More About the Work-At-Will Rule

Illinois is a work-at-will state. My advice to prospective clients who have just lost their jobs invariably begins with the proposition that the employment relationship is terminable at will by either party (employer or employee) at any time for any reason or for no reason.

Virtually all the action in employment law over the last 40 years has been in the development of exceptions to the general rule that the employer can terminate the employment relationship whenever it wants to.

Quite recently we received a query from an individual who had lost his long-time job with a national retailer after he was late reporting back to work from a trip overseas that was unrelated to his employment.

He had developed quite a good case to show that he had a good excuse for not getting back to work on time. But he was unable to identify any situation, circumstance or event which - in his case - diminished or eliminated the right of his employer to terminate the employment relationship.

Even if he had reported back to work exactly when and where required, his employer was nevertheless free to terminate the relationship. There are indeed situations in which an employer’s decision to end the employment relationship can fairly be challenged (e.g. discrimination on the basis of age, race, sex, disability).

In the case under discussion here, there was the faintest hint of discrimination on the basis of national origin, but my invitation to him to tell me more about that point went unaccepted.

All this presupposes that the employee does not have a contract for a specified period of time. If the employee does have a contract for employment for a specified period of time and the employer terminates the employement relationship before the period has expired, the termination may be (and often is) actionable on a basic, common law breach-of-contract theory.

DO I HAVE A RIGHT TO REVIEW MY PERSONNEL FILE?

By David McCarthy

Yes.
Current employees and some former employees are entitled to see their personnel file and to make a copy of it by authority of the Personnel Records Review Act, 820 ILCS 40/0.01 et seq. The question is often put by someone who has just been fired, and the right of access survives for one year following termination of the employment relationship.)

In general the employer must produce the file within seven working days of receiving a request therefor, and may not charge more for copies than the actual cost of the copies. Small employers (fewer than five employees) are not bound by the statute, and the statute does not require an employer of any size to maintain personnel records.

There is a right to correct the record.

It hardly needs saying that when the employer and the employee concur that the record is erroneous, it can be corrected by removal of the offending material, or otherwise, as they mutually agree.

What if they disagree?

In that instance, the employee is entitled to submit a written statement of his or her position, which must be attached to that part of the record it takes issue with, and any time the disputed portion is produced to a third party, the employee's position paper must be produced as well.

Records pertaining to disciplinary action may not as a rule be produced to third parties unless the employee has been notified. The employer must examine the file before producing it to third parties and must in most instances delete information about disciplinary matters that are more than four years old.

Do you get to see everything?

No.

Letters of reference are not subject to production. The same is true for personal information about someone other than the employee in question and for records pertinent to a criminal investigation.

BAILEY HOBSON HOUSE

This rather glum-looking gentleman was an early pioneer settler of Naperville and is frequently called the "Founding Father of DuPage County."

Bailey Hobson and I have something in common.

The old stone building in front of my office was built between 1845 and 1847 as the home for this man's son, John Hobson. I have called the structure behind the old stone building my home away from home for the best part of 20 years. The Hobsons resided in the building somewhere around 49 years.

Besides the Hobsons, various colorful occupants have lived in the old building over the years. From 1894 to 1910 it was used to board both horses and their trainers. Gambling was a favorite past time of the trainers and sometimes there were differences of opinion. The bullet holes found in the original front door are thought to date from this time.

In 1979 the Law Offices of Cellucci and Yacobellis purchased the old stone building and under their ownership the building has flourished. I'm happy to report that although there have been quite a few heated discussions in the building, no additional shots have been fired since the horses and trainers vacated the premises.

In 1988 a red brick addition was built behind the stone house creating an attractive space for professional offices. Next time you're in the office check out the interior design. The fireplace, staircase, doors, bookcases, and moldings were removed from a monastery in Oconomowoc, Wisconsin and masterfully installed throughout the addition.

I'm just speculating, but I think Bailey Hobson would be impressed.

A LITTLE LEARNING IS A DANGEROUS THING

by David McCarthy

There is a saying in Texas: You can’t fix stupid. Is it true? We’ll report. You decide.

At the request of an on-again, off-again client we recently made contact with a distant relative of hers who had been named a respondent to a petition for an order of protection.

