When Illinois employees are the victims of intentional torts by supervisors, can they bring common law tort suits against their employers for these injuries, or are they limited to bringing a claim under the workers\u27 compensation system? This question, which arises with unfortunate reguIarity, lacks a clear answer because both state and federal courts in Illinois are divided over the scope of the  alter ego  exception to the exclusivity of workers\u27 compensation as the remedy for intentionally inflicted workplace injuries.
The Illinois Workers\u27 Compensation Act ( IWCA ) contains exclusivity provisions that mandate that workers\u27 compensation is the sole remedy available to employees for workplace injuries. There are exceptions to the exclusivity rule, including the principle that the rule does not apply if the injury is not accidental

Broverman, Quinn

Hayes, Michael

English

University of Baltimore School of Law

University of Baltimore LawScholarWorks@University of Baltimore School of LawAll Faculty Scholarship Faculty Scholarship3-1998Employer Liability for Supervisors' IntentionalTorts: The Uncertain Scope of the "Alter Ego"ExceptionMichael HayesUniversity of Baltimore School of Law, mjhayes@ubalt.eduQuinn BrovermanBroverman Professional CorporationFollow this and additional works at: http://scholarworks.law.ubalt.edu/all_facPart of the Labor and Employment Law Commons, Torts Commons, and the Workers'Compensation Law CommonsThis Article is brought to you for free and open access by the Faculty Scholarship at ScholarWorks@University of Baltimore School of Law. It has beenaccepted for inclusion in All Faculty Scholarship by an authorized administrator of ScholarWorks@University of Baltimore School of Law. For moreinformation, please contact snolan@ubalt.edu.Recommended CitationEmployer Liability for Supervisors' Intentional Torts: The Uncertain Scope of the "Alter Ego" Exception, 86 Ill. B.J. 154 (1998)Bl1tpl()yer.'ta.hittty£orSupe~ Inten.tiol1.a1T6rts:The···Uncertain Scope of thellAIter Ego" Exception By Michael J. Hayes" and Quinn Broverman I. Introductlon W hen Illinois employees are the . victims of intentional torts by supervisors,' can they bring common law tort suits against their employers for these injuries, or are they limited to bringing a claim under the workers' compensation system? This question, which arises with unfortunate reguIari· ty, lacks a clear answer because both state and federal courts in Illinois are divided over the scope of the "alter ego" exception to the exclusivity of workers' comperuation as the remedy for intentionally inflicted workplace injuries. The Illinois Workers' Compensation Act ('1WCA") contains exclusivity pr0-visions that mandate that workers' compensation is the sole remedy avail-able to employees for workplace injuries.2 There are exceptions to the exclusivity rule, including the principle that the rule does not apply if the injury is not accidental.3 In Meerbrey v ~rshall Field and Co., Inc., the Illinois Supreme Court held tha~ employees were barred from suing then employers in tort for injuries intentionally inflicted by co-workers because such injuries were "accidental" for purposes of the IWCA.4 The court explained that "such injuries are unex-pected and unforeseeable from the injured employee's point of view." More importantly, these injuries "are also accidental from the employer's point of view" and therefore lithe employer has a to consider that the injured s sole remedy against the wtllbeu.nder the workers' statute. "$ empto),-ltCtiOft5 against their co-workers for intentb'-IJJ torts. The court found that such suits are not barred by the exclusivity rule because persons who committed inten-tional torts should not be permitted to claim that their victims' injuries were accidental and covered by the IWCA.' The Meerbrey court used a similar rationale in reaffinning two judidl!llly created exceptions to the IWCA's preclusion of employee suits against employers for intentionally inflicted injuries. Citing prior Illinois courtcled,.. sions, the court held that the exclusivity rule would not apply where (l) the injuries were intentionally inflicted. by "the employer or its alter ego," or (2) the injuries "were commanded or ex-pressly authorized by the employer."' The court reasoned that "the employer "Professor Hayes thanks Professor Patrick JCeIkoy for his valuable comments on an eerller dolt and law student Kamran Q. Khan for his excellent research _istsnce. 