Hester v. Gilster-Mary Lee Corporation

NO. 5-07-0283
NOTICE
Decision filed 12/18/08. The text of
IN THE
this decision may be changed or
corrected prior to the filing of a
APPELLATE COURT OF ILLINOIS
Peti tion for Rehearing or th e
disposition of the same.
FIFTH DISTRICT
________________________________________________________________________
CARRIE HESTER, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Randolph County.
)
v. ) No. 06-L-42
)
GILSTER-MARY LEE CORPORATION, ) Honorable
) William A. Schuwerk, Jr.,
Defendant-Appellee. ) Judge, presiding.
________________________________________________________________________
JUSTICE STEWART delivered the opinion of the court:
The plaintiff, Carrie Hester, appeals from the trial court's order dismissing her
complaint for retaliatory discharge against the defendant, Gilster-Mary Lee Corp. (Gilster).
We reverse and remand.
FACTS
On January 29, 2007, Hester filed an amended complaint for retaliatory discharge,
alleging, in relevant part, that she had been assigned to work at Gilster by her employer,
Manpower, Inc. (Manpower), an employment agency, and that Gilster was her "de facto
employer." Hester alleged that during the entire time she was assigned to work at Gilster,
Gilster set her daily hours, her work schedule, her hourly wage, her job assignments, and her
workplace. Hester also alleged that while she was assigned to work at Gilster, no one from
Manpower supervised her work in any way and that she worked "side-by-side" with regular
Gilster employees with no distinction between them and herself or other workers from
Manpower. She alleged that, when she was assigned to work for Gilster, Manpower had
offered her no other employment opportunities, and she believed that future employers would
1
be likely to seek references from Gilster.
Hester's amended complaint included the following additional allegations:
"4. On September 13, 2006, under threat of subpoena, Hester gave testimony
in the workers['] compensation case of Barba v. Gilster-Mary Lee Corporation, Case
No. 06-WC-34548;
5. On the next day, September 14, 2006, Gilster-Mary Lee, by and through its
agents, Greg Wright and Mike Phillips, informed Hester that [it] would not be using
her services and that if she wanted other employment she would have to return to
Manpower, Inc.;
6. In agreeing to testify under threat of subpoena, Hester was exercising her
right to give testimony accorded to her as a citizen of the United States and in doing
so was furthering Illinois [p]ublic [p]olicy of promoting the speedy recovery for
employees who had been injured in the workplace and was promoting the policy of
the State of Illinois as set forth in the Illinois Workers['] Compensation Act. 820
ILCS 305/1(a) [(West 2006)];
7. On September 14, 2006, Hester was refused work by [Gilster] in retaliation
for her giving testimony in a proceeding authorized by the Illinois W orkers[']
Compensation statutes;
8. Hester was damaged as a result of Gilster's refusal in that she was deprived
of gainful employment and she suffered mental anguish and distress[.]"
Gilster filed a motion for the involuntary dismissal of Hester's amended complaint,
arguing that Hester's actual employer was Manpower and that Gilster had not fired Hester.
In its motion to dismiss, Gilster pointed out that Hester had alleged in her amended
complaint that she "was employed by Manpower" and merely assigned to work at Gilster.
Gilster argued that this allegation defeated her claim for retaliatory discharge because she
2
had admitted that Gilster was not her employer. Additionally, Gilster pointed out that Hester
had alleged that it had informed her "that [it] would not be using her services and that if she
wanted other employment she would have to return to Manpower, Inc." According to
Gilster, that allegation, together with her allegation that she was unable to find other work
for more than eight weeks, showed that she could not prove that Gilster had discharged her.
Gilster's motion to dismiss included an affidavit signed by Steve Landholt, Gilster's
risk manager, in which he stated that Hester was never an employee of Gilster, that Gilster
did not pay her, that she was not on Gilster's payroll list, that Gilster did not maintain
personnel records for her, and that she was not entitled to pension or other employee benefits
through Gilster. Additionally, he stated that Manpower paid Hester for the work she had
performed at Gilster and that Gilster did not set her hourly rate but had merely paid a flat fee
to Manpower for her services.
The parties waived oral argument, and on April 27, 2007, the trial court entered an
order granting the motion to dismiss, finding that Hester's amended complaint failed to state
a cause of action upon which relief could be granted "because it fails to state facts sufficient
to support allegations that she was an employee of the Defendant and that she was
discharged by the Defendant." On May 16, 2007, at Hester's request, the trial court entered
an order dismissing her amended complaint with prejudice so that the order would be
appealable. Hester filed a timely notice of appeal.
