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Chamber attacks judicial “activism”

Tuesday, Oct 29, 2013

* Crain’s

The Illinois Chamber of Commerce is ramping up efforts to reform the state’s workers’ compensation system, issuing a report today that takes aim at specific judges and court opinions for “activism” that the business group says has badly hurt the state’s economy.

In a 74-page report called “The Impact of Judicial Activism in Illinois,” the chamber details 19 cases in which it says decisions by the Illinois Industrial Commission that would have limited payments to injured workers instead were overturned or otherwise weakened by appellate and supreme court justices.

As a result, it says, at least some of the benefits promised in a major workers’ comp package adopted by the Legislature two years ago have not arrived. As my colleague Paul Merrion recently reported, medical payments for workers’ compensation dropped just 4.6 percent last year, even though Illinois has ranked near the top of the 50 states in system costs.

* But the chairman of the Workers’ Comp Commission Michael Latz hotly disputes that earlier Crain’s report. From an e-mail with emphasis in the original…

In reporting that the reform resulted in total pre-claim payments being reduced by only one percent, Crain’s relied on a report which only looked at injuries which occurred before the reform went into effect. On page 13 of the Workers Compensation Research Institute’s (WCRI) Benchmark Study for Illinois, WCRI reports that “overall cost per claim with more than seven days of lost time decreased 1 percent between 2010 and 2011.” As indicated in the sidebar of the WCRI graph, the medical data reported reflected only 7 months of services under the new fee schedule rates and, therefore, the results show a partial impact. The data does not report on injuries which occurred after September 1, 2011 – therefore the effects of the AMA impairment ratings are not considered. The Crain’s report also neglected to mention that WCRI also reports: “The maturity of the data does not allow for the assessment of the indemnity impact from the 2011 reforms, which is why the sidebar of the chart clarified that the impact was likely related to the economic recovery.”

Insurance industry actuaries excel at assessing data – and the actuaries report that the 2011 reform is working. The 2011 reform of the Workers Compensation Act has resulted in the National Council on Compensation Insurance recommending reductions in insurance premiums each of the last two years. Those reductions in the advisory rates for insurance premiums – which come to about $315 million in savings for businesses so far – are a better indication of how the 2011 reform is working than the early study which looked at injuries occurring before the reform was in effect. If Crain’s wants to be accurate, it can learn from the sports editors and wait at least until the eighth inning before predicting outcomes.

* Back to Crain’s

The chamber does not want Illinois to join a “race to the bottom” in which injured workers are left to fend on their own, Mr. Whitley said. “I don’t want us to be Indiana.”

But Illinois has the fourth-highest premiums of the 50 states, when it used to be “somewhere in the middle, 24th or 26th or so.” As a result, employers in Illinois now pay $10.10 more in workers’ comp costs per $1,000 in salary than an employer in Florida and $12.30 more than an employer in Texas, he said.

* Anyway, the Chamber’s report can be read by clicking here. One of the cases cited in the report

Mlynarczyk v. Illinois Workers Compensation Commission, 2013 IL App (3d) 120411WC.

In Mlynarczyk the Appellate Court unanimously ruled that a cleaning lady employed by a janitorial service to clean churches, offices and residences was a traveling employee because she did not work at a fixed job site and her duties required her to travel to various locations in the Chicago area.The Court held that injuries resulting when she slipped and fell on snow and ice at home as she was walking to the vehicle in her driveway that would transport her to her next cleaning assignment were compensable because, as a traveling employee, her “walk to the minivan constituted the initial part of her journey to her work assignment” and was both reasonable and foreseeable.

* Another case

Cox v. Illinois Workers Compensation Commission, 406 Ill. App. 3d 541, 941 N.E.2d 961, 347 Ill.Dec. 92 (1st Dist. 2010).

