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Illinois Subrogation And Third Party Litigation For Employers

OUTLINE

I.          INTRODUCTION

II.         ILLINOIS SUBROGATION

            A.        IICLE Third Party Recovery and Subrogation Law Summary and Checklist

            B.        Statute of Limitations Summary

                        1.         Standard personal injury (auto, product liability, slip and fall, etc.) -  Two years from date of accident, 735 ILCS 5/13-202

                        2.         Construction injuries - Four years from date of accident

3.                  Claims against municipalities and public employees (state agencies) -  One year from the date of the occurrence.

                        4.         Contribution and Indemnity - Two years from date of occurrence or from date of service of summons

                        5.         Personal or Real Property, Unwritten Contracts - Five years from date of occurrence

                        6.         Written Contracts - Ten years from date of occurrence.

                        7.         Minor’s Claims - Two years after reaching 18.

                        8.         Statute of Repose (Product Liability) - Twelve years from date of first sale, lease or delivery by seller, or ten years from the date of first sale, lease or delivery to initial user, whichever expires earlier.

9.           Wrongful Death – Two years regardless of type of accident, even                                                     

for construction injuries.

C.                No Reduction of the Workers’ Compensation Lien

Court does not have the authority to reduce the lien.  Contributory negligence does not equal a reduction in the lien.  Neither the fault of the employee nor the employer can reduce the lien.  The employer’s fault can only be addressed in a third party action for contribution, separate and independent from the lien recovery.

1.                  Employers right to recover is not limited to damages compensable under the Act.

                        3.         Settlement strategies.

            D.        Illinois Case Law on Lien Recoveries

1.         If an employee’s third party complaint is dismissed after the statute of limitations has passed, the employer may move to vacate the dismissal before it becomes final and substitute itself as the plaintiff.  Holzmiller v. Clark Equipment, 100 Ill.App.3d 687, 427 N.E.2d 342 (1^st Dist. 1981).

2.         Workers compensation liens attach to an injured workers medical malpractice recovery, but only to the extent of those expenses attributable to the medical aggravation of the injury, i.e., the amount of the lien is limited to the amount that the employer was required to pay because of the malpractice.   Kozak v. Moiduddin,  294 Ill.App.3d 365, 689 N.E.2d 217 (1^st Dist 1997).

3.         Workers compensation liens do not attach to an employee’s recovery for legal malpractice.  Eastman v. Messner, 188 Ill.2d 404,  721 N.E.2d 1154 (1999).

4.         Workers compensation liens do not attach to an employee’s uninsured or underinsured claim, when the third party tortfeasor lacks sufficient insurance coverage.  Terry v. State Farm, 287 Ill.App.3d 8, 677 N.E.2d 1010 (2^nd Dist. 1997)

5.         An employer’s obligation to pay to plaintiff its pro rata share of costs and reasonably necessary expenses, under §5(b) of the Act, must be calculated based on the employer’s net recovery, after first deducting the 25% of the lien the employer is required to pay to the plaintiff/employee’s attorney.  Overlin v. Windmere Cove Partners, Inc., 756 N.E.2d 926 (2^nd Dist. 2001).

E.        Loss of Consortium Claims

1.         Employer’s right to reimbursement does not extend to claims recovered on a spouse’s loss of consortium claim.

2.         Spouses cannot solely file consortium claims to effectively circumvent the lien, unless the spouse can prove facts showing why it is impossible to join the loss of consortium claim with a claim for the employee’s injuries.

F.         Enforcing Judgments

1.         Judgments may be enforced for seven years, and must be revived at that time.  735 ILCS 5/12-108.   Judgments may be revived up to twenty years from the date of the judgment.  735 ILCS 5/13-218.

2.         Citations to discover assets may be used to force the judgment debtor or anyone holding money or property on the judgment debtor’s behalf to come into court and state the debtor’s assets, including bank account numbers, the amounts in the accounts, salary owed etc.  Refusal to comply with a citation may result in a body attachment, which is similar to a civil arrest warrant.

3.         Wages may be garnished and driver’s licenses may be suspended          for the failure to comply with a judgment.

G.        Tort Immunity Act

(derived from ancient “King can do no wrong” concept)

1.         Public employers may be held liable for the negligent, willful, malicious or criminal acts of its employees when committed in the course and scope of employment.

