On May 17, 2019, the Illinois Appellate Court, Third District, held that a corporate employer may be liable under the Illinois Gender Violence Act ("IGVA") (740 ILCS 82/10 (West 2016)) arising from gender-related violence perpetrated by the employer's corporate employees (which would include 'physical' workplace sexual harassment). Gasic v. Marquette Management, Inc., 2019 IL App (3d) 170756 (3d Dist. May 17, 2019). The Gasic decision expands the liability of Illinois employers for gender-based workplace violence, workplace sexual assault, and physical sexual harassment committed by their employees. In this case, the plaintiff, an alleged victim of sexual violence, filed a complaint against the employer of the alleged perpetrator, alleging a statutory cause of action against the defendant employer under section 10 of the IGVA, based on the alleged acts of the employer's employee. The trial court dismissed the claim on the basis that the IGVA does not apply to corporate conduct. The following question was certified for appeal: "[C]an an entity be considered a 'person' committing acts 'personally' for purposes of liability under the Gender Violence Act?" The Illinois Appellate Court answered the question in the affirmative, and reversed the trial court's dismissal of the plaintiff's statutory claim under the IGVA.
Illinois Appellate Court
On May 23, 2019, the Illinois Supreme Court upheld a plaintiff's complaint against an employer for negligent hiring, retention, and supervision of an employee. Jane Doe, et al. v. Chad Coe, et al., 2019 IL 123521 (May 23, 2019). This case involved an alleged sexual assault by a youth pastor who was employed by the employer. The plaintiff alleged that the employer negligently and willfully and wantonly hired, supervised, and retained the employee. The plaintiff filed a complaint alleging five counts: (1) negligent supervision; (2) negligent retention; (3) willful and wanton failure to protect; (4) willful and wanton retention and failure to supervise; and (5) negligent hiring. Under Illinois negligence law, an employer may be liable for an employee's torts in one of two ways, depending on whether the employee was acting within the scope of his employment. If the employee was within the scope of his employment, the employer can be found liable for his actions under a theory of vicarious liability, or respondeat superior. If an employee acts outside of the scope of his employment, however, the plaintiff can bring a direct cause of action against the employer for the employer's misconduct. Negligent hiring, negligent supervision, and negligent retention are all direct causes of action against the employer for the employer's misconduct in failing to reasonably hire, supervise, or retain the employee.
On May 10, 2019, the Illinois Appellate Court, First District, reversed the trial court's dismissal of an employer's two-count complaint for breach of fiduciary duty and tortious interference with prospective economic advantage. Advantage Marketing Group, Inc. v. Keane, 2019 IL App (1st) 181126 (First District May 10, 2019). The First District held that the employer's complaint stated causes of action against the employee for breach of fiduciary duty and tortious interference, even though the employee was not an officer or director of the company. The employer alleged that the employee breached his fiduciary duty to the employer when he allegedly failed to disclose and misappropriated a corporate opportunity to purchase a competing business. Under Illinois law, an employee owes fiduciary duties to his or her employer, which arise from the employment relationship. These include the duties of loyalty and fidelity as well as the duty to avoid self-dealing at the expense of the employer.
On April 2, 2019, the Illinois Appellate Court, Second District, reversed the trial court's order of summary judgment in favor of the defendant-employer in an employment discrimination lawsuit under the Illinois Human Rights Act ("IHRA"), in which the plaintiff-employee claimed that her employer unlawfully discriminated against her because of her sex, race, national origin, and age, and unlawfully retaliated against her for complaining about it. Lau v. Abbott Laboratories, 2019 IL App (2d) 180456 (Second Dist. April 2, 2019). The IHRA is an Illinois anti-discrimination statute that contains the same employee protections as the federal anti-discrimination statutes (as well as some additional protected classifications that are not covered by the federal laws). Illinois courts interpreting the IHRA are guided by federal case law interpreting the federal anti-discrimination laws. The same legal standards and proof paradigms apply.
On March 29, 2019, the Illinois Appellate Court, First District, upheld the rule that continued employment for less than two years does not constitute adequate consideration to support noncompetition or nonsolicitation provisions contained in Illinois at-will employment contracts. Axion RMS, Ltd. v. Booth, 2019 IL App (1st) 180724 (First Dist. March 29, 2019). This is the so-called "two-year rule," established by the Illinois Appellate Court, First District, in its decision in Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327, which remains fluid and controversial, because the Illinois Supreme Court has not decided the issue. Consequently, federal district court judges may, but are not required to follow the "two-year" rule when determining the enforceability of noncompetition or nonsolicitation agreements under Illinois law. Federal judges in the U.S. District Court for the Northern District of Illinois have split on the issue--some follow the bright-line "two-year rule," while others determine the enforceability of employment restrictive covenants based upon the totality of the circumstances.
