Court Opinion

ID: 3147333
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:29:52.720839+00
Date Added: 2024-06-11T12:09:08.689806
License: Public Domain

FIRST DIVISION
                                                September 7, 2010

No. 1-09-2095

520 SOUTH MICHIGAN AVENUE ASSOCIATES,    )   Appeal from the
d/b/a The Congress Plaza Hotel and       )   Circuit Court of
Convention Center,                       )   Cook County.
                                         )
     Plaintiff-Appellant                 )
                                         )
      v.                                 )   No. 06 L 050602
                                         )
THE DEPARTMENT OF EMPLOYMENT SECURITY,   )
an Administrative Agency in the State    )
of Illinois; BRENDA A. RUSSELL,          )
Director of Illinois Department of       )
Employment Security; LOCAL 1, UNITE      )
HERE, f/n/a/ Hotel Employees and         )
Restaurant Employees International       )
Union; et al.,                           )   The Honorable
                                         )   Alexander P. White,
     Defendants-Appellees.               )   Judge Presiding.

     JUSTICE GARCIA delivered the opinion of the court.

     Plaintiff 520 South Michigan Avenue Associates, doing

business as the Congress Plaza Hotel & Convention Center

(Congress Plaza), appeals from the decision of the Illinois

Department of Employment Security and its Director (collectively,

the Director) that its employees, striking since June 15, 2003,

were "not ineligible" for unemployment benefits after the week

ending July 5, 2003, a decision the circuit court confirmed.

Congress Plaza contends the claimants remained ineligible under

section 604 of the Illinois Unemployment Insurance Act (the Act),

which provides a claimant is "ineligible for benefits for any
1-09-2095

week his *** unemployment is due to a stoppage of work which

exists because of a labor dispute."     820 ILCS 405/604 (West

2008).     In a supplemental decision, the Director found that the

"stoppage of work" ended July 5, 2003, because Congress Plaza had

resumed substantially normal operations.     Congress Plaza

challenges this decision, contending a shortage of workers

remained, its occupancy remained low, and it had to contend with

a noisy, disruptive picket line, all of which preclude a finding
that substantially normal operations had resumed.

     The Director and the claimants, members of Local 1 UNITE

HERE, the union representing the striking employees,1 contend

Congress Plaza's own admissions to the Department's written

inquiries that it had suffered no curtailment in the operations

of the hotel within two to three weeks after the start of the

strike support the Director's decision, which is subject to

     1
         Congress Plaza named all members of the striking

"bargaining unit" of the union as defendants, but only about

seventeen striking employees actually filed for unemployment

benefits at the time of the Director's initial decision, making

them claimants and the only union members that should have been

named as defendants in the circuit court proceedings.       See 56

Ill. Adm. Code §2720.1, amended at 21 Ill. Reg. 12129, eff.

August 20, 1997 (a claimant is "a person who applies for benefits

under the Act").

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review for clear error.    The Director and claimants argue that it

was Congress Plaza's burden to establish the stoppage of work was

ongoing by showing that its business continued to suffer

significantly, a burden Congress Plaza failed to carry.      We agree

on all counts and affirm.

                             BACKGROUND

     On June 15, 2003, members of Local 1 went on strike against

the Congress Plaza Hotel & Convention Center.    The union members
were employed in various guest service positions such as

housekeeper, laundry attendant, cook, steward, server, bartender,

and bell attendant.   The striking members represented between 130

and 185 of the approximately 220 individuals employed by Congress

Plaza.   The employees established a picket line outside the hotel

that continued through at least July 15, 2004.

     Shortly after the start of the strike, some of the union

members filed for unemployment benefits.    On June 18, 2003,

Congress Plaza filed an eligibility protest with the Department

pursuant to section 2720.130(a) of Title 56 of the Administrative

Code (56 Ill. Adm. Code §2720.130(a), amended at 18 Ill. Reg.

16340, eff. October 24, 1994), contending the claimants were

ineligible for unemployment benefits under section 604 of the Act

because of the strike.    On various dates thereafter, the

Department made numerous inquiries of the hotel regarding the

level of its business operations.     Congress Plaza's director for

human resources, Mark Souder, responded in writing to the

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inquiries.    Mr. Souder indicated 94 permanent employees were

working at the hotel as of July 29, 2003.      Congress Plaza was

also using outside temporary workers to fill guest services

positions as needed.     Sixteen union members had crossed the

picket line and returned to work at this point, and a total of

twenty-seven did so by July 13, 2004.

     In August 2003, the Department submitted a written inquiry

to Mr. Souder: "Do you feel that the hotel's level of operation
is substantially normal despite the strike?"      On August 12, 2003,

Mr. Souder responded, "Yes."     In correspondence dated August 27,

2003, the Department asked the very same question, with a follow-

up question, "If yes, why?"     Mr. Souder responded, "Yes.   All

services normally provided for the guests are being provided."

To the questions, "What is the extent of curtailment in

operations?     What is the percentage?"   Mr. Souder responded,

"None.   0%."    To the question, "How many managers are being

utilized and to what extent is [any] work being neglected?", Mr.

Souder responded, "All the managers of the Hotel.      No work is

being neglected."

     On September 23, 2003, and again on September 29, 2003, the

Department, through Carolyn Vanek, mailed nearly identical

correspondence to Mr. Souder to confirm its understanding of a

telephone conversation Ms. Vanek had with Mr. Souder on September

22, 2003.    Ms. Vanek reiterated that Mr. Souder had "estimated

operations returned to 'substantially normal' within the *** two

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to three week period" after the strike began.   In the September

29 correspondence, she informed the hotel, "To be clear, once

operations are substantially normal, Section 604 of the

Unemployment Insurance Act, which generally provides that

striking or locked-out workers are ineligible for benefits, is no

longer applicable."

     Following the September 29 correspondence concerning the

continued applicability of section 604, on September 30, 2003,
Mr. Souder wrote to Cheryl Howard, manager of the Labor Dispute

Unit at the Department, asserting, "Overall, 'operations' at the

hotel have not returned to a 'substantially normal' level."      He

explained his conflicting responses to the Department's written

inquiries.   "[Ms. Vanek] did not define what she meant by these

terms and I responded to them in the limited context of the

questions she asked: i.e., guest service."   He asserted that

Congress Plaza's business levels had suffered due to the strike

and because of the disruption caused by the picket line.    He

pointed to union literature boasting its action against the hotel

had caused over $400,000 in lost revenue.

