On March 13, 2017, the 7th Circuit affirmed a jury verdict in favor of an employer in a lawsuit in which an employee alleged that the employer breached and waived its right to terminate an employment agreement that was terminable only for cause. Burford v. Accounting Practice Sales, Inc., et al., No. 16-1871 (7th Cir. 3/13/2017). This case involved an employment contract that provided the employee with an exclusive sales territory. The employment agreement stated that the employer could not terminate the contract unless it was violated by the employee. Based on this language, the contract was not terminable “at will,” but only terminable for cause. The contract gave the employer the option to terminate the agreement if the employee failed to meet his sales goals.

However, this option did not require the employer to fire the employee immediately (upon his failure to meet his goals) or loose its right to terminate. Thus, in this case, where the employer gave the employee considerable time to improve his performance–and fired him later after he failed to do so–there was no waiver of the employer’s right to terminate the employment contract for cause. Accordingly, the employer was not liable to the employee for breach of contract when it terminated him. Under Illinois law, the general rule is that employment agreements are terminable “at will.” When drafting an employment agreement, however, it is important for the employer to not include language–such as the clause in this case–that carves out an exception to the general rule of employment “at will” and converts the contract to one that is only terminable for cause.