On March 11, 2019, the Illinois Appellate Court, First District, held that under Illinois law, a successor business entity may be liable for an employment discrimination claim against an employer that transferred its assets to the successor in order to avoid liability for the employment discrimination claim. Illinois Department of Human Rights v. Oakridge Nursing & Rehab Center, et al., 2019 IL App (1st) 170806, March 11, 2019. The employee filed an age and disability discrimination charge (the "Charge") against his employer under the Illinois Human Rights Act ("IHRA"). After the employer received notice of the Charge, it transferred substantially all of its assets to a related but separate business entity. Subsequently, a judgment in the amount of $30,000 was awarded by the Illinois Human Rights Commission to the employee and against the employer, which the employer failed to pay.
On December 11, 2018, the Illinois Appellate Court, Third District, declined to establish a per se standard of reasonableness for the temporal scope of employment-based restrictive covenants, indicating that reasonableness must be determined based upon the totality of the facts and circumstances of each individual case. Pam's Academy of Dance/Forte Arts Center v. Marik, 2018 IL App (3d) 170803 (12/11/2018). In this case, the plaintiff alleged two counts of breach of an employment contract and a third count for breach of the Illinois Trade Secrets Act. The plaintiff alleged that the defendant, a former employee, breached their employment non-disclosure and restrictive covenant agreement by opening a dance studio within 25 miles of the plaintiff's studio and soliciting students and teachers through an improperly-obtained customer list.
On April 16, 2018, the Illinois Appellate Court, First District, reversed the dismissal of an Illinois common law retaliatory discharge claim. Roberts v. Board of Trustees Community College, 2018 IL App (1st) 170067 (4/16/2018). The plaintiff filed a lawsuit against his former employer alleging claims for common law retaliatory discharge, violation of the Illinois Whistleblower Act, and wrongful termination. The circuit court dismissed the retaliatory discharge claim and whistleblower claim. The First District reversed the dismissal of the plaintiff's retaliatory discharge claim, but affirmed the dismissal of his claim under the Whistleblower Act. Illinois follows the employment at-will rule, which means that an employee who does not have a specified term of employment under an employment contract is subject to termination by the employer at any time for any or no reason, with or without notice. However, Illinois recognizes an exception to the general employment at-will rule when the discharge violates a clear mandate of public policy.
On December 13, 2017, the Illinois Appellate Court, Second District, reversed the circuit court's dismissal of a workplace discrimination and wrongful termination lawsuit on procedural grounds. Metzler v. Katherine Shaw Bethea Hospital, 2017 IL App (2d) 170001 (12/13/2017). The plaintiff, who was employed by the defendant for 24 years, most recently as a chemistry supervisor, alleged that he was harassed by a female supervisor, given a negative performance review, suspended, and terminated because of his sex, male, in violation of the Illinois Human Rights Act (the "Act"). After his termination, he filed a Charge of Discrimination with the Illinois Department of Human Rights (the "Department") alleging unlawful sex discrimination in violation of the Act, which prohibits various types of employment discrimination.
On October 20, 2017, a federal district court judge for the Northern District of Illinois held that a non-solicitation restrictive covenant contained in an employment contract was not unenforceable for lack of adequate consideration, even though the defendants were employed for fewer than two (2) years. Stericycle, Inc. v. Simota, et al., No. 16 C 4782 (N.D.Ill. 10/20/2017). In so holding, the court rejected the Illinois Appellate Court's ruling in Fifield v. Premier Dealer Servs., 2013 IL App (1st) 120327, which held that a non-competition or non-solicitation restrictive covenant contained in an employment at-will employment agreement is unenforceable for lack of adequate consideration when the employee was employed for fewer than two (2) years. Several other Illinois Appellate Court decisions have followed Fifield and adopted the so-called "two-year rule," but the Illinois Supreme Court has not reached the issue. Accordingly, federal court judges are not bound to follow Fifield, and instead must make a predictive judgment on how the Illinois Supreme Court would decide the issue.