State News : Illinois

Positive Drug Tests and Penalty Exposure After Ramirez v. IWCC, What Employers and Carriers Should Know When Managing Early Claims - Jigar Desai

In Ramirez v. Illinois Workers’ Compensation Commission (2025 IL App (1st) 242467WC), the Illinois Appellate Court recently issued an important decision for employers and carriers handling post-accident drug tests.

The case involved an injured employee who tested positive for marijuana after a work accident. The employer delayed benefits, arguing the positive test raised questions about impairment. Ultimately, the Appellate Court ruled that the employer acted unreasonably in withholding benefits because the drug test lacked supporting evidence to show impairment under the Illinois Workers’ Compensation Act.

The Court reinstated penalties and attorney fees, emphasizing that a positive test alone — without concentration levels, expert interpretation, or other factual context — does not justify delay or denial of benefits.

Why It Matters

Most employers and insurers do not require immediate defense representation or guidance when a claim is first reported. A drug test result often arrives within days of an accident, and claim handlers must decide whether to pay or delay benefits before counsel becomes involved.

Ramirez clarifies that the Commission and Courts expect any delay or denial based on a drug test to rest on objective, documented evidence. Without that foundation, employers risk exposure to penalties under Sections 19(k), 19(l), and 16 of the Illinois Workers’ Compensation Act.

Key Takeaways from Ramirez

1. A Positive Test Alone Is Not Enough.
• The Court made clear that a test result — even if it shows THC or another controlled substance — cannot by itself prove intoxication or justify a denial.
• To rely on the intoxication defense under Section 11, the employer must show the employee was impaired at the time of injury and that impairment caused the accident.
2. Reasonableness Is the Standard for Penalties.
• If benefits are delayed, the employer must demonstrate a reasonable, fact-based justification for doing so.
• In Ramirez, the absence of details such as test type, concentration levels, timing, or observed impairment made the delay unreasonable.
3. Documentation Is Everything.
• The decision emphasizes recordkeeping: contemporaneous notes, witness observations, and clear timelines can make the difference between a defensible claim and penalty exposure.

Best Practices for Employers and Claims Handlers

1. Secure a Properly Documented Drug Test.  Section 11 provides that no compensation is payable if an employee’s intoxication is the proximate cause of the injury or if the employee was so intoxicated that the intoxication constituted a departure from employment. However, the statute also establishes strict evidentiary requirements. 

A rebuttable presumption of intoxication arises only when:

·       There is 0.08% or more alcohol by weight in the employee’s blood, breath, or urine, or

·       There is any evidence of impairment due to unlawful or unauthorized use of cannabis, controlled substances, or intoxicating compounds, or

·       The employee refuses to submit to testing.

·       To rely on this presumption, the employer must prove that the test was performed by an accredited or certified testing laboratory and followed Commission rules for collection, chain of custody, split testing, documentation, and analytical procedures.  Tests that do not meet these standards are inadmissible, as confirmed in Ramirez v. IWCC (2025 IL App (1st) 242467WC).

2. Obtain the testing lab’s certification, chain-of-custody forms, and the collector’s documentation.
3. Confirm that split testing was used and that the sample was handled according to recognized procedures.
4. Request quantitative results, not just “positive” or “negative.” THC, for example, must include concentration levels to assess impairment.

5.     Retain copies of all documentation, including consent forms, lab certifications, and test methodology.

6. Document Observations Immediately.
• Have supervisors and co-workers record any signs of impairment (odor, behavior, coordination, etc.) at or near the time of injury.
• A short written statement can later establish the factual basis for your initial claim decision.
7. Record the Employer’s Rationale for Delay.
• If benefits are temporarily withheld pending investigation, document the reasons clearly — e.g. “awaiting certified test results” or “reviewing chain of custody documentation.”
• Make sure the claim file shows the decision was based on evidence, not assumption.
8. Communicate Early and Clearly.
• Notify the employee (and the insurer, if applicable) that the claim is under investigation.
• Avoid blanket denials.  Instead, frame the delay as an effort to gather additional information.
9. Consult Counsel Promptly.
• Once results are confirmed, seek legal input before issuing a denial.  Counsel can assess whether the test meets statutory standards and whether sufficient evidence exists to assert intoxication as a defense.
10. Do Not Overlook Other Evidence.
• Review surveillance footage, witness statements, and equipment logs.
• Often, the best defense to penalty exposure is showing a well-documented, balanced investigation — even if the claim is later found compensable.

