Temporary Transitional Employment: A New Decision and Alternative Approach

Jun 3, 2019

 

It is well recognized in the disability and healthcare literature that the longer amount of time an injured employee stays off work, the lower the chances are for a successful recovery and return to work. In order to limit the amount of lost time and facilitate recovery to regular work, employers who have limited capacity to offer productive light duty work, sought to provide modified work in alternative settings, often a charitable organization. This plan has come to be called Temporary Transitional Employment, or TTE, and it has a checkered past at the IWCC. Generally speaking, injured employees or their attorneys who challenge the plan have prevailed in subsequent litigation over TTD benefits. Over the years, the efforts to provide temporary alternative workplaces have been rebuffed by IWCC decisions awarding TTD even if the employee declined to accept work in an alternative workplace. Up until this year, the view in Illinois has been that the Workers’ Compensation Act does not acknowledge or allow TTE.

Traditional View

Usually employers were frustrated when TTD is awarded despite the offer of light duty work. In a series of cases through Eric Alvarez v Foodliner, 13 WC 20686, 14 IWCC 1122, TTD was awarded when a light duty job at a charity was offered but not accepted. The Arbitrator rejected the employer’s argument and noted there is no Temporary Transitional Employment in the Workers’ Compensation Act and, therefore, it could not be recognized in TTD disputes. The Arbitrator raised other issues such as resolution in the event of injuries in the alternative workplace, the impact from alternative employment on pension or retirement benefits, group insurance benefits, and mileage reimbursement. In the end, the Arbitrator stated clearly that an employee has the right to refuse a TTE assignment, regardless of the reason, and that an injured worker is not required to perform TTE under the Act. Prior decisions used similar grounds that there is no statutory authority in the State of Illinois for TTE. Accordingly, Temporary Transitional Employment was viewed as extinct in Illinois.

Commission Reversal of Position on TTE

Many were caught off guard by the IWCC Decision in April of Gary Stegan v Reladyne, LLC, 17 WC 07749. 19 IWCC 0174. A shoulder injury kept the employee from his usual work as a forklift operator. He could work light duty. The employer sought to challenge TTE decisions and took several actions. It had its own transitional work program that matched injured employees in other workplaces. Stegan was asked to report for light duty work at Habitat for Humanity. The employer clarified that it, rather than Habitat for Humanity, would pay Stegan his full salary and that he would remain subject to the employer’s human resources and attendance policies. The employee declined to report to the job. Employer then filed an action to challenge Stegan’s right to TTD. The Arbitrator agreed with the employee and ordered TTD. The Arbitrator cited Saineghi v Demar Logistics, 14 IWCC 1093 where the employee declined a volunteer position with a charity. Stegan’s employer filed for review at the Commission, which reversed the Arbitrator. The IWCC noted that contrary to Saineghi, Stegan’s employer offered to pay his salary while he worked for the charity. Stegan’s employer itself made the offer and made clear that the employee would remain its employee, paid by the employer and subject to its human resources and attendance policies. Unlike other cases where authority over the employee was seemingly delegated to a third-party, Stegan’s employer retained control over him. The IWCC found the employee gave no justification for refusing to participate in the light duty despite the work being in a different workplace. The IWCC noted that the employee made a decision to stay home and receive TTD rather than accept light duty and his full salary. An appeal from Stegan is pending.

An Alternative Approach

The argument against TTE from the standpoint that the Act does not recognize the concept seems tenuous. While the Act does not acknowledge TTE, nor does it prohibit it. Traveling employees is not a concept defined or even mentioned in the Act, yet the Commission and Courts have seen fit to not only recognize it, but carve out special rules for traveling employees. We hope that the Stegan decision will signal a new era where employers can offer light duty work in alternative workplaces that are able to accommodate the employee’s restrictions as a means to hasten the return to work.  Employees have made strenuous arguments against TTE including the fact that the employee did not bargain for work with the alternative employer, could have philosophical objections with some charities, and are being treated as indentured servants. The employee is not required to accept the alternative job; he or she could decline over philosophical differences but waive any claim for TTD.

Still, employers have an alternative that achieves the same purpose and deflects the objection of acting outside the Act. After all TTE represents the employer lending its employee to another employer.  The Act acknowledges lending/borrowing employer relationships. Ordinarily, when a lending employer and borrowing employer situation exists, the Act provides that both employers are jointly liable to the employee. Silica Sand Transport Inc. v Industrial Comm., 197 Ill.App.3d 640, 143 Ill.Dec. 799 (1990). Parties are free to enter agreements that define liability under the Act. Specific agreements should be preferred where placement is considered in transitional workplaces.

It is interesting that the Arbitrator in Alvarez commented that the employer offered no evidence of a lending-borrowing agreement. The employer could have achieved the desired goal by characterizing the process as lending-and-borrowing with proper proof.

In summary, employers may be able to avoid many of the risks and outcome outlined in the Alvarez case by not describing their actions as TTE, but as a simple case of lending and borrowing of an employee.

Employees must be cautious about risks from lending employees whether done under TTE or with a lending-borrowing agreement such as injury risks in the alternative workplace. Charities will want to avoid risk of their own workers’ compensation claim which can be achieved by a written agreement setting out the terms of the relationship, such as the employer’s obligation to not only pay the employee’s salary while places in the alternative work, but insurance to cover injuries. The lesson from the Stegan decision is that the employers will want to retain some control over the employees and keep the injured party as its employee.

 

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.

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