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Weinberg v. Dep't of Employment Security

Court of Appeals of Illinois, First District, First Division

May 11, 2015

ADAM WEINBERG, Plaintiff-Appellee,
v.
THE DEPARTMENT OF EMPLOYMENT SECURITY; DIRECTOR OF DEPARTMENT OF EMPLOYMENT SECURITY; and BOARD OF REVIEW, Defendants-Appellants (William Blair and Company, LLC, Defendant)

Page 206

Appeal from the Circuit Court of Cook County. No. 12 L 51401. Honorable Robert Lopez Cepero, Judge Presiding.

Lisa Madigan, Attorney General, Carolyn E. Shapiro, Solicitor General, Chicago, Illinois, (Paul Racette, of counsel), for APPELLANTS.

Katten & Temple, LLP, Chicago, Illinois, (Nancy A. Temple, of counsel), for APPELLEE.

JUSTICE CUNNINGHAM delivered the judgment of the court, with opinion. Presiding Justice Delort and Justice Harris concurred in the judgment and opinion.

OPINION

Page 207

CUNNINGHAM, JUSTICE.

[¶1] This appeal involves the decision of the Board of Review (the Board) of the Department of Employment Security (the Department) finding Adam Weinberg ineligible for unemployment benefits because he was a partner in William Blair and Company (WBC). The Board found that Weinberg could not receive unemployment benefits because his compensation as a partner did not constitute wages as defined by section 500(E) of the Unemployment Insurance Act (the Act) (820 ILCS 405/500(E) (West 2010)). The circuit court reversed the Board's decision, finding that a portion of Weinberg's income constituted wages. On appeal, the Department contends the evidence established Weinberg's status as a partner, thus making him ineligible for benefits. We affirm the decision of the Board.

[¶2] In 2000, Weinberg began working for WBC as an equity sales representative. In 2007, Weinberg accepted WBC's invitation to become a principal in the company. In 2008, WBC underwent a restructuring in which it became a subsidiary of WBC Holdings (WBCH), which is a limited partnership. When WBCH was formed, Weinberg became 1 of 170 principals or partners. WBCH also had approximately 900 nonprincipal employees.

[¶3] On March 6, 2011, Weinberg filed an application for unemployment compensation. On May 6, 2011, a Department claims adjudicator found Weinberg eligible for unemployment benefits because he received remuneration for services that he performed during the base period for establishing benefits, which was the four quarters from October 1, 2009, to September 30, 2010. The claims adjudicator found that Weinberg received $354,230.70 in base period wages, comprised of $0 in the fourth quarter of 2009, and $118,076.90 in each of the first three quarters of 2010. The adjudicator found that Weinberg was compensated for his services, which were performed under the direction and control of WBC.

[¶4] WBC requested reconsideration, asserting Weinberg was ineligible for benefits because he was a partner in the company. On July 20, 2011, the Department claims adjudicator reversed its decision and found that Weinberg's compensation did not fall under the Act's definition of wages. In August 2011, Weinberg appealed that decision.

[¶5] A Department referee held a telephone hearing on Weinberg's claim over

Page 208

the course of four days between September and November 2011. Relevant testimony was provided by Weinberg and by two representatives of WBC/WBCH: John Smith, chief human ...


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