ILLINOIS OFFICIAL REPORTS

Appellate Court

Bartlow v. Costigan, 2012 IL App (5th) 110519

Appellate Court

Caption

RHONDA BARTLOW and JACK BARTLOW, d/b/a Jack’s Roofing,

RYAN TOWLE, d/b/a Jack’s Siding and Windows, and CHARLES

ERIC MODGLIN, Plaintiffs-Appellants, v.JOSEPHCOSTIGAN, in His

Capacity as Director of Labor, State of Illinois, Defendant-Appellee.

 District & No. Fifth District

Docket No. 5-11-0519

Filed

Rehearing denied

August 21, 2012

September 20, 2012

Held

(Note: This syllabus

constitutes no part of

the opinion of the court

but has been prepared

by the Reporter of

Decisions for the

convenience of the

reader.)

The Illinois Employee Classification Act, which establishes criteria for

determining whether an individual performing services for a construction

contractor is an employee or an independent contractor, is not facially

unconstitutional under the due process clause, it does not improperly

delegate legislative authority, it is not unconstitutionally vague, and it

does not violate the equal protection clause or the prohibition against

special legislation.

Decision Under 

Review

Appeal from the Circuit Court of Franklin County, No. 10-CH-35; the

Hon. Robert W. Lewis, Judge, presiding.

Judgment Affirmed.
Counsel on

Appeal

Jana Yocom, of Jana Yocom, P.C., of Mt. Vernon, for appellants.

Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,

Solicitor General, and Mary E. Welsh, Assistant Attorney General, of

counsel), for appellee.

Marc R. Poulos, Melissa L. Binetti, and Kara M. Principe, all of Indiana,

Illinois, Iowa Foundation for Fair Contracting, of Countryside, amicus

curiae.

Panel JUSTICE STEWART delivered the judgment of the court, with opinion.

Justices Goldenhersh and Chapman concurred in the judgment and

opinion.

OPINION

¶ 1 This appeal concerns the constitutionalityof the Illinois Employee Classification Act (the

Act) (820 ILCS 185/1 to 999 (West 2008)). On March 12, 2010, the plaintiffs, Rhonda

Bartlow and Jack Bartlow, doing business as Jack’s Roofing, Ryan Towle, doing business

as Jack’s Siding and Windows, and Charles Eric Modglin, filed a complaint in the circuit

court of Franklin County, Illinois, for a declaratoryjudgment and for injunctive relief against

the defendant, Joseph Costigan, in his capacity as the Director of the Illinois Department of

Labor (the Department). The plaintiffs alleged in their complaint that the Department is

1

attempting to enforce the Act against them, but the Act is facially unconstitutional and

unenforceable. The circuit court granted the Department’s motion for a summary judgment.

We affirm.

¶ 2 BACKGROUND

¶ 3 The Act was enacted on January 1, 2008, and it establishes criteria to determine whether

an individual performing services for a construction contractor is an employee of the

contractor or is an independent contractor. The Act seeks to ensure that workers in the

construction industryare offered protections under numerous labor laws, including minimum

wage, overtime, workers’ compensation, and unemployment insurance, and are not

misclassified as independent contractors by the contractor in orderto avoid tax and labor law

As a matter of law, Joseph Costigan, the current Director of the Illinois Department of 1

Labor, has been substituted as a party in place of Catherine M. Shannon, the originally named

defendant and Costigan’s predecessor. 735 ILCS 5/2-1008(d) (West 2010).

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obligations. 820 ILCS 185/3 (West 2010); 56 Ill. Adm. Code 240.100 (2008).

¶ 4 Rhonda and Jack Bartlow are spouses and general partners in a general partnership that

has been doing business as Jack’s Roofing since 1977. The Bartlows are in the business of

installing siding, windows, seamless gutters, and roofs. Ryan Towle and Charles Eric

Modglin perform siding, window, and roof installation services for the Bartlows. The

Bartlows maintain that Towle and Modglin are not their employees, but are subcontractors

who operate their own businesses as sole proprietors. At the time of the lawsuit, the

Department was investigating whether the Bartlows had misclassified Towle, Modglin, and

others as independent contractors when they should have been classified as employees under

the Act.

¶ 5 On September 3, 2008, the Department sent the Bartlows a “notice of investigation and

request for documents.” The Department’s request for documents sought documents

concerning their relationship with Towle, Modglin, and other persons who the Department

“contends are or were [Jack’s Roofing] employees,” not subcontractors. The investigation

was identified as “File Number: 2009-CA-JD08-0017.” On October 15, 2008, the Bartlows

furnished the Department numerous documents it had requested. They did not have

possession of documents related to the capitalization of their subcontractors, information

concerning other customers of the subcontractors, or the subcontractors’ income tax

compliance. In April 2009, a conciliator working for the Department conducted a telephone

interview with Rhonda Bartlow and with various individuals who had contracted with the

Bartlows.

¶ 6 On February 16, 2010, the Department sent the Bartlows a “Notice of Preliminary

Investigative Findings,” stating that it had made a preliminary determination that the

Bartlows “had failed properly to classify ten subcontractors in violation of the Act.” The

notice also stated that the Bartlows “may be assessed a fine of $1,683,000” and requested a

response within 30 days of the date of the notice. The notice furtherstated that “upon receipt

and review of the response, [the Department would] issue a written decision informing the

parties of the final determination in the matter.”