ANALYSIS
The precise issue before the court is whether a cause of action for retaliatory
discharge extends to a borrowed employee whose employment with the borrowing employer
is terminated for testifying in a coworker's workers' compensation claim. In order to
determine this issue we must address two separate questions. First, we must decide whether
an action for retaliatory discharge exists for a borrowed employee, an issue of first
3
impression in Illinois. Second, we must determine whether Illinois public policy protects
workers from discharge for testifying in a coworker's claim hearing. We answer both
questions in the affirmative, reverse the circuit court's order of dismissal, and remand this
cause for further proceedings.
"A plaintiff states a valid claim for retaliatory discharge only if she alleges that she
was (1) discharged; (2) in retaliation for her activities; and (3) that the discharge violates a
clear mandate of public policy." Hinthorn v. Roland's of Bloomington, Inc., 119 Ill. 2d 526,
529, 519 N.E.2d 909, 911 (1988). The trial court dismissed Hester's complaint pursuant to
section 2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 2006)
("That the claim asserted against defendant is barred by other affirmative matter avoiding the
legal effect of or defeating the claim")). Since the complaint was dismissed with prejudice
in response to a motion to dismiss, the central question on review is whether the dismissed
complaint stated a cause of action. Welsh v. Commonwealth Edison Co., 306 Ill. App. 3d
148, 150-51, 713 N.E.2d 679, 681 (1999). This issue is one of law for which our review is
de novo. Porter v. Decatur Memorial Hospital, 227 Ill. 2d 343, 352, 882 N.E.2d 583, 588
(2008). Our review of a section 2-619 dismissal requires that we take all well-pleaded facts
in the amended complaint as true and draw all reasonable inferences from those facts which
are favorable to the pleader. Porter, 227 Ill. 2d at 352, 882 N.E.2d at 588. Additionally, we
consider whether there is a genuine issue of material fact that precludes a dismissal or, absent
a question of fact, whether the dismissal is proper as a matter of law. Evergreen Oak
Electric Supply & Sales Co. v. First Chicago Bank of Ravenswood, 276 Ill. App. 3d 317,
318-19, 657 N.E.2d 1149, 1151 (1995).
By statute, the rights and remedies of the W orkers' Compensation Act (the Act) apply
to borrowed employees:
"Where an employer operating under and subject to the provisions of this Act
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loans an employee to another such employer and such loaned employee sustains a
compensable accidental injury in the employment of such borrowing employer and
where such borrowing employer does not provide or pay the benefits or payments due
such injured employee, such loaning employer is liable to provide or pay all benefits
or payments due such employee under this Act and as to such employee the liability
of such loaning and borrowing employers is joint and several ***.
***
An employer whose business or enterprise or a substantial part thereof consists
of hiring, procuring[,] or furnishing employees to or for other employers *** and who
pays such employees their salary or wages notwithstanding that they are doing the
work of such other employers shall be deemed a loaning employer within the meaning
and provisions of this [s]ection." 820 ILCS 305/1(a)(4) (West 2006).
Thus, a borrowing employer is primarily liable for the payment of a borrowed employee's
workers' compensation claim. Chaney v. Yetter Manufacturing Co., 315 Ill. App. 3d 823,
826, 734 N.E.2d 1028, 1030 (2000).
Likewise, borrowing employers are entitled to claim the protections of the Act.
Chaney, 315 Ill. App. 3d at 825, 734 N.E.2d at 1030. In Chaney, a mother who was assigned
to work for the defendant by an employment agency filed a tort action seeking damages for
her children for an injury she sustained while working for the defendant. The court
examined the relationship between the defendant and the plaintiff and concluded that the
defendant controlled her work to an extent that she was a borrowed employee of the
defendan t. Chaney, 315 Ill. App. 3d at 829, 734 N.E.2d at 1032. As a result, the court
affirmed the trial court's grant of a summary judgment to the defendant on the ground that
the plaintiffs were limited to the exclusive remedies of the Act.
As a borrowing employer, Gilster would be entitled to the protections of the Act.
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Nevertheless, Gilster argues that it should not be held accountable for terminating the
employment of a borrowed employee for exercising her rights under the Act. This position
is untenable.
