Illinois Government May Never Be the Same

By Eugene F. Keefe

Breaking News: 

The Workers' Compensation Commission may be wildly changed and swept clean in the next 60 days along with the rest of Illinois government.

Editor's comment: They are clearly trying to erase the influence of our last two misguided former governors who may some day become cell-mates. A new bill may sweep out anyone and everyone who came to state government under the offices of either former Governors George Ryan or Rod Blagojevich. We assure our readers the honest folks will be swept out with the less-honest and the changes are going to be painful for many to stomach. If it happens, all of it will be chaotic for some time.

 

We have just received word HB 4450 was introduced by Speaker Madigan last week. Madigan is its lead sponsor which means it is almost certain to pass in the Democratic-controlled legislature. We are confident Governor Quinn will sign it the minute it hits his desk.

 

It is the Officials and Employees Termination Act of 2009. The new major bill provide the terms of office or employment of all designated officials and employees are terminated, by operation of law, effective on the effective date of the Act. The designated officials and employees are:

 

1. The heads, assistant heads, and deputy heads of executive State agencies who were nominated by either former Governor Ryan or Blagojevich between January 11, 1999 and January 29, 2009 for a position that requires the advice and consent of the Senate;
   
2.  Members of executive boards or commissions who were nominated by either former Governor between those dates for a position that requires the advice and consent of the Senate;
   
3.  Employees of executive State agencies or executive boards or commissions, whose employment in a Rutan exempt position began between those dates;
   
4.  Employees of executive State agencies or executive boards or commissions, appointed to a term appointment between those dates, and
   
5.  Any other official or employee who was nominated by either former Governor between those dates for a position that requires the advice and consent of the Senate.
   

Executive State agencies and executive boards or commissions are those of the executive branch not under the jurisdiction and control of the Lieutenant Governor, Attorney General, Secretary of State, Treasurer, or Comptroller. The bill allows hold-over for no more than 60 days. This new bill allows the current governor to make temporary appointments and to subsequently nominate or employ a terminated person. It is effective immediately.

Details are available for your review at the General Assembly website:

As introduced, the bill would terminate approximately 3,000 people who were hired or appointed to certain exempt positions between Jan. 11, 1999 and Jan. 29, 2009, and allows for a holdover for no more than 60 days during which time the governor could reappoint/rehire.

Though the current language is somewhat unclear how exemptions may be applied (for instance, whether exempt employees who are in the union are included) and how reappointments are considered (original hire date which may have been before 1/11/99 compared to reappointment date), we have identified positions which could be eligible for termination.

More than 30% of the positions/people at the commission may be terminated. These positions include Chairperson Amy J. Masters, all sitting commissioners, some or all arbitrators (all arbitrators were either hired or reappointed during this time-frame), executive director, secretary, staff attorneys, and several other managers and staff. Some Commission staff have exempt positions, as they are not in policy-making positions.

Additionally, all appointments to the following boards may be terminated:

•  Workers' Compensation Advisory Board
  
•  Workers' Compensation Medical Fee Advisory Board
  

The Self-Insurers Advisory Board isn't affected, because its members are not appointed by the Governor.

There is talk this bill may be amended to include only double-exempt employees. This would then limit the scope to our Chairperson, commissioners, executive director, secretary, and a handful of other managers and staff but so far no amendments have been added, and five state representatives signed on as co-sponsors today.

We are told Chairperson Amy Masters and other Commission staff are asking for support of the WC community in contacting legislators to try to keep their jobs. We are certain the bill would dramatically alter the commission's make-up and delivery of benefits if all sitting commissioners and arbitrators are terminated. They won't be replaced for the foreseeable future. As we indicate above, we consider it a mistake to sweep out the honest and hard-working hearing officers in an effort to re-tool Illinois government. We are also certain lots of the folks who are in the commission jobs got their appointed positions via the very folks who are sponsoring the bill!!

On the other hand, we will let our readers tell us your thoughts and we are happy to relay them to the powers-that-be. Should we completely re-tool the place? Can they change the name back to "Industrial Commission?" Can anyone imagine a balanced commission with interests of both business and labor represented? Can they dump the totally stupid Second Injury Fund and all the other anti-business funds? Can the devil we don't know be better than the devil we know?

Synopsis: Illinois workers' compensation benefits keep growing every day; should we start to incorporate webcams and similar technology to bring certainty to the process?

