Back-pay claim has 10-year statute of limitations

The Illinois Appellate Court, Second District, recently ruled that a back-pay claim against a unit of government under the Wage Payment and Collection Act did not fall within the one-year limitation period in the Tort Immunity Act (745 ILCS 10/8-101(a)) in Prorok v. Winnebago County, 2017 IL App (2d) 161032. As a result of this decision, back-pay claims from public employees could be brought as long as 10 years after the claim arises under the Wage Act (735 ILCS 5/13-206), and the Court’s reasoning in reversing the trial court’s decision was that the claim was essentially for the non-performance of a contractual obligation, regardless of whether it could be viewed as “equitable.” Prorok, 2017 IL App (2d) 161032, ¶ 10.

The trial court had determined that the Tort Immunity Act’s one-year statute of limitations applied to block the former employee’s claim on the basis of the County employer’s argument that the claim was essentially seeking equitable relief and damages and thus fell within the Tort Immunity Act’s one-year limitation. Id. ¶ 4.

The appellate court’s opinion started by noting that “to determine the applicable statute of limitations, a court must focus on the nature of the liability and not on the nature of the relief sought.” The court determined that the “injury” alleged, though a “matter on which reasonable people could certainly disagree,” need not be addressed because the claim for back pay was said to fall within the Tort Immunity Act’s exception for contract claims. Id. ¶ 6.

The key to the appellate court’s analysis is what the court identified as the purpose of the Act, which is to protect local public entities and their employees from liability arising from the operation of government. In its reasoning, the Court noted that while claims for damages can arise from a breach of legal duty (i.e. tort) or from the breach of a contractual promise (i.e. ex contractu), here, the plaintiff’s claim was for wages for work he had already performed, which arose from his employment with the county. Since the employee was an “at-will” employee and employment at-will is essentially a contractual relationship, the claim fell outside of the scope of the Tort Immunity Act. Id. ¶ 9.

Of course, practically speaking, the holding of this case opens more widely the potential for much older claims to be brought against local government employers for the 10-year period after claims arise, rather than the one-year limitation under the Tort Act. And the decision eliminates a legal argument that somewhat protected public entities by limiting the period for wage claims post-employment. At the very least, the decision suggests that employers would be wise to maintain employment records past the 10-year period. 