1

STATE OF ILLINOIS ILLINOIS LABOR RELATIONS BOARD

STATE PANEL

State of Illinois, Department of Central )

Management Services, )

)

Employer/Petitioner, )

)

) Case No. S-UC-17-028

and )

)

American Federation of State, County )

and Municipal Employees, Council 31, )

)

Labor Organization. )

ADMINISTRATIVE LAW JUDGE’S RECOMMENDED DECISION AND ORDER

On October 19, 2016, the State of Illinois Department of Central Management Services

(Employer or Petitioner) filed a unit clarification petition with the Illinois Labor Relations Board

(Board) seeking to exclude hearing referee positions within the Illinois Department of

Employment Security (IDES) from the RC-10 bargaining unit represented by the American

Federation of State, County and Municipal Employees, Council 31 (AFSCME or Union). On

March 31, 2017, the Employer amended the petition to clarify that it sought to exclude both

filled and vacant hearing referee positions. The Employer asserts that the positions are excluded

from collective bargaining because they are managerial within the meaning of Section 3(j) of the

Illinois Public Labor Relations Act (Act), 5 ILCS 315 (2014), as amended.

In accordance with Section 9(a) of the Act, an authorized Board agent conducted an

investigation and determined that there was reasonable cause to believe that a question

concerning representation existed. A hearing on the matter was conducted on May 9 & 10, and

July 18, 2017 before ALJ Deena Sanceda. Both parties elected to file post-hearing briefs. The

Board subsequently transferred the case to me.

I. Preliminary Findings

The parties stipulate and I find:

2

1. The Employer is a public employer within the meaning of Section 3(o) of the Illinois

Public Labor Relations Act. 5 ILCS 315/3(o).

2. AFSCME is a labor organization within the meaning of Section 3(i) of the Act. 5 ILCS

315/3(i).

3. The Board has jurisdiction over this matter pursuant to Section 5(a-5) of the Act. 5 ILCS

315/5(a-5).

II. Issues and Contentions

The issues are (1) whether the unit clarification petition is procedurally appropriate, (2)

whether the hearing referees in the Illinois Department of Employment Security (IDES) are

managerial as a matter of law, and (3) whether they are managerial as a matter of fact.

The Union contends that the unit clarification petition is inappropriately filed. It argues

that there has been no change in the hearing referees’ duties or functions and no change in

statutory or case law affecting the bargaining rights of the hearing referees since the Board

certified the Union as the hearing referees’ bargaining representative. In addition, the Union

asserts that the Employer waived the right to file the unit clarification petition under the change

in law standard because the Board certified the unit in response to the parties’ jointly-filed,

voluntary recognition petition. The Union also contends that the petition is inappropriately filed

to the extent that it seeks to remove vacant positions from the bargaining unit, and it asks the

Board to reconsider its position that it is appropriate to make determinations on a vacant

position’s unit placement. Finally, the Union characterizes this petition as part of a systematic

attempt to remove attorneys from the RC-10 bargaining unit, which is contrary to the policies of

the Act.

The Employer counters that the unit clarification is appropriately filed because the

Court’s decision in Office of Cook County State’s Attorney v. Local Labor Rel. Bd. constitutes a

change in case law that impacts the bargaining rights of the hearing referees. 166 Ill. 2d 296,

304-05 (1995). The Employer also contends that the unit clarification petition is appropriately

filed because it seeks to remove positions from the bargaining unit that are statutorily excluded

from collective bargaining.

Addressing the merits, the Employer contends that the hearing referees are managerial as

a matter of law because they exercise independent judgment and act as surrogates for the

3

Director of IDES and the Board of Review. The Employer contends that the hearing referees are

likewise managerial as a matter of fact. The Employer reasons that they are “the whole game”

when it comes to determining eligibility for benefits and setting aside reserves for unemployment

insurance, which is a primary mission of the agency. They exercise discretion in conducting

hearings and issuing decisions; and their superiors do not review their decisions. In addition, the

hearing referees’ decisions become the final administrative determination for IDES because the

vast majority of their cases are not appealed. The Employer further notes that when the cases are

appealed, the members of the Board of Review are deferential to the draft decisions prepared by

the Board of Review referees.

The Union argues that the hearing referees are not managerial as a matter of law because

their discretion is limited and they have no broad authority to act on behalf of the agency. They

are bound by legal interpretations and policy decisions made by the IDES Office of Legal

Counsel and by detailed policies set out in statute, agency rules, and U.S. Department of Labor

procedures. In addition, their authority to fashion remedies is limited.1 The Union emphasizes

that the hearing referees do not review most of the agency’s initial findings because parties

frequently do not appeal them. When the hearing referees do review the agency’s initial

findings, the decisions they issue affect only the parties to the case, do not set precedent for other

cases before the agency, and are not available to the public. The Union concludes that the

hearing referees simply help carry out the mission of the agency, as do most of the agency’s

1000 other employees, and that they are not managerial as a matter of law. For these reasons, the

Union similarly contends that the hearing referees are not managerial as a matter of fact.

III. Facts

1. IDES Mission and Organization

The mission of the IDES is to administer the Unemployment Insurance Act, provide job

services, produce statistics of economic information, and provide analysis of that information.

To that end, IDES has four basic functions: (1) to pay temporary income maintenance, i.e.,

unemployment benefits, to individuals who are unemployed through no fault of their own, (2) to

1 The Union further notes that administrative law judges in other jurisdictions who exercise greater

discretion than the hearing referees in this case are represented for purposes of collective bargaining.

4

collect revenues from employers to fund those benefits, (3) to match job seekers with job

openings, and (4) to generate various types of labor market information.

Seventy percent of the IDES’s employees, including the hearing referees at issue in this

case, are involved in the unemployment insurance program by collecting revenue to support the

payment of unemployment benefits.

Director Jeffrey Mays heads the IDES. The Director oversees the Offices of the Director,

the Office of the Chief of Staff, the Business Services Bureau, the Service Delivery Bureau, and

the Legal Services Bureau.

The Offices of the Director include the EEO/Affirmative Action unit, the Office of

Internal Audit, the Economic Information and Analysis Unit, and the Labor Management

Relations Unit.

The Business Services Bureau administers veterans programs funded by the Federal

Government and an electronic job matching system, also known as the labor exchange system.

The Service Delivery Bureau includes the job services division and the local

unemployment offices, which provide services to the public. Individuals file unemployment

insurance claims with claims adjudicators. The claims adjudicators make the initial agency

determination of whether an individual is entitled to unemployment benefits.

The Office of the Chief of Staff oversees the Bureaus of Administration, Information

Services, and Financial Operations. Administration handles procurement, general services,

human resources management, and employee training. Information Services performs data

processing and programming.2 Financial Operations performs accounting, payment of bills, and

collection and distribution of the money used to pay unemployment benefits. It includes the

Office of the Budget, Accounting Services, External Audits, Quality Assurance and Compliance

Review, and the Revenue Division. Specifically, revenue analysts in the Revenue Division

collect unemployment taxes, set up unemployment accounts, and handle inquiries into, and

analysis of, employer accounts. Tax auditors audit employers to determine whether they are

paying the appropriate unemployment contributions and send employers demands for payment if

they are not paying the appropriate amount. Tax auditors and revenue analysts make the initial

agency determinations concerning an employer’s unemployment tax rate, the charges that an

2 Most of the individuals who worked in this Bureau are now within the Department of Information and

Technology.

5

employer must pay, whether an employer is in fact chargeable for a particular unemployment

insurance claim, whether an employer is entitled to a refund because it overpaid its

unemployment taxes, whether an employer is liable for penalties and interest, and whether an

employer owes the IDES money.

The Chief Legal Counsel Joseph Mueller oversees the Legal Services Bureau, which

includes legal counsel staff, the Appeals Division, the Board of Review, and administrative staff.

The legal counsel staff includes the General Counsel Natalie Stegall, Deputy Legal Counsel

Gregory Ramel, and the legislative liaison. Legal Counsel staff members draft rules and

regulations, prepare a digest of adjudication precedent, prepare legal opinions for the department,

review cases that parties have appealed to the circuit and appellate courts, and write decisions on

behalf of the Director.

All the hearing referees work in the Legal Services Bureau in either the Appeals Division

or the Board of Review. As discussed more fully in the next section, the Appeals Division and

the Board of Review represent different levels of administrative authority.

Elizabeth Lindberg is the Manager of the Appeals Division. She oversees the Benefit

Appeals Unit and the Administrative Hearings Unit. Assistant Manager Jennifer Borowitz-

Gutzke reports to Lindberg and helps oversee these units. Benefit Appeals referees work in the

in the Benefit Appeals Unit and Administrative hearing referees work in the Administrative

Hearings unit. Robert BonDurant and Bob Stevenson directly supervise the hearing referees in

the Appeals Division. Andrew Fox heads the Board of Review and directly supervises the

hearing referees in the Board of Review. There are 27 Benefit Appeals hearing referees. There

are four or five Administrative hearing referees. There are eight Board of Review hearing

referees.

2. Overview - Issuance and Review of Initial IDES Determinations

There are three levels of administrative authority within the IDES, described here first in

general terms to assist the reader. At the first level, claims adjudicators, revenue analysts, and

other employees in the Service Delivery Bureau or the Financial Operations Bureau make an

initial agency determination pertaining to matters within the IDES’s jurisdiction. Claims

adjudicators make a determination concerning an individual’s claim for employment insurance.

6

Revenue analysts or tax analysis made a determination concerning an employer’s unemployment

tax-rate or payment obligations. Parties may appeal these determinations to the second level.

At the second level, the hearing referees in the Appeals Division consider the parties’

appeals from the initial agency determinations. There are two types of hearing referees within

the Appeals Division, Benefit Appeals hearing referees and Administrative Appeals hearing

referees. Benefit Appeals referees consider appeals from determinations made by claims

adjudicators concerning an individual’s eligibility for unemployment benefits. Administrative

hearing referees consider appeals by employers from determinations made by revenue analysts,

or other employees in the Service Delivery Bureau, concerning tax-related matters and

chargeability issues. Administrative hearing referees sometimes also consider appeals from

claims adjudicators concerning an individual’s monetary eligibility for unemployment benefits.

When hearing referees consider benefit eligibility cases, they issue documents identified as

decisions. However, when hearing referees considering tax-related and chargeability cases, they

issue documents identified as recommended decisions. Parties may appeal the hearing referees’

decisions to the third level.

At the third level, there are two parallel authorities, the Board of Review and the

Director. They each consider appeals from different types decisions issued by hearing referees.

The Board of Review considers appeals from decisions made by hearing referees concerning an

individual’s eligibility for unemployment benefits, which mostly arise from decisions issued by

Benefit Appeals hearing referees.3 The Board of Review consists of five members. A separate

group of hearing referees, termed Board of Review hearing referees, are assigned to the Board of

Review. They draft decisions for the Board of Review’s consideration and approval, and these

decisions may affirm, modify, or reverse the lower authority hearing referees’ decisions. The

Director considers appeals from recommended decisions issued by Administrative hearing

referees in tax-related and chargeability cases. Legal counsel staff members review the appeal

and draft decisions for the Director’s consideration and review, which then issue in the

Director’s name upon approval. Parties may appeal decisions issued by the Board of Review

and decisions issued by the Director to circuit court.

3 Appeals from monetary eligibility decisions issued by Administrative hearing referees also come before

the Board of Review as do time lapse matters.