¶ 7 On March 1, 2010, the Department sent the Bartlows a notification of a second

investigation “of a complaint regarding work done at 311 West Grand, Carterville, Illinois.”

In this second notification, the Department requested “production of documents within 15

calendar days of the date of the letter” and identified the second investigation as “File No.

2010-CA-RT12-0050.”

¶ 8 On March 12, 2010, the Bartlows, Towle, and Modglin filed a complaint against the

Department, requesting a declaratory judgment and injunctive relief. They alleged that the

Department had not provided them an “opportunity for hearing,” that their telephone calls

to the Department requesting settlement discussions had not been returned, and that the Act

and the pending investigations have created uncertainty concerning how they are to conduct

their business.

¶ 9 The plaintiffs’ five-count complaint maintained that the Act violates the due process

clauses of the United States and Illinois Constitutions, the special legislation clause of the

Illinois Constitution, the equal protection clauses of the United States and Illinois

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Constitutions, and the prohibition of bills of attainder in the United States Constitution. The

plaintiffs also filed a motion for a temporary restraining order (TRO) and a preliminary

injunction, requesting the court to enjoin the enforcement of the Act during the pendency of

the action.

¶ 10 On March 15, 2010, the circuit court conducted a contested hearing on the plaintiffs’

request for a TRO and denied the motion. The plaintiffs filed an interlocutory appeal

pursuant to Illinois Supreme Court Rule 307 (eff. Feb. 26, 2010). On March 25, 2010, on the

expedited timetable required by Rule 307(d), we reversed the circuit court’s denial of the

plaintiffs’ TRO request. Bartlow v. Shannon, 399 Ill. App. 3d 560, 927 N.E.2d 88 (2010).

We concluded that the plaintiffs’ complaint raised a “fair question” concerning whether the

Act violated procedural due process by granting the Department the power to assess fines,

penalties, and sanctions without affording the plaintiffs with a meaningful hearing. Id. at 571,

927 N.E.2d at 98. We did not determine the merits of the plaintiffs’ due process claim, only

that it raised a “fair question.” In addition, we did not address any of the plaintiffs’ other

constitutional claims. We remanded the case and directed the circuit court to enter a TRO

until it conducted a full hearing on the plaintiffs’ request for a preliminary injunction.

¶ 11 On remand, the plaintiffs did not request a hearing on their motion for a preliminary

injunction. Instead, the plaintiffs and the Department each filed cross-motions for summary

judgment, and the parties agreed that no evidentiary hearing was necessary to determine the

plaintiffs’ constitutional issues. On October 20, 2011, the circuit court entered a

memorandum of decision with respect to the parties’ cross-motions for a summaryjudgment,

finding that the Act did not violate the guarantees of due process and equal protection or the

prohibitions against special legislation and bills of attainder.

¶ 12 The court noted in its memorandum that the Act granted the Department the power to

assess penalties and sanctions and that there is no provision in the Act for any type of

administrative hearing. However, the court ruled as follows:

“The instant case presents a facial challenge only. No as applied challenge is

presented in Plaintiffs’ Second Amended Complaint. The Department is not precluded

from giving Plaintiffs notice and a hearing if it so chooses. Therefore, *** the court finds

[the Act] is not facially unconstitutional.”

¶ 13 On November 14, 2011, the circuit court entered its final order based on its memorandum

of decision. The court’s final order found that the Act was not unconstitutional special

legislation, did not violate the equal protection clause of the Illinois or United States

Constitution, does not constitute a bill of attainder, and is not facially unconstitutional under

the due process clauses of the United States and Illinois Constitutions. The court entered a

judgment on all counts of the plaintiffs’ complaint in favor of the Department. The plaintiffs

filed a timely notice of appeal.

¶ 14 DISCUSSION

¶ 15 The plaintiffs argue that the circuit court erred in granting the Department’s motion for

summary judgment and denying their motion for summary judgment because the Act is

facially unconstitutional under both the due process and equal protection clauses of the

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United States and Illinois Constitutions. The plaintiffs also argue that the Act is an

unconstitutional special legislation in violation of the Illinois Constitution. The plaintiffs

appeal the circuit court’s judgment granting a summary judgment in favor of the Department

on their constitutional challenges and denying their motion for summary judgment.

¶ 16 “Summary judgment is proper when the pleadings, depositions, and affidavits

demonstrate that no genuine issue of material fact exists and that the moving party is entitled

to judgment as a matter of law.” Schultz v. Illinois Farmers Insurance Co., 387 Ill. App. 3d

622, 625, 901 N.E.2d 957, 960 (2009). “The court must construe the evidence strictly against

the movant and liberallyin favor of the opponent.” (Internal quotation marks omitted.) Gatlin

v. Ruder, 137 Ill. 2d 284, 293, 560 N.E.2d 586, 589 (1990). The review of the grant of

summary judgment is de novo. Ioerger v. Halverson Construction Co., 232 Ill. 2d 196, 201,

902 N.E.2d 645, 648 (2008).

¶ 17 In addition, applicable to our review in the present case, we note that the constitutionality

of a statute is a question of law that we review de novo. Irwin Industrial Tool Co. v.

Department of Revenue, 238 Ill. 2d 332, 340, 938 N.E.2d 459, 465 (2010). “Statutes are

presumed to be constitutional, and we must construe a statute so as to uphold its

constitutionality if it is reasonably possible to do so. The party challenging the validity of a

statute has the burden of clearly establishing a constitutional violation.” Id.

