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Illinois Supreme Court Resolves Appeal on Illinois Employee Classification Act

 

Even after a law is passed, it is possible for citizens to challenge that law as unconstitutional. However, anyone who does so should make sure that they have good reasons for making such a claim and can back up their argument.

The Employee Classification Act was challenged as being unconstitutional in a recent lawsuit. The plaintiffs, Rhonda and Jack Bartlow, are general partners in Jack’s Roofing in Illinois. The other named plaintiffs, Ryan Towle and Charles Eric Modglin work for Jack’s Roofing. In 2008, the Department of Labor informed Jack’s Roofing that it would be conducting an investigation into reports it had received that the company was misclassifying its employees as independent contractors in violation of the Employee Classification Act. In connection with the investigation, the Department requested related contracts, work records, payroll, and payment records, which Jack’s Roofing provided. In February 2010, the Department sent Jack’s Roofing a notice of its “preliminary determination” which found that Jack’s Roofing had allegedly misclassified ten people, including Towle and Modgin, for between 8 and 160 each in 2008. The Department also provided a calculation of a “potential penalty” of $1,683. The Department requested that Jack’s Roofing respond within 30 days of the notice before it’s “final determination”.
Before those 30 days had passed, the Department sent Jack’s Roofing a notice of a second investigation and requested additional information.

The plaintiffs responded by filing a lawsuit against the Department. The lawsuit alleged that the way that the Department handled the investigation caused uncertainty on “how to continue their business in compliance with the Act” and requested a temporary restraining order and preliminary injunction against the Department. The lawsuit also claimed that the act is unconstitutional because it violates:

1. The special legislation clause of the Illinois Constitution because it subjects the construction industry to more stringent standards that other industries;
2. The due process clauses of the United States and Illinois Constitutions by failing to provide an opportunity to be heard and by being too vague;
3. The prohibition against bills of attainder in the United States Constitution because it is a legislative act which inflicts punishment without a judicial trial; and
4. The equal protection clauses of the United States and Illinois Constitutions because no other industry is subjected to the same standards when hiring independent contractors.

The Circuit Court and Appellate Court both ruled in favor of the Department, but granted the plaintiffs a stay pending appeal. The plaintiffs appealed the decision and the case went to the appellate court, which upheld the ruling of the lower court. The case then went before the Illinois Supreme Court.

Since the Department conducted its investigation of Jack’s Roofing, the Employee Classification Act has been amended to require written notice of the Department’s findings, provide a formal hearing under the Illinois Administrative Procedure Act, and subject a final decision to judicial review. Since this amendment solves one of the problems raised by the plaintiffs in their complaint, the Supreme Court determined that it renders the point moot.

The Court disagreed with the plaintiff’s assertion that the act was too vague, ruling instead that it was clear enough to allow a person of “reasonable intelligence” to be able to interpret it.

The other claims of unconstitutionality made by the plaintiffs were too vague and, as they plaintiffs did not bother to provide any kind of analysis to argue these points, the Court did not deem them to be worth reviewing. The Court upheld the rulings of the lower courts in favor of the Department of Labor.


The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, vacation pay, meal breaks, and tips. We have offices conveniently located in Oakbrook Terrace and Chicago, Illinois. Contact an Bartlett and Vernon Hills wage and hour lawyer at the Chicago Overtime Law Center today at 312-869-4095. We are looking to represent loan and mortgage brokers who have not been paid overtime and have been misclassified as managers.