Appellate Court Examines Jurisdictional Issues in Valles v. Illinois Workers’ Compensation Commission

In Valles v. IWCC, 2024 IL App (1st) 241032WC-U, the Appellate Court considered how Illinois jurisdiction applied for an Indiana resident who worked for an Indiana company, and who was injured in Indiana.  How could petitioner argue that the Illinois Workers’ Compensation Commission had jurisdiction in such a case? Untangling jurisdictional questions in Illinois Workers’ Compensation can be both complex and nuanced.

Pursuant to Section 1 (b) of the Act, the Illinois Workers’ Compensation Commission has jurisdiction over a claim If (1) the accident occurred in Illinois; (2) the claimant’s employment was principally located in Illinois; OR (3) the contract for hire was made in Illinois. The petitioner in Valles focused on the last factor, where the contract of hire was made.   In order to determine where a contract for hire is made, it is necessary to determine “the place where the last act necessary to give validity to” that contract is made.  The location of the “last act” is a question of fact for the Commission.

The petitioner, Hunter Valles, a member of Local 150, was hired by the respondent to work at their East Chicago, Indiana facility. On March 3, 2022, an explosion occurred at the East Chicago, Indiana facility, causing the petitioner to sustain severe burns.  Petitioner’s Union, Local 150, is based in Countryside, Illinois.  According to the Collective Bargaining Agreement between the respondent and the union, the respondent would post a job if it had a vacancy for a production employee. The respondent would then contact the union within 5 days if the job remained vacant. The union would use its seniority lists and would identify a qualified candidate, which would be referred to the respondent using a referral form. The identified candidate would have to undergo three requirements before he was hired. The candidate had to be interviewed, undergo drug testing, and also undergo a physical examination before the job was offered. The candidate was not paid for completing the three requirements. If the candidate successfully completed these three requirements and was offered the job, the candidate would need to call the union to be taken off the list of available candidates. The union would then remove the candidate from its list of available candidates and would send a ‘dispatch form.’

In Valles, it was agreed by both parties that petitioner completed the three requirements on May 8, 2018, and his first day of work with the respondent was on May 9, 2018. The business representative of Local 150 testified that Mr. Valles could not start working for the respondent until he was “formally dispatched.”  On cross-examination, however, the witness admitted that the union confirmed Mr. Valles’ hiring by the respondent before the dispatch form was issued. Another witness for Local 150 testified that an employee cannot accept employment before he is dispatched.  The respondent’s general manager at the East Chicago facility testified that the respondent could reject a candidate that does not successfully complete the three requirements or isn’t qualified. The respondent’s manager testified that Mr. Valles started work on May 9, 2018, and accepted employment prior to that date.

The case proceeded to trial, and the Arbitrator found that Illinois did not have jurisdiction over the claim and found that the “last act” necessary to form a contract for hire occurred in Indiana, when the claimant reported for work on May 9, 2018. The petitioner appealed, and the Commission majority affirmed and adopted.  The Commission found that Local 150 was the exclusive bargaining agent for the respondent’s production and maintenance employees but was not the hiring agent. Respondent had to obtain referrals from the union but retained the right to reject a referred applicant.  Furthermore, the Commission perceived the time-stamped dispatch form as an internal memo that Mr. Valles had been hired and was working for respondent.  According to the Commission, the “last act” occurred in Indiana on May 9, 2018, when Mr. Valles reported to work.

One Commissioner dissented, pointing out that the “last act” occurred in Illinois on May 9, 2018 “when the union referred petitioner to respondent, removing him from the referral list.” The petitioner again appealed, and the Circuit Court confirmed the decision of the Commission. Petitioner appealed again.  At the Appellate Court level, the petitioner cited Hunter Corporation v. Industrial Commission, 268 Ill.App.3d 1079 (1994) in arguing that the union’s formal dispatch was the final requirement to form the employment application.  Respondent maintained that the last acts had already been completed “before Local 150 compiled what amounted to an internal memorandum for the union to take Mr. Valles off the roll for employment.”  Respondent, like the Commission majority, relied on Correct Construction Co. v. Industrial Commission, 307 Ill.App.3d 636 (1999).

In an unpublished decision, the Appellate court found that the time-stamped dispatch order merely confirmed the last act, and that the petitioner began work when he appeared at the Indiana facility.  Petitioner showing up to work, the Appellate Court concluded, was an acceptance of the offer extended by respondent.  The Appellate court distinguished Hunter.  In Hunter, while the employer retained the right to reject an applicant referred by the union, if the employer rejected for any reason other than physical incapacity or lack of qualifications, a grievance would be filed under the union’s contract.

The Appellate decision in Valles involved a very detailed analysis of how the hiring process works, highlighting the nuances that can ultimately determine jurisdiction cases.  The last act necessary to form the employment contract can be tricky to untangle, and employers must be vigilant about determining the “last act” where an employment contract was made.

The NBKL blog is provided for informational purposes; we are not giving legal advice or creating an attorney/client relationship by providing this information.  Before relying on any legal information of a general nature, you may consider consulting legal counsel as to your particular facts and applications of the law.