Synopsis: The Road Map for Illinois Staffing Companies to Avoid GL Suits Against Your Accounts.
Editor’s comment: If you are a staffing risk manager and want happy accounts that don’t get sued in Circuit Court by your staffers, here is how to do it. This claim is a must-read for all staffing companies and their accounts.
The IL Rule on WC Liability for Injuries to Staffing Companies
The legal rules in IL WC for staffing employers and your accounts are simple to understand—you both owe WC benefits. The party managing the site where Claimant is injured/exposed is primarily liable, unless there is an agreement to the contrary. If you aren’t sure what this means, send a reply.
The Rules on Circuit Court Claims Arising From Work-Related Injuries to Staffing Workers in Illinois
Please note this nutty State just passed a new law I can only call SB1596 that indicates workers can now sue employers in Circuit Court for work-place exposures to asbestos. This new law would change the ruling below but only for asbestos exposures. Please note there is no time limitation on when such suits can be brought. Please check with your insurance gurus to insure you are covered for such business-busting risk—the exposure is going to be rare, as asbestos is disappearing, but the risk is possibly seven-figures.
Can a Staffer Sue the Staffing Company’s Account for Workplace Injuries?—This Ruling Provides a Resounding NO.
In this great and crystal-clear new ruling our IL Appellate Court ruling indicates Android, a manufacturer, contracted with a temp staffing company named Staff on Site for the provision of temporary employees. As pertinent, the contract between Android and Staff on Site provided:
Staff On Site and Client agree that Staff On Site will provide temporary employees ('Employees') for Client.
Client [Android] agrees that it will pay for said employees at the rate set forth in the attached proposal which, from time to time, may be amended by both parties in writing.
Client agrees Staff On Site's obligation to Client is limited to assigning employees ('Employees') with certain skills and abilities; maintain personnel and payroll records; calculate and pay wages; withhold and remit payroll taxes and other government-mandated charges (including worker[s'] compensation); hire, assign, reassign, counsel, discipline and discharge Employees and to be responsible for and handle work-related claims and complaints. Client further agrees to notify Staff On Site of any placement of employees working in conjunction with any Government Contract."
It was undisputed that Staff on Site maintained the requisite workers' compensation insurance. For staffing risk managers, it is your goal to insure that WC insurance covers all losses/workplace injuries and your accounts can’t be separately sued in Circuit Court.
Staff on Site hired Plaintiff Holten in approximately October or November 2011 and assigned Plaintiff to Android's industrial facility in Belvidere, as a forklift operator. Plaintiff alleged that on January 20, 2012, he sustained injuries when the forklift he was operating at Android fell from inside a tractor-trailer as the tractor-trailer moved away from a loading dock.
Plaintiff filed a workers' compensation claim against Android. However, Android directed Plaintiff to file the claim against Staff on Site. Accordingly, Plaintiff filed the claim against Staff on Site and received workers' compensation benefits. My research indicates he received a settlement of $32,500 for 3% BAW and 15% LOU hand. His counsels then fought and kicked to get additional GL monies from the manufacturer in Circuit Court.
The operative complaint alleged negligence against Android, the manufacturer where Claimant worked. Android filed affirmative defenses, confirming it was a borrowing employer under section 1(a)(4) of the IL WC Act. They also asserted Plaintiff's claims were barred by the exclusive-remedy provision of the IL WC Act. The parties filed cross-motions for summary judgment on the exclusive-remedy defense. The evidence submitted with the motions included deposition testimony of Plaintiff and Brian Brown (Android's human resources manager), a verified statement from Plaintiff, an affidavit, the contract between Android and Staff on Site, and the correspondence from Android redirecting plaintiff's workers' compensation claim.
The manufacturer’s manager also explained that, when a temporary employee arrives, "we say okay, here's the equipment, here's the hours of work, here's what we want you to do. We provide the training and they do the job." The manager specified Android owned or leased the equipment plaintiff used.
