Paramount Consulting Agency, Inc. v. Johnson

Citations: 394 N.E.2d 672; 75 Ill. App. 3d 749; 31 Ill. Dec. 470; 1979 Ill. App. LEXIS 3139Docket: 78-219

Court: Appellate Court of Illinois; August 24, 1979; Illinois; State Appellate Court

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Paramount Consulting Agency, Inc. (Paramount) appealed a Cook County circuit court decision that upheld the Department of Labor's revocation of its private employment agency license. The appeal was filed against Donald Johnson, the Director of the Department of Labor, and John Riorden, the Superintendent of the Division of Private Employment Agencies, under the Administrative Review Act. The Department cross-appealed a denial of its motion to dismiss Paramount's action due to its failure to pay for the hearing transcript, as required by the private employment agencies act.

The court affirmed part of the lower court's decision, reversed another part, and remanded the case for further proceedings. Paramount, incorporated in Illinois and led by officers James G. Ivan and Helen Ivan, faced a seven-count complaint from the Department alleging violations of the private employment agencies act from March to December 1974. The Department's findings indicated that Paramount, through Ivan, employed two main methods for advertising job vacancies: one involved placing ads in the Chicago Tribune with only a phone number for responses, often leading to misrepresentation by Ivan under the alias Mark Thomas Stein, and the other involved obtaining applicant information from third parties.

After a comprehensive hearing, the Department concluded that all counts against Paramount were sustained, finding Ivan guilty of immoral and illegal conduct, resulting in the revocation of Paramount's license. This decision was affirmed in the administrative review, leading to Paramount's appeal. The revocation order was stayed pending the appeal's outcome.

Paramount appeals the hearing officer's decision, asserting that the findings are not supported by competent evidence, as required for administrative review. Such reviews treat agency findings as prima facie correct, limiting the analysis to whether the decision is against the manifest weight of evidence, without reweighing or assessing witness credibility. 

Count I of the complaint alleges multiple violations of the private employment agencies act, specifically: 
1) Failure to disclose in advertisements that they were placed by a private employment agency and to include the licensee's name and address.
2) Invoices sent to employers did not identify the licensee as a private employment agency.
3) Applicants were not personally interviewed prior to being referred to employers.
4) No referral slips were provided to employers or applicants.
5) Engaging in fraudulent or misleading advertising.

Paramount argues that the Department incorrectly linked ads to them solely through a telephone number and misinterpreted interview and referral slip requirements. The ads did not mention Paramount or its associates but included traceable phone numbers. Testimony revealed connections between various phone numbers and individuals associated with Paramount, including the identification of employees and referral processes that involved the company. Despite these allegations, Paramount claims its operational methods were previously approved by the Department.

A letter from the director to Ivan indicates that the Department would seek an Attorney General's opinion on Paramount's practices and expects compliance with the Act's provisions. This creates a factual issue regarding whether there was actual permission, which was resolved in favor of the Department. Paramount argued that telephone interviews fulfilled the 'personal interview' requirement of section 5, asserting that they serve the same purpose as face-to-face meetings. However, no definition of 'personal interview' exists in case law or statute, leading to the conclusion that it implies an in-person meeting based on its ordinary meaning. The Department's requirement for a face-to-face interview is thus supported. 

Paramount's assertion that it provided referral slips was contradicted by testimony from law firm managers and applicants, who claimed they received no slips prior to interviews. Paramount contended that the referral slip requirement is an excessive burden, but section 5 mandates that every applicant receive a referral slip before job interviews, and no unreasonable hindrance to hiring is evident. Ivan’s production of some slips did not sufficiently challenge the contrary evidence. Therefore, the findings on count I were upheld as consistent with the evidence.

Count II alleged violations related to scheduling an interview for Katherine Brinegar without a prior interview and without a referral slip, alongside violations of solicitation and inducement regulations, and offering false statements to potential employers on her behalf.

Paramount's primary argument hinges on the impeachment of Ms. Brinegar by a Department witness, Heather Didzerekis, who confirmed that there was no record of an interview with Ms. Brinegar, supporting the assertion that no referral slip was issued. Ms. Brinegar claimed Ivan offered her false references, while Ivan disputed this, leading to a factual dispute resolved against him. Paramount's request for the court to reassess witness credibility is deemed inappropriate in this administrative review, thus upholding the findings related to Count II.

Count III alleges violations of interview procedures and referral slip requirements concerning Lynn Svehla. Ms. Svehla testified she was interviewed by Ivan via phone but did not receive a referral slip for her employer interview. Although Ivan advised her to misrepresent her experience to the prospective employer, the evidence supports the hearing officer's conclusions, countering Paramount's claims that misrepresentation was unnecessary.