7

The following sections describe in greater detail the origin of the hearing referees’ cases,

the types of cases they consider, the process by which they hold hearings and draft their

decisions, and the legal impact of those decisions.

3. Benefit Appeals Hearing Referees

The Benefit Appeals hearing referees hear most of the cases involving disputed

unemployment benefit claims.

a. Origin of their Cases

Cases decided by the Benefit Appeals hearing referees arise from determinations made by

claims adjudicators. When an individual files a claim for unemployment benefits, the IDES’s

computer system makes an initial finding as to whether the claimant was paid sufficient wages to

qualify for unemployment benefits, and it automatically generates a document showing that

finding. An employer typically files a protest in response to a claim for unemployment benefits.

The protest gives the employer party status and entitles the employer to receive notice of further

agency actions. If the employer contests the claim, the adjudicator sets up a phone interview

with the claimant and the employer to gather facts. The adjudicator will reach a determination

following the phone interview that the claimant is either qualified or not qualified for

unemployment benefits.

If no party appeals the claims adjudicator’s decision, it is final and does not impact

anyone except the parties involved. The parties have 30 days within which to appeal the

adjudicator’s decision to a hearing referee.4 Once the parties appeal, the IDES assigns the case

to a Benefit Appeals hearing referee.

a. Types of Cases

The vast majority of cases (~60-75%) heard by Benefit Appeals hearing referees concern

Sections 601(A) and 602(A) of the Unemployment Insurance Act. The issues presented in cases

arising under these sections are whether an individual voluntarily leaves without good cause or

was involuntarily terminated and whether the individual was terminated for misconduct. If the

4 The agency has a year to reconsider the claims adjudicator’s determination on its own motion.

8

individual left without good cause or was terminated for misconduct, the individual is not

entitled to unemployment benefits.

Other types of cases include the following: 500(C) cases, which determine whether the

claimant meets the eligibility requirements of actively seeking work and availability for work;

500(A) cases, which consider how registration with the Illinois Job Link site affects eligibility

and appeals from benefit payment control fraud determinations; 612 cases, which arise

seasonally when academic personnel file claims alleging that they should have received benefits

over the summer; and 500(C)(4) cases, which concern unemployment benefit eligibility for

students, as opposed to full-time participants in the workforce.

b. Case Volume and Hearing Process

In 2016, the Benefit Appeals Unit received 40,533 appeals. The hearing referees each

hear approximately 8 cases a day and 40 cases a week. Each hearing is typically scheduled for

30 minutes. Some hearings last longer and some are shorter. Most of the hearings are held by

telephone. Hearing referees in Benefit Appeals must spend approximately 5 to nine minutes at

the beginning of the hearing to identify themselves, the date, the place of hearing, the

determination that is being appealed, and the individuals present at the hearing. In addition, the

hearing referees must explain the hearing procedure to the parties and ask each party if they have

any questions about the procedure. At the close of the hearing, the hearing referee must ensure

that all parties have said all they wish to say, and the hearing referee then informs the parties of

their appeal rights.

The Benefit Appeals hearing referees consider the case de novo. They rule on credibility

and apply the law to the facts, considering the same factors as the claims adjudicators. They

have the power to issue subpoenas, to compel production of documents, and to order depositions,

but they rarely exercise these powers. Benefit Appeals hearing referees have authority to rule on

evidentiary matters. However, their training manual states that the “technicalities of legal proof

characteristic of court proceedings are out of place in unemployment insurance hearings, and the

exclusionary rules applicable to admissibility of evidence in court proceedings should not be

adopted or used.” It further provides that “any evidence pertaining to the issues in a case should

be received as a matter of course.” Former Benefit Appeals hearing referee Celeste Haley

testified that when she received training on how to conduct a hearing, IDES managers informed

9

her that the hearing referees did not really rule on objections. They simply needed to note the

objection for the record so that the objecting party’s objection was memorialized. However,

Haley testified that she sometimes excluded exhibits when the party who proffered it did not

send it to the opposing party in accordance with IDES rules.

The Benefit Appeals hearing referees issue written decisions. Most are long form

decisions, which are approximately three pages long. The IDES computer system prepopulates

parts of the hearing referees’ decisions including the statement of law, jurisdiction, and the

conclusions of law. However, hearing referees have discretion to create their own boilerplate or

to borrow boilerplate language drafted by another hearing referee. In addition, the system allows

hearing referee to change or edit the pre-populated language, and hearing referees will delete

language where it does not apply. For example, if the hearing referee determines that a case was

incorrectly labeled by the local office as one type of separation case (e.g. discharge) the hearing

referee may add an issue so that the decision will correctly state that it is a different type of

separation case (e.g., a quit). However, there are limits on what a hearing referee can add to his

decision, and the hearing referee therefore cannot convert a separation case into a different class

or cases where the issue is not separation. The hearing referees then write the statement of fact

and the section that follows the conclusion.

Approximately a quarter or a fifth of cases result in short form decisions. There are four

types of short form decisions. The first is a default, which issues when a party who appeals a

case does not show up for a hearing. The second is a no-party status case, where an employer

files a late protest and is not a party to the case. The third is a late appeal, which results in a

dismissal of the appeal. The fourth is a withdrawal of the case, which occurs when a party

informs the IDES that it does not wish to proceed with the case. The computer system

prepopulates more of a short form decision than a long form decision. However, the hearing

referee still adds an explanation for the decision

c. Authority and Discretion of Benefit Appeals Hearing Referees

Benefit Appeals hearing referees’ supervisors do not review the decisions before the

hearing referees issue them because appropriately 500-600 decisions issue each week. Rather,

the supervisors of the Benefit Appeals hearing referees select a sampling of 40 Benefit Appeals

10

decisions picked at random each quarter to assess their quality and to ensure that they meet

federal standards.

As a general matter, IDES supervisors allow the hearing referees to decide the outcome

of their own cases and do not tell them how to rule. Hearing referees may ask their superiors for

advice on a case, but they are not bound by the advice their supervisors provide. For example,

Stevenson discusses cases with his subordinates or “kick[s] around” issues of law, but he does

not tell them how to rule. Stevenson may give them his opinion, but they are not obligated to

follow it.

The witnesses uniformly testified that hearing referees are formally bound only by

Illinois Appellate Court cases, Supreme Court cases, and IDES administrative rules. Agency

interpretative regulations and policy statements are persuasive but not binding. However, the

Guide to Unemployment Insurance Benefit Appeals Principles and Procedures, issued by the

U.S. Department of Labor and provided to referees, states that referees should follow decisions

both of the Board of Review and of the State courts. Specifically, it states the following:

[P]arties to an appeal, claims determination personnel, and the public [e]xpect reasonable

consistency of principle, reasoning, and result in appeals decisions involving similar sets

of facts. In attaining such a goal, decisions of higher tribunals are considered as binding

upon lower tribunals, while those of coordinate tribunals may be considered as persuasive

but not binding. To illustrate, referees, in deciding questions involving the interpretation

of law, should follow decisions of the board of review and of the State courts. Decisions

of fellow referees, opinions of agency counsel and of attorneys general, and agency

interpretative regulations and policy statements are considered as persuasive, but not

binding.”

In addition, IDES evaluates hearing referees on how well they cooperate with

management and specifically, how well they “cooperate…[with management] to achieve long or

short-term goals.” One of the IDES’s goals is to achieve consistency in the treatment of

procedural and substantive issues that come before the agency. Ramel testified that he expects

hearing referees to reach consistent outcomes if two cases present the same facts and if the

parties present the case in the same way. Mueller similarly testified that the IDES attempts to

maintain uniformity in the treatment of issues so that hearing referees addressing similar issues

treat them in the same manner. For example, he noted that the IDES wishes its hearing officers

to interpret the terms misconduct and voluntary resignation in the same manner. Nevertheless,

11

Mueller testified that it is impossible to ensure complete uniformity in decisions issued by

hearing referees because the IDES cannot control how each hearing referee will handle his case.

To achieve consistency in treatment of procedural and substantive issues that come

before the agency, supervisors issue memoranda to Benefit Appeals hearing referees’ that set

forth directives related to case handling. In addition, the OCL issues them digests of

adjudicative precedent to achieve consistency and to ensure that hearing referees apply uniform

interpretations of the law.

For example, on September 15, 1994, Ramel issued a memo to then head of the Appeals

Unit to clarify the manner in which Benefit Appeals hearing referees should treat cases in which

a party has failed to appear. Ramel issued the memo in response to the fact that Benefit Appeals

hearing referees’ decisions on this procedural issue were not consistent. Former Benefit Appeals

hearing referee Celeste Haley testified that she received this memo in a packet of training

materials, and that her supervisor instructed her to read the materials and to comply with them.

Similarly, on September 28, 2016, Mueller and Assistant Legal Counsel Les Lehr sent a

memorandum to all employees in the Benefit Appeals Unit and the Board of Review to apprise

them of a change in the Department’s approach to enforcing Section 500(A) of the

Unemployment Insurance Act. The UI Act requires claimants to be registered with employment

services as a condition of receiving unemployment benefits, and the Department decided that

claimants were required to have posted a resume on the employment service’s online labor

exchange system (IllinoisJobLink.com) by a certain date in order to begin receiving

unemployment benefits, unless they were otherwise exempt from that requirement. The memo

instructed hearing referees that if the claimant appealed a denial of benefits, which was based on

failure to post a resume on IllinoisJobLink.com, the hearing referee would have no discretion to

grant the appeal. The memo instructed that hearing referees would be required to deny the claim

even if the claimant registered later, after seeking benefits. In relevant part, the memo stated,

“you will still deny the claimant because the issue on appeal is only the weeks during which

the claimant was not registered.” (emphasis in original).

Mueller testified that hearing referees had discretion to disregard this memo, but the

weight of the evidence refutes this claim. The express language of the memo (“you will still

deny”) demonstrates that is a directive. IDES never informed hearing referees that they were not

required to follow the memo. Mueller stated he was unaware of any cases in which hearing

12

referees contravened the instructions in the memo. Lindberg’s follow-up memo of October 12,

2016, which she labeled “VERY IMPORTANT” confirms that IDES wanted its hearing referees

to adhere to the memos’ instructions. In relevant part, the email stated, “we are receiving a

relatively large number of 500A dockets and we’re seeing varying decisions and approaches to

these cases.” The email had attachments including the September 28, 2016 memo from Mueller

and Lehr. The email concluded, “you are each accountable for the information set forth in the

attachments....” Lindberg denied that the purpose of the email and the attachment was to ensure

that the hearing referees’ handled 500A cases in a consistent manner. However, the plain

language of her email, the high importance attached to its contents, and the fact that her email

followed up an earlier directive, refutes this testimony. It is also refuted by testimony provided

by Benefit Appeals hearing referee Robert Dachis, who testified that no one informed him that

he was not required to follow the guidance provided in the email’s attachments.

Likewise, the IDES instituted a directive, entitled the “14-day Rule,” which instructed

Benefit Appeals hearing referees to extend the claimants’ appeal time by 14 days because of

IDES mailroom irregularities. Lindberg implemented the directive on July 23, 2013 in an email

to the former supervisor of administrative hearings, administrative hearing referees, and benefit

appeals referees. She informed the recipients that senior management, the Attorney General’s

Office, and the Office of Legal Counsel had together decided how to handle the timeliness of

appeals and protests. A year and a half later, on October 17, 2014, Lindberg later informed

Benefit Appeals hearing referees and their supervisors that the 14-day rule remained in effect and

that certain language “verbatim, MUST be used in [their] decisions in these situations.” When

the IDES rescinded the directive on July 15, 2015, Lindberg informed Benefit Appeals hearing

referees by email that “in reviewing any matter before you, the mailing date on any department

document mailed on or after April 9, 2015, shall be used for purposes of any statutory deadline.”

