Mahoney v. Industrial Comm'n

Case Date: 01/10/2005
Court: Workers' Compensation
Docket No: 1-03-2780WC Rel   

                     NOTICE
Decision filed 01/12/05.  The text of
this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.


No. 1--03--2780WC



IN THE
 
APPELLATE COURT OF ILLINOIS
 

FIRST DISTRICT
 

INDUSTRIAL COMMISSION DIVISION

       
ROBERT C. MAHONEY,

                       Plaintiff-Appellant,

          v.

THE INDUSTRIAL COMMISSION
et al. (United Airlines,
Defendant-Appellee.)

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Appeal from the Circuit Court
of the 1st Judicial Circuit,
Cook County, Illinois

No. 03--L--050359

Honorable
Dennis J. Burke
Judge, Presiding



JUSTICE HOLDRIDGE delivered the Opinion of the Court:


In this matter, we are asked to determine whether the siteof the contract for hire is the exclusive test for determiningthe applicability of the Illinois Workers' Compensation Act(Illinois Act or Act) (820 ILCS 305/1 et seq. (West 2002)) topersons whose employment is outside the state of Illinois wherethe contract for hire is made within Illinois. 820 ILCS305/1(b)(2)(West 2202). We find that the contract for hire isthe exclusive test in such cases, and the decision of theIllinois Industrial Commission to the contrary, that the site ofthe contract for hire is merely one factor to be consideredwithin the totality of the arrangements, including significantcontacts with Illinois, is erroneous. We reverse.

The facts herein are undisputed. The claimant, Robert C.Mahoney, a Florida resident, sought benefits under the IllinoisAct for injuries he sustained while working for United Airlines(United) at its Orlando, Florida, facility on May 19, 1999, andJanuary 2, 2001. The claimant was hired by United on January 6,1969, to work as a ramp serviceman at O'Hare Field, in Chicago,Illinois. In 1993, after a divorce, Mahoney decided to relocateaway from Chicago. Looking for "a chance to start his life overagain," he requested a voluntary transfer to United's facility atthe Orlando, Florida, International Airport. Transfers at UnitedAirlines are done on a voluntary basis, and claimant had thenecessary seniority to pick many locations throughout the UnitedStates. He chose Orlando, Florida, because of its warm weather.On his last day at work at O'Hare, the claimant turned all hisO'Hare identification badges and cards into the employer. Hethen reported to the airport in Orlando, Florida, where hereceived new identification and passes. Upon his arrival inFlorida, claimant purchased a home in the Orlando area. Since1993 he has worked continuously for United Airlines in the Stateof Florida. The claimant has a Florida driver's license and paysall appropriate local and state taxes in that state. Although hehas the right to do so, the claimant has never attempted torelocate back to Illinois or any other state.

On March 19, 1999, Mahoney sustained an accidental injury tohis left foot while traversing up a flight of steps onto anairplane. The injury occurred in Orlando, Florida, while Mahoneywas working, and medical treatment for the injury was provided inOrlando. The claimant received compensation under the FloridaWorkers' Compensation laws.

The claimant sustained a second accidental injury on January2, 2001, when his left knee "just went out" while he was pushinga suitcase container. Again, the accident occurred and medicaltreatment was rendered in Orlando. Again, compensation wasobtained for this injury under the Florida workers' compensationlaws.

The arbitrator determined that Illinois lacked jurisdictionover the claimant's claim. In reaching this conclusion, thearbitrator relied upon the five factor test for determiningjurisdiction laid out in Carroll v. Industrial Comm'n, 205 Ill.App. 3d 885, 890 (1990), and reiterated in United Airlines v.Industrial Comm'n (Rankins), 252 Ill. App. 3d 972, 981 (1993). Under Carroll and United Airlines (Rankins), jurisdiction isdetermined by: (1) the situs of the contract; (2) the continuityof the employment between the time of the contract and the timeof injury; (3) whether the employment transfer from Illinois wasvoluntary; (4) the length of time between the employee'sdeparture from Illinois and the injury; and (5) the significanceof the employee's contact with Illinois following his departurefrom Illinois. Carroll, 205 Ill. App. 3d at 890; United Airlines(Rankins), 252 Ill. App. 3d at 981.

In the instant matter, the arbitrator found that only thesitus of the original contract weighed in favor of Illinoisjurisdiction. All other factors weighed against jurisdiction. The Commission adopted the arbitrator's ruling, noting that:

"The site of the contract for hire isnot the exclusive test determining theapplicability of the Act, but is only one ofthe factors the Commission is to considerwithin the totality of the arrangements. Another factor to be considered is thesignificance of the of claimants' contactswith Illinois. The Act does not create aperpetual right to claimants who transfer toanother state to recover benefits for work-related injuries in the new state ofresidence when the claimant has voluntarilysevered relations with Illinois. UnitedAirlines v. Industrial Comm'n., 252 Ill. App.3d 972."

