11-20-2023; Wage Loss Differential Claims are A-Changing in IL WC; Injured Worker Can't Bring Civil Claim Against Borrowing Employer, Happy Thanksgiving to All!

Synopsis: Wage Differential Claims Are A-Changing in Illinois Workers’ Comp.

Editor’s comment: I consider this a “must-read” for IL WC risk managers, claims handlers and attorneys/hearing officers. The information I am doing my best to provide is going to change reserves, lump sums and all handling of one of Illinois’ biggest WC claims—wage loss differential under Section 8(d-1) of the IL WC Act. I am fairly sure we are going to need computers to accurately set reserves.

I don’t believe many of the troops, on both sides of this matrix, are aware of the new battlefield that may be wage loss differential claims, in light of the City of Chicago’s new ever-increasing minimum wage concept. I assure my readers this idea is new to this arena.

Section 8(d-1) of the IL WC Act

This section of the Act provides benefits from the date of loss to the day Claimant reaches age 67 or five years from the date the award becomes final, if the worker is unable to return to the same job at the same rate of pay and returns to work at a lower paying job.

The language is:

(d) 1. If, after the accidental injury has been sustained, the employee as a result thereof becomes partially incapacitated from pursuing his usual and customary line of employment, he shall, except in cases compensated under the specific schedule set forth in paragraph (e) of this Section, receive compensation for the duration of his disability, subject to the limitations as to maximum amounts fixed in paragraph (b) of this Section, equal to 66-2/3% of the difference between the average amount which he would be able to earn in the full performance of his duties in the occupation in which he was engaged at the time of the accident and the average amount which he is earning or is able to earn in some suitable employment or business after the accident. 

Please note most jobs in this State are within a range of 50 miles from the City of Chicago—that 50 mile range creates what has been called “the reasonably stable labor market” around such workers’ homes. Folks living in that area are “able to earn” spiraling minimum wage that is now available in Chicago.

So What Changed?

Initially, the City of Chicago’s minimum wage was raised to $15 per hour for workers with jobs with “large” employers. That change did make some difference in calculating wage loss differential.

What I and most IWCC observers may have missed is every July 1 from now on, Chicago’s minimum wage increases on an annual basis per the City of Chicago Minimum Wage Ordinance.

This is new and there has never been anything like it. In the past, once a worker was felt to be able to perform minimum wage work, the minimum wage stayed the same, sometimes for decades. In that environment, it was simple to calculate what a worker would get in an 8(d-1) wage loss award.

Now, with this new change to Illinois’ biggest city’s minimum wage, I feel an Arbitrator hearing the claim, creating an award or approving a settlement has to adjust to the changes that are mandated by Chicago’s new ordinance.

The Chicago minimum wage is tiered for large businesses with 21 or more employees, and small businesses with 4-20 employees. The minimum wage for larger employees increases annually, from now on, according to the Consumer Price Index or 2.5%, whichever is lower, since reaching $15 per hour in 2021. 

As of July 1, 2023, the minimum wage in Chicago rose to $15.80 per hour for employers with 21 or more workers, and $15.00 per hour for employers with 4 to 20 workers.

If you do compound interest calculations, at a minimum, in five years from now, Chicago’s minimum wage is going to be $17.88 an hour—this assumes the CPI or Consumer Price Index is more than 2.5%. In ten years assuming the CPI stays higher than 2.5%, the Chicago minimum wage will be $20.23 per hour. At 20 years from now, the Chicago minimum wage will be $25.89 an hour.

These annual increases are certain to change wage loss differential values in IL WC.

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Synopsis: Injured Illinois Worker Can't Maintain a Civil Suit against the Borrowing Employer.

Editor’s comment: We strongly support this ruling. In Leman v. Volmut, No. 2019 L 3711, 10/26/2023, published, the Illinois Appellate Court upheld the Circuit Court’s ruling that an injured worker could not pursue a civil claim against his borrowing employer.

Claimant Leman suffered injuries in January 2019 when he was struck by a vehicle while walking. Leman claimed a vehicle being driven by Defendant Volmut failed to stop at a stop sign and struck a vehicle being driven by another driver named Nucci. Her vehicle then struck Leman, a pedestrian.

Leman filed suit against Volmut, Nucci and Volmut’s alleged employers — CPU RX Inc. and Forum Coworking LLC. Nucci answered the complaint and filed a counterclaim against Volmut. He answered the complaint and counterclaim and filed a third-party complaint for contribution against INTREN LLC and Pinto Construction. Nucci and CPU also filed third-party complaints for contribution against INTREN and Pinto.

Leman then amended his complaint to add a negligence action against INTREN, which was engaged in construction activities in the area where the event occurred.

