Illinois law

7th Circuit Affirms Summary Judgment on Claim for Breach of Employee Compensation Plan but Reverses Summary Judgment on Illinois Wage Claim

On June 25, 2018, the 7th Circuit affirmed the district court's grant of summary judgment on a claim for breach of an employment compensation plan, but reversed the district court's grant of summary judgment on the plaintiff's wage claim under the Illinois Wage Payment and Collection Act.  Sutula-Johnson v. Office Depot, Inc., No. 17-1855 (7th Cir. 6/25/2018).  The plaintiff sued her former employer alleging that its changes to her employee compensation plan for selling office furniture breached its employment contract with her and violated the Illinois Wage Payment and Collection Act (the "Act").  In her claim for breach of employment contract, the plaintiff contended that the defendant did not effectively amend its employment contract with her until she signed a written acknowledgement form on a certain date.  She argued that prior thereto, any amendment to her employment contract was without consideration; and that she did not accept the new terms until she signed them.  Thus, it was the plaintiff's position that a new contract was not formed until she signed the acknowledgment, and that the defendant breached her previous contract by failing to comply with the old compensation plan through the date she signed the acknowledgement.  She also argued that the defendant breached her employment contract by retroactively reducing her commissions.

Covenant not to Compete Held Unenforceable under Illinois Law

On April 17, 2018, a U.S. District Court judge for the Northern District of Illinois ruled that under Illinois law, a covenant not to compete is unenforceable per se if the covenant, on its face, restricts an employee from taking any position with another company that engages in the same business as the employer, without regard to whether that position is similar to the position that the employee held with the employer or otherwise competes with the employer.  Medix Staffing Solutions, Inc. v. Dumrauf, 17 C 6648 (N.D.Ill 4/17/2018).  The employee entered into an employment at-will, confidentiality, and non-compete agreement with the employer and subsequently executed an employee confidentiality/non-compete agreement.  The agreement included a covenant not to compete that restricted the employee, for a period of eighteen (18) months following termination of employment, within a radius of 50 miles from any office of the employer where the employee performed services for the employer, from employment in any capacity with any business that either offers a product or services in actual competition with the employer, or which may be engaged directly or indirectly in the employer's business.

Illinois Appellate Court Reverses Dismissal of Retaliatory Discharge Claim

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.

Illinois Appellate Court Reverses Dismissal of Reverse Sex Discrimination Lawsuit

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.

Federal Judge Rules that Non-solicitation Provision of Employment Agreement is Enforceable

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.

$2,656,315.50 Jury Verdict in Retaliatory Discharge Case Reduced by Illinois Appellate Court

On September 26, 2017 (in an unpublished Rule 23 opinion), the Illinois Appellate Court, First District, ruled that a 2.5 Million Dollar punitive damages award in an Illinois workers' compensation retaliatory discharge lawsuit was unconstitutional under federal due process standards, and reduced the punitive damages award to $1,406,839.50 based on a 9:1 ratio of punitive damages to compensatory damages.  Francek v. Dominick's Finer Foods, LLC, et al., 2017 IL App (1st) 162574-U.  Following a jury trial in a retaliatory discharge case, the circuit court entered judgment on the jury verdict in favor of the plaintiff and against his former employer in the total amount of $2,656,315.50.  The plaintiff claimed that he was discharged in retaliation for filing claims under the Illinois Workers' Compensation Act.  The jury returned a verdict in the amount of $156,315.50 in compensatory damages, $2,500,000 in punitive damages, plus court costs.  The compensatory damages were itemized as follows: (1) $31,315.50 for psychological treatment and counseling; (2) $75,000 for emotional and/or psychological damages; and (3) $50,000 for emotional and/or psychological damages reasonably certain to be experienced.

7th Circuit Clarifies Standard for Preemption of Employment-Related Tort Claims under the Illinois Human Rights Act

On August 28, 2017, the 7th Circuit affirmed an order of summary judgment in favor of the defendant on an Illinois state-law claim for intentional infliction of emotional distress in the employment law context.  Richards v. U.S. Steel, No. 16-2436 (7th Cir. 8/28/2017).  The plaintiff filed a lawsuit against her employer for sexual harassment, retaliation and intentional infliction of emotional distress.  The sexual harassment and retaliation claims were dismissed based on timeliness grounds prior to this appeal.  The issue on appeal was whether the claim of intentional infliction of emotional distress failed as a matter of law based on preemption by the Illinois Human Rights Act ("IHRA") and on substantive grounds.  The case involved various incidents of workplace and sexual harassment.  The IHRA provides that no court shall have jurisdiction over the subject of an alleged civil rights violation other than as set forth in the IHRA, which means that jurisdiction is limited to the claims enumerated in the IHRA.

7th Circuit Affirms Summary Judgment on Employment Discrimination Claim under the Illinois Human Rights Act

On August 25, 2017, the 7th Circuit affirmed an order of summary judgment in favor of the defendant in a race discrimination lawsuit under the Illinois Human Rights Act ("IHRA").  Reed v. Freedom Mortgage Corporation, No. 16-3661 (7th Cir. 8/25/2017).  The plaintiff, a broker liaison, had been given verbal and written warnings for violations of the defendant's attendance policy, after which he committed further violations.  He was subsequently selected for elimination in a reduction-in-force because of a history of attendance and disciplinary problems and lack of seniority.  The remaining broker liaisons were eventually terminated, and the office was later closed.

Illinois Appellate Court Holds that LinkedIn Invitations did not Violate Noncompetition Agreement Contained in Employment Contract

On August 7, 2017, the Illinois Appellate Court, First District, held that a former branch sales manager did not violate the noncompetition covenants contained in his employment contract with his former employer when he transmitted LinkedIn invitations to its employees.  Bankers Life and Casualty Company v. American Senior Benefits, LLC, et al., 2017 IL App (1st) 160687 (8/7/2017).  The former employer sued for breach of the noncompetition agreement.  It alleged that the former employee breached the agreement by attempting to solicit and recruit its employees for his new employer, a competitor, through LinkedIn requests to induce them to sever their employment with the plaintiff and join the competitor.  The noncompetition provision stated that during the term of his employment contract and for 24 months thereafter, he was prohibited from inducing or attempting to induce any employee to sever his or her employment relationship or sell insurance for any competitor.

Illinois Appellate Court Affirms $2,838,968 Judgment for Executive Severance Pay and Bonus

On July 18, 2017, the Illinois Appellate Court, First District, affirmed the trial court's judgment in favor of an executive employee against his employer in the amount of $2,838,968 for his earned bonus and severance pay.  Schultze v. ABN AMRO, Inc., et al., 2017 IL App (1st) 162140 (7/18/2017).  The plaintiff filed a lawsuit alleging that the defendants violated the Illinois Wage Payment and Collection Act (the "Act") by failing to pay him the proper amount of his earned bonus and severance pay.  After trial, the trial court ruled in favor of the plaintiff, and ordered the defendants to pay him $2 million as an earned bonus and $375,000 as severance, plus 5% interest and attorneys' fees.  On appeal, the defendants argued that the bonus was discretionary and that the plaintiff failed to execute a separation agreement and release that was a condition of receiving any severance.

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