Haley testified that she understood that she was required to follow the 14-day rule while it was in

effect. She testified that one hearing referee did not apply the 14-day rule and “got in trouble for

it.” Mueller similarly testified that he expected the hearing referees to follow this directive.

On February 9, 2017, BonDurant issued an email to all hearing referees in the Benefit

Appeals unit regarding preferred language when addressing an appellant in cases involving late

appeals. The email directed hearing referees to use the language similar to that set forth in the

email when apprising appellants of a dismissal because of a late appeal. Dachis received this

13

email. No one instructed him that he was not required to follow the instructions set forth in the

email. He followed the instructions set forth in the email.

On December 20, 2013, Borowitz-Gutzke issued an email to all full- and part-time

hearing referees outlining the procedure they should follow when the protest letter is not in the

electronic case filing, and the party offered to e-fax the document to the hearing referee during

the hearing. The email stated in relevant part that if the opposing party did not object, then the

referee should allow the proponent to e-fax the document during hearing. It further stated that if

the opposing party did object, that the referee should continue the hearing to a new date and

allow a copy of the document to be sent to the objecting party. Dachis received this email. No

one instructed him that he was not required to follow the instructions set forth in the email.

On February 27, 1998, then-Manager of Benefit Appeals Vic Napolitano issued a memo

to hearing referees regarding decisions issued under Section 500C2 of the UI Act. He noted that

under a recent court decision, school bus drivers are ineligible for unemployment benefits during

school holiday periods, and that if an individual spent more than 50% of his working time as a

school bus driver, the referees’ decision should find that the individual is ineligible for benefits.

The memo further stated that “no decision allowing benefits under Section 500C2 is to be issued

unless it clearly distinguishes the case from the circumstances described above.” Haley received

a copy of this memo as part of a training packet and her supervisor instructed her to follow it.

On October 15, 2002, Napolitano issued a memo regarding “Union Made Pension

Payments.” He explained that a particular legal position advanced by unions was incorrect and

he observed that “some referee decisions…erroneously supported that view.”5 He noted that the

Federal Unemployment and Training Administration required the IDES to take steps to ensure

that “non-compliance in adjudicating this issue [should be] addressed.” Haley received a copy of

this memo as part of a training packet and her supervisor instructed her to follow it.

One memorandum stated that the approach outlined therein “does not, and cannot[,]

provide answers to specific situations…that is the job of the adjudicator and the referee, but it

does provide a frame of reference so that the fact finding can approach these cases in a consistent

manner.”6

5 Unions argued that employer contributions to the pension fund were negotiated as part of the overall

salary package for union members and that they must be considered as paid by the workers and not

disqualifying. 6 See Union Exhibit 20.

14

In addition, the Office of Legal Counsel prepared a digest when the legislature amended

the misconduct statute to ensure consistency of results among cases and uniform interpretations

of the law. It informed hearing referees that as a result of the change in the law “much of the

boilerplate (aka canned) language we’ve used over the years will not comply with current law.”

The memo set forth sample boilerplate language that could be used to cover (i) the definition of

misconduct (ii) the burden of proof, (iii) the definition of the phrase “deliberate and willful”, (iv)

analysis of implied and common-sense rules, (v) the definition of insubordination, (vi) and

acceptable language related to the application of new sections of the UI Act. The memo stated,

“there is nothing wrong…with using boilerplate language.” However, it further stated the

following:

[B]oilerplate language will not work in all cases. There will be times when you

will have to modify boilerplate language to fit your facts. Furthermore,

boilerplate language is never a substitute for the conclusion portion of your

decision. The purpose of your conclusion is to show how the law applies to the

facts in your case. Using only boilerplate language will never accomplish this

goal.

Lindberg testified that she expected hearing referees to follow this memo. She expected

them to use language in their decisions along the lines of the language identified as acceptable in

the memo. Hearing referee Dachis interpreted the email as instructing hearing referees on what

type of boilerplate was acceptable and what boilerplate was unacceptable under an appellate

court decision. No one informed Dachis that he should not comply with the guidelines set forth

as to what is acceptable boilerplate and what is not.

Similarly, the Office of Legal Counsel prepared another memorandum entitled “Areas

identified for training in reviewing local office determinations, Benefit Appeals, and Board of

Review decisions decided Under Section 602(A). The memo noted that it “compiled a list of

issues [the OCL] had identified in reviewing local office determinations, and Benefit Appeals

and Board of Review cases since the new law took effect.” The memo consisted of four pages

and provided guidance to hearing referees on the listed issues. For example, the memo reads in

part, “Issue: we reviewed a small number of cases where the claimant made several attempts to

pass a test for a license, could not pass, and was discharged…. Guidance: …if, after reviewing

all the evidence, the ability to maintain the license was beyond the claimant’s control, then the

claimant [sic] should be allowed.” In addition, the memo reads, “Issue: we see cases where the

15

claimant…admits to misconduct, but the adjudicator allows benefits because the employer did

not participate or ‘does not wish to protest benefits.’ Guidance: ...if the employer does not

protest…the decision should still be based on all available evidence [and] a claimant may be

denied even if the employer does not participate.” The memo further explained that if the

claimant admitted he was fired for misconduct, e.g. violation of the employer’s rules, then the

claimant would be ineligible for benefits. Haley received a copy of the memo. She testified that

no one from IDES ever told her that she was not required to comply with the memo.

d. Legal Impact of the Benefit Appeals Hearing Referees’ Decision

The hearing referee’s decision becomes the final administrative decision of the agency

unless a party challenges that decision. However, it is binding only on the parties to the case and

does not set precedent for other cases. In addition, if no party appeals the hearing referee’s

decision to the Board of Review, no party may appeal the hearing referee’s decision to court.

There are few appeals of Benefit Appeals hearing referees’ decisions. However, when

parties do appeal, the Board of Review frequently sets aside or modifies the hearing referees’

decisions.

4. Role of Administrative Hearing Referees

Administrative hearings referees handle monetary eligibility cases (“500(E) cases”), labor

dispute cases, and tax-related cases, as outlined more fully below.

a. Types of Cases Handled and Their Origin

500(E) cases arise from determinations made by a claims adjudicator regarding the

claimant’s base period wages. The claims adjudicator considers whether the claimant has earned

enough wages in covered employment to be eligible for unemployment benefits. If the claimant

does not contest the adjudicator’s determination, that determination becomes the final agency

decision on that issue. If the claimant contests the adjudicator’s determination he may file an

appeal to a hearing referee. The parties to the case are the claimant, the employer, and possibly

another entity if there is a dispute concerning the identity of the employer.

16

Labor dispute cases arise from decisions made by claims adjudicators in the Labor

Dispute Unit within the Service Delivery Bureau.7 They concern disputed unemployment

benefit claims that involve a labor dispute. If the claimant does not appeal the adjudicator’s

determination, the determination becomes the final agency decision. If the claimant appeals the

adjudicator’s decision, an Administrative hearing referee conducts a de novo hearing. Issues for

hearing are whether the claimant was a striker, such that he is ineligible for unemployment

benefits, whether the claimant was locked out, such that he is eligible for unemployment

benefits, and whether the claimant falls within any exceptions to these general rules.

There are five types of tax-related cases. Chargeable employer cases determine whether

the employer is the “chargeable employer” for the particular claim. The party to these cases is

the appellant, who is identified as the chargeable employer. The employer has an interest in

these cases because the employer’s insurance rate is based on the benefits charged to the

employer’s account. The more benefits charged to the employer, the higher the employer’s rate.

Claims adjudicators at the local offices make the initial determination of whether the employer is

the chargeable employer.

Benefit charge cases arise from an employer’s challenge of the charges that appear on the

employer’s Statement of Benefit Charges. The computer generates the Statement of Benefit

charges, and the employer has 45 days to file an application for its revision, contesting the

charges that appear on the statement. If the employer does not seek review of the Statement of

Benefit Charges, the benefit charge issued by the computer is the final agency decision on that

issue. If the employer contests the charges, employees in the Benefit Charge Unit of IDES

determine whether the employer’s application should be granted or denied. If the employer

contests the decision of the Benefit Charge Unit, the employer may appeal the matter to an

Administrative hearing referee, who conducts a hearing. The issues before a hearing referee in

benefit charge cases are whether the employer received proper notice of the claim and whether

the employer who is charged benefits succeeded to substantially all of the employing enterprises

of another employer.

7 The claims adjudicators within the Labor Dispute Unit are represented for purposes of collective

bargaining.

17

Rate hearing cases are cases in which an employer protests the IDES’s determination of

its annual contribution rate, initially generated by the IDES’s computers.8 If the employer files a

timely application for review of the computer’s determination, employees in the Revenue Bureau

of the IDES either approve or deny the application for review. If the employer contests the

Revenue Bureau’s determination, the employer may appeal it to an Administrative hearing

referee, who conducts a hearing. The issues for hearing are whether the benefit charges were

correct, whether the taxable wages were correct, and whether there was a succession. The parties

to the case are the employer and/or another entity that may or may not be deemed the employer.

Refund cases involve claims by the employer that the IDES owes the employer money

because the employer overpaid its taxes. Employees in the Revenue Bureau determine whether

the employer is owed the refund. If the employer does not contest that determination, the

Revenue Bureau’s determination is final on that issue. If the employer contests the Revenue

Bureau’s determination, the employer may appeal it to an Administrative hearing referee, who

conducts a hearing.

Waiver cases arise when the employer has incurred penalties and/or interest and wants

the Department to waive the penalties and/or the interest incurred. The employer may incur

penalties for the late filing of wage reports, failure to file wage reports, or wage reports that are

filed on the wrong medium. The employer incurs interest on the late payment or underpayment

of contributions. The revenue unit determines whether the employer owes penalties and interest.

If the employer does not contest that determination, the Revenue Bureau’s determination of the

penalties and interest becomes the final agency decision.9 If the employer contests that

determination, the employer may appeal it to an Administrative hearing referee, who conducts a

hearing. The issues for hearing are whether the IDES should waive the interest or the penalty

and whether the penalty or interest was properly imposed. The hearing referee may also consider

estoppel arguments. The rules set forth factors to determine when it is appropriate to grant a

waiver.

H Cases involve an assessment by IDES and demand for payment from the employer.

An analyst in the Revenue Bureau makes the initial determination of the amount owed by the

employer. If the employer does not contest the determination of the Revenue Bureau, the

8 If the employer does not file a request for review from the rate generated by the computer, that becomes

the final rate determination by the agency 9 Interest will continue to accrue.

18

Revenue Bureau’s decision becomes the final agency decision. If the employer contests that

determination, the employer may appeal it to an Administrative hearing referee, who conducts a

hearing. Issues that arise in such cases are whether the employer’s payments to individuals,

which serve in part as the basis for the IDES calculation regarding the amount to be paid by the

employer, were for services and whether the individuals paid were employees or independent

contractors.

a. Case Volume and Hearing Process

When Administrative hearing referees handle monetary eligibility cases, they issue

decisions, which parties may appeal to the Board of Review. When they handle labor cases and

tax-related cases, they are termed “Director’s Representatives” and issue recommended

decisions, which parties may appeal to the Director.

