Seventh Circuit Announces a New Standard for Retaliatory Discharge Claims Brought Under the Illinois Workers’ Compensation Act

Workers’ compensation-related absences pose a number of challenges for employers, including declining production, staffing shortages and employee morale problems.  When confronted with these issues, employers should be mindful of the very real dangers posed by discharging an employee who has missed time due to a workers’ compensation-covered injury, in particular the likelihood of an Illinois Workers’ Compensation Act retaliatory discharge lawsuit. 

Retaliation claims are more popular than ever.  Juries regularly reject the underlying discrimination claims in Equal Employment Opportunity (EEO) cases, only to find in favor of the employee on the retaliation claim.  It fits within popular perceptions of human nature that someone accused of a misdeed will strike back, especially when the allegation is unfounded.  Similarly, it is not a particularly difficult leap for a jury to find that an employer wrongfully discharged an employee who reported a workplace injury, despite the employee causing problems for the company.  Indeed, employees need not show that their initial workers’ compensation claim was successful—it does not matter whether the initial claim was denied or even deemed frivolous—the employee need only prove that his or her termination was causally related to the exercise of his or her rights under the Act.  Plaintiffs’ attorneys often rely on the proximity of the termination to the exercise of rights under the Act, where simply telling the employer one is thinking of filing a claim, or seeing a doctor, can be enough to invoke the Act’s protections. 

Damages may include back pay, future lost wages, mental anguish, and attorneys’ fees.  Punitive damages may be awarded when the employee shows that the employer’s actions were willful and wanton.  In Clark v. Owens-Brockway Glass Container Inc., for example, an employee was fired for fraudulent misrepresentation in connection with her workers’ compensation claim after her employer hired a private investigator who videotaped her mowing her lawn after she claimed to have suffered a back injury.  The trial court awarded summary judgment to the employee, finding that her termination was causally related to her injury, as she was fired because her employer believed her claim for benefits was exaggerated.  “While an employer may discharge an employee claiming benefits for a valid and nonpretextual reason, a dispute about the nature and extent of the injury does not constitute such a valid reason.”  697 N.E.2d 743 (Ill. App. Ct. 1998).  A jury then awarded Clark $150,000, including front pay and damages for emotional distress.  

A recent Seventh Circuit decision, however, provides a modicum of good news for employers.  In Gacek v. American Airlines, Inc., the Court of Appeals rejected the use of the McDonnell Douglas burden-shifting theory (used with Title VII and other EEO claims), which does not require the employee to prove causation when deciding workers’ compensation retaliation cases under Illinois law.  Instead, the Court applied the more rigorous Illinois standard, which requires proof of a causal link between the protected activity and a plaintiff’s termination.  This means that a plaintiff may no longer prevail on summary judgment by showing that the employer’s stated reason for the discharge was false—instead he or she must show that his or her protected activity was the cause of his or her termination.  This heightened burden may be the difference between winning and losing for an employer in a close case. 

There is no magic formula to follow when dealing with employees who have engaged in activities protected by statute, whether filing a charge, blowing the whistle, or, in this case, exercising their rights under the Illinois Workers’ Compensation Act.  That said, it is essential that employers take a measured and deliberate approach, ensuring that such employees are being treated in a manner consistent with other employees who have not engaged in such activities, documenting each step along the way, and monitoring the actions of the impacted supervisors who are most likely to be viewed as having a motive to retaliate.