                        Claims Adjudicator

     Following Congress Plaza's written protest that the

claimants were ineligible for unemployment benefits under section

604, the claims adjudicator ruled on January 9, 2004, that the

claimants were ineligible from June 15, 2003, through the week

ending July 5, 2003, but "not ineligible" for any week

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thereafter.    The adjudicator determined that while the hotel was

not operating at precisely the same level as before the strike,

the hotel was running at substantially normal operation levels

with the use of management personnel, service workers that had

crossed the picket line, and temporary workers from four or five

different agencies.    Congress Plaza appealed the adjudicator's

decision pursuant to section 800 of the Act.       820 ILCS 405/800

(West 2008).   An administrative hearing was conducted pursuant to
section 801 before the Director's representative.       820 ILCS

405/801 (West 2008).

                       Director's Representative

     At the administrative hearing beginning on July 13, 2004,

Lucinda Scharbach, an organizer for the union, testified she

spends 20 percent of her time trying to persuade potential guests

not to patronize the hotel.    In one "Strike Alert" she e-mailed

an individual regarding an upcoming conference at the hotel and

"strongly recommended" the individual inform conference guests of

substandard conditions at the hotel and of the union's intentions

to stage loud demonstrations during the conference.       Ms.

Scharbach participated in large demonstrations outside the hotel

on Labor Day in 2003 and on June 16, 2004.    Dan Miller, a lead

union organizer, testified that since the strike began,

demonstrations were held at the hotel on seven or eight occasions

involving more than 100 individuals.

     On behalf of Congress Plaza, Mark Souder testified that

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picketing workers would sometimes use bull horns or bang drums

outside the hotel.   The picket line typically included about 20

striking employees, but larger rallies would occur about once per

month.   Mr. Souder testified customers would occasionally

complain, and one guest sought "some sort of restitution from the

hotel" for the inconvenience caused by one of the larger rallies.

According to Mr. Souder, another guest complained to police that

a union supporter had assaulted him.   Mr. Souder also testified
that a hotel doorman complained that two striking employees had

shouted racial epithets at him, which the union denied.

     According to Mr. Souder, he had to devote a large amount of

time in December 2003 to assist employees that had crossed the

picket line when the union gave notice that their health

insurance benefits were set to terminate at the end of the year.

The highly publicized nature of the strike also triggered a large

number of job applicants, requiring Mr. Souder to devote

considerable time explaining that Congress Plaza was not hiring

permanent replacements, but using temporary workers.   Mr. Souder

conceded that his involvement with some of these matters fell

within his job description and thus the work was not directly

attributable to the strike.

     Mr. Souder testified the high turnover among the temporary

workers required him to spend time training new replacements.    He

admitted, however, that the annual turnover of employees during

the years leading up to the strike was also high, between 40% and

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60%.

       Mr. Souder testified that the temporary workers performed

50% to 75% of the work previously done by the striking employees.

This meant that he, other managers, nonunion "line workers," and

the returning strikers had to perform the rest.     Managers were

often required to perform line work, which was generally outside

the scope of their jobs.    The managers were generally required to

do the line work when the hotel was fully occupied or the
restaurant was especially busy.    Mr. Souder testified that he

worked up to two hours longer per day after the strike and worked

more weekends than before.    After the strike, he performed

housekeeping functions six times.     He answered phones for the

housekeeping staff three or four times.     He bussed tables one or

two dozen times.    He observed one restaurant manager serve almost

"exclusively" as a bartender.    He stated the food and beverage

manager spent time serving food or bussing tables after the

strike, but he told Ms. Vanek that this was probably true before

the strike as well.    He testified that clerical workers were

performing guest service work in addition to their clerical

duties.

       Nonetheless, Mr. Souder confirmed the accuracy of his

written responses to the written inquiries of the Department.       As

of September 9, 2003, all "work was getting done."     He noted,

however, the restaurant had to cut back some items from its menu

and it might take longer to respond to requests from guests for

                                  8
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additional towels, an iron or the like.   Mr. Souder testified

Congress Plaza had hosted at least 20 weddings since the start of

the strike in June through the end of 2003, but had hosted only 6

weddings in the first six months of 2004.

     Mr. Souder also sought to testify about his knowledge of the

revenues of Congress Plaza, both before and after the strike.

Mr. Souder's knowledge was not first-hand, but predicated on

business records, which the hotel refused to produce.   Congress
Plaza claimed disclosure of the information was prohibited by

confidentiality requirements of ongoing labor negotiations before

the National Labor Relations Board.   Counsel for the claimants

argued, however, that nothing prohibited the hotel from producing

the business records.   The Director's representative ruled "there

is no basis for the lack of presentation of [the hotel business]

records" and, in their absence, barred Mr. Souder's testimony

about Congress Plaza's revenue.

     Shakeel Siddiqui testified he is the general manager of

Congress Plaza, to whom all other managers report.   He lives at

the hotel.   He testified that the three primary internet hotel

booking Web sites had issued advisories warning potential guests

of the strike at the hotel.   Since the start of the strike, he

had cleaned rooms, parked cars, served in the dining room, poured

drinks in the bar, and carried guests' bags to their rooms.    On

cross-examination, he admitted to having parked cars only once.

While he initially claimed to have cleaned rooms "every single

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day," he retracted that claim, stating he cleaned rooms no more

than four days per week during some months and during other

months he cleaned no rooms at all.     He testified that since the

start of the strike he worked 24 hours per day.    Prior to the

strike, Mr. Siddiqui would spend at least an hour per day

comparing prices with competitors and working on hotel marketing.

He was no longer able to do that after the start of the strike.

     On September 1, 2005, the Director's representative issued a
report recommending that the claimants be found ineligible for

unemployment benefits from June 15, 2003, through the date of the

hearing, July 15, 2004.    The representative concluded that a work

stoppage was ongoing at Congress Plaza and, contrary to the

determination by the claims adjudicator, its business operations

had not returned to substantially normal levels because Congress

Plaza had relied on "extraordinary methods and abnormal

operations, consisting of the use of management personnel,

temporary agency workers, and line workers to do work normally

done by" union employees.    She found Congress Plaza had to rely

on "the use of greater man-hours to maintain the same level of

service, to the neglect of significant management duties."

