APPELLATE COURT RULES NON-HOME RULE MUNICIPALITIES CAN CREATE PSEBA HEARING OFFICER PROCESSES

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APPELLATE COURT RULES THAT NON-HOME RULE
MUNICIPALITIES CAN CREATE PSEBA HEARING OFFICER PROCESSES

June 16, 2017 

The Fourth District Appellate Court recently ruled that non-home rule municipalities have the legal authority to establish internal administrative hearing officer processes for determining an employee’s eligibility for health insurance benefits under the Public Safety Employee Benefits Act (“PSEBA”). Prior that to this decision, Illinois appellate courts had expressly approved only a home rule unit’s ability to create a hearing officer process. See Pedersen v. Vill. of Hoffman Estates, 2014 IL App (1st) 123402. Since then, parties have debated whether non-home rule units enjoyed similar legal authority.

The Fourth District answered that question in the affirmative with its recent decision in Englum v. City of Charleston, 2017 IL App (4th) 160747. Specifically, the Court ruled that a trial court improperly addressed a former police officer’s PSEBA lawsuit. Instead, the trial court should have dismissed the lawsuit until the police officer fully had pursued his administrative remedies under the municipality’s local hearing officer PSEBA process. The Fourth District concluded that Section 10-4-1 of the Illinois Municipal Code was broad enough to authorize for non-home rule communities the creation of an administrative process for regulating how PSEBA benefits will be awarded to employees.

Assuming this decision is not overturned by the Illinois Supreme Court or otherwise later questioned by another appellate court, non-home municipalities now have an additional legal option when handling employee requests for PSEBA benefits. A number of home rule units of local government have enacted hearing officer processes via ordinance as a way to standardize the process for collecting evidence and assessing an employee’s entitlement to PSEBA benefits. In turn, reviewing courts tend to pay deference to an administrative hearing officer’s factual findings and conclusions, which by extension, helps avoid a formal fact-finding hearing before a circuit court.

In light of this decision, non-home rule municipalities should consider whether a PSEBA hearing officer process makes legal and practical sense for their communities. There are a number of practical and legal considerations, however, which should be weighed before making such a decision. Please contact a Clark Baird Smith LLP attorney for more information if your community is interested in establishing such a hearing officer process.

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