

There was a 1995 accommodation agreement--the employee began working for the Chicago Park District in 1973, later becoming a City sanitation truck driver. Plaintiff Hillman claimed he developed cervical radiculopathy—we do not see an “accident” or “injury” described in the record. This appears to be a “repetitive working” claim that is just about indefensible.  In 1995, Plaintiff Hillman entered into an ADA reasonable accommodation agreement with the City that allowed him to avoid “repetitive work” with his injured arm. He was reassigned to be chief timekeeper, and though he never performed all duties required by the job description, he performed the essential functions. In May 2000, the employee was put under a new supervisor, who assigned additional duties arguably requiring “repetitive use” of his arm, allegedly exacerbating his asserted delicate condition. In July of that year, for the first time in his career, the employee did not receive a merit raise—one might think “merit” would mean one earned the raise. Either way, Plaintiff informed his new supervisor he could not physically perform the additional “repetitive” duties. In response, the supervisor assigned him to supervising timekeeper duties which probably meant there wasn’t much work to do.

Aren’t All Jobs “Repetitive?”; Isn’t Repetition the Nature of Work?

Thereafter, the employee’s attorney wrote to the City manager asking the 1995 accommodation agreement be magically honored. In response, the personnel liaison wrote a new job description for Plaintiff. The first paragraph covered duties he had done as chief timekeeper; the second covered the reassigned duties of a supervising timekeeper. It also anticipated use of a new computerized payroll system that might render all of it otiose. The second paragraph supposedly included supposedly “repetitive tasks” the employee somehow claimed he could not physically perform. In August 2000, the liaison told him to report for a fitness-for-duty exam to reassess his asserted accommodation. Around that time, his physician noted his condition had somehow worsened while doing almost nothing at work. Later, the employee was transferred to the Construction Division where he answered phones. We assume this might mean he had to repetitively push buttons on the phones and he might have to put the phone to his ear and talk. That same day, he filed an IL workers’ comp claim. On October 1, he was again denied a merit raise. A week later, he was transferred to the Transportation Division where he again answered phones. He continued to see medical professionals in connection with his workers’ comp claim and, on December 1, he received a letter from the City advising “the most viable option for you is to apply for a Leave of Absence and to return to work when your physical condition allows you to perform the duties of your job title.” In February 2001, a doctor cleared him to perform sedentary work, but the department’s Assistant Commissioner wrote “Cannot accommodate with restriction” on the discharge sheet. He noted the employee could be accommodated in the Bureau of Traffic Services.

Cleared to work, the employee reported to Traffic Services and was given a temporary assignment involving routine duties, though his title was still chief timekeeper. Thereafter, he had a pattern of tardiness and absenteeism due to sick leave. He was again denied merit raises in 2002. When the City faced a serious budget shortfall and department heads had to identify positions to include in a RIF, the employee and his position was selected. Both the chief timekeeper and supervising timekeeper positions were included because no one was performing them and the Department’s transition to the new computerized payroll system rendered them obsolete. Final approval of the RIF was by an individual who did not know the employee had filed a workers’ comp claim.

In 2004, the employee filed a legal action claiming the City violated his rights under the First Amendment, the ADA, and state law. The judge allowed two claims to go to trial—discharge in retaliation for filing a workers’ compensation claim and an ADA claim alleging he was denied raises and terminated for requesting an accommodation. The jury returned a verdict for the City on the workers’ comp retaliation claim and the judge died before considering the ADA claim. A new judge granted a new trial. This time the jury returned a split verdict, awarding $2 million to the employee for workers’ comp retaliation and issuing an advisory verdict in favor of the City on the ADA claim. After post-trial motions, the court denied the City’s motion for judgment as a matter of law on the workers’ comp retaliation claim, though it did reduce damages to $1.6 million. It denied the employee’s motion for judgment on the ADA claim. Both parties appealed.

Reversing in part, the federal appeals court found the undisputed evidence showed the workers’ comp retaliation claim should not have reached a jury. To prevail, the employee had to show his workers’ comp claim was the “but-for” reason for his termination. That requires, at a minimum, the decision-maker knew he intended to file or had filed, a workers’ compensation claim, but here there was no such evidence at all.

Rejecting the employee’s cross-appeals as to his ADA claim, the federal court found no reason to disturb the findings of fact after the bench trial because the employee failed to prove his request for an accommodation was the “but-for” cause of the merit-pay increase denials and his inclusion in the RIF. In the federal appellate court’s view, the lower court’s findings were well supported by the record, including the lack of raises followed excessive tardiness and absenteeism, and the RIF was necessitated by a budget shortfall.