The Administrative hearing referees hear approximately 25 to 30 cases a week, in the

aggregate. Each Administrative hearing referee issues approximately two or three recommended

decisions a week.10

Administrative hearing referees conduct a hearing in a manner similar to that of the

Benefit Appeals referees; however, the hearings may be longer and the cases are more complex.

Tax cases in particular may produce a voluminous record. The Administrative hearing referees’

decisions do not come from a template.

Administrative hearing referees make findings of fact, issue subpoenas, and make the

same types of evidentiary rules as the Benefit Appeals hearing referees. Administrative hearing

referee Ronald Rodgers testified that he denies the request for a subpoena if he determines that

the probative value of the requested information is not great enough. Administrative hearing

referees sometimes also rule on motions. However, Rodgers testified that fewer than half of his

hearings require him to rule on motions, and of those motions, may are requests for

continuances. Other motions ask for a prehearing conference.

10 The record does not reveal how many decisions they issue.

19

b. Authority and Discretion of Administrative Hearing Referees

Lindberg and Mueller testified that they do not tell hearing referees how to rule on a case.

Supervisor Stevenson similarly testified that he does not tell hearing referees how to rule and that

he has no authority to do so.

However, the record contains one counterexample to Stevenson’s testimony pertaining to

a decision by an Administrative hearing referee. Sometime prior to March 16, 2017, Stevenson

informed Rodgers that he could dispose of a case without proceeding to hearing. The case

concerned an employer’s appeal of a claims adjudicator’s determination that the employer was

subject to interest and/or penalties. At hearing, Rodger testified that Stevenson informed him

that he should just allow the waiver request because the Director would ultimately allow the

employer’s request. Rodgers wrote an email to Stevenson that stated the following: “I am

writing to clarify my understanding as to how I am to handle this case. You said that you spoke

with Greg [Ramel], and that after looking at the file, including the employer’s filings and

exhibits, you are both in agreement that the employer can get the relief that it is asking for and

that I can write a Recommended Decision in this case – without conducting a hearing –

recommending that the employer be granted that relief. Stevenson responded, “your assumption

on the facts is correct…you may issue the Decision as we discussed.”

At hearing Stevenson confirmed that Ramel told him and Rodgers that Rodgers could

summarily dispose of the case without a hearing. Rodgers testified that in this case, Stevenson

and Ramel told him how to rule on a case. However, Stevenson testified that the hearing referee

Rodgers did not need to come to Stevenson about the case and that he did not need Stevenson’s

approval to act on the matter. Rodgers testified that he issued a decision that remanded the

matter back to the Revenue Bureau for implementation.

Administrative hearing referees do not have authority to settle a case. Instead, the OCL

or the hearing referee’s supervisor instructs the referee to “sit on it” until told otherwise.

The Administrative hearing referees received a directive that they are not permitted to

identify a new tax rate for employers if they find the original rate is incorrect. They must instead

remand the matter back to the Revenue Bureau.11

11 Rodgers stated that he calculates the new tax rate for employers only in the rare cases where the court

remands a case back to him and directs him to do so.

20

Some of the directives issued to Benefit Appeals hearing referees also apply to

Administrative hearing referees.

c. Legal Impact of the Administrative Hearing Referees’ Decisions

The Administrative hearing referee’s decision in a monetary eligibility case becomes the

final administrative decision of the agency unless a party appeals it to the Board of Review. The

Administrative hearing referee’s recommended decision becomes the Director’s decision unless

a party appeals it to the Director. If no party appeals the hearing referee’s decision to the Board

of Review or the Director, no party may appeal the hearing referee’s decision to court. The

hearing referee’s decision in such cases is binding only on the parties to the case and does not set

precedent for other cases.

Parties appeal approximately five to eight recommended decisions each year. In the past

three years, parties appealed 45 Administrative hearing referee recommended decisions to the

Director. Of those, the Director affirmed 25 of them and rejected 20 of them. Of the 20 that the

Director rejected, the Director remanded 12, modified five, and reversed three.

5. Role of Board of Review Hearing Referees

a. Origin of Their Cases

Parties may appeal decisions issued by Benefit Appeals hearing referees and monetary

eligibility decisions issued by Administrative hearing referees (“lower authority hearing

referees”) to the Board of Review. The vast majority of cases considered by the Board of

Review arise from appeals of decisions issued by Benefit Appeals hearing referees.

b. Structure of Board of Review and the Referees’ Decision-making Process

The Board of Review is comprised of five members. Two members are of the employer

class, two are of the employee class, and one is the Chairman, who has no affiliation. There are

eight Board of Review hearing referees. They review the decisions issued by the lower authority

hearing referees, including the entire administrative record. The hearing referees listen to the

recording of the phone hearing or read the transcript, if the case has been transcribed. They

evaluate the evidence, make credibility determinations, and draft a Board of Review decision

that affirms, modifies, or reverses the lower authority’s decision. On very rare occasions, the

21

Board of Review may conduct its own hearings. The Board of Review receives approximately

150-160 cases a week, and each Board of Review hearing referee drafts approximately 35 to 40

decisions for issuance each week.

Board of Review decisions may be long form or short form. The long form includes a

statement of jurisdiction, a summary of the facts, a legal section, and application section, an

analysis section, and a conclusion. The long form decisions admitted into the record in this case

are approximately three pages long. Short form decisions contain a jurisdictional section and

they summarize the outcome of the case. Approximately one in 20 decisions are short form

decisions.

The hearing referee submits his draft decision to the hearing referee supervisor, Andrew

Fox. Fox is the intermediary between the Board of Review hearing referees and the Board

members. Fox accepts or rejects the hearing referee’s decision. In cases where Fox accepts the

hearing referees’ decision, he does so because the decision properly applied the law to the facts

and the decision contained no typos. Fox does not conduct a review of the record and simply

accepts the facts as laid out by the hearing referee. However, he looks for inconsistencies within

the decision, points them out, and marks up drafts with comments and questions. One draft

Board of Review Decision includes a directive from Fox that states, “edit [to] soften language.”

Once Fox accepts the draft, he sends it to one Board member for review. If the draft

decision allows benefits, the Fox provides the decision to a member from the employer class

because in those cases the employer class is adversely affected. If the draft decision denies

benefits, Fox provides the decision to member from the employee class because in those cases,

the employee class is adversely affected.

The Board of Review member may either accept the decision, reject it, or ask for

modifications. If the member rejects the draft or has comments, Fox discusses the case with the

hearing referee who wrote it and asks for their comments. If the hearing referee finds that he

made a mistake, he will modify the decision and resubmit it. If the hearing referee stands by the

decision, then Fox sends the decision to the chairman for a tie-breaker vote.

If Fox and the hearing referee disagree on a case, the hearing referee gets the final say

because the referee writes the decision and reviews the evidence. When Fox informs the hearing

referee that either he or a Board member have rejected the draft decision, the hearing referee is

not required to change the decision. Hearing referees sometimes ask Fox his opinion of such

22

cases, and he has told them that it is their decision and they should write it as they see fit.12 The

Board member who rejected the decision then dissents. The chairman of the Board’s decision

becomes the final agency decision. When a Board member rejects a decision, Fox does not tell

the hearing referee to change his decision; he asks the referee what they think.

The Board members of the Board of Review and/or Fox reject approximately three or

four draft decisions a week. They may reject a decision because of grammatical errors, legal

mistakes, or incorrect dates. Board members reject approximately two cases per week. Fox

catches most of the mistakes before they get to the Board. Either Fox or the Board members

reject one case a week based on its substance.

On December 26, 2012, Fox issued Board of Review referees a memo in his former

capacity as Chief Hearing Referee. The memo listed common scenarios for ascertaining whether

good cause or exceptional reasons exist for remanding a case to the Benefit Appeals hearing

referee. For example, the memo stated that good cause exists where the claimant did not receive

notice because it was mailed to an incorrect address or where there was a family death or

medical emergency that prevented the claimant from appearing at hearing. Fox testified that the

memo did not require hearing referees to remand in such cases.

d. Legal Impact of Board of Review Decisions and Director’s Decisions13

Board of Review cases are not binding on the next Board of Review’s decisions.

However, they provide guidance that most referees follow.

Parties may appeal decisions issued by the Director or the Board of Review to the circuit

court within 35 days of the decision’s issuance. The Board of Review and the IDES are

defendants in administrative review actions. The Attorney General’s office represents them and

works closely with the Department’s inhouse legal counsel. Parties appeal approximately 300

IDES cases to court each year. Of those cases, the court upholds approximately 275-280 of

them.

12 However, there have been cases in which a hearing referee asked that a case be reassigned because he

and Fox disagreed on the interpretation of the law and the hearing referee did not want to write the

decision the way Fox believed comported with the law. 13 The Director’s Decisions are discussed in this section because the Director and the Board of Review

both represent the highest level of administrative decision-making within IDES, albeit on different cases.

23

Decisions issued by the Board of Review and decisions issued by the Director become

final administrative decisions if not appealed.

6. Certification and Collective Bargaining History of the Hearing Referees;

Continuity of Duties

On June 20, 1991, the Executive Director of the then-Illinois State Labor Relations Board

issued a Certification of Voluntarily Recognized Representative (“certification”) in Case No. S-

VR-91-10. The certification described the unit as follows:

Included: Technical Advisors I, II and IIIs and Hearing Referees. Employees to be

included are set forth on the attached list. The parties have stipulated that all other

Technical Advisors I, II and IIIs are either supervisory, confidential or managerial

employees.

Excluded: All supervisory, managerial and confidential employees as defined by the Act.

The attached list included individual holders of the hearing referee position by name and

address, but not by position number. The following six hearing referees were on the list of

inclusion, are still employed as hearing referees at the IDES, and are subjects of this petition:

Frank Kaitis, Warren Loar IV, Clifton Flex, George Irizarry, Cynthia Ruiz, and Ronald Rodgers.

The remaining hearing referees currently employed at IDES are not named on the list of

inclusion attached to the certification.

Stevenson testified that he was a Benefit Appeals hearing referee for 18 years, prior to

becoming a supervising administrative law judge, and that his job duties as a hearing referee

remained essentially the same during that time. He further testified that the hearing referees’

duties are the same now as they were when he was a hearing referee. The extent of the

supervising ALJ’s oversight of hearing referees was likewise the same then as it is now.

BonDurant testified that he was a hearing referee for 23 years, prior to becoming a supervisor,

and that during that time his duties remained essentially same. In addition, he testified that the

duties performed by the hearing referees now are the same as the duties he performed when he

was a hearing referee.

7. Testimony Regarding Vacant Hearing Referee Positions

24

There is a vacant Board of Review hearing referee position. Fox testified that if that

position were filled, the job duties of that position would mirror those of the duties performed by

the currently-employed Board of Review hearing referees, with the exception that the holder of

the currently-vacant position would be required to speak Spanish. Fox based his testimony on

the job description.

There are also vacant hearing referee positions in the Appeals Division. Lindberg

testified that the prospective holders of the now-vacant Appeals Division hearing referee

positions will perform all the same job duties as the currently-employed Appeals Division

hearing referees.

IV. Discussion and Analysis

1. Appropriateness of the Unit Clarification Petition

The unit clarification petition is appropriately filed.

The Illinois Public Labor Relations Act specifically provides that “[a] labor organization

or an employer may file a unit clarification petition seeking to clarify an existing bargaining

unit.” 5 ILCS 315/9(a-6). Section 1210.170(a) of the Board’s regulations allows for the filing of

unit clarification petitions under three sets of circumstances:

An exclusive representative or an employer may file a unit clarification petition to clarify

or amend an existing bargaining unit when:

1) substantial changes occur in the duties and functions of an existing title, raising

an issue as to the title’s unit placement;

2) an existing job title that is logically encompassed within the existing unit was

inadvertently excluded by the parties at the time the unit was established; and

3) a significant change takes place in statutory or case law that affects the

bargaining rights of employees.

