Case on Point

Illinois Court Renders Favorable Ruling for Employee Sued by Employer on Employer’s “Information and Belief”

2012-02-01T21:24:00Z

Author: Kendra Kutko, Associate Attorney at The Case Law Firm, LLC

In an employment climate where non-competition agreements, non-solicitation agreements, and other restrictive covenants have become rather standard mechanisms that allow employers to protect their economic interests, the rising number of employees who sign these agreements as a condition of hire must confront the unsavory possibility that they may one day face a lawsuit when they decide to leave those employers in pursuit of other job opportunities. Indeed, our practice has seen a marked increase in cases where employers have filed suit against former employees, alleging breaches of such agreements.

The task of defending against these types of employer-initiated legal actions entails extensive time and cost for employees who often have modest resources. However, in one of our recent cases, we obtained a great decision by the Circuit Court of Cook County, Illinois that should provide optimism for employees who currently remain bound by restrictive covenants and should provide pause to employers who may contemplate filing suit over these agreements.

In TriNet International, LLC v. Synchronous Solutions, Inc. et al., No. 2011 L 005526, the employer filed a third-party complaint against its former employee for breach of contract, breach of fiduciary duty, and tortious interference with contract after the employee left the company to pursue another career opportunity. The employee had signed an employment agreement with the employer, which contained a non-solicitation provision and a non-competition provision. All causes of action filed against the employee derived from the employer’s “information and belief” that the employee allegedly “solicited” the employer’s client and “intentionally and purposefully induced” the employer’s client to terminate its business relationship with the employer so as to steal that corporate opportunity for the employee’s own financial benefit. The employee adamantly denied these allegations, but most significantly, the employer presented no facts in support of these allegations.

The employee subsequently moved to dismiss the third-party complaint in its entirety, arguing that the employer presented mere conclusions of fact and law without providing any detailed factual underpinnings with which to support its causes of action such that the third-party complaint remained deficient under Illinois fact-pleading standards. In ruling on this motion, the Circuit Court determined that the employer’s allegations against the employee lacked sufficient factual specificity to meet the Illinois fact-pleading requirements. Consequently, the Circuit Court granted the employee’s motion to dismiss. (1/12/12 Order Granting Third-Party Defendant’s Motion to Dismiss Third-Party Complaint, Bartkowicz, J.).

Although it seems unlikely that employers will shy away from filing suit against employees over restrictive covenants any time soon, the TriNet decision provides some reassurance that, at least in the Illinois courts, an employer must have more than its own speculation or “information and belief” that the employee engaged in wrongful conduct before doing so.

Worker Fired for Working Too Hard, Vindicated by Illinois Courts

2012-01-19T17:54:12Z

After ten years of successful employment, Sharon Smiley was fired from her job as a receptionist for a local real estate agency, incredibly, for working too hard. Her workload had become increasingly heavy and, as a result, she decided to work through her lunch break. She knew her employer’s policy required that she clock out for lunch and so she did. Reasonably believing, however, that once she clocked out what she did with her time was her business, she sat at her desk and continued to work on a special project a supervisor had assigned her that morning. She had not planned on eating, and thought she would use her time to get the project done.

Ms. Smiley’s supervisor asked her to leave her desk but Ms. Smiley refused, explaining that she knew she could not eat her lunch at her desk, but she was not eating. Ultimately, the company terminated Ms. Smiley’s employment for insubordination and contested her right to obtain unemployment benefits.

The Illinois Department of Employment Security sided with the employer and held that Ms. Smiley’s insubordination amounted to misconduct, denying Ms. Smiley benefits. Representing herself, she appealed that decision three different times internally, but was ultimately unsuccessful.

Finally, Ms. Smiley appealed her case to the Circuit Court of Cook County, which overturned the decision denying her benefits and, in January of 2012, the Illinois Appellate Court for the First District affirmed that decision. The Courts’ decisions confirmed what the rest of the world knows is basic common sense – attempting to work through lunch, even if in violation of company policy, is not willful or wanton misconduct indicating a disregard for the employer’s interests.

