Synopsis: U.S. Employers Can Legally Fire a WC Claimant Who Refused a Required Post-accident Drug Test. Recent Federal Seventh Circuit case confirms it is a non-discriminatory termination even when related in part to a workers’ comp claim/filing. Analysis by Shawn R. Biery, JD, MSCC.

Editor’s Comment: It will be no surprise to most of our clients, readers and others we generally support discipline for violating company policies which would normally result in suspension or termination regardless of whether a WC claim is pending. This rule is effective even if the termination may in some part be due to violation of a policy which was put into play directly due to an otherwise valid WC injury and filing. In Phillips v. Continental Tire The Americas, LLC ,(C.A.7 (Ill.)) , theFederal Seventh Circuit confirmed our advice is still sound where you have a true violation of your enforced company drug-testing policy.

This Ruling Has National Impact--It Isn’t Limited to Illinois Law

Please note this is not simply an Illinois-only WC/EPLI ruling, because it comes from the U.S. Seventh Circuit Court of Appeals. This important decision is binding law on three of the four states where KCB&A provides legal defense—Illinois, Indiana and Wisconsin. If the U.S. Supreme Court doesn’t accept this ruling for further appeal and modify it, the decision will provide guidance for U.S. and federal employers in all the federal appellate circuits across the country.

Just the Facts, Ma’am; Just the Facts

Continental Tire has a tire manufacturing facility in Mt. Vernon, Illinois. Plaintiff Phillips worked there as a general trucker for twenty-two years until his discharge. The Mt. Vernon facility has a health services department and in April 2010, Phillips visited the health services department to report his fingers went numb at work and to initiate a workers' compensation claim. At the time, Continental Tire had a written substance abuse policy that required drug testing in certain situations including initiation/reporting of a workers' compensation claim. That company policy provided “[r]efusal to submit to testing will be cause for immediate suspension pending termination.” Accordingly, any employee who sought to initiate a workers' compensation claim was required to submit to drug testing or be immediately suspended pending termination, regardless of whether he received treatment or services at the health services department.

Plaintiff Phillips was informed he had to submit to a drug test before he could initiate a workers' compensation claim. There is no dispute he was shown the Continental Tire drug testing policy. He also was advised if he didn't take the drug test, his employment would be terminated. Nonetheless, he refused to take the drug test because he didn't think that it should be a necessary consequence of filing a workers' compensation claim. Phillips was terminated from his employment with Continental Tire for refusing to submit to drug testing upon his initiation of a workers' compensation claim per their well-settled and enforced policy.

Phillips was well aware of the reason for termination, however he filed a retaliatory discharge claim. However, when asked at his deposition why Continental Tire terminated him, Phillips stated, “Because I didn't submit to a drug test.” And when asked if he was contending Continental Tire fired him because he filed a workers' compensation claim, he answered, “They fired me because I didn't submit to a drug test.” Phillips agreed he had no evidence or information there was a different reason for his discharge. It was his understanding he would still be employed at Continental Tire if he had taken the drug test. Even though he refused to submit to the test, Phillips did file a workers' compensation claim and Continental Tire’s counsel advised the court Phillips eventually received workers' compensation benefits. We checked online and it appears the underlying 2010 WC claim for “hand numbness” was eventually denied by the Arbitrator and Commission in 2013—it is currently pending on remand.

Legal Standards for Retaliatory Discharge Claims

It is clear Illinois law recognizes a cause of action for retaliatory discharge where an employee is terminated because of his actual or anticipated exercise of workers' compensation rights. To establish a retaliatory discharge claim, a plaintiff must prove:

(1) They were an employee before the injury;

(2) They exercised a right granted by the Workers' Compensation Act; and

(3) They were discharged and

(4) The discharge was causally related to pursuit of a claim under the Workers' Compensation Act.

Obviously in this claim, the only issue is whether he was discharged due to the pursuit of his WC claim. It doesn’t appear to be a difficult answer since there was a clear company policy. The Court agreed and noted proving causation “requires more than a discharge in connection with filing a claim.” Marin v. Am. Meat Packing Co. (Ill.App.Ct.1990).

