Rosenstengel dismisses truckers' proposed class action involving work comp premiums

By Tomas Kassahun | Apr 23, 2018

EAST ST. LOUIS – The U.S. District Court for the Southern District of Illinois has dismissed a case against Jones Motor Co. Inc. and Zurich American Insurance Co.

EAST ST. LOUIS – The U.S. District Court for the Southern District of Illinois has dismissed a case against Jones Motor Co. Inc. and Zurich American Insurance Co.

District Judge Nancy J. Rosenstengel granted a motion to dismiss brought by Jones Motor Co. Inc. and Zurich American Insurance Co. on March 30 on grounds that the plaintiff "failed to state a claim upon which relief can be granted."

Michael Daley sued on behalf of himself and class members who were truck drivers for Jones Motor, according to the ruling.

Daley’s lawsuit included claims against Jones Motor and Zurich for civil conspiracy, violations of the Illinois Deceptive Business Practices Act, unjust enrichment and violations of the Illinois Wage Payment and Collection Act.


District court dismissed suit brought by truck drivers   morguefile.com

According to the order, Jones Motor conspired with Zurich to misclassify its drivers as independent contractors in order to avoid the Illinois Workers’ Compensation Act and workers’ compensation premiums.

Daley alleged Jones Motor made the drivers sign contracts, indicating that the drivers were independent contractors and that workers’ compensation benefits would be provided by Jones Motor to the drivers in the event they were injured on the job. 

“The agreements required the drivers to purchase an ‘occupational accident policy’ from Zurich and to allow Jones Motor to make a deduction from their wages to cover the cost of the policy,” Rosenstengel wrote in the opinion. “The deduction was approximately $38 per week.”

According to Daley, the drivers were deceived into “paying premiums for occupational accident policies that were worthless, or worth far less than represented, because the policies provided coverage for work-related injuries that were already covered by the Workers’ Compensation Act.”

After Jones Motor raised concerns about the jurisdiction of the court and the Illinois Workers’ Compensation Commission, the court found the argument invalid.

Rosenstengel ruled that Daley can’t make claims without proving that he was an employee as defined by the Worker’s Compensation Act and that Jones Motor failed to provide him with the benefits he was entitled to under the Act and instead unlawfully required him to pay for the benefits himself.

“Only the Commission is empowered to make these determinations,” the opinion stated. “Until the Commission does so, this court is incapable of resolving Daley’s claims, and they must be dismissed for failure to state a claim upon which relief can be granted.”

Daley had argued that the Illinois Workers’ Compensation Commission can’t have exclusive jurisdiction over his employment status and entitlement to benefits because he doesn’t have a pending workers’ compensation claim for a workplace injury or death.

The court said Daley didn’t explain why a pending workers’ compensation would be necessary to report a company's workers’ compensation fraud.

“Surely, an individual is not required to injure himself at work and file a workers’ compensation claim before he can report that the company was wrongfully making him pay for his own workers’ compensation insurance?” the opinion stated.

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