2.                 Purpose of the Act is to protect local public entities and their agents from liability arising out of the operation of government.  Thus, the immunity stems from numerous specific statutory enactments.  There is no liability for damages due to exercises of discretionary powers, but liability is permitted based on ministerial conduct.  A public entity exercises discretion, when it selects and adopts a plan in the making of public improvements, such as constructing sewers or drains; but as soon as it begins to carry out that plan, it acts ministerially, and is bound to see that the work is done in a reasonably safe and skillful manner.

3.         No actions in contract against local public entities and punitive damages are not available against local public entities.

4.         Recreation:    a local public entity is not liable for an injury where the liability is based on the existence of a condition of any public property intended or permitted to be used for recreational purposes, unless the local entity is guilty of willful and wanton conduct that proximately caused the injury.

5.         Numerous specific statutory provisions providing immunity in the Tort Immunity Act.  

            H.        Lien recoveries less than 100% - Application of §5(b) of Act

1.         Pro rata share of costs and reasonably necessary expenses.

2.         How to prevent plaintiffs/employees from stiffing the employer.

                      3.       In Re Estate of Dierkes, 191 Ill.2d 326 (2000).

III.         THIRD PARTY LITIGATION FROM WORKERS' COMPENSATION CLAIMS

            A.        Pre-Kotecki Background

                        1.         Third Party Litigation Defined

2.         Skinner v. Reed Prentice Division Package Machinery Company, 70 Ill.2d 1 (1977).

                        3.         §5(a) of the Act

                        4.         Doyle v. Rhodes, 101 Ill.2d 1 (1984).

                        5.         Briseno v. Chicago Union Station Company, 197 Ill.App.3d 902 (1990).

            B.        Kotecki v. Cyclops Welding, 146 Ill.2d 155 (1991)

            C.        Post-Kotecki:  Contractual Waiver of Kotecki Protection

1.         Lannom v. Kosco, 158 Ill.2d 535 (1994).

2.         Braye v. Archer-Daniels-Midland Co., 175 Ill.2d 201 (1997).

3.         Liccardi v. Stolt Terminals, 178 Ill.2d 540 (1997).

4.         Indemnity agreements in general.

5.         Christy-Foltz, Inc. v. Safety Mutual Casualty Corp., 309 Ill.App.3d 686 (4^th Dist. 2000).

6.                 Michael Nicholas, Inc. v. Royal Insurance Company of America,

321 Ill.App.3d 909 (2d Dist. 2001).

                      7.       West Bend Insurance Co. v. Mulligan Masonry, 337 Ill.App.3d 698

(2d Dist. 2003).

            D.        Lien Recovery - §5(b) v. Third Party Liability

1.         Silva v. Electrical Systems, Inc., 183 Ill.2d 356 (1998).

2.         LaFever v. Kemlite Co., 185 Ill.2d 380 (1998).

3.         Settlement/trial considerations for employers.

            E.        Contribution/Apportionment for Employers

1.         Unzicker v. Kraft Foods, 203 Ill.2d 64 (2002).

2.         Application of Unzicker v. Kraft Foods to employers and employees.

3.         June 4, 2003 Amendment to Apportionment Act – Legislatively overruling Unzicker decision.

4.         Settlement/trial considerations for employers.

            F.         Retaliatory Discharge

1.         General considerations and developments.

2.         Clark v. Owens-Brockway Glass Container, Inc., 697 N.E.2d

            743 (1998).

3.         Reinneck v. Taco Bell Corporation, 696 N.E.2d 839 (1998).

HENNESSY & ROACH, P.C.

THIRD PARTY LITIGATION LAW SUMMARY

            A.        Holzmiller v. Clark Equipment Company, 100 Ill.App.3d, 427 N.E.2d 342 (1^st Dist. 1981):  A products liability action filed in the employee’s name within the last 90 days of the statute of limitations was dismissed due to the employee’s failure to comply with discovery.  The trial court refused to allow the plaintiff’s employer’s insurance company to file an amended complaint substituting the insurer for the injured worker.  On appeal the Court found that if an action is dismissed after the statute of limitations has passed, the employer may move to vacate the dismissal before it becomes final and to substitute the employer for the employee as the plaintiff. 

            B.        Kozak v. Moiduddin, 294 Ill.App.3d 365, 689 N.E.2d 217 (1^st Dist. 1997):  An employer may exercise a lien against an employee’s subsequent medical malpractice recovery, although the lien should extend only to expenses attributable to the medical aggravation of the injury.  However, in this case since the alleged malpractice occurred only six days after the initial trauma, any award for medical expenses incurred after the alleged malpractice may be subject to the employers lien.  Further, the Court found that to the extent the employee’s temporary and permanent disability were caused by the medical mistreatment, any award for such disability would also be subject to the employer’s lien.

