Appeal from the Appellate Court for the Fourth District; heard
in that court on appeal from the Circuit Court of Livingston
County, the Hon. Samuel Harrod III, Judge, presiding.
MR. JUSTICE RYAN DELIVERED THE OPINION OF THE COURT:
Rehearing denied January 25, 1979.
Plaintiff, Marilyn Jo Kelsay, filed a complaint in the circuit court of Livingston County, seeking compensatory and punitive damages against her ex-employer, Motorola, Inc. The plaintiff alleged that her employment with defendant had been terminated as retaliation for her filing a workmen's compensation claim. The trial court directed a verdict in plaintiff's favor and the jury assessed damages in the amount of $1,000 compensatory damages and $25,000 punitive damages. The court remitted the compensatory damages to $749, which represents the wages plaintiff lost between the time she was discharged and the time she found a new job. On appeal, the Fourth District Appellate Court reversed the judgment of the trial court, holding that an employee has no cause of action against an employer for retaliatory discharge. (51 Ill. App.3d 1016.) Because a different panel of the same court reached a contrary result in an opinion filed on the same day (Leach v. Lauhoff Grain Co. (1977), 51 Ill. App.3d 1022), the appellate court issued a certificate of importance to this court (see 58 Ill.2d R. 316) so that we may resolve the conflict.
Plaintiff suffered a cut to her thumb while working at the Motorola factory in Pontiac. She received immediate medical attention at a local hospital, where her thumb was stitched. She returned to work later that same afternoon. Shortly thereafter, plaintiff sought advice of counsel regarding a workmen's compensation claim for her thumb injury. Counsel sent notice of the impending claim to the employer, Motorola, Inc.
Plaintiff spoke with the personnel manager at the Motorola plant, Donald Aherns, after he received notice of the workmen's compensation suit. Aherns told plaintiff that the corporation was aware of the situation, that she would be "more than adequately compensat[ed]" by the corporation for her thumb injury, and that there was no need for her to follow through with her claim. He also informed the plaintiff that it was the corporation's policy to terminate the employment of employees who pursued workmen's compensation claims against it, and advised the plaintiff to "think about it" a little longer. Plaintiff, however, decided to proceed with her claim and, after informing Aherns of her final decision, was discharged. Her compensation claim against Motorola was eventually settled. Subsequently, as noted above, plaintiff sought relief in the Livingston County circuit court against defendant, Motorola, for her retaliatory discharge by the corporation.
This appeal raises several issues. First, should this State recognize a cause of action for retaliatory discharge? If so, is such an action one which may give rise to a claim for punitive damages, and, if so, was the jury's award of $25,000 punitive damages proper in the instant case?
The employer argues that no cause of action should exist in this State for the retaliatory discharge of an employee. He contends that, as of the time of plaintiff's discharge, there was nothing in the Workmen's Compensation Act (Ill. Rev. Stat. 1973, ch. 48, par. 138.1 et seq.) that impinged on the employer's unfettered right to terminate without cause an employee whose employment contract was at will. Further, the employer argues that recognition of a cause of action for retaliatory discharge is totally inconsistent with the exclusivity provision of the Act itself, which specifically provides:
"The compensation herein provided, together with the provisions of this Act, shall be the measure of the responsibility of any employer engaged in any of the enterprises or businesses enumerated in Section 3 of this Act * * *." (Ill. Rev. Stat. 1973, ch. 48, par. 138.11.)
Finally, the employer argues that the legislature's decision to provide solely for criminal punishment of employers who, after 1975, "discharge or * * * threaten to discharge * * * an employee because of the exercise of his rights or remedies granted to him by [the] Act" (Ill. Rev. Stat. 1975, ch. 48, par. 138.4(h)), without providing for a civil remedy for employees who are so discharged, precludes the plaintiff's action in the instant case.
The Workmen's Compensation Act (Ill. Rev. Stat. 1973, ch. 48, par. 138.1 et seq.) substitutes an entirely new system of rights, remedies, and procedure for all previously existing common law rights and liabilities between employers and employees subject to the Act for accidental injuries or death of employees arising out of and in the course of the employment. (37 Ill. L. & Prac. Workmen's Compensation sec. 2 (1958).) Pursuant to the statutory scheme implemented by the Act, the employee gave up his common law rights to sue his employer in tort, but recovery for injuries arising out of and in the course of his employment became automatic without regard to any fault on his part. The employer, who gave up the right to plead the numerous common law defenses, was compelled to pay, but his liability became fixed under a strict and comprehensive statutory scheme, and was not subjected to the sympathies of jurors whose compassion for fellow employees often led to high recovery. (See 81 Am.Jur.2d Workmen's Compensation sec. 1 et seq. (1976).) This trade-off between employer and employee promoted the fundamental purpose of the Act, which was to afford protection to employees by providing them with prompt and equitable compensation for their injuries. See O'Brien v. Rautenbush (1956), 10 Ill.2d 167.