1. In this article, the term "supervi8or" will refer generically to ~II persons with supervisory or _-agerial authority over employees, regardless of their level of authority. 2. See 820 ILCS 305/5(a) ("No common IiIw or statutory right to recover damages h'om the employer ... or the [employer'sl agents oremptoy_· ees ... for Injury or death sustained by M'lY ~'IIt! while engaged in the line of his duty.lI .. cll employee, other than the compt!NIIH:on ~.po­vided. is available to any employee who.1s~ by the provisions of this Act"); 8H~t.'GS 305/1l("The rompensatlon.heretII ~."iM be the measure of the I'I!IIpOIWtbtlityOfId\Y~ er ... for acddentallnjurles sustained by M\y.~... . -.. ee"). 3. See Collifr!l Nrg!m ~ Co... . 408 NE2d 198,202 (1980). 4. 1391l12d 455, !1M Nat 1 •• 1_,<' •. Il'Qifp!B'Il1litald to a8lel'tthat ~h'ac:ddentlll," and'. there-Hdushre provisions of himself committed .... 'deCilk)J\ did not define these exceptions. eight years since employees itig_ted the meaning many cases of by supervisors, has contended l11aen1lor Is an "alter ego" of that the exclusivity nOlt'.Dltr a ,ult against the IlUnOlls court., however, leallt three different .'UFEIlIU alter ego exception, ~<lliICW. below. ~.ltIor .. of the "Alter Ego'" 1I.:'a _1'11e employee daimed 'llPetR)nhad harasled and mh)l'lrlOre than 18 months in ·oo;.!d:km to allegedly ;Dank pr'actlces. Based on this sued his ~erfj[)f.:iJltenlti011al infliction of .deltlelS; One of the employ-.. ..., ............ that the suit was the .. ·exclusi'vity provisions of ing any type of suJlervisor. These' deci-sions have found the alter ego excep-tion applicable to, for example, three "management employees" whose pow-ers were not described in.the plaintiff's complaint,12eight supervisory and man-agerial staffers of various rank,ll a worker "employed ... in a supervisory capacity,"'· a district manager,15 and a vice president of corporate relatioos.'· In Feliciano, Tolson, Wysong, and Whitehead, the courts found that for purposes of denying defendants' motions to dismiss, the "alter ego" sta-tus of the alleged tortfeasors was suffi-ciently demonstrated by allegations that they had such standard superviso-ry powers as the authority to discharge employees, to mriew employee perfor-mance, and to grant vacation and sick Ieaves.'7 Only two of these decisions, both by Judge Norg1e of the U.S. District Court for the Northern District of Illinois, offered any rationale for the conclusion tha t all supervisors are alter egos of their employer. In Whitehead, the court noted that the seminal decision, Tohnson, had not explained why the bank managers were alter egos. The court then provided its own explana-tion: "[WJhere the employer is a ficti-tious person, i.e., corporate entity, and its authorities and powers are necessar-ily delegated to supervisors to conduct the corporate business, the supervisors act as alter egos of the corporate entity."'· Similarly, in Feliciano, the court rea-soned that where the empioyer is a "fic-titious person," like a corporation, "powers are necessarily delegated to managers to conduct the corporate business" and so those managers may be alter egos of the corporation. I. Under these precedents that broadly interpret the alter ego exception, an employee's showing that the person who committed the intentional tort possessed standard· sUp.i!rvisory pow-ers is sufficient to overcome the exclu-sivity ofthelWCAand to permit the employee to bring a common law action against his or her employer. B. ThI SM,*" I""~tfJti(J"': feasor has such a dominant role stantial ownership interest In the employer that there is a blurring of 8. Id. 9. 