Regarding the manufacturer's ability to terminate a worker placed by the staffing company, the manufacturer’s manager testified the manufacturer had the right to remove the worker from its facility and tell the worker to return to the staffing company for reassignment. The manager further testified: "[W]e don't fire them. We can ask the staffing agency not to have them return and-because they're their employees, not ours. So we can say please, end their assignment here, but-you know, it's a matter of semantics. We don't-I don't go out there and tell a temp that you're fired. We just notify the staffing agency to please not have them come back."
Brown acknowledged that Staff on Site could still send the worker back but explained that "at the very least the working relationship would end with the agency" and that Android might need to call the police if "somebody just keeps showing up." Brown surmised, "They could do it, but, like I said, it would get old in a hurry."
Regarding his duties at Android, plaintiff testified that he "started off loading and unloading semis on the south side of the plant which would have been parts coming in and going out to supply the line." Plaintiff explainedhis duties changed before the accident. He testified, "because [he] was such a good forklift driver, they trusted [him] with the engines and transmissions which is a little more complicated than your general forklift or your general material handling." Thus, "[a] day or two before the accident," his assignment changed to "engines and transmissions" and "they [took him] to the other side and gave [him] a day or two of kind of breaking [him] in back there of how things go."
In Plaintiff's verified statement, he stated that prior to the accident he "was never told" that Android had the power to dismiss him from any employment, "was never told" that Android had the power to compel Staff on Site to dismiss him from his employment or from working at Android, and "was never told" that he "had to start or stop working when told by Android." Plaintiff also stated that, prior to the accident, he "did not believe that Android had the power to compel Staff on Site to dismiss [him] from employment at any location" and he "did not believe [that he] was employed by Android nor that Android controlled [his] work performance." Moreover, "[b]y the day of the accident, [plaintiff] worked independently, with less than a minute of instruction from Android."
Following a hearing on the parties' cross-motions for summary judgment, the trial court granted summary judgment in favor of Android. The trial court found no genuine issue of material fact with respect to Android's right to control and direct the manner of Plaintiff's work. In doing so, it found Staff on Site placed Plaintiff at Android to drive a forklift, Plaintiff worked the same hours as other Android employees, Android's employees supervised Plaintiff, no Staff on Site supervisors worked at the Android facility, Android had the right to remove Plaintiff from the Android facility, and Android provided the equipment Plaintiff used. The trial court also found that "a borrowing employer need not have the power to dismiss the employee from his general employment, just the power to dismiss from the borrowed employment."
Accordingly, the trial court concluded that Android was a borrowing employer under section 1(a)(4) of the Act (id. § 1(a)(4)) and entitled to the immunity set forth in the Act's exclusive-remedy provision.
On appeal, Plaintiff argued summary judgment on the exclusive-remedy defense should have been entered in his favor, because it was undisputed Android neither paid Plaintiff's workers' compensation premiums or benefits nor was obliged to reimburse Staff on Site for the expenses. Our Illinois Appellate Court disagreed.
They addressed whether the trial court properly entered summary judgment in Android's favor on the exclusive-remedy defense under the IL WC Act. Their ruling confirmed the IL WC Act is intended to provide financial protection to workers for accidental injuries arising out of and in the course of employment. Accordingly, the IL WC Act imposes upon the employer liability without fault but prohibits the employee from bringing a common-law suit against the employer. Section 5(a) of the Act sets forth this exclusive remedy: "No common law or statutory right to recover damages from the employer *** for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided, is available to any employee who is covered by the provisions of this Act.
The Appellate Court ruled the exclusive-remedy provision is part of the quid pro quo pursuant to which the employer assumes liability without fault but is relieved of the prospect of large verdicts for damages. They further confirmed our IL WC Act specifically incorporates the borrowed-employee doctrine and extends the immunity of the exclusive-remedy provision to borrowing and loaning employers. Section 1(a)(4) provides: "Where an employer operating under and subject to the provisions of this Act loans an employee to another such employer and such loaned employee sustains a compensable accidental injury in the employment of such borrowing employer and where such borrowing employer does not provide or pay the benefits or payments due such injured employee, such loaning employer is liable to provide or pay all benefits or payments due such employee under this Act and as to such employee the liability of such loaning and borrowing employers is joint and several, provided that such loaning employer is in the absence of agreement to the contrary entitled to receive from such borrowing employer full reimbursement for all sums paid or incurred pursuant to this paragraph together with reasonable attorneys' fees and expenses in any hearings before the Illinois Workers' Compensation Commission or in any action to secure such reimbursement."