The undisputed facts—including the parties' stipulation and Phillips' own deposition testimony—established Continental Tire terminated Phillips because he refused to take a drug test upon initiation of a workers' compensation claim as required by Continental Tire policy. Other facts included:

· Phillips admitted he had no evidence or other information Continental Tire had any other reason for discharging him.

· Continental Tire consistently has applied its drug testing policy and has discharged other employees who have refused to submit to the drug test pursuant to the policy.

· Other Continental Tire employees have initiated workers' compensation claims and have not been discharged.

· Phillips had filed a workers' compensation claim in the past and was not discharged.

· Phillips agreed if he had taken the drug test, he would still be employed at Continental Tire.

Phillips argued the case of Clark v. Owens-Brockway Glass Container, Inc. (Ill.App.Ct.1998) was applicable due to the language which states: “An employer may discharge an injured employee who has filed a workers' compensation claim as long as the reason for the discharge is wholly unrelated to the employee's claim for benefits under the Workers' Compensation Act.” The Seventh Circuit noted numerous instances where it had been determined “but-for causation” was rejected without facts to establish retaliatory discharge. They also noted Clark was unhelpful to Phillips for another big reason: the employer in that case discharged the employee because it thought her claim for benefits was exaggerated and the employer admitted the discharge was directly for filing the workers' compensation claim.

Phillips also argued the U.S. District Court erred in relying on a provision of the Illinois Workers' Compensation Act, 820 ILCS 305/11, which was not in effect at the time of his injury. This part of the statute is generally known as the “Intoxication provision” which establishes a rebuttable presumption the employee was intoxicated and the intoxication was the proximate cause of the employee's injury if the employee refuses to submit to drug or alcohol testing. The Seventh Circuit rejected this argument as well because, while the Court referred to this provision, its grant of summary judgment to Continental Tire was not premised upon it.

Finally, Phillips presented an argument the drug testing policy discourages employees from filing workers' compensation claims—the court simply referred to the provision in the IL WC Act as support for its conclusion there were valid reasons for requiring drug testing upon initiation of a workers' compensation claim and confirmed the enactment of such a provision reflected an employer is not out of step with Illinois public policy by requiring drug testing under certain circumstances. They also noted in opposition to the argument drug testing discouraged claim filings, Plaintiff Phillips was not deterred in filing his work comp claim which was the basis for this suit.

The Court also noted the recently enacted Compassionate Use of Medical Cannabis Pilot Program Act provides “[n]othing in this Act shall prohibit an employer from enforcing a policy concerning drug testing ... provided the policy is applied in a nondiscriminatory manner.” 410 ILCS 130/50(b) (effective Jan. 1, 2014). And the Illinois Human Rights Act provides “[i]t shall not be a violation of this Act for an employer to adopt or administer reasonable policies ..., including ... drug testing, designed to ensure that an individual described in [the Act] is no longer engaging in the illegal use of drugs.” 775 ILCS 5/2–104(C).

Teaching Points for HR, Safety and Claims Handlers

The Federal Court confirmed an appropriate conclusion--employment was terminated because of Phillips’ refusal to take the mandatory drug test—not in retaliation for his seeking to file a workers' compensation claim. The teaching points to take away from the claim are the same basics Keefe, Campbell, Biery & Associates attorneys espouse every day in practice when we advise our clients and potential clients to:

· Adopt and maintain well documented policies, including a policy prohibiting retaliation

· Provide training or documentation to employees with regard to policies

· Do not ignore claims or claimants

· Consider additional measures consistently such as two strike policies or written warnings

· Closely review all employment actions

· Document everything to show the policy is routinely and uniformly implemented

In essence, you should consider whether an unbiased observer would think the action was reasonable.

Ramp Up Accident-Reporting Protocols to Block Late Reporting

Please also consider ramping up your accident reporting protocols—one way for workers to skirt or circumvent drug testing protocols is to wait to report the problem or accident for several days or more. The idea is to avoid a positive drug test due to the passage of time. If an employer requires accident reporting to take place on a “same-shift” or same-day basis or have the employee face discipline leading to discharge, you may be able to insure you get valid drug test results. We do feel this concept would hold up in a retaliatory discharge setting because the basis for discharge isn’t the fact of the accident or injury; it would be due to late reporting.