The Illinois Supreme Court first recognized retaliatory discharge as a viable cause of
action in Kelsay v. Motorola, Inc., 74 Ill. 2d 172, 384 N.E.2d 353 (1978). There, the court
considered whether a "corporation's policy to terminate the employment of employees who
pursued workmen's compensation claims against it" was actionable and, if so, whether the
cause of action would support claims for punitive damages. Kelsay, 74 Ill. 2d at 179, 384
N.E.2d at 356. In ruling that a retaliatory discharge cause of action should be recognized and
that those pursuing such claims could request punitive damages, the supreme court relied
heavily upon the public policy behind the Act. Kelsay, 74 Ill. 2d at 180-81, 384 N.E.2d at
356-57; 820 ILCS 305/1 et seq. (West 2006).
"The *** Act [citation] substitutes an entirely new system of rights, remedies,
and procedure for all previously existing common law rights and liabilities between
employers and employees subject to the Act for accidental injuries or death of
employees arising out of and in the course of the employment. [Citation.] Pursuant
to the statutory scheme implemented by the Act, the employee gave up his common
law rights to sue his employer in tort, but recovery for injuries arising out of and in
the course of his employment became automatic without regard to any fault on his
part. The employer, who gave up the right to plead the numerous common law
defenses, was compelled to pay, but his liability became fixed under a strict and
comprehensive statutory scheme, and was not subjected to the sympathies of jurors
whose compassion for fellow employees often led to high recovery. [Citation.] This
trade-off between employer and employee promoted the fundamental purpose of the
Act, which was to afford protection to employees by providing them with prompt and
6
equitable compensation for their injuries. [Citation.]
The *** Act, in light of its beneficent purpose, is a humane law of a remedial
nature. [Citation.] It provides for efficient remedies for and protection of employees
and, as such, promotes the general welfare of this [s]tate. Consequently, its
enactment by the legislature was in furtherance of sound public policy. [Citation.]
We are convinced that to uphold and implement this public policy a cause of action
should exist for retaliatory discharge." Kelsay, 74 Ill. 2d at 180-81, 384 N.E.2d at
356-57.
It is apparent from the foregoing that the public policy considerations which led to
recognition of an action for retaliatory discharge in Kelsay apply equally to a claim by a
borrowed employee against a borrowing employer. Accordingly, we hold that to the extent
that an employee could maintain an action against an employer for retaliatory discharge as
a result of activities engaged in by the employee which are protected by the Workers'
Compensation Act, such an action is also available to a borrowed employee against a
borrowing employer.
The recognition of a borrowed employee's right to maintain an action for retaliatory
discharge resolves the primary issues raised in this appeal. Gilster argues that Hester's
allegation that Manpower is her "employer" and Gilster is her "de facto employer" is an
admission that defeats her claim, for if Gilster was not her employer, it could not have
discharged her. Gilster further argues that Steve Landholt's affidavit, filed with its motion
to dismiss, settles the issue with facts showing that Gilster was not Hester's employer. We
disagree. Hester alleged that Gilster set her daily hours, her work schedule, her hourly wage,
her job assignments, and her workplace, that no one from Manpower supervised her work
in any way, and that she worked "side-by-side" with regular Gilster employees with no
distinction between them and herself. In Landholt's affidavit, he averred that Hester was not
7
an employee of Gilster, that Gilster did not pay her, that she was not on Gilster's payroll list,
that Gilster did not have personnel records for her, and that she had no pension or other
employee benefits through Gilster.
Taking the allegations of Hester's amended complaint as true, which we must, it is
apparent that Hester has alleged an employment relationship sufficient to support a claim for
retaliatory discharge in that she has alleged facts which show that she was a loaned employee
and that Gilster was a borrowing employer. Gilster's claims that there are insufficient
allegations that it is Hester's employer are without merit. Hester has set forth sufficient
allegations to raise a question of fact regarding whether Gilster is a borrowing employer,
which is crucial to her retaliatory discharge cause of action because a borrowing employer
has the authority to dismiss a loaned employee and return her to the loaning
employer/employment agency. See Highway Insurance Co. v. Sears, Roebuck & Co., 92 Ill.
App. 2d 214, 221-22, 235 N.E.2d 309, 313 (1968) (where the borrowing employer controlled
all aspects of the plaintiff's work, it had the right to discharge the plaintiff from her work).