This Ruling Cuts in Numerous Directions

First, please note the City was sued in civil court for the retaliatory discharge/ADA dispute—at the same time, the WC claim was filed for the same damages. Magically, they don’t offset for reasons we completely disagree with. There is no possible way Claimant could be seeking “damages” for loss of earnings but not have those “damages” be offset by a T&P WC award that is clearly worth millions and millions of dollars to him. Whatever device was used by the civil courts to allow what would be double-compensation should be reviewed, reconsidered and vacated.

Second, for HR managers, if you are setting up a RIF, you need to find some way to get rid of or RIF your “challenged” workers while not knowing if they have pending WC claims. We are happy to assist in this process—just send a reply.

Third, please don’t pay or blindly accept “repetitive working” claims. The defense team at KCB&A knows how to fight and win such claims—please contact us for your best defense strategies.

Fourth, as we indicate above, Plaintiff Hillman is a GPP or Ghost Pension Payroller. In December 2007, the Commission panel headed by former IL WC Commissioner DeMunno affirmed an award of total and permanent disability benefits of $716.86 a week on a tax-free basis for life. By now from year 2000 to present, Plaintiff has already received about $600,000! That award also provides for RAF benefits that will double the weekly award every 23 years or so. Therefore, if Claimant lives to 2023, he will be getting about $1,500 a week or $75,000 on a tax-free basis each year for both T&P and RAF benefits. If he can make it another 23 years, he will be getting about $150,000 each year from Chicago taxpayers and the businesses/governments that pay into the RAF. Claimant Hillman got his wish to go on the dole and get paid handsomely to do nothing. Is there anyone so disabled in one arm, they can’t answer the phone wearing a headset?

Fifth and finally, I salute the federal appellate court for getting this one right. I point out it is decisions like this one that are causing property and other taxes/fees to skyrocket in Chicago. We need to stop creating GPP’s or Ghost Pension Payrollers that are gipping our taxpayers. It is also causing the entire workers’ comp system in this state to needlessly come under a microscope. As we outline above, we don’t see a work accident and we don’t see a work injury. We consider it impossible to consider Plaintiff Hillman couldn’t answer phones and work at sedentary work. I feel the reason he isn’t working right now and earning his pay was his personal decision to quit a sedentary position and sue, sue, sue. If the Arbitrator and WC Commission in 2007 hadn’t rewarded this unusual and unsupported behavior, we feel Plaintiff Hillman would probably have stopped the shenanigans and gone back to work.

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

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Synopsis: Epi-Pen Cost Skyrockets—Should HR/Risk Managers Still Have Them On the Job?

Editor’s comment: Epinephrine injection is used to treat life-threatening allergic reactions caused by insect bites, latex and other causes. Symptoms of allergic reaction include wheezing, shortness of breath, low blood pressure, hives, itching, swelling, stomach cramps, diarrhea, and loss of bladder control. Epinephrine is in a class of medications called sympathomimetic agents. It works by relaxing the muscles in the airways and tightening the blood vessels.

In its latest move to quell outrage over its price increases, the maker of the Epi-Pen has resorted to an unusual tactic — introducing a generic version of its own product. The company, Mylan, said the generic Epi-Pen would be identical to the existing product, which is used to treat severe allergic reactions. But it will have a wholesale list price of $300 for a pack of two, half the price of the brand-name Epi-Pen. The raging debate over Epi-Pen pricing has offered a surprisingly wide window into the complicated world of prescription drug pricing, in which powerful drug companies, pharmacy benefit managers, insurers and federal health programs all play major roles. However, the system remains questionable and quirky.

Can a Bee/Wasp Sting Be A Compensable Workplace Exposure?

For the most part, bee/wasp stings are random and rare. In those settings, it is hard for a hearing officer to relate the attack to the workplace. However, if an employee is subjected to high level of exposures to bees/wasps than the regular public, compensation may lie.

Therefore for workers who have allergies and sensitivities of all kinds, having an Epi-Pen at a work site is a must. Employees who, as part of their daily work activities, are exposed to bee/wasp venom or other workplace hazards that may result in an allergic reaction could potentially be at risk and may need an epinephrine pen or Epi-Pen.

Your employees who have workplace hazards that may result in an allergic reaction should indicate they are at risk when around some animals, bees and wasps. Employees who are known to have a systemic allergic reaction to the venom should carry, or have available at a moment’s notice, an epinephrine dispensing pen. To acquire an Epi-Pen for workplace use, the employee must obtain a prescription from your OccDoc or their personal physician. Most occmedicine staff will train and document with an outline of the training, date and participants. If you have occhealth selected for your workers, have them contact your Occupational Medicine group to schedule an appointment. Once an exam and training have been completed, the Epi-Pen may be acquired at a local pharmacy.

