Employer Groups Obtain TRO Against IWCC Emergency Rule

4.24.2020 Blog

On April 21, 2020, the Illinois Manufacturers’ Association (IMA) and Illinois Retail Merchants Association (IRMA) filed case 2020 CH 000098 in the Circuit Court of Sangamon County. It consisted of a Verified Complaint and Motion for a Temporary Restraining Order (TRO) and Preliminary Injunction against the Illinois Workers’ Compensation Commission (IWCC) and the Chairman in his official capacity. The Pleadings seek injunctive relief to nullify the recent Emergency Rule and Amendment to Illinois Workers’ Compensation Commission Rule 9030.70, which establishes that if an employee’s “injury, occupational disease, or period of incapacity resulted from exposure to COVID-19 virus” during the Governor’s disaster proclamation 2020-38 (dated March 20, 2020) and all subsequent proclamations, it will be rebuttably presumed to arise out of and in the course of employment and be causally related to the employment. This rebuttable presumption went into effect on April 16, 2020.

It is also worth noting that while IMA and IRMA are the named Plaintiffs, they are not alone in opposing the Emergency presumption Rule.  Within a day of Plaintiffs’ filing, at least four industry groups filed amicus briefs in support of the TRO request. We know at least one was accepted by the Court. Several employment organizations and groups also authored a letter to the Joint Committee on Administrative Rules (JCAR) offering objections to the legality of the Emergency presumption Rule.

The Complaint makes two primary arguments.  First, that the IWCC overstepped its authority in making the Emergency Rule.  Second, that the Rule as written creates an extremely unwelcome economic impact on businesses. IMA and IRMA’s position may most succinctly be summarized by this statement from their Motion for TRO – “If left unchecked, the Commission’s unlawful usurp of power reserved solely for the legislature will result in immediate, irreparable harm to both employees and employers…”

In its lead paragraph Plaintiffs state, “Defendants’ [IWCC and its Chairman] brazen usurp of authority now creates a virtually irrefutable rebuttable presumption under the IWCA that COVID-19 was in fact contracted in the workplace.”  (emphasis in original)

The COVID-19 strain was first identified globally less than six months ago, and in the United States, true widespread concern did not begin until sometime over the past 2-3 months.  During that time, “what we know” has seemed to continually change. The simple truth is with so much still uncertain about COVID-19, including scientific uncertainties such as how it can and cannot be contracted, IMA and IRMA ask – how can the presumption possibly be rebutted?

Count I of the Complaint alleges a violation of the Illinois Administrative Procedure Act (by creation of substantive rights without authority – a role of the Illinois Legislature), 5 ILCS 100 §1-5 and §1-20.  IMA and IRMA assert that the IWCC and Chairman substantively changed the law, and in doing so, exceeded the scope of the IWCC’s administrative power. Citing portions of the Illinois Administrative Procedure Act, as well as the Illinois Workers’ Compensation Act, Plaintiffs submit that the Commission’s rulemaking power is limited to 1) procedural aspects for cases it decides, and 2) to implement or prescribe existing law or policy. Plaintiffs argue that the COVID-19 rebuttable presumption the IWCC created is neither but is instead a substantive change to the law. In support, they declare the Emergency Rule unlawfully removes an employee’s burden of proof – something only the legislature and Act can do. Therefore, the IWCC’s Emergency Rule is invalid and void, according to Plaintiffs.

IMA and IRMA were also cognizant of the potent potential financial impact caused by the Commission’s Emergency COVID-19 Rule. In doing so they discuss the impact of increasing workers’ compensation premiums from the surge in claims and benefits paid caused by change in law. Plaintiffs also offered that when presented with claims that fall within the purview of the Rule, they are also presented with a “Sophie’s Choice” – immediately and voluntarily pay the claimants’ lost time and medical benefits, or instead face the prospect of penalties for non-payment. Possible penalties include:

  • 19(k) – 50% of benefits awarded,
  • 19(l) – $30.00 per day of non-payment up to a maximum of $10,000.00,
  • Section 8.2(d) interest of 1% on unpaid medical bills, owed to the provider(s), and
  • Section 16 attorney’s fees at 20% of benefits awarded.

As touched upon above, with the relevant science so uncertain and in flux, employers risk severe penalties for instances of non-payment or denial. Accordingly, employers may incur steep financial costs down either path chosen. Even if successful, Plaintiffs in their Complaint claim rebutting the presumption forces employers to incur “irreparable” costs.

Plaintiffs IMA and IRMA requested a declaratory judgment ruling the IWCC’s Emergency COVID-19 Rule void and invalid. In the meantime, Plaintiffs asked the Court to enjoin the IWCC from invoking the Emergency Rule with the COVID-19 presumption against anyone or any entity until a declaration is made.

On April 23, 2020, Judge Madonia agreed to enter a TRO enjoining enforcement of the amendment to the Commission’s Rules of Evidence. It is expected to be entered on April 24, 2020. Reportedly, Judge Madonia felt the Plaintiffs were on strong footing in its claim the IWCC overstepped its authority. The TRO is expected to declare that workers’ compensation law and procedure will be enforced as it existed on April 15, 2020, which was the day before the effective date of the Emergency Rule.  The IWCC was given until April 30, 2020 to file its Answer.  The Court set the matter for a teleconference on the afternoon of May 4 to discuss further proceedings.

Check back with this blog for the latest information and updates.

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.