Gilster also argues that Hester has failed to allege a "discharge" that would support
her claim because she only alleged that she was "refused work" by Gilster and that she was
required to "return to Manpower, Inc." This argument ignores the nature of a borrowed-
employee relationship. In the context of that relationship, the most severe sanction a
borrowing employer can impose is to refuse all further work. In that context, the sanction
is tantamount to a discharge. We find that Hester sufficiently alleged a "discharge" to
support her claim. Moreover, we disagree with Gilster's argument that because Hester
returned to Manpower, the loaning employer, in her search for other work, she cannot prove
that she had been discharged. Her return to Manpower and the time it took her to find other
work relate to her claim for damages. The fact that she had an established method for
finding alternate work through her relationship with Manpower is irrelevant to her assertion
8
that Gilster unlawfully terminated her employment.
The amended complaint alleges sufficient facts to show that, if proved, Gilster
controlled Hester's work to an extent that Gilster was a borrowing employer with the right
to discharge her. During the time she worked for Gilster, Hester was confined to her
workers' compensation remedies for any injuries she might have sustained. W e agree with
Hester's assertion that if Gilster was allowed to shield itself from liability other than for
workers' compensation benefits, then it should not be able to assert immunity from this
retaliatory discharge suit by claiming it was not Hester's employer and did not discharge her
but merely sent her back to Manpower, the employment agency. Allowing that outcome
would violate the foundational principles of retaliatory discharge first stated by the supreme
court in Kelsay:
"We are not convinced that an employer's otherwise absolute power to
terminate an employee at will should prevail when that power is exercised to prevent
the employee from asserting his statutory rights under the *** Act. As we have
noted, the legislature enacted the workmen's compensation law as a comprehensive
scheme to provide for efficient and expeditious remedies for injured employees. This
scheme would be seriously undermined if employers were permitted to abuse their
power to terminate by threatening to discharge employees for seeking compensation
under the Act. We cannot ignore the fact that when faced with such a dilemma many
employees, whose common law rights have been supplanted by the Act, would choose
to retain their jobs, and thus, in effect, would be left without a remedy either common
law or statutory. This result, which effectively relieves the employer of the
responsibility expressly placed upon him by the legislature, is untenable and is
contrary to the public policy as expressed in the *** Act." Kelsay, 74 Ill. 2d at 181-
82, 384 N.E.2d at 357.
9
The same rationale applies with equal force in this case. The public policy of
providing efficient and expeditious remedies for injured employees would be seriously
undermined if borrowing employers such as Gilster were permitted to abuse their power by
discharging their borrowed employees in retaliation for exercising their rights under the Act.
We, too, cannot ignore the fact that when faced with that dilemma, many workers like Hester
would simply choose not to exercise their rights in order to retain their employment. As in
Kelsay, that result would be untenable and contrary to the public policy as expressed in the
Act.
Finally, although we have determined that Hester has sufficiently alleged that she was
discharged by an employer who is subject to liability for retaliatory discharge, we still must
decide whether she has alleged that her discharge was in retaliation for participation in a
protected activity. Certainly, Hester would be protected from a discharge for pursuing her
own remedies under the Act. In this case, however, she claims protection for testifying in
a coworker's claim.
Before 1979, at-will workers in Illinois had no cause of action for a retaliatory
discharge. The general rule " 'that an employer may discharge an employee-at-will for any
reason or for no reason is still the law in Illinois, except for when the discharge violates a
clearly mandated public policy.' " Buckner v. Atlantic Plant Maintenance, Inc., 182 Ill. 2d
12, 19, 694 N.E.2d 565, 569 (1998) (quoting Barr v. Kelso-Burnett Co., 106 Ill. 2d 520, 525,
478 N.E.2d 1354, 1356 (1985)).
Soon after Kelsay, the court expanded the tort of retaliatory discharge to include
causes of action for employees discharged for exercising their right to cooperate with
criminal investigations and other aspects of enforcing the law. Palmateer v. International
Harvester Co., 85 Ill. 2d 124, 133-34, 421 N.E.2d 876, 880 (1981) ("The law is feeble
indeed if it permits [an employer] to take matters into its own hands by retaliating against its
10
employees who cooperate in enforcing the law"). In Palmateer, the court considered "what
constitutes clearly mandated public policy" sufficient to support a claim for retaliatory
discharge. Palmateer, 85 Ill. 2d at 130, 421 N.E.2d at 878.
"There is no precise definition of the term. In general, it can be said that
public policy concerns what is right and just and what affects the citizens of the State
collectively. It is to be found in the State's constitution and statutes and, when they
are silent, in its judicial decisions. [Citation.] *** [A] matter must strike at the heart
of a citizen's social rights, duties, and responsibilities before the tort will be allowed."
