At-Will Employment in Illinois: What Employers Need to Know

Can I fire this employee?

It's a question we get all the time. 

Understanding the nuances of the at-will employment doctrine in Illinois, and its exceptions, is critical for employers. 

This guide will address what the at-will employment doctrine means, what it doesn't mean, and some practical steps for employers who are thinking about terminating an employee. 

Understanding at-will employment in Illinois

In most circumstances, the default legal presumption in Illinois is that an employment relationship is at-will unless there is a contract which guarantees employment for a certain period of time.

At-will employment means you can terminate an employee for any reason—or no reason at all—as long as it’s not illegal.

It also means that employees can resign without notice.

This flexibility benefits employers in that it allows employers to quickly address underperformance, misconduct, or other business needs.

While the at-will employment doctrine in Illinois gives employers wide latitude to let employees go, employers must be aware of the boundaries.  

Missteps in managing at-will employees can expose employers to liability for claims such as wrongful termination, among others.  

Exceptions to at-will employment

While at-will employment offers flexibility, Illinois law imposes limits. Below are some common exceptions to the at-will employment doctrine in Illinois:

• Public policy: Employers cannot terminate employees if the termination violates a public policy of the state. This could be a situation where an employee is fired for refusing to participate in illegal conduct at the employer’s request.
  
  
• Protection against discrimination: Many federal and state laws prohibit termination based on protected characteristics like race, gender, age, and others.
  
  
• Implied contracts: When there is no written agreement in place that sets forth the terms of employment, an employee may be able to show there was an implied contract based upon the conduct of the parties. Verbal promises or poorly drafted employee handbook policies can undermine at-will status.
  
  
• Retaliation protection: State and federal law protect employees from being terminated for exercising legal rights or reporting wrongdoing within their company.

The role of the employee handbook

Employee handbooks are an essential tool for employers in Illinois.

A well-crafted employee handbook is a first line of defense if the at-will relationship is ever challenged.

Employment policies should clearly state that employment is at-will, and that the handbook is not a contract or other guarantee of employment.

Employers should consider including the following provisions in their handbooks to clarify the nature of the employment relationship:

• At-will disclaimer: Include a clear statement at the beginning which defines an employee’s relationship with the employer as at-will.
  
  
• Anti-discrimination policy: Reinforce the company’s commitment to compliance with federal and Illinois anti-discrimination laws.
  
  
• Whistleblower policy: Leave no confusion to employees that they will not be retaliated against by reporting improper or illegal conduct.
  
  
• Acknowledgment page: Require employees to sign an acknowledgment confirming they understand the at-will policy and handbook contents.

Best practices for terminating employees

Even though that at-will doctrine allows employers a wide latitude in terminating employees, there are still best practices that should be followed to mitigate the risk of wrongful termination lawsuits.

1. Define at-will status early: Employers should be clear from the interview process, the offer letter, the onboarding documents, and the employee handbook that employment is at-will.
   
   
2. Document performance issues: Maintain records of employee performance, warnings, and disciplinary actions. While employers can terminate employees at-will for no reason, it is generally advisable to have a clearly defined reason. In the event an employee files a wrongful termination lawsuit, documentation of poor performance can be used as evidence to show the termination was not unlawful.
   
   
3. Confirm at-will status: If an employer has decided to terminate an employee, it is important to first verify that the employee is actually an at-will employee. If the employee has an employment contract, be sure the contract defines the employee as at-will.
   
   
4. Consult legal counsel: Before terminating an employee it is best to consult with an Illinois employment lawyer, especially in more complex scenarios. Your lawyer will be able to quickly help you evaluate the scenario and provide guidance on how to best mitigate the potential for liability. Pre-termination consults with a lawyer will be fairly inexpensive and ensure the proper steps are taken.

Final thoughts

At-will employment generally means you can terminate an employee for any reason, or no reason at all. However, it is important for employers to keep in mind that there are a number of exceptions to the at-will doctrine.

Employers that understand the doctrine, and the exceptions, will be able to use the flexibility of at-will employment status to quickly address employee issues that arise in their business.

If you need help navigating the complexities of employment law in Illinois, feel free to schedule a meeting with us by clicking on the button below.

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Disclaimer: The information contained in this article has been prepared by Small Business Legal Solutions LLC for general informational purposes only. Nothing in this article is intended to constitute legal advice on any subject matter. The materials in this article are not intended to and do not create an attorney-client relationship. Do not act or refrain to act based on any information contained in this article without first personally consulting with an attorney. Every circumstance is different and must be judged on its own merits.