In a 12(b)(6) motion to dismiss, the Village argued that Council's claims were barred because he had litigated (and lost) his claim for unemployment benefits all the way up to the Illinois Appellate Court as it found that he "voluntarily" separated when he failed to obtain a license.
Judge Zagel agreed, but the Seventh Circuit, in an opinion written by Judge Posner, reversed, holding that it violated the plain language of the Illinois Unemployment Insurance Act, which provides that unemployment claims shall have no preclusive effect in any other litigation.
More specifically, the Unemployment Insurance Act provides that “no finding, determination, decision, ruling or order (including any finding of fact, statement or conclusion made therein) issued pursuant to this Act shall constitute res judicata.” 820 ILCS 405/1900(B) (as amended in 1991). Further, the Illinois Appellate Court finding as to why Council lost his job was a ruling made pursuant to that Act. Therefore, "[i]t squarely fits the list of determinations in section 1900(B) that shall not have preclusive effect."