A stripper has filed a lawsuit in the U.S. District Court in Peoria, Illinois, alleging that a Gentleman's Club where she performed violated federal and state employment law by failing to pay her and other exotic dancers minimum wage. The lawsuit alleges that the club misclassified her and other dancers as independent contractors instead of employees to avoid minimum wage and other employment law requirements. Whether an individual is an employee or an independent contractor depends mostly on the degree of control that the company exercises over the individual's work. The dancer alleges that she was actually an employee because the club controlled the terms and conditions of her work environment though various workplace rules, such as no gum chewing while performing, always smile at customers while performing, etc.
On May 13, 2015, the 7th Circuit reversed the district court's entry of summary judgment in a case involving an alleged breach of an employment contract. Burford v. Accounting Practice Sales, Inc., et al., No. 14-2692 (7th Cir. 2015). The parties had entered into a contract to market and facilitate the sale and purchase of accounting practices. The contract provided that APS could terminate the contract only if Burford violated it, while Burford could terminate any time on 30-days' notice. Under Illinois law, employment contracts of indefinite duration are terminable at-will by either party at any time. For instance, a contract with an initial term of 12 months that automatically renews every year for another 12 month term, without the need for either party to take action, is of indefinite duration and therefore terminable at will.
On March 17, 2015, the Illinois Appellate Court, First District, held that a terminated employee who was not paid a discretionary bonus by his former employer may state claims for breach of contract, unjust enrichment, and violation of the Illinois Wage Payment and Collection Act. McCleary v. Wells Fargo Securities, LLC, 2015 IL App (1st) 14128-U (March 17, 2015). The employee bonus plan at issue provided that payment of a bonus to an employee was entirely within the discretion of the employer. At the time of his employment termination, the employee had met all criterion for entitlement to a bonus, including employment for at least three months of the bonus year. After his termination, the employer unilaterally changed the terms of its bonus plan to require employment for at least six months during the bonus year as a condition to entitlement to the bonus. The employee, who was employed for less than six months during the bonus year, was denied his bonus.
On January 14, 2015, the Illinois Appellate Court, First District, affirmed a jury verdict in favor of the defendant in a state court age discrimination lawsuit brought under the Illinois Human Rights Act. Cipolla v. Village of Oak Lawn, 2015 IL App (1st) 132228 (1-14-2015). The plaintiff filed a charge of discrimination with the Illinois Department of Human Rights, and later filed a complaint in the circuit court of Cook County, in which she alleged that the defendant terminated her employment on account of her age in violation of the Illinois Human Rights Act. Section 1-102(A) of the Act provides that it is the public policy of Illinois to secure freedom from discrimination against any individual because of her age or other protected class. After a four-day trial, the jury returned a verdict in favor of the defendant. The plaintiff appealed on several grounds and argued to the Appellate Court that the jury's verdict should be reversed and the case remanded for a new trial.
On January 4, 2015, Illinois Governor Quinn signed the Illinois Secure Choice Savings Program Act (S.B.2758). This new Illinois law applies to Illinois private sector employers: (1) with 25 or more employees, (2) that have been in business for at least two years, and (3) do not already offer their employees retirement benefits. By June 1, 2017, covered employers will be required to provide their employees with a retirement savings plan under the state-operated Secure Choice Savings Program. The plan is actually a mandatory 3% payroll wage deduction deposited into a state-run retirement fund. There is an opt-out provision for employees who choose to not participate in the program. Automatic enrollment in the program is mandatory for all employees who do not opt out. The employer obligations are to offer the plan to all full-time employees and auto-enroll all employees who do not opt out. No employer contributions are required. The secure choice plan is not an employer-sponsored plan; it is a state-run program. The employer is not a fiduciary. The Act becomes effective on June 1, 2015.
On December 11, 2014, the Illinois Appellate Court, Third District, reversed the trial court's order granting a preliminary injunction that enforced a noncompetition agreement. Prairie Rheumatology Associates v. Francis, 2014 IL APP (3d) 140338. The restrictive covenant, part of a physician's employment contract, prohibited the physician from competing with her employer within a 14-mile radius of its office for two years after the termination of her employment. Under Illinois law, a post-employment restrictive covenant is enforceable only if it is reasonable in geographic and temporal scope and necessary to protect an employer's legitimate business interest. A restrictive covenant is reasonable only if it: (1) is no greater than required to protect a legitimate business interest of the employer; (2) does not impose undue hardship on the employee; and (3) does not harm the public.
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.
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.
The Governor of Illinois recently signed into law an amendment to the Illinois Human Rights Act that extends its protections against sexual harassment to unpaid interns. The new law becomes effective on January 1, 2015. Before the amendment, the protections against sexual harassment under the Illinois Human Rights Act were only available to employees. Illinois employers should become aware of the new law and get ready to apply their sexual harassment policies and procedures to unpaid interns. Employee handbooks should be revised accordingly.
On July 19, 2014, Governor Quinn signed into law the Job Opportunities for Qualified Applicants Act. The Act prohibits private employers (who employ 15 or more employees) and employment agencies from: (1) conducting criminal background checks, or (2) asking about, considering, or requiring disclosure of a job applicant's criminal record, background, or history, until after the applicant is: (a) deemed qualified for the position, and (b) notified that he or she has been selected for an interview. The new law becomes effective on January 1, 2015.