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Yes, Illinois is Still an Employment-At-Will State!

Yes, Illinois really is an employment-at-will state. To that point, Illinois courts follow the employment-at-will legal doctrine in deciding "discharge cases."

"Employment at will" means there is mutual freedom by both the employer and the employee to end the employment relationship. This means that the employer can end the employment relationship at any time, for any reason, with or without notice. This also means that an employee can end the employment relationship at any time, for any reason, with or without notice to the employer. The mutual freedom in the employment-at-will relationship is an advantage to both the employer and the employee in that they are not "bound" legally to each other.

However, when employees are fired, they try to sue the company under a breach of contract theory - claiming that the company promised them when they were hired that they would be employees for a stated period of time. The terminated employee may claim that the employer's written documents or oral statements changed the "at will" relationship to an employment contract. For example, statements in an employee handbook can modify employment-at-will status on the theory that, in essence, the written statements constituted a contract between the employer and the employee. An example of a verbal assurance that could constitute a contract is when the employer entices an individual to join the company by saying something like, "I guarantee you a long and successful career with our company."

Under Illinois law, all employees are employees at will unless there are promises to the contrary. Those promises could be in an official written contract, a written offer letter, or found within the policies and/or promises of an Employee Handbook. There might be verbal assurances by the company that rise to the level of an employment contract.

An employer must protect and preserve the employment at will relationship (unless, of course, the employer actually wants to put an employee under an employment contract for a specified period of time).

In order to help firmly establish an employment-at-will relationship between the company and its employees, the company should have clear and prominent employment-at-will disclaimers in its Employment Applications, Employee Handbook, any offer letters, and any other appropriate written documents such as Performance Improvement Plans and Last Chance Agreements.

Below is a sample employment-at-will disclaimer:

"The Employee is an employee-at-will which means that both the Company and the Employee have the right to terminate the employment relationship at any time, with or without cause or notice.

No supervisor, manager, or representative of the Company other than the President has the authority to enter into any agreement with the Employee for employment for any specified period of time or to make any promises or commitments contrary to the foregoing. Further, any employment agreement entered into by the Company President will not be enforceable unless the agreement is in writing and signed by the Company President."

On an Employment Application, you should include a clear employment-at-will disclaimer like the following:

"I understand and agree that if I am employed, my employment is for no definite period of time and may be terminated at any time, with or without prior notice, at the option of either myself or the Company, and that no promises or representations contrary to the foregoing are binding on the Company unless made in writing and signed by me and the Company's President."

The Receipt page of an Employee Handbook should also contain an employment-at-will disclaimer. Below is a sample Receipt page:

Receipt of Employee Handbook

1. I acknowledge receipt of my copy of ABC's Employee Handbook and understand I am obligated to read and familiarize myself with its contents, as well as abide by its terms.

2. The purpose of this Employee Handbook is to provide brief, general information on Company benefits and employment practices. The content of this Employee Handbook is subject to change without prior notice to employees. As such, I understand that the Company does not intend to create a contract of employment by placing these matters in writing.

3. I have read the E-Mail and Electronic Communication policy and agree to abide by its terms. I have read the broad Workplace Search policy and know that my privacy in the workplace is affected and limited by this policy.

4. Employment-at-Will Disclaimer: I understand and agree my employment with ABC is for no definite period of time and that ABC may elect to discontinue my employment relationship for whatever reason it considers proper and at any time. I, likewise, may leave the Company for whatever reason I consider proper and at any time.

________________________________

Print Name of Employee

________________________________

Signature of Employee

________________________________

Date

An employment-at-will disclaimer helps undercut an argument by the employee that an employment contract was formed and/or intended.

Clients often ask: "If Illinois is really an employment at will state, why do I have to be careful when firing employees?"

The answer to that question is that employers may be sued for such issues as discrimination, retaliation, and other legal theories. Although Illinois is an employment-at-will state, Illinois employers cannot discriminate based on race, color, religion, sex, national origin, sexual orientation, ancestry, citizenship status, age, marital status, physical or mental disability, arrest record, military service or unfavorable military discharge. Also, the employee may claim breach of contract by the employer. There are many known and unknown risks in each prospective termination. This is why each termination must be carefully evaluated.

Questions? Call Attorney Nancy E. Joerg of Wessels Sherman's St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com.

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