Court Opinion

ID: 9520426
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:39:38.51406+00
Date Added: 2024-06-11T12:46:14.214228
License: Public Domain

PRESIDING JUSTICE McMORROW, dissenting: I respectfully dissent. The Department maintains that the Act sets forth a particularized employer “standing” requirement designed to alleviate the Department’s administrative burden to notify employers óf a claimant’s eligibility for unemployment compensation benefits. To lessen the Department’s administrative notice obligation, the Department contends, the Act limits entitlement to notice of Department “findings” and “determinations,” and thereafter the right to challenge wage benefit charges, to those employers who have filed “sufficient” allegations of possible ineligibility and have renewed those allegations in an application for revision of wage benefit charges. Carson argues, the able trial court judge found, and I agree, that the Department’s interpretation and application of the Act have narrowed the Act’s requirement in a manner not contemplated by the Illinois legislature. In so doing, the Department has erected a labyrinth of barriers to employer standing that is simply not found in the language of the Act itself. I also agree with Carson and the trial court that the Department’s “sufficiency” standard is in error because it is considerably more stringent than the sufficiency standard embodied in the Act. I would also hold that the Department’s hearing upon Carson’s application for revision operates as a waiver of any argument by the Department that Carson was not entitled to cancellation because its allegations of possible ineligibility were factually insufficient. As a result, I am unable to concur in the majority’s opinion adopting the Department’s positions in the case at bar. I The majority’s entire analysis, as well as the arguments of the Department, hinge upon the assumption that an employer must file a “sufficient” allegation of possible ineligibility in order for the employer to have “standing” “to object” to wage benefit charges through a section 1508 application for revision. According to the majority and the Department, this “sufficient” allegation must be presented by the. employer with respect to a section 701 “finding,” a section 702 “determination,” and in the substance of a section 1508 “application for revision.” Both the majority and the Department misconstrue the roles of an employer’s allegation of possible ineligibility, and an employer’s application for revision of wage benefit charges, in the overall scheme of the Act. The purpose of an employer’s allegation of possible ineligibility is to allow the employer the opportunity to challenge a claimant’s entitlement to benefits at the time the Department makes its decision of whether the claimant is in fact entitled to benefits (a section 701 “finding”), and if so, what amount of benefits are appropriate for a particular period of time (a section 702 “determination”). Qnce the, Department’s “findings” and “determinations” are made, the Department is directed to so notify all employers who have filed allegations of possible ineligibility with regard to that claimant. If the employer is not so notified, it is entitled to cancellation of wage benefit charges deriving from the “findings” and “déterminations” of which it was deprived notice, pursuant to an employer’s section 1508 application for revision. ■ Thus, the legislature’s intent in enacting section 1508 is to provide for cancellation of wage benefit charges erroneously assessed against an employer by reason of an administrative or clerical error. The administrative error anticipated by section 1508 is the error, of imposing wage benefit charges upon an employer without providing the employer the requisite notice and Opportunity to be heard, which are, in conjunction with section 1508, an inherent part of the claims-processing provisions of the Act. Section 1508 provides for an internal correction mechanism to remedy the administrative error of failure of notice to the employer, through the cancellation of inappropriate wage benefit charges, in order to avoid the time, delay, and expense of the Department’s defense of circuit court litigation with respect to those charges. As the tnajority itself notes, “the likelihood of an administralive error resulting in the Department’s failure to send the requisite notice of a claim to the employer was contemplated and compensated for by the legislators in the drafting of this Act.” 164 Ill. App. 3d at 538. A To support its theory that section 1508 is designed to offer employers a second chance to demonstrate that a claimant was ineligible for benefits, the Department argues, and the majority agrees, that the language of the Act itself mandates that an employer’s application for revision include an allegation of possible ineligibility. The position is not well taken. There is nothing in section 1508, or sections 701 and 702, which requires an employer to include, in its application for revision, an allegation that the claimant was ineligible for benefits. The majority and the Department also reason that the Department’s Regulation 302, adopted pursuant to section 1508, properly calls for the inclusion of an allegation of possible ineligibility in an employer’s application for revision of wage benefit charges. Section 1508 accords to the Department the authority to determine the “time and manner” of an employer’s application for revision. However, the Department’s interpretation of its own “time and manner” regulation, in furtherance of section 1508, cannot engraft upon section 1508 a “substantive” component to an application