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Knell & Poulos Workers’ Compensation Trial Result

Case Name:  Four Seasons v. IWCC and Jerry Chesney
IWCC No.:  03 WC 38419
D/A:  7/8/03
Venue:  Joliet – Arbitrator Hennessy
Judge on Appeal:  Bobbi Petrungaro
Petitioner/Defendant’s Attorney:  James Kamide
Respondent/Plaintiff’s Attorney:  Robert Harris

Issue:

Section 8(j) employer credit versus employee-union payback agreement.

Trial Facts:

Defendant was awarded benefits by Arbitrator Hennessy, who found that the Petitioner’s injuries arose out of and in the course of his employment. Further, the Petitioner was awarded TTD, medicals and penalties. Respondent was denied Section 8(j) credit per a union payback agreement between the union and the Petitioner/Employee.

The Commission partially modified the Decision by reversing penalties as not being proper. On appeal to the Circuit Court, Judge Bobbi Petrungaro ruled that the Employer was to be granted a Section 8(j) credit for the amount paid to the Petitioner, but “should not be forced to pay back the Petitioner”. In addition, the Circuit Court ordered the Respondent was entitled to Section 8(j) credit and shall hold the Petitioner/Defendant harmless for any and all demands by any group providers.

In support of the aforementioned order, the Court explained that while the Petitioner/Employee may be required to reimburse the Union, that action or contract (payback agreement) was not part of the reviewing Court’s proceeding. The Court entered a final order requiring the Respondent/Employer was not obligated to pay the Petitioner/Employee or the union back per the payback agreement. Therefore, the Commission’s Decision was reversed on the issue of Section 8(j) credit.

Legal Significance:

We feel that this Decision is a major victory for Illinois employers. Basically, the Commission was awarding Section 8(j) credit and taking away that same credit by ordering the Employer to pay the Union or the Petitioner back directly. Now, the Employer was granted full Section 8(j) credit without paying back the Union or the Petitioner. Section 8(j) credit should be now preserved without it being taken away by the Commission. The Union-Employee payback agreement is a separate contract between two parties, which is outside the Commission and Court’s jurisdiction. Plus, the Respondents’/Employers’ statutory rights under Section 8(j) of the Act should take precedent over a separate and private agreement.

Legal/Claim Recommendation:

As a result of this Decision, we recommend taking the pre-trial step in obtaining Section 8(j) credit information. First, we should inquire about any medical or disability payments made by the Employer on behalf of the Employee. The key is to inquire if the Employer paid the premiums of the health care or disability policies on behalf of the Employee. If not, the Employer does not get the Section 8(j) credit. Lastly, it is always helpful to find out if there is an Employee/Union payback agreement. If so, you can anticipate a battle on that issue and prepare accordingly, i.e. witnesses.

If you should have any questions, please do not hesitate to contact the undersigned.

Very truly yours,

KNELL & POULOS, P.C.

Bradley C. Knell