C.        Eastman v. Messner, 188 Ill.2d 404, 721 N.E.2d 1154 (1999):  A workers compensation lien cannot be asserted against an employee’s recovery from a legal malpractice claim.  In coming to this determination, the Court relied heavily on the language of Section 5(b) of The Workers Compensation Act which states “Where the injury or death for which compensation is payable under this Act was caused under circumstances creating a legal liability for damages on the part of some person other than his employer to pay damages, then legal proceedings may be taken against such other person * * *."  820 ILCS 305/5(b).  A legal malpractice complaint does not arise out of the facts of a worker’s compensation injury.  Rather, it arises only from a separate claim for negligence against the employee’s attorney, and thus falls outside of the language of Section 5(b) of the Act.

D.        Terry v. State Farm, 287 Ill.App.3d 8, 677 N.E.2d 1010 (2^nd Dist. 1997):  A police officer, who was injured at an accident while driving a police vehicle, received workers' compensation benefits from the Village.  He thereafter filed a complaint to determine his rights under an underinsured motorists policy paid for by the Village.  The underinsured motorists’ carrier then sought a declaration that it was entitled to a set off or reduction of any payments it would have to make under the underinsured motorists’ policy in an amount equal to the officer’s workers' compensation settlement.  The Village had obtained a partial recovery of the workers' compensation lien from the third party tortfeasor’s insurance carrier, but also sought a declaration that it had a valid workers' compensation lien against the proceeds of any claim under the subject underinsured motorist policy.  The court held that the employer could not assert the lien against proceeds from the underinsured motorist policy.  The court held that the language of §5(b) of the Act “that refers to a legal liability to pay damages refers to liability in tort, not contractual liability under an underinsured motorists policy.”

E.        Overlin v. Windmere Cove Partners, Inc., 756 N.E.2d 926 (2^nd Dist. 2001):  The Second District Appellate Court held that, in calculating an employer’s pro rata share of costs and reasonably necessary expenses to be paid back to plaintiff’s counsel, the court must first deduct the 25% attorney’s fee from the employer’s reimbursement, pursuant to §5(b) of the Workers' Compensation Act.  In Overlin, the employer had paid to the plaintiff/employee $121,592.92 in workers' compensation benefits, and had a lien in said amount on plaintiff’s judgment of $250,114.96.  Plaintiff contended that the employer’s pro rata share of costs and reasonably necessary expenses should be 48.6% ($121,592.92 ∻$250,114.96), based on the gross amount of reimbursement recovered by the employer.  The employer countered that it should only be responsible for 34.6% ($91,194.69 ∻$250,114.96) of the total judgment, based on the net amount of reimbursement to the employer ($91,194.69), after taking into consideration the payment to plaintiff’s counsel of 25% of the total lien for attorney fees.  The court in Overlin accepted the employer’s interpretation, thereby limiting the amount of costs and expenses that can be further deducted from the employer’s recoverable lien.  In cases where the expenses are significant in preparing and presenting a case for trial, this decision can result in savings of thousands of dollars for the employer.

            F.         In Re Estate of Dierkes, 191 Ill.2d 326 (2000):  The Illinois Supreme Court held that an employer’s lien reimbursement can only be reduced as set forth in §5(b) of the Workers' Compensation Act.  Thus, if a third party settlement or verdict is rendered for less than the total amount of the employer’s lien, the attorney fee for plaintiffs’ attorneys can only be 25% of the total settlement or verdict amount, not the attorney’s fees agreed to between plaintiff’s counsel and the plaintiff (usually 33-1/3% or 40%).  This is a helpful case to use with stubborn plaintiffs’ attorneys who insist that they are entitled to 1/3 of any recovery for the plaintiff under any circumstances.  They frequently need to be reminded that they are bound by law and ethics to reduce their fees to 25% when the workers' compensation lien exceeds the amount recovered in the third party action.

            G.         §5(a) of the Illinois Workers' Compensation Act:  §5(a) of the Act provides an employer with immunity from suit by an injured employee.  In other words, §5(a) establishes workers’ compensation benefits as the injured employee’s exclusive remedy for his injuries.