199111 App 3d 427, 557 NE2d 328 (1st 019110). 10. Id, 557 NE2d at 329-30. 11. Id, 557 NE2d at 332. 12. Bullilillgh v Soulh ChkllgD C""'e. IIIC., 830 F Supp4l7. 442. 443 (NO 1111993). 13. Felit'illllo v Itrry'~ Fruit Imll C",rlle" Cellttr, Inc., No 9J..C-591J, 1994 WL 142963, 1 (NO III April 15,1994). 14. 1bIIIOII v HHI. FillimclRl SmJim;, Inc., No. 94-C·513("I995WL461883.1 (NOIIIAuR3,1995). 15. Wys{lIIg v Wmlly's lillI, IIIC., 71 PEr CII_ (BNA) 1472 (NO 111 1996). 16. Whittluwd t' AM '"",1160 F Supp 12110. 1285. 1290 (NO 1111994). 17. FclicillllO, 1994 WL 14296.1, al 3; 1111110", 1995 WL 461883, at 3: WllSO"g, 71 FEr CiI_ II 1474: Whittluwd, 1160 P Supp at 1290. 18. 860 F 5upp al 1290. 19. 1994 WL 14296.1, al 3. 20. 63 III App 3d 908, 3110 NE2d 924 (1,;1 0 1978). ABOUT THE AUTHORS Michael J. Hayes has been an assistant professor of law at Southern Illinois University School of Law in Carbondale since 1995. Previously, he practiced labor and employment law in Washington, D.C. for seven years. He received his B.S. from Cornell University in 1985 and his J.D. from the University of Virginia in 1988. suits against <fQr;'inttmtic>nal torts by su-IM'CD\I1n declared that the the rule which Under the~tion 01 alter ego adopted in TtlbIortski,most supervisors would not be covered by the alter ego exception. The .qUotations from Lanon repeatedly distinguiJh between "gen_ • Ctssrnan. .. offered a senslDleresolutlon to the conflict over the altar ego .x~.Underthe 01Stm8n standard, an individual II deemed an alter ego If .... or ..... ·ha. 'the authorItY to make decision. and set policy on behalf of the empIoyer.' and thus 'speakS for the company.'· uine alter egos" and "mere supervi-sor'S." Moreover, the reference, in the second passage from Larson, to the ordinary corporate law standards on alter ego suggests a particularly narrow definition of that roncept. In corporate law, the alter ego doctrine applies only when there is "such unity of interest or ownership that the individual and cor-poration are, for all practical purposes, coextensive."lI6 Thus, under the stan-dard set forth in the Larson treatise, and adopted in /tfbIomJki, the alter ego exception would apply only in unusual cim.unstances. Since the alter ego exception was reaffirmed by the Meerbrey decision in 1990, several dedsions in DIinois have relied on./IrbIfmski·and the Lanon trea-tisein stridIy:1imiting that exception. One striking examPle is Joyce v HHL Finncild sm,;m,'II in -which .the court found· that that· the tortfea.. ~with promote, dis· between employee and COI'BOrate" employer that has been UlIlICICU a1ter-ego mncept.HIII Both Damato v Tack P""'n CIIerJmIet Ceo, Inc. and Al-Dabbtlgh v G~I Inc. relied on lengthyquotesftom Jablonski and the Larson treatise m. explaining why the alter ego exception did not apply.29In an unpublished ded-sion in 1996, the seventh circuit also employed the JIIblonski standard in rul-ing that the alter ego exception did not apply.:IOIn 1997, the seventh circuit again appeared to apply the strict inter-pretation of alter ego when it held, without elaboration, that a "head supervisor" did not possess "sul&ient stature" to be the employer's alter ego.11 Thus, in contrast to the Johnson line 01 cases discussed in the previous sec-tion, the decisions applying the Jablonski definition of alter ego have held that the alter ego exception to exclusivity applies only in very limited cim.unstances. C. A MiMk GtoIl,",: TIre Crissman Decision In Crissman v Healthco InttrnlltioMl, 21. Arthur Larson .. Lex Larson, l.IIrlHlII WorkMtn's COMpenu/ion l.IIw (Matthew Bender 1996). 22. 380 NE2d at 926. 23. kI,380 NE2d at 9'0 (quoting Arthur lAnon. 2A 7lIt Urw of NIrkIIItn's Co/nptIIsIIlion Urw § 68.21) (emphasis added). 24. 217 Ad< 350. 230 SW2d 28 (1950). 25, 380 NE2d at 927 (quoting Arthur lA.-. 2A NIrkIIItn's Co/nptIIsII/ion Urw § 68.22) (emphasis added). 26. Fmdtlich v ,.R. Froelich Mfg. Co .• 93 In App 3d 179,416 NE2d 1134. 