A proposed piece of legislation, entitled “Employee Security Act” (HB 3530 and SB 2332) is working its way though Illinois’ congress. If passed, it would make it only the second state in the country to prohibit at-will employment outright—a handful of other states have certain exceptions to their at-will rules. The effects would span beyond Illinois and may signal a trend toward a greater power shift toward employees.
What is employment at will?
About three quarters of the American workforce are considered “at-will” employees. Employment at will refers to the oft-repeated expression that the relationship may be terminated by either party “for any reason or no reason at all”. As employment lawyers, we would humbly correct that general rule to “for any legal, non-discriminatory reason or no reason at all”.
This generally means that an employer has broad power to legally terminate their at-will employee without a specific reason for doing so. Contrary to many employers’ beliefs, that power is not unlimited, but plagued with legal perils; an employer generally may not terminate an at-will employee on the basis of their race, gender, disability, religion, or other protected trait which are defined at the federal and state levels. Most of the cases we see (and caution our clients about) involve a gray area. For example, an employer who terminates all employees who refuse to work on Sundays might find itself exposed to a religious discrimination claim.
What does the Illinois bill say?
If enacted, the Employee Security Act would take effect January 1, 2022 and impose two obligations on Illinois employers: (1) employers may only terminate employees for just cause, and (2) employers must provide employees with mandatory severance upon termination.
According to the bill, “just cause” means (1) an employee’s failure to satisfactorily perform their job duties or to comply with employer policies if the employee was afforded progressive discipline; (2) an employee’s egregious misconduct; or (3) for “bona fide economic reasons” provided in writing to the employee. Just cause may not be based on off-duty conduct unless the employer demonstrates a nexus between the conduct and the employee’s job performance. Next, the employer must provide the former employee a written explanation of the reasons for the discharge. Finally, in court, the employer bears the burden of proof to establish just cause.
The law would also require employers to provide employees with mandatory severance pay at a rate of one hour for every 12.5 hours worked during the first year, then one hour for every 50 hours worked thereafter. The rate of pay is based upon the employee’s rate of pay upon discharge.
What about other states?
A similar bill has been introduced in Maine’s legislature (without the severance requirements), but as of this writing appears unlikely to survive through passage. Frier Levitt will continue to monitor Illinois, Maine, and the rest of the country for similar legislation.
What does this mean for our clients?
Of course, our Illinois clients must be aware of policy and payroll changes that they may need to implement by January 1, 2022. Nationwide, however, this legislation may signal a trend toward more employee-friendly legislation and rulemaking that employers must contend with. While we certainly do not envision this being the end of at-will in the United States, employers should consider internally how a similar law might affect their staffing and operations. All of our clients and employers generally should stay up to date of any changes.
What happens next?
The bills will make their way through the legislative process or be voted down or otherwise fail. Frier Levitt’s employment attorneys are keeping up to date on any developments in this area of the law and will follow up with more client alerts.
How Frier Levitt Can Help?
Frier Levitt’s skilled employment attorneys are closely monitoring legal developments and changes and are available to help employers work out the complexities and navigate these difficult times. Since there is no “one size fits all” solution for every business, employers should consult a skilled employment attorney to ensure their employment policies and practices are compliant with the current law. Contact us today to speak to an attorney.