¶ 18 I.

¶ 19 The Statutory and Regulatory Framework of the Act

¶ 20 We begin our analysis of the constitutionality of the Act by first outlining the statutory

and regulatory framework of the Act. As noted above, the Act is designed to address

problems in the construction industry that arise when contractors improperly classify

employees as independent contractors in order to avoid certain laws and regulations that are

designed to protect employees. The Act grants the Department the power to conduct

investigations in connection with the administration and enforcement of the Act and provides

that the Department has the duty to enforce the provisions of the Act. 820 ILCS 185/25

(West 2008).

¶ 21 A.

¶ 22 The Department’s Investigatory Powers

¶ 23 An investigation under the Act begins when an interested party files a complaint with the

Department against an employer if there is a reasonable belief that the employer is in

violation of the Act. 820 ILCS 185/25 (West 2008). The Department itself may also file a

complaint alleging a violation of the Act. 56 Ill. Adm. Code 240.200 (2008).

¶ 24 Upon the filing of a complaint, the Department reviews the complaint to determine

whether there is cause for an investigation. 56 Ill. Adm. Code 240.220(a) (2008). If the

Department determines that there is cause for an investigation, it is obligated to investigate

to ascertain the facts relating to the alleged violation and determine whether a violation has

occurred. 56 Ill. Adm. Code 240.300 (2008). The Department may investigate using “any

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method or combination of methods deemed suitable at the discretion of the Department.” 56

Ill. Adm. Code 240.300 (2008). “The investigation shall include a written notice to the

contractor of the substance of the complaint and an opportunity to present any information

the contractor wishes the Department to consider in reaching its determination.” 56 Ill. Adm.

Code 240.300 (2008). If a contractor refuses to cooperate with an investigation, “the

Department may make a finding that the Act has been violated based upon the evidence

available to the Department.” 56 Ill. Adm. Code 240.300(a) (2008).

¶ 25 “Before making a final determination of a violation, the Department shall notify the

contractors of the substance of the Department’s investigation and afford the contractors an

opportunity to present any written information, within 30 calendar days, for the Department

to consider in reaching its determination.” 56 Ill. Adm. Code 240.300(d) (2008). “As part of

its investigation, the Department may convene a fact-finding conference in person or by

telephone for the purpose of obtaining additional information or evidence, identifying the

issues in dispute, ascertaining the positions of the parties and exploring the possibility of

settlement.” 56 Ill. Adm. Code 240.310 (2008). All parties are to be given notice of the factfinding conference at least 15 days prior to the conference, and each party may be

accompanied by the party’s attorney. 56 Ill. Adm. Code 240.310(a), (b) (2008).

¶ 26 B.

¶ 27 The Department’s Enforcement Powers Following Its Investigation

¶ 28 The Act and its regulations not only grant the Department the power to investigate

alleged violations of the Act, but also give the Department a list of enforcement remedies it

may seek once it determines that there has been a violation of the Act. Section 25(b) of the

Act provides as follows:

“Whenever the Department believes upon investigation that there has been a violation

of any of the provisions of this Act or any rules or regulations promulgated under this

Act, the Department may: (i) issue and cause to be served on any party an order to cease

and desist from further violation of the Act, (ii) take affirmative or other action as

deemed reasonable to eliminate the effect of the violation, (iii) collect the amount of any

wages, salary, employment benefits, or other compensation denied or lost to the

individual, and (iv) assess any civil penalty allowed by this Act. The civil penalties

assessed by the Department as well as any other relief requested by the Department shall

be recoverable in an action brought in the name of the people of the State of Illinois by

the Attorney General.” 820 ILCS 185/25(b) (West 2010).

¶ 29 The regulations further provide that the Department mayseek a voluntarysettlement with

the contractor that eliminates the unlawful practice and provides appropriate relief;

recommend the commencement of a civil action; issue a cease-and-desist order; assess civil

penalties; collect denied or lost wages, salary, employment benefits, or compensation owed

to the employee; place the contractor on a debarment list pursuant to section 42 of the Act

(820 ILCS 185/42 (West 2010)); and/or take any other reasonable action to eliminate the

unlawful practice and/or remedy the effect of the violation. 56 Ill. Adm. Code 240.510

(2008).

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¶ 30 When the Department makes a decision that a violation has occurred and has determined

to seek remedies for the violation, it must send a notice to all parties. 56 Ill. Adm. Code

240.500(c) (2008). The Act’s regulations require the Department to “seek voluntary

compliance by the contractor for any violations of the Act,” but if “the contractor fails to pay

the penalties or complywith the remedies specified in the notice within 30 calendar days, the

Department may within 180 days refer the matter to the Attorney General for enforcement.”

56 Ill. Adm. Code 240.500(d) (2008). Section 35 of the Act states that, if a contractor refuses

to obey a “valid order of the Department issued under this Act,” the Department can obtain

a court order commanding the contractor to obey the order or be adjudged guilty of contempt

of court and punished accordingly. 820 ILCS 185/35 (West 2010).

¶ 31 The contractor can seek a review of the Department’s final determination by filing a

written request for an “informal conference” with the Director of the Department. 56 Ill.