                          Director's Decision

     On May 25, 2006, the Director rejected the decision of the

Director's representative, in favor of the decision by the claims

adjudicator, finding the claimants were "not ineligible" for

benefits for any week beginning after July 5, 2003.    The

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Director's written decision concluded that Congress Plaza had the

burden to show that its business had not resumed substantially

normal levels of operation and it had not met that burden.

"Evidence concerning an employer's normal operations is a matter

within the exclusive control of the employer.   The employer has

the burden of proving it."   Congress Plaza did not produce the

necessary evidence to support its contention.   In her decision,

the Director stated, "I conclude that the employer was able to
resume substantially normal operations by July 5, 2003, by

farming out much of the claimants' work to temporary service

agencies."

     On September 7, 2007, in the administrative review

proceedings, the circuit court remanded the case to the Director

with instructions to supplement her decision with specific

findings of fact.

     On June 4, 2008, the new Director issued a "Supplemental

Decision."   The Director affirmed the earlier decision.   He found

Mr. Souder worked no more than 1 additional hour during the

strike relative to before, and Mr. Siddiqui's testimony that he

worked 24 hours per day was beyond belief.   He found both

witnesses "evasive."   The Director found "farming out work"

through the use of temporary employees did not necessarily

preclude a conclusion that the hotel had resumed substantially

normal operations.   The Director also noted Congress Plaza's

refusal to document the extent of its use of temporary workers or

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the extent to which its business revenues suffered.

     On July 13, 2009, the circuit court issued a lengthy

decision confirming the Director's decision.    The court observed

"there may be some leeway given to Mr. Souder's non-attorney

status in answering" the Department's written inquiries regarding

whether guest services had returned to normal operations

following the start of the strike in June 2003.    Nonetheless, it

found "it is difficult to understand how, 'no work is being
neglected' can somehow imply in any sense that [the hotel] had

not returned to substantially normal operations."

     This timely appeal followed.

                             ANALYSIS

     We begin with the stated purpose of the Illinois

Unemployment Insurance Act: "The general purpose of the Act is to

provide compensation for those persons who are involuntarily

unemployed."   Bridgestone/Firestone, Inc. v. Doherty, 305 Ill.

App. 3d 141, 147, 711 N.E.2d 799 (1999).    The Act is to be

"liberally construed" in the interest of eliminating "[p]overty,

distress, and suffering."   Huggins v. Board of Review, Department

of Labor, 10 Ill. App. 3d 140, 143, 294 N.E.2d 32 (1973); 820

ILCS 405/100 (West 2008).   The general purpose behind the Act is

tempered by section 604 of the Act, which provides that a

claimant is ineligible for benefits if his or her unemployment is

"due to a stoppage of work which exists because of a labor

dispute" at the claimant's employer.    820 ILCS 405/604.   Section

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604 "evinces the legislative determination that the State is to

remain neutral in labor disputes and collective bargaining,

rendering assistance to neither the employer nor labor."       Local

7-641, Oil, Chemical & Atomic Workers International v. Department

of Labor, 96 Ill. 2d 94, 98, 449 N.E.2d 134 (1983).

       In 1953, our supreme court recognized that whether a

"stoppage of work" arising from a labor dispute continues for

purposes of ineligibility for unemployment benefits turns on
whether " 'production or operation' " of the business has been

diminished as a result of the labor dispute.    Robert S. Abbott

Publishing Co. v. Annunzio, 414 Ill. 559, 569-70, 112 N.E.2d 101

(1953), quoting the Nebraska Supreme Court in Magner v. Kinney,

141 Neb. 122, 130-31, 2 N.W.2d 689, 693 (1942).    In Abbott

Publishing Co., two distinct groups of claimants from the same

employer were involved.    The supreme court affirmed the

Director's decision that for the "composing room employees" the

"stoppage of work" ceased on the day the employer employed "the

same number of workers *** normally employed prior to the time of

the strike."    Abbott Publishing Co., 414 Ill. at 563, 571.    For

the "mailing room employees," the stoppage of work ceased on the

very day they joined the strike, because "they were fully

replaced on the same day."    Abbott Publishing Co., 414 Ill. at

571.

       The central issue in this appeal is the Director's decision

that the "stoppage of work" at the Congress Plaza, caused by the

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strike on June 15, 2003, had ceased by July 5, 2003.     The

"stoppage of work" test, to determine eligibility for

unemployment benefits of employees that lost their work due to a

labor dispute has been refined to require a finding that the

employer has "return[ed] to substantially normal [business

operations]."   Travis v. Grabiec, 52 Ill. 2d 175, 182, 287 N.E.2d

468 (1972).   If Congress Plaza had resumed substantially normal

business operations after July 5, 2003, it is immaterial that a

labor dispute continued to exist.     The Director's finding that

the union members were "not ineligible" for unemployment benefits

would be a matter of rendering assistance to prevent "poverty,

distress, and suffering" (Huggins, 10 Ill. App. 3d at 143), and

not of "rendering assistance to *** labor" (Local 7-641, Oil,

Chemical & Atomic Workers International, 96 Ill. 2d at 98).

                         Standard of Review

     "The Unemployment Insurance Act provides that judicial

review of the Director's decision must accord with the

Administrative Review Law."   International Union of Operating

Engineers, Local 148 v. Illinois Department of Employment

Security, 215 Ill. 2d 37, 61, 828 N.E.2d 1104 (2005), citing 735

ILCS 5/3-101, et seq. (West 1994).     "Under the Administrative

Review Law (735 ILCS 5/3-101 et seq. (West 2000)), we review the

final decision of the administrative agency and not the decision

of the circuit court."   Blessing/White, Inc. v. Zehnder, 329 Ill.

App. 3d 714, 726, 768 N.E.2d 332 (2002).      In reviewing an

                                 14
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administrative decision, " '[t]he applicable standard of review

depends upon whether the question presented is one of fact, one

of law, or a mixed question of fact and law.' "    Cinkus v.