The Ramirez decision does not eliminate the intoxication defense — it simply reminds employers that the defense must be supported by admissible and credible evidence. A positive test result can still be relevant, but it must be contextualized and properly documented.

For claims professionals and employers, the message is clear:  Investigate promptly, document thoroughly, and justify every delay with evidence. Doing so not only protects against penalties but also strengthens the employer’s credibility when the case eventually reaches defense counsel or the Commission.

Final Thought

In Illinois, the window between an accident and counsel involvement is often the most critical. Ramirez teaches that what happens in those first few weeks — how the employer documents the event, tests, and communications — will often determine whether the case is defensible later.

A structured, evidence-driven response to post-accident drug tests is no longer just best practice; after Ramirez, it is a legal necessity.

Collateral Estoppel Bars Relitigation of Causation: City of Zion Police Department v. Illinois Workers’ Compensation Commission – Jigar Desai

In City of Zion Police Department v. Illinois Workers’ Compensation Commission, 2025 IL App (2d) 240758WC-U, the Appellate Court affirmed the Circuit Court’s reversal of the Illinois Workers’ Compensation Commission, holding that claimant James Labonne was collaterally estopped from relitigating causation for his right wrist injury.

Labonne, a police detective, claimed bilateral wrist injuries after performing a “burpee” exercise during firearms training. He sought workers’ compensation benefits under the Illinois Workers’ Compensation Act (“Act”). Respondent argued that Labonne had already litigated the issue before the Zion Police Pension Board, which denied “line-of-duty” disability benefits but awarded “non-duty” benefits. Labonne did not appeal the Pension Board’s decision, which became final.

The Commission initially awarded benefits, finding collateral estoppel did not apply. On review, however, the Circuit Court determined that the Pension Board’s decision conclusively resolved causation, accident timing, and credibility issues. The Appellate Court affirmed, noting that:

• The Pension Board’s determination that the injury did not occur during an act of duty was identical to the causation issue under the Act.
• The decision was final and binding; Labonne had a full and fair opportunity to litigate the issues before the Pension Board.
• Collateral estoppel applied because Labonne had been a party to both proceedings and the issues were necessarily decided.

Impact on Workers’ Compensation Law:  Labonne underscores that prior administrative decisions — such as Pension Board determinations — can bar subsequent workers’ compensation claims when the issues are identical, the decision is final, and the claimant had a full and fair opportunity to litigate. In particular, it aligns with prior case law equating “duty” determinations under the Pension Code with “arising out of and in the course of employment” determinations under the Act.

Best Practices for Employers and Claims Handlers

1. Check Pension or Other Prior Decisions Early:  Review any prior pension, insurance, or administrative determinations before investigating a workers’ compensation claim. These can provide defensible grounds to challenge causation or accident-related claims.
2. Document Reporting and Treatment Delays:  In Labonne, failure to promptly report the injury and inconsistent medical records supported the Pension Board’s finding. Clear documentation of reporting and treatment timelines can be critical evidence.
3. Evaluate Collateral Estoppel Opportunities:  If a claimant has litigated a similar issue in another forum, consult counsel to assess whether collateral estoppel can bar or limit workers’ compensation benefits.
4. Confirm Claimant’s Party Status and Opportunity to Litigate:  Collateral estoppel applies only if the claimant was a party (or in privity) and had a full and fair opportunity to contest the prior proceeding. Ensure these elements exist before asserting the defense.
5. Coordinate Evidence Across Forums: Keep track of medical records, depositions, and other evidence presented in pension hearings or related administrative proceedings; this may streamline defenses in workers’ compensation proceedings.

Labonne reinforces that prior adjudications, including Pension Board determinations, can decisively impact workers’ compensation claims.  Prompt review of prior decisions, thorough documentation of injury reporting and treatment, and strategic use of collateral estoppel can protect employers from unnecessary exposure.