Monday, September 29, 2014

Lessons Learned from School District on At-Will Employment

The Illinois Appellate court recently gave employers a refresher course in the pros and cons of maintaining at-will status of employees. In Taylor v. Board of Education of the City of Chicago, 10 N.E.3d 383, 2014 Ill. App. (1st) 123744, Plaintiff was an assistant principal at an elementary school in the District, selected to serve in that capacity by the newly appointed principal at that school. Plaintiff relinquished his tenure status to take the position. According to Board of Education rules, the assistant principal is appointed for the same four year term as the principal. At the end of the four years, the assistant principal can either be retained for another term or replaced. Board rules also state that assistant principals are subject to discipline for cause and shall be notified in writing and afforded a hearing prior to discipline. The rules also incorporate a mandatory progressive disciplinary procedure.

Plaintiff sued the District after he was not retained in his position for, among other things, the common law action of retaliatory discharge. Plaintiff claimed that he was fired because he reported the fact that the administration at the school where he was assigned, failed to report an allegation of abuse by a teacher towards a student.

In what must have been a heartbreaking turn of events for the Plaintiff (and his attorneys),  the Appellate Court reversed a $1 million jury verdict in his favor, finding that the Plaintiff could not properly bring an action for retaliatory discharge. The court held that this type of action is available only to at-will employees. It found that the Plaintiff, in fact, had an employment agreement in that he had been retained for a specific period of time. Further, the court also reiterated that a progressive discipline policy, like the one that applied to Plaintiff, which mandates certain procedures and requires a just cause finding for discipline, creates a contractual relationship between the employer and the employee.

While most employers believe that contractual employees gain rights in that relationship, they clearly relinquish some as well. Employers should weigh that factor when entering into employment relationships.

Finally, the lesson for employers is to review your discipline policies. They should not set a standard for discipline, such as just cause. While no one disputes the value of a progressive disciplinary procedure in most situations, policies should also notify employees that discipline may be initiated at any appropriate step of the procedure. Although the court’s finding in this case ultimately saved the District, a finding of contractual employment relationship may not always be the desired result for employers.