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How Employment Contracts And Policies Impact Wrongful Termination Cases

April 22 , 2025

Understanding Wrongful Termination In Illinois

Wrongful termination occurs when an employer unlawfully fires an employee in violation of federal or Illinois employment laws, contractual agreements, or established workplace policies. While Illinois is an at-will employment state, meaning employers can terminate employees for any reason or no reason at all, there are clear legal protections that prevent termination based on retaliation, discrimination, or contract violations.

Employment contracts and workplace policies often play a critical role in wrongful termination cases. A well-drafted contract may establish clear expectations regarding termination procedures, while internal policies may create implied protections for employees. Understanding how employment agreements, company policies, and legal protections interact is essential when evaluating a wrongful termination claim.

How Employment Contracts Define Termination Rights

Employment contracts may contain specific provisions regarding how and why an employee may be terminated. These contracts override default at-will employment rules, providing additional protections that may prevent an employer from terminating an employee without good cause.

Common contract provisions that impact wrongful termination cases include:

  • Cause-Based Termination – Many contracts define what constitutes a valid reason for termination. If an employer fires an employee for a reason not outlined in the contract, it may be considered wrongful termination.
  • Severance Agreements – Some contracts guarantee severance pay if termination occurs under specific conditions. Failure to honor these provisions may constitute a breach of contract.
  • Progressive Discipline Policies – Contracts often outline disciplinary procedures that employers must follow before termination. If an employer fails to follow these steps, the termination may be unlawful.
  • Notice Requirements – Some contracts require employers to provide advance notice before terminating an employee. Terminating an employee without proper notice may result in legal action.

If an employer fails to comply with the terms of an employment contract, the employee may have a valid claim for wrongful termination based on breach of contract under Illinois law.

The Role Of Employee Handbooks And Company Policies

Even when an employee does not have a formal employment contract, company policies may create implied agreements that impact termination rights. Employers often establish guidelines for discipline, termination, and workplace conduct in employee handbooks.

When company policies specify termination procedures, employers are often required to adhere to their own rules. If an employer fails to follow internal procedures, it may provide grounds for a wrongful termination claim.

For example, if a company’s handbook states that an employee must receive two written warnings before termination, but an employee is fired without warning, that employee may be able to file a wrongful termination lawsuit. Courts may view such policies as contractual commitments, even if they are not part of a formal employment agreement.

Federal And Illinois Laws That Protect Against Wrongful Termination

Regardless of employment contracts or policies, federal and state laws protect employees from being terminated for illegal reasons. These laws provide critical safeguards for employees who face termination due to retaliation, discrimination, or public policy violations.

Retaliatory Discharge Protections

Federal and Illinois law prohibit employers from terminating employees in retaliation for engaging in legally protected activities, such as:

  • Reporting workplace discrimination or harassment (Title VII of the Civil Rights Act, 42 U.S.C. § 2000e-3)
  • Filing a claim for unpaid wages under the Fair Labor Standards Act (29 U.S.C. § 215(a)(3))
  • Reporting safety violations under the Occupational Safety and Health Act (OSHA, 29 U.S.C. § 660(c))
  • Participating in a whistleblower investigation under the Illinois Whistleblower Act (740 ILCS 174)

If an employer retaliates against an employee for asserting their legal rights, the employee may have a strong case for wrongful termination.

Discrimination-Based Wrongful Termination

Federal and Illinois law prohibit employers from terminating employees based on protected characteristics, such as:

  • Race, color, or national origin (Title VII of the Civil Rights Act, 42 U.S.C. § 2000e-2)
  • Age (40 and over) (Age Discrimination in Employment Act, 29 U.S.C. § 623)
  • Disability (Americans with Disabilities Act, 42 U.S.C. § 12112)
  • Sex or gender (Title VII and the Illinois Human Rights Act, 775 ILCS 5/2-102)

If an employer fires an employee based on any of these characteristics, the termination may be considered unlawful discrimination under both state and federal law.

How Employees Can Protect Their Rights

Employees who believe they have been wrongfully terminated should take specific steps to protect their legal rights, including:

  • Reviewing Employment Contracts and Policies—Employees should examine their contract or employee handbook to determine if their termination violates any written policies.
  • Documenting Employer Actions – Keeping written records of conversations, emails, and warnings can help prove wrongful termination claims.
  • Filing A Legal Claim Promptly – Employees should not wait too long to take legal action, as wrongful termination claims are subject to strict filing deadlines under Illinois law.

By taking these steps, employees can build a strong case against wrongful termination and seek compensation for lost wages, emotional distress, and other damages.

Employment Law FAQs

What Should I Do If My Employer Violated My Employment Contract?

If an employer terminates an employee in violation of their contract, the employee may have grounds for a breach of contract claim. It is essential to review the contract language carefully and consult an attorney about potential legal action.

Can An Employer Fire Me Without Cause If I Have An Employment Contract?

It depends on the specific terms of the contract. Some contracts allow at-will termination, while others require cause-based dismissal. If the employer fails to follow contract terms, the termination may be legally challenged.

Are Verbal Agreements Enforceable In Wrongful Termination Cases?

Verbal agreements may be enforceable in some cases, but written contracts carry more legal weight. Courts may consider past employment practices and verbal promises, but having a written contract provides stronger protection.

How Long Do I Have To File A Wrongful Termination Claim In Illinois?

Filing deadlines vary based on the type of claim:

  • Retaliation claims must be filed with the Illinois Department of Human Rights (IDHR) within 180 days of termination.
  • Federal discrimination claims must be filed with the Equal Employment Opportunity Commission (EEOC)within 300 days.

Can I Sue My Employer If I Was Fired After Filing A Complaint?

Yes, federal and Illinois laws prohibit retaliation against employees who file complaints regarding discrimination, wage violations, or workplace safety issues. Employees who are fired after making legitimate complaints may have a strong case for wrongful termination.

What Damages Can I Recover In A Wrongful Termination Lawsuit?

Employees may be eligible to recover:

  • Back pay and lost wages
  • Emotional distress damages
  • Attorney’s fees and court costs
  • Punitive damages in cases of willful misconduct

Can I Be Fired For Refusing To Do Something Illegal?

No. Illinois law protects employees who refuse to engage in illegal activities. Employers cannot terminate workers for refusing to break the law, and doing so may result in legal consequences.

Contact Our Chicago Wrongful Termination Lawyer

If you believe you were wrongfully terminated, it is important to take immediate action. At Michael T. Smith & Associates, we help employees fight back against illegal terminations and hold employers accountable.

To receive your free consultation, contact our Chicago wrongful termination lawyer at the Law Office of Michael T. Smith & Associates when you call (847) 450-1103. We represent clients throughout Chicago from our office in Lisle, Illinois, and we are committed to protecting employee rights under federal and Illinois law.

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