Palmateer, 85 Ill. 2d at 130, 421 N.E.2d at 878-79.
The court held that the plaintiff in that case had stated a cause of action for retaliatory
discharge because the foundation of the tort "lies in the protection of public policy, and there
is a clear public policy favoring investigation and prosecution of criminal offenses."
Palmateer, 85 Ill. 2d at 133, 421 N.E.2d at 880.
Similarly, in the case at bar, we find that Hester has stated a cause of action for
retaliatory discharge because there is a clear public policy favoring the prompt and efficient
resolution of workers' compensation cases. The law would be "feeble indeed" if it allowed
an employer to fire an employee in retaliation for exercising her right and obligation to
testify in another employee's workers' compensation case. Palmateer, 85 Ill. 2d at 133-34,
421 N.E.2d at 880.
In Pietruszynski v. McClier Corp., Architects & Engineers, Inc., 338 Ill. App. 3d 58,
63, 788 N.E.2d 82, 86 (2003), the First District Appellate Court considered "whether a
discharge based on participation in a workers' compensation proceeding as a witness, if
proven, falls within the narrow class of cases recognized by our supreme court as violating
public policy." The court concluded that "protecting participation in workers' compensation
hearings is consistent with public policy and promotes the purpose of the Act as recognized
11
in Kelsay." Pietruszynski, 338 Ill. App. 3d at 64, 788 N.E.2d at 87. The court also
determined that "extension of the retaliatory discharge cause of action to" plaintiffs who had
not filed their own workers' compensation claims but who had participated in another
worker's claim was "consistent with the supreme court's narrow definition of the tort and the
plain language of the Act." Pietruszynski, 338 Ill. App. 3d at 64, 788 N.E.2d at 87.
The relevant facts in Pietruszynski are virtually identical to this case: the plaintiffs
there were laborers employed by the defendant employer, a coworker had filed a workers'
compensation claim, they were subpoenaed to testify in the coworker's compensation
hearing, and they were laid off one month after testifying. Pietruszynski, 338 Ill. App. 3d
at 60, 788 N.E.2d at 83. In the case at bar, Hester alleged that Gilster was her de facto
employer, that she testified for a coworker under threat of subpoena, and that she was fired
the next day. We follow Pietruszynski and hold that a worker who participates in a fellow
employee's workers' compensation case may state a cause of action for a retaliatory discharge
based upon a termination in retaliation for that participation. See also Hoth v. American
States Insurance Co., 753 F. Supp. 703, 708 (N.D. Ill. 1990) (discharge for planning to
testify at a coworker's compensation hearing before the Illinois Industrial Commission would
violate the clear mandate of public policy and be actionable as a retaliatory discharge under
Illinois law).
CONCLUSION
We hold that a borrowed employee may maintain a cause of action for retaliatory
discharge against a borrowing employer based upon an allegation that the employee has been
discharged for engaging in activities protected by the Workers' Compensation Act. We also
join the First District Appellate Court in determining that a cause of action for retaliatory
discharge may be maintained for the discharge of an employee for testifying in a coworker's
workers' compensation claim hearing. Based upon these holdings, we find that Hester's
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amended complaint states a cause of action for a retaliatory discharge and that the circuit
court erred in granting the defendant's motion for an involuntary dismissal. We reverse the
trial court's dismissal of Hester's amended complaint, and we remand for further proceedings.
Reversed and remanded.
GOLDENHERSH and SPOM ER, JJ., concur.
13
NO. 5-07-0283
IN THE
APPELLATE COURT OF ILLINOIS
FIFTH DISTRICT
___________________________________________________________________________________
CARRIE HESTER, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Randolph County.
)
v. ) No. 06-L-42
)
GILSTER-MARY LEE CORPORATION, ) Honorable
) William A. Schuwerk, Jr.,
Defendant-Appellee. ) Judge, presiding.
___________________________________________________________________________________
Opinion Filed: December 18, 2008
___________________________________________________________________________________
Justices: Honorable Bruce D. Stewart, J.,
Honorable Richard P. Goldenhersh, J.,
Honorable Stephen L. Spomer, J.,
Concur
___________________________________________________________________________________
Attorney Darrell Dunham, 1224 W est Main Street, Suite A, P.O. Box 803, Carbondale,
for IL 62903
Appellant
___________________________________________________________________________________
Attorney Edward Renshaw, Feirich/Mager/Green/Ryan, 2001 West Main Street, P.O. Box
for 1570, Carbondale, IL 62903
Appellee
___________________________________________________________________________________