INTREN filed a motion to dismiss the claims against it. The company alleged it was the borrowing employer of Leman and, therefore, immune from common-law liability for his injuries.

A Circuit Court judge denied the motion, finding triable issues as to whether there was an employment relationship between Leman and INTREN. INTREN then filed a motion for summary judgment, again based on its workers’ compensation payments. The Circuit Court initially denied the motion but then granted reconsideration and granted the motion.

The Illinois Appellate Court explained when an employer loans an employee to another employer and the employee suffers injury, both employers have joint liability to the employee under IL workers’ compensation law, and both employers are therefore immune to common-law liability, under Section 5 of the IL WC Act.

Illinois has a two-part inquiry to determine whether a borrowing employer-employee relationship exists. It looks at whether the alleged borrowing employer had the right to direct and control how the employee performed his work and whether there was an express or implied contract of hire between the employee and the alleged borrowing employer.

Plaintiff Leman was a carpenter and a member of Carpenters Union Local 58. He had a years-long relationship with INTREN, but because it was not a signatory to his union’s contract, he could not work directly for it.

He testified that INTREN’s chief executive officer helped him secure employment with Pinto, a signatory to the union’s contract, before INTREN and Pinto entered into a contract to provide carpentry services to INTREN. The contract contained an acknowledgment by Pinto that its employees and agents were not employees of INTREN but were independent contractors.

In the seven years before his injury, Leman worked exclusively for INTREN, though Pinto paid him. He testified that INTREN assigned him work daily, supervised his work and provided safety training.

The court confirmed there was deposition testimony that Leman worked the same hours as INTREN employees, received instruction and direction from INTREN foremen and was assisted in his work by INTREN employees, and none of Pinto’s supervisors were on the INTREN job site on the date of the injury.

The Court’s ruling confirmed:

Based upon the evidentiary material in the record before us as set forth above, we conclude that there is no genuine question of fact on both the issue of whether INTREN had the right to control and direct the manner in which the plaintiff performed his work and the issue of whether, at minimum, there was an implied contract of hire between the plaintiff and INTREN…

To read the court’s decision, click here.

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10-31-2023; Halloween Edition!! IL Appellate Court Rules on Future Medical and Remands for Ruling on Multi-Million Dollar "Life Care Plan;" NLRB New...

Synopsis: The Illinois Appellate Court, WC Division Ruled on a “Future Medical” Issue, Remanding to See if a “Life Care Plan” for up to $17.8 Million is Reasonable.

Editor’s comment: In Montgomery v. IWCC, No. 3-21-0604WC, 11/15/2022, published, our IL WC Appellate Court ruled the IL Workers’ Compensation Commission exceeded its authority in setting conditions for the provision of future medical treatment for an injured worker.

This ruling strongly emphasizes one issue with leaving medical rights completely open in any IL WC claim—I feel this decision to leave medical rights open was “easy” until it turned ugly and resulted in years of fighting and litigation. I also feel claims like this are difficult to successfully litigate from the defense perspective, as they reach our Appellate Court, WC Division. You might note this pro-Petitioner ruling was unanimous by all five Justices without any dissent/comment or support for the interests of IL business.

The “must read” message from this ruling is IL WC risk/claims managers and attorneys should be very, very cautious and get advice from veteran counsel when leaving medical rights open and most particularly, uncapped. If you need help with this concept we have lots of experts on it, just send a reply and we are happy to help/consult.

Claimant Montgomery worked for Caterpillar Logistics Services Inc. He suffered accepted and ostensibly serious injuries at work in 1994 when his forklift was bumped by another forklift. Montgomery filed a workers’ compensation claim in which he identified the parts of his body affected as his neck, shoulder and arms. He described the “nature of injury” as “arm in sling.”

In 1996, Caterpillar’s WC team entered into a IL WC settlement with Montgomery for $86,000 with open medical. The agreement stated the affected parts of Montgomery’s body were his neck, shoulder and right arm. The nature of the injury was described in the agreement as right upper extremity sympathetic dystrophy with lower right extremity migration. The agreement provided Claimant Montgomery waived all rights under the Workers’ Compensation Act except his right to future medical treatment.

Fifteen years later, in 2011, Claimant Montgomery filed an interim Section 8(a) petition against Caterpillar, alleging wrongful denial of medical treatment. He also moved for statutory penalties and attorney fees.

