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Employer Slammed With $8 Million Verdict for Fabricating "for Cause" Termination

This report relates to 1 case(s)

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    Leyshon v. Diehl Controls, 407 Ill. App. 3d 1 (1st Dist. 2010). (0 other reports)

Author: James M. Moakley

In Leyshon v. Diehl Controls No. Amer., Inc. +407 Ill. App. 3d 1 (Ill. App. 2010), an Illinois appellate court considered whether an employer defamed a former employee when it fabricated a "for cause" termination.

Employees with written employment contracts typically must be terminated in accordance with the terms of the contract, particularly if the employment contract contains a provision indicating that termination may only be "for cause." Oftentimes, the contract will specify what types of behaviors will qualify for "cause," such as gross negligence, dereliction of duties, insubordination or violation of the law. Terminating an employee for cause may undermine the employee's ability to find another job. If an employer fabricated an employee's for cause termination, such a fabrication may be considered defamation, or a statement that tends to harm a person's reputation by lowering his or her standing in the community. If an employer does defame an employee, it may be liable for compensatory damages (to fulfill the employee's employment contract) and, worse, punitive damages (to punish the employer for severe behavior).

In this case, the First District Appellate Court of Illinois held that the employer defamed the employee and was liable for both compensatory and punitive damages given that it falsely labeled the employee's termination as being "for cause." The court found that the fabricated "for cause" termination damaged the plaintiff's business reputation so severely that he was unable to find a job for a significant period of time.