On December 4, 2014, the Illinois Supreme Court reversed the judgment of the Illinois Appellate Court and affirmed the judgment of the Circuit Court in favor of the defendant in an Illinois common law retaliatory discharge case. Michael v. Precision Alliance Group, 2014 IL 117376 (12-4-2014). The plaintiffs alleged that they were terminated for reporting underweight seed bags to the Illinois Department of Agriculture. The defendant contended that it discharged one of the plaintiffs for misconduct and selected the other two for elimination as part of a reduction-in-force. After a bench trial, the circuit court entered judgment in favor the defendant, applying the McDonnell Douglas proof paradigm used in federal employment discrimination cases. The court found that although the plaintiffs established a "causal nexus" between their protected activity and employment terminations, the defendant articulated legitimate reasons for the terminations, which the plaintiffs failed to prove were pretextual. The appellate court reversed on the basis that the circuit court's finding of a "causal nexus" necessarily proved causation and sealed the case for the plaintiffs. The appellate court reasoned that since the plaintiffs had proved causation, they were not required to prove pretext.
Illinois Appellate Court
On November 5, 2014, the Illinois Appellate Court, Fifth District, affirmed summary judgment on an Illinois common law retaliatory discharge claim. Flick v. Southern Illinois Healthcare, 2014 IL App (5th) 130319. In order to establish a common law claim for retaliatory discharge under Illinois law, a plaintiff must demonstrate that: (1) she was discharged; (2) the discharge was in retaliation for her protected activities; and (3) the discharge violates a clearly mandated public policy of Illinois. Claims of retaliatory discharge have been recognized where an employee has been discharged in retaliation for filing a workers' compensation claim, reporting illegal or improper conduct, or refusing to work in conditions that are hazardous or violate federal safety standards. Reporting illegal conduct is protected regardless of whether the conduct violates state or federal law, or whether the employee reported it to the employer or a government agency. The employment "at will" doctrine is not a defense to a retaliatory discharge claim. Unlike federal retaliation law, only an actual termination of employment is actionable under Illinois common law.
On June 9, 2014, the Illinois Appellate Court, First District, held that an arbitration clause contained in an employment contract is valid and enforceable. Fuqua v. SVOX AG, 2014 IL App (1st) 131429. The arbitration clause stated that arbitration is the exclusive remedy for, "[a]ny dispute or controversy arising under or in connection with this Agreement or any other dispute concerning [employee's] employment with [employer]." However, the clause carved out an exception for restrictive covenants and confidentiality provisions, which could be enforced in court. The Appellate Court stated that the Illinois Uniform Arbitration Act (710 ILCS 5/1) is controlling, which applies contract law to arbitration agreements. The Appellate Court found that the arbitration clause is supported by the offer of employment, acceptance of the offer, and consideration--the employment (which lasted only 8 months). The Appellate Court also found that there are no grounds for revocation of the arbitration clause because it is not procedurally or substantively unconscionable. The employment law claims subject to the arbitration clause in Fuqua include breach of contract and retaliatory discharge, as well as alleged violations of the Illinois Wage Payment and Collection Act, the Illinois Whistleblower Act, and the Illinois Personnel Record Review Act.
On May 6, 2014, the Illinois Appellate Court, First District, held that the Illinois common law tort of retaliatory discharge applies only to at-will employees, and not to employees who have a definite contractual term of employment that is not renewed. Taylor v. Board of Education of Chicago, No. 123744, 2014 IL App (1st). Therefore, the plaintiff, who had a four-year employment contract, terminable only for cause, could not establish a common law claim for retaliatory discharge based upon the non-renewal of his employment contract. However, the Appellate Court also held that the non-renewal of an employment contract is actionable under the Illinois Whistleblower Act (740 ILCS 174). The plaintiff established a statutory claim under the Illinois Whistleblower Act on the basis that the non-renewal of his employment contract was in retaliation for his protected activity.
The Illinois Appellate Court recently held that a sales representative contract that, according to its own terms, is terminable only upon the written consent of both parties, is actually terminable at will, because contracts of indefinite duration, which the termination provision created, are unenforceable under Illinois law as against public policy. Rico Industries, Inc. v. TLC Group, Inc., 2014 IL App (1st) 131522, February 7, 2014. Employers and executives should take note of this decision because its holding--that contract termination provisions requiring the consent of both parties are unenforceable--would apply to executive employment agreements and other employment contracts.