It appears to me Claimant went to a nurse who is a life care planner based out of Rockford, IL. She has a PhD but is not a medical doctor. While our Appellate Court noted she was a nurse on one occasion, thereafter the ruling repeatedly called her a doctor, as if she is a physician. Please note this individual does not and did not have a medical degree, she is a PhD. Please note all Illinois attorneys have the equivalent of a PhD and we are not allowed to call ourselves “doctors” because it is misleading, as we cannot practice medicine. In this claim and in my opinion, someone should clearly point out nurses aren’t doctors. This “life care planner” isn’t going to provide any medical care and/or scientifically respond to successful or unsuccessful care, like doctors do.

By this Nurse’s calculations, the total cost of medical treatment and pharmaceuticals for Petitioner over what she appears to have asserted is the remaining 32 years of his life expectancy would be $15,232,552 without acupuncture and $17,823,599 with acupuncture. You might note the cost of the plan is around $500K+ a year for what she felt would be Claimant’s expected life. I looked up this Claimant and per Social Security tables, his expected life is about 22 years.

As a skeptical defense attorney, I am concerned such a “life care planner” or nurse could be seasonably relied upon, taking a middling claim and compounding the medical aspects of it into a gigantic claim.

In June 2018, the IL Workers’ Compensation Commission panel issued  what we would consider a measured decision. The Commission determined the proposed life care plan, created by a nurse and presented by Claimant Montgomery was "premature and should not be considered.” The IL WC Commission panel also ordered the care and treatment of Montgomery’s chronic regional pain syndrome should be managed by one central treating physician, who must oversee all treatment and attendant care related to the 1994 injury. The Commission panel also found the central treating physician could not be Montgomery’s current physician and had to be medical care from a provider affiliated with a major medical institution. As an observer of our State’s WC system for several decades, I salute the IWCC’s careful consideration and ruling in this matter.

The Commission further found Montgomery failed to prove his asserted radiculopathy was related to the 1994 accident, but his gastrointestinal issues were causally related. The Commission panel denied Montgomery’s request for statutory penalties and attorney fees.

Claimant Montgomery and Respondent Caterpillar both appealed, and a circuit court judge confirmed the Commission’s decisions. Both parties then sought further review. The Illinois Appellate Court, WC Division ruled the Commission’s decision was interlocutory and the circuit court lacked jurisdiction to review it. Thus, the Appellate Court, WC Division vacated the circuit court's judgment and remanded the case to the Commission for further proceedings.

On remand, the Commission announced the parties reached a settlement under which Caterpillar’s payment of $44,000 would be the full extent of its liability for the unpaid balances and other expenses claimed by Montgomery. The Commission noted much of Montgomery’s treatment had been covered by the Centers for Medicare & Medicaid Services and Caterpillar agreed to hold him harmless for any liens asserted by CMS.

The Commission noted this settlement and then adopted and incorporated into its decision "all other facts findings and conclusions” from its June 2018 decision. The circuit court confirmed the Commission’s decisions from June 2018 and on remand.

As the Commission then announced this “settlement,” it is somewhat baffling to read Claimant Montgomery appealed from this decision.

Please note my view the concept of “future medical care” is not defined and the term does not appear in the IL WC Act or Rules. It is my view, it was “created” by our courts in their rulings. It is my respectful view, it is contradictory to start future medical rights by judicial edict and then assert the IWCC doesn’t have statutory power to properly administer it.

In any event, the Illinois Appellate Court, WC Division ruled the IL Workers’ Compensation Act contains no provision empowering the Commission to attach specific conditions to its finding of whether future medical care is necessary and reasonable. They also ruled the IL WC Act somehow contemplates decisions by the Commission “based on treatment provided or to be provided, not on who provides it.” Again, with respect, I don’t agree with this judicial finding at all—if the IWCC feels a medical procedure needs to be done, I feel they have every right to describe the appropriate credentials of physicians or surgeons who can best provide it. For an example, I don’t feel the IWCC would have to approve a podiatrist who wanted to do spine surgery in a life care plan.

Thus, the Court ruled, the Commission lacked statutory authority to order the designation of a central treating physician or to disqualify Montgomery’s treating physician from that role.

When a Petitioner seeks authorization for future medical care prescribed, it is the function of the Commission to determine reasonableness and necessity of care sought. Therefore, in my humble view, it is challenging for the Court’s members to make such a ruling about the IWCC panel’s asserted lack of statutory authority to direct whatever future medical is supposed to be. Where an avalanche of future medical care is outlined by a “life care planner” it is the function of the Commission to assess the requested care and offer a ruling on what aspects are approved. I consider that common sense in this WC matrix.

In this vein, our WC Appellate Court did rule it was the Commission’s function to determine which of the future medical treatments and pharmaceuticals recommended in the multi-million-dollar life care plan presented by Montgomery were necessary and reasonable. The Court went on to find substantial evidence supported the Commission’s finding of non-compensability for Montgomery’s radiculopathy, as the Commission credited the opinion of one medical expert that radiculopathy was not connected to alleged CRPS.