Village of Stickney Municipal Officers Electoral Board, 228 Ill.

2d 200, 210, 228 N.E.2d 200 (2008), quoting American Federation

of State, County & Municipal Employees, Council 31 v. Illinois

State Labor Relations Board, 216 Ill. 2d 569, 577, 839 N.E.2d 479

(2005).

     The sides dispute the nature of the essential question

presented in this case.   Congress Plaza contends the Director's

finding that business operations at the hotel had returned to a

substantially normal level is a factual determination subject to

review against the manifest weight of the evidence; whereas, the

finding that the work stoppage ended by July 5, 2003, presents a

question of law to be reviewed de novo, citing as authority the

supreme court's decision in Local 148, 215 Ill. 2d 37.

     The Director responds that the two questions Congress Plaza

contends are presented by this case are not separate, but a

single mixed question of law and fact.   "It is *** improper, as

some of the cases have done and as the Hotel attempts to do in

its brief, to split apart 'mixed questions.' "    The Director

asserts his ultimate decision finding that the stoppage of work

had ceased, as a mixed question, is reviewed under the clearly

erroneous standard, citing Cinkus, City of Belvidere v. Illinois

State Labor Relations Board, 181 Ill. 2d 191, 205, 692 N.E.2d 295

                                15
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(1998), and AFM Messenger Service, Inc. v. Department of

Employment Security, 198 Ill. 2d 380, 392, 763 N.E.2d 272 (2001).

The claimants agree that a single mixed question of fact and law

is presented by this case.

     No deference is owed to an agency on a question of law, such

as "an agency's interpretation of the meaning of the language of

a statute," a question we review de novo.   Cinkus, 228 Ill. 2d at

210 ("an agency's decision on a question of law is not binding on

a reviewing court").

     "An administrative agency's findings and conclusions on

questions of fact are deemed prima facie true and correct."

Cinkus, 228 Ill. 2d at 210.   We disturb them only if "such

findings of fact are against the manifest weight of the

evidence."   Cinkus, 228 Ill. 2d at 210.

     In City of Belvidere, the supreme court "held for the first

time that an examination of the legal effect of a given state of

facts involves a mixed question of fact and law with a standard

of review of 'clearly erroneous.' "   Cinkus, 228 Ill. 2d at 211,

quoting City of Belvidere, 181 Ill. 2d at 205.   In other words, a

mixed question of law and fact arises from an agency's decision

that " ' "the [undisputed] rule of law as applied to the

established facts is or is not violated." ' "    Cinkus, 228 Ill.

2d at 211, quoting American Federation of State, County &

Municipal Employees, Council 31 v. Illinois State Labor Relations

Board, 216 Ill. 2d 569, 577, 839 N.E.2d 479 (2005), quoting

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Pullman-Standard v. Swint, 456 U.S. 273, 289 n.19, 72 L. Ed. 2d

66, 80 n.19, 102 S. Ct. 1781, 1790 n.19 (1982).

     The phrases "given state of facts" used by the supreme court

in Cinkus, 228 Ill. 2d at 211, and "given set of facts" used in

City of Belvidere, 181 Ill. 2d at 205, refer to findings of fact

as determined by the administrative agency, which must stand

unless "the opposite conclusion is clearly evident."   City of

Belvidere, 181 Ill. 2d at 204.   Consistent with the deference

owed to an agency's decision making, a mixed question is reviewed

for clear error.   Cinkus, 228 Ill. 2d at 211, citing City of

Belvidere, 181 Ill. 2d at 205.   "[A]n administrative agency's

decision is deemed 'clearly erroneous' when the reviewing court

is left with the ' "definite and firm conviction that a mistake

has been committed." ' [Citation.]"   Cinkus, 228 Ill. 2d at 211.

     We reject Congress Plaza's suggestion that there is a

difference, beyond mere semantics, between a "given state of

facts" as the court stated in Cinkus and "undisputed facts" as

the court stated in Local 148, such that the Director's decision

here, that work stoppage ended by July 5, 2003, is subject to de

novo review as the supreme court applied in Local 148.   In its

main brief, Congress Plaza states it "does not agree that the

'facts' relied upon by the second director are a 'given state of

facts.' "   We take from this that the Director's findings of fact

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cannot constitute "undisputed facts" under Local 148.2      Thus,

even if we were to agree that the standard of review holding in

Local 148 has not been called into question by Cinkus, which we

do not, the hotel's own contention makes Local 148 inapposite

where its application of de novo review was based on "undisputed

facts."    See Cinkus, 228 Ill. 2d at 211, ("We acknowledge that

the distinction between [the] three different standards of review

has not always been apparent in our case law)", citing Local 148,

215 Ill. 2d at 62.    We also question whether there is a

distinction of any significance between a finding by the Director

that "work stoppage" has ceased and a finding that substantially

normal business operations have resumed in the context of this

case, where neither side disputes that a "labor dispute" existed.

In this sense, a " 'stoppage of work' ends when the employer's

business operations return to a substantially normal condition."

Be-Mac Transport Co. v. Grabiec, 20 Ill. App. 3d 345, 351, 314

N.E.2d 242 (1974), quoting Travis, 52 Ill. 2d at 182.       A finding

that work stoppage has ceased flows from a finding that normal

business operations have resumed.     The two are inextricably

linked.    See Bridgestone, 305 Ill. App. 3d at 147 ("Whether

[employer] resumed substantially normal operations so that the

     2
         Both sides make clear that the findings of fact as

determined by the Director based on the administrative

proceedings below remain highly disputed.

                                 18
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'stoppage of work' ended is not purely a question of law").

     We agree with the Director and the claimants that the

ultimate decision that normal business operations had resumed,

making the claimants "not ineligible" for unemployment benefits

under section 604, is subject to clearly erroneous review.     The

findings and conclusions on questions of fact are subject to

review based on the manifest weight of the evidence standard.

Cinkus, 228 Ill. 2d at 210.

                         Findings of Fact

     The circuit court remanded the initial decision by the

Director, directing that findings of fact in support of the

decision be set forth.   The new Director, following his re-

examination of the record, issued a supplemental decision in

which he made explicit findings of fact and conclusions of law.

