Appeal from the Appellate Court for the Fourth District; heard
in that court on appeal from the Circuit Court of Macon County,
the Hon. Jerry L. Patton, Judge, presiding.
JUSTICE RYAN DELIVERED THE OPINION OF THE COURT:
In this case we must decide (1) whether a municipality may set off the salary paid to a de facto employee from the back pay owed to a wrongfully discharged civil service employee and (2) whether plaintiff is entitled to recover the attorney fees he incurred in bringing a mandamus action to compel his reinstatement.
On July 23, 1981, plaintiff, John F. Thaxton, a classified employee of the city of Decatur, was suspended without pay pending a hearing before the Decatur civil service commission to determine whether plaintiff's employment should be terminated. In early September the city hired another employee to replace plaintiff. Shortly thereafter, on September 18, 1981, the commission held a hearing concerning the charges against plaintiff, and on October 13, 1981, it ordered plaintiff discharged. On February 16, 1982, the circuit court of Macon County, sitting in administrative review, reversed the commission's decision. No appeal was taken from the court's action. The city, however, failed to reinstate plaintiff. As a result, on May 20, 1982, plaintiff filed a petition for mandamus in the circuit court of Macon County naming the commission, the city and various city officers and officials as defendants. In addition to seeking his reinstatement, plaintiff sought back pay and attorney fees involved in bringing the action. On September 3, 1982, the court ordered plaintiff reinstated to his former position. In early 1983 the court denied plaintiff's request for attorney fees but awarded him back pay from the date of his suspension. The appellate court affirmed the denial of attorney fees but reversed on the issue of back pay, holding that the city could set off from the amount owed plaintiff the sums it paid to the de facto employee between October 13, 1981 (the date the commission ordered plaintiff discharged), and February 16, 1982 (the date the circuit court reversed the commission's decision). (122 Ill. App.3d 266.) We allowed plaintiff's petition for leave to appeal (94 Ill.2d R. 315(a)).
Initially we note that it is not disputed that the circuit court properly ordered plaintiff reinstated to his position with the city. Thus, no issues are raised concerning the basis for his discharge or the propriety of the procedures used to effectuate his removal, the arguments being limited solely to the questions of back pay and attorney fees.
We first consider the question of the amount of back pay to which plaintiff is entitled. The Illinois Municipal Code (Ill. Rev. Stat. 1983, ch. 24, par. 1-1-1 et seq.) contains no provision for back pay for a wrongfully suspended or discharged civil service employee. It has long been recognized, however, that where an employee is reinstated following a determination that his suspension or discharge was illegal, he is entitled to recover his salary for the period that he was prevented from performing his duties, reduced by what he earned in other employment. People ex rel. Bourne v. Johnson (1965), 32 Ill.2d 324; People ex rel. Krich v. Hurley (1960), 19 Ill.2d 548; Kelly v. Chicago Park District (1951), 409 Ill. 91; 63A Am.Jur.2d Public Officers and Employees sec. 297 (1984).
This court first confronted the issue presented here in People ex rel. Sartison v. Schmidt (1917), 281 Ill. 211, where, as a matter of public policy, the court held that payment to a de facto officer or employee constituted a good defense against an action by the de jure officer or employee to recover the salary he would have earned but for the wrongful action of the State or municipality in removing him from his position. The court observed:
"`It is important that the public offices should be filled, and that at all times persons may be found ready and competent to exercise official powers and duties. If, on a controversy arising as to the right of an officer in possession and upon notice that another claims the office, the public authorities could not pay the salary and compensation of the office to the de facto officer except at the peril of paying it a second time if the title of the contestant should subsequently be established, it is easy to see that the public service would be greatly embarrassed and its efficiency impaired. Disbursing officers would not pay the salary until the contest was determined, and this, in many cases, would interfere with the discharge of official functions.' [Citation.]" 281 Ill. 211, 215.)
For a general discussion of the right to setoff, see Annot., 64 A.L.R.2d 1375 (1959), supplementing Annot., 55 A.L.R. 997 (1928).
The rule announced in Schmidt was applied in numerous other cases (e.g., Malloy v. City of Chicago (1938), 369 Ill. 97; McKinley v. City of Chicago (1938), 369 Ill. 268; Hittell v. City of Chicago (1927), 327 Ill. 443; People ex rel. Durante v. Burdett (1918), 283 Ill. 124; People ex rel. Trapp v. Tanner (1956), 10 Ill. App.2d 155), although it was held in People ex rel. McDonnell v. Thompson (1925), 316 Ill. 11, that the city could not set off payments made to the de facto employee after a judicial determination that the de jure employee had been wrongfully removed from his position.
Much of the controversy in this case concerns the interpretation to be given this court's decision in Corbett v. City of Chicago (1945), 391 Ill. 96. That Corbett created a certain amount of confusion is evident by the fact that both the circuit and appellate courts relied on Corbett in reaching different conclusions. We find it unnecessary to indulge in a lengthy analysis of Corbett; limited to its facts, the case simply stands for the principle not disputed in this case that once there has been a judgment ordering the reinstatement of the de jure employee, payments made to the de facto employee may not be set off from the salary owed the de jure employee.
This court has not directly addressed the propriety of allowing a municipality to set off sums paid to a de facto employee since Corbett was decided in 1945. In People ex rel. Hurley v. Graber (1950), 405 Ill. 331, though, the court found, inter alia, that the circuit court had properly issued injunctions to prevent the demotion or removal of certain civil service employees. The court observed that the employees would have suffered irreparable injury since, under the authority of Schmidt, they would have been precluded from recovering the salaries paid to their de facto replacements. 405 Ill. 331, 351, citing People ex rel. Sartison v. Schmidt (1917), 281 Ill. 211.
Although this court has repeatedly followed the setoff rule established in Schmidt, we do not believe that the rule can be justified in light of the action taken by the legislature with respect to State civil service employees. In 1975 the legislature amended the Personnel Code (Ill. Rev. Stat. 1983, ch. 127, par. 63b101 et seq.) by adding section 11b, which provides:
"Every employee reinstated for the period for which he was suspended, discharged or improperly laid off shall receive full compensation for such period notwithstanding the fact that any person was employed to perform any duties of such employee during the time of such suspension, discharge or layoff. * * * [F]ull compensation shall mean compensation such suspended, discharged or laid off employee would have earned in the position classification during the period of suspension, discharge or layoff less amounts earned by the employee from any other source and unemployment compensation payments received during such period." (Emphasis added.) (Ill. Rev. Stat. 1983, ch. 127, par. 63b111b.)
The legislative record reveals that the amendment introduced as Senate Bill 845 was designed to "close a gaping hole in the Personnel Code" and to prevent what was described as "a serious transgression against [a State] employee who has been off work through no fault of his own." Specifically, the legislation was enacted to overcome the result of a Court of Claims decision which had precluded a wrongfully suspended State employee from recovering that portion of his salary which had been paid to his replacement. A rule which deprives an improperly suspended or discharged employee of the salary he would have ...