On February 24, 2017, the Illinois Appellate Court, First District, reversed an order of summary judgment in favor of a defendant employer in a lawsuit for breach of an employment agreement. Rosenberger v. United Community Bancshares, Inc., 2017 IL App (1st) 161102 (2/24/2017). This case involved an executive employment contract that provided the executive, a Chief Lending Officer, with a 3-year term of employment. The contract contained a severance compensation provision, which stated that if the company terminated the executive’s employment prior to the expiration of his employment term for any reason other than cause, the executive would be entitled to a lump-sum severance payment equal to two times his annual base salary then if effect.
The employment agreement defined “cause,” among other things, as the failure of the executive to follow the company’s reasonable instructions with respect to the performance of his duties. The company argued that under the terms of the employment agreement, the executive was not entitled to the severance payment because his employment was terminated for “cause.” The company asserted that it terminated the executive for cause based on his failure to follow reasonable instructions. The company alleged that he did so by disagreeing with and rejecting a performance improvement plan as well as failing to follow the instructions of the executive committee to provide it with weekly progress reports. However, the record evidence created a genuine issue of material fact as to whether the executive’s conduct, including a letter expressing his willingness to cooperate, given to the executive committee six days before his termination, constituted “cause” for the company to terminate his employment. Thus, the case was remanded for further proceedings, which may include a costly jury trial to decide the disputed factual issues.