In Cox, the Appellate Court applied the traveling employee doctrine to and that it was foreseeable that an employee, assigned an employer-owned vehicle 24/7, would use the truck to perform a personal errand. The Court agreed that the errand constituted a personal deviation from the employee’s scope of employment. However, the Court ruled the deviation was “insubstantial”because the claimant had completed his errand and was on the way home when he was injured in an automobile accident.

Consequently, the injuries sustained by the employee while he was conducting personal business were compensable.

* And my own, personal “favorite”

Circuit City Stores v. Illinois Workers Compensation Commission, 391 Ill. App. 3d 913, 909 N.E.2d983, 330 Ill. Dec. 961 (2d Dist. 2009).

In Circuit City, the Appellate Court ruled that injuries sustained by an employee who shoulder-butted a vending machine in order to help a co-worker dislodge a bag of chips were compensable under the Good Samaritan doctrine adopted by the Illinois judiciary. In the past, the Good Samaritan concept has been used to provide benefits where employees left the scope of employment and were injured in efforts to provide assistance to another person in urgent or life-threatening situations. The Court held that “what the Circuit City case lacked in urgency, it made up for in familiarity and collegiality.”

Sheesh.

- Posted by Rich Miller        


26 Comments
  1. - Bill White - Tuesday, Oct 29, 13 @ 2:10 pm:

    I’ve been told that “above market” medical pay rates contributes to high workers comp premiums.

    Once universal coverage comes into play with the ACA, why not let medical bills be covered by the mandatory health insurance and remove medical pay from the workers comp arena altogether?


  2. - Downstate Illinois - Tuesday, Oct 29, 13 @ 2:11 pm:

    So according to the first ruling, if I slip on my own driveway on the way to work, I can get my employer to pay for the injury.

    Judicial activism doesn’t even begin to explain what’s wrong with the three examples you cited. Unbelievable.


  3. - Demoralized - Tuesday, Oct 29, 13 @ 2:13 pm:

    Hey, when your Snickers gets stuck in the machine I think it’s an urgent or life-threatening situation.


  4. - Bill White - Tuesday, Oct 29, 13 @ 2:13 pm:

    @downstate Illinois

    If the plaintiff in Mlynarczyk had health insurance from another source, I would be far more supportive of changes that made that injury fall outside the workers comp arena.


  5. - 47th Ward - Tuesday, Oct 29, 13 @ 2:18 pm:

    Years ago when I used to sit through a lot of Cook County Board meetings, I’d flip through the Finance agenda to the Industrial Claims Commission report. My all-time favorite was the case of an employee awarded compensation for a broken hand who was injured while on the job. The injury occurred when he punched his supervisor.

    Hand to God, that’s a true story.


  6. - Ahoy! - Tuesday, Oct 29, 13 @ 2:25 pm:

    I would like to make one point and throw out one idea, even though it’s probably radical.

    1. I have not heard one business say their workers compensation costs are going down. I hate to argue with Mr. Latz’s actuaries, but just saying the people that pay the bills, aren’t noticing a difference.

    2. It might help to control workers comp (and UI) costs to make it more like the social security cost split. Employer pays half, employee pays half. After your first claim (or two), you’re insurance goes up and the employee has some skin in the game. The legislation could also provide additional protections for employees, but at the end of the day, there’s always going to be abuse when someone else is paying 100% of the bill.


  7. - OneMan - Tuesday, Oct 29, 13 @ 2:37 pm:

    Wow… wonder if the slip on ice extension is if my wife falls inside the house on a workday before she heads to her first visit it is covered…

    Wow…


  8. - Adam Smith - Tuesday, Oct 29, 13 @ 2:40 pm:

    The plaintiff’s bar has figured it out. They shell out big bucks to get their lap dogs elected/appointed to the bench and then these judges repay the favor by going to any ridiculous lengths to uphold their political sponsors and perpetuate the tort cesspool that is the Illinois court system.

    As long as lawyers are in charge of the system, the system will continue to richly reward them, at the expense of taxpayers and consumers.