The Workmen's Compensation Act, in light of its beneficent purpose, is a humane law of a remedial nature. (Shell Oil Co. v. Industrial Com. (1954), 2 Ill.2d 590.) It provides for efficient remedies for and protection of employees and, as such, promotes the general welfare of this State. Consequently, its enactment by the legislature was in furtherance of sound public policy. (Deibeikis v. Link-Belt Co. (1914), 261 Ill. 454.) We are convinced that to uphold and implement this public policy a cause of action should exist for retaliatory discharge.
While noting that in 1975, subsequent to plaintiff's discharge, the Workmen's Compensation Act was amended making it unlawful for an employer to interfere with or to coerce the employee in the exercise of his rights under the Act (Ill. Rev. Stat. 1975, ch. 48, par. 138.4(h)), the employer argues that as of the time of plaintiff's discharge, the legislature had neither prohibited nor provided for any remedy for a discharge resulting from the filing of a workmen's compensation claim. As such, its authority to terminate the employee, whose contract was at will, was absolute. In this regard he cites various statutes in which the legislature has seen fit to limit the employer's right to discharge (the wage assignment act (Ill. Rev. Stat. 1975, ch. 48, par. 39.11), the Service Men's Employment Tenure Act (Ill. Rev. Stat. 1973, ch. 126 1/2, par. 33), and the Fair Employment Practices Act (Ill. Rev. Stat. 1973, ch. 48, par. 851 et seq.)), and correctly notes that none of these limitations are applicable to the instant case.
We are not convinced that an employer's otherwise absolute power to terminate an employee at will should prevail when that power is exercised to prevent the employee from asserting his statutory rights under the Workmen's Compensation Act. As we have noted, the legislature enacted the workmen's compensation law as a comprehensive scheme to provide for efficient and expeditious remedies for injured employees. This scheme would be seriously undermined if employers were permitted to abuse their power to terminate by threatening to discharge employees for seeking compensation under the Act. We cannot ignore the fact that when faced with such a dilemma many employees, whose common law rights have been supplanted by the Act, would choose to retain their jobs, and thus, in effect, would be left without a remedy either common law or statutory. This result, which effectively relieves the employer of the responsibility expressly placed upon him by the legislature, is untenable and is contrary to the public policy as expressed in the Workmen's Compensation Act. We cannot believe that the legislature, even in the absence of an explicit proscription against retaliatory discharge, intended such a result.
We recognize that the Court of Appeals for the Seventh Circuit has reached a contrary conclusion in construing the Illinois Workmen's Compensation Act. In Loucks v. Star City Glass Co. (7th Cir. 1977), 551 F.2d 745, the court considered the question without the benefit of any prior decision of this court on the question involved and held that inasmuch as the legislature had not provided for a prohibition against retaliatory discharge, the employer was free to exercise its traditional right to discharge at will. Decisions of the Federal courts> in construing statutes of this State are not binding on this court. For the reasons above stated, we believe that the construction adopted in Loucks contravenes the public policy of this State.
Two recent cases in other States have held that an employee has a cause of action against an employer for retaliatory discharge. Frampton v. Central Indiana Gas Co. (1973), 260 Ind. 249, 297 N.E.2d 425, and Sventko v. Kroger Co. (1976), 69 Mich. App. 644, 245 N.W.2d 151.
In Frampton, the plaintiff had been injured on the job, and received workmen's compensation. Later, she made a claim for increased disability and received a settlement. Soon thereafter she was fired without cause, and brought an action for retaliatory discharge against the employer. In sustaining the cause of action, the Indiana Supreme Court noted that to prohibit a cause of action under such circumstances would be to sanction the ability of employers to coerce employees into forgoing their rights and by so doing unilaterally defy and destroy the function of the State's workmen's compensation act. See 2A A. Larson, Workmen's Compensation sec. 68.36 (Supp. 1978).
Similarly, in Sventko, the plaintiff was discharged for filing a workmen's compensation claim against her employer. The Michigan Appellate Court, in holding that the employee should have an action for retaliatory discharge, stated that an "employer at will is not free to discharge an employee when the reason for the discharge is an intention on the part of the employer ...