While I understand that Illinois is an at-will employment state and that the employer was allowed to terminate Ms. Smiley’s employment for any reason at all (so long as that reason was not discriminatory or otherwise unlawful), the notion that an employer would terminate a long-term, hard-working employee for attempting to go above and beyond by completing a project on her own time really angers me. But the fact that her employer chose to contest her right to unemployment benefits after it terminated her for working too hard simply shocks the conscience – especially given the economic climate of the last few years and the dearth of employment opportunities out there.

My hat’s off to Sharon Smiley for having the courage and conviction to call her employer on its wrong-minded efforts to deny her benefits. Congratulations on a hard-fought win!

Supreme Court Upholds So-Called "Ministerial Exception" - Narrowing the Rights of Employees of Religious Institutions to be Free From Discrimination

2012-01-11T22:23:46Z

For the full story, view the following link:
http://www.usatoday.com/news/washington/judicial/story/2012-01-11/supreme-court-job-bias/52498914/1

Kristin Case and Kate Sedey Voted "Rising Stars" amongst Illinois' Super Lawyers!

2012-01-11T15:14:19Z

Kristin Case, the Principal of The Case Law Firm, and Kate Sedey, one of her Associates, have both been voted "Rising Stars" by Illinois' Super Lawyers Association. This accolade indicates that they were both nominated by their peers in the legal and/or judicial community as standing out amongst the crowd of practitioners. Ms. Case was rated a Rising Star for her work in the Employment and Labor field, while Ms. Sedey was rated a Rising Star amongst employee-side Employment Litigation attorneys. This is Ms. Case's third year being voted a Rising Star and Ms. Sedey's first. To view their Super Lawyer profiles, please visit the following links:

http://www.superlawyers.com/illinois/lawyer/Kristin-M-Case/cfd6bfb4-5d4d-42af-bff3-4eed18b39076.html
http://www.superlawyers.com/illinois/lawyer/Kate-Sedey/fe6951ed-193d-4420-b053-84030edb9a7c.html

To read more about the Super Lawyers organization or the Rising Star selection process, please go to:

http://www.superlawyers.com/about/selection_process.html

If At First You Don't Succeed....

2011-10-28T15:52:39Z

After seeing their nation-wide gender discrimination class action dismissed by the Supreme Court of the United States, the Wal-Mart Plaintiffs did not just throw up their hands and concede defeat. Instead, they've decided that if the highest court will not allow them to proceed as one large nation-wide class, that they will simply have to enforce their rights to be given the same terms and conditions of employment as men in smaller classes representing regions, districts, and states.

Click on the link below to read about their plans to file "an armada of lawsuits" across the country and make sure that Wal-Mart and corporations across America hear their message - that women will not tolerate discrimination in the workplace!

http://www.nytimes.com/2011/10/28/business/women-file-new-class-action-bias-case-against-wal-mart.html?ref=jobs

Kate Sedey

The Case Law Firm, LLC

250 S. Wacker Drive, Suite 230

Chicago, IL 60606
(312) 920-0400
ksedey@thecaselawfirm.com

IRS Announces New Program Addressing Misclassification of Employees as Independent Contractors

2011-10-05T21:56:21Z

The IRS has recently implemented a program called the “Voluntary Classification Settlement Program” (“VCSP”). The program allows eligible employers to pay a small sum in order to obtain partial relief from federal employment taxes for previous mischaracterizations of workers as “independent contractors” when such individuals should have received classification as “employees.” The announcement of this program undoubtedly marks a positive development for employers who have engaged in this type of mischaracterization and who now wish to reduce their tax liability and avoid IRS audits. However, from an employee perspective, the fact that this sort of misclassification remains so frequent and widespread that the IRS has found a need for such a program in the first place educes a timeless question in employment law: why does the distinction between “independent contractor” versus “employee” even matter?

The implications of whether you constitute an “employee” versus an “independent contractor” are immense. Namely, only qualified “employees” are entitled to statutory protection under such legislation as Title VII of the Civil Rights Act, the Americans with Disabilities Act (“ADA”), the Family and Medical Leave Act (“FMLA”), the Age Discrimination in Employment Act (“ADEA”), the Fair Labor Standards Act (“FLSA”), the Illinois Workers’ Compensation Act, the National Labor Relations Act (“NLRA”), and the Employee Retirement Income Security Act (“ERISA”).