80 Ill. Adm. Code 1210.170(a).

The Board has recognized other circumstances in which unit clarification petitions are

appropriately filed: (i) to include newly created job classifications entailing job functions already

covered in the unit,14 and (ii) to include positions that the Board earlier excluded in a majority

14 City of Evanston v. Ill. State Labor Relations Bd., 227 Ill. App. 3d 955, 969-70 (1st Dist. 1992) (citing

State of Ill. (Dep’ts of Cent. Mgmt. Serv. & Public Aid), 2 PERI ¶ 2019 (IL SLRB 1986)).

25

interest petition as an administrative measure to expedite certification, where the employer’s

objections to those positions, even if well-founded, would not eliminate majority support.15

Finally, the Court has found unit clarification to be the appropriate vehicle to remove

confidential employees from a bargaining unit, and a majority of the Board has held that the

Court’s rationale encompasses the use of unit clarification procedures to also remove managerial

and supervisory employees from the bargaining unit. Dep’t of Cent. Mgmt. Servs. (Dep’t of

Corrections) v. Ill. Labor Relations Bd. (“AFSCME Drug Screeners”), 364 Ill. App. 3d 1028

(4th Dist. 2006) (reversing Board dismissal of stipulated unit clarification petitions seeking to

exclude confidential employees from the bargaining unit); State of Illinois, Department of

Central Management Services (Department of Children and Family Services, Department of

Employment Security) (“SOI/CMS DCFS & DES II”), 34 PERI ¶ 79 (IL LRB-SP 2017).

An employer may file a unit clarification petition seeking to remove statutorily excluded

positions at any time16; however, this statement of law must be reconciled with the Board’s long-

standing history of holding parties to their stipulations regarding bargaining unit inclusions/

exclusions, absent a change in circumstances. See Vill. of Bensenville, 20 PERI 12 (IL LRB-SP

2003)(employer could not successfully challenge sergeants’ public employee status, absent

change in sergeants’ job duties, where it entered into a stipulation three years earlier for a

consent election covering those sergeants); City of Carmi, 9 PERI ¶ 2012 (IL SLRB 1993)

(where union and employer previously stipulated to consent election in petitioned-for unit,

employer could not object to an election petition, filed later by another union, alleging that some

unit members were supervisors); County of St. Clair, 2 PERI ¶ 2010 (IL SLRB 1986) (Board did

not allow a party to a consent election to object to the election based upon an allegation that its

15 The Board explained the process in Treasurer of the State of Illinois, 30 PERI ¶ 53 (IL LRB-SP 2013)

as follows:

“When, with respect to a majority interest petition, an employer objects to inclusion of

certain positions, but its objections, even if well founded, would not eliminate majority

support, the Board will certify the proposed unit, but exclude all objected-to positions,

advising the petitioner to use a unit clarification petition to add in the objected-to

positions. 80 Ill. Admin. Code 1210.100(b)(7)(B). That way, the employees, who are

undeniably entitled to representation, can begin to enjoy its benefits while the Board sorts

out the proper status of the objected-to positions. The use of the unit clarification procedure

in this context was approved in City of Washington v. Ill. Labor Relations Bd., 383 Ill. App.

3d 1112 (3d Dist. 2008).”

16 State of Illinois, Department of Central Management Services (Department of Children and Family

Services, Department of Employment Security), 34 PERI ¶ 79.

26

own stipulated inclusions were improper); County of Menard, 2 PERI ¶ 2037 (IL SLRB 1986)

(in objecting to conduct of election, employer could not allege supervisory coercion by an

individual who it stipulated was included in the unit); see also In Re Grancare, Inc., 331 NLRB

123 (NLRB 2000).

The Board recently reaffirmed the continued existence of its approach to stipulations, but

over the years, both the Board and the Court have carved out some exceptions to it. See City of

Chicago, 34 PERI ¶ 90 (IL LRB-SP 2017) (reaffirming rule, but distinguishing effects of

different types of agreements). For example, in one case, the Board did not hold a union to an

agreement to exclude lieutenants as managerial or confidential where 12 years had passed since

the agreement’s execution and the ALJ’s fact finding demonstrated that those previously

excluded employees did not satisfy a statutory exclusion.17 City of Chicago, 23 PERI ¶ 145 (IL

LRB-LP 2007). Similarly, the Court in AFSCME Drug Screeners declined to hold an employer

to its agreement to include allegedly confidential employees in the bargaining unit reasoning that

if the employees at issue were confidential, the employer had no authority to place them in the

bargaining unit and could not be estopped from seeking to remove them. AFSCME Drug

Screeners, 364 Ill. App. 3d at 1034 (remanding the case for fact finding to determine whether

employees in the petition were in fact confidential).

At issue here is the impact of the parties’ 1991 voluntary recognition petition on the

propriety of the instant unit clarification petition. As discussed below, the 1991 voluntary

recognition petition is an agreement between the parties regarding unit inclusions and exclusions,

analogous to a stipulation for a consent election, but it does not bar the unit clarification petition

in this case.

First, the agreement is not relevant to most of the positions at issue in this case because

they are not covered by the agreement. The parties’ agreement specifies inclusion in the

bargaining by employee name and address rather than by position number or job class, and it

therefore covers only positions still held by employees on the parties’ agreed-upon inclusion list.

17 In this case, the original agreement was between the Fraternal Order of Police and the City of Chicago,

but another union, the Policemen's Benevolent and Protective Association (PBLC), became bound by it

because it intervened in the petition after the FOP and the City entered into the agreement. City of

Chicago, 23 PERI ¶ 145. As the Board noted, citing to its rules, “‘any intervenor who files after the

commencement of the hearing or, if no hearing is held, after the approval of a consent election agreement

or the direction of an election, shall have waived objections to the bargaining unit.” City of Chicago, 23

PERI ¶ 145 (citing 80 Ill. Adm. Code 1210.50(c)).

27

These include the positions held by Frank Kaitis, Warren Loar IV, Clifton Flex, George Irizarry,

Cynthia Ruiz, and Ronald Rodgers. It does not cover vacant positions or positions held by other

individuals whose names do not appear on the inclusion list and is therefore inapplicable to all

but the six above-referenced positions. Thus the parties’ agreement does not impact the analysis

of whether the unit clarification petition is appropriately filed with respect to the vacant positions

and the positions held by individuals not covered by the parties’ agreement.

Applying the Board’s case law, as set forth above, the unit clarification petition is

appropriately filed with respect to the vacant positions and the positions held by individuals not

covered by the parties’ agreement. The Employer contends that these positions are statutorily

excluded from collective bargaining, and there is no agreement applicable to these positions that

might serve as a procedural bar. SOI/CMS DCFS & DES II, 34 PERI ¶ 79 (permitting unit

clarification petition where employer alleges they are statutorily excluded).

The unit clarification petition is appropriate even as to those positions covered by the

agreement because there are exceptions to the Board’s general rule on stipulations that permit the

Board to consider the positions’ unit placement. First, an agreement will not serve as a bar to a

petition where the positions are deemed statutorily excluded from collective bargaining, after the

Board’s review of the position holders’ duties and authority. In such cases, the agreement is

deemed unenforceable because the employer never had authority to agree to the statutorily

excluded positions in the bargaining unit. AFSCME Drug Screeners, 364 Ill. App. 3d at 1034. In

essence, the Board may examine the duties and authority of employees at issue in the petition

and determine whether the petition was appropriate, based on the outcome of that analysis.

AFSCME Drug Screeners, 364 Ill. App. 3d at 1034; cf. County of St. Clair, 2 PERI ¶ 2010

(Board presumes that parties who appear before it act in good faith and that employers who agree

to include employees in the bargaining unit have authority to do so).

Second, a 1995 change in case law justifies a reexamination of the parties’ stipulations

and a consideration of the positions’ unit placement; that change also constitutes an additional

basis for finding the unit clarification appropriate on the whole. As noted above, a unit

clarification petition is appropriately filed when there is a significant change in statutory or case

law that affects the bargaining rights of employees. 80 Ill. Admin Code. 1210.170(a)(3). Here,

the Illinois Supreme Court changed the law when it established the “managerial as a matter of

law” test. Office of the Cook County State’s Attorney v. Illinois Local Labor Relations Board,

28

166 Ill. 2d 296 (1995). For the first time, the court found that individuals could meet the

requirements for exclusion from collective bargaining under Section 3(j) of the Act without

administrative fact-finding. In applying the exclusion to Assistant State’s Attorneys, the Court

focused exclusively on the statutes and case law articulating the powers and duties of the State’s

Attorney and his assistants. Office of the Cook County State’s Attorney, 166 Ill. 2d at 305. As

discussed in the following section, this change in law impacts the bargaining rights of the Benefit

Appeals hearing referees and the Administrative hearing referees because it renders them

managerial as a matter of law.

Contrary to the Union’s contention, the Employer has not waived its right to assert that a

change in the law justifies its unit clarification petition. The Board will bar an employer from

filing a unit clarification petition based on a change in the law pertaining to a statutory exclusion

where the employer previously agreed to include the positions at issue and where the Board, at

the time the parties’ entered their agreement, had not yet developed any case law on the claimed

exclusion. In such cases, the Board will find that the employer waived its right to file a unit

clarification petition based on a change in the law, reasoning there is no case law from which the

employer can mark a change. County of Kane, (Kane County Sheriff), 7 PERI 2043 (IL SLRB

1991); City of Pontiac, 7 PERI 2017; State of Ill. (Dep’t of Police), 7 PERI 2007 (IL SLRB

1990).

Here, at the time the parties entered their agreement in 1991, the Board had already

rendered many decisions on the managerial statutory exclusion, the first of which issued in 1985.

Secretary of State, 1 PERI ¶ 2009 (IL SLRB 1985). The managerial as a matter of law analysis

described in Cook County State’s Attorney, represented a new interpretation of that exclusion

based on the statutory definition. Cook County State’s Attorney, 166 Ill. 2d at 302 (holding as a

matter of law that “assistant State’s Attorneys must be regarded as managerial employees, as that

term is defined in the [Labor Relations Act]” (emphasis added)). Accordingly, the court’s

decision in Cook County State’s Attorney constitutes a change from the law that existed when

the parties entered into their agreement, and the Employer therefore did not waive its right to file

the unit clarification petition under the change in law standard.

The cases cited by the Union are all distinguishable on the grounds that the employers

there entered into stipulations to include certain titles before the Board had occasion to develop

any case law at all interpreting the statutory exclusion at issue. In those cases, the Board rejected

29

the employers’ claims that the Board’s first-time interpretation of the exclusion constituted a

change, reasoning that there was no case law from which a change could be judged. City of

Pontiac, 7 PERI 2017 (IL SLRB 1991); State of Ill. (Dep’t of Police), 7 PERI 2007 (IL SLRB

1990); County of Kane, (Kane County Sheriff), 7 PERI 2043 (IL SLRB 1991) (finding this

principle applied to some of the positions at issue).

In sum, the unit clarification petition is appropriately filed.

4. Managerial as a Matter of Law

The Benefit Appeals hearing referees and Administrative hearing referees are managerial

as a matter of law. However, the Board of Review hearing referees are not managerial as a

matter of law.

