People ex rel. Dept. of Labor v. K. Reinke, Jr. & Co.

Case Date: 02/21/2001
Court: 1st District Appellate
Docket No: 1-00-0226 Rel

THIRD DIVISION

FEBRUARY 21, 2001

1-00-0226

THE PEOPLE ex rel. ) Appeal from the
THE DEPARTMENT OFLABOR,) Circuit Court of
  ) Cook County
)
Plaintiff-Appellant, )
)
v.)
)
K. REINKE, JR. AND COMPANY/REINKE)
INSULATION and KARL REINKE,)
JR., Indiv. and in His Capacity)
as Company President,) Honorable Richard
) A. Siebel, Judge
Defendants-Appellees.) Presiding.

JUSTICE CERDA delivered the opinion of the court:

Plaintiff, the People of the State of Illinois ex rel. theIllinois Department of Labor, appeals from the dismissal of itscomplaint seeking overtime compensation on behalf of 27 employeesof defendant K. Reinke, Jr. & Company/Reinke Insulation. Alsosued was defendant Karl Reinke, Jr., individually and in hiscapacity as company president. The issue on appeal is whetherthe legislature intended any limitations period to apply toactions that are brought by the State on behalf of employeespursuant to section 12(b) of the Minimum Wage Law (820 ILCS105/12(b) (West 1998)). We find that no statute of limitationsapplies to plaintiff's complaint, and we reverse and remand.



FACTS

On April 10, 1998, plaintiff, the People of the State ofIllinois, filed a complaint against defendants, alleging thatdefendants failed to comply with the provisions of the MinimumWage Law by not paying 27 employees time and a half for hoursworked after 40 hours per week. The total amount of compensationallegedly due was about $29,000. The relevant time period wasJuly 1, 1990, through June 22, 1993.

Defendants filed a second motion to dismiss the complaint inwhich they argued that the applicable statute of limitations wasfive years under section 13-205 of the Code of Civil Procedure(735 ILCS 5/13-205 (West 1998)).

On June 23, 1999, the trial court entered a memorandum order finding that section 12(b) actions were subject to section 13-205. Therefore the only claims that could be pursued were thosedating from the period of April 10, 1993, through June 22, 1993.

On December 16, 1999, the remaining claims that were timelyfiled were dismissed pursuant to settlement.

On January 14, 2000, plaintiff filed a notice of appeal from

the June 23, 1999, and December 16, 1999, orders. Plaintiff inits brief appears to only contest the former order; plaintiffdoes not argue that the trial court erred in entering the latterorder.



ANALYSIS

Plaintiff argues that its direct actions under section 12(b)of the Minimum Wage Law for wage underpayments are not governedby any statute of limitations.

While section 12(a) of the Minimum Wage Law contains athree-year statute of limitations, there is none in section12(b):

"(a) If any employee is paid by his employer lessthan the wage to which he is entitled under theprovisions of this Act, the employee may recover in acivil action the amount of any such underpaymentstogether with costs and such reasonable attorney's feesas may be allowed by the Court, and any agreementbetween him and his employer to work for less than suchwage is no defense to such action. At the request ofthe employee or on motion of the Director of Labor, theDepartment of Labor may make an assignment of such wageclaim in trust for the assigning employee and may bringany legal action necessary to collect such claim, andthe employer shall be required to pay the costsincurred in collecting such claim. Every such actionshall be brought within 3 years from the date of theunderpayment. Such employer shall be liable to theDepartment of Labor for 20% of the total employer'sunderpayment and shall be additionally liable to theemployee for punitive damages in the amount of 2% ofthe amount of any such underpayments for each monthfollowing the date of payment during which suchunderpayments remain unpaid. ***

(b) The Director is authorized to supervise thepayment of the unpaid minimum wages and the unpaidovertime compensation owing to any employee oremployees under Sections 4 and 4a of this Act and maybring any legal action necessary to recover the amountof the unpaid minimum wages and unpaid overtimecompensation and an equal additional amount as punitivedamages, and the employer shall be required to pay thecosts. Any sums thus recovered by the Director onbehalf of an employee pursuant to this subsection shallbe paid to the employee or employees affected. Anysums which, more than one year after being thusrecovered, the Director is unable to pay to an employeeshall be deposited into the General Revenue Fund." 820ILCS 105/12 (West 1998).

Three districts of the appellate court have found that thethree-year statute of limitations in section 12(a) does not applyto the action that the Department of Labor can bring undersection 12(b). People ex rel. Department of Labor v. SoccerEnterprises, Inc., 302 Ill. App. 3d 481, 484, 707 N.E.2d 108 (1stDist. 1998); People ex rel. Martin v. Smith, 205 Ill. App. 3d553, 557, 563 N.E.2d 1170 (4th Dist. 1990); People ex rel. Martinv. Schwartz Oil Field Services, Inc., 203 Ill. App. 3d 903, 906,561 N.E.2d 201 (5th Dist. 1990).

