Eugene Keefe <EKeefe@keefe-law.com>

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Synopsis: Illinois Has Another Awful Anti-Business Law and This Law Can’t Be Blocked by the IL WC Act.

Editor’s comment: In McDonald v. Symphony Bronzeville Park LLC, 2020 IL App (1st) 192398 (issued September 18, 2020), the Appellate Court ruled the exclusivity provisions of the Workers’ Compensation Act do not bar a claim for statutory, liquidated damages, where such damages arise under Illinois’ Biometric Information Privacy Act where an employer is alleged to have violated an employee’s statutory privacy rights under the Biometric Information Privacy Act. The court ruled a claim under the Privacy Act is not the type of “injury” that fits within the purview of the IL Workers’ Compensation Act. In short, the Illinois Appellate Court ruled IL employers can’t use Section 5 of the Illinois’ Workers’ Compensation Act to escape a rapidly growing number of class actions under IL new biometrics privacy law. The unanimous Court’s ruling is because the lawsuits brought under the biometrics law accuse the employers of violating the workers’ rights, but not actually harming them in any real way.

On Sept. 18, 2020, a three-justice panel of the Illinois First District Appellate Court in Chicago ruled the Illinois Workers’ Compensation Act does not bar class action lawsuits brought under the Illinois Biometric Information Privacy Act. Quoting the ruling, “… We conclude that the exclusivity provisions of the (Workers’) Compensation Act do not bar a claim for statutory, liquidated damages, where an employer is alleged to have violated an employee’s statutory privacy rights under the (Biometric Information) Privacy Act [or BIPA], as such a claim is simply not compensable under the Compensation Act,” the justices wrote.

The ruling arose out of an appeal on a question of law from a class action lawsuit pending in Cook County Circuit Court since 2017. In that case, attorneys with a Chicago-based class action law firm filed suit against the corporate entity that operates the Symphony Bronzeville nursing home in Chicago. The lawsuit, which could represent virtually all of the workers at the nursing home in recent years, was filed on behalf of a named plaintiff.

The lawsuit accused the nursing home operators of violating the Illinois BIPA law by requiring its workers to verify their identity by scanning their fingerprints when punching in and out of work shifts, without first securing authorization from the workers to conduct the scans and without first notifying the workers about how their scanned prints would be collected, stored, used, shared and ultimately, destroyed, as allegedly required by the BIPA law.

In response to the lawsuit, attorneys representing Symphony argued the BIPA case should be dismissed, because the claims were preempted by the Illinois Workers’ Compensation Act. Symphony centered its arguments on a key provision in the workers’ comp law, which declares the workers’ comp law “preempts any ‘statutory right to recover damages from the employer … for injuries incurred in the course of … employment.”

The argument advanced by Symphony in this claim, and by other employers targeted in other similar BIPA class actions, had not secured any victories, either in state or federal court. As veteran defense observers, we greatly dislike the BIPA law but we don’t feel this attack on the legislation makes sense other than as a delaying tactic to block enforcement of the law. All state and federal judges sided against the employers on the workers’ comp law question.

 

Across this State, hundreds of employers face similar class actions in reliance on this punitive and anti-business law, with more being added, almost daily, in Cook County Circuit Court and other venues. The lawsuits place IL employers at a business-busting financial risk. Under the BIPA law, employers could face potential liability of $1,000-$5,000 for every single violation of the BIPA law. Please understand this is wildly punitive and doesn’t in any way match the conduct it is designed to stop. In these kinds of class actions, the law has been laughingly interpreted to define a “violation” as each time any worker punched the clock every day by scanning a fingerprint. This could place even moderately sized employers at risk of losing millions of dollars in damages and certain bankruptcy. Again, this law highlights to me how awful our IL legislature is to vital businesses.

 

We appreciate your thoughts and comments. If you need help defending your company in the biometric sphere, please send a reply.

 

Synopsis: New Proposed Rule from the Feds on “Independent Contractor” Versus “FLSA Employee.”

Editor’s comment: The U.S. Department of Labor (DOL) issued a proposed rule Sept. 22 to clarify when a worker is an “employee” covered by the Fair Labor Standards Act (FLSA) versus an independent contractor. Independent contractors, including what are called “gig-economy workers,” are not eligible for minimum wage, overtime and other benefits/protections that regular employees must receive. The proposed rule adopts an “economic reality” test to determine a worker’s status as an FLSA employee or independent contractor.