Editor's comment: As consultants to Illinois risk managers and claims handlers, we are constantly asked about one topic  how do we nail down accident investigation on every single claim? How do we make sure to pay the good ones and fight the bad ones? What is the best evidence for an arbitrator to truly deny a phony case?

On a preliminary basis, we assure our readers accident investigation is a paramount importance in Illinois workers' compensation claims handling and legal practice. Our system is very demanding - defense counsel is not allowed the right to depose or send written interrogatories or requests to produce to their opponents. If the employer doesn't maximize the opportunity to investigate claims at the early stages of reporting, the claims handler and attorneys may be "flying blind: in trying to protect you from a questionable claim. The only true method to avoid paying WC or employment claims you may not owe is to insure you have an aggressive accident investigation system in place and insure all of your managers are keenly aware of its importance.

With that in mind, we want all of our readers to understand there is a very simple and somewhat inexpensive tool we feel would dramatically nail down and improve accident investigation protocols. It is called a video camera. We are so used to them and they are so ubiquitous, we almost forget how powerful they would be, if properly used in the claims environment. This is particularly important in Illinois where any opportunity to maximize accident investigation is so critical.

At present, we feel the vast majority of outside claims representatives and in-house risk managers focus on developing paper files. If a recorded statement is taken, it is transcribed onto paper. Accident investigation forms are all paper. Claimants, supervisors and witnesses are all routinely asked to fill out paper forms. Effective immediately, we are trying to get all of you to think about what investigating accidents on paper means. If the dispute is about the condition of a set of stairs - say for example, claimant says the stairs were damaged and in a state of complete disrepair; we consider of questionable value to have a supervisor look at the stairs and say they are in a state of good repair. Many arbitrators in the state would routinely rule claimant was correct and will view the supervisor's statements as suspect -  the worker fell so something had to be wrong? In contrast, if the supervisor took out a camera phone and took 10 pictures of the stairs, it locks in the facts. The arbitrator can view the "independent" video evidence and see a much more accurate view of the stairs.

We will give you another example of a simple questionable claim. The matter involves a fully disputed cervical fusion for an Illinois truck driver. If you have any medical or claims background, rest assured, such a claim has a six or even seven-figure exposure. Medical care for a cervical fusion by itself may cost $50,000 - 300,000 in this state for surgeon's fees, hospital charges, presurgical workup and postsurgical physical therapy. In this claim, the injured worker reported the disputed claimed event as occurring the Tuesday before Thanksgiving. He doesn't tell anyone about the claimed event for three weeks. He fills out the report and says he strained his neck lifting freight.

Thereafter, three coworkers step forward and all three of them indicate the injured worker told them a dramatically different tale. All three independent witnesses confirm the injured worker told them he injured himself at home on Thanksgiving. This sets up a fraud case and a solid defense to compensability. However, at present, everyone in Illinois WC claims would have them write stuff down on a piece of paper.

We are telling all of you simply taking written reports is a minimalist thing to do when you are investigating major losses with six- and seven-figure values. A much better approach would be to have all of the defense witnesses provide videotaped statements on a webcam or other video camera to the claims adjuster. The adjuster should then burn all of it to a DVD. If you have clear videotaped statements from all three witnesses who independently verify claimant is lying, what can you do with them? You could:

1.  Send them to claimant's counsel and tell him/her to drop the fraudulent claim and not waste their money getting medical records and IME's for a phony;
   
2.  Send them to the IDFPR and have them start a fraud investigation - the videos could be forwarded to the appropriate states' attorney for prosecution of claimant;
   
3.  Send them to your defense attorney for use in defense of the claim;
   
4.  Send them to the IME doctor for their consideration in reviewing the medical chart.
   
5.  Use them at pretrials to get the arbitrators to see how strong your defenses are and to try to get the other side to drop or discount their case.
   
6.  Use them at any later hearing to support testimony given at trial.
   

Are such videotaped statements admissible into evidence? Well, you would need the person on the tape to be present to provide foundation and make themselves subject to cross-examination by Petitioner's counsel. We are also suggesting a better "second-step" in phony claims is to get an expedited videotaped evidence deposition of your crucial defense witnesses. In so doing, defense counsel is locking in your case-in-chief. The concern we have is most petitioner's attorneys put questionable claims on the back burner - they want the claim to sit to avoid having to confront their clients and deal with the phony claimant. They also don't want to invest time and money in questionable claims. This works directly contrary to insuring a defense attorney has a solid case.