The Circuit Court of Cook County confirmed the Commission'sdecision. The claimant appeals.

The development of the law on this issue is somewhatconfusing. Beginning as we must, with the express language ofthe Act, the issue would appear simple. The plain language ofthe Act clearly states that site of the contract for hire is theexclusive test for determining the applicability of the Act topersons whose employment is outside Illinois where the contractof hire is made within Illinois. Employees covered by the Actinclude "[e]very person in the service of another under anycontract of hire, express or implied, oral or written, includingpersons whose employment is outside the State of Illinois wherethe contract for hire is made within the State of Illinois. * * *" 820 ILCS 305/1(b)(2)(West 2002).

In Severin v. Industrial Comm'n., 363 Ill. 217 (1936), oursupreme court repeated what was by then a long held propositionthat the Act grants coverage to workers injured outside Illinoiswhere the contract for employment was entered into in Illinois. 363 Ill. at 219 ("We have repeatedly held that the IndustrialCommission had no jurisdiction in cases where injuries weresustained outside the state unless the proof showed a contractfor employment in Illinois." (Emphasis added.)).

In Morris v. Industrial Comm'n., 55 Ill. 2d 563 (1973), oursupreme court again was asked to address the question of coverageunder the Act for a person injured in another state. In Morris,the claimant was injured while working in Indiana after havingbeen sent to the Indiana employer as a result of a call to theclaimant's union hall in Danville, Illinois. The claimant soughtbenefits under the Illinois Act. The court noted that "[t]heonly issue in this case is whether the contract of hire was madein Illinois or Indiana." 55 Ill. 2d at 564. The court held thatthe contract for hire was not entered into until the claimantreported to the Indiana work site. 55 Ill. 2d at 565.

Our supreme court next visited this issue again inYoungstown Sheet & Tube Co. v. Industrial Comm'n, 79 Ill. 2d 425(1980). In Youngstown, an employee was hired to work inYoungstown's South Chicago, Illinois coke plant. The employeeworked at that job for several years. The employer then notifiedthe employee and his union of its intention to close the SouthChicago facility, which it did shortly thereafter. After theemployee's last day of employment, the employee immediatelyapplied for work with other employers. Also at that time, theemployee sought unemployment benefits. After three monthswithout a job, the employee became aware of a job possibility atYoungstown's Gary, Indiana, plant. He applied, was interviewed,and subsequently was hired at the Indiana facility. The job forwhich he was hired was not the same job he had previously held inIllinois. 79 Ill. 2d at 427. However, after completing aprobationary period, the employee was converted to permanentstatus. Under the terms of a collective bargaining agreementwith the employee's union, he was given credit toward hisseniority equal to the time he had been employed at the SouthChicago plant. The employee was injured twelve years later whileworking at the Indiana plant and sought compensation under theIllinois Act.

Our supreme court in Youngstown determined that the claimantwas not entitled to compensation under the Illinois Act. But inso doing, the court focused exclusively upon the question ofsitus of the contract for hire. The court determined that theclaimant's contract of employment made in Illinois terminatedwhen the claimant's employment at the South Chicago plant ended,and a completely new contract of hire was established when theclaimant began working in Indiana. 79 Ill. 2d at 432. The courtnoted that the claimant's employment with Youngstown ended whenthe South Chicago plant closed. The claimant was informed at thetime of the plant closing that his employment was terminated, andthe claimant's actions in seeking new employment confirmed hisunderstanding that his employment contract with Youngstown hadended. 79 Ill. 2d at 431. The court rejected the claimant'sargument that the restoration of his seniority rights pursuant tothe collective bargaining agreement was sufficient to establishthat his contract of employment, which began in Illinois,continued to cover his employment in Indiana. 79 Ill. 2d at 433.

The Youngstown decision, relying upon the plain language ofthe Act, established a bright-line test for future courts tofollow. Under Youngstown, if the employment contract was made inIllinois, a claimant injured while working in another state wascovered under the Act. Conversely, if the contract for hire wasnot entered into in Illinois, then there was no coverage. Ofparticular interest to the case at bar is the Youngstown court's observation that "* * * this is not a case where an Illinoisemployer transferred [the claimant] to its place of business inIndiana. This case involves a cessation of employment inIllinois and a reemployment in Indiana with certain carry-overbenefits derived from the contract between the parent company andthe labor union." 79 Ill. 2d at 433.