     The Director expressly found the two witnesses for Congress

Plaza to be "evasive."   The Director found Mr. Siddiqui's claim

that he worked 24 hours a day during the strike to be

unbelievable on its face.   The Director found Mr. Souder's

credibility to be "undermined by his frequent written and oral

statements given to the Department before the hearing that the

hotel had resumed substantially normal operations by July 5,

2003."   The Director found Mr. Souder "vacillated" in his

testimony regarding the percentage of work performed by

management personnel that had previously been performed by the

striking workers.   The Director discounted the figures given by

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Mr. Stouder because, in testifying by memory, "he frequently

referred to information contained in hotel reports," which

Congress Plaza refused to submit.     The Director considered Mr.

Souder's testimony regarding the percentage of work done by

management personnel to be "uncorroborated opinion."

     The Director ruled that Congress Plaza's use of large

numbers of temporary workers did not preclude a finding that the

hotel had resumed substantially normal operations.     The hotel's

reliance on the testimony of two of its managers alone was

insufficient to demonstrate that its business continued to suffer

significantly.    The absence of any documentary evidence to

support Congress Plaza's claim, in particular where Mr. Souder

referenced reports detailing information the hotel failed to

produce, undermined the trustworthiness of the manager's

testimony.    Ultimately, the Director concluded that Congress

Plaza had not met its "burden of proving that it had not resumed

substantially normal operations."

     In the supplemental decision, the Director listed six

reasons he did not agree with his representative's decision that

Congress Plaza had not returned to substantially normal

operations.    Some of the reasons, summarized above, constituted

findings of facts, others conclusions of law.

     In challenging the Director's supplemental decision,

Congress Plaza argues that each of the reasons given by the

Director "for reversing the hearing officer's determination as

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set forth in the Supplemental Decision" is contrary to the

manifest weight of the evidence.     Congress Plaza explains that,

unlike the representative, the Director "was not even present to

hear and observe testimony."   The hotel urges that greater

deference is owed to the decision by the Director's

representative, as the individual that was "present at the

hearing and heard and observed the witnesses, [who] found as fact

that the hotel's Director of Human Resources, Mr. Souder,

testified 'credibly.' "

     Congress Plaza's overarching contention is that between the

opposing decisions, the conclusion of the Director's

representative that the hotel's ability "to maintain the same

level of service" within two to three weeks after the start of

the strike was due to an " 'abnormal means of operation' " is

entitled to greater consideration by this court.    To support this

contention, Congress Plaza offers rebuttal arguments in its main

brief to each of the reasons given by the Director for

overturning the decision of the representative.    In Gregory v.

Bernardi, 125 Ill. App. 3d 376, 465 N.E.2d 1052 (1984), a very

similar argument, that the decision of the administrative officer

that hears live testimony should be given greater consideration

on administrative review than the board that issues the final

decision, was made and rejected.

     The Gregory plaintiff argued "that the Board's decision is

against the manifest weight of the evidence and that the ***

                                21
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decision [of the referee who heard the witnesses and found in

favor of the claimant] is supported by substantial evidence."

Gregory, 125 Ill. App. 3d at 381.        In rejecting this contention,

the Gregory court explained:

            "In an unemployment compensation case, the

            court's function is limited to ascertaining

            whether the findings of the Board are

            supported by the manifest weight of the

            evidence; the court may neither substitute

            its own judgment nor overturn the Board's

            findings unless they are without substantial

            support in the record.      [Citations.]   Thus,

            whether the referee's decision is supported

            by substantial evidence is not relevant to

            this court's determination."      Gregory, 125

            Ill. App. 3d at 381.

     Though the procedures for review of eligibility under

section 604 are distinct from the procedures for ascertaining

whether an individual claimant is eligible for unemployment

benefits, the Board's position and the referee's position in

Gregory are analogous to the Director and his representative in

this case.    820 ILCS 405/800, 801 (West 2008).       Both the referee

and the Director's representative hear live testimony, while it

is the Board's decision and the Director's decision that is

subject to review under Administrative Review Law.         See 735 ILCS

                                   22
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5/3-101 et seq. (West 2006); 820 ILCS 405/1100 (West 2006).

       Congress Plaza's contention that deference is owed to the

credibility determinations and the findings and conclusions of

fact reached by the Director's representative in her decision is

indistinguishable from the argument rejected in Gregory.       See

Starkey v. Civil Service Comm'n, 97 Ill. 2d 91, 100-01, 454

N.E.2d 265 (1983) ("there is no requirement *** that [the officer

with the ultimate decision-making authority] rehear the evidence

in order to reject [the hearing] officer's findings and

recommendations").

       We note the Director was under no legal obligation to

support his decision to reverse the representative by giving

explicit reasons for his disagreement, as opposed to issuing a

decision based on his independent assessment of the record

evidence.    "[W]here an administrative agency and not the hearing

examiner is responsible for the decision, the agency need not

reverse only when the examiner's findings are 'clearly

erroneous'; rather, the agency must make its own decision based

on the evidence in the record."    Gregory, 125 Ill. App. 3d at

381.    Because it is the Director's decision that we review, we

see no reason to explicitly address Congress Plaza's rebuttal

arguments that the reasons given by the Director to reverse his

representative's decision are contrary to the findings made by

the Director's representative; the reasons for the Director's

disagreement with his representative are "not relevant to this

                                  23
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court's determination."    Gregory, 125 Ill. App. 3d at 381.

     While we agree with Congress Plaza's position that the

representative's report is part of the record (citing Gregory,

125 Ill. App. 3d at 380-81), we limit our consideration of the

representative's report to ascertaining whether the Director's

findings of fact are supported by the record.   We decline the

hotel's implicit invitation to compare the findings issued by the

Director to the findings of the Director's representative and

decide which is more in line with the record.   It falls to the

administrative agency to make "an independent assessment of the

evidence in the record, rather than merely determining the

supportability of the [hearing officer's] findings."    Gregory,

125 Ill. App. 3d at 379.   As confirmed by the circuit court's

ruling below, it is only the Director's (supplemental) decision

that we consider on administrative review.   See Local 148, 215

Ill. 2d at 61.