Emergency Use

Epi-Pens should be readily available in areas associated with apiaries/wasps for emergency use by workers, grounds keepers, etc. who may be exposed to or near the bees/wasps. Epi-Pens should be placed in your First Aid Kits and administered by First Responders (CPR, AED and First Aid) who have been trained to use them.

Epi-Pen users must observe the expiration date of the individual pens and replace accordingly. Expired Epi-Pens should be considered hazardous waste and must be returned to the pharmacy where they were purchased for proper disposal.

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

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    Bedford Park – Clearing Industrial Association

                                                          5101 West 67th Street ● Bedford Park, Illinois 60638 ● 708-496-0336 ● Fax 708-458-8885

_____________________________________________________________________________________________

QUARTERLY MEETING

Workers’ Compensation 101-102 For BPCIA

Speakers: Gene Keefe & John Campbell

September 20th

Mid-level presentation for managers and executives about dealing with workers’ comp claims including accident investigation, compensability, claim management, legislative and legal developments. Expect an interactive discussion of workers’ comp issues that will be entertaining and informative. Veteran WC trial lawyers Gene Keefe and John Campbell are also adjunct professors of law at The John Marshall Law School and can review strategies to avoid work injury claims, early intervention and how to maximize strong outcomes when an unfortunate injury occurs at your workplace. They will also discuss how workers’ comp interacts with other state and federal benefit programs like FMLA, ADA, Older Workers’ Benefit Protection, Unemployment and OSHA.

                                   DATE:   September 20, 2016 (Tuesday)

               COST:   $25.00 per person includes lunch (Non-members $35)

                                       PLACE:  Marriott Chicago Midway

                                             6520 S. Cicero Avenue          

              TIME:    11:30 A.M. Registration / 12:00 NOON Luncheon

For Reservations call 708-496-0336 or Email donna@bpcia.org

8-22-2016; Can IL Taxpayers Stop Being GPP'd By State Workers; Can the IWCC Be A Model of Efficiency to Survive?; New IL Law Changes "Mod Rate" and Ratings for Staffing Cos and more

Synopsis: Can IL Taxpayers Stop Being GPP’d by Former State Workers? Can Our IWCC Be A Model of Gov’t Efficiency in Doing So?

Editor’s comment: I wrote an article in last week’s KCB&A Monday Law Update about taking the staffers out of the four “remote” or satellite IL WC Commission offices across our state. The article appears to have hit a chord with attorneys and readers on both sides of the IL WC matrix who want the gov’t staffers to remain in the offices, despite a changing landscape where technology allows for the elimination of brick-and-mortar offices and people to perform tasks that can actually be done on-line.

With respect to these staffers, we don’t consider those tasks to comprise full time work. Their combined salaries are significant. That said, we are even more concerned about the staggeringly high future cost of GPP Former State Workers.

What Is A GPP Former IL State Worker?

Well, GPP stands for “Ghost Pension Payroller.” What is a Ghost Pension Payroller? That is easy to understand—it is an IL state worker that spent enough time working in a state job to become vested in our unconscionably lucrative state pensions to then receive more current tax money not working than they made while working with 3% compounded annual increases and lifetime “free” or taxpayer-paid health care coverage. In our view, becoming a GPP is the equivalent of winning the lottery because the Ghost Pension Payroller puts in so little to then get millions in return later in life. Please note we aren’t blaming the GPP’s in our state, as they didn’t create this mess but we don’t see lots of them calling for changes to end this welfare-like largesse at a staggeringly high cost to taxpayers. Either way, the less state workers we have now, the fewer GPP’s we will have in the future.

Who Are The Worst IL GPP Former State Workers?

I also want to make it clear, the math underlying these statements is immutable—it is simply math. I can back up the math with more details for anyone interested.

• A married IL legislator is fully vested in four years of service and will contribute about $24,000 to the IL Legislative Retirement System. If they remain at base pay (and very few of them do so), their fake pensions start at $57,800 each year, so they go through their entire $24K contribution in about six months of retirement. That means they are not actually getting “pension” payments after about a year because they will have completely exhausted their contributions and the State’s matching contributions during their service. They become “Ghost Pension Payrollers,” as they are back on your and my payroll, even though they are no longer working. After 23 years of retirement, they will be getting $115,000 each year. After 46 years of retirement, they will be getting $230,000 a year. If you note the math, they can receive several million dollars in retirement for their fake gov’t pension contribution of only $24K. I think that is a lot like winning the lottery—it certainly isn’t a “pension.”

