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The Illinois legislature has passed Senate Bill 1596 (SB 1596) and forwarded it to Governor Pritzker for signature.  This bill amends the Illinois Workers Compensation Act and Occupational Diseases Act to remove the Act as an injured worker’s exclusive remedy against his or her employer where recovery under the Act is barred by the statute of repose.  Among other things, this amendment will impact latent injury cases like those alleging illness from asbestos exposures.  In those cases, illnesses often do not manifest themselves until decades after a claimed exposure to asbestos or other materials or substances.  Under the proposed statute, if a worker’s compensation claim is precluded by the statute of repose, a civil action can then be brought against the employer in state or federal court.  While a defendant employer would have various defenses available that would not be available in a worker’s compensation case, damages would not be capped or limited as they would be under the Act.

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"SB 1596... has the potential to create virtually never-ending liability for claims of illness from former employees."

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This action by the legislature essentially overturns the Illinois Supreme Court’s decision in Folta v. Ferro Engineering, Inc., 2015 IL 118070, 43 N.E.2d 108, 397 Ill.Dec. 781 (2015).  There, plaintiff’s decedent, James Folta, was employed by Ferro Engineering as a shipping clerk and product tester between 1966 and 1970.  His job duties there caused him to be exposed to asbestos.  Some forty-one years later, in 2011, Mr. Folta was diagnosed with mesothelioma.    He brought a civil lawsuit in the Circuit Court of Cook County against some fifteen defendants, including his former employer, Ferro, seeking damages for his disease, which he alleged was caused by his exposure to asbestos while employed at Ferro and elsewhere.

Ferro moved to dismiss the complaint pursuant to 735 ILCS 5/2-619, urging that the claims against it were barred by the so-called exclusive remedy provisions of the Workers’ Compensation Act (820 ILCS 305/5(a), 11) (collectively, “the Acts”) and the Workers’ Occupational Diseases Act (820 ILCS 310/5(a), 11), which is modeled after and complements the Workers’ Compensation Act.  Plaintiff countered, arguing that his action was not barred by these exclusive remedy provisions because, since his symptoms did not manifest themselves until some 40 years after his last exposure to asbestos, any potential workers’ compensation claim was barred by the 25 year limitation provisions at section 6(c) of the Workers’ Occupational Diseases Act.  Thus, plaintiff argued, decedent’s illness was not “compensable” under the Act and the civil action in the circuit court was not barred.  (2015 Ill. 118070, ¶¶ 4 - 5).

The trial court granted Ferro’s motion and dismissed the action as to Ferro.  In part, the court found that the running of the statute of limitations on the workers’ compensation action did not render the action “non-compensable” under the Acts.  The appellate court reversed and remanded, finding that an injured employee may bring a common law civil action against his employer where “the injury is not compensable under the Act.”  (2014 Ill.App. (1st) 123219, ¶27)(Citations omitted).  The appellate court equated “compensability” with the ability to recover under the Act.”  The appellate court reasoned that because all possibility of recovery under the Acts was foreclosed due to the nature of the injury and the fact that the disease did not manifest itself until after the expiration of the statute of limitations, the injury was “quite literally not compensable” under the Acts.  Thus, the appellate court held, the exclusivity provisions of the Acts did not bar plaintiff’s direct civil action against decedent’s employer. (2015 Ill. 118070, ¶¶ 6 - 7).

In reversing the appellate court, the Illinois Supreme Court examined the purpose of the Acts, noting first that they were created by the Illinois legislature to provide a new framework for recovery by injured employees from their employers, meant to replace the common-law rights and liabilities that previously governed employee injuries. (2015 Ill. 118070, ¶ 11).  Then, the court noted that in exchange for what amounts to a system of no-fault liability on the employer, the employee is subject to statutory limits on recovery for workplace injuries and occupational diseases arising out of and in the course of employment.  The Acts further provide that these statutory remedies “shall serve as the employee’s exclusive remedy if he sustains a compensable injury.”  (2015 Ill. 118070, ¶ 12).  Accordingly, noted the Folta court, both acts contain an exclusive remedy provision as part of the quid pro quo which balances the sacrifices and gains of employees and employers. (Id.)  The court went on to note that in past cases, it had indicated that the Workers’ Compensation Act generally provides the exclusive means by which an employee can recover against an employer for a work related injury.  (2015 Ill. 118070, ¶¶ 11 - 13).