Each statute has its own definition of qualified “employee.” In general, the employer’s decision to simply label an individual as an “employee” or “independent contractor” will not serve as the dispositive factor for determining that individual’s employment status. Instead, courts use a number of different tests depending on the particular statute at issue to determine whether someone meets the precise, legal definition of “employee.” Each of these tests relies on a variety of factors. However, an employer’s decision to label someone as an “independent contractor” can indeed impose practical and legal hurdles for an individual attempting to gain protection under an employment statute. In short, the determination of whether someone constitutes an “employee” or an “independent contractor” can be a complex and nuanced exercise. Nonetheless, qualifying as an “employee” under a particular statute can often mean the difference between having legal recourse against your employer and having none. Hence, the distinction between “independent contractor” versus “employee” matters a great deal. The emergence of the IRS’s VCSP program stands as yet another reminder of that fact.

Stop Discrimination Against the Unemployed!

2011-08-25T20:26:41Z

As appalling as it may be, a shocking number of employers these days are publishing job listings with the caveat that the unemployed need not apply. This is so backwards and plain old wrong that I have a hard time wrapping my mind around it. We are currently facing one of the worst economies this country has ever seen and there is a glut of talented, intelligent, ambitious individuals without jobs who are looking for work.  And yet, for some unfathomable reason, many employers have simply written them off as undesirable employees.

Some states, including New Jersey, have passed legislation making this type of discrimination unlawful. Unfortunately, Illinois is not one of them. Our own state recently failed to pass a pending bill that would address this very issue.

If you want to show your support for a bill that tells employers that they cannot discriminate against the unemployed, please click on the link below and sign your name to the petition.  It's important that your legislators hear your voice!

http://act.credoaction.com/campaign/monster_ads/index2.html?rc=paste1&r_by=26253-1404266-VupAlix

Happy Employees

2011-08-23T01:21:18Z

I passed a billboard the other day which said, "The best employee benefit is a happy employee." I can't remember what company adopted this slogan but I can tell you that I know this to be unequivocally true. Our next few blog posts will cover what we have found to be the top five keys to employee happiness.

One: Trust

I and the people in our office spend all day, every day, talking with employees, former employees or people who wish they were someone's employee and we hear plenty about what employees want, what infuriates them and what makes them happy.

Surprisingly, money is rarely even at the top of the list. What we find employees want, more than anything, whether they are waitresses or executives, is to be treated like trusted competent individuals. Contrary to many employer's beliefs, employees are not all idiots, are not out to cheat them or to find ways to somehow undermine their profits. They don't need to be watched liked children and monitored like prisoners. Just tell them what you want them to do, tell them that you believe they can do it and then let them do it. There are few things more demeaning than being micromanaged. If they fail, kindly correct them. If they continue to fail then take action. I believe most employers would be shocked to learn that if an employee feels as if their employer has confidence in them the employee will almost always rise to the occasion. Everyone wants to feel valued.

Next up: Two: Flexibility

50 Best Books for the Unemployed

2011-06-29T02:38:45Z

A really good list for those who are in between jobs. Some very practical; some inspirational. indiglit.wordpress.com/2011/06/28/the-50-best-books-for-the-unemployed

Credit History Discrimination

2011-06-23T19:15:34Z

Given the recent tanking of our country's economy, Illinois (and a number of other states) have enacted laws which protect employees from credit history discrimination. And this makes sense given that someone with a negative credit history likely needs a job to dig out of that hole and if he or she is unable to get one a vicious cycle could ensue.

So what does the prohibition against credit history discrimination mean? Well, in Illinois it means that employers cannot inquire about or refuse to hire, fire or otherwise discriminate against workers on the basis of their credit reports.

The bill also forbids retaliation or discrimination against those who file complaints under the law. The laws provide employees with a civil right of action.