1137 (1st D 1981). 'rI. No 94-C-5357, 1995 WL 215169 (ND III April 10. 1995). 28. 1995 WL 215169 at 3. 29. 0. .... /0. 927 F Supp 283, 291-92 (ND HI 1996); N-DIIIJNgII, 873 F Supp 1105. 1113-14 (NO • 1994). In A'-~. the court ~ thiltdte tortt-w did not even have a ~or_ agement role, but stn!sMd in a foolRoIe ... tNs oIMervation Hshould not be IIIiIuftdentood as .... gestins that IddsJ type of low Ie'ft!I stl!t\lll __ __ ponte hleran:hy ... would IIIUftke to It'i:IIIP!r .... nIIIpOIISiblIity for the corponItion. H 8Y3 p 9IW itt 111409. 30. CHkfIin " """-Mart ~ hie., Nus ~ and 9S-ZS14, 1996 WL 12B.t (fth Or .. '" ... Uader the NIea of the IMM!Mh ~. lift •••. IIshed dedsioft ~~be'~ .~ .•.. deftt. .... c' 31. ".11'1 Ilion 10"tM Ctt Judge Rovner position that the corporate iUit·.be··.virtuaJllv one and the Rovner interpretation 01 thel.ter ego exception was inapproprUate.becaWieacorpora-tion couId<be.~tebom its·owners under theltrkt~tetegoSWldani "and yet take purpoflcmalactionswhich are injurious to theb'employees."fl P.Icking up orrProfeSsor Larson's WIe of the term l'rea1iatkally maIter ego," Judge Rovner propo$ed a "realistic and prlctical appraisaJ"of which persons should be deemed alter egos.42 Judge Rovner reasoned that "Isltatus as a 'foreman, supervisor, or mlnager' alone" was not sufficient to make an individual an alter ego, if that individu-allacked poJicymIking authority.43 But where In individual has "the authority to make decisionslnd set policy on behalf of an employer," then that indi-vidual could reaJistiailly be regarded as the employer's alter ego. Accordingly, Judge Rovner found that "when the tortfeasor holds a position in which he, in a practical sense, speaks for the com-pany, he may be. deemed the employ-er's alter ego for purposes of the Workers' Compensation Act."" Judge Rovner then explained that, under this "realistic and practical" approach, more than one person may be deemed a company's alter ego. For example, Judge Rovner stated, "To the extent that each of Healthco's seven regional managers had final decision-making authority with respect to the policies and procedures within his or her region ... eachmay qualify as an alter ego."45 Judge Rovner added that "Itlhe same might arguably be said at the level of branches and branch man-agers .... " The key was whether the indi-vidual had "authority" to deliver the employer's "final word" in his or her sphere .... If so, then that individual would qualify .slmalter ego. Judge Rovner found that another fador supporting application of the exc:epl:iOO inCrissmmr was that aUn:e!dltotlts involved recurrent 33. Id al 73.000. 34. Id al 72,999-73.000. 35. Judge Rovner, who now aervllllllll a _enth cin:uit appellate justice, decided CrissmlllI when she wala federal district rourt judge. 36. Crissmal/, 60 Empl Prac Dec (CCH) at 73.000. 37. Id. 38. Id. 39. Id. 40. Id at 73.001. 41. Id. 42. Id. 43. Id (quoting Arthur Lal'!lOn, 2A Workmert'S Compellilltimtl.llW § 68.21). ... Id. 45. Id. 46. Id. 47. Id at 73.001-73,002. 48. Id at 73,003. 49. Id. TRADEMARK It COPYRIGHT SEARCHFS lU\Jl.Ir.lMllIU\. - Supply word and/or plus goods or services. I ~J:!.IU!l.LJt"I FEES: COMBINED SEARCH - $260 (U.s .• State. and Espanded Common Law) U.S. TRADEMARKOFFICE-$120 STATE TRADEMARK - $125 EXPANDED COMMON LAW· $J65 DESIGNS - $145 per U.S. class (minimum) COPYRIGHT - $155 PATENT SEARCH· $390 (minimum) INTERNATIONAL SEARCHING DOCUMENT PItEPAltATlON (lOr attorneys only - applications, Section 8 &: J 5, Aasipmenu. renewals.) RF.SEA.RCH-(SEC • ·tOK's, ICCFC:C. COUKfRECORDS,·CONGRESS.) Alberts, and Reynolds, the 01'1rCriR!