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People ex rel Illinois Department of Labor v. Tri State Tours

August 14, 2003


Appeal from the Circuit Court of Cook County. Honorable Raymond Funderburk, Judge Presiding.

The opinion of the court was delivered by: Justice Hartman


Plaintiff, The People of the State of Illinois, ex rel. Illinois Department of Labor (the Department), appeals from the dismissal with prejudice of its complaint seeking accrued vacation pay on behalf of a former employee of defendants, Tri State Tours, Inc., an Illinois Corporation, and J. Michael Hillard a/k/a Mike Hillard, Individually and in his official capacity (collectively Tri State Tours). The complaint, brought pursuant to the Illinois Wage Payment and Collection Act (the Act) (820 ILCS 115/1 et seq. (West 2000)), was dismissed as time barred, from which the Department appeals.

Pursuant to section 11(a) of the Act (820 ILCS 115/11(a) (West 2000)), the Department investigated a complaint brought by Barbara Elliot that her former employer, Tri State Tours, had failed to pay her for 12.5 days of accrued vacation time. On January 5, 1998, the Department issued a wage payment demand requiring Tri State Tours to pay Elliot $1,632.05. On January 9, 1998, Tri State Tours filed an exception to the wage payment demand.

On August 1, 2000, the Department filed a complaint against Tri State Tours, seeking accrued vacation pay pursuant to section 5 of the Act (820 ILCS 115/5 (West 2000)) (section 5), on behalf of Elliot and statutory penalties pursuant to section 14(b) of the Act (820 ILCS 115/14(b) (West 2000)). Tri State Tours moved to dismiss the complaint pursuant to section 2-619.1 of the Illinois Code of Civil Procedure (the Code) (735 ILCS 5/2-619.1 (West 2000)), arguing inter alia that the action was time barred under the two year statute of limitations set forth in section 13-202 of the Code (735 ILCS 5/13-202 (West 2000)) (section 13-202). *fn1 Tri State Tours argued that it had paid Elliot all outstanding vacation pay. On November 11, 2000, the circuit court dismissed the complaint without prejudice and allowed plaintiff to file an amended complaint.

On November 14, 2000, plaintiff filed an amended complaint alleging that the action was brought pursuant to section 11(c) of the Act (820 ILCS 115/11(c) (West 2000)). As earlier noted, Tri State Tours successfully moved to dismiss the amended complaint with prejudice pursuant to section 2-619(5) of the Code (735 ILCS 5/2-619(5) (West 2000)) (section 2-619), as time barred under section 13-202. The Department appeals from that dismissal.

Section 2-619 dismissals are reviewed de novo. City of Chicago ex rel. Scachitti v. Prudential Securities, Inc., 332 Ill. App. 3d 353, 772 N.E.2d 906 (2002).


The Department contends that the circuit court erred in finding the action time barred, arguing that it is immune from any statute of limitations when it brings an action seeking to enforce section 5 because such an action seeks to enforce a public right and therefore the doctrine of governmental immunity from statutes of limitations applies. Tri State Tours responds that the doctrine does not apply because the Department seeks to enforce a private right.

A statute of limitations will not apply to bar a claim by a governmental entity acting in a public capacity, under the doctrine of governmental immunity. Where the entity is acting in a private capacity, however, its claim may be subject to a limitations defense. Board of Education of City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428, 546 N.E.2d 580 (1989) (Board of Education); City of Shelbyville v. Shelbyville Restorium, Inc., 96 Ill. 2d 457, 451 N.E.2d 874 (1983) (Shelbyville). The doctrine is supported by the policy judgment that the public should not suffer as a result of the negligence of its officers and agents in failing promptly to assert causes of action which belong to the public. Board of Education, 131 Ill. 2d at 472; Shelbyville, 96 Ill. 2d at 461. The test is whether the right the governmental unit seeks to assert "is in fact a right belonging to the general public, or whether it belongs only to the government or to some small and distinct subsection of the public at large." Shelbyville, 96 Ill. 2d at 462. Courts should consider who would benefit by the government's action and who would lose by its inaction. Shelbyville, 96 Ill. 2d at 462. Three factors must be addressed when determining whether a governmental entity is asserting a public or private right: (1) the effect of the interest on the public; (2) the obligation of the governmental entity to act on behalf of the public; and (3) the extent to which public funds must be expended. Board of Education, 131 Ill. 2d at 476; Shelbyville, 96 Ill. 2d at 464-65.

In support of its argument that it is seeking to enforce a public right, the Department relies on the Third District's decision in People ex rel. Martin v. Lipkowitz, 225 Ill. App. 3d 980, 589 N.E.2d 182 (1992) (Lipkowitz). In Lipkowitz the Department brought an action on behalf of five former employees of a company to recover unpaid vacation leave benefits and statutory penalties under the Act. Defendants successfully moved to dismiss the complaint for failure to bring suit within the five year statute of limitations contemplated by section 13-205 of the Code (735 ILCS 5/13-205 (West 2000)) (section 13-205). The circuit court found that the complaint was based on a private, rather than a public cause of action.

The Third District reversed, finding that "the public has a clear and definite interest in enforcing the [Act], and that the 'right' the director seeks to vindicate in an action brought on behalf of aggrieved employees belongs to the public" and therefore "suits brought by the Director under the [Act] are immune from statutory limitation periods of the Civil Practice Act." Lipkowitz, 225 Ill. App. 3d at 985. The Third District noted that the primary purpose of the Act "'is to ensure employees receive all earned benefits upon leaving their employer and the evil it seeks to remedy is the forfeiture of any of those benefits.'" Lipkowitz, 225 Ill. App. 3d at 985, quoting Mueller Co. v. Department of Labor, 187 Ill. App. 3d 519, 524, 543 N.E.2d 518 (1989). Enforcing the public policy underlying the Act inures to the benefit of Illinois workers and taxpayers. An employer's denial of earned benefits burdens the State financially and socially by decreasing the tax base and potentially depleting State assistance funds. Finally, the court noted "that by authorizing the Director to prosecute civil actions for unpaid benefits and penalties *** and to expend State resources to enforce the Act the legislature thereby expressed its intent to benefit the public generally." Lipkowitz, 225 Ill. App. 3d at 985.

Tri State Tours responds that this case is governed by People ex rel. Hartigan v. Agri-Chain Products, Inc., 224 Ill. App. 3d 298, 586 N.E.2d 535 (1991) (Agri-Chain), where the First District held that an action brought by the State to recover vacation pay for employees of a dissolved corporation under the Act was a private cause of action subject to the two year statute of limitations provided for in section 13-202. In Agri-Chain, the State filed a complaint seeking vacation pay as well as statutory penalties pursuant to section 14(b) of the Act. Defendants successfully moved to dismiss the complaint as time barred. On appeal the State argued that its complaint was not time barred because the action was brought in the name of the State and involved a public right which provided them immunity from any statute of limitations.

In determining whether the claim was public or private the appellate court analyzed the case in light of the factors enumerated in Board of Education and Shelbyville. As to the first factor, the court concluded that the interest asserted, i.e. recoupment of accrued vacation pay, was not one affecting the general public; but was an interest arising from a private employment contract. Only the interest of the 16 former employees would be affected directly by the outcome of the claim. The court further noted that the 16 former ...

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