• A married IL judge or justice is fully vested in only nine years of service. Their total pension contributions to the Judicial Retirement System will be about $180K over 9 years. A vested IL judge/justice retiring today will receive $174,250.00 in the first year of retirement. Noting the math, that judge will have exhausted their entire fake pension contribution in about a year and will be back on the payroll of folks like you and me and every IL taxpayer on this email chain in two years. With compounded 3% annual increases, a retired judge’s first annual raise will be more than $5K. In just 23 years, they will be receiving $348,500 each year. If they live 46 years into retirement, they will be getting almost $700K a year and their annual raises will be $20K a year. Again, to see a retired judge eventually getting as much as $15 million or more in retirement for an initial contribution of less than $200K is like winning the lottery to me.

All IL State employees can bask in this coming taxpayer-fed benevolence at whatever level—they all get un-funded state pensions that aren’t truly pensions. What I don’t think most folks understand is this “hidden” aspect of GPP’s or Ghost Pension Payrollers on IL State government. There are about 50,000 current State employees. To my understanding, there are about 250,000 folks on IL State fake government pensions. All employers have more retirees than active workers. Only IL State gov’t has literally hundreds of thousands of Ghost Pension Payrollers who get paid but don’t do any current work for their pay.

Actually, being vested and then retiring to become a Ghost Pension Payroller is a better financial deal than actively working for the State. Regular state workers don’t always get raises. In contrast, Ghost Pension Payrollers get annual, guaranteed 3% raises. They get the raises every year for the rest of their lives. Lots of folks are retiring right now from gov’t work to start getting paid more to NOT work.

I don’t feel some folks believe the GPP pension payout will double (and then quadruple) every 23 years. The math isn’t debatable. Try it out: https://www.investor.gov/tools/calculators/compound-interest-calculator. I just don’t think many folks understand how lucrative these fake pensions have become and how they are almost certainly going to bankrupt our State. This same killer math applies to secretaries, cleaning people, anyone with a IL State job that comes with a fake gov’t pension. Does it make sense to eventually pay the admins working at the Collinsville, Rockford, Peoria or Springfield call $100K+ a year in retirement?

What Does This Have to Do With the IWCC And Remote Office Staffing?

The IL WC System is under attack in every direction. At least one source is now calling for IL business to have an “opt-out” choice that would replace the current IWCC with another admittedly inconsistent and confusing approach to injured workers’ needs. I feel one way to quell the attacks and allow the system to remain in place is to start looking at the IWCC and make tough calls on what is needed and what we can live without.

The current budget of the IWCC is paid for entirely—every nickel—comes from IL business. That budget is about $30 million each year. If our IWCC Chairperson and General Counsel Ron Rascia and the many IWCC advisory boards want to show our great Governor and all the business leaders in this state they care about work comp costs, one way to do so would be to cut costs and staff by 10-20-25%. A 25% cut would be an immediate savings to IL business of $7.5 million. The longer term savings could be even greater because you would end the hiring of some GPP’s that are certain to end up costing double or triple or even quadruple what they are paid while working! Either way, such actions are sure to make national WC headlines in the very best way.

It is our hope the IWCC becomes a model for the other 87 IL State agencies in cutting costs by taking the lead and making headlines doing so. Please remember our State government debt is over $200 billion, yes billion. Our State’s unpaid or late-paid bills are nearing $10 billion dollars. I hate being in a state where we laugh at outside vendors who diligently work for taxpayers and then State gov’t laughs at them and is forcing some suppliers into bankruptcy waiting to get paid. One major reason for the unpaid bills are all the GPP’s.

How do we stop this embarrassing situation? Well, it starts with reducing or eliminating staff where possible, especially with the emergence of on-line filing capability at the IWCC, which we understand is in the works. We can also consider eliminating items like the IL WC Second Injury Fund and Rate Adjustment Fund and start to actually notice IL WC claims have dropped dramatically while administrative staffing and budgets keep going up. When e-filing starts, we hope even further cuts can be made as paper forms and libraries go on the cloud.

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

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Synopsis: New IL Law Changes WC Rules for IL Staffing Companies.

Editor’s comment: Staffing/Logistics and similar companies are exploding in growth. Governor Rauner just signed a new bill that is required reading for anyone in that part of the WC matrix. If you read the new law below, you may note it appears to block fiddle-fooling with “experience mods” or insurance ratings for staffing agencies.

