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03/23/88 Dolores Weingart Et Al., v. the Department of Labor Et

March 23, 1988

DOLORES WEINGART ET AL., APPELLEES

v.

THE DEPARTMENT OF LABOR ET AL., APPELLANTS



SUPREME COURT OF ILLINOIS

521 N.E.2d 913, 122 Ill. 2d 1, 118 Ill. Dec. 436 1988.IL.408

Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Arthur L. Dunne, Judge, presiding.

APPELLATE Judges:

CHIEF JUSTICE MORAN delivered the opinion of the court.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MORAN

In separate actions, Dolores Weingart and Janice Corbett (plaintiffs) filed in the circuit court of Cook County actions for judicial review of decisions of the board of review (board) of the Illinois Department of Labor (Department). In each case, the board had found that the plaintiffs had received back pay in the form of a settlement. The settlement payment was made to plaintiffs by their former employer in order to terminate an action before the National Labor Relations Board based on a complaint filed by plaintiffs' union representatives. The board concluded that because of the back-pay award, plaintiffs were retroactively ineligible for unemployment benefits already received during those weeks to which the back-pay awards were applicable, and that those unemployment benefits were subject to recoupment. The circuit court heard the two actions together and affirmed the decisions of the board. The actions were consolidated on appeal. The appellate court reversed. (147 Ill. App. 3d 1076.) We allowed defendant's petition for leave to appeal under Rule 315 (107 Ill. 2d R. 315).

The questions presented for review are: (1) Do the time limitations of section 703 of the Unemployment Insurance Act (Act) (Ill. Rev. Stat. 1981, ch. 48, par. 453) restrict the time in which the Department may make a determination under section 900of the Act (Ill. Rev. Stat. 1981, ch. 48, par. 490) as to whether, by reason of a back-pay award, an individual has received back pay or wages for weeks with respect to which she has already received unemployment compensation benefits? (2) If the time limitations of section 703 apply, is the applicable time limitation the general one-year limit or the extended two-year limit which applies if the claimant misstated her earnings? (3) Did the circuit court have jurisdiction to entertain an action in administrative review which was filed after the expiration of the 35-day limitation period (Ill. Rev. Stat. 1985, ch. 110, par. 3-103)? (4) Did the board err in finding the settlement payments received by plaintiffs from their former employer to be back pay? (5) Were plaintiffs deprived of due process in the proceedings before the Department?

Plaintiffs were both employees of Advo-Systems, Inc., until August 21, 1980. At that time, Advo-Systems closed its Illinois operations, leaving plaintiffs and other employees jobless.

Plaintiffs promptly applied for and received unemployment compensation benefits. Weingart received benefits of $116 per week from August 24, 1980, through June 27, 1981, totaling $4,408. Corbett received benefits of $162 per week from August 22, 1980, through May 2, 1981, totaling $5,832.

The Advo-System plant closed shortly after the employees elected to have a union act as their collective bargaining agent. The ex-employees' union representatives filed a complaint before the NLRB against Advo-Systems. A year and a half after Advo-System's plant closing, the company entered into an out-of-court settlement to end the pending NLRB litigation. Pursuant to that settlement, Weingart received a payment of $8,140 in two installments, the first on January 20, 1982, and the second on February 16, 1982. Corbett received a settlement payment in the amount of $8,140 on January 20, 1982.

On March 31, 1982, Advo-Systems wrote a letter to the division of unemployment insurance of the Department alleging that it had been ordered to make back-pay awards to its former employees, including plaintiffs, for the period of August 30, 1980, through June 1, 1981. The letter, received by the Department April 7, 1982, stated that these employees had also collected unemployment compensation benefits.

On September 17, 1982, over 5 months after the Department had received Advo-System's letter and 15 months after plaintiff Weingart had received her last unemployment benefit check, a Department claims adjudicator issued to plaintiff Weingart a notice of reconsidered determination and recoupment decision. The notice informed her that she had been found retroactively ineligible to receive benefits from August 24, 1980, to June 27, 1981, and that $4,408 in benefits were subject to recoupment because she had received a back-pay award. It is unclear why the claims adjudicator determined that the alleged back-pay award ran through June 27, 1981, when the Advo-Systems letter indicated the payment was for a period ending June 1, 1981. Plaintiff Weingart timely appealed to a referee. After a hearing, the referee upheld the claims adjudicator's determination. Plaintiff Weingart next appealed to the board of review, which, without taking further evidence, affirmed the referee's decision on March 30, 1983. The board's decision was not received by plaintiff Weingart until July 12 or 13, 1983. Thereafter, she wrote to the board protesting the late notice and seeking a further appeal, but received no response. It was not until September 30, 1983, that she finally filed a complaint in the circuit court of Cook County seeking administrative review of the board's decision.

Plaintiff Corbett's case took a similar course. On April 12, 1983 -- over one year after the Department received Advo-System's letter and over 23 months after plaintiff Corbett received her last unemployment benefit check -- a Department claims adjudicator sent Corbett a notice of reconsidered determination and recoupment finding her ineligible for benefits from August 30, 1980, to May 2, 1981, because of the purported back-pay award. The claims adjudicator determined that $5,832 in benefits were subject to recoupment. The claims adjudicator's decision was affirmed on appeal by the referee and, on March 26, 1984, by the board. Plaintiff Corbett sought judicial review in the circuit court of Cook County on April 23, 1984.

The circuit court did not consolidate the plaintiffs' cases, but heard both cases at the same hearing. The circuit court found that the time limitations set forth in section 703 of the Act (Ill. Rev. Stat. 1981, ch. 48, par. 453) did not apply to redeterminations involving back pay under section 900of the Act (Ill. Rev. Stat. 1981, ch. 48, par. 490). The circuit court consequently held that the claims adjudicator's redeterminations of plaintiffs' eligibility for benefits were not untimely. The court also held that the board's findings that the settlement payments constituted back pay were not against the manifest weight of the evidence.

On appeal, a majority of the appellate court reversed the circuit court's decision. The appellate court ruled that the one-year limit in section 703 did apply to back-pay recoupment actions taken under section 900. Accordingly, the appellate court found that, under section 703, the redetermination of eligibility had to be made within one year after the last day of the week for which the determination was made. The redetermination of eligibility in these cases occurred more than one year after the last day of the benefit period; therefore, the appellate court concluded that the Department's recoupment actions were void and unenforceable. The appellate court also held that because the Department's actions were void, they could be attacked at any time and without regard to the 35-day filing limit for judicial review of administrative decisions. Accordingly, the court found that the circuit court had jurisdiction to hear the complaint of plaintiff Weingart even though it had not been filed within 35 days of her receipt of the Department's ...


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