April 8, 2010

Employers that lose discrimination and other cases before the Illinois Human Rights Commission must meet a little-known requirement before filing an appeal. According to Illinois courts, employers must first ask the Commission to reconsider every ruling in an employee's favor. If not met, this condition, which stems from the need under Illinois law to exhaust all administrative remedies available before appealing to the local circuit court, can trap an employer and doom an appeal.

For the past few years, employees alleging discrimination under state law have had the option of either filing a charge with the Illinois Department of Human Rights (IDHR) or filing a lawsuit in court. Previously, employees had to file charges with the IDHR and try their cases before the Commission. Many employees, however, still elect to file an IDHR charge instead of suing in court. Once an employee chooses this non-judicial route, Illinois law requires that both the employee and the employer exhaust all administrative remedies available.

The IDHR first conducts an informal hearing to learn about the facts and decide whether sufficient evidence exists that discrimination may have occurred. If the IDHR determines that it does, then an administrative law judge at the Commission holds a trial in which both the employee and the employer present all available evidence. After the trial, the judge makes a recommended decision to a three-member panel of the Commission. That panel then issues a final order, which is equivalent to a verdict in court.

It stands to reason that a final order from the Commission would mark the end of any available administrative remedies, and that the losing party could then file an appeal to the local circuit court within 35 days, as authorized by Illinois' administrative review law. After all, if an employer must exhaust all administrative remedies before filing such an appeal, it seems logical that an employer on the losing side of a final order would have met that requirement.

But employers take heed. That logic will actually prove fatal to your ability to appeal.

Here's why. The Illinois Human Rights Act provides that the losing party, within 30 days of the final order, "may file an application for rehearing before the full Commission." Illinois courts view this rehearing option as one last administrative remedy that the employer must pursue before appealing an adverse ruling to the local circuit court. As a result, employers that fail to exhaust that remaining administrative remedy will lose their ability to appeal before a court even hears why the employer thinks the Commission's ruling was wrong.

This little-known risk does not apply exclusively to rulings by the Illinois Human Rights Commission. In fact, companies regulated by any Illinois statute should exercise caution before appealing a so-called "final" administrative agency order. If the relevant statute allows for a possible rehearing of such a final order from any state administrative agency, then the employer must exhaust that remedy or risk losing the right to file an appeal.

This article contains material of general interest and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. Under applicable rules of professional conduct, this content may be regarded as attorney advertising.