Our supreme court next visited the issue in United Airlinesv. Industrial Comm'n. (Walker), 96 Ill. 2d 126, 131 (1983). United Airlines (Walker), involved facts nearly identical to thefacts in the instant matter. Walker, an Illinois resident, washired by United Airlines to work as a ramp serviceman at O'HareField in Chicago. Several years later, he filed an applicationfor voluntary transfer to any of four locations, including theSan Francisco International Airport. United granted Walker'srequest for transfer and transferred him to California. Therewas no break in Walker's employment with United Airlines. Shortly thereafter, Walker was injured at work, and soughtcompensation under the Illinois Act. The Commission held thatWalker's employment contract had been made in Illinois and thatjurisdiction therefore existed. The circuit court reversed,finding that, under the "spirit" of Youngstown, the Commissionlacked jurisdiction. 96 Ill. 2d at 129. Our supreme courtreversed the circuit court and upheld the holding of theCommission. Our supreme court noted:

"The circuit court's reliance uponYoungstown Sheet & Tube Co. v. IndustrialComm'n., (citation omitted), for its holdingthat the Commission lacks jurisdiction inthis cause is misplaced, as that decision isclearly inapposite upon its facts. Unlikethe situation here, in which claimant'semployment with respondent was continuous anduninterrupted at the time of the transfer,the claimant in Youngstown was permanently"laid off" from his position in an Illinoisplant. * * * Under the circumstances presentin that case, this court concluded that therewas no contractual basis for applyingIllinois compensation law because theclaimant's Illinois employment contract hadbeen terminated when his employment with thecompany had ended and that his new employmentrelationship was governed by a contract madein Indiana." 96 Ill. 2d at 130-131.

In reiterating the contract situs test as the sole test fordetermining compensability, the court in United Airlines(Walker), specifically rejected a significant contacts test forjurisdiction:

"Respondent also urges that we apply atheory of jurisdiction suggested by ProfessorLarson that jurisdiction over compensationissues should be present only where theemployment relationship is centered, and thatthe situs of that relationship should begoverned by rules similar to those governingquestions concerning an individual'sdomicile. (citations omitted.) An exclusiveapplication of that theory, however, is notconsistent with the contractual basis ofjurisdiction specified by our compensationact, and any change therein will have to belegislatively mandated." 92 Ill. 2d at 131.

Justice Simon's dissent in United Airlines (Walker), isparticularly interesting. Justice Simon observes that, under the majority's opinion, "a worker who has been permanently reassignedfrom Illinois to another State and who has worked in that Statefor many years is nevertheless entitled to claim workmen'scompensation in Illinois provided that he initially was hired inIllinois and briefly worked here." 96 Ill. 2d at 132 (Simon, J.dissenting). Justice Simon further commented, "[i]n decidingthis question I would not rely, as the majority does, on thearcane rules of contract formation. Instead, * * * [compensationshould be limited to those] workers with some substantialrelationship to the State of Illinois." 96 Ill. 2d at 132.

After United Airlines (Walker), it was quite clear that oursupreme court interpreted the Act to provide jurisdiction wherethe contract for hire was established in Illinois, even if theemployee permanently transferred to another state and the injuryoccurred several years after the transfer.

However, the appellate court in Carroll v. IndustrialComm'n, 205 Ill. App. 3d 885 (1990), subsequently held that "thesite of the contract for hire is not the exclusive test fordetermining the applicability of the Act, but is only one of thefactors the Commission is to consider within the totality of thearrangements." 205 Ill. App. 3d at 888. In Carroll, theclaimant, an over the road truck driver, was originally hired in1969 to work in the Consolidated Freightways Chicago facility. In 1971, a job restructuring plan forced the claimant to loosehis job in Chicago, however, his seniority allowed him to bid ona similar position with the employer in North Platte, Nebraska. The claimant moved to Nebraska, purchased a home, paid Nebraskaproperty and income taxes, and procured a Nebraska driverslicence. In 1978, Consolidated instituted another jobrestructuring plan, and as a result of that restructuring, theclaimant transferred to Ketcham, Idaho, where he again purchaseda home, paid taxes and procured a driver's licence. Whileworking out of Consolidated's Idaho facility, the claimant wasinjured while in the state of Washington. The claimant wascompensated under the Idaho Workers' Compensation Act, but thensought benefits under the Illinois Act. The Commission foundjurisdiction under United Airlines (Walker), but the circuitcourt found the Commission's decision to be against the manifestweight of the evidence. The appellate court upheld the circuitcourt, finding that Illinois lacked jurisdiction under UnitedAirlines (Walker). Carroll, 205 Ill. App. 3d at 888.