            H.         Doyle v. Rhodes, 101 Ill.2d 1 (1984):  In Doyle, the Illinois Supreme Court decided that while §5(a) acts to bar an employee from a direct action against his employer, it does not bar a third party sued directly by the employee from filing a contribution action back against the employer.  Under Doyle, the employer’s liability in the third party action is equal to its negligence.  In other words, if a jury found an employer to be 80% liable for an employee’s injuries, the employer would be liable for 80% of the verdict award.  While the employer received a credit against its verdict liability for the workers’ compensation benefits paid on behalf of the employer, the amounts of workers’ compensation benefits paid had no relevance to the employer’s liability in the contribution action.

            I.          Briseno v. Chicago Union Station Company, 197 Ill.App.3d 902 (1990):  In Briseno, the First District Appellate Court held that a defendant cannot seek contribution against an employer/third-party defendant when the employer listed the defendant as an additional insured under the employer’s insurance policy and the employer’s policy in fact defended and fully indemnified the defendant.  The naming of the defendant as an additional insured and provision of the insurance coverage acted as an exculpatory agreement barring the defendant’s subsequent contribution claim against the employer.  In Briseno, the insurance carrier was essentially suing itself for contribution in an effort to attribute blame to the employer presumably for the purposes of increasing the employer’s insurance premium.

            J.         Kotecki v. Cyclops Welding, 146 Ill.2d 155 (1991):  In Kotecki, the Illinois Supreme Court held that an employer’s liability in a contribution action was limited to the amount of workers’ compensation benefits paid to the injured employee.  In other words, even in the worst case scenario, an employers’ liability is limited under Kotecki to the money the employer already paid out.  The employer is not liable under Kotecki for what was called “fresh money”, or additional money above and beyond the employer’s workers’ compensation liability in pre-Kotecki third party litigation.

            K.        Lannom v. Kosco, 158 Ill.2d 535 (1994):  The Supreme Court ruled that Kotecki applied retroactively and further held that an employer can satisfy all potential contribution liability by waiving its workers’ compensation lien.  By doing this, an employer can also obtain immediate dismissal with prejudice of all contribution actions pending against it (assuming no Kotecki waiver applies).

            L.         Braye v. Archer-Daniels, 175 Ill.2d 201 (1997):  The Supreme Court held generally that an employer can contractually waive the Kotecki limitations on its liability in contribution to other tortfeasors.  As a construction case, the Court also considered whether the contractual clause at issue violated the Indemnification Act.  740 ILCS 35/0.01 (1994).  The clause at issue was as follows:

                        “If [employer’s] work under the order involves operations by [employer] on the premises of [owner] or one of its customers, [employer] shall take all necessary precautions to prevent the occurrence of any injury to person or damage to property during the progress of such work and, except to the extent that any such injury or damages due solely and directly to [owner’s] or its customers’ negligence, as the case may be, [employer] shall pay [owner] for all loss which may result in any way from any act or omission of [employer], its agents, employees or subcontractors.”

                        With respect to the above provision, the Supreme Court held that indemnity was not the dominant aspect of said provision, and it was thus not void as violating the Indemnification Act.  Further, by enforcing the agreement, the policies of the Contribution Act in achieving comparative fault and encouraging good faith settlements remained intact.

            M.        Liccardi v. Stolt Terminals, 178 Ill.2d 540 (1997):  The Supreme Court again confirmed the employer’s ability to waive its Kotecki protection by contract.  However, the provision at issue in this case read more like an indemnity clause, as follows:

                        “If Vendor performs services…hereunder, Vendor agrees to indemnify and hold harmless Stolt Terminals…from all loss or the payment of all sums of money by reason of all accidents, injuries, or damages to persons or property that may happen or occur in connection therewith.”

                        As the owner was not seeking indemnity in its third party complaint against the employer, the court extended its ruling in Braye to include any and all agreements, despite the fact that the specific agreement called for indemnity, contrary to the Indemnification Act.

            N.        Christy-Foltz, Inc. v. Safety Mutual Casualty Corp., 309 Ill.App.3d 686 (4^th Dist. 2000):  The Fourth District Appellate Court in Illinois found that an employer’s written agreement to assume full contribution liability, thereby waiving Kotecki protection, will not be covered under the employer liability policy.  By agreeing to waive its limited contribution liability allowed in Kotecki, the employer “voluntarily assumed” a loss, falling within the policy language excluding from coverage “any loss. . .voluntarily assumed under. . .contract.”  As such, the amounts of the employer’s contribution liability above and beyond the workers' compensation liability under Kotecki will not be covered under the employer liability policy, assuming the standard exclusionary language applies.