Section 3(j) provides that a managerial employee is “an individual who is [1] engaged

predominantly in executive and management functions and [2] is charged with the responsibility

of directing the effectuation of management policies and practices.” 5 ILCS 315/3(j).

Illinois Courts have applied an alternative “matter-of-law” test to establish managerial

status under Section 3(j) of the Act. The courts consider whether the employees are, in essence,

surrogates for an office holder. Office of the Cook Cnty. State’s Attorney v. Ill. Labor Rel. Bd.,

166 Ill. 2d at 303. Three factors weigh heavily in finding employees surrogates and thus

managerial as a matter of law: (1) a close identification of the office holder with the actions of

his or her subordinates, (2) a unity of their professional interests, and (3) the power of the

subordinate to act on behalf of the office holder. Chief Judge of the 16th Judicial Circuit v. Ill.

State Labor Rel. Bd., 178 Ill. 2d 333, 344 (1997). In assessing these factors, courts focus on the

statutory powers and duties of the type of employee at issue rather than on the specific tasks of

any particular individual. Cook Cnty. State’s Attorney, 166 Ill. 2d at 305. However, the Fourth

District Appellate Court held that employees may be managerial as a matter of law even absent a

detailed a statutory apparatus if they perform tasks that are substantially similar to those

performed by judicial law clerks. Dep’t of Cent. Mgmt. Serv. (Pollution Control Bd.) v. Ill.

Labor Rel. Bd. (“PCB”), 2013 IL App (4th) 110877 (finding attorney assistants to Pollution

Control Board members to be managerial as a matter of law because they performed law clerk-

like functions and acted as surrogates to the office holders, even though no statute clothed them

with the powers and privileges of the office holder).

30

The court’s decisions addressing the unit-placement of administrative law judges (ALJs)

are particularly instructive here because the hearing referees at issue in this case perform work

akin to that of administrative law judges. As discussed below, these cases demonstrate that the

court views ALJs as surrogates to an officeholder and therefore managerial as a matter of law

where (i) they are empowered by statute to issue decisions on matters within the agency’s

purview that (ii) can become the final decision of the officeholder, even if the office holder takes

no action on the matter, and (iii) exercise discretion in doing so.

For example, in Dep’t of Central Mgmt. Svcs (Ill. Human Rights Comm’n) v. Ill. Labor

Relations Bd. (“HRC”), the court found that the ALJs at the Illinois Human Rights Commission

(HRC) were managerial as a matter of law. HRC, 406 Ill. App. 3d 310, 316-17 (4th Dist. 2010).

It reasoned that the ALJs acted with discretion and with the purpose of carrying out the policies

of the Commission by presiding over hearings and rendering decisions in cases that involve

alleged civil rights violations. Id. at 316. The court emphasized that the ALJs’ recommended

orders could become the final decision of the Commission, but that even if they did not, the

Commission was “highly deferential to the ALJ’s findings of fact.” Id. The court concluded that

the ALJs thereby had a unity of professional interest with the Commission and the power to act

on the Commission’s behalf, which rendered the ALJs managerial as a matter of law. Id.

By contrast, in Dep’t of Cent. Mgmt. Svcs. (Ill. Commerce Comm’n) v. Ill. Labor

Relations Bd.(“ICC”), the court found that ALJs at the Illinois Commerce Commission were not

managerial as a matter of law. ICC, 406 Ill. App. 3d 766, 775 (4th Dist. 2010). The court

observed that the enabling Act of the ICC, the Public Utilities Act, was somewhat comparable to

the Human Rights Act for purposes of the managerial exclusion, but that there was one

significant difference between the two, which warranted a different result. Id. at 782. While

both the Public Utilities Act and the Human Rights Act conferred authority upon the ALJs to

issue recommended orders, the court observed that there was nothing in the Public Utilities Act

that allowed the ALJs’ recommendation to become the Commissioner’s decision, absent

affirmative action by the Commission. The Court emphasized that even in cases where parties

did not appeal the ALJ’s decision, the members of the Commission would still “retain the power

and duty to issue their own order, after receipt of the ALJ’s recommended order.” Id. The Court

concluded that “under no circumstances is an ALJ of the Commerce Commission clothed with

the ultimate power of the Commission members.” Id.

31

a. Benefit Appeals Hearing Referees and Administrative Appeals Hearing Referees

The Benefit Appeals hearing referees and Administrative Appeals hearing referees

(collectively, “Appeals Division referees”) are managerial as a matter of law under the Court’s

decision in HRC. HRC, 406 Ill. App. 3d at 316-17.

The authority of the Appeals Division referees, like the authority of the HRC ALJs, is set

forth in the administrative agency’s enabling statute, here, the Unemployment Insurance Act. It

is further clarified in the IDES administrative regulations. The referees have authority to hear

and decide disputed claims by conducting a fair hearing, in a capacity similar to that of the HRC

ALJs. 820 ILCS 405/802 (“To hear and decide disputed claims, the Director shall obtain an

adequate number of impartial Referees”). The Benefit Appeals hearing referees and some

Administrative referees conduct hearings and issue decisions on appeals taken from claims

adjudicators’ determinations regarding an individual’s eligibility for unemployment benefits.

820 ILCS 405/800. The Administrative hearing referees also conduct hearings and issue

recommended decisions on appeals taken from determinations on employer’s claims regarding

its chargeability, its tax rate, and matters related to other payments used to fund the

Unemployment Insurance program. 820 ILCS 405/800; 56 Ill. Adm. Code 2725.1 (a “claim”

includes claims made by employers for adjustments of required payments or refunds of monies

already paid). In such cases, the IDES administrative regulations refer to the Administrative

hearing referees as the “Director’s Representative.” 56 Ill. Admin. Code 2725.100 through

2725.120 (describing types of underlying decisions that are subject to appeal to Director’s

Representative); 56 Ill. Admin. Code 2725.200 through - 2725.280 (describing appeals to

Director’s Representative).

In addition, the decisions or recommended decisions issued by the Appeals Division

referees, like the decisions issued by the HRC ALJs, can become the final decision of the

administrative agency in cases where no party files an appeal. To illustrate, parties may appeal

the Benefit Appeals referees’ decisions to the Board of Review, but if they do not, the referee’s

decision becomes the final agency decision unless the Board of Review takes the case up on its

32

own motion. 820 ILCS 405/801.18 While the Board of Review may exercise its discretion to

take up the case if no party files exceptions, the Board of Review is not required to do so, and the

referee’s decision becomes final where the Board takes no action. 820 ILCS 405/801; HRC, 406

Ill. App. 3d at 316 (ALJs were managerial as a matter of law where their decisions could become

final without further agency action); Cf. ICC, 406 Ill. App. 3d at 766 (ALJs were not managerial

as a matter of law where Commission was required to take further action on ALJs’ decisions

before they became final, even where no party filed an appeal).

Similarly, parties may appeal Administrative hearing referees’ decisions regarding

monetary eligibility to the Board of Review, but if they do not, the referee’s decision becomes

the final agency decision unless the Board of Review takes the case up on its own motion. 820

ILCS 405/801. Parties may also appeal Administrative hearing referees’ recommended decisions

in tax-rate and chargeability cases to the Director, but if they do not, those recommended

decisions become the Director’s decisions. 56 Ill. Adm. Code 2725.270

(“recommended decision shall become the decision of the Director unless objections are filed”);

ICC, 406 Ill. App. 3d at 775 (finding it appropriate to rely on administrative regulations to

ascertain the authority conferred upon an ALJ by the enabling statute).

Finally, the Appeals Division referees exercise discretion when making their decisions.

Benefit Appeals referees consider each case de novo and decide the outcome of their own cases.

To that end, they rule on the admissibility of evidence, sometimes excluding documents when

one party has not provided them to the opposing party in accordance with the IDES rules. While

Benefit Appeals referees may ask their supervisors for advice, the referees are not required to

follow it. The IDES does not review the Benefit Appeals referees’ decisions before they issue.

Similarly, the Administrative hearing referees, on the whole, exercise discretion to decide

the outcome of cases pending before them. To that end, they make findings of fact and

evidentiary rulings. They also rule on requests for subpoenas and may deny the request if they

determine that the probative value of the requested information is not great enough. Though

there is one instance in which Supervisors Ramel and Stevenson instructed referee Rodgers to

simply resolve a case in the employer’s favor without holding a hearing, this appears to be the

exception rather than the rule because the Union could point to only one instance in which this

18 “The decision of the Referee shall be final, unless, within 30 calendar days after the date of mailing of

such decision, further appeal to the Board of Review is initiated pursuant to Section 803.” 820 ILCS

405/801.

33

occurred. The IDES does not appear to review the Administrative hearing referees’ decisions or

recommended decisions before they issue.

The guidance provided by the Office of Legal Counsel does not eliminate the hearing

referees’ exercise of discretion in their cases. As a preliminary matter, the Appellate Court has

held that a supervisor’s exercise of “some” control over an employee’s work product does not

diminish that employees’ managerial authority where the employee in question otherwise has the

statutory authority to act on behalf of the office holder, as is the case here. See discussion supra;

Am. Fed’n of State, County & Mun. Employees, Council 31 v. Illinois State Labor Relations Bd.

(“Assistant State Appellate Defenders”), 333 Ill. App. 3d 177, 186 (5th Dist. 2002) (assistant

state appellate defenders were managerial as a matter of law).

Furthermore, the majority of the directives provided by the OLC addresses procedural

matters and constitutes an attempt to maintain consistency on commonly-occurring, and largely

non-substantive issues. For example, the OLC has issued memos on how referees should treat

cases in which a party has failed to appear or cases in which claimants had not posted a resume

on IllinoisJobLink.com, and had therefore not met the threshold requirements for obtaining

benefits. Other guidance has pertained to the manner in which referees should calculate the

appeal time in cases where the IDES mailroom was encountering “irregularities,” or how to

proceed when a protest letter was not included in the electronic case filing system.

Although the OCL has also provided guidance on substantive matters, by summarizing

court decisions and offering sample boilerplate language, the OCL does not specify the outcomes

for any particular case. For example, one memo expressly stated that it did not “provide

answers to specific situations.” Another memo instructed referees to clearly distinguish the

relevant case law regarding unemployment benefits for school bus drivers, if they wished to

grant benefits covering the school holiday period. In addition, the OLC has caution that the

sample boilerplate does not work in all cases and is never a substitute for the conclusion section

of a decision, which shows how the law applies to the facts. Notably, the Administrative hearing

referees’ recommended decisions contain no boilerplate at all. The fact that the referees may

feel compelled to follow some of the more specific guidance provided by the OLC does not

eliminate the referees’ discretion or managerial authority. Assistant State Appellate Defenders,

333 Ill. App. 3d at 186 (Assistant State Appellate Defenders were managerial as a matter of law

34

even though they “typically fe[lt] compelled to follow the suggestions offered by their

supervisors and where therefore not completely autonomous).19

Contrary to the Union’s contention, there is insufficient basis on which to distinguish the

court’s decision in HRC, which excluded ALJs at the Human Rights Commission as managerial

as a matter of law. Although there are some notable distinctions between the enabling statute at

issue in HRC and the Unemployment Insurance Act at issue in this case, they do not warrant a

result different from that obtained in HRC. The Union correctly observes that the Human Rights

Act describes the authority of the HRC ALJs in detail, while the Unemployment Insurance Act

contains considerably less detail.20 However, the court’s decisions in HRC and ICC demonstrate

that the finality of the ALJs’ decisions in the absence of exceptions, rather than the specificity of

the enabling statute, determines whether ALJs are managerial as a matter of law. The court in

HRC expressly focused on the fact that the ALJs’ decisions could become final agency decisions

without further action by the Commission in finding that they were managerial as a matter of

law. HRC, 406 Ill. App. 3d at 316. Similarly, the court in ICC distinguished HRC where the

ALJs’ decisions there could not become final absent some action by the highest decision-making

body. ICC, 406 Ill. App. 3d at 782 (“members of the Commerce Commission retain the…duty to

issue their own decision, after receipt of the ALJ’s recommended order”). Notably, the Court in

ICC could have relied on the lack of detail in the Public Utilities Act21 as an additional basis for

distinguishing the HRC decision. Its failure to do so further supports a finding that the lack of

detail in Unemployment Insurance Act, at issue here, does not preclude a finding that the

referees are managerial as a matter of law.