The new law says: Section 5. The Employee Leasing Company Act is amended by changing Sections 25 and 30 as follows:

Sec. 25. Record keeping and reporting requirement.

    (a) A lessor shall maintain accounting and employment records relating to all employee leasing arrangements for a minimum of 4 calendar years. A lessor shall maintain the address of each office it maintains in this State, at its principal place of business.

    (b) A lessor shall maintain sufficient information in a manner consistent with a licensed rating organization's data submission requirements to permit the rating organization licensed under Section 459 of the Illinois Insurance Code to calculate an experience modification factor for the lessee.

    (c) Upon written request of a lessee with an annual payroll attributed to it in excess of $200,000, the lessor shall provide the lessee's experience modification factor to the lessee within 30 days of the request.

    (d) Upon request of a lessee with an annual payroll attributed to it of less than $200,000, the lessor shall provide the loss information required to be maintained by this Section to the lessee within 30 days of the request.

    (e) Nothing in this Section shall preclude a licensed rating organization from calculating the experience modification factor for each lessee nor an insurer from maintaining and furnishing on behalf of the lessor, such information as required by this Section.

    (f) In the event that a lessee's experience modification factor exceeds the lessor's experience modification factor by 50% at the inception of the employee leasing arrangement, the lessee's experience modification factor shall be utilized to calculate the premium or costs charged to the lessee for workers' compensation coverage for a period of 2 years. Thereafter, the premium charged by the insurer for inclusion of a lessee under a lessor's policy may be calculated on the basis of the lessor's experience modification factor.

    (g) A lessor that does not provide workers' compensation insurance coverage for leased employees of a lessee under an employee leasing arrangement shall not be subject to compliance with subsections (b) through (f) of this Section.

    Sec. 30. Responsibility for policy issuance and continuance.

    (a) Either a lessor or lessee may provide workers' compensation insurance coverage for leased employees under an employee leasing arrangement. When a workers' compensation policy written to cover leased employees is issued to the lessor as the named insured, the lessee shall be identified thereon by the attachment of an appropriate endorsement indicating that the policy provides coverage for leased employees. The endorsement shall, at a minimum, provide for the following:

        (1) Coverage under the endorsement shall be limited to the named insured's employees leased to the lessees.

        (2) The experience of the employees leased to the particular lessee shall be separately maintained by the lessor as provided in Section 25.

    (b) (Blank).

    (c) The lessor shall notify the insurer or a licensed rating organization 30 days prior to the effective date of termination or immediately upon notification of cancellation by the lessor of an employee leasing arrangement with the lessee in order to allow sufficient time to calculate an experience modification factor for the lessee.

    (d) The insurer shall provide proof of workers' compensation insurance to the lessor and to each applicable lessee within 30 days of the coverage being effected or changed.

    (e) Calculation of a lessor's or lessee's premium shall be done in accordance with the insurer's rating manual filed with the Department.

    (f) When the lessee provides workers' compensation coverage for leased employees under an employee leasing arrangement, the lessor shall notify the Department in a manner specified by the Department to ensure proper and timely notification of coverage to the Department.

Effective Date: 1/1/2017

If you are with a staffing company or handle insurance for staffing companies and need assistance with the new law, send a reply. We appreciate your thoughts and comments. Please post them on our award-winning blog.

8-15-2016; New Rules For IL WC Folks to Know; IL WC E-Filing Vendor Bids Are Out and E-Filing Will Be Comin'; Lilia Picazo Reviews Important Fee-Splitting Ruling and more

Synopsis: Proposed New IL WC Commission Rules May Be Changing Lump Sum Settlement Contracts, Disciplining Attorneys and Other Hearings.

Editor’s comment: The Illinois Workers’ Compensation Commission has proposed several amendments to the Rules Governing Practice before it at 50 Ill. Adm. Code 9070, Settlement Contracts and Lump Sum Petitions. Under filing requirements, in addition to settlement contracts being filed in quadruplicate on the IWCC form, one copy must be provided for each additional case number listed on the contract, the proposed amendment states.

Another proposed amendment makes settlement contract forms available on the web at: http://www.iwcc.il.gov/forms.htm We would comment most IWCC forms have been available on the IWCC website for a number of years so we are unsure of the basis for this new amendment to the Rule. 

Will the IL WC Commission Ever Close the Unneeded “Remote” Offices?