There are some industries that are exempt from this new law including but not necessarily limited to: insurance, banks and law enforcement agencies. And, of course, there is the ever-present catch-all. In this case it is for jobs in which a satisfactory credit history is an “established bona fide occupational requirement” such as jobs in which state or federal law requires bonding or in which duties include access to cash or assets valued at $2,500 or more. This catch-all is important because it could, feasibly, cover far more jobs than I believe the legislature intended to cover. Nevertheless, something is better than nothing and this law, at a minimum, will make employers think twice before making discriminatory assumptions about employees' credit histories.

An Inspiring Article About the Struggles of Coming Out in the Workplace

2011-05-17T13:08:00Z

Earlier this week Rick Welts, the former Executive Vice President of the NBA and the current President and Chief Executive of the Phoenix Suns professional basketball team, opened up about his sexuality. After decades of living what the New York Times refers to as a "shadow life," he felt it was time that he told the public his biggest secret. Read the article here to learn more about the fears and struggles he faced as a homosexual in a male-dominated and quintessentially masculine workplace. The story is inspiring but also says a lot about the continuing struggle to rid our workplaces of discrimination. open to people of all sorts.

http://www.nytimes.com/2011/05/16/sports/basketball/nba-executive-says-he-is-gay.html?_r=1&src=me&ref=sports

Help our Firm Raise Money to Find a Cure for Breast Cancer

2011-05-15T21:42:00Z

This year we have decided to do more than just advocate for people with cancer in the workplace. We are putting our money (and hopefully others' money, too) where our mouths are.

The Case Law Firm has assembled a team that will be walking sixty miles over the course of three days with thousands of other women and men in the Susan B. Komen Three Day for a Cure. We hope that you will consider donating to this worthwhile cause.

If you would like to donate please go to www.The3day.org and click on Donations and then search for Team Case Law Firm.

The Firm has committed to matching every dollar donated up to $10,000. Our fundraising goal is $50,000.

If you have any questions about our walk or making a donation, please do not hesitate to call us.

Kendra Kutko, Our Law Clerk, Receives Employment Law Award!

2011-05-09T15:54:00Z

From the front-page of Kent Law School's Website....

http://www.kentlaw.edu/news/releases/zemm-labor-law-prize-2011.html

IIT Chicago-Kent student Kendra L. Kutko awarded the 2011 Sandra P. Zemm Labor Law Prize

CHICAGO--May 6, 2011–Kendra Kutko, a third-year student at IIT Chicago-Kent College of Law, has been awarded the 2011 Sandra P. Zemm Labor Law Prize. The prize was established in 2009 at Chicago-Kent by the law firm of Seyfarth Shaw LLP to honor the memory of Sandra P. Zemm, who died in September 2008 after a lengthy battle with cancer.

Third-year student Kendra L. Kutko received the 2011 Sandra P. Zemm Labor Law Prize.

The Sandra P. Zemm Labor Law Prize is awarded annually to a third-year Chicago-Kent student in the Labor and Employment Law Certificate Program who exemplifies the qualities that Ms. Zemm possessed: "a commitment to pursue a career in labor and employment law, a pioneer spirit and willingness to take the initiative whenever possible, and a gracious and generous attitude toward helping those in need." Recipients are selected by Chicago-Kent faculty who teach the law school's program in labor and employment law.

"Kendra is a poised young lady who will do great things in the labor and employment field," said Francine Soliunas, assistant dean for strategy and student professional development and executive director of the Institute for Law and the Workplace at Chicago-Kent College of Law. "She truly epitomizes the spirit and legacy of Ms. Zemm, not only in what she has done but in the graciousness with which she has done it! She is a remarkable young woman and will truly be an asset to our profession."

Kendra Kutko earned a bachelor of science in legal studies from the University of Wisconsin-Madison. Kutko currently serves as a law clerk with the Case Law Firm LLC, a woman-owned, woman-run civil rights employment law firm in Chicago. In the fall of 2010, she received an Institute for Law and the Workplace scholarship. Kutko has worked on labor and employment law matters as an intern in Chicago-Kent's Employment Discrimination Clinic and as a clerk in the Law Offices of Laurie J. Wasserman. She has also served as an intern with Addis Greenberg & Schultz LLC. Kutko is a member of Chicago-Kent's Labor and Employment Law Society, the ABA Section of Labor and Employment Law and the National Employment Lawyers Association - Illinois.

