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.