Locke Lord Obtains Ruling in Favor of Illinois’ Temporary Staffing Agency Industry

A Locke Lord team led by Matt Furton (Chicago) secured a ruling in favor of the temporary staffing industry following a challenge brought by two trade associations and three staffing agencies to recent amendments to the Illinois Day and Temporary Labor Services Act and related regulations. In response to amendments that made it very difficult to provide temporary staffing services in Illinois, the five plaintiffs sued the Illinois Department of Labor in November 2023 seeking injunctive relief. Locke Lord argued that Section 42 of the amended act, which requires temporary staffing agencies to offer certain employees certain benefits or their cash equivalent, was preempted by the Employee Retirement Income Security Act (ERISA), which is a comprehensive federal statute establishing a uniform body of employee benefits law throughout the United States. On March 11, 2024, Judge Thomas Durkin, a federal judge for the U.S. District Court for the District of Illinois ruled the State of Illinois cannot force staffing agencies to alter their existing employee benefit plans to instead provide their employees with benefits “equivalent” to those benefits offered by staffing agencies’ clients or the actual cash value of those benefits. The court’s ruling prohibits the Illinois Department of Labor from enforcing the so-called “equivalent benefits requirement” while the case continues to proceed through litigation. Additional support was provided by Carl Scherz (Dallas), Julie Webb, Heidi Brady and Joshua Skundberg (all of Chicago).
Posted on March 12, 2024