for revision that is not embodied in section 1508. (See generally, e.g., Shanahan v. Edgar (1986), 149 Ill. App. 3d 868, 501 N.E.2d 197.) Thus, Regulation 302, as construed by the Department, exceeds the scope of section 1508, and attempts to require more from an employer’s application for revision than that called for in the statute itself. It is significant that the Department’s construction of section 1508, adopted by the majority, permits the Department to effectively deprive a claimant of unemployment compensation benefits on an ex parte basis. The majority’s interpretation deprives a claimant of his right to notice and an opportunity to be heard with respect to the employer’s allegation that the claimant is ineligible for those benefits. Such a construction is contrary to the rule that statutes are to be interpreted in a manner that does not render them unconstitutional. See generally, e.g., Costello v. Unarco Industries, Inc. (1986), 111 Ill. 2d 476, 490 N.E.2d 675. I note that the position of the Department that section 1508 is intended to provide employers a second opportunity to demonstrate a claimant’s ineligibility allows the agency to consider two separate and unrelated matters in one hearing, a procedure not provided for in the Act. There is nothing that permits the Department to determine both a claimant’s entitlement to benefits, and an employer’s entitlement to cancellation of wage benefit charges, in one proceeding. See generally Owens-Illinois, Inc. v. Bowling (1983), 95 Ill. 2d 397, 401-03, 447 N.E.2d 1324. B The majority also concludes that Carson lacked “standing” to challenge its wage benefit charges because Carson’s allegations of possible ineligibility, which it had previously filed with the Department, were “insufficient.” The majority adopts the Department’s general position that “sufficiency” of an employer’s allegation of possible ineligibility dictates whether the employer has “standing” “to object” to wage benefit charges in a section 1508 application for revision. I submit that the sufficiency or lack thereof of an employer’s allegation of possible ineligibility is an improper standard by which to determine status or standing to object to wage benefit charges. Status or standing should not derive, as the trial court noted, “from the degree of specificity relating to the allegations of the grievance — but rather who is the most recent employing unit and the interest involved and its objectives.” I also note that the majority never explains what is “sufficient” for purposes of an employer’s allegation of possible ineligibility. I agree with Carson’s argument that an employer’s allegation of possible ineligibility is “sufficient” if it presents factual allegations which tend to show that the claimant may be ineligible for benefits. (See Ill. Rev. Stat. 1981, ch. 48, par. 452; Ill. Rev. Stat. 1979, ch. 48, par. 452; see generally Board of Managers of Dominion Plaza One Condominium Association No. 1-A v. Chase Manhattan Bank (1983), 116 Ill. App. 3d 690, 452 N.E.2d 382; Sostak v. Sostak (1983), 113 Ill. App. 3d 954, 447 N.E.2d 1345.) The trial court’s finding that Carson’s allegations of possible ineligibility were in sufficient compliance with the Act was not error, and the court properly ordered their cancellation. II I also disagree with the majority’s treatment of the Department’s hearing upon Carson’s application for revision. The majority reasons that although “Carson’s application was deemed insufficient; *** it erroneously was granted a hearing.” (164 Ill. App. 3d at 539.) The majority then observes that it “fail[s] to discover, and Carson fails to show ***, any manner in which it was prejudiced by the granting of a hearing where one could have been denied. Thus, Carson was granted more due process protection than it was entitled to and, although in error, the granting was to the benefit of the company, causing no harm.” 164 Ill. App. 3d at 539. The majority is in error that Carson was not prejudiced by the procedure adopted by the Department. By concluding that Carson’s allegations of possible ineligibility were “insufficient,” for lack of suf- ' ficient factual allegation regarding the claimant’s possible ineligibility, the Department deprived Carson of its right to amend its application • to satisfy the Department’s “sufficiency” standard prior to a hearing on Carson’s application. Thus, once it held a hearing, the agency foreclosed Carson’s statutory right to amend its application for revision. The prejudice to Carson is obvious, since the Department refused to cancel wage benefit charges on the sole premise that Carson’s allegations of possible ineligibility were factually “insufficient.” Furthermore, the Department’s allowance of a hearing on Carson’s application for revision effectively waived any claim from the Department that Carson’s application was factually insufficient, and the Department cannot now urge that factual insufficiency as a basis for the Department’s refusal to cancel the wage benefit charges Carson challenged in its application for revision. Carson also requested cancellation of wage benefit charges deriving from referee and board of review decisions of which Carson was never notified. Section 1508’s references to sections 701 and 702 subsume or incorporate by necessary implication administrative appellate review orders thereon of which an employer was deprived of notice. Accordingly, the trial court correctly ordered their cancellation here. Because the majority dismisses Carson’s cross-appeal without discussion of its substantive merit, I do not address the arguments raised therein. For the reasons stated, I respectfully dissent.