An effective tool in attempting to limit recovery and the scope of discovery in Illinois may be gone. In McQueen v. Green, a tractor-trailer accident case involving personal injuries, the Illinois Supreme Court overruled Illinois’ application of Missouri’s “McHaffie Rule” (McHaffie v Bunch, 891 S.W.2d 822 (Mo. banc 1995)) which bars theories of “direct” negligence against a principal if the principal admits it is vicariously liable for the acts or omissions of its agent. The rationale of the Missouri Supreme Court in McHaffie is that once vicarious liability is admitted, additional liability theories are extraneous. The practical effect of this rule is that it limits the scope of relevant evidence. It also eliminates the potential of duplicative awards of damages, that is, a jury awarding damages for a theory based on negligent operation of a truck and a theory based upon a principal’s failure to train for which damages are indivisible.
Unfortunately, the McQueen opinion will probably ensure most lawsuits arising out of tractor-trailer accidents will include not only vicarious liability theories against motor carriers, but also claims of negligent hiring, retention and entrustment, even though the carriers fully complied with FMCSA regulations.
Since its enactment, numerous questions have arisen involving the Illinois Biometric Information Privacy Act (“BIPA”), including which statute of limitations applies to the Act, whether employees are able to pursue BIPA lawsuits against their employers, the amount of damages available to plaintiffs in BIPA lawsuits, and when BIPA causes of action accrue, among others. As previously discussed here and here, Illinois courts are poised to address several of these issues in 2022. For example, in February, the Illinois Supreme Court resolved the issue of whether the Illinois Workers’ Compensation Act precludes employees from filing BIPA lawsuits against their employers. The court determined that the Workers’ Compensation Act’s exclusivity provision does not apply to BIPA lawsuits.
On February 25, 2022, the Illinois First District Court of Appeals addressed another long-standing issue involving the scope of BIPA: specifically, whether an exclusion in BIPA for biometric information collected, used, or stored for healthcare treatment, payment, or operations under HIPAA applies to biometric information collected by a healthcare provider from its employees. In the case Mosby v. Ingalls Mem. Hosp., 2022 IL App (1st) 200822, the First District concluded that the exception does not apply to this situation.
The plaintiff in Mosby worked for the defendant Northwestern Memorial Lake Forest Hospital as a registered nurse. She alleged that as a condition of her employment, she was required to scan her fingerprint to gain access to a medication dispensing system. The plaintiff filed suit against her employer, alleging that it violated BIPA by: 1) not informing the plaintiff in writing of the specific purpose and length of time for which her biometric information was being collected, stored, and used; 2) failing to provide a publicly available retention schedule and guidelines for permanently destroying her biometric information; 3) failing to obtain a written release from the plaintiff to collect, store, or otherwise use her biometric information; and 4) failing to obtain the plaintiff’s consent before disclosing disseminating her biometric information to a third party.
The defendant moved to dismiss the plaintiff’s lawsuit pursuant to an exclusion contained in Section 10 of BIPA. That exclusion states that biometric information and identifiers of the type protected by BIPA do not include: 1) information captured from a patient in a healthcare setting; or 2) information collected, used, or stored for healthcare treatment, payment, or operations under HIPAA. 740 ILCS 14/10. The defendant argued that the exclusion applied because the plaintiff’s biometric information that was collected was used for healthcare treatment, payment, or operations pursuant to HIPAA. The circuit court denied the motion to dismiss, finding that the Section 10 exception applies only to information taken from a patient, prompting the defendant to appeal.
On appeal, the defendant argued that the plain language of the Section 10 exclusion in BIPA demonstrates that employee biometric information used in medication dispensing systems is not protected by BIPA. More specifically, the defendant maintained that the collection, use, and storage of healthcare workers’ biometric information is for “health care” and “treatment” and that those terms are expressly defined by HIPAA. The defendant further argued that the biometric information collected through the medication dispensing system was used for “health care operations” and “payment” because the system provided an audit trail and aided in patient safety, quality of care, and accurate billing. Finally, the defendant argued that the use of the word “or” in Section 10 indicates that it applies to two different situations; the first being biometric information obtained from a patient in a healthcare setting, and the second being biometric information collected for healthcare treatment, payment, or operations under HIPAA.
The appellate court rejected the defendant’s arguments, finding that the Section 10 exclusion applies to: 1) biometric information collected from a patient in a healthcare setting; and 2) biometric information that is already protected under HIPAA. According to the court, the use of the term “or” in Section 10 means that patient biometric information and biometric information protected by HIPAA are alternatives that are to be considered separately. HIPAA did not protect the plaintiff’s biometric information HIPAA applies only to patient information and she was an employee, not a patient.
The court also rejected the defendant’s proposed interpretation of the Section 10 exclusion. The defendant argued that the exclusion should be read as applying when biometric information is collected, used, or stored for the type of “health care” and “treatment” defined by HIPAA. While both of those terms are defined in HIPAA, the court explained that the Section 10 exclusion uses the phrase “under HIPAA,” not “as defined by HIPAA.” Moreover, the court indicated that the biometric information of employees is not defined or protected “under HIPAA.” Thus, the court concluded that the plain language of section 10 does not exclude healthcare employee biometric information from BIPA’s protections because they are neither patients nor protected under HIPAA.