~1ft;2t1 in consider-.tolrUI!aSOr"s decisional n>t'1In'IPnt nature of ~ •. injfinc:jling the plain-... u .... '" alter ego The onltyr'atic)na)e offeredfot·.the that"cm'J'()rationtlnust act through their supervisors" -is .. untenable. Under that rationale, . the alter ego exception should not be limited to supervisors I.)ecauaeOOrporations dele-gatefurictions to, and "ad through," all t:heIrempio)tees.By contrast, the ratio-nale appanmtiyexcludes non-corporate entities, such as partnerships and pro-prietorships,from the alter ego excep-tion, even though the$e entities also delegate powers to supervisors and other employees. There i. no logical reason why the employer's form of organization should so greatly impact whether it can be sued in tort for the intentional acts of its employees. The strict interpretation of alter ego, however, is too narrow. As was dis-cussed in Section II, the strict interpre-tation derives from the Larson treatise on workers' 1:ompensation. But even the Larson tr~atise recognizes that exclusivity should not apply where the injury is inflicted by employer policy-milkers. In the section following the sec-tion on alter ego, the Larson treatise notes that the "unpremeditated assaults" by supervisors discussed in preceding sections "could not conceiv-ably be said to have any content of cor-porate or employer policy."S< Relying on this point in the Larson treatise, another commentator has asserted, "When ... an injury is intended and effectuated through a deliberate man-agerial decision by those with corporate decision-milking responsibility and author-ity rtgrlrdingsuch matters, a strong argu-ment can be made for allowing a tort claim."S5 In Crissman, Judge Rovner offered a sensible resolution' to the conflict over the al exception. Under the Crissman an individual is deemed ego if he or she has make decisionsahd employer," thl~5~~~ik$rotthe·tOrtil~rl~lI~ apply in cases itse1fcommitted the inlllI\tkNl.tOJjt. It is reasonable and fair Crissman standard does, I.l'N'''.''''''_ .• tort is committed byakey QiUiBi;. maker of an.empIoyer, it.istruJY mitted by the employer. Moreover; Judge Rovner emphasized, Crissman standard. is baaed.ona "_ ... 1 .. "'-, tic and practical appraisal" ofwhaflt means to be an alter ego of an employ-er. For these reasons, the state and red-eral courts of Illinois should uniformly adopt the Crissman standan:l for defin-ing the alter ego exception to workers' compensation exclusivity. Then, the workers of Illinois would know with greater certainty whether they can go to court to Obtain relief for intentional torts in the workplace. .qz. so. See, for example, Dllllio v Common_IIII Edison, 938 P Supp 1388 (NO ill 1996); ROWOIn v GoII/1eb MtI'IlOri41 Hospillll, No 95-<:-6515, 1996 WL 131716 (NO III Mar 20, 1996); Alberls v Wickes Lumber Co .. No 93-<:-4397, 1995 WL 476654 (NO m Aug 9, 1995); ~ v Illinois Bell TIIlepIKme Co., No 93-<:·5194, 1994 WL 194228 (NO III May 16, 1994); Reynolds v Hi/llchi Stiki USA, Inc., No 92-<:-8281, 1993 WL 384535 (NO III Sept 28,1993); Ken",q1J Frilsch, No 9O-C-5446, 1993 WL 761979 (NO m Mar I, 1993) (report of Executive Magistrate Judse Lefkow) . 51. Rowlln, 1996 WL 131716 at 2 (quoting Crissllllln, 60 Empl Prac Dec (CCH), at 73.(01). 52. Wood, 1994 WL 194228 at 3 (quoting Crissllllln, 60 Empl Prac Dec (CCH), at 73.(01). 53. Kennedy, 1993 WL 761979 at 10; Albms.l995 WL 476654 at 5; R£yno/ds, 1993 WL 384535 at 3. 54. Arthur Larson, 2A Larson's Workers' Compe!lSlltion lRw at § 68.23. 55. Joseph King, Tile Exclusiveness fir Ilfl Employee's Wf1rkers' Compensalion Remedy AgIffltst His Employer. 55 Tenn L Rev 405, 450 and n219 (1988) (citing Arthur Larson. 2A Workmew'$ Compe!lSlllwn lRw § 68.23). 56. Crissmlln. 60 Empl Prac DeC (CCH).1: 73,001. As was discussed earlier. some peat-Crissllllln decisions have In!ated Crissmlmas Iishing a rwo-prong standard that both authority of the tortfeasor 11M w"' .... rth~"" ......... is recurrent in natuJe. The prong is mispI/K:'ed. AJthoosh the ro.,""'~r-."""iiIo··. did rely on the repeated natuJe finding the alter exception Midthatwhm~oous~~~ becovemd ;:~&~~:!1~~ 

Employer Liability for Supervisors\u27 Intentional Torts: The Uncertain Scope of the  Alter Ego  Exception

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Employer Liability for Supervisors\u27 Intentional Torts: The Uncertain Scope of the Alter Ego Exception

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