The continuous availability of the forms on the IWCC website has been one source of criticism of the “remote” or “satellite” offices the IWCC maintains at our cost—the main task of these remote offices was to print and make paper forms available to the public. The same forms are always available on the web and could be printed at a local library or other government office. The IL WC Commission continues to maintain “information offices” in Collinsville, Rockford, Peoria and Springfield. The Rockford and Peoria offices appear to be open on a part-time basis, as the IWCC website cautions readers to call to insure they will be open on any given day. The Collinsville office wasn’t staffed for a very long time, indicating it is not needed.

Under Governor Rauner, we feel all “remote” government offices be immediately and permanently closed to save IL business money. We do not think they would be missed by IL injured workers or business people. We feel if the IL WC Commission took a poll to ask our citizenry if they want this service, no one would respond.

Lump Sum Settlement Contracts Rules May Change

Attorneys and claims managers need to know IL WC lump sum settlement contracts on cases originating in Cook County may be assigned randomly to an Arbitrator in the appropriate venue by a computer program. When the venue is outside Cook County, the parties may present settlement contracts by appearing personally before an Arbitrator assigned to that venue.

Under Section 9070.40, Action by Commission under Contested Petitions for lump sum settlement approval, two amendments were proposed:

When a Settlement Contract has been rejected by a Commissioner and re-assigned to an Arbitrator for hearing, no settlement contract may be approved by any Arbitrator. Any additional settlement contract must be presented to the Commissioner who rejected the prior settlement contract for consideration and possible approval.

Parties may reserve the right to amend an approved settlement contract by stipulation and order of a Commissioner to conform with regulatory requirements including, but not limited to, those of Social Security and Medicare. In no event may those amendments abridge the substantive rights of the parties as listed in the previously approved settlement contract.

Proposed Change to Rules on IWCC Attorney Discipline—What/When Was There Ever IL WC Commission Attorney Discipline?

Under Section 9090.10, Disciplining of Attorneys: Procedure, items b and c would be removed from the Rules Governing Practice. As these provisions relate to appropriate notice of a disciplinary hearing conducted by the IWCC, we have no idea why they need to be removed. In 36 years of practice, your editor is not aware of a disciplinary hearing being conducted in relation to an attorney appearing before the IWCC.

Proposed New Rules on Self-Insurance and Work-Stop Orders

There also are proposed amendments relating to the solvency of self-insured employers and work-stop orders. The new Rule would require notice of work-stop hearings to list the specific statute violations and periods of non-compliance, and confirm failure to appear at a hearing would trigger findings employers have knowingly failed to comply with the statute and such failure constitutes an immediate serious danger to public health.

Public comments will be accepted by the IWCC until Sept. 12, 2016 and should be submitted to Ronald Rascia, general counsel, IWCC, 100 W. Randolph, Suite 8-200, Chicago, IL 60601, or by telephone at 312-814-4932, or by email at IWCC.Rules@illinois.gov.

All of the proposed amendments can be found here.

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Synopsis: E-Filing Continues to Approach and Come Online for the IL WC System. Is This Then End of IL WC Status Calls?

Editor’s comment: The Illinois Workers’ Compensation Commission later this month should unveil a vendor to institute their e-filing model that will culminate in an e-filing system. As odd as it sounds, the monies to  pay for e-filing will come from the settlement of a lawsuit over business fees imposed by former Governor, now jail-bird Rod Blagojevich.

The e-filing project will encompass filing of

·         New Applications for Adjustment of Claim;

·         All motions;

·         Status call management including calendaring and docket management;

·         Decisions.

Is E-Filing the End of Humans Attending IL WC Status Calls?

One of our lawyers wondered if all status calls will be conducted partially or completely online. Please note the IL WC Commission, like those of many other states, has a monthly status call where each month all cases assigned to an Arbitrator are reviewed with clerks or lawyers present to report developments including settlements and the need for hearings. For a time, many cases are automatically continued unless an emergency arises. After 2-1/2 years that an IL WC claim has been pending, attendance by someone on behalf of the law office is required to confirm the reasons for delay.

If the status calls are conducted in an online or web setting, it might mean attorneys at “out-state” or what is inaccurately termed “downstate” status calls do not have to appear. As fast as that happens, we feel many insurance carriers and TPA’s may hold back assigning such claims to defense attorneys because they would be able to watch/track developments from the nearest computer.

Our best answer to this question is “we don’t know.” We are sure the Federal and IL County Circuit Courts have gone to e-filling protocols. Both judicial systems still have status calls where the judges seek status reports from the parties litigant to insure cases are moving forward and being handled appropriately. Email and web handling hasn’t replaced the specter of judges pressing lawyers to be prepared and ready to act on their claims. We feel that is going to continue at the IWCC but we will all have to wait and see.