In contrast, an earlier First District case, Amigleo v.Bernardi, 175 Ill. App. 3d 449, 458, 529 N.E.2d 1020 (1988), heldthat a logical interpretation of section 12 would be to apply thethree-year statute of limitations of section 12(a) to section12(b). Amigleo was a mandamus action to compel the Department ofLabor to prosecute plaintiffs' wage claims in which plaintiffssought an injunction against the Department's policy to limit itswage collections to claims that were not more than two years old. Amigleo held that the trial court properly refused to issue awrit of mandamus because the Department's powers were onlydiscretionary and because there was no injustice to plaintiffs asthey failed to institute their own timely suit under section12(a). Amigleo, 175 Ill. App. 3d at 456. The court's statementconcerning the applicability of the statute of limitations tosection 12(b) was in the context of a discussion of plaintiffs'further argument that the Department's two-year policy wasunreasonable.

Soccer, 302 Ill. App. 3d at 485, a First District case,found that if Amigleo had any precedential value, it was limitedbecause the Department of Labor had since abandoned its policy ofinstituting unpaid wage collections to a two-year period. Soccer, 302 Ill. App. 3d at 485, citing with approval Smith, 205Ill. App. 3d at 558 (which found that Amigleo's interpretation ofsection 12 was dicta). Whether or not we agree with either ofthese two reasons for not following Amigleo on the issue of thestatute of limitations, we believe that Soccer has effectivelyoverruled Amigleo on this issue.

The Illinois Code of Civil Procedure in section 13-205provides as follows:

"Except as provided in Section 2-725 of the'Uniform Commercial Code' *** and Section 11-13 of 'TheIllinois Public Aid Code', *** actions on unwrittencontracts *** and all civil actions not otherwiseprovided for, shall be commenced within 5 years nextafter the cause of action accrued." 735 ILCS 5/13-205(West 1998).

As the three-year statute of limitations of section 12(a)does not apply to section 12(b), the issue is whether thelegislature by its omission of a limitations period meant toadopt the catchall five-year statute of limitations for "allcivil actions not otherwise provided for" contained in section13-205 or whether it meant that no statute of limitations wasapplicable. The cases finding that no statute of limitationsapplied to section 12(b) do not address the issue whether section13-205 applied. Soccer, 302 Ill. App. 3d 481; Smith, 205 Ill.App. 3d 553; Schwartz, 203 Ill. App. 3d 903.

Our standard of review of a dismissal pursuant to section 2-619 is de novo because this issue concerns statutoryinterpretation. First Bank & Trust Co. v. King, 311 Ill. App. 3d1053, 1059, 726 N.E.2d 621 (2000).

The overriding objective in interpreting a statute is toascertain and give effect to the intent of the legislature. Roser v. Anderson, 222 Ill. App. 3d 1071, 1075, 584 N.E.2d 865(1991). To ascertain the legislature's intent, we first look tothe plain language of the statute. Advincula v. United BloodServices, 176 Ill. 2d 1, 17, 678 N.E.2d 1009 (1996); Burnett v.Safeco Insurance Co., 227 Ill. App. 3d 167, 173, 590 N.E.2d 1032(1992). In addition to the language chosen by the legislature,the court should consider the reason for the law, the evil to beremedied, and the purpose to be obtained thereby. Roser, 222Ill. App. 3d at 1075.

The omission of an explicit provision on the inapplicabilityof the statute of limitations to section 12(b) actions could bebased on either one of two assumptions by the legislature: (1)that the omission of a statute of limitations in a statuteestablishing a cause of action makes section 13-205 operative; or(2) that no statute of limitations is applicable to actionsbrought by the government to assert a right belonging to thegeneral public.

Some support for the position that the legislature wasacting on the second assumption is found in a reference inanother statute to the general inapplicability of statutes oflimitation to the State. Section 13-121 of the Code of CivilProcedure states in part that "the rule that the State ofIllinois is not bound by acts of limitations shall not apply" tothe limitation on claims to real estate. 735 ILCS 5/13-121 (West1998). The legislature's explicit reference to this "rule"indicates that it believed that a section 12(b) action would beimmune from statutes of limitation and that the statute oflimitations in section 13-205 would not therefore apply bydefault.

We recognize that there is no rule that the State is neverbound by statutes of limitations. Under City of Shelbyville v.Shelbyville Restorium, Inc., 96 Ill. 2d 457, 462, 451 N.E.2d 874(1983), the determination whether a government's action is immunefrom a statute of limitations depends on whether the right soughtto be asserted is a right belonging to the "general public"rather than to the government or to "some small and distinctsubsection of the public at large."