     To be clear, we give no deference to the representative's

assessment of Mr. Souder's testimony as "credible."    It fell to

the Director, as the "ultimate finder of fact," to make his own

assessment of the evidence on record, including assessing the

credibility of the witnesses.    Gregory, 125 Ill. App. 3d at 379.

We reject any suggestion by Congress Plaza that the Director was

bound to weigh the evidence in favor of the hotel, as his

representative did.   The assessment of demeanor and candor of a

witness is particularly within the province of a finder of fact.

                                 24
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We find no basis to overturn the Director's negative assessment

of the testimony offered by Mr. Souder and Mr. Siddiqui, the only

witnesses presented by Congress Plaza, based on a contrary

finding by the representative.    Gregory, 125 Ill. App. 3d at 380-

81; Starkey, 97 Ill. 2d at 100.

     We will not substitute our judgment for that of the

Director, nor is there any authority for substituting the

judgment of the representative for the Director's.       City of

Belvidere, 181 Ill. 2d at 204 ("In examining an administrative

agency's factual findings, a reviewing court does not weigh the

evidence or substitute its judgment for that of an administrative

agency").

     We also expressly reject Congress Plaza's suggestion that

explicit findings of fact can be shown to be against the manifest

weight of the evidence by pointing to evidence in the record and

the testimony of a hotel's witness's as given "without rebuttal,"

even if such evidence might be favorably seen as contrary to

explicit findings:

                 "For example, the Director of Human

            Resources, Mark Souder, testified without

            rebuttal that since the strike, he regularly

            attends frequent meetings with hotel

            officials discussing strike related issues

            where prior to the strike, no such meetings

            took place."

                                  25
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That the director for human resources was required to spend time

on matters he would not otherwise have had to address in the

absence of the labor dispute does not mean that the Director was

obliged to find facts consistent with the hotel's claims that the

strike occupied an inordinate amount of the manager's time.    As

Congress Plaza itself acknowledges, the testimony at the

administrative hearing was highly contested; the resolution of

contested testimony falls within the exclusive province of the

ultimate finder of fact, which, in this case, is the Director.

     An agency's findings of fact are "deemed prima facie true

and correct."   Cinkus, 228 Ill. 2d at 210.   It falls to the party

challenging an agency's findings of fact to demonstrate that they

are against the manifest weight of the evidence.    Gregory, 125

Ill. App. 3d at 381.   If, on review, the issue "is merely one of

conflicting testimony and credibility of a witness, the agency's

determination should be sustained. [Citation.]"    Gregory, 125

Ill. App. 3d at 383.   We will not overturn an agency's findings

of fact unless it is shown that "the opposite conclusion is

clearly evident."   City of Belvidere, 181 Ill. 2d at 204.    That

showing has not been made here.    See Gregory, 125 Ill. App. 3d at

381 (Board's decision, reversing referee's decision in favor of

claimant, upheld even though "two of its findings of fact have no

basis in the record of the proceedings before the referee," thus

violating the due process rights of the claimant as to those two

findings).

                                  26
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                           Conclusion of Law

     In the supplemental decision, the Director addressed the

burden of establishing the continued applicability of section 604

at the administrative hearing: "Evidence concerning an employer's

normal operations is a matter within the exclusive control of the

employer.     The employer has the burden of proving it."     Whether

the burden of proof fell on Congress Plaza raises an issue of law

subject to de novo review.     Czajka v. Department of Employment

Security, 387 Ill. App. 3d 168, 173, 901 N.E.2d 436 (2008).       Each

party filed a supplemental brief on the issue of the nature of

the burden of each party prior to oral argument, as we requested.

     There is support for the position taken by the Director and

the union that the employer carries a burden of proof under

section 604: "Therefore, in the process of attempting to bring

otherwise eligible claimants within the affirmative defense

created by this specific exception [section 604] in the statute,

the burden of proof should logically rest upon the employer."

Be-Mac Transport Co., 20 Ill. App. 3d at 354.3    Nonetheless, the

supreme court has stated, in another context, that the burden of

proof regarding the inapplicability of section 604 rests with the

     3
         The court relied on its label of section 604 as an

"affirmative defense" to conclude that the burden of proof rests

on the employer, without providing any authority for imposing the

label.     Be-Mac Transport Co., 20 Ill. App. 3d at 354.

                                  27
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claimant.    "To be eligible for unemployment insurance benefits

under the relieving proviso of section 604, an employee must

prove both that he is not directly interested in the labor

dispute and that he is not of the same grade or class as

employees who are participating in, financing or who hold a

direct interest in the labor dispute."    (Emphasis added.)   Local

148, 215 Ill. 2d at 70; see also Shell Oil Co. v. Cummins, 7 Ill.

2d 329, 334, 131 N.E.2d 64 (1955) ("To relieve the employee of

this ineligibility [imposed by the predecessor to section 604],

it is incumbent upon him to prove, not one, but both of [the

exceptions regarding lack of involvement in the labor dispute]").

       In line with our supreme court's decisions, we believe the

better approach to assessing the nature of the burden on the

employer regarding the continued applicability of section 604 is

that taken by the Fourth District in Bridgestone, which addresses

the burden question in the context of a prima facie case.     "In

essence, *** [once] a prima facie case of eligibility for

claimants [was established,] *** the burden of going forward

shifted to Bridgestone ***."    Bridgestone, 305 Ill. App. 3d at

150.    Be-Mac Transport Co. can also be read as involving a prima

facie case of eligibility when it addresses "the process of

attempting to bring otherwise eligible claimants within the

affirmative defense created" by section 604.    (Emphasis added.)

Be-Mac Transport Co., 20 Ill. App. 3d at 354.    This was made

clear by the court's ultimate conclusion.    "[E]ven assuming that

                                 28
1-09-2025
the burden of proof rested upon claimants, we would be obliged to

approve the ultimate finding of eligibility by the Director which

rested necessarily upon the basic premise that unemployment

during the disputed period existed because of unavailability of

work."   Be-Mac Transport Co., 20 Ill. App. 3d at 355.

     In an administrative hearing under section 604, no shifting

of the burden of proof occurs; the burden of proof remains on the

claimants in accordance with the position taken by Congress Plaza

before us.   Local 148, 215 Ill. 2d at 70; Shell Oil Co., 7 Ill.