A Chicago native, Sandra P. Zemm earned her undergraduate degree from the University of Illinois. She received her J.D. from Florida State University, where she served as managing editor of the law review.

Sandra Zemm joined Seyfarth Shaw in 1975 as the first female associate in the Labor and Employment practice. In 1982, Ms. Zemm became the firm's first female equity partner in Labor and Employment. Her practice concentrated on traditional labor matters, and on matters involving employment discrimination, wage-hour, and employment litigation. She negotiated collective bargaining and/or shutdown agreements with major labor unions, and represented management in more than 200 hearings before arbitrators, the National Labor Relations Board and various state labor agencies. In 2002, Ms. Zemm was elected to the American College of Labor and Employment Lawyers.

"Sandy was beloved by her colleagues and clients and respected by her opponents. She was a no-nonsense labor lawyer and an elegant, sophisticated woman at the same time. Her ability to stand up to the toughest adversaries while always carrying herself with style and grace inspired many of us who came to the firm after her," said Allegra Rich, Pro Bono and Philanthropy Partner at Seyfarth Shaw. "This award is our way of keeping her in our thoughts and honoring her legacy."

Seyfarth Shaw has over 750 attorneys located in 10 offices throughout the United States, including: Atlanta, Boston, Chicago, Houston, Los Angeles, New York, Sacramento, San Francisco, and Washington, D.C., as well as internationally in London. Seyfarth Shaw provides a broad range of legal services in the areas of labor and employment, employee benefits, litigation, corporate, and real estate. The firm's practice reflects virtually every industry and segment of the country's business and social fabric. Clients include over 300 of the Fortune 500 companies, financial institutions, newspapers and other media, hotels, health care organizations, airlines and railroads. The firm also represents a number of federal, state and local governmental and educational entities.

Chicago-Kent College of Law is the law school of Illinois Institute of Technology, a private, Ph.D.-granting university with more than 7,700 students in engineering, sciences, architecture, psychology, design, humanities, business and law. With more than 1,100 students, Chicago-Kent offers full-time and part-time J.D. and LL.M. degree programs as well as joint-degree programs with other IIT units. Chicago-Kent’s Program in Labor and Employment Law allows students to specialize in the law governing the workplace.

Good News for Employees with Disability Discrimination Claims

2011-03-29T15:52:00Z

On March 24^th, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued the much anticipated final regulations to implement the ADA Amendments Act (ADAAA). In its press release, the EEOC emphasized that the purpose of these new regulations are “to simplify the determination of who has a ‘disability’ and make it easier for people to establish that they are protected by the Americans with Disabilities Act (ADA).”[1]

Under the ADA, an individual qualifies as “disabled” if she (a) has a physical or mental impairment that substantially limits one or more major life activities; (b) has a record of such an impairment; or (c) is regarded as having such an impairment. The regulations have preserved this three-part definition of disability. However, as part of the effort to broaden coverage under the ADA, the ADAAA and the EEOC regulations have imposed certain noteworthy expansions to the definition’s interpretation.

For instance, the regulations state that major life activities encompass not only activities such as seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, but also activities such as the operation of major bodily functions, including functions of the immune system, special sense organs and skin, normal cell growth, digestive, genitourinary, bowel, bladder, neurological, brain, respiratory, circulatory, cardiovascular, endocrine, hemic, lymphatic, musculoskeletal, and reproductive functions. The recognition of major bodily functions as “major life activities” will make it easier to find that individuals with certain types of impairments have a “disability” under the ADA. The regulations also provide examples of specific impairments that should require simple, straightforward analysis and should usually be found to constitute a disabilities under the ADA. These impairments include deafness, blindness, intellectual disability, partially or completely missing limbs, mobility impairments requiring use of a wheelchair, autism, cancer, cerebral palsy, diabetes, epilepsy, HIV infection, multiple sclerosis, muscular dystrophy, major depressive disorder, bipolar disorder, post-traumatic stress disorder, obsessive-compulsive disorder, and schizophrenia.