19 Admittedly, the guidance provided to the individual Assistant State Appellate Defender was a function

of their particular supervisor, rather than an edict issued by the agency’s legal office. Yet, even assuming

that distinction is relevant, the Board has previously rejected consideration of employees’ actual duties, as

distinct from their statutory responsibilities, when analyzing their managerial status under the managerial

as a matter of law analysis. State of Illinois Attorney General, (Public Aid Bureau), 27 PERI ¶ 67 (IL

LRB-SP 2011). 20 For example, the Human Rights Act describes the process by which the ALJs conduct a hearing and

sets forth a list of remedies the HRC ALJs are authorized to impose. 775 ILCS 5/8A-102 (hearing

process); 775 ILCS 5/8A-104 (relief and penalties). By contrast, the Unemployment Insurance Act

merely states that the referees are authorized to “hear and decide disputed claims.” 820 ILCS 405/802. 21 220 ILCS 5/10-111 (the “hearing examiner presiding, shall, after the close of evidentiary hearings,

prepare a recommended or tentative decision, finding or order including a statement of findings and

conclusions and the reasons or basis therefore, on all the material issues of fact, law or discretion

presented on the record.”).

35

The Union further argues that the decisions issued by the Appeals Division referees

cannot be managerial where they are not precedential, but it is difficult to distinguish the Court’s

decision in HRC on these grounds. The precedential value of an ALJ’s decision does not appear

to have been a factor in the HRC court’s ruling because the court did not discuss that issue.

Indeed, it is unclear whether the HRC ALJs’ unappealed yet final decisions are binding on other

HRC ALJs or the on the Commission as a whole. HRC, 406 Ill. App. 3d at 316 (4th Dist. 2010).

Although the Board in State of Illinois, Department of Central Management Services did

consider the precedential value of an ALJ decision to be relevant in determining managerial

status, the Union’s reliance on that case is misplaced. State of Illinois, Department of Central

Management Services, 28 PERI 160 (IL LRB-SP 2012) aff’d by unpub. ord. No. 4-12-0507 (4th

Dist. 2013). There, the Board held that ALJs at the Department of Healthcare and Family

Services were not managerial where their recommended decisions had no precedential value and

affected only the parties to that case. State of Illinois, Department of Central Management

Services, 28 PERI 160. However, the Board performed its analysis under the “managerial as a

matter of fact” framework, rather than the managerial as a matter of law framework, applied

here. Id. In addition, the Board also relied on the fact that the ALJs’ supervisors and the

Director reviewed the decisions before they became final, whereas in this case, by contrast, the

IDES does not review the referees’ decisions before issuance. Moreover, the referees’ decisions

may become final absent any review. Cf. State of Illinois, Department of Central Management

Services, 28 PERI 160.

The Union also contends that other public-sector jurisdictions have granted collective

bargaining rights to individuals who do work similar to that of the hearing referees in the

Appeals Division. However, the relevance of this observation is unclear where the referenced

collective bargaining relationships arose under different statutory frameworks than that set forth

by the Act.

Finally, the Union’s reliance on a slippery slope argument must be rejected. The Union

asserts that the exclusion of the Appeals Division referees would lead to the eventual exclusion

of entire agencies and all individuals appointed as deputies to office holders. However, each

case is considered on its own merits, and the unit-placement of titles other than that of “hearing

referee” is not before me. Moreover, the Illinois Supreme Court is aware of this slope and its

potential perils, as evidenced by the dissenting opinion in Office of Cook County State’s

36

Attorney,22 but has not yet placed restrictions on the matter of law analysis that would preclude

its application here.

Thus, the Benefit Appeals hearing referees and the Administrative hearing referees are

managerial as a matter of law.

b. Board of Review Hearing Referees

The Board of Review hearing referees are not managerial as a matter of law.

First, they do not qualify as managerial under the framework set forth in HRC, applicable

to ALJs. Although the Board of Review referees are empowered “to hear and decide disputed

claims” on matters within the agency’s purview—matters on appeal from the Benefit Appeals

unit and certain select cases from the Administrative hearings unit—their decisions do not

become the final decision of the office holder unless and until the office holder approves of

them. Both Supervisor Fox and a Board member must approve of the draft decision before it

becomes the final agency decision, and the referee’s decision never becomes the agency’s final

decision absent such review and approval. In this respect, their authority is more akin to the

ALJs at the ICC, whose decisions required approval before they became final, than it is to the

HRC ALJs, whose decisions could become final even absent approval. Cf. HRC, 406 Ill. App. 3d

at 316 (ALJs were managerial as a matter of law where their decisions could become final

without any action by the Commission); ICC, 406 Ill. App. 3d at 775 (Commerce Commission

had obligation to finalize ALJs’ decisions, even if no party filed exceptions).

Contrary to the Employer’s anticipated contention, the Board of Review referees are also

not managerial as a matter of law under the Court’s decision in PCB. Although the Board of

Review referees draft decisions on the Board’s behalf, as the staff attorneys in PCB drafted

decisions for the Pollution Control Board, there are fundamental factual distinctions between this

case and PCB that render the court’s decision in PCB inapplicable here. First and most

importantly, unlike the staff attorneys in PCB, the Board of Review referees are not assigned to

any individual Board of Review member. Cf. State of Illinois, Department of Central

22 The dissent stated the following in relevant part: “The majority’s approach would therefore have the

effect of removing not only attorneys, but all professional employees, from the reach of the [Act],

contrary to the clear intention of the legislature…Although the majority claims that its holding does not

necessarily mean that all publicly employed lawyers will be deemed managers, its analysis provides for

no exceptions.”

37

Management Services, 28 PERI ¶ 50 (IL LRB-SP 2011) (noting that attorney assistants were

assigned to individual PCB members). Rather, they work on their own, drafting decisions

apparently without any one-on-one collaboration, consultation or intellectual exchange with any

of the members. In fact, Board of Review supervisor Fox acts as an intermediary between the

referees and the Board’s members by reviewing the draft decisions and catching internal

inconsistencies or typos. Moreover, if a member rejects the draft decision, the referee is not

required to rework it to the member’s liking, as would a law clerk or a PCB staff attorney.

Instead, Supervisor Fox simply sends the decision to the Chairman who acts as a tie-breaker.

Thus, the law clerk analogy on which the Court based in decision in PCB is inapposite, and the

Board of Review referees cannot be deemed managerial as a matter of law based on the court’s

reasoning in that case. PCB, 2013 IL App (4th) 110877 (noting that staff attorneys performed

“strikingly similar functions to that of judicial law clerks by “working closely with the PCB

members and at times on behalf of PCB members to draft and issue administrative decisions”).

Finally, the Employer contends that the Board of Review referees are managerial as a

matter of law under the analysis the courts have applied to Assistant State’s Attorneys, Assistant

Attorneys General, and Assistant Public Defenders, but the referees’ authority is distinguishable

from the employees at issue in those case. Most notably, the referees lack any independent

authority to act on behalf of the office holder or to exercise any of the office holder’s “same

sovereign power.” Office of Cook County State’s Attorney, 166 Ill. 2d at 304 (assistant state’s

attorneys had power to action behalf of the State’s Attorney); Cf. Chief Judge of Sixteenth

Judicial Cir., 178 Ill.2d 333, 346 (“assistant public defenders act on behalf of the public defender

in carrying out the statutory duties of the public defender’s office”); Cf. Am. Fed’n of State,

County & Mun. Employees, Council 31 v. Illinois State Labor Relations Bd., 333 Ill. App. 3d at

187 (assistant appellate defenders, in all decisions that they make on behalf of the State

Appellate Defender’s clients, exercised the same sovereign power as if they were the State

Appellate Defender).

In sum, the Board of Review hearings referees are not managerial as a matter of law.

However, as discussed below, they are managerial as a matter of fact.

2. Managerial as a Matter of Fact

The Board of Review hearing referees are managerial as a matter of fact.

38

As noted above, section 3(j) of the Act provides that a managerial employee is “an

individual who is [1] engaged predominantly in executive and management functions and [2] is

charged with the responsibility of directing the effectuation of management policies and

practices.” 5 ILCS 315/3(j).

The first part of the statutory definition of a “managerial employee” describes the nature

of the work to which the individual devotes most of his time. ICC, 406 Ill. App. 3d at 774. The

term predominant may mean superiority in importance or numbers. Am. Fed’n of State, County,

& Mun. Employees (AFSCME), Council 31 v. State, Illinois Labor Relations Bd., 2014 IL App

(1st) 130655, ¶ 29; 31.

“Executive and management functions,” amount to running an agency or department by

establishing policies and procedures, preparing the budget, or otherwise assuring that the agency

or department operates effectively. ICC, 406 Ill. App. 3d at 774 (citing Am. Fed. of State, Cnty.

& Mun. Employ. Council 31, 25 PERI ¶ 68 (IL LRB-SP 2009)); City of Freeport, 2 PERI ¶ 2052

(IL SLRB 1986). Employees need not create new policies to fulfill this requirement as long as

they help run the agency. ICC, 406 Ill. App. 3d at 778 & 780. To determine whether employees

help run the agency, one must compare their job functions to the agency’s overall mission. Id. at

774. If the responsibilities of the petitioned-for employees in fulfilling their duties encompass

the agency’s entire mission, or a major component of it, the employees help run the agency. Id.

at 778. In doing so, the employee must also possess and exercise authority and discretion which

broadly affects an agency’s or a department’s goals and the means of achieving them. Dep’t of

Cent. Mgmt. Serv. v. Ill. State Labor Rel. Bd., 278 Ill. App. 3d 79, 87 (4th Dist. 1996) (discretion

required).

The second part of the definition requires that managerial employees bear responsibility

for making such policies happen, thus demonstrating that they possess authority that extends

“beyond the realm of theorizing and into the realm of practice.” ICC, 406 Ill. App. 3d at 774.

An individual directs the effectuation of management policies and practices if he oversees or

coordinates policy implementation through development of the means and methods of achieving

policy objectives, determines the extent to which the objectives will be achieved, and is

empowered with a substantial amount of discretion to determine how policies will be effected.

Id. citing Dep’t of Cent. Mgmt. Serv., 278 Ill. App. 3d at 87.

39

Further, an advisory employee who makes effective recommendations on “major policy

issues” may be managerial. ICC, at 780. The test of effectiveness is the “power or influence of

the recommendations.” Id.