Adm. Code 240.500(e) (2008). The informal conference will be conducted by the Director

and/or the Department’s chief legal counsel. 56 Ill. Adm. Code 240.500(e)(1) (2008). At the

informal conference, the contractor can “present written or oral information and arguments

as to why the Department’s final determination should be amended or reconsidered.” 56 Ill.

Adm. Code 240.500(e)(1) (2008).

¶ 32 Section 42 of the Act provides that when the Department determines that the contractor

has committed a second or subsequent violation within five years of an earlier violation, the

Department must place the contractor on a debarment list posted on its official website. 820

ILCS 185/42 (West 2010). Specifically, “the Department shall add the employer or entity’s

name to a list to be posted on the Department’s official website. Upon such notice, the

Department shall notify the violating employer or entity. No state contract shall be awarded

to an employer or entity appearing on the list until 4 years have elapsed from the date of the

last violation.” 820 ILCS 185/42 (West 2010); 56 Ill. Adm. Code 240.530 (2008).

¶ 33 II.

¶ 34 Procedural Due Process

¶ 35 The plaintiffs maintain that the statutory and regulatory scheme under the Act is facially

unconstitutional under the due process clauses of the United States Constitution and the

Illinois Constitution. The plaintiffs do not challenge the Act as applied, only on its face.

Specifically, the plaintiffs maintain that the Act and its regulations grant the Department the

powerto impose significant penalties and sanctions upon its finding of a violation of the Act,

but the Act does not provide an accused with a sufficient hearing during the Department’s

investigative process.

¶ 36 We begin our constitutional analysis with the presumption that the statute is

constitutional. Irwin Industrial Tool Co., 238 Ill. 2d at 340, 938 N.E.2d at 465. A statute is

facially unconstitutional only if “ ‘no set of circumstances exists under which the Act would

be valid. The fact that the [statute] might operate unconstitutionally under some conceivable

set of circumstances is insufficient to render it wholly invalid’ ” except in the context of the

first amendment. In re C.E., 161 Ill. 2d 200, 210-11, 641 N.E.2d 345, 350 (1994) (quoting

United States v. Salerno, 481 U.S. 739, 745 (1987)). “[A] challenge to the facial validity of

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a statute is the most difficult challenge to mount successfully ***.” People v. One 1998

GMC, 2011 IL 110236, ¶ 20, 960 N.E.2d 1071.

¶ 37 While we must construe a statute so as to uphold its constitutionality if it is reasonably

possible to do so (Irwin Industrial Tool Co., 238 Ill. 2d at 340, 938 N.E.2d at 465), this rule

of construction is not a license to rewrite legislation. In re Branning, 285 Ill. App. 3d 405,

410, 674 N.E.2d 463, 467 (1996). Nonetheless, we will resolve any doubt as to the statute’s

construction in favor of its validity. People v. Boeckmann, 238 Ill. 2d 1, 6-7, 932 N.E.2d 998,

1001 (2010).

¶ 38 The plaintiffs’ due process challenge raises procedural due process concerns. The due

process clauses of the United States and Illinois Constitutions provide that the State may not

“deprive any person of life, liberty, or property, without due process of law.” U.S. Const.,

amend. XIV; Ill. Const. 1970, art. I, § 2. The guarantee of due process normally compels the

government to provide notice and an opportunity to be heard before a person is deprived of

property. United States v. James Daniel Good Real Property, 510 U.S. 43, 47 (1993).

¶ 39 “Procedural due process claims concern the constitutionality of the specific procedures

employed to deny a person’s life, liberty or property.” Segers v. Industrial Comm’n, 191 Ill.

2d 421, 434, 732 N.E.2d 488, 496 (2000). Procedural due process is meant to protect people

from the mistaken or unjustified deprivation of life, liberty, or property, not from the

deprivation itself. Id. “To survive a facial challenge, the procedures a statute incorporates

must at least be adequate to authorize the deprivation with respect to some of the persons

subject to it.” In re Marriage of Beyer, 324 Ill. App. 3d 305, 318, 753 N.E.2d 1032, 1043

(2001). “At a minimum, due process requires that a deprivation of property cannot occur

without providing notice and an opportunity for a hearing appropriate to the nature of the

case.” Id.

¶ 40 “Due process of law is served where there is a right to present evidence and argument in

one’s own behalf, a right to cross-examine adverse witnesses, and impartiality in rulings

upon the evidence which is offered.” Piotrowski v. State Police Merit Board, 85 Ill. App. 3d

369, 373, 406 N.E.2d 863, 866 (1980). “Before a person is deprived of a protected interest,

he must be afforded opportunity for some kind of a hearing, ‘except for extraordinary

situations where some valid governmental interest is at stake that justifies postponing the

hearing until after the event.’ ” Board of Regents of State Colleges v. Roth, 408 U.S. 564, 570

n.7 (1972) (quoting Boddie v. Connecticut, 401 U.S. 371, 379 (1971)). A fundamental

requirement of due process is the opportunity to be heard “at a meaningful time and in a

meaningful manner.” Armstrong v. Manzo, 380 U.S. 545, 552 (1965).