Orders of protection are available under the Illinois Domestic Violence Act of 1986, and they can be used to obtain all sorts of relief, from a “stay-away” order to exclusive possession of a house or apartment to custody of a child to an order on the respondent to undergo counseling. In the case at hand a long-time adversary was asking the court for a “stay-away” order on grounds that the respondent was guilty of stalking.

The conversation took place at three o’clock on a Wednesday afternoon. The case was going to be up in court the next morning. The respondent had been served with the court papers a month before and had, in fact, gone to court some weeks earlier to get the matter continued to the date in question.

Why, then, did she wait until late on the afternoon prior to the hearing to think about hiring an attorney? She inferred from the fact that she had spent some time in the employ of a law office that she was fully capable of defending herself, and she continued to think so until there arrived, in that day’s mail, notice that the petitioner had a dozen witnesses under subpoena.

At that point the respondent prevailed upon a family member to front the legal expense, but just as she had overestimated her abilities to defend herself, so, too, she grossly underestimated the expense associated with a hearing at which the opposition proposed to submit testimony from 12 witnesses.

Next, the respondent drew upon her law office experience to conclude that she could defend the case on the grounds that some of the witnesses under subpoena had not received the per diem and mileage fees required by statute. That objection was available only to a witness under subpoena, not to the respondent, and it did not provide her with a defense of any sort.

Finally, for all the importance the respondent placed upon having once worked in a law office, the experience had not enabled her to identify her best defense. The petitioner was not within the class of persons eligible to seek an order of protection against the respondent.

A little learning is a dangerous thing, said Alexander Pope.

The law office experience of the respondent in the foregoing case worked against her, not for her. She overestimated her abilities, underestimated the expense, and mis-identifed her defense.

YOU OWE IT TO YOURSELF TO BUY UM/UIM INSURANCE

by David McCarthy

If you value yourself as much as you value others (and why wouldn’t you?), the car insurance you buy will include UM/UIM coverage, and at limits equal to the limits of your liability coverage.

UM stands for “uninsured motorist” and UIM for “underinsured motorist.” In case you are in an accident, you will want as much insurance for your own injuries as for the injuries of people you hit. So buy UM/UIM coverage, and buy it at limits equal to the limits of your liability coverage.


Picture this:

You are rear-ended at a red light by an “at-fault” driver whose limits of liability insurance (say, $100,000.00) are not nearly enough to compensate you for your medical expense, your lost income, your pain and suffering, and all the rest of it. Can you go against your own insurance company for the UIM coverage under your own policy? Yes, but only if the limits of your liability insurance exceed the limits of his liability insurance. If his liability limits equal or exceed yours, he is not “underinsured” in relation to you.

You would fare no better if you had greater limits of liability coverage (say, $250,000.00 per person/ $500,000.00 per occurrence) but only $100,000.00/ $300,000.00 of UM/UIM coverage (which is to say, that you provided more insurance for the people you hit than you provided for yourself). You not only want to buy UM/UIM coverage, you want to buy it at limits equal to the limits of your liability coverage.

UM/UIM insurance protects you in case you are hit by a driver who has no insurance, or by a hit-and-run driver, or by a driver whose liability limits are less than your liability limits. UM/UIM insurance helps fill the gap between the value of your injury and the amount of insurance available to pay for it.

Your relationship with your own insurance company will be adversarial because you will be looking to it to pay you for that part of your claim which exceeds the limits of liability insurance of the at-fault driver but does not exceed the limits of your UM/UIM coverage. (No matter what the value of your claim, your insurer will not pay out in excess of the limits of your coverage.)

It is easy to foul up a UM/UIM claim.

A mis-timed “okay” is all it takes. We recently got a call from a man who believed he had an open-and-shut UIM case and who was annoyed that his insurer had not already cut him a check. To us it was at least as likely that he had outsmarted himself, but he did not stay on the telephone long enough to tell for sure. He had already received a “policy limits” offer from the insurer of the “at-fault” driver and he had already told the adjuster for his own insurer to “open a file” for his UIM claim. He acknowledged he had reached a point at which some professional advice would be of help to him. Alas, he may have taken one step too many, but there is no way to tell, for at that point, something that meant more to him than his UIM claim came up, he ended the call, and nothing further has been heard from him.

We assumed that he had already prejudiced the right of his own insurer to pursue the at-fault driver, and so his UIM claim was DOA.