The Court also ruled the Commission did not abuse its discretion in denying Montgomery’s request for penalties and attorney fees, since it could have reasonably concluded that such payments were forms of liability for the unpaid balances and other expenses, which the $44,000 settlement payment was supposed to encompass.

The Appellate Court, WC Division remanded to have the zillion-dollar life care plan ruled “reasonable” or not. I am chagrined to contemplate the remand for a ruling on “reasonableness” is precisely what the Appellate Court ruled was wrong with the Commission’s decision—It begs the question … don’t they have statutory authority to rule on “reasonableness” of providers? This is a term our reviewing Courts selected and typically use in evaluating medical decisions by the IWCC.

We are confident this claim is going to continue in litigation over the complex medical “plan” and we won’t see final resolution anytime soon. The case can be viewed on the following:

https://scholar.google.com/scholar_case?case=13058500818166151462&q=Montgomery+v.+IWCC&hl=en&as_sdt=400006&as_vis=1

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Synopsis: The National Labor Relations Board (NLRB) released their final rule Oct. 26 to provide a broad standard for when two employers conducting business together are considered to be “joint employers” and therefor liable for unfair labor practices.

Editor’s comment: How will this change Work Comp? The Rule contemplates if two entities are joint employers under the National Labor Relations Act (NLRA), both must bargain with the union that represents the jointly employed workers, both are potentially liable for unfair labor practices committed by the other, and both are subject to union picketing or other economic pressure if there is a labor dispute.

This final rule will replace an older rule from April 27, 2020. Under that rule, an employer could be a joint employer of another entity if it had direct and immediate control over the essential terms and conditions of employment, such as wages, benefits, work hours, hiring, discharge, discipline, supervision and direction.

The new rule states that two entities are considered joint employers if they share or co-determine the employees' essential terms and conditions of employment. It will take effect on Dec. 26, 2023.

Please note in workers’ comp, both employers can be liable for one accident with the employer on whose site the worker was working when injured having primary liability unless there is a written agreement to the contrary.

When the WC liability attaches and benefits paid and accepted, only WC is due—the employer can’t be sued at common law for the same injuries.

Following this new NLRB concept, both “joint employers” may have joint liability and simultaneous joint protection from common law claims.

Again, this new rule is in place for now and doesn’t start until the day after Christmas.

Only time will tell how this all plays itself out.

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

10-22-2023; IL WC Arbitrator Transfers Coming in 70 days; IL Appellate Court Actually Cuts a PPD Award for a Police Officer to Comply With The IL WC Act and more

Synopsis: IL WC “Downstate” Arbitrator Transfers to Happen in 70 days or 1/1/2024. Several Arbitrators seated in IWCC Zones 1-6 will be transferred effective January 1, 2024. Thoughts and Analysis by Lindsay R. Vanderford, JD.

Editor’s comment: In an October 11, 2023 announcement, the IWCC notified all known members of the bar and litigants of the upcoming transfer of 14 of the 18 IL WC arbitrators sitting in venues outside of Cook County.

The Commission’s message read, “Our Act provides that no Arbitrator may sit at any docket outside of Cook County for more than four (4) years. Based upon that statutory requirement, we moved a limited number of Arbitrators last year. In conformance with our [IL WC] Act, we will effectuate a series of Arbitrator transfers, effective January 1, 2024.”

The list of those re-assigned arbitrators is as follows:

PREVIOUS

NEW 2024

Zone 1

Lee

Gallagher

Pulia

Gilliespie

Cantrell

AuBuchon

Zone 2

O’Brien

Hinrichs

Gallager

Lee

AuBuchon

Cantrell

Zone 3

Hinrichs

O’Brien

Carlson

Carlson

Zone 4

Cellini

Soto

Hegarty

Granada

Dalal

Dalal

Zone 5

Seal

Glaub

Friedman

Friedman

Napleton

Napleton

Zone 6

Soto

Cellini

Granada

Hegarty

Glaub

Seal

For reference, the relevant terms of 820 ILCS 305/14 prior to 2022 read, “No arbitrator shall hear cases in any county, other than Cook County, for more than 2 years in each 3-year term.” The May 27, 2022 amendment to the Act, 2022 P.A. 102-910, changed these terms to “No arbitrator shall hear cases in any county, other than Cook County, for more than 2 4 years in each 3-year term.”

Several of the Arbitrators being reassigned will have been in their respective venues for only a year as they were involved in the Commissioner’s aforementioned transfer in 2023.