2d at 334.

     In the instant case, once the claims adjudicator determined

that Congress Plaza had resumed substantially normal business

operations after July 5, 2003, the burden of going forward

shifted to Congress Plaza to rebut the prima facie case that the

claimants were "not ineligible" for unemployment benefits.

Bridgestone, 305 Ill. App. 3d at 150.   Congress Plaza recognized

the logic of this and agreed to assume the burden of producing

evidence at the administrative hearing it requested before the

Director's representative as set out in the supplemental record

filed after oral argument was heard in this case.   820 ILCS

405/804 (West 2008) ("the conduct of hearings and appeals shall

be in accordance with regulations prescribed by the Director for

determining the rights of the parties"); 56 Ill. Adm. Code

S2725.250(b) (West 2008) ("At the hearing the petitioning

employer must produce testimony, argument or other evidence to

                                29
1-09-2025
establish that the *** determination and assessment is

incorrect").4

     As we noted, Congress Plaza does not challenge before us the

Director's ruling as to its burden at the administrative hearing.

We find it unnecessary to answer whether there is a practical

difference in the instant case between failing to carry its

burden of proof and failing to carry its burden of going forward.

See Schiff v. Friberg, 331 Ill. App. 3d 643, 658, 771 N.E.2d 517

(2002) (once a prima facie case is made out, it falls to the

finder of fact to assess the "credibility of the witnesses and

*** [resolve the] conflicting evidence").    Ultimately, we do not

read the Director's decision as turning on his reference to the

term "burden of proof" as opposed to the burden of going forward.

We follow the prima facie case analysis employed by the Fourth

District in Bridgestone.    Bridgestone, 305 Ill. App. 3d at 150.

     We agree with the Director that, in the context of this

case, the burden to establish that substantially normal

operations had resumed to overcome the claimant's prima facie

case rested with Congress Plaza.

     4
         The supplemental record reveals that at the administrative

hearing before the Director's representative, Congress Plaza

acknowledged its burden "to go forward;" the Director's

representative described it as a burden of proof: the employer

must "prove that the determination is incorrect."

                                  30
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                         Stoppage of Work

     We now review the Director's ultimate decision that Congress

Plaza had resumed substantially normal business operations by

July 5, 2003, which we determined above involves a mixed question

of law and fact, subject to review under the clearly erroneous

standard.   The issue can be restated as whether Congress Plaza

overcame the prima facie case that the claimants were "not

ineligible" under section 604.   In this regard we begin with the

negative inference the Director drew based on the lack of

business records to corroborate the testimony of the witnesses on

behalf of Congress Plaza.   See Bridgestone, 305 Ill. App. 3d at

148-49 ("The employer's refusal to provide information to the

Department with respect to the question of return to

substantially normal operations is an appropriate factor to

consider in determining the merits of the controversy").

     Following an independent assessment of the record evidence,

the Director noted:

                 "Witnesses for the hotel as well as the

            hotel's attorney admitted that the hotel

            issued reports concerning the number of

            temporary workers hired during the strike,

            the hotel's occupancy rates before and during

            the strike, and the hours worked by

            management personnel during the strike."

The Director ruled that when Congress Plaza failed to produce the

                                 31
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reports or any other evidence documenting the alleged curtailment

of business operations, the hotel failed to carry its burden.     "I

conclude that the hotel failed to show that it had not resumed

substantially normal operations by July 5, 2003 because it did

not sufficiently document the extent of its reliance on temporary

help agencies and the extent of management personnel performing

bargaining unit work during the strike."   See Bridgestone, 305

Ill. App. 3d at 146 ("Bridgestone offered no evidence *** that

production levels *** were substantially below what was needed").

     Thus, we review the Director's decision that the work

stoppage ceased as of July 5, 2003, against the backdrop that,

according to the Director, Congress Plaza failed to come forward

with sufficient evidence to establish the continued ineligibility

of the claimants under section 604.   We review the Director's

decision, which presents a mixed question of fact and law, that

Congress Plaza failed to demonstrate a "stoppage of work"

continued past July 5, 2003, for clear error.   Cinkus, 228 Ill.

2d at 211.

     The only remaining challenge to the Director's decision made

by Congress Plaza that we have yet to address is that "there is

nothing in this record but speculation to conclude that transient

workers who were repeatedly replaced were sufficiently up to

speed in their work to return the hotel to normal conditions."

Congress Plaza does not contest that an employer "farming out

[its] work" does not preclude a finding that substantially normal

                               32
1-09-2025
operations had resumed at the business.   Union Starch & Refining

Co. v. Department of Labor, 8 Ill. App. 3d 406, 411, 289 N.E.2d

692 (1972).   Nor does Congress Plaza contend that the use of

temporary workers constituted extraordinary methods to preclude a

finding that substantially normal business operations had

resumed.5   See Bridgestone, 305 Ill. App. 3d at 148 ("To conclude

that substantially normal operations had returned would mean that

the employer did not need the striking employees"), citing

Travis, 52 Ill. 2d at 182.

     Congress Plaza's contention is that the facts do not warrant

the factual conclusion that the temporary workers hired by the

hotel, within three weeks after the start of the strike, "had

supposedly learned all aspects of the jobs to efficiently replace

long term striking employees."   Congress Plaza argues that there

is no evidence in the record "the Director may point to" of a

     5
         Had Congress Plaza permanently replaced all of the

striking workers, there is little doubt that the stoppage of work

would have ceased.    See Abbott Publishing Co., 414 Ill. at 571

(the stoppage of work caused by the strike ceased when the

employer permanently hired the same number of workers normally

employed prior to the strike).    Congress Plaza fails to inform

why the use of temporary workers standing alone, in numbers it

decides upon, should preclude a finding by the Director that

substantially normal business operations had resumed.

                                 33
1-09-2025
change in circumstances from the first couple weeks after the

strike, when the hotel was undoubtedly experiencing a "stoppage

of work," to support his conclusion that the work stoppage had

ceased by July 5, 2003.

