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At Will Employment Provision Over Rides Employment Contract Provision Setting an Employment Term Illinois Appellate Court Holds

An employment agreement that sets out a specific term of employment may not protect an employee from being terminated at any time. The Fifth District Appellate Court in Wessel v. Greer Management Services, Inc., 2016 IL App (5th) 150259-U recently ruled against a plaintiff who brought a breach of contract action against her former employer, holding that the language in the agreement she signed provided for at-will employment despite the inclusion of fixed employment dates.

Christina W. was hired as a compliance manager by Greer Management Services. She and a Greer representative signed an untitled document labeled an “employment summary,” which stated that Christina would serve in the position “for the period of January 1, 2012 to December 31, 2014,” and described the compensation package. However, the final paragraph read: “Greer Management Services reserves the right to change the above provisions at any time. The provisions of the policy manual govern the rights and obligations of the employee. The employee acknowledges that she is an employee at will.” After Greer terminated Christina’s employment in September 2013, midway through the term specified in the signed document, Christina filed a complaint against the company claiming that the document was a contract for employment which was breached by Greer.

The trial court dismissed the complaint, finding that Greer reserved the right to change the provisions of the agreement at any time, including by terminating Christina’s employment before the expiration of the term, and that the “employment summary” was not sufficient to overcome the presumption of employment at-will. Christina then filed an amended complaint again alleging breach of contract and also breach of the implied covenant of good faith and fair dealing, for “terminating her employment without notice, warning, or explanation, contrary to her expectations.” The court against dismissed her complaint, on the grounds there was no valid and enforceable contract for employment and therefore could be no breach.

In affirming the trial court, the Fifth District emphasized that employment contracts are presumed to be at-will and terminable by either party, absent evidence to the contrary, and the “four corners rule” of contract interpretation presumes that the language used in a written agreement speaks the intention of the parties. “A contract that specifies a term of employment can be a contract for at-will employment,” the court concluded, citing to Ohlemeier v. Community Consolidated School District No. 90, 151 Ill.App.3d 710 (1987), which found that such an employment contract constituted an at-will contract because, read as a whole, it was subject to the employer school district’s policy manual. “An examination of [Christina’s] contract as a whole clearly shows that it was for at-will employment,” the court concluded. “As in Ohlemeier, because it contained a provision allowing modification at will, the contract constituted an at-will contract of employment despite the specific term.”

The court also noted that the last paragraph of the agreement Christina signed specifically stated “the employee acknowledges that she is an employee at will.” Finally, in rejecting her claim for breach of the implied covenant of good faith and fair dealing, the court noted that no independent action sounding in contract for such a breach exists in the employment at-will setting, and the duty of good faith and fair dealing does not override the right to terminate a contract at-will.

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DiTommaso Lubin Austermuehle a firm of Chicago business dispute lawyers handles litigation over non-compete clauses and other employment issues for individuals and businesses of all sizes, including small or closely held businesses for whom competition from an ex-employee can be a serious threat. Our Chicago business lawyers with offices near Lombard, Addison, Oak Brook and Chicago have substantial experience in restrictive covenant and breach of contract cases, and we are proud of our record of strong results.

DiTommaso Lubin Austermuehle a Chicago business litigation law firm represents both plaintiffs and defendants in such cases, and can also help stop litigation before it starts by reviewing contracts to look for covenants and clauses that could create problems later. Our firm has also handled many shareholder and LLC disputes between owners of closely held corporations, and LLCs.

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