Legal Question in Employment Law in Illinois

Hiring Implied Contracts

I resigned my position with compensation in the $200,000 range along with considerable stock options to take a job with a new company run by an ex boss. The new job paid more money and included an equity position. However, the offer was never put in writing due to the fact he (boss) had a ''no recruit'' clause in a separation and general release agreement with my existing employer (his ex employer that he was terminated from). The verbal offer was rescinded three days before I was to start. Conversations took place over a 4 month period, I had exact new compensation figure, bonus program, and title along with tenative start date. I made multiple visits to his location and he help me obtain a lawyer to finalize my release. Do I have any legal recourse or compensation due to me until I have obtained satisfactory employment?


Asked on 4/23/02, 10:49 pm

1 Answer from Attorneys

Kenneth J. Ashman Ashman Law Offices, LLC

Re: Hiring Implied Contracts

Interesting issues. First, without an express contract with a term to the contrary, the nature of an employer-employee relationship under Illinois law is one "at-will." This means that even if he had hired you and you had started working for him, he could have fired you a week later (as long as for a non-discriminatory purpose as defined by federal & state statute). Of course, you could have quit a week later as well w/out liability.

Second, there is a concept known in the law as "promissory estoppel," whereby one may recover under a "contract" theory even when no formal contract exists, such as where a contract fails for lack of consideration. Under such circumstances, where one party has relied to his or her detriment on the promise of another party, courts will enforce the promise to the extent that the first party has suffered damage.

This, of course, leads to what was promised to you by your former boss. If he promised you employment for a year or more, the "contract" may fail for not being in writing, for Illinois statute of frauds requires contracts that cannot be performed in less than a year must be in writing.

Okay . . . so where are we? If he promised you employment for less than a year, you may be able -- under the right circumstances -- to hold him liable for the damages you suffered as a result of your reliance on such promise.

-- Kenneth J. Ashman; [email protected]; www.lawyers.com/alo

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Answered on 4/24/02, 12:24 am


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