Further support for concluding that no statute oflimitations was intended is found in the fact that a case thatwas decided several years ago found that governmental immunityprecluded application of a statute of limitations to theDepartment of Labor's action on behalf of former employees torecover unpaid vacation leave benefits and statutory penalties. In People ex rel. Martin v. Lipkowitz, 225 Ill. App. 3d 980, 985,589 N.E.2d 1892 (1992), the action was brought pursuant to theIllinois Wage Payment and Collection Act (Ill. Rev. Stat. 1987,ch. 48, par. 39m-11), under which the Department of Labor had thepower to take assignments of wage claims and to prosecute actionsfor the collection of wages for persons financially unable toprosecute such claims. The court found that the Director'saction belonged to the public because the public had an interestin enforcing the Illinois Wage Payment and Collection Act. Lipkowitz, 225 Ill. App. 3d at 985.

Although plaintiff argues that Lipkowitz did not involve anaction in the Department of Labor's "own right," the purpose ofthe Department's action in Lipkowitz on behalf of aggrievedemployees was to enforce public policy. Lipkowitz analogized tothe Minimum Wage Law: "Enforcing the public policy underlyingthe [Illinois Wage Payment and Collection Act] inures to thebenefit of Illinois workers and taxpayers in precisely the waythat the [Minimum Wage Law] does." Lipkowitz, 225 Ill. App. 3dat 985. Lipkowitz's holding that there was immunity fromstatutes of limitation would indicate to the legislature thatsimilarly no statute of limitations would apply to section 12(b)actions.

We believe a section 12(b) action asserts a right belongingto the general public. Section 2 of the Minimum Wage Law statesthat the legislature was concerned about the existence of"conditions detrimental to the maintenance of the minimumstandard of living necessary for the health, efficiency andgeneral well-being of workers." 820 ILCS 105/2 (West 1998). Section 2 further stated that those conditions imposed upontaxpayers the "unnecessary burden" to assist workers. 820 ILCS105/2 (West 1998). The legislature likely believed that anaction by a State agency to enforce compliance with a wage lawinvolved a public right and was immune from statutes oflimitation.

A review of the history of the amendment of section 12 ofthe Minimum Wage Law is an indication that the legislature didnot intend to have a statute of limitations for direct actions bythe Director. In 1971 the legislature enacted the law foractions by or on behalf of the employee. Ill. Rev. Stat. 1971,ch. 48, par. 1012. The law did not give the Director the rightto bring an action in his own right. There were no limitationsprovisions.

In 1984 the legislature amended the section to include atime limitation period for employees for their own actions. Ill.Rev. Stat. 1983, ch. 48, par. 1012(a). For the first time theDirector was given the power to file an action in his own rightand without any time limitations. Ill. Rev. Stat. 1983, ch. 48,par. 1012(c).

In 1986 the legislature amended the section to again containtwo subsections. Ill. Rev. Stat. 1987, ch. 48, par. 1012. TheDirector no longer had a right of assignment from an employee toenforce a private right. The employee's private right of actionwas subject to a three-year statute of limitations. Ill. Rev.Stat. 1987, ch. 48, par. 1012(a). Actions by the Director in hisown right contained no limitations provision. Ill. Rev. Stat.1987, ch. 48, par. 1012(b).

The section was amended in 1990 to grant the Director theright to accept an assignment by an employee and to file anaction on behalf of the employee. Ill. Rev. Stat. 1991, ch. 48,par. 1012(a). Every action under subsection (a) was subject to athree-year statute of limitations. Ill. Rev. Stat. 1991, ch. 48,par. 1012(a). Under subsection (b) the Director could bring anaction in his own right again without time limitation. Ill. Rev.Stat. 1991, ch. 48, par. 1012(b). This is the version of thesection which is applicable to this case.

As can be seen, the history of this section is a strongindication that our legislature never intended to provide for astatute of limitations for lawsuits filed by the Director undersubsection (b). The legislature however has provided for astatute of limitations for actions filed under subsection (a).

We further note that the legislature did not amend section12(b) after cases were decided that held that no statute oflimitations applied. See Fink v. Ryan, 174 Ill. 2d 302, 308, 673N.E.2d 281 (1996) (the legislature is presumed to act withknowledge of the prevailing case law in enacting amendment). Thelegislature can amend a statute if it intended a differentconstruction than a court decision has given the statute. In reMay 1991 Will County Grand Jury, 152 Ill. 2d 381, 387-88, 604N.E.2d 929 (1992).

Defendants argue that no statute of limitations in section12(b) is inconsistent with section 8's requirement that employerskeep pay records for employees for a minimum of three years (820ILCS 105/8 (West 1998)). However, a five-year statute oflimitations, which defendants urge applies, is also inconsistentwith the three-year minimum record-keeping time period. In lightof the legislature's silence in face of cases finding that nostatute of limitations was intended, we are not persuaded thatsection 8 indicates the applicability of section 13-205.

We have considered the remainder of defendants' arguments onthe statute of limitations issue and find them unpersuasive.

The June 23, 1999, judgment is reversed, and the cause isremanded.

Reversed in part and remanded.

HALL, P.J., and WOLFSON, J., concur.