Finally, the court noted that if the Illinois legislature intended to create a wide-ranging exemption under BIPA for hospitals, it would have done so in the blanket exclusion provision of BIPA. Section 25 of BIPA excludes from the Act’s coverage financial institutions subject to Title V of the Gramm-Leach-Bliley Act and employees, contractors, or subcontractors of local government or the State.
While the First District Appellate Court’s opinion temporarily resolves this issue, as with many other questions involving BIPA, we expect the Illinois Supreme Court ultimately will address this issue.
Illinois Supreme Court Workers' Compensation Act is Exclusive Remedy Only Against "Immediate Employers"March 7, 2022 | Nicholas Ruble
The Illinois Supreme Court recently held that the Workers’ Compensation Act’s exclusive remedy provision does not extend immunity to a general contractor who paid workers’ compensation insurance premiums for its subcontractor (a wholly-owned subsidiary) and the subcontractor’s employees. Only an employee’s “immediate employer” is entitled to immunity under the Act’s exclusive remedy provision. The Court held that the general contractor was not the “immediate employer” of the subcontractor’s employees within the meaning of the Act, and was therefore not entitled to immunity from suit.
This case involved a fairly familiar arrangement for construction projects. The project owner, RAR2-222 South Riverside, LLC (“222 South Riverside”), contracted with Bulley & Andrews, LLC (“B&A”), to act as general contractor on the project. The contract between 222 South Riverside and Bulley & Andrews required B&A to maintain several lines of insurance coverage, including coverage for, among other things: workers’ compensation claims; claims for bodily injury or death of the contractor’s employees; and claims for bodily injury to any person other than the contractor’s employees.
B&A used its wholly-owned subsidiary called Bulley Concrete, LLC to perform concrete work on the project, but the two companies did not enter into a subcontract or other joint venture agreement. B&A and Bulley Concrete operated as totally separate corporate entities, and Bulley Concrete employed its own laborers, including caulkers and concrete finishers.
Munoz was a concrete laborer employed and paid (including all tax withholding) by Bulley Concrete. During the project Bulley Concrete used blankets to cover wet concrete to prevent the concrete from freezing as it cured. While Munoz was removing a blanket, he injured his back and incurred more than $75,000 in medical bills. Munoz filed a claim for workers’ compensation against Bulley Concrete, who was an insured under B&A’s workers’ compensation policy. Due to a large deductible, B&A paid Munoz’s claim.
In 2019, Munoz filed a personal injury law suit against B&A and others, alleging that as the general contractor, B&A had a non-delegable duty to maintain the safety of the worksite. The Circuit Court granted B&A’s motion to dismiss, finding that it was immune from suit under the Act’s exclusive remedy provisions. The Court of Appeals affirmed.
Supreme Court Decision
The Supreme Court described the Workers’ Compensation Act as a quid pro quo between employers and employees, wherein employers give up common law defenses to liability, and in exchange, employees give up their right to bring common law suits. The role of the Courts is to give effect to the legislative intent in that bargain. Generally, where the Act covers a workplace injury, compensation under the Act is the employee’s sole and exclusive remedy.
Turning to the Act’s exclusivity provisions, the Court of Appeals found that there was no doubt that Munoz was an “employee” under the Act. However, the essential question was whether B&A was Munoz’s “employer,” and thus immune from suit. Under the Act’s exclusivity provision, Section 5(a): “No common law or statutory right to recover damages from the employer … for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided, is available ….” Section 1(a)(2) of the Act defines an “employer” as “Every person, firm, public or private corporation … who has any person in service or under any contract for hire, express or implied … for which compensation under this Act may be claimed” (emphasis added).
Under Section 1(a)(2), B&A would seem at first to be an employer. However, Section 1(a)(3) states that any employer is one who is “liable to pay compensation to his own immediate employees.” The Supreme Court relied on its prior holding from a 1976 case, which held: “[W]e must interpret section 5(a) as conferring immunity upon employers only from common law or statutory actions by their immediate employees.” Laffoon v. Bell & Zoller Coal Co., 65 Ill. 2d 437, 447 (1976). In a situation involving a parent and a subsidiary, the question is whether the companies operated as separate entities, in which case only the immediate employer is entitled to immunity.
The Supreme Court evaluated the relationship between B&A and Bulley Concrete and found them to be completely separate entities. The companies were separate LLCs, with separate leadership, different tax ID numbers, and employed different workers. Because Bulley Concrete paid Munoz, Bulley concrete was his “immediate employer,” and B&A was not. Even though B&A was liable for paying workers’ compensation under its contract with 222 South Riverside, it not liable to pay Munoz’s bills as his “immediate employer,” was not an “employer” under the Act from whom “compensation under this Act may be claimed” under Section 5(a), and was thus not entitled to immunity. The Supreme Court also rejected B&A’s argument that it and Bulley Concrete were a joint venture (and thus entitled to immunity under a separate exception) because the companies did not have a contract to operate as a joint venture.
The Act permits employees of a subcontractor to pursue claims against a third-party general contractor. In the end, B&A was simply a general contractor on the project and Bulley Concrete a subcontractor. The Court reversed the trial court and the Court of Appeals and remanded for further proceedings.
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