The Carroll court reasoned that United Airlines (Walker) didnot deem the situs of the contract for hire as the sole criteriafor determining jurisdiction. It noted that United Airlines(Walker) was factually distinguishable because the claimanttherein was still within a 90-day probationary period wherein hecould have returned to Illinois, when he was injured. Carroll,205 Ill. App. 3d at 888. How this fact had any role in thesupreme court's decision, the Carroll court did not say.

Instead of the situs of the contract analysis articulated inUnited Airlines (Walker), the Carroll court articulated a fivepart test, which placed heavy emphasis upon the "significantcontacts test" that had been rejected in United Airlines(Walker). The Carroll court found it appropriate to review: (1)the situs of the contract; (2) the continuity of the employmentbetween the time of the contract and the time of injury; (3)whether the employment transfer from Illinois was voluntary; (4)the length of time between the employee's departure from Illinoisand the injury; and (5) the significance of the employee'scontact with Illinois following his departure from Illinois. Carroll, 205 Ill. App. 3d at 890

Shortly thereafter, the appellate court decided UnitedAirlines v. Industrial Comm'n. (Rankins), 252 Ill. App. 3d 972(1993), wherein the appellate court reiterated the Carrollcourt's analysis that situs alone was not controlling on theissue of jurisdiction. The court noted with approval the fivepart test articulated by the court in Carroll, and commented uponthe particular significance of the employee's contacts withIllinois. United Airlines (Rankins), 252 Ill. App. 3d at 981-82.

Thus, when the instant case came before the Commission, itrelied upon Carroll and United Airlines (Rankins) to find that itlacked jurisdiction based upon a lack of significant contactsbetween the instant claimant and Illinois.

Our review of the case law leads us to conclude that Carrolland United Airlines (Rankins) are clearly at odds with Youngstownand United Airlines (Walker). We are thus faced with the problemof whether to continue to ignore the plain language of the Actand the binding supreme court precedent of Youngstown and UnitedAirlines (Walker), or to return to the analysis articulatedtherein. We choose the latter.

We hold that the situs of the contract is the soledeterminate of jurisdiction under the Act for a person whoseemployment is outside Illinois where the contract of hire is madewithin Illinois. To the extent that Carroll and its progenydeviate from this holding, they are overruled. Ultimately, weleave it to our supreme court whether to continue in thisinterpretation of the Act.

For the foregoing reasons, the decision of the Commission isreversed, and this cause is remanded to the Commission forfurther proceedings.

Reversed and remanded.

HOFFMAN, CALLUM, and GOLDENHERSH, JJ., concur.

MCCULLOUGH, P. J., specially concurs.


PRESIDING JUSTICE McCULLOUGH, specially concurring:

I write this special concurrence only to express mydisagreement with the majority's determination as to thecontinued vitality of "Carroll and its progeny."

The facts in this case involve a claimant whose contract ofemployment was made in Illinois and not interrupted by anytermination of the employment. Carroll is easily distinguished. In Carroll, the claimant's driver position in the Chicago,Illinois, terminal was eliminated. He was given a bid list anddid bid for a job in Nebraska.

In United States Steel Corp. v. Industrial Comm'n, 161 Ill.App. 3d 437, 442, 510 N.E.2d 452, 455 (1987), we held that"[w]here an Illinois employer recommends or gives an employeenotice of a possible job in another state, the contract ofemployment is not entered into in Illinois."

In Youngstown, the supreme court decided employment didcease in Illinois but discussed claimant being employed by thesame employer in Indiana, the same job, and given credit forseniority. I submit that the Carroll factors are appropriate anddo not conflict with Youngstown.

In Youngstown, the supreme court stated: "[i]t isunnecessary for this court to make the technical determination ofthe last act necessary to give validity to the contract, sincethe totality of the arrangements for reemployment occurred in theState of Indiana." Youngstown Sheet & Tube Co. v. IndustrialComm'n, 79 Ill. 2d 425, 433, 404 N.E.2d 253, 257 (1980). Thesupreme court then reviewed factors considered in finding thatIllinois lacked jurisdiction.

In the instant case, claimant was not terminated,furloughed, et cetera, but requested a transfer and hisemployment was continuous and uninterrupted. In Carroll andRankins, the employment was not continuous and uninterrupted.

In this case, claimant could have remained in his presentjob and location. In Carroll, claimant, because ofrestructuring, lost his job in Chicago and bid on a similarposition in Nebraska. The factors set forth in Carroll are notin conflict with Youngstown. The supreme court in Youngstowndiscussed various factors, as did Carroll, in determining the"totality of the arrangements for reemployment."