The court acknowledged the aforementioned exceptions to this exclusivity.  Plaintiff in Folta focused on the “not compensable” exception, urging that the illness was not compensable because of fact that the limitations period for bringing a workers’ compensation action had lapsed through no fault of decedent, but because of the long latency period between exposure to asbestos and manifestation of his illness.  Taking this as an opportunity to specifically address what it means by “compensable” when interpreting the Act, the Folta court disagreed, noting that based on the allegations of the complaint, the plain language of the Acts, and appellate precedent, there was no question but that injuries for occupational diseases, including those caused by exposure to asbestos, are clearly covered by the Acts.  However, it reiterated that despite any limitations on the amounts and types of recovery to be had under the Acts, they represent the employee’s exclusive remedy against an employer for workplace injuries.  Rejecting plaintiff’s arguments, the court cited to section 6(c), which provides that, “[i]n cases of disability caused by exposure to … asbestos, unless application for compensation is filed with the Commission within 25 years after the employee was so exposed, the right to file such application shall be barred.” 820 ILCS 310/6(c)(West 2010); see also 820 ILCS 305/6(d) (West 2010) (analogous 25-year limitation period under the Workers’ Compensation Act). Section 6(c) further provides that “[i]n cases of death occurring within 25 years from the last exposure to … asbestos, application for compensation must be filed within 3 years of death… .” 820 ILCS 310/6(c) (West 2010).  (2015 Ill. 118070, ¶¶ 24, 31 - 33).

Thus, the court held, section 6(c) of the Workers’ Occupational Diseases Act did in fact bar plaintiff’s right to file an application for compensation, because it operates as a statute of repose and thus as an absolute bar to the right to bring a claim.  Different than a statute of limitations, which determines the time within which a lawsuit may be brought after a cause of action has accrued, a statute of repose extinguishes the action after a defined period of time, regardless of when the action accrued. (2015 Ill. 118070, ¶¶ 32 – 33).  It begins to run when a specific event occurs, ‘“regardless of whether an action has accrued or whether any injury has resulted.”’  Thus, the statute of repose limit is ‘not related to the accrual of any cause of action; the injury need not have occurred, much less have been discovered.’ ”  Finally, the Folta court reiterated that the “purpose of a repose period is to terminate the possibility of liability after a defined period of time. After the expiration of the repose period, there is no longer a recognized right of action. (2015 Ill. 118070, ¶ 33)(Citations omitted).  Conversely, the Folta court cited to a number of cases of worker’s compensation actions brought by former employees against their employers based on injuries allegedly the result of decades old exposures.  (2015 Ill. 118070, ¶ 25).  As noted by the Folta court, “the [legislature] intended to provide an absolute definitive time period within which all occupational disease claims arising from asbestos exposure must be brought. Since [decedent’s] last employment exposure to asbestos was in 1970, the 25-year period of repose has long since expired. The fact that [decedent] was not at fault for failing to file a claim sooner due to the nature of the disease is not a consideration that is relevant to a statute of repose. Although the statute barred [plaintiff’s] claim before it had yet accrued, that is the purpose of such a provision.” To allow a common law action under the circumstances presented, the court found, would be to frustrate the essential intended function of the statute of repose and would contradict the plain language of the exclusive remedy provision that the employer’s liability is “exclusive and in place of any and all other civil liability whatsoever, at common law or otherwise.”  820 ILCS 310/11 (Emphasis added).  (2015 Ill. 118070, ¶ 25).

This action by the Illinois Legislature, if signed into law by the governor, will operate to obviate the Illinois Supreme Court’s interpretation of the Acts and their plain language.  Employers will do well to monitor the governor’s response to the bill, as it has the potential to create virtually never-ending liability for claims of illness from former employees.