  9. - wordslinger - Tuesday, Oct 29, 13 @ 2:41 pm:

    –Crain’s relied on a report which only looked at injuries which occurred before the reform went into effect.–

    Why’d they do that?

    –The 2011 reform of the Workers Compensation Act has resulted in the National Council on Compensation Insurance recommending reductions in insurance premiums each of the last two years. Those reductions in the advisory rates for insurance premiums – which come to about $315 million in savings for businesses so far – are a better indication of how the 2011 reform is working than the early study which looked at injuries occurring before the reform was in effect.–

    That seems significant.


  10. - the Patriot - Tuesday, Oct 29, 13 @ 2:45 pm:

    There is a lot more to this and people in IL have to change philosophy on a lot of things to make changes, not just the work comp system.

    1. The traveling employee doctrine is very old. It is far from a recent advent of judicial activism. The concept that the employer benefits from efforts to boost morale is also not new. The precedent followed in those cases probably predates any of the parties or the judges hearing the case. 2009 and 2010 case are not activism, they are following precedent.

    2. We all pay higher work comp rates because the state mismanages it own work comp cases and has more than any other employer. I am not sure if state cases are in the stats on costs, but the incompetence of CMS, the AG’s office bogs down the system and drives costs up for everyone. A new AG and a new Governor will yield the most dramatic results to the system.

    3. At the core of the debate is what do you do with the people who have their claim denied? The people still need medical treatment and probably can’t work. Other states who do not have comprehensive Medicaid or welfare programs and just screw the employee. Due to our expansive welfare state, you just shift the burden to the taxpayer. Especially now that we are mandating government run health insurance.

    So remember, when you say cut back on WC claims, you are also arguing that the tax payer pick up the medical bills and the person’s lost wages. Denying the claim does not unhurt the person, just shifts responsibility.


  11. - the Patriot - Tuesday, Oct 29, 13 @ 2:48 pm:

    Word, it also takes an average of over 2 years for a case to make its way through the system. Bigger cases, with bigger costs take longer. Reform that went into effect in Sept of 2011 and Jan of 2012, has had very few cases, and virtually no major ones start and finish under the reforms.


  12. - walkinfool - Tuesday, Oct 29, 13 @ 3:02 pm:

    To raise the flag that perhaps the cost-savings intended with the WC reforms passed, is a cogent argument by the Chamber.

    As others have noted, it might be too early to tell with the data they used.

    However, to call this “judicial activism” is just right-wing pandering language. There have been some stupid decisions, based on some foolish precedents of long-standing, but they don’t rate that label.

    Ironic, because the broadest “judicial activism” in recent years, has been the Citizens’ United case, which the Chamber somehow loved.


  13. - Andrew Szakmary - Tuesday, Oct 29, 13 @ 3:10 pm:

    Let me see if I have this right: Illinois business interests expect courts and judges similar to those who have made these rulings to uphold the diminishment of earned pension benefits of current employees and retirees, despite clear-cut constitutional prohibitions against doing so?


  14. - walkinfool - Tuesday, Oct 29, 13 @ 3:18 pm:

    missing some words above:

    …”perhaps the costs savings expected with the WC reforms will not occur”… seems a good warning by the Chamber.

    But it’s too early to tell.


  15. - Louis G. Atsaves - Tuesday, Oct 29, 13 @ 3:19 pm:

    During the last “reform” hearings, the Arbitrators who were following the law as laid out by the Illinois Supreme Court and Illinois Appellate Court were scapegoated. Chairman Latz is right about the numbers that were forwarded to Crains. But let’s not allow facts to get in the way of scapegoating those truly and severely injured. Nor should we expect more complicated hearings using expensive AMA Guidelines from doctors to move through the system any faster.

    Sigh!