¶ 41 In evaluating procedural due process claims, the court uses a three-part test, under which

the court (1) asks the threshold question whether there exists a liberty or property interest

which has been interfered with bythe State, (2) examines the risk of an erroneous deprivation

of such an interest through the procedures already in place, while considering the value of

additional safeguards, and (3) addresses the effect the administrative burden would have on

the State’s interest. Segers, 191 Ill. 2d at 434, 732 N.E.2d at 496. However, as the

Department notes, these procedural safeguards are not triggered unless and until an agency

is adjudicating legal rights. Securities & Exchange Comm’n v. Jerry T. O’Brien, Inc., 467

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U.S. 735, 742 (1984) (the due process clause is not implicated when an administrative

agency, without notifying a person under investigation, uses its subpoena power to gather

evidence; the due process clause is not implicated under such circumstances because an

administrative investigation adjudicates no legal rights).

¶ 42 In response to the plaintiffs’ procedural due process argument, the Department maintains

that its role under the Act is limited to an investigatory function and that it has no power to

adjudicate any claim that a contractor has misclassified an employee. The Department notes

that it is not authorized to issue a final administrative determination that is subject to judicial

review under the Administrative Review Law (735 ILCS 5/3-101 to 3-113 (West 2010)).

Instead, the Department argues that if its investigation leads it to a finding that there is a

violation of the Act, it may take reasonable action to eliminate or remedy the violation by

seeking, among other things, a voluntary settlement, issue a cease-and-desist order, assess

civil penalties, or collect the employee’s lost wages or benefits. 820 ILCS 185/25(b) (West

2010). It argues that these powers are not adjudicatory powers. The Department cites World

Painting Co. v. Costigan, 2012 IL App (4th) 110869, 967 N.E.2d 485, in support of its

argument that it has no adjudicatory powers, only investigative powers, under the Act.

¶ 43 In World Painting Co., the trial court enjoined the Department from enforcing the Act

against the plaintiffs based on our decision in Bartlow v. Shannon, 399 Ill. App. 3d 560, 927

N.E.2d 88 (2010). On appeal, the World Painting Co. court noted that the requirements of

notice and the opportunity to be heard are not implicated by executive action that cannot

result in an administrative adjudication of rights. World Painting Co., 2012 IL App (4th)

110869, ¶ 15, 967 N.E.2d 485. In that case, the Department entered into an agreement with

the plaintiff that, under the Act, it could “only conduct a no-consequences investigation.” Id.

¶ 22, 967 N.E.2d 485. The court described the parties’ agreed interpretation of the Act as

follows:

“Defendants liken the Department’s role to that of the police in a criminal investigation.

The Department, according to defendants, may subpoena witnesses and documents and

inspect businesses toward determining whether to recommend the commencement of an

action for civil or criminal penalties in the trial court. If the Department found a

violation, defendants’ interpretation would allow the Department to conduct informal

negotiations with a firm toward settling on a penalty. However, if the firm were unwilling

to negotiate, the Department’s sole recourse would be in ‘de novo’ court proceedings in

which the Department’s findings would be inadmissible. Defendants argue the

Department’s investigation under the Act does not require due-process protections such

as notice and an opportunity to be heard because the Department itself cannot adjudicate

a firm’s rights or liabilities.” Id. ¶ 22, 967 N.E.2d 485.

¶ 44 The World Painting Co. court reversed the trial court’s injunction because “[t]he parties

have agreed to a constitutional plan for conducting their interaction as the Department

investigates plaintiff’s possible violations of the Act.” Id. ¶ 24, 967 N.E.2d 485. Under the

parties’ agreement, “the Department is forbidden from making any adjudicatory findings of

plaintiff’s liability.” Id. Accordingly, the court concluded that “due process is not implicated

by the Department’s investigation in this case.” Id.

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¶ 45 When the present case came before this court in Bartlow, the Department argued that the

Act met the requirements of procedural due process because any party can request an

“informal conference” after the Department issues its final determination, and the contractor

may present written or oral information and arguments at this informal conference. Bartlow,

399 Ill. App. 3d at 572, 927 N.E.2d at 99. We concluded that this procedure appeared to be

inadequate because the Act authorized the Department, upon its finding of a violation, to

issue cease-and-desist orders, assess civil penalties, and levyother sanctions, but the informal

conference did not provide the contractor with an opportunity to confront accusers, examine

witnesses, or inspect the evidence offered against it. Id.

¶ 46 In the present appeal, the Department advances an interpretation of the Act that is similar

to the parties’ agreed interpretation in World Painting Co. The Department maintains that

it has no adjudicatory power; it investigates but has no authority outside of court to enforce

any finding that there has been a violation of the Act. In addition, any circuit court

proceeding to enforce the Act is a de novo proceeding in which the Department has the

burden of proving a violation of the Act. Also, the Department maintains that, pursuant to

section 80 of the Act (820 ILCS 185/80 (West 2010)), its finding that there has been a

violation of the Act is not admissible in a court proceeding seeking sanctions for a violation

of the Act. The Department describes its investigative power as a “no consequences power,”

meaning that there are no consequences as a result of its investigation and no change in

status. The Department’s power to assess fines under the Act, the Department argues, is

merely the power to ask the contractor to settle the matter outside of court. Its assessment of

fines can be ignored by the contractor with no consequences. Once the Department brings

an action in the circuit court and proves that a violation of the Act has occurred, the circuit

court will decide whether any fines or sanctions should be assessed and, if so, what they

should be.