Count IV involves an alleged arrangement between Paramount, Ivan, and Andrea Michna, where misleading ads placed in the Chicago Tribune referred applicants to Ms. Michna, who was employed by the International Sporting Club. This arrangement supposedly violated section 197j due to the ads not disclosing the involvement of an employment agency and also breached Rule 6 by failing to notify the Department of relevant phone numbers. Ms. Michna testified about her involvement in the ads and stated that she had never been employed or compensated by Ivan. Lee Franklin, the program director at International, corroborated her lack of hiring authority and revealed that the ads were unauthorized, leading to an investigation where Ms. Michna admitted to placing the ads for Ivan in exchange for payment per hire.

Franklin's claim of a $500 demand was disputed by inspector Thomas Madden, who testified that Franklin threatened Stein with adverse testimony in Department proceedings unless paid. Paramount raised a hearsay objection regarding Franklin’s telephone conversation testimonies, but since Franklin, Ivan, and Ms. Michna could all testify about the conversation's content, the objection was not applicable; the hearsay rule's purpose of ensuring cross-examination was satisfied. Although Madden should not have testified about conversations he did not participate in, the presence of direct testimony from the involved parties mitigated any potential prejudice to Paramount. 

Additional evidence, including testimony from Benjamin Nix, indicated that Ms. Michna paid bills to Nix's answering service for 'Mr. Brooks,' who had given Ivan's home phone number. Despite conflicting testimonies, the hearing officer's findings concerning count IV were upheld as not contrary to the manifest weight of the evidence. Count V alleged violations regarding Paramount's record-keeping practices, including the absence of fee transaction records, failure to maintain advertisement files, off-premises interviewing, missing applicants' referral slips, and discriminatory job orders. 

Paramount argued that the inspection, which led to the allegations in count V, was improperly motivated and that inspector Madden did not examine all records offered. Madden acknowledged seeing gender designations on job forms and was informed by Ivan about the Department's approval for off-premises interviewing. However, when Madden requested transaction records, Ivan claimed they were with his accountant. Paramount presented a transaction book post-inspection, asserting that their records complied with Department requirements, but failed to provide an accountant's receipt during or after the inspection, which was necessary under section 3 of the relevant statute requiring records to be available for inspection.

Missing records' production at trial does not clarify their status during Madden's visit. Paramount's defense for off-premises interviews relies on Colaizzi's letter, which indicated an expectation of compliance with the Act pending an Attorney General ruling. Paramount claims no proof of off-premises transactions was required, as Ivan admitted to them. Findings for count V are therefore supported by evidence. 

Count VI alleges a violation of section 5 for failing to conduct a preliminary interview with Patricia Kral before sending her to an employment interview without a referral slip. Kral's testimony corroborates these allegations, upholding the findings.

Count VII includes multiple violations: 
1) Advertising without identifying the licensee or disclosing it as a private employment agency,
2) Failing to inform the Department of phone numbers used,
3) Using misleading pseudonyms in advertisements, and 
4) Discriminatory references to "Gal Friday." 

Dorothy Childers' testimony, an investigator of employment agency practices, was admitted despite Paramount's objections, as was evidence of prior actions against Paramount. There is sufficient independent evidence to support the allegations in count VII. The advertisements, lacking references to Paramount but linked through phone numbers billed to Ivan or his wife, did not receive Department approval for alternate numbers. Thus, Childers' testimony did not prejudice Paramount, and findings for count VII are upheld.

On cross-appeal, the Department argues that the trial court erred by not dismissing Paramount's administrative review for failing to pay for the hearing transcript as mandated by section 12, which states that the Department will only certify records upon payment of preparation costs. After notifying Paramount twice, the Department moved to dismiss on November 13, 1975. Despite continuances allowing payment time, the trial court denied the motion to dismiss on October 25, 1976, deeming enforcement of section 12 unconstitutional in this instance.

The transcript was filed in the trial court on November 18, 1975. Under section 12, the Department must certify the record only if the opposing party pays the preparation costs. By submitting the record, the Department waived its right to a mandatory dismissal under section 12, so the trial court's denial of the dismissal motion is not under review. However, the trial court's order declaring section 12 unconstitutional and relieving Paramount of its obligation to pay for the record was improper, as Paramount did not request such a declaration nor demonstrate how the payment requirement violated its constitutional rights. Paramount's argument focused solely on seeking protection for its right to full administrative review, which was preserved when the trial court denied dismissal.

Paramount's claim regarding the expense of the review was deemed without merit, as requiring the Department to edit the record could lead to accusations of prejudice against Paramount. Section 12 specifies that the costs include all testimony introduced in the proceedings. Paramount's rights were adequately protected without declaring section 12 unconstitutional or relieving it of financial responsibility for administrative review expenses. The court affirmed the trial court's denial of the dismissal motion and reversed the unconstitutionality finding, remanding the case to determine the parties' cost liabilities. The findings of the hearing officer regarding counts I through VII were upheld, with Paramount's credibility arguments resolved against it. The judgment was affirmed, and the order was affirmed in part, reversed in part, and remanded for further proceedings.