Plaintiff, Dimple Kamboj (“Kamboj”), worked as a chemist in the Indianapolis office of Defendant Eli Lilly and Company (“Lilly”) from April 1999 until October 2003, when she moved to Chicago to take a new position in Lilly's sales force. Kamboj claimed that when she interviewed for the new position, her interviewer and soon-to-be supervisor, Sonia Newman (“Newman”), promised her the title of “senior sales representative” and promised that she would receive a salary increase of two pay grades, full tuition reimbursement for all of her MBA expenses, and relocation expenses.
Kamboj accepted the offer, moved to Chicago, and started the new sales position in October 2003. She was in sales training from October through December 2003, and she did not make her first solo customer calls until January 2004. In February 2004, during a ride-along with Newman, Kamboj first questioned the fact that her pay had not increased from what she had been making in her previous position as a chemist. Newman responded that she could not start Kamboj as a senior sales representative because she had no sales experience; however, Newman also told Kamboj during that conversation that she would “check into it again,” so Kamboj did not pursue the matter herself with Lilly’s human resources department (“HR”).
One month later, during a business review meeting, Kamboj again raised the issue of her job title with Newman, and again Newman told her she was not a senior sales representative because she lacked sales experience. Newman again said she would “check with” HR about Kamboj's concern about not being a senior sales representative. Kamboj never contacted HR herself because Newman always said she would handle it. By April 2004, Kamboj realized that she was not going to receive the title and salary that Newman allegedly promised her. During Kamboj's April performance review, Newman explained that Kamboj would not be eligible for a promotion to senior sales representative for three years. Kamboj considered this the final word on her position and title, but she continued to do her job, reasoning that if she performed well “the rewards would come later.”
In April 2005 Kamboj left her job. She claimed that she had been constructively discharged. She filed suit in Cook County Circuit Court, alleging, among other things, breach of oral contract by Lilly to employ her as a “senior sales representative,” to pay her an increased salary, and to reimburse her for all of her MBA expenses. Kamboj acknowledged that she was an “at-will” employee, meaning she had no fixed term of employment, and that, under Illinois law, employment contracts without fixed terms are presumed to be terminable at-will by either party without liability. However, Kamboj claimed that notwithstanding an employment contract is at-will and terminable at any time by either party, it is still a binding contract and the contract’s other terms must be upheld.
Lilly denied an oral contract was ever reached. Lilly alternatively argued that even if an oral contract existed, Kamboj accepted its terms by continuing to work for a year after she realized that Lilly was not going to honor those terms. Lilly relied on Illinois case law which held that not only may an employer modify the terms of an at-will employment contract (including compensation terms) as a condition of continuance, but that the employee’s continuance under the modified conditions is acceptance of the new terms. Lilly argued that this principle precluded relief entirely.
The court agreed with Kamboj that the absence of a specific term or duration of employment did not defeat her oral contract theory. The court stated that an “at will” contract is significant in that an employer can discharge an employee at any time. Nevertheless, an at-will contract is still a contract with binding terms. Although a plaintiff may not enforce the employment provision of an “at-will” contract, an employee can still demand benefits promised pursuant to an agreement with her employer. The “at-will” portion of the agreement means only that the employer may discharge an employee without a reason at any time. An “at-will” contract is still a contract and its terms are still binding.
Thus, the court agreed that Kamboj could assert a claim for breach of the other terms or conditions of her at-will employment contract, even though she would not be able to assert a claim for termination of that contract, or for a unilateral modification of that contract past any time of her acceptance of the modification without objection, which the court said was in March or April 2004 when Kamboj became aware that Lilly was not going to fulfill Newman’s alleged promises.
The bottom line of this case is important for both employers and employees: promises made by employers to at-will employees who can be terminated at any time and for any reason or no reason at all are still enforceable promises. Our firm represents both employers and employees in employment issues such as these. If you have a question or need legal assistance, please call and ask for our employment practices department.