Most importantly, as the EEOC has so aptly put it, the new regulations reflect a fundamental shift in disability discrimination analysis under the ADA: “[t]he changes to the regulations reflect changes made by the ADAAA itself, which are intended to make the primary focus of an ADA inquiry whether discrimination occurred, not whether an individual meets the definition of ‘disability.’”[2]

Although plaintiff employees still have their work cut out for them in terms of successfully litigating a disability discrimination case, the new ADAAA regulations seem to clear at least one more hurdle.

[1] www.eeoc.gov/eeoc/newsroom/release/3-24-11.cfm

[2] http://www.eeoc.gov/laws/regulations/ada_qa_final_rule.cfm

EQUAL PAY DAY, April 12th

2011-03-18T17:11:00Z

The Average

Working Woman

EARNS JUST 77¢

TO THE AVERAGE MAN’S DOLLAR

EQUAL PAY DAY, April 12th, represents when a woman’s wages finally catches up to a man’s wages from December 31st, of the previous year. 102 days later.

EQUAL WORK

DESERVES

EQUAL WAGES!

TUESDAY, APRIL 12, 2011

12:00 NOON - DALEY CENTER PLAZA

Clark and Washington, Chicago

HEAR PROMINENT EQUAL PAY ADVOCATES:

 EVELYN MURPHY THE WAGE PROJECT

 DORIS MOY ILLINOIS DEPARTMENT OF LABOR

To RSVP: http://svy.mk/EqualPayDay

For more info: Contact Barb Yong at 312-696-2034 or

Blyong@golanchristie.com

SPONSORED BY:

Illinois Federation of Business and Professional Women; Women Employed; Mujeres Latinas en Accion; AAUW Chicago Illinois; Chicago Commission on Human Relations Advisory Council on Women; Chicago NOW; Chicago Women in Trades; Cook County Commission on Women’s Issues; EEOC; Illinois Department of Human Rights; NELA-IL; Northwestern University School of Law, Women's Leadership Coalition; Sargent Shriver National Center on Poverty Law; Women’s Bureau, U.S. Department of Labor; YWCA Metropolitan Chicago

Vote YES on SB 128 - Healthy Workplace Act - Senator Sandoval

2011-03-03T17:36:00Z

SB 128 - Healthy Workplace Act - Senator Sandoval

This bill would provide for paid sick leave for Illinois workers.

Requires an employer to provide an employee up to 7 sick days with pay during each 12-month period. Provides that an employee may use the sick days care for physical or mental illness, injury, medical condition, professional medical diagnosis or care, or a medical appointment of the employee or a family member.

PLEASE CALL members of the Senate Labor Committee TODAY and urge them to VOTE YES on SB 128. This bill will be up for a vote tomorrow.

Call the switchboard at 217/782-2000 and ask for a Senator's office.

You can call any and all members of the Committee and leave your message with their staff:

Kristin Case voted 2011 Super Lawyer

2011-02-14T16:02:00Z

Kristin Case has been voted '2011 Super Lawyer' by her peers. Please, click on link for more information.

http://www.superlawyers.com/illinois/lawyer/Kristin-M-Case/cfd6bfb4-5d4d-42af-bff3-4eed18b39076.html

Unjustified Termination "For Cause" Leads to Significant Jury Award for Former Employee

2011-02-08T14:56:00Z

The Appellate Court for the First District of Illinois recently upheld a jury verdict awarding the plaintiff $2 million dollars in compensatory damages and $6 million dollars in punitive damages for defamation per se.[1] Leyshon v. Diehl Controls North America, Inc., 2010 WL 5480668 (Ill. App. 1st Dist. Dec. 27, 2010).

The plaintiff in Leyshon v. Diehl Controls was the former President of his company and was working under an employment contract which allowed for termination only for cause. Unfortunately, despite that Mr. Leyshon had done nothing wrong and certainly not engaged in any conduct which qualified as just cause, the defendants decided that they wanted to terminate his employment. Rather than simply terminating the contract and paying Mr. Leyshon the benefits he would have received under its terms, the company decided to falsify its justification for Mr. Leyshon’s termination. Thus, on February 1, 2006, Christoph Weigand, a member of Diehl’s supervisory board, announced to Mr. Leyshon that he was fired. Mr. Leyshon asked Mr. Weigand why he was being fired and Mr. Weigand responded that he did not have to give him a reason, but that he was terminated “for cause under the terms of [his] employment agreement.” Mr. Leyshon responded, “You are telling me that you are firing me for gross insubordination, for gross misconduct, for gross negligence and willful violation of the law?” Mr. Weigand answered by merely saying “yes.”

