Key Points

  • The Fourth District held that the Public Employee Disability Act, 5 ILCS 345/1, implies a private right of action for public employers who pay disability benefits to employees who are secondarily employed while receiving them.
  • Applying the four Fisher v. Lexington Health Care factors, the court found the Act was intended to protect public employers from double payment, not only to compensate injured employees.
  • The court held that unjust enrichment is not an adequate substitute because the Act requires outright forfeiture and disgorgement, so the employer need show only the amount paid and secondary employment during the benefit period.
  • The court rejected the employee's argument that benefits paid before the city discovered his secondary employment are unrecoverable under the Act.
  • The dismissal of the city's statutory count was reversed and the case remanded to the Warren County Circuit Court.

An Illinois appeals court held on Oct. 13 that public employers may sue under a state disability-pay law to take back benefits from injured employees who worked other jobs while collecting them. The ruling revives the City of Monmouth's bid to recover $55,370.66 in benefits paid to Justin Thomas.

A three-justice panel of the Fourth District of the Illinois Appellate Court unanimously reversed Warren County Circuit Judge Kenneth J. Hogan, who had dismissed the city's claim under the Public Employee Disability Act. Justice DeArmond wrote the opinion, and Justices Cavanagh and Harris joined it.

The 1973 law, as the court described it, was intended "to provide for a continuation of full pay for law enforcement officers, corrections officers, firefighters, and state employees who suffer disabling injuries in the line of duty." It bars those employees from working elsewhere while disabled and provides that anyone who does "forfeits the continuing compensation provided by this Act from the time such employment begins."

The panel held that the law gives employers an implied private right of action, a right to sue that a court infers from a statute even though the text does not expressly create one. It rejected the trial court's view that unjust enrichment, a claim that the defendant unjustly kept a benefit to the plaintiff's detriment, already gave the city an adequate remedy.

Monmouth sued Thomas in December 2023, alleging that he received $55,370.66 in benefits under the Act and that he began secondary employment on Feb. 10, 2023, forfeiting those benefits. A January 2025 amended complaint pleaded an implied right of action under the Act in count I and, in the alternative, unjust enrichment in count II.

Thomas moved in February 2025 to dismiss count I. He argued that the statute was "designed to benefit and protect injured workers, not municipalities," and that unjust enrichment "would provide adequate remedy if proven, thus negating the need for an implied cause of action." At a June 3, 2025, hearing, the city's lawyer told Hogan that "the only someone to which those forfeited benefits could inure is the city that paid those benefits."

Hogan granted the motion in a written order on June 12, 2025. He wrote that the city's claimed injury "is not an injury the Act was designed to prevent," and that implying a right to sue would be "at best, duplicative of a public employer's right to pursue an action for unjust enrichment and, at worst, a diminution of the rights of public employees at odds with the overall purpose of the Act."

On appeal, the Fourth District applied the four-part test the Illinois Supreme Court set out in 1999 in Fisher v. Lexington Health Care, Inc. That test asks whether the plaintiff belongs to the class the statute protects, whether the statute targets the plaintiff's injury, whether a private suit fits the statute's purpose, and whether one is "necessary to provide an adequate remedy for violations of the statute." The panel found that all four factors favored the city.

On the first factor, DeArmond wrote that the Act, beyond paying injured workers, "was further intended to protect public employers from double payment to a disabled employee." The panel relied on its own 1988 decision in City of Jacksonville v. Coop. In that case a city sued under a predecessor law after a firefighter drew his pay for two months while also receiving workers' compensation. Coop cited a 1973 House floor statement by Representative Philip that an amendment would "make it very clear that a person who has a disability does not collect from two funds."

On the second factor, the court pointed to Section 1(d) of the Act, which also provides that workers' compensation and insurance salary payments "shall revert to that entity during the time for which continuing compensation is paid." Read as a whole, DeArmond wrote, the Act was "designed not only to compensate first responders for duty-related injury, but to prevent the injury the City seeks to remedy."

On the third factor, the panel said a right to sue "would discourage employees from seeking secondary employment while they are receiving disability benefits." It rejected Hogan's concern about diminishing employees' rights "when the very language of the statute prohibits secondary employment while receiving disability benefits under the Act."

On the fourth factor, the court noted, quoting a 2016 Fourth District decision, that an unjust-enrichment plaintiff must show that the defendant's retention of a benefit "violated the fundamental principles of justice, equity, and good conscience." A claim under the Act, by contrast, "would simply require an outright forfeiture and disgorgement of the improperly paid compensation, not a calculation of unjust enrichment." The city "would merely have to show the amount paid to the disabled employee and the existence of secondary employment during the time in which the compensation was paid," DeArmond wrote.

The panel also rejected Thomas's contention that benefits paid before the city discovered his outside work cannot be recovered. The court called that position a "misinterpretation" of the statutory phrase "continuing compensation." "The same claim may well be available in an action for unjust enrichment, but it has no place in a cause of action based on the language of the Act," DeArmond wrote.

The court concluded that "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."

Lawyers for the city included Arthur W. Eggers of Califf & Harper, P.C. Thomas was represented by Matthew D. McCue of Goldfine & Bowles, P.C.

The panel reversed the dismissal of count I and remanded the case to the Warren County Circuit Court for further proceedings consistent with its opinion. The appeal decided only whether the city may bring the statutory claim. The city's allegation that Thomas held a second job remains untested, and his motion to dismiss did not challenge the alternative unjust-enrichment count.