Companies Dispute Responsibility for Workers’ Compensation Claim – Elite Labor Services, Ltd. v. William Dudek Manufacturing

According to the Illinois Workers’ Compensation Commission, workers’ compensation is “a no-fault system of benefits paid by employers to workers who experience job-related injuries or diseases.” The idea behind workers’ compensation is that when an employee is injured during the scope of his/her employment, that the employer will cover medical fees associated with that injury.

And while the employer may sometimes dispute the extent and nature of the injured worker’s injury, that was not the basis for the Illinois lawsuit of Elite Labor Services, Ltd. as subrogee of Fulgencio Nunez v. William Dudek Manufacturing, 09 L 14859. Rather, the lawsuit involved a dispute about who should pay the workers’ compensation benefits – the injured worker’s employer, or the company he was performing work for.

Fulgencio Nunez was employed by Elite Labor Services, a staffing agency specializing in contract and temp employees. Elite had agreed to supply staff to William Dudek Manufacturing, a manufacturing company that specialized in creating precision metal stampings and wire forms. In addition to supplying staff to Dudek, Elite had agreed to cover all workers’ compensation benefits for the workers it supplied to Dudek. However, the agreement regarding the workers’ compensation benefits was not formally set down in any contract, but rather was a verbal agreement between Elite and Dudek.

In December 2007, Nunez became injured while working for Dudek Manufacturing. Nunez filed a workers’ compensation claim against both Elite and Dudek; the claim was settled for $68,365. Elite contributed $44,665 to the workers’ compensation settlement, while Dudek contributed $23,700. However, when Elite learned that Nunez was not acting within the scope of his agreed work assignment when he was injured, it then contended that Dudek should be responsible for paying the full workers’ compensation settlement.

Elite then brought the present claim against Dudek in an attempt to be reimbursed for the $44,665 that Elite paid in workers’ compensation fees. Dudek refuted that it was responsible for reimbursing Elite. Not only did Dudek claim that Nunez was acting within the scope of his assigned job category at the time of his work injury, but also pointed out that Elite had failed to place any limitations on the work its employees could perform.

Dudek not only refused to reimburse Elite, but also filed its own claim to be reimbursed for the amount it contributed to Nunez’s workers’ compensation settlement. Dudek contended that Elite should reimburse the $23,700 Dudek had paid because Elite had verbally agreed to be responsible for covering workers’ compensation fees for its employees and their work injuries.

At the end of the Illinois trial, the jury was given two special interrogatories to help it reach its decision:

  • Did the parties agree that Elite would provide workers’ compensation insurance and cover workers’ compensation obligations for its loaned employees who were injured while assigned to William Dudek Manufacturing?
  • Did Elite and Dudek both agree to any limitation on the work that could be performed by Mr. Nunez under the arrangement between Elite and Dudek?

The jury found that Elite did agree to cover workers’ compensation benefits and that there were no limitations on the work Nunez was allowed to perform. As a result, the jury found in favor of Dudek Manufacturing and held that Elite was responsible for reimbursing Dudek for the $23,700 that it had paid towards Nunez’s workers’ compensation settlement.

Kreisman Law Offices has been handling Illinois business and contract litigation for more than 35 years in and around Chicago, Cook County, and surrounding areas, including Burbank, Orland Park, Crestwood,, Bridgeview, Maywood, and Homewood.

Similar blog posts:

Illinois Appellate Court Holds That Express Terms in Employment Contract Not Waived – Downs v. Rosenthal Collins Group

$5M Verdict for Company for Conspiracy and Fraud Against Ex-Employee – Catmet Company v. Melnick

Jury Awards Chicago Recycler $3.25 Million for Business Breach of Contract – Paper Recovery, Inc. v. Segerdahl Corp.