Every day that goes by, defense witnesses quit, get fired, lose interest and forget details. In a major claim, every veteran risk manager knows claimant is certain to eventually come forward and tell a well-prepared tale of woe. It is much harder to track down and prepare a defense witness who has nothing to gain by participating. If you have videotaped evidence depositions of your lead witnesses, you are ready whenever the other side gets their ducks in a row. Our vote in major claims is take the extra step and be sure you are ready. Take advantage of your advantage.

Synopsis: U.S. Supreme Court allows mandatory arbitration of age claims. Talk to your unions and avoid the costs and uncertainty of endless employment litigation.

Editor's comment: We consider this a major development all risk managers should be aware of, even in union settings. Arbitration clauses in collective bargaining agreements can serve a greater purpose than the traditional resolution of contractual disputes arising from the terms of the collective bargaining agreement in grievance hearings. Now, U.S. employers may utilize arbitration clauses to expressly require resolution of statutory disputes, such as claims of age discrimination arising out of the Age Discrimination and Employment Act (ADEA). In a recent decision, 14 Penn Plaza LLC v. Pyett et. al., (No. 07-581 April 1, 2009), the Supreme Court upheld an arbitration clause that specifically mandated arbitration of any age discrimination claim and ruled that such arbitration clauses are enforceable as a matter of federal law. In other words, an employer can legally obligate the employee and his or her union to arbitrate an age discrimination claim rather than dealing with a charge of age discrimination from the Equal Employment Opportunity Commission, Illinois Department of Human Rights along with related litigation with flows from the administrative agencies.

It has been our experience most employment law claims are inherently anti-employer. You can fight even a bona fide claim and be forced to pay high defense fees to your typical employment-law defense firms who charge $400 - $800 per hour in handling them. In contrast, Keefe, Campbell & Associates charge less than $200 per hour to fight such matters. Even with more reasonable defense fees, you still may be looking at paying double-fees if plaintiff prevails and even gets $1 from a jury. Our vote is to try to end the possibility of such litigation at the earliest opportunity.

In 14 Penn Plaza, the Service Employees International Union withdrew its request to arbitrate a grievance alleging age discrimination on behalf of employees that had been reassigned to less desirable positions, allegedly on the basis of age. The union withdrew its request, because they agreed to allow the company to enter into a new contract for services that caused reassignment of the aggrieved employees. The aggrieved employees later filed an EEOC charge claiming age discrimination. Once the EEOC issued a "right to sue" letter the employees filed suit in Federal Court. The employer tried to compel arbitration of the employees' age discrimination claims, however, the District Court and the Federal Court of Appeals ruled another Supreme Court case forbids enforcement of collective bargaining provisions requiring arbitration of ADEA claims. 

Prior to 14 Penn Plaza, the respective Courts of Appeals were divided on the issue of whether a clear waiver of statutory rights was legally enforceable. Some courts held a collective bargaining agreement could not waive covered rights to a judicial forum for causes of action created by Congress and other courts held the opposite. As a result of this dichotomy in the Courts of Appeals below, the U.S. Supreme Court in 14 Penn Plaza, accepted the case and agreed to decide the issue.

In this claim, two federal laws were at issue: the National Labor Relations Act and the Age Discrimination and Employment Act. The Supreme Court reasoned courts generally may not interfere with a bargained-for exchange in the collective bargaining context, rights guaranteed under the NLRA, and thus held the collective bargaining agreement's arbitration provision must be honored unless the ADEA itself removes this particular class of grievances from the NLRA's broad sweep. The Court reasoned ADEA does not preclude arbitration of claims brought under the ADEA. The Supreme Court specifically reasoned when the parties collectively bargain in good faith and agree employment-related discrimination claims are to be resolved in arbitration, this agreement constitutes a clear and unmistakable waiver of the employee's right to pursue rights created by statute, and thus is enforceable.

We again urge U.S. employers to avoid unnecessary litigation and concomitant costs and negotiate arbitration clauses that require your union(s) and employees to remedy any claim of age discrimination in arbitration. The basis of this obligation must be a clearly written arbitration clause that which outlines precisely which statutory rights are specifically waived. Employers with collective bargaining agreements should review the arbitration language and consider the feasibility of negotiating a modification or propose a change in the language during contract renewals.

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Eugene F. Keefe is a partner in the Chicago law firm of Keefe, Campbell & Associates.

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