Employment Law Muddle

Monday, June 24, 2013 | 0

We saw two very different outcomes in two very similar actions across our state in the past couple of weeks. The legal battlefield and potential costs have to make Illinois risk, safety and human resources folks bewildered.
 
In Holland v. Schwan’s Home Service, No. 5-11-0560, issued May 30, 2013, plaintiff alleged his erstwhile employer Schwan's Home Service, Inc. (Schwan's) terminated his employment in retaliation for “exercising his rights” under the Illinois Workers' Compensation Act. After a seven-day trial, a jury returned a verdict in Holland's favor on his retaliatory discharge claim, awarding him a total of $4,260,400 in compensatory and punitive damages.

The punitive damages portion of the award was $3.6 million. We consider that amount to be comical, ludicrous—you pick the adjective. Throughout the trial court proceedings in one of Illinois’ notoriously anti-business judicial areas, Defendant Schwan's denied Plaintiff Holland's assertion Schwan’s terminated his employment. Instead, Schwan’s maintained when Holland recovered from his work accident and was ready to return to work, it offered him an available position at the facility where he previously worked, but he refused to report for work. At several stages of the lower court proceedings, Schwan's requested the Circuit Court decide the issue of whether it had terminated Holland in its favor as a matter of law, rather than letting the jury decide.
 
Prior to the trial, Schwan's made this request in a motion for summary judgment, which the circuit court denied. After the conclusion of Plaintiff Holland's case in chief, Schwan’s made the request for a directed verdict. Again, the court denied the motion. In denying Schwan's motion for directed verdict, the circuit court found Holland presented sufficient evidence for the jury to conclude he was terminated. The court noted Schwan's was "free to argue to the jury" Holland was not terminated but it was "up to the finder of fact to make that determination." Finally, after the jury considered the evidence and entered a verdict in Holland's favor, Schwan's raised this issue again in a post-trial motion requesting the court enter judgment notwithstanding the jury's verdict and the lower court again denied Schwan's request.
 
Please note the attorneys or risk managers handling this matter appear to have a challenging understanding of Illinois workers' compensation claims handling. If you look on the Illinois Workers' Compensation Commission website, Larry Holland settled his workers' compensation claim against Schwan’s amicably for a relatively meager 7.5% body as a whole in 2009. Obviously, they didn’t get a release/resignation as part of that settlement, leaving the option open for Plaintiff to seek millions. If there were disputes about temporary total disability and return-to work-issues, they should have been compromised as part of that approved settlement. Actually, as you are reading this, we remain puzzled as to why defense counsel for Defendant Schwan’s haven’t raised that workers' compensation settlement as a bar to this seven-figure verdict and judgment. In our view, every aspect of this complaint and lawsuit presented issues that should have been heard by the Illinois Workers’ Compensation Commission. Return-to-work issues and the nature of a job offer being bona fide are decided in a routine fashion by our arbitrators and commissioners on a daily basis. We cannot tell from the ruling whether that defense was presented to the lower or appellate court. If it wasn’t, it should have been.
 
Defendant Schwan's appealed the multimillion-dollar judgment entered on the jury's verdict to the 5th District Appellate Court. They argued their many motions should have been granted. To no one’s surprise, the 5th District followed the circuit court and ruled plaintiff is entitled to more than $4 million dollars, despite the strong evidence of a job offer. We hope the Illinois Supreme Court will consider this appeal. We again urge all of our readers to understand this dispute should have been resolved at the Illinois Workers' Compensation Commission.
 
In a starkly contrasting ruling that more closely follows our legal entreaties, in Schroeder v. RGIS, No. 1-12-2483, issued June 7, 2013, Plaintiff Schroeder asserted he suffered from intentional infliction of emotional distress because he was being treated poorly by supervisors due to the fact he is gay. Various epithets are contained in the records and we aren’t going to repeat them here. Defendant RGIS filed a combined motion to dismiss, brought pursuant to Section 2-619.1 of the Illinois Code of Civil Procedure, arguing, among other reasons, Plaintiff Schroeder's complaint must be dismissed pursuant to Section 2-619 of the code because his claim of intentional infliction of emotional distress was preempted and, thus, barred by the Illinois Human Rights Act and by the exclusivity provision of the Illinois Workers' Compensation Act.
 
The 1st District Appellate Court noted the following issues were:
 
(1)  Whether Plaintiff was able to establish, independent of any duties created by the Human Rights Act, the elements of the tort of intentional infliction of emotional distress; and
(2)  Whether the exclusivity provision of the Workers' Compensation Act barred plaintiff's claims.
 
The Appellate Court ruled the Circuit Court properly dismissed plaintiff's second amended complaint because his tort claim of intentional infliction of emotional distress was inextricably linked to a civil rights violation. They further ruled plaintiff's claim was preempted and, thus, barred by the Human Rights Act. They also held plaintiff's alleged injury was compensable under the Workers' Compensation Act. Therefore, plaintiff's claim was also preempted and, thus, barred by the Workers' Compensation Act.
 
Our vote for our readers is don’t necessarily assume expensive defense counsel at $300-$600 per hour are doing you a favor when the right workers' compensation/employment practices liability insurance defense counsel could get the matter resolved rapidly as part of any resolution of the workers' compensation claim. Both of these cases should have the same outcome—resolution of the workers' compensation claim should resolve all other possible claims, if at all possible.

Eugene Keefe is a founding partner of Keefe, Campbell, Biery & Associates, a Chicago workers' compensation defense firm. This column was reprinted with his permission from the firm's weekly client newsletter.