            O.        Michael Nicholas, Inc. v. Royal Insurance Company of America, 321 Ill.App.3d 909 (2^nd Dist. 2001):  The Second District Appellate Court in Illinois held that a Kotecki waiver agreement for indemnity/full contribution, in a construction negligence action, must be considered as an “insured contract” based on the language of the policy at issue.  Thus, liability for Kotecki waivers has been found to be covered under the employer’s commercial general liability policy, despite the coverage exclusion for injuries to employees.  The “insured contract” provision in Michael Nicholas read as follows:

“That part of any other contract or agreement pertaining to your business. . .under which you assume the tort liability of another party to pay for ‘bodily injury’ or ‘property damage’ to a third person or organization.  Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.” 

           P.         West Bend Insurance Co. v. Mulligan Masonry,  337 Ill.App.3d 698, (2d Dist. 2003):     The Second District Appellate Court confirmed its prior decision in the Michael Nicholas case, in holding that the Commercial General Liability insurance policy of West Bend provided coverage for liability against an employer from a contractual waiver of Kotecki protection.  West Bend contended that the referenced indemnity contract was not an “insured contract”, as the employer was not assuming another party’s tort liability, but could only be found liable for its full pro rata share of the total liability to the plaintiff.  However, the court held that the employer’s “tort liability” was limited to what had already been paid out in workers compensation benefits based on Kotecki.  Thus, with the indemnity agreement, the employer did assume the “tort liability” of another party.  West Bend unsuccessfully tried to convince the court to go against both the Michael Nicholas and Christy-Foltz decisions, and impose the coverage for Kotecki waivers back on the Employer Liability policy.

            Q.        Silva v. Electrical Systems, Inc., 183 Ill.2d 356 (1998):  The Illinois Supreme Court held that the employer’s obligation to reimburse the plaintiff’s attorneys for 25% of the lien recovery for attorneys’ fees incurred in the third party action (pursuant to §5(b)) is not subject to reduction by the amount of the employer’s contribution liability to a third party.  In Silva, the employer had accepted reimbursement of its workers’ compensation payments after plaintiff obtained a satisfactory verdict in the third party action.  The employer was also sued as a third party defendant for contribution and was found liable to an extent that only effected a portion of the lien.  Instead of paying the §5(b) fees and cost for the entire lien recovery, the employer attempted to first deduct its contribution liability from the reimbursement and then only calculate the §5(b) costs and fees on the remaining amount of the lien.  The court disagreed, and held that an employer’s negligence has nothing do with its statutory obligation to pay §5(b) fees and costs pursuant to plaintiff’s successful recovery.  To hold otherwise would require plaintiffs’ counsel to subsidize [an employers] lack of due care.  Thus, once an employer agrees to accept reimbursement of its workers’ compensation payouts, it cannot escape the requirements of §5(b).

            R.        LaFever v. Kemlite Co.,     185 Ill.2d 380 (1998):  The Illinois Supreme Court held that an employer/third party defendant that never requested reimbursement of its workers’ compensation lien, could waive the lien after jury verdicts and not be responsible for any attorneys’ fees and costs pursuant to §5(b) of the Act.  In LaFever, the employer/third party defendant participated in the trial, and after the jury’s verdict, which found the employer liable to an extent greater than its workers’ compensation lien, moved to waive its lien in exchange for a dismissal of the defendant’s contribution claim.  The trial court granted this motion, but was later reversed by the appellate court.  The appellate court had held that the employer was barred from waiving its lien after it took the unsuccessful gamble of proceeding to trial and verdict.  The Supreme Court overruled the Appellate Court, finding that §5(b) of the Act requires the employer to pay attorneys’ costs and fees only on “actual reimbursement of workers’ compensation payments.”  If an employer/third party defendant waives the lien, it could never receive “actual reimbursement” of the workers’ compensation payments.  The court found that this “actual reimbursement” was an express statutory condition precedent to the payment of costs and fees under §5(b).  Since it was never fulfilled in LaFever, the obligation never arose.  Thus, it does not matter when an employer waives its lien.  It can no longer be ultimately liable for 125% of the lien, as the LaFever Appellate Court decision had concluded.

