From May 2002 until the end of February 2004, Douglas Robinson ("Robinson" or "plaintiff") was employed by Huron Consulting Group ("Huron") as a director of financial and economic consulting. At Huron, Robinson was paid a $118,500 salary per year and a $10,000 bonus per year and received benefits including a 401(k) plan, health insurance and stock options.
In August 2003, Robinson was contacted by a headhunter on behalf of BDO Seidman LLP ("BDO" or "defendant"). The headhunter explained BDO intended to establish a division devoted to computer fraud and forensic investigation and was looking for someone to head the division. In August or September 2003, Robinson met with Irv Levinson ("Levinson"), an employee of BDO, to discuss the position. Levinson and Robinson met again in October and December of that year. At the December 2003 meeting, BDO’s employee Susan Henry ("Henry") was also present. During the December meeting, Levinson and Henry told Robinson that if he accepted the position as head of BDO’s new department, "he would be employed as long as it takes to successfully build the department, and then as long as he (Robinson) desired." On January 15, 2004, Robinson flew to New York, where he met with another BDO employee for a final interview.
On January 23, 2004, BDO offered Robinson the position and presented him with an employment package that would entitle him to a salary of $126,000 per year, benefits including a 401(k) plan and health insurance, but no annual bonus or stock options. Robinson accepted the offer in early February 2004 and resigned from his position at Huron on February 16, 2004. Robinson began working for BDO on March 1, 2004. On May 1, 2004, Robinson's employment was terminated, and he then filed suit.
Essentially, Robinson's complaint alleged that in terminating his employment in May 2004, BDO breached two of the oral employment contract terms. First, BDO breached its agreement to employ Robinson until the new computer fraud and forensic investigation department was successfully established, and second, BDO breached its agreement to employ Robinson for as long as Robinson desired.
The Illinois Appellate Court rejected Robinson’s argument that BDO breached the contract term to employ Robinson “as long as it takes to successfully build the department.” The Court stated, generally, an employment agreement that does not specify a definite duration “will last for as long as is mutually satisfactory, and either employer or employee may terminate the employment ‘at will,’ without liability for breach of contract.” Thus, an employee at will may be discharged for any reason or for no reason at all. In order to overcome the assumption that employment is at will, the terms of an oral contract for employment for a specific duration must be clear and definite.
The Court found that a specific duration for Robinson’s employment was not established. BDO’s representations to Robinson during the interview process – that he would be employed until the new department was successfully established – was nothing more than an informal expression of goodwill and hope. Further, Robinson did not allege that this representation was mentioned again in a subsequent interview or when Robinson was presented with his employment package. Accordingly, the Court found that BDO's assurance that Robinson would be employed until the new department was successfully established was merely an “informal expression . . .of goodwill and hope that naturally occur[s] between a prospective employer and a prospective employee in an interview situation” and was not sufficiently clear and definite to overcome the presumption that Robinson's employment was at-will.
The Court noted that, if the parties had more clearly defined when or what conditions would signify that the department had been successfully established, for example, when the equipment that would support the department was put into place, when the employees were hired and working or when the department was turning a profit, the Court may have decided this issue differently and found that the contract term was sufficiently clear and definite to overcome the presumption of at-will employment.
Similarly, the Court rejected Robinson’s claim that BDO breached the “as long as plaintiff desired” term of his employment contract. The Court found this statement was also a mere informal expression of goodwill and hope. Furthermore, the Court stated the alleged agreement that BDO would employ Robinson as long as Robinson desired is barred by the Statute of Frauds. The Illinois Statute of Frauds prohibits oral contracts that cannot be performed within one year of their making.
Robinson made the common error of accepting the BDO job offer without “getting it (all) in writing.” BDO also erred by failing to clearly state in writing that Robinson’s employment was “at-will.” If you are an employee and are considering switching jobs, or if you are a prospective employer about to make a job offer, please give us a call to help you avoid the costly errors that were made by the plaintiff and defendant in this case.
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