¶ 47 The circuit court disagreed with the Department’s interpretation of the statute because,

under its reading of the Act, it grants the Department the power to assess penalties and

sanctions. Nonetheless, the circuit court cited East St. Louis Federation of Teachers, Local

1220 v. East St. Louis School District No. 189 Financial Oversight Panel, 178 Ill. 2d 399,

687 N.E.2d 1050 (1997), and held that the Act was not facially unconstitutional because

“[t]he Department is not precluded from giving Plaintiffs notice and a hearing if it so

chooses.”

¶ 48 In East St. Louis, the supreme court addressed a statute that gave an oversight panel the

authority to remove school board members from their office for failure to follow a valid

order of the panel. Id. at 405-06, 687 N.E.2d at 1055-56. The supreme court held that when

the oversight panel exercised its power to terminate the term of a school board member’s

term of office, it must afford the office holder due process. Id. at 418-19, 687 N.E.2d at 1061.

However, the court noted that the statute did not provide any notice and procedure

requirements, which created a great risk of erroneous deprivation of a school boardmember’s

rights. Id. at 419, 687 N.E.2d at 1062. The court held that the school board member was

entitled to notice of the panel’s pending decision to remove him or her from office and was

entitled to procedural safeguards. Id. at 420, 687 N.E.2d at 1062.

¶ 49 Nonetheless, the supreme court held that the statute was not unconstitutional on its face

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because nothing in the statute prevented the panel from giving the school board member

notice and a hearing before removing him from office. Id. at 421, 687 N.E.2d at 1063. The

court stated, “Given that the Panel was free to give notice or hearing if it so chose, [the

statute] is not facially unconstitutional.” Id.

¶ 50 In the present case, the Department agrees that if the Act authorized it to adjudicate

liability, procedural safeguards would be necessary. We share the circuit court’s concern that

the language of the statute grants the Department more than investigatory powers. However,

as the supreme court emphasized in East St. Louis, we must interpret statutes as

constitutional if we can reasonably do so. Id. Therefore, we adopt the interpretation of the

Act offered by the Department and hold that the statute is not facially unconstitutional under

the due process clause.

¶ 51 Under the Department’s interpretation of the Act, it functions only in an investigative

role. If it finds that a violation of the Act has occurred, it has no power to assess any fines or

impose any sanctions, but can only seek a voluntary settlement with and compliance by the

contractor. If the Department cannot reach an agreement with the contractor, it must seek any

penalties, sanctions, or other remedies by bringing an action in the circuit court. The

Department has the burden of proving a violation of the Act, and the circuit court decides if

penalties or sanctions are justified and what penalties, sanctions, or other remedies to impose.

¶ 52 Section 80 of the Act states that the Department’s “finding made pursuant to this Act is

for the purpose of enforcing this Act and may not be admissible or binding against a party

in anyother proceeding.” (Emphasis added.) 820 ILCS 185/80 (West 2010). The Department

interprets section 80 of the Act to mean that its findings are not admissible in any court

proceeding, including an action brought bytheDepartment pursuant to the authorityprovided

in section 25 of the Act. In addition, although the Act authorizes the Department to serve “an

order to cease and desist from further violation of the Act,” under the Department’s

interpretation of the Act, this is a no-consequences order that does not change the status of

the parties.

¶ 53 The Department’s interpretation of the Act clearly meets due process requirements

because a contractor accused of violating the Act is afforded all of the due process

protections contained in the Code of Civil Procedure (735 ILCS 5/1-101 to 22-105 (West

2010)) and the Code of Criminal Procedure of 1963 (725 ILCS 5/100-1 to 126-1 (West

2010)) before he or she can be deprived of life, liberty, or property. Accordingly, we affirm

the circuit court’s decision, holding that the Act is not facially unconstitutional under the due

process clauses of the United States and Illinois Constitutions.

¶ 54 III.

¶ 55 Vagueness/Unlawful Delegation of Legislative Power

¶ 56 The next argument the plaintiffs raise is that the Act is unconstitutionally vague under

the due process clauses of the United States and Illinois Constitutions. U.S. Const., amend.

XIV; Ill. Const. 1970, art. I, § 2. The plaintiffs also argue that the statute’s criteria for

nonemployees are so vague, indefinite, and uncertain that they impermissibly delegate

legislative power to the Department. See Ill. Const. 1970, art. II, § 1 (“No branch shall

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exercise powers properlybelonging to another.”). We disagreewith the plaintiffs’ assertions.

¶ 57 The issue of vagueness as it relates to due process and the question of unlawful

delegation of legislative authority are issues that are intertwined. People v. Gurell, 98 Ill. 2d

194, 210, 456 N.E.2d 18, 25 (1983). A statute is unconstitutionally vague if it does not

provide sufficient standards to guide the administrative body in the exercise of its functions.

Id. A statute must be sufficiently clear to (1) provide people of ordinary intelligence with

reasonable opportunity to understand what conduct it prohibits so that one may act

accordingly and (2) provide reasonable standards to restrict the discretion of governmental

authorities who apply the law. Owens v. Department of Human Rights, 403 Ill. App. 3d 899,

928, 936 N.E.2d 623, 647 (2010).

¶ 58 With respect to unlawful delegation of legislative power, the statute in question must

identify three factors: (1) the persons or activities potentially subject to regulation, (2) the

harm sought to be prevented, and (3) the general means available to the administrator to

prevent the identified harm. Gurell, 98 Ill. 2d at 210-11, 456 N.E.2d at 25. “While the

legislature cannot delegate its legislative power to determine what the law should be, it may

delegate the authority to execute the law.” East St. Louis, 178 Ill. 2d at 423, 687 N.E.2d at

1063.