There will be a 30-day comment period after the proposed rule’s official publication in the Federal Register. The rule, if finalized as proposed, may make classifying workers as contractors or employees easier. However, the US DOL proposed rule would not overturn labor-friendly state independent-contractor laws, such as the one in California.

Gene Keefe’s “Independent Contractor” Rule

In my view, someone is an “independent contractor” when they have their own work comp, liability, MVA and other insurance coverage. You can buy it for them or give them money to buy it but if they have their own coverages on their own dime, insurance coverages to a great extent, mitigate corporate exposure in the event of injury or serious loss.

If a supposed “independent contractor” is injured or disabled and they have no WC or other coverage, they are going to fight to be treated as an FLSA employee.

Economic Reality Test Proposed by the Feds

Under the proposed economic reality test, the U.S. DOL would consider whether a worker is in business for himself or herself and thus is an independent contractor, or if the worker is economically dependent on another business entity for work and is an FLSA employee.

In making this determination, the DOL would identify two core factors:

§  The nature and degree of the worker’s control over the work.

§  The worker’s opportunity for profit or loss based on initiative or investment.

It also would identify three other factors that may serve as additional guides in the analysis:

§  The amount of skill required for the work.

§  The degree of permanence of the working relationship between the worker and the potential employer.

§  Whether the work is part of an integrated unit of production.

But the two core factors are entitled to greater weight than the other factors, the DOL noted.

Core Factors

The first factor—the nature and degree of the individual’s control over the work would suggest that an individual is an independent contractor to the extent they exercise substantial control over key aspects of the performance of the work, the DOL explained.

Examples of an individual’s substantial control include:

§  Setting his or her own work schedule.

§  Choosing assignments.

§  Working with little or no supervision.

§  Being able to work for others, including a potential employer’s competitors.

In contrast, the control factor would weigh in favor of classification as an employee to the extent that a potential employer, rather than the individual, exercises substantial control over key aspects of the work, including through requirements that the individual work for the employer exclusively during the working relationship.

The proposed rule clarifies that requiring an individual to comply with specific legal obligations, satisfy health and safety standards, carry insurance, meet contractually agreed-upon deadlines or quality control standards, or satisfy other similar terms that are typical of contractual relationships between businesses would not constitute control that makes the individual more or less likely to be an employee under the FLSA.

The second factor—the worker’s opportunity for profit or loss based on initiative or investment—would, under the proposed rule, suggest that an individual is an independent contractor if he or she has an opportunity for profit or loss on either:

§  The exercise of personal initiative, including managerial skill or business acumen.

§  The management of investments in or capital expenditure on, for example, helpers, equipment or materials.

We appreciate your thoughts and comments. If you have concerns about “independent contractor” versus FLSA Employee status, please send a reply.

Synopsis: Annual IL State Chamber WC Conference Goes Virtual—Shawn Biery & John Campbell to present.

 

Editor’s comment: The 14th Annual Workers’ Compensation & Safety Conference set for November 4th is being held virtual this year. The 8:30 am to noon program features John Ruser, President & CEO of the Workers’ Compensation Research Institute (WCRI) and Michael Brennan, Chairman of the Illinois Workers’ Compensation Commission.

 

The program also will include the following breakout sessions:

 

  • Advances in the Diagnosis and Treatment of Carpal Tunnel Syndrome – Presented by Dr. Andrew Zelby and Dave Rusch, Vice President of Business Service Development, Ovation Hand Institute;

 

  • Medical Marijuana in the Workplace – Presented by AJ Sheehan, MVP Law

 

  • The Covid-19 Rebuttable Presumption – What is it and What Does it Mean for You? – Presented by Peter Stavropoulos, Brady Connolly and Masuda

 

  • 2020 Workers Compensation Case Law Update – Presented by Shawn Biery and John Campbell, Keefe Campbell Biery & Associates

 

  • Snakes, Leaches, and Tobacco Enemas – The Case for Evidence-Based Medical Treatment Guidelines – Presented by Patrick Robinson, Vice President, Government Affairs, ODG, an MCG Health Company

 

  • OSHA Updates for 2020 and Beyond – Presented by Matthew Horn, SmithAmundsen LLC

 

For more information and to register:

https://ilchamber.org/workerscompconference/