The IWCC expects an update to the 2024 Arbitration calendars prior to these upcoming transfers.

Each matter set in January during the December status call will be handled on trial by the “new” Arbitrator in that zone. No Arbitrator will handle a case in their prior zone after January 1, 2024. This appears to answer the question as to bifurcated hearings following the assigned Arbitrator after their transfer and could make matters more difficult to push to trial at the end of the year.

The IL WC Commission is hoping for minimal impact.

Thoughts from Gene Keefe—the purpose of all this switching is to insure there is an independent and fresh person handling litigated claims in each zone. There was a concern in the past that IL WC Arbitrators were too “buddy-buddy” with members of the bar who routinely appeared before them. At present, the IL WC Arbitrators comprise a professional, well-informed and generally moderate group. Please note the Arbitrator assigned my effect your IL WC claim reserves—feel free to reply for our thoughts.

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

This article was researched and written by Lindsay R. Vanderford, JD.  Lindsay can be reached with any questions related to workers’ compensation defense and employment law defense at lvanderford@keefe-law.com.

Synopsis: The IL WC System Does Provide a Credit for a Prior Injury to the Same Body Part (Other Than “Body As A Whole” Awards).

In Village of Niles v. Illinois Workers’ Compensation Commission, No. 1-22-1617WC, 09/29/2023, the Illinois Appellate Court, Workers’ Comp Division cut a permanent partial disability award to an injured Niles police officer, finding the IL WC Commission miscalculated the amount/credit due after accounting for the statutory credit for a prior settlement/award due to his employer.

As with most claims that reach the IL Appellate Court, WC Division, this minor change took years and years to finalize. The original date of loss was May 4, 2015!

You might also note the defense costs for fees, transcripts, bonds and handling had to be exponentially higher than this claim could ever be worth. This simple claim should have been quietly and quickly resolved years ago.

Veteran claims handlers on all sides should note the statutory credit outlined in this ruling does not apply to:

• What are called “body as a whole” PPD awards, as there is no credit for prior settlements/awards specifically in that section of the IL WC Act and

• Most IL WC shoulder awards, as many folks are now handling shoulder claims as body as a whole values.

Claimant Markadas initially worked for the Village of Niles in a civilian capacity. The parties agreed he injured his right knee at work in 1999. Claimant filed an IL workers’ compensation claim, which he eventually settled. The settlement acknowledged Markadas had a 20% loss of use of the right leg, and he received 40 weeks of permanent partial disability benefits—a “leg” in IL WC used to be valued at 200 weeks of PPD.

In 2001, Claimant became a police officer for the village. In 2015, he slipped on wet grass while responding to a burglary call, again injuring his right knee. Markadas then filed an Application for Adjustment of Claim.

At hearing, an IL WC arbitrator found Claimant’s condition was causally related to his work and ordered the Village to pay medical bills. The Arbitrator also awarded Markadas 24.5 weeks of PPD benefits.  The PPD benefits were arrived at by subtracting the 40 weeks of compensation that Markadas earlier received from 30% LOU leg at the current PPD value 215 weeks for a leg or 64.5 weeks of compensation for the May 2015 injury.

The Workers’ Compensation Commission panel affirmed, as did a Circuit Court judge.

The Illinois Appellate Court, WC Division ruled the extent of PPD is a question of fact to be resolved by the IL WC Commission, as is the mathematical calculation of PPD to which an injured worker is entitled.

The opinion ruled Section 8(e)(17) of the Workers’ Compensation Act provides permanent or partial loss of use of a specified member for which compensation has been paid, the PPD calculation shall be deducted from any award for a subsequent injury to the same member, the Court noted in its ruling:

“The only condition precedent to the deduction of the prior loss is that compensation for that loss must have been paid,” the Court further ruled. The decision goes on to find “Nothing in the statute provides for the subtraction of the compensation awarded for the initial loss from the compensation provided for the subsequent injury.”

It was undisputed permanent partial disability was paid to Claimant for the 20% permanent partial loss of use of his right leg from the 1999 claim. Applying the clear language of section 8(e)(17) to the facts of the case means 20% loss of use from the 1999 accident should be subtracted from the 30% loss of use of his right leg from the 2015 accident. The remaining 10% is then multiplied by 215 weeks of benefits provided in Section 8(e)(12) for the loss of use of a leg.

“The result is that the claimant is entitled to 21.5 weeks of PPD benefits, not the 24.5 weeks awarded by the Commission,” the Appellate Court ruled.

To read the court’s decision, click here. If you ever have a question or concern about handling statutory credit for prior settlements/awards in an IL WC claim, send me a reply and I will get you clear and simple answers.

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