No “Cake” For Either Employer—Substantial WC Benefits Were Paid
The Appellate Court noted Plaintiff objected to allowing Android to invoke immunity under the exclusive-remedy provision of the Act, arguing it would be tantamount to "allowing a party to have its cake and eat it too." The Appellate Court ruled the metaphor is inapt here. This case involves whether a borrowed-employee relationship existed under section 1(a)(4) of the Act. There was no “cake” here for either employer; there was joint and several liability. Under the plain language of section 1(a)(4), the liability of the borrowing and loaning employers is joint and several, and the loaning employer is, "in the absence of [an] agreement to the contrary," entitled to reimbursement from the borrowing employer "for all sums paid or incurred pursuant to this paragraph," in addition to the specified attorney fees and expenses. 820 ILCS 305/1(a)(4) (West 2012). Here, there was in fact a specific agreement to the contrary. Plaintiff's argument would have us ignore the plain language of the statute.
Accordingly, the Court ruled Plaintiff presented no persuasive argument upon which to hold that he was entitled to summary judgment on the ground that Android neither paid his workers' compensation insurance premiums or benefits nor was obliged to reimburse Staff on Site for the expenses.
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Synopsis: Illinois Circuit Court Rules IWCC Awards Have To Be Paid in a Lump Sum. How In Tarnation Is That Going to Work?
Editor’s comment: As I have told my readers, bad things happen in IL work comp under a one-party political system. I remain shocked and stunned to see a Circuit Court judge require the City of Chicago, as a party Respondent in a WC claim, to pay a PPD award as a lump sum and penalize them for not doing so with literally no Illinois legislative backup for this concept. Do wage loss benefits need to be paid in a lump sum? Do total and permanent disability benefits also need to be paid in a lump sum? Do we need a Ouija board to figure out what might be owed at any particular time?
The Circuit Court also awarded a hefty amount for attorney’s fees as part of this shocking new ruling—he provided Plaintiff’s/Petitioner’s counsel the tidy sum of $34,247.50. At the time of the award, there was only $63K of the PPD award still due to Claimant? How does Judge McGing award more than half of that amount as an additional attorney fee? Please note over $200K of the final award had already been paid in installments.
If you want to read this shocking ruling, take a look at:
Please note no one appears to have read the IL WC Act, including the Honorable Judge McGing. The IL WC Act says
§8(e): Schedule of Injuries
(e) For accidental injuries in the following schedule, the employee shall receive compensation for the period of temporary total incapacity for work resulting from such accidental injury, under subparagraph 1 of paragraph (b) of this Section, and shall receive in addition thereto compensation for a further period for the specific loss herein mentioned, but shall not receive any compensation under any other provisions of this Act. The following listed amounts apply to either the loss of or the permanent and complete loss of use of the member specified, such compensation for the length of time as follows…
The term “further period” seems fairly simple to me—TTD is paid for a period of time and then PPD is paid for another period of time. Could Judge McGing order TTD to be paid all at once under the same illusory logic as this unprecedented ruling?
I don’t want to characterize the decision of a Circuit Court as “goofy” so I won’t but the concept of “period” doesn’t mean a one-time payment. The other simple term above says “for the length of time.” Either way I have looked at this my entire career, it means permanency or PPD can be paid over time.
If you review the link, Judge McGing looks to Colorado and Montana, as if those States have anything to do with Illinois. I vote we stop checking the WC statutes all across the globe to accurately confirm they have nothing to do with our IL WC Act and system.
I assume the Appellate Court, WC Division will be asked to weigh in on this mess. I know they will carefully read the IL WC Act and constrain their review to the legislation that applies to Illinoisans and not the nice folks in Colorado and Montana and Wherever-ville. You may note if the Appellate Court remands the matter back for further findings by the IWCC or Circuit Court, the entire award will be paid in full.
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