City Has Private Right of Action to Recover PEDA Benefits from Employee
An Illinois Appellate Court ruled in favor of a city in a lawsuit filed by the city to recover payments made to an employee under the Public Employees' Disability Act (PEDA). City of Monmouth v. Thomas.
A city employee received disability benefits from a city under PEDA. The city filed a lawsuit against the employee claiming he forfeited those benefits when he engaged in secondary employment, and that the city was entitled to a return of $55,370.66 in benefits. The circuit court held that PEDA does not provide a right of action to the city to recover benefits even where those benefits were forfeited under the statute, and that the city had an adequate remedy in its secondary "unjust enrichment" claim.
The city appealed, arguing that PEDA creates an implied right of action to recover payments made to an employee that the employee statutorily forfeits under the statute. The Appellate Court acknowledged that PEDA does not include express language authorizing a private right of action to recover benefits but noted that the Illinois Supreme Court had established four factors to consider in deciding whether a right might exist by implication. In applying those four factors, the Appellate Court held as follows:
Based on the foregoing application of the Fisher factors, we find it reasonable to conclude the Act implies a private right of action for public employers who suffer monetary injury resulting from disability payments made to public employees who are secondarily employed while receiving benefits under the Act. Accordingly, the trial court’s finding that the City could not pursue an action under the Act was in error.
The Appellate Court sent the case back to the circuit court for further proceedings.
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