If you want our sample drug-testing protocol to implement in your workplace, send a reply. If you have any questions with regard to employment decisions/litigation or workers’ compensation, please don’t hesitate to contact one of the attorneys at KCBA. This article was researched and written by Shawn R. Biery J.D. MSCC who can be reached at sbiery@keefe-law.com for any questions or insight on your specific situations.

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Synopsis: Analysis of Company Parking Lot Slip/Falls Remains an IL WC Dichotomy Between the Rulings in Wal-Mart and Homerding.

Editor’s comment: The winter in this part of the country during 2013-2014 has been one for the history books. While a given winter apparently has been worse, we don’t remember more ice, snow, sleet and cold. This winter has temporarily allayed concerns about global warming due to its severity. Most reports across the area indicate this is the 6th worst winter of all time in this Midwest U.S and it still keeps snowing and freezing!

We are being asked when a fall-down in a corporate parking lot in all this Illinois ice and snow is compensable. The answer is variable and is highly fact intensive. We are happy to provide a free analysis to any reader who is concerned about covering an unquestioned fall down involving one of your workers. Please understand we are certain to ask some or all of the following questions:

Did you thoroughly investigate the accident?

Do you have a written accident report, signed by the injured worker?

Did you have the supervisor or someone in management confirm the report and the presence of a hazard?

Do you have and did you carefully preserve any surveillance/security video of the event?

What company or party owns the land or surface upon which the worker was traveling at the time of the fall-down?

What company or party maintains the land or surface upon which the worker was walking at the time of the fall-down?

Are the injuries serious?

From our perspective, if you have a thorough and complete accident investigation, you have completed two important things for your risk management protocols. First, you have documentation needed to accept or defend the problem. Second, you should have the ability to learn from the work injury/problem and prevent the same issue from recurring in the future. A company parking lot fall-down almost always involves a safety failure by someone in your organization.

If you don’t have a thorough and detailed accident investigation, please note the facts may “change” as you get into the claim. In IL, claimants may receive coaching from friends, family and sometimes lawyers about how to best make a claim—you want to prevent that phenomenon if possible with a strong accident review. There is also the unsettling concept where you may have the matter under-reserved and also be in a precarious position, should you decide to aggressively defend a claim that grows from being a minor problem to a major mess. Our advice to all of our readers—“lock in” the facts within the first 24 hours to avoid surprises at a later time.

If you have the facts locked in, the next battle is to accurately determine when to accept and pay and when to fight or controvert an accepted company parking lot fall-down claim for one of your workers. The IL Appellate Court set out a relatively simply analysis for how to handle parking lot fall-down claims. In the Wal-Mart v. IWCC ruling, evidence indicated the employer had a parking lot outside the workplace that was completely unregulated, other than for federally required handicapped parking set-aside spots. Basically, everyone could park anywhere they wanted. There were no assigned or prescribed spots for employees, venders, maintenance providers or the public. When someone fell down in such a parking lot, the risk clearly was the same for everyone in the area or a “risk common to the public.”

In contrast, in the Homerding v. IWCC decision, the Court reviewed facts where the employee was advised to “park out back” and fell in the area where they were directed to park. The limitation on the areas where an employee was required to park was felt to create an increased risk leading to WC coverage. Following this theory, if you have “employee-only” parking or areas of your facilities where the public, your vendors, maintenance specialists or others are not allowed to go, you are setting up a situation where the risks of ice/snow and slipping are limited to your workers. In such a setting, you probably want to accept the claim and direct your ire at your facilities’ managers for leaving areas you control in a dangerous slippery state.

Please also remember many fall-downs aren’t serious. If you are managing a minor strain/sprain situation for a worker, keep the claim minimal by paying for the first OccHealth visit. There is little need to worry about coverages and lawyers and fighting on a medical-only, no-lost-time claim. If the case grows and becomes a major issue, send an email on a 24/7/365 basis to Keefe, Campbell, Biery & Associates for our thoughts on coverage and further handling of the claim.

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

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Synopsis: The Three “Worst” or Most-Challenging Claims for IL WC Adjusters—Amputations, T&P and Death Claims.