Here, the Board of Review referees are predominantly engaged in executive and

management functions because they devote most of their work time to helping run a major

component of the IDES, the Board of Review. The Board of Review (“Board”) constitutes a

major component of the IDES because it is the highest authority that regulates the distribution of

unemployment benefits to claimants. The distribution of unemployment benefits to individuals

who are unemployed through no fault of their own, represents one half of the Unemployment

Insurance Program, and that program is the primary means by which the IDES accomplishes its

mission.23 The centrality of the Unemployment Insurance Program, on the whole, to the IDES’s

mission is further illustrated by the fact that seventy percent of all IDES employees are involved

in the Unemployment Insurance Program, by either distributing benefits or collecting revenue

from employers to fund those benefits.

Board of Review referees help run the Board of Review, and in turn the IDES, by making

managerial, effective recommendations on the outcome of cases pending before the Board of

Review to resolve issues raised on appeal from Benefit Appeals referees’ decisions. The Board

of Review referees exercise discretion when they make recommendations to affirm, reverse, or

modify the Benefit Appeals referees’ decisions, or to remand the case. They do not rely on the

Appeals referees’ findings of facts and instead review the entire record and make their own

credibility determinations. In addition, the Board of Review referees develop their

recommendations independently. Contrary to the Union’s suggestion, there is insufficient

evidence that any higher-level decision-maker tells Board of Review referees how to formulate

their recommendations on the pending cases. There is no indication that the Board of Review

referees even consult the Board of Review members before preparing a draft decision. Although

Supervisor Fox reads the Board of Review referees’ decisions before transmitting them to a

Board member for further review and approval, he does not review the record and simply accepts

the facts as described by the Board of Review referee.

23 The other half of the Unemployment Insurance Program concerns the collection of revenue from

employers to fund those disbursements.

40

Although the Board of Review referees consult memos that provide legal guidance on

some common issues of law that come before the Board of Review, this guidance does not

eliminate their exercise of discretion. County of Will, 34 PERI ¶ 91 (IL LRB-SP 2017)

(modifying ALJ’s decision to the extent that it suggested that mere existence of government

regulations warranted a finding that an employee lacked managerial discretion). Much of the

guidance offered by the Office of Legal Counsel concerns grayer areas of the law, and the

referees retain discretion to determine whether and how to apply the guidance in any particular

case. For example, in cases where an individual is unemployed because he lost a license, the

Office directs that benefits should be allowed if the claimant’s ability to maintain that license

was “beyond the claimant’s control,” but the Office does not define that phrase. Similarly,

another memo offered examples in which good cause existed to remand a case to the lower

authority referee, but it did not require the referee to recommend a remand in such cases and it

did not purport to spell out all the circumstance in which a remand would be appropriate. The

remaining guidance concerns rote, procedural matters.24

In addition, the high rate at which the Board of Review accepts the Board of Review

referees’ draft decisions demonstrates that the referees’ recommended/draft decisions are

effective. Ninety percent of the draft decisions produced by Board of Review referees become

decisions of the Board of Review, without any modification—clerical or substantive.

Approximately 97% of the draft decisions become decisions of the Board with only minor

modifications to correct grammatical or clerical errors. Specifically, only three or four of

approximately 35-40 draft decisions are rejected each week by either Supervisor Fox or a Board

member, and only one of those drafts is rejected based on its substance.

Contrary to the Union’s suggestion, neither the nature nor the extent of the review

process in this case diminishes the effectiveness of the referees’ recommendations, or in turn, the

referees’ managerial authority. Although there are two levels of review, the first by a supervisor

and the second by a Board member, it is the recommendation’s influence that is the litmus test

for effective recommendation. State of Ill. Dep’t of Cent. Mgmt. Serv. (Ill. Commerce

Comm’n), 406 Ill. App. 3d at 777; Am. Fed'n of State, County & Mun. Employees (AFSCME),

Council 31 v. Illinois Labor Relations Bd., State Panel (“ICC II”), 2014 IL App (1st) 123426, ¶

24 For example, and as noted above, the Office of Legal Counsel has instructed that referees must deny a

claim where the claimant did not post a resume on the agency’s labor exchange website before seeking

benefits.

41

44 (review of ICC ALJs’ recommendations by commissioners and their assistants did not

diminish the ALJs’ managerial authority). Here, both reviewers routinely accept the Board of

Review referees’ draft decisions, without modification, and the acceptance rate of the

recommendations’ substantive aspects is above 97%. ICC II, 2014 IL App (1st) 123426, ¶ 45

(99% acceptance constituted effective recommendation); Cf. State of Illinois, Department of

Central Management Services, 28 PERI 160 (ALJs were not managerial as a matter of fact where

their decisions were almost always modified during the review process). The influence of the

referees’ recommendations is further illustrated by the fact that a referee’s recommended draft

decision may become a decision of the Board even if one reviewing Board member rejects it. In

such cases, the draft becomes the Board’s decision if the Chairman accepts it, and the member

who initially rejected the recommended draft decision simply dissents. Notably, the agency does

not require the Board of Review referee to change his recommendation if the first Board member

rejects it.

The Union emphasizes that recommendations issued by the Board of Review referees

never become precedential decisions because the Board of Review’s decisions do not bind others

within the agency, but this fact does not undermine a finding of managerial authority. The

precedential value of a decision is relevant to determining whether the decisionmaker has

authority to formulate policy. State of Illinois, Dep’t of Cent. Mgmt. Servs., 28 PERI 160

(considering this factor). However, an individual need not formulate policy to qualify as

managerial.25 ICC II, 2014 IL App (1st) 123426, ¶ 47. While the Board of Review does not

issue binding declarations of policy through precedential decisions, it nevertheless directs the

effectuation of existing policies through its decision-making. The Board of Review referees in

turn help the Board direct the effectuation of existing policies by making effective

recommendations on all cases that come before the Board of Review, and this authority is

sufficient to satisfy the managerial test. Id.

Moreover, the recommendations issued by the Board of Review referees, which become

the Board’s decisions, are not as devoid of impact on other pending cases as the Union suggests.

In fact, the IDES encourages the lower-authority decisions-makers to follow the guidance

provided by the Board of Review and by extension, the guidance provided by the Board of

25 If that were the case, then even the members of the Board of Review would lack managerial authority

because none of their decisions hold precedential value.

42

Review referees who draft the Board’s decisions. Appeals referees receive a “Guide to

Unemployment Insurance Benefit Appeals Principles and Procedures,” which states that referees

“should follow decisions of the [B]oard of [R]eview and the State courts” when “deciding

questions involving the interpretation of law.”26 This directive echoes the testimony provided by

the Employer’s witnesses that the IDES strives to achieve consistency in the treatment of

procedural and substantive issues that come before the agency. In this respect, the recommended

decisions drafted by the Board of Review referees have greater influence on the agency as a

whole than the decisions issued by employees that the ILRB has deemed non-managerial. Cf.

State of Illinois, Dep’t of Cent. Mgmt. Servs., 28 PERI 160 n. 8 (recommended decisions that

were accepted by Director had no precedential value, but there was no agency-wide emphasis on

consistency; Director also frequently modified the recommended decisions prior to acceptance).

The Union also contends that the Board of Review referees cannot be managerial because

others within the agency including the lower-authority referees have authority to issue final

agency decisions. However, “exclusivity in the implementation of management policy is not a

requirement” under the Act for a finding of managerial authority. Dep’t of Cent. Mgmt. Services

v. Illinois Labor Relations Bd., State Panel, 2011 IL App (4th) 090966, ¶ 186.

Finally, the Union contends that the referees are professional employees, as opposed to

managerial ones, but these two designations are not mutually exclusive. Employees who

perform professional work can also be managerial, both as a matter of law and as a matter of

fact, and this is the case with the Board of Review referees. Office of the Cook Cnty. State’s

Attorney, 166 Ill. 2d at 303 (matter of law); ICC II, 2014 IL App (1st) 123426, ¶ 48 (matter of

fact); Dep’t of Central Management Services (Illinois Commerce Commission), 30 PERI ¶ 206

(IL LRB-SP 2014) aff’d by Am. Fed’n of State, County & Mun. Employees, Council 31 v. State

Dep’t of Cent. Mgmt. Services (Illinois Commerce Comm’n), 2018 IL App (1st) 140656 (matter

of fact and law); State of Ill., Dep ‘ t of Cent. Mgmt. Servs., 30 PERI ¶ 38 (IL LRB-SP 2013)

(matter of fact).

Thus, the Board of Review referees are managerial as a matter of fact.

26 See U. Exh. 17, p. 6 of second document. This is a document issued by the federal government.

43

5. Determination Regarding Vacant Positions

The single vacant Board of Review hearing referee position and the nine vacant Benefit

Appeals hearing referee positions are managerial within the meaning of Section 3(j) of the Act

and properly excluded from the bargaining unit.

In State of Ill., Dep’t of Cent. Mgmt. Servs., 33 PERI ¶ 55 (IL LRB-SP 2016), the Board

held that it is appropriate to hold hearings on the unit placement of vacant positions when there is

evidence that sufficiently defines the actual duties of the prospective employee who will

eventually hold the position in question.

In this case, there is sufficient evidence concerning the duties of the prospective

employee who will eventually hold the vacant Board of Review hearing referee position because

the record includes testimony concerning the job duties of individuals with the same job

description. Moreover, the future holders of the vacant Board of Review hearing referee position

will likewise have the same managerial authority as the current holders of the Board of Review

hearing referee position with the same job description.

Similarly, there is sufficient evidence concerning the duties of the prospective employees

who will eventually hold the vacant Benefit Appeals hearing referee positions because the

evidence of those positions’ managerial authority was established as a matter of law, drawn from

the Unemployment Insurance Act and the IDES regulations.

In sum, the vacant positions are properly excluded from the bargaining unit.

V. Conclusions of Law

1. The unit clarification petition is appropriately filed.

2. The Benefit Appeals hearing referees and Administrative hearing referees are

managerial as a matter of law.

3. The Board of Review hearing referees are not managerial as a matter of law.

4. The Board of Review hearing referees are managerial as a matter of fact.

5. The vacant Board of Review hearing referee position is managerial as a matter of

fact.

6. The vacant Benefit Appeals hearing referee positions are managerial as a matter of

law.

44

VI. Recommended Order

The petition is granted.

VII. Exceptions

Pursuant to Section 1200.135 of the Board’s Rules and Regulations, 80 Ill. Adm. Code

Parts 1200-1240, the parties may file exceptions to this recommendation and briefs in support of

those exceptions no later than 14 days after service of this recommendation. Parties may file

responses to any exceptions, and briefs in support of those responses, within 10 days of service

of the exceptions. In such responses, parties that have not previously filed exceptions may

include cross-exceptions to any portion of the recommendation. Within five days from the filing

of cross-exceptions, parties may file cross-responses to the cross-exceptions. Exceptions,

responses, cross-exceptions and cross responses must be filed with the General Counsel of the

Illinois Labor Relations Board, 160 North LaSalle Street, Suite S-400, Chicago, Illinois 60601-

3103, and served on all other parties. Exceptions, responses, cross-exceptions, and cross-

responses will not be accepted in the Board’s Springfield office. Exceptions and/or cross-

exceptions sent to the Board must contain a statement listing the other parties to the case and

verifying that the exceptions and/or cross-exceptions have been provided to them. If no

exceptions have been filed within the 14 day period, the parties will be deemed to have waived

their exceptions.

Issued at Chicago, Illinois this 17th day of September, 2018

STATE OF ILLINOIS

ILLINOIS LABOR RELATIONS BOARD

STATE PANEL

/S/ Anna Hamburg-Gal

Anna Hamburg-Gal

Administrative Law Judge