But beyond that, he was indulging some rosy assumptions that his insurer was likely to challenge. For one thing, he took his best-case outcome for granted, and he carped that he did not have a check in hand already. His best-case was a payment of $145,000.00 under the UIM clause of his auto policy, that is, the limits of his UIM coverage ($250,000.00) reduced by payments from the insurer of the “at-fault” driver ($100,000.00) and from the “med pay” clause of his own policy ($5,000.00). His actual medical expense to that point was rather modest. The evaluation of the case was predicated on “wage loss” and on “future medical expense.”

As for “wage loss” we would love to know how he planned to reconcile the fact that he was working full, eight-hour shifts with his assertion that he was receiving only half pay. His insurer is apt to want a plausible explanation for that.

Additionally, there was a conflict between his complaints that his insurer had not yet offered him the full $145,000.00 and his assertion that surgery was inevitable (and lots of physical therapy thereafter) but that he would not have this surgery for at least four months. (It is not the practice of liability insurance companies to throw gobs of money at you while you are still being treated for your injuries and before you have reached the point of “maximum medical improvement.”)

Then there is the question of comparative fault, that is, the extent to which the caller’s own negligence caused his injuries.

It does not follow from the fact that the other insurer made a “policy limits” offer that the caller’s own insurer will proceed as if the caller were free of fault. On the contrary, and because they are spending their own money, they will investigate whether, and to what extent, their insured was responsible for his own injuries. And even were they to conclude that he was utterly blameless, they might formulate a settlement offer that factors in some comparative fault.

Our caller professed dismay that his insurance company had not yet written him a check for the full $145,000.00. We allow for the possibility that he will not receive a dime on his UIM claim because he blundered at a critical moment in dealing with the representatives of both insurers.

IT IS BECOMING EVER EASIER TO ENFORCE NON-COMPETE AGREEMENTS.

by David McCarthy

It has long been my position that an attorney preoccupied with his/ her win-loss record would rather oppose a non-competition agreement than attempt to enforce it. They have been difficult to enforce in Illinois, and for good reason: They are a restraint on trade.

But the worm is turning. First, the "blue pencil rule" has gained some traction in Illinois. There was a time when our courts would withhold enforcement of a non-competition agreement if they determined that it was unduly broad in time or area, even if the agreement included a "blue pencil" clause.

The "blue pencil" clause, a staple of non-competition agreements, authorizes a court-ordered narrowing of time and area limitations if those which the agreement recites are deemed too broad. Illinois was slow to accept the "blue pencil rule" on the theory that it amounted to re-making the agreement of the parties. And this spared employers from a sordid temptation to overreach on the front end. After all, why not shoot for the moon -- write in outrageous time and area restrictions -- if, worst case, the court can be counted on to apply the "blue pencil rule" and pare back the time and area restrictions? Nonetheless, over time, the "blue pencil rule" has gained some favor in Illinois.

In September of 2009 one of our Illinois Appellate Courts took an even more dramatic step in favor of the enforceability of non-competition agreements. The Fourth District Appellate Court (central Illinois, including Springfield) held that the "legitimate business interest" prong of the analysis was irrelevant. For ages, the proponent of a non-competition agreement was obliged to establish (i) the reasonableness of the time and area restrictions and (ii) that enforcement (an injunction) was necessary to protect a "legitimate business interest" of the employer (e.g., an interest in preserving confidential information or a "near-permanent" relationship with customers). In today's Fourth District, the proponent need only show that the time and area restrictions are reasonable (and the "blue pencil rule" is often available in aid of that showing).

Does this matter in the real world? You bet it does. Some time ago, we successfully opposed an action to enforce a non-competition agreement on the grounds that the former employer did not have the "legitimate business interest" that was necessary to obtain an injunction. Our client spent all his time at the office of the customer, and the only "confidential information" accessible to him was the customer's information, not the employer's information. Additionally, the customer relied on its own personnel and a number of other outside organizations for the same sorts of services which the employer provided. Finally, despite allegations that "vast sums" had been expended to cultivate the customer, the evidence was to the contrary: All advertising was generic. No advertising was customer-specific. And beyond that the "vast sums" spent to woo the customer consisted of $130.00 doled out to buy lunch on a number of occasions.

All that would be irrelevant in today's Fourth District. Whether the law of the Fourth District will become the law elsewhere in Illinois remains to be seen. There is now a conflict among the districts, and one of the chief functions of the Illinois Supreme Court is to resolve conflicts among the Appellate Courts. Stay tuned.