Because Mr. Leyshon had not engaged in gross insubordination, misconduct, negligence or willful violation of the law, he filed a lawsuit alleging that, amongst other unlawful conduct, Diehl and Mr. Weigand had engaged in defamation per se when they stated that his termination was “for cause.” The jury found in his favor and awarded him $8 million in damages. However, the defendants appealed that ruling, arguing that the “innocent construction rule” barred Mr. Leyshon’s defamation claim. The defendants also challenged the compensatory and punitive damages awarded as excessive.

The innocent construction rule requires a court to look at allegedly defamatory statements “in context and give the words of the statement and any implications arising from them, their natural and obvious meaning.” Id. at *4. However, the Appellate Court explained that the innocent construction rule does not mean a court must find words to be innocent “simply because the allegedly defamatory words are capable of an innocent construction.” Id. at *5 (emphasis added). Instead, the court must give the words their natural and obvious meaning and interpret words “as they appeared to have been used and according to the idea they were intended to convey.” Id.

Considering these rules, the Leyshon court held that the defendants’ statement that Mr. Leyshon was terminated “for cause” was incapable of innocent construction. The court explained that, given the context in which the comment was made (“the sudden termination of [Mr. Leyshon’s] employment and Weigand’s confirmation that the reasons for [Mr. Leyshon’s] termination were gross insubordination, gross misconduct, gross negligence and willful violation of the law”), the statement could “not reasonably be construed as having an innocent meaning as a matter of law.” Id.

Significantly, the court upheld the $2 million dollars in compensatory damages. The court acknowledged that it can be difficult to determine when “presumed” damages (the type of damages awarded for defamation per se) are excessive. However, the court explained that because Mr. Leyshon had presented proof of his damages, the award was justified. That proof included evidence that others had learned of the defamatory statement, Mr. Leyshon’s testimony and his wife’s regarding his emotional distress and humiliation, as well as the testimony of a recruiter who expressed his belief that others in the industry likely knew of the “for cause” termination and that as a recruiter he would never recommend an executive for hire if he had been terminated for cause from previous employment. Id. at *9-10.

The $6 million dollars in punitive damages was also upheld. In that analysis, the court considered that there was evidence of a premeditated scheme to harm Mr. Leyshon as opposed to mere recklessness on the defendants’ part. Additionally, the court considered the fact that the defamatory statement had not been published to a limited audience, but instead many people seemed to have learned of the for cause termination. The court explained that the defendants’ conduct was reprehensible given that they had used the power of their corporation to humiliate and destroy the Mr. Leyshon’s reputation to avoid paying him what he was due. Finally, the court considered the ratio between the compensatory and punitive damages awarded. In light of all of these factors, the court found that the $6 million dollar award should stand. See id. *13-17.

This decision constitutes a significant victory for employees whose contractual right to employment is terminated for trumped up and false “cause.” In light of this holding and the significant damages at stake, companies may be more careful before alleging that grounds for termination exist as a means of avoiding their contractual obligations.

[1] Note that the jury actually awarded $10 million dollars in punitive damages, but that award was subsequently reduced to $6 million on remittitur.

Great Verdict for Employees - Supreme Court Expands Anti-Retaliation Protections

2011-01-25T16:12:00Z

Yesterday, the United States Supreme Court ruled that an employee may sue for retaliation where his employer took an adverse action against him in retaliation for his fiancee's complaint of discrimination. To read more about this decision, check out the link below:
http://www.abajournal.com/news/article/worker_is_protected_from_retaliation_due_to_fiancees_files_bias_complaint_s/

Wage Theft Protections For Employees

2011-01-20T01:13:00Z

An interesting article regarding greater wage theft protections for employees. Click on link below.

http://www.sj-r.com/top-stories/x100918332/New-law-targets-wage-theft-in-Illinois

Kate Sedey
Associate
The Case Law Firm, LLC
www.thecaselawfirm.com