¶ 59 In the present case, the Act is neither unconstitutionally vague nor an unlawful delegation

of legislative power. The statute clearly defines the persons subject to its regulation. 820

ILCS 185/5 (West 2010). It contains detailed standards to guide the Department and the

circuit court in determining whether a contractor has misidentified an employee as an

independent contractor. 820 ILCS 185/10 (West 2010). The language of the Act provides a

contractor of reasonable intelligence the opportunity to understand what conduct it prohibits

and is specific enough to restrict arbitrary and discriminatory enforcement by the

Department. 820 ILCS 185/20 (West 2010). The harm sought to be prevented by the Act is

clearly defined (820 ILCS 185/3 (West 2010)) and is also evident from its provisions.

¶ 60 As noted above, the Department’s role under the Act is limited to an investigative role.

Its enforcement powers are limited to either a settlement with the contractor or the filing of

a de novo court proceeding in which it has the burden of proving a violation of the Act. If the

Department proves a violation, the fines, sanctions, and remedies that the circuit court can

order are spelled out in section 25 of the Act. 820 ILCS 185/25 (West 2010). This legislative

scheme sets out sufficient standards and is not an improper delegation of legislative authority

or unconstitutionally vague.

¶ 61 Section 10(a) of the Act states that “an individual performing services for a contractor

is deemed to be an employee of the employer except as provided in subsections (b) and (c)

of this Section.” 820 ILCS 185/10(a) (West 2010). Subsection (b) provides that an

“individual performing services for a contractor is deemed to be an employee of the

contractor unless it is shown that:

(1) the individual has been and will continue to be free from control or direction

over the performance of the service for the contractor, both under the individual’s

contract of service and in fact;

(2) the service performed by the individual is outside the usual course of services

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performed by the contractor; and

(3) the individual is engaged in an independently established trade, occupation,

profession or business; or

(4) the individual is deemed a legitimate sole proprietor or partnership under

subsection (c) of this Section.” 820 ILCS 185/10(b) (West 2010).

¶ 62 Subsection (c) provides that the

“sole proprietor or partnership performing services for a contractor as a subcontractor is

deemed legitimate if it is shown that:

(1) the sole proprietor or partnership is performing the service free from the

direction or control over the means and manner of providing the service, subject only

to the right of the contractor for whom the service is provided to specify the desired

result;

(2) the sole proprietor or partnership is not subject to cancellation or destruction

upon severance of the relationship with the contractor;

(3) the sole proprietor or partnership has a substantial investment of capital in the

sole proprietorship or partnership beyond ordinary tools and equipment and a

personal vehicle;

(4) the sole proprietor or partnership owns the capital goods and gains the profits

and bears the losses of the sole proprietorship or partnership;

(5) the sole proprietor or partnership makes its services available to the general

public or the business community on a continuing basis;

(6) the sole proprietor or partnership includes services rendered on a Federal

Income Tax Schedule as an independent business or profession;

(7) the sole proprietor or partnership performs services for the contractor under

the sole proprietorship’s or partnership’s name;

(8) when the services being provided require a license or permit, the sole

proprietor or partnership obtains and pays for the license or permit in the sole

proprietorship’s or partnership’s name;

(9) the sole proprietor or partnership furnishes the tools and equipment necessary

to provide the service;

(10) if necessary, the sole proprietor or partnership hires its own employees

without contractor approval, pays the employees without reimbursement from the

contractor and reports the employees’ income to the Internal Revenue Service;

(11) the contractor does not represent the sole proprietorship or partnership as an

employee of the contractor to its customers; and

(12) the sole proprietor or partnership has the right to perform similar services for

others on whatever basis and whenever it chooses.” 820 ILCS 185/10(c) (West

2010).

¶ 63 The language of section 10 provides contractors with sufficient guidance to allow them

to meet the requirements of the Act. A person working for a contractor can qualify as an

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independent contractor under subsection (b) or subsection (c). The contractor can determine,

prior to entering into a subcontract, whether a person performing work qualifies as an

independent contractor under either section. If not, then the person has to be treated as an

employee. Although some of the information in subsection (c) is solely within the control of

the potential subcontractor at the time the contracts are entered into, the plaintiffs do not

explain why a contractor cannot require the subcontractor to furnish the information before

entering into the subcontract to ensure that he or she is properly classified as either an

independent contractor or an employee.

¶ 64 Accordingly, the Act provides contractors of ordinary intelligence with a reasonable

opportunity to understand what conduct it prohibits and provides reasonable standards to

restrict the discretion of governmental authorities who apply the law. Because the language

of the statute defines the individuals who are potentially subject to its regulation, the harm

it seeks to prevent, and the general means available to the Department to prevent the

identified harm, it does not improperly delegate legislative authority and is not

unconstitutionally vague.

¶ 65 IV.

¶ 66 Equal Protection/Special Legislation

¶ 67 The plaintiffs’ final arguments are that the Act violates the special legislation clause of

the Illinois Constitution and the equal protection clauses of the United States and Illinois

Constitutions.