  16. - Cornerfield - Tuesday, Oct 29, 13 @ 3:24 pm:

    “As a result, employers in Illinois now pay $10.10 more in workers’ comp costs per $1,000 in salary than an employer in Florida and $12.30 more than an employer in Texas, he said.”

    I would have thought the problem amounted to a lot more than just a little over 1% of payroll compared to other states.


  17. - Formerly Known As... - Tuesday, Oct 29, 13 @ 3:31 pm:

    Did I just read a summary of sound legal reasoning?

    Or the script from the next “Dumb & Dumber” movie?


  18. - Undercover - Tuesday, Oct 29, 13 @ 3:34 pm:

    Adam Smith is right. IL’s judicial system is corrupt because it’s bought and paid for by lawyers and other special interest groups.

    Eliminate popularly elected judges and judicial fundraising and nearly every one of the Chamber’s beefs would be remedied. They’d even be able to build a very broad coalition of opposing interests to get that one done. But that would make way too much sense, wouldn’t it?

    None of these IL business groups understand how to build a movement. If they did, they might actually get something done rather than regurgitate the same old misguided talking points and get trampled by unions. Businesses still don’t want to come to IL. Imagine that!


  19. - kerfuffle - Tuesday, Oct 29, 13 @ 3:36 pm:

    Cornerfield - “I would have thought the problem amounted to a lot more than just a little over 1% of payroll compared to other states”

    At $10.10 more per thousand it still adds up. If you had 10 employees each earning $20,000 per year, that’s an extra $2,020 that the employer could be saving or spending on something else.


  20. - RMW Stanford - Tuesday, Oct 29, 13 @ 3:38 pm:

    1% may not sound like much but its add up and in a competitive marekt place and it can and does make a difference. The Circut City one is the worse of the three by far


  21. - D.P.Gumby - Tuesday, Oct 29, 13 @ 3:42 pm:

    “Judicial Activism” is the term used by anyone who does not like a ruling in a case. Try remembering that the worker’s comp system was established so that every work place injury would not have to go thru the regular judicial system w/ jury trials, etc. That was reform that benefited employers and employees and still does in the overwhelming majority of cases. If all the CofC can find are 16 fubars (granting them their characterizations) out of the hundreds of cases, it would seem the system works well. But they are not happy unless every case is in their favor and we return to the late 19th/early 20th Century where no worker was compensated because of the “primacy of contract”! This CofC garbage is really hypocritical given the massive amounts of money they (secretly) plough into judicial elections to put their partisans on the bench to further their own “judicial activism”.


  22. - x ace - Tuesday, Oct 29, 13 @ 3:42 pm:

    The real Activism occurred when the Chamber backed candidate won election to the Illinois Supreme Court funded in large part by State Farm Ins., and then immediately voted in favor of State Farm in a Multi-Million Dollar Case.

    That’s the Chamber’s idea of reform.

    The Chamber and State Farm tarnished forever a good man who previously was a good judge.

    It ain’t Judicial Activism that is the problem.

    It is Robber Baron Activists operating to destroy Judicial independence. Openly sometimes and often clandestinely like State Farm was caught doing.


  23. - Rich Miller - Tuesday, Oct 29, 13 @ 3:46 pm:

    ===Eliminate popularly elected judges and judicial fundraising and nearly every one of the Chamber’s beefs would be remedied. ===

    Sure it would. And who’d be on the magical mystery committee appointing those judges?


  24. - dupage dan - Tuesday, Oct 29, 13 @ 4:03 pm:

    “The Magical Mystery Committee”. Apple Records, right?


  25. - 1776 - Tuesday, Oct 29, 13 @ 11:26 pm:

    I’m amazed that Mr. Whitley is quoted that “we don’t want to be Indiana.” In nearly every hearing, they cite the lower cost of work comp in Indiana as a model.


  26. - Undercover - Wednesday, Oct 30, 13 @ 8:38 am:

    Rich Miller, good point. It would stay a mess in a different way, I’m sure.


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