The Weird Way E-Filing in IL WC Will Be Funded

The initial cost of e-filling won’t be made public until the IL WC Commission releases the winning bid for the e-filing vendor selected. The IWCC put out a 52-page RFP earlier this year and accepted sealed offers from vendors until May 11, 2016. The money to fund e-filing will come in part from a $44 million settlement the IL WC Commission agreed to with the Illinois Chamber of Commerce, which filed a lawsuit against business fees imposed by  the Blago administration in 2003 to combat a $5 billion budget shortfall.

We sadly note U.S. District Court Judge James Zagel recently resentenced Blagojevich to the same 14 years in prison for his many remaining convictions. You may recall a federal appeals court last year threw out five of the 18 corruption counts, but Judge Zagel affirmed the former governor’s criminal actions were egregious enough to remain in a federal prison for about 8 more years until at least May 2024, when he may be 67 years old. This projected release date factors in a reduction of two years for good behavior.

The IL State Chamber Fought for Their Members Against the Fees and Got an Amazing Settlement They Are Putting to Good Use.

In response to the State Chamber’s lawsuit, the Cook County Circuit Court ruled in favor of the Chamber’s position. They ruled Blagojevich’s anti-business taxes violated the uniform taxation rules by creating classifications that singled out business groups to bear the cost of operating general government functions. After some additional fussing, the State agreed to settle for the $44M.

Part of the $44 million settlement was set aside to repay loans used to provide cost-of-living increases to permanently injured workers and to pay claims owed to others. The bulk of the settlement $26 million then and now $30 million was earmarked for IL WC Commission capital improvements, to include a new electronic filing system, and to increase staffing in the agency’s anti-fraud unit. None of the settlement money was intended to cover normal Commission operating expenses that are paid under a separate levy on IL business..

The IL State Chamber said its members have saved $19 million a year since the anti-business fees were rolled back. The 1.5% surcharge imposed on employers’ insurance premiums generated two-and-a-half times the amount needed to operate the IL WC Commission. 

Rules the IL WC Commission proposed to implement electronic filing were published in the July 29, 2016 edition of the state register, and are available here. Public comments will be accepted until Sept. 12 and should be submitted to Ron Rascia, general counsel, Illinois Workers’ Compensation Commission, 100 W. Randolph, Suite 8-200, Chicago, Ill., 60601. Stakeholders can call 312-814-4932 or email IWCC.Rules@illinois.gov.

The Commission's request for proposals is online here. The digital transformation project will be done in two phases. The first phase will determine the steps needed to craft system requirements and parameters, and developing an RFP for the second phase. The second phase will be the actual development and implementation of the solution identified in Phase 1. The successful bidder in the first phase is excluded from bidding on the second phase.

Will the New Electronic Filing Efficiencies Result in Actual Savings for IL Business and Local Gov’ts?

Again, 100% of the cost of everything at the IL WC Commission is paid for via levy after levy on IL business. Labor doesn’t pay a penny. Along with the levy that funds the IWCC, there are lots and lots of lesser-known “funds” at the IWCC that could be eliminated at a dramatic and immediate cost savings to IL business. We hope the new e-filing protocols will result in actual and demonstrable savings to include limited layoffs but we are going to have to wait and see.

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

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Synopsis: IL Appellate Court Reinstates Plaintiff/Petitioner Law Firm's Claim Pursuant to Attorney Fee-Splitting Agreement. Research and analysis by Lilia Picazo, J.D.

Editor’s comment: The Illinois Appellate Court overturned a trial judge's finding an IL personal injury law firm's fee-splitting agreement with a workers' compensation attorney was not enforceable. In Ferris, Thompson & Zweig v. Esposito, No. 2-15-1148, 08/10/2016, published, the personal injury law firm of Ferris, Thompson, & Zweig ("FTZ") had a long-standing relationship with attorney Anthony Esposito under which the firm would refer potential workers' compensation clients to Esposito in exchange for a share of the attorney fees Esposito would receive if the client hired him to pursue a claim.

The relationship between the parties eventually soured when fee-splitting may have stopped. The firm sued Esposito for failing to pay their share of attorney fees pursuant to the terms of two written and executed fee-splitting agreements between them. In response, Attorney Esposito moved to dismiss the action, asserting sole jurisdiction of the workers' compensation fee dispute was within the jurisdiction of the IL Workers Compensation Commission, not a state trial court. We note there is no provision, rule or form for the IWCC to consider fee-splitting agreements. Such agreements would appear to exist separate and apart from the IL WC Act and Rules Governing Practice before the IWCC as they relate to the breach of an agreement.