Editor’s comment: When we provide training for adjusters, we always like to take a deep breath and confirm there are three types of claims you and your managers have to watch for. The main reason is these claims come with major surprises if you don’t know what has hit your desk.

First and probably most common are amputation losses. The reason amputations can be challenging Illinois claims comes from the mildly confusing way in which Illinois has an “amputation rate” versus normal PPD rates. By that we mean, if an adjuster becomes aware of bone loss for an Illinois worker, you have a short window of opportunity, perhaps no more than 30 days to start paying both TTD or temporary total disability and PPD or the amputation rate for the body part lost. If you don’t make the payments, the claim value can increase to include a 50% penalty and a 20% attorney fee under the 2009 IL WC Appellate ruling in Greene Welding & Hardware v. IWCC.

What is unusual is a worker who makes $250 per week and smashes a hand and loses their pinky or fifth finger will receive amputation benefits at a rate of $501.34 but the rest of the permanency for the hand at the applicable PPD rate of perhaps $250.00 per week (depending on whether they have a spouse and dependents). The weekly amputation benefit is due as soon as the adjuster is aware of the amputation. The balance of the PPD can be negotiated and pretried and even tried.

The same rate issues apply in an IL WC total and permanent disability or death claim. In blunt terms, if a worker making $250 per week is adjudicated to be totally and permanent disabled under any of the three IL WC approaches to lifetime disability, their weekly benefits start at the current minimum of $501.34 per week or $26,069.68 each year. The weekly cap on T&P benefits is $1,336.91 or $69,519.32 per year. Both of those numbers make it crucial for Illinois employers to make strong efforts to bring all injured workers back to work at the earliest opportunity and keep them working. Along with the ADA, every employer should seek to reasonably accommodate return to work efforts at both light and full duty.

On death claims, this math creates a minimum for a widow/widower of $26,069.68 each year with a 25-year undiscounted value of $651,742.00. The maximum IL WC death benefit value for 25 years is $1,737,983.00.

If you need help on setting reserves or managing a claim involving amputation, total and permanent disability or death, send an email and we will get you the right answers.

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Synopsis: Welcome Aboard, Kevin Boyle!

Editor’s comment: We are thrilled to add Kevin to head up our Indiana GL/WC defense team. He is a long-time, knowledgeable and veteran defense attorney based in Bloomington, IN and covers the entire state.

He is listed on www.linkedin.com and is now on our website. Please consider Kevin at KBoyle@keefe-law.com for your statewide IN defense needs!

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Synopsis: This Thursday!! WCRI or the Workers’ Comp Research Institute Stat Rats Document Continued Savings for IL Business in Workers’ Comp—to register, click the link below.

Editor’s comment: Please take a look. Everyone in the IL WC matrix hopes these dramatic and documented savings are going to cause IL WC premiums to proportionately drop.

New WCRI Publication:

The Effect of Reducing the Illinois Fee Schedule

In September 2011, Illinois enacted new legislation that introduced a 30 percent decrease in the fee schedule rates across all types of medical services. Important questions asked by policymakers and others after this fee schedule change are: Did a 30 percent reduction in the fee schedule produce a 30 percent change in the average medical cost of a claim? Was the 30 percent reduction too much or too little? How do the post-reform prices paid in Illinois compare with prices in other states? These important policy questions are addressed in this report.?read the abstract?order this report

Webinar - Effect of Reducing the Illinois Fee Schedule

In an effort to address one of the highest fee schedules in the nation, Illinois enacted a 30 percent reduction in their medical fee schedule in 2011. Since then many have wondered about the impact. Join WCRI researchers and co-authors, Dr. Rebecca Yang and Dr. Olesya Fomenko, for an hour-long webinar as they discuss the findings from a recently published study, The Effect of Reducing the Illinois Fee Schedule on Thursday, February 27, 2014 at 1pm ET (12pm CT, 11am MT, and 10am PT). Click here to register.

KCBA Blog

2-24-14; You Can Fire WC Claimant for Refusal To Drug Test, Analysis by Shawn Biery, JD, MSCC; Adjusting Company Parking Lot Slip Falls in IL WC; Three Most Challenging IL WC Claims and much more