     While Congress Plaza's contention regarding the absence of

any evidence showing a change of circumstances from June 15,

2003, the start of the strike, to July 5, 2003, is well taken,

there are admissions in the record by Congress Plaza, which

support the conclusion drawn by the Director that by July 5,

2003, Congress Plaza had resumed substantially normal levels of

operation.   "[T]his court will not substitute its judgment for

that of the agency merely because other reasonable inferences

could have been drawn from the evidence."   Bridgestone, 305 Ill.

App. 3d at 147, citing Golab v. Department of Employment

Security, 281 Ill. App. 3d 108, 114, 666 N.E.2d 347 (1996).

     While it is true that no specific documentary evidence

exists to demonstrate a change in circumstances within three

weeks after the strike, the record contains Mr. Souder's written

responses to the Department's early inquiries regarding the level

of Congress Plaza's business operations immediately after the

strike.   In written responses to the Department, Mr. Souder

indicated that the hotel was using temporary workers to fill

guest services positions as needed and 94 permanent employees

were working at the hotel as of July 29, 2003.   In his response

to the August 2003 inquiry by the Department, "Do you feel that

                                34
1-09-2025
the hotel's level of operation is substantially normal despite

the strike?", Mr. Souder responded, "Yes."    In correspondence

dated August 27, 2003, the Department asked the very same

question, with the follow-up question, "If yes, why?"    Mr. Souder

responded, "Yes.    All services normally provided for the guests

are being provided."   To the questions, "What is the extent of

curtailment in operations?    What is the percentage?"   Mr. Souder

responded, "None.   0%."   To the question, "How many managers are

being utilized and to what extent is [any] work being

neglected?", Mr. Souder responded, "All the managers of the

Hotel.   No work is being neglected."

     That Congress Plaza later sought to limit the Department's

reliance on these admissions is understandable, though we find

that Mr. Souder's status as a nonattorney fails to undercut the

reasonable import of his admissions; in any event, we cannot say

that a fair reading of Mr. Souder's written admissions that there

was no curtailment in Congress Plaza's operations, that no work

was being neglected, and that all guest services were being

provided, are at odds with the Director's decision.

     We decline to engage in any reweighing of Mr. Souder's

testimony to reconcile his early admissions with his later

complaint that he misunderstood the intent of the questions when

it was explained to him the information would be used in

assessing whether the ineligibility under section 604 would

continue.   See Shell Oil Co., 7 Ill. 2d at 339 (Director's

                                 35
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finding will not be disturbed on review when evidentiary support

exists for the decision).   The Director properly gave the

admissions their "natural probative effect."   Bridgestone, 305

Ill. App. 3d at 149 (newspaper articles, which referenced

statements made by Bridgestone's officials that the employer was

"resuming full production" and its "plant was running at full

speed," supported Director's decision that Bridgestone had

resumed substantially normal business operations).    We reject any

suggestion by Congress Plaza that the weight the Director gave to

the admissions is at odds with the record evidence.   See Slowik

v. Schrack, 77 Ill. App. 3d 42, 45-46, 395 N.E.2d 753 (1979)

("credibility and weight of the evidence are normally matters

left to the finder of fact").

     The parties agree that under rule of law applicable to this

case, "stoppage of work" ceases when the employer's business

operations have returned to substantially normal levels.     The

Director's conclusion that the "stoppage of work" had ceased

beginning the week after July 5, 2003, "necessarily presupposes a

finding that there was not sufficient evidence to invoke the

statutory exception [based on a work stoppage due to a labor

dispute.]"   Be-Mac Transport Co., 20 Ill. App. 3d at 354.

     The burden of going forward to overcome the prima facie case

that the claimants were "not ineligible" for unemployment

benefits rested upon, and was assumed by, Congress Plaza.     The

findings of fact by the Director amply support his decision that

                                36
1-09-2025
the claimants were "not ineligible" under section 604.   On the

mixed question of fact and law, based on the record before us, we

cannot say the Director's decision finding Congress Plaza had

resumed substantially normal business operations for weeks ending

after July 5, 2003, is clearly erroneous.

                            CONCLUSION

     Based on the administrative record, we are not left with a

definite and firm conviction that the Director made a mistake in

finding the claimants "not ineligible" to receive unemployment

compensation for weeks beginning after July 5, 2003, under

section 604 of the Act, based on his finding that Congress Plaza

had resumed substantially normal business operations by that

date, the ongoing labor dispute notwithstanding.

     We affirm the judgment of the circuit court confirming the

decision of the Director.

     Affirmed.

     HALL, P.J., and LAMPKIN, J., concur.

                                37
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           REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
______________________________________________________________________________
      520 SOUTH MICHIGAN AVENUE ASSOCIATES, d/b/a the Congress Plaza Hotel
      and Convention Center,
            Plaintiff-Appellant,

             v.

      ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY, an administrative
      agency in the State of Illinois, Brenda A. Russell, DIRECTOR OF ILLINOIS
      DEPARTMENT OF EMPLOYMENT SECURITY, LOCAL 1, UNITE HERE, f/n/a/
      Hotel Employees and Restaurant Employees International Union, et al.
             Defendants-Appellees.
        _______________________________________________________________

                                     No. 1-09-2095

                               Appellate Court of Illinois
                              First District, First Division

                             Filed: September 7, 2010
       _________________________________________________________________

                  JUSTICE GARCIA delivered the opinion of the court.

                      HALL, P.J., and LAMPKIN, J., concur.
       _________________________________________________________________

                   Appeal from the Circuit Court of Cook County
                   Honorable Alexander P. White, Judge Presiding
       _________________________________________________________________

For PLAINTIFF-APPELLANT                         For DEFENDANTS-APPELLEES

Bradley Wartman, Esq.                           N. Elizabeth Reynolds
Peter Andjelkovich, Esq.                        Angie M. Cowan
Peter Andjelkovich & Associates                 Allison, Slutsky & Kennedy, P.C.
39 S. LaSalle, Suite 200                        230 W. Monroe Street, Suite 2600
Chicago, Illinois 60602                         Chicago, Illinois 60602

                                                Carl J. Elitz, Assistant Attorney General
                                                Lisa Madigan, Attorney General,

                                           38
1-09-2025

                 State of Illinois
                 100 W. Randolph Street, 12th Floor
                 Chicago, Illinois 60601

            39