The trial judge denied Esposito's motion, and the Appellate Court later affirmed this decision. The IL Supreme Court did so as well.

While this dispute was pending, Esposito balked at paying FTZ attorney fees pursuant to 10 other written agreements executed between 2007 and 2010. FTZ then filed a second complaint against Esposito, and Attorney Esposito again moved to dismiss this second lawsuit. Esposito argued the fee-splitting agreements were not enforceable because they did not expressly provide that he and FTZ would share financial responsibility for representing the clients.

This time a trial judge agreed with Esposito’s approach, and, in response to the motion, the judge dismissed FTZ's complaint. Ferris, Thompson & Zweig thereafter appealed. 

For any attorney referral agreement to be held enforceable, the IL Appellate Court ruled, the attorneys involved in the agreement must strictly comply with Rule 1.5(e) of the Illinois Rules of Professional Conduct. The Rule provides division of an attorney fee among lawyers who are not in the same firm may be made if

·             The primary service performed by one lawyer is the referral of the client to another lawyer;

·             Each lawyer assumes joint financial responsibility for the representation;

·             The client agrees to the arrangement, including the proportionate share each lawyer will receive;

·             The agreement is confirmed in writing; and

·             The total fee is reasonable. 

In examining the history of Rule 1.5(e), the Court read referral agreements must be in writing, but there was no indication the referral agreement must expressly state the parties assume joint financial responsibility when representing clients. The Court also stated “joint financial responsibility” applied similar to attorneys engaged in a general partnership. Joint financial responsibility in such case would apply regardless of whether it was expressly included in a written referral fee-splitting agreement.

If the client agrees to the arrangement, including the share each lawyer will receive, the agreement is confirmed in writing and the total fee is reasonable, the Court said an agreement could be enforced.

The Court later read the rule as establishing two scenarios where attorneys could split fees, one of which required the attorneys expressly state they assume joint financial responsibility. See Donald W. Fohrman and Associates, Ltd. v. Marc D. Alberts,P.C. 2014 IL App. (1st) 123351 The Court held a fee-splitting agreement unenforceable as there was no substantial compliance with Rule 1.5(e) of the Rules of Professional Conduct.  However, the Court in this case stated FTZ established prima facie case of reversible error, and the matter was reversed and remanded for further adjudication by the trial court. 

In short, we want our readers to take away the significance of the Rules of Professional Conduct for fee-splitting agreements. Failure to adhere to the Rules will likely result in the loss of referral fees should the agreement be disputed. Therefore, PI and WC referring attorneys entering into such agreements should strictly adhere to the Rules in order for fee-splitting agreements to be held enforceable.

This article was researched and written by Lilia Picazo, J.D. She can be reached for questions at lpicazo@keefe-law.com. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis:  HERE WE GO AGAIN--NEW IL WC RATE SHEETS ARE HERE AND ILLINOIS RATES INCREASE!!! 

Editor’s comment: Illinois WC Rates Jump Again So Please Be Aware Of The New Rates or Your Claims Handling Will Suffer and Penalties May Ensue. 

Email Shawn at sbiery@keefe-law.comand Marissa at mpatel@keefe-law.com to Get a Free and Complimentary Hard Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!

Maybe it’s a sign of a growing economy—even though rates continued to increase almost every cycle as we continue to watch the growth of IL WC rates. Starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing—WC rates continue to climb and climb some more.

We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now a whopping $755.22. This rate is only through June 30, 2016 and the new max PPD will be published in January 2017. When it will be published in January 2017, this rate will change retroactively from July 1, 2016 forward. If you don’t make the change, your reserves will be incorrect--if this isn’t clear, send a reply.

The current TTD weekly maximum has risen to $1,428.74. A worker has to make over $2,143.11 per week or $111,441.72 per year to hit the new IL WC maximum TTD rate. Does any state in the United States have a TTD maximum that sky-high?

The new IL WC minimum death benefit is 25 years of compensation or $535.79 per week x 52 weeks in a year x 25 years or $696,527.00! The new maximum IL WC death benefit is $1,428.74 times 52 weeks times 25 years or a lofty $1,857,362.00 plus burial benefits of $8K. IL WC death benefits also come with annual COLA increases that we feel potentially makes our state the highest in the U.S. for WC death claims.

The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. AGAIN—If you want just one or a dozen or more, simply reply to Shawn at sbiery@keefe-law.com and Marissa at mpatel@keefe-law.com  They will get a copy routed to you before they raise the rates again! Please confirm your mailing address if you would like laminated copies sent to your home or office!