S.        Unzicker v. Kraft Foods, 203 Ill.2d 64 (2002):  The Illinois Supreme Court held that an employer named as a third party defendant can be included on a verdict apportionment form, because employers can be sued by plaintiffs/employees, as set forth in §2-1117 of the Illinois Code of Civil Procedure.  Although an employer is typically protected by the exclusivity provisions of the Workers' Compensation Act from a direct lawsuit by its employee, the exclusivity defense must be raised as an affirmative defense by the employer.  This does not prevent an employee from attempting to sue the employer as a direct defendant.  Section 2-1117 of the Code of Civil Procedure states that any “third party defendant who could have been sued by the plaintiff,” whose apportioned liability is found to be less than 25% of the total liability, will be jointly and severally liable for all medical expenses of the plaintiff, but will only be severally liable for all non-medical damages.  Thus, a defendant must be found at least 25% at fault for plaintiff to hold that defendant responsible for the entire verdict.  The court found that the legislative intent behind the Apportionment Act was that minimally responsible defendants should not have to pay entire damage awards.  The Supreme Court further rejected arguments that the Apportionment Act (§2-1117) was unconstitutional special legislation.

            T.         Application of Unzicker v. Kraft Foods to Employers and Employees:  Based on the Unzicker decision, an injured employee may not be able to recover an entire verdict if an employer is found primarily at fault, as compared to a direct defendant.  For example, if a direct defendant is found 10% liable and the employer/third party defendant is found 90% liable for plaintiff’s injuries, then the direct defendant is only liable to the plaintiff for 10% of the non-medical damages awarded in the verdict.  The defendant will still be jointly and severally liable for all of plaintiff’s medical bills.  The employer will not be responsible to pay any portion of the verdict, except for a percentage of medical bills, as it can only be liable for contribution to a defendant who is required to pay more than its pro rata share of liability.  A defendant found less than 25% at fault cannot be required to pay more than its pro rata share of fault for any non-medical damages, such as disability or pain and suffering, and thus cannot seek contribution from an employer for the non-medical damages it must pay under the verdict.  This will result in the plaintiff/employee not recovering the entire verdict from anybody.  The employer will not be subject to any contribution liability above and beyond a percentage of the plaintiff/employee’s medical bills.

            U.        Public Act 93-0010:     Effective June 4, 2003, the Illinois Legislature overturned the Unzicker decision by amending the Apportionment Act as follows:

                                                “Any defendant whose fault, as determined by the trier of                                                               fact, is less than 25% of the total fault attributable to the

                                                 plaintiff, and any third party defendant except the plaintiff’s

                                                 employer  shall be severally liable for all other damages [all

                                                 non-medical damages] ….”

                        The language of Public Act 93-0010 includes no wording to provide for retroactive application to causes of action, which accrued before June 4, 2003.   If this amendment is deemed to be a substantive change in the law, rather than merely a procedural change, it should be held to apply only to causes of action accruing after June 4, 2003.  If deemed procedural, this amendment will apply to all cases currently pending.  This will no doubt be decided by the courts in the near future.  When the Unzicker decision helps the employer, it should still be argued until determined otherwise.

            V.        §5(b) of the Workers’ Compensation Act (820 ILCS 305/5(b) (1995)) states in pertinent part:

                        “…Out of any reimbursement received by the employer pursuant to this Section the employer shall pay his pro rata share of all costs and reasonably necessary expenses in connection with such third-party claim, action or suit and where the services of an attorney at law of the employee or dependents have resulted in or substantially contributed to the procurement by suit, settlement or otherwise of the proceeds out of which the employer is reimbursed, then, in the absence of other agreement, the employer shall pay such attorney 25% of the gross amount of such reimbursement. . .”

            W.       Clark v. Owens-Brockway Glass Container, Inc., 697 N.E.2d 743 (1998):  Employers are subject to retaliatory discharge claims for terminating a former employee based on even a rational belief that the employee was malingering and improperly collecting workers’ compensation benefits.  Even with a surveillance videotape appearing to indicate that the petitioner was not as disabled as claimed (shown mowing the lawn) a reasonable belief on the part of the employer that an employee is lying about his or her injuries is not sufficient to justify firing an employee who has sought worker’s compensation benefits.  An employer who goes through with such a discharge on this premise will be setting itself up for a retaliatory discharge claim with potential compensatory and punitive damages.

            X.        Reinneck v. Taco Bell Corporation, 696 N.E.2d 839 (1998):  Despite the fact an employee had not yet filed a workers’ compensation claim prior to her discharge by the employer, she was still entitled to bring a retaliatory discharge cause of action, as she had sought medical attention for her work-related injuries and it was determined that the employer discharged plaintiff for the assertion of her workers’ compensation rights in general.   In Reinneck, plaintiff informed her supervisors that she was injured on the job and that she was hiring a lawyer to purse her remedies.  The technicality of whether plaintiff had actually filed the workers’ compensation claim at the time of discharge is irrelevant.  The ultimate issue in a retaliatory discharge action is the employer’s motive in discharging the employee.