¶ 68 “The special legislation clause [(Ill. Const. 1970, art. IV, § 13)] expressly prohibits the

General Assembly from conferring a special benefit or exclusive privilege on a person or a

group of persons to the exclusion of others similarly situated.” Best v. Taylor Machine

Works, 179 Ill. 2d 367, 390-91, 689 N.E.2d 1057, 1069 (1997). The special legislation clause

is designed to prevent arbitrary classifications by the legislature that discriminate in favor of

a select group without a sound, reasonable basis. Id. at 391, 689 N.E.2d at 1069-70. A special

legislation challenge and an equal protection challenge are generally judged under the same

standards. Id. at 393, 689 N.E.2d at 1070.

¶ 69 The equal protection clauses in the federal and Illinois constitutions (U.S. Const., amend.

XIV; Ill. Const. 1970, art. I, § 2) require the government to treat similarly situated individuals

in a similar manner. Byrd v. Hamer, 408 Ill. App. 3d 467, 490, 943 N.E.2d 115, 136 (2011).

The analysis is the same under both the United States and Illinois Constitutions. Jacobson

v. Department of Public Aid, 171 Ill. 2d 314, 322, 664 N.E.2d 1024, 1028 (1996). The

guarantee of equal protection “does not preclude the State from enacting legislation that

draws distinctions between different categories of people, but it does prohibit the government

from according different treatment to persons who have been placed by a statute into

different classes on the basis of criteria wholly unrelated to the purpose of the legislation.”

Id.

¶ 70 The parties agree that the court is to employ a rational basis review in reviewing the

plaintiffs’ equal protection challenge. See Clark v. Jeter, 486 U.S. 456, 461 (1988). To

withstand rational basis scrutiny, the statutory classification must be rationally related to a

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legitimate government purpose. Id. Under the rational basis test, we give high deference to

the judgments made by the legislature. Village of Lake Villa v. Stokovich, 211 Ill. 2d 106,

125, 810 N.E.2d 13, 26 (2004). “So long as there is a conceivable basis for finding the statute

rationally related to a legitimate state interest, the law must be upheld.” Id. at 126, 810

N.E.2d at 26. The “standards used to determine an equal protection claim are also applicable

when evaluating a claim that the statute constitutes special legislation under our Illinois

constitution.” American National Bank & Trust Co. of Chicago v. Anchor Organization for

Health Maintenance, 210 Ill. App. 3d 418, 425, 569 N.E.2d 128, 133-34 (1991).

¶ 71 The plaintiffs argue that the Act is unconstitutional because it creates differential

treatment of laborers in the construction industry as opposed to laborers in other fields, and

this differential treatment is not rationally related to the goals of the legislation. We disagree

and believe that the statute passes constitutional muster under equal protection and special

legislation standards.

¶ 72 As noted above, the Act was enacted “to address the practice of misclassifying employees

as independent contractors.” 820 ILCS 185/3 (West 2008). The State has a legitimate interest

in preventing employee misclassification because employees who are misclassified as

independent contractors lose the benefit of worker protection laws, including minimum

wage, discrimination, and occupational safety laws. In addition, the State has an interest in

the revenue it loses from the misclassification, including unemployment insurance

contributions and payroll taxes. The State also has an interest in seeing that contractors who

properly classify employees are not at a competitive disadvantage to contractors who

misclassify employees. The provisions of the Act are rationally related to these legitimate

interests.

¶ 73 The Act creates an incentive for contractorsto properlyclassifyindividuals as employees.

Although the statute is limited to the construction industry, this limitation does not establish

an equal protection or special legislation violation. The legislature was not required to

address misclassification across all industries before it could address misclassification in any

industry. Equal protection does not require “the legislature to address all areas of a problem

that it seeks to reform.” In re Petition to Adopt O.J.M., 293 Ill. App. 3d 49, 64, 687 N.E.2d

113, 123 (1997). The legislature is entitled to implement reform one step at a time. Harris

v. Manor Healthcare Corp., 111 Ill. 2d 350, 372-73, 489 N.E.2d 1374, 1384 (1986). The

General Assembly could rationally believe that statutory intervention was more urgently

needed for employees in the construction industry. Id. at 372, 489 N.E.2d at 1384.

¶ 74 Whether the issue of misclassification is most prevalent in the construction industry is

a policy decision that we must defer to the legislature because “we are not concerned with

the wisdom of the statute or even if it is the best means to achieve the goal, but only with

whether there is any sort of conceivable basis for finding the statute rationally related to a

legitimate state interest.” People v. Gale, 376 Ill. App. 3d 344, 359, 876 N.E.2d 171, 186

(2007). In addition, the legislature “ ‘may confine its restrictions to those classes of cases

where the need is deemed to be the clearest.’ ” Chicago Real Estate Board v. City of

Chicago, 36 Ill. 2d 530, 545, 224 N.E.2d 793, 803 (1967) (quoting Gadlin v. Auditor of

Public Accounts, 414 Ill. 89, 98, 110 N.E.2d 234, 238 (1953)). Accordingly, in the present

case, the legislature was free to limit the application of the Act to the construction industry

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without offending the equal protection clauses or violating the prohibition against special

legislation. Williamson v. Lee Optical of Oklahoma, Inc., 348 U.S. 483, 489 (1955) (“The

legislature may select one phase of one field and apply a remedy there, neglecting the

others.”).

¶ 75 CONCLUSION

¶ 76 For the foregoing reasons, we affirm the circuit court’s judgment granting a summary

judgment in favor of the Department.

¶ 77 Affirmed.

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