Both employers and employees may have to recalibrate their approach to severance negotiations after a recent ruling by an Illinois appeals court that involved the Chicago White Sox.
According to the court, if a terminated employee signs away the right to bring legal claims against an employer in exchange for a severance payment—which is common practice—that waiver could be invalidated if the termination was in fact illegal and that illegal basis was hidden from the employee. This decision carries significant implications for both organizations and workers as they negotiate exit packages and severance agreements.
What Happened?
The Illinois Appellate Court for the First District, which covers Chicago, issued a significant ruling in the case of Ball v. Chicago White Sox, Ltd. in February. The court’s decision addressed the enforceability of employment severance agreements when it is alleged that an employer fraudulently concealed facts underlying the employee’s termination. The decision has far-reaching implications for both employers and employees, particularly as it applies to the waiver of rights under the Illinois Human Rights Act (“IHRA”) and potentially Title VII of the Civil Rights Act of 1964 (“Title VII”).
The case was filed by Brian Ball, who had worked as an athletic trainer for the Chicago White Sox since 2000, including during the White Sox’s 2005 World Series championship run. In 2020, however, the White Sox decided to fire Ball under the purported rationale that he no longer fit in with the organization’s plan to “reach the next level.” (As of this writing in 2025, as all baseball fans likely know, the “next level” has not yet been reached).
In terminating Ball’s employment, the White Sox offered him a year of salary and health benefits. In exchange, the severance agreement provided that Ball would waive any and all legal claims against the White Sox. Ball signed the severance agreement but later alleged that the White Sox told him he had to sign the agreement within 7 days, in contravention of Illinois law.
However, two months later, a management-level White Sox employee revealed to Ball that he was in fact fired not due to his “fit” with the organization, but rather because of his sexual orientation. Ball then filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”), cross-filed with the Illinois Department of Human Rights (“IDHR”), received a “right-to-sue” letter, and then filed suit in court, alleging that the White Sox concealed and misrepresented the true reason for his termination, which, if proven, would violate the IHRA.
The Appeals Court Overturns the Ruling against Ball
The trial court initially dismissed Ball’s complaint with prejudice—meaning he would not be able to re-file his claims in the future—citing the waiver of legal claims that Ball had signed in his severance agreement. The appellate court, however, reversed the trial court’s decision for several reasons.
First, the appeals court held that the trial court improperly shifted the legal burden from the White Sox to Ball when it ruled on the White Sox’s motion to dismiss. When considering a motion to dismiss, a court must accept the allegations of the party that might be dismissed as true and consider them in a light most favorable to that party. In other words, Ball’s allegation that he signed the severance agreement due to fraudulent concealment of a discriminatory motive for his termination should have been taken at face value for purposes of deciding that motion, and yet they were not.
The court further determined that, accepting Ball’s construal of events, he did not enter into the release agreement knowingly and voluntarily. If he was really fired due to a discriminatory motive that was fraudulently concealed, that scenario would certainly challenge the validity of the agreement.
In addition to considering the White Sox’s allegedly improper conduct, the court accepted Ball’s allegations that the White Sox deceived him at a time when he was particularly vulnerable. The court took into account the unprecedented context in which Ball signed his agreement, which was the height of the COVID-19 pandemic that resulted in an unprecedented 14.8% unemployment rate.
This case represents a shift in Illinois contract and employment law. Historically, liability waivers within severance agreements have represented an assurance for employers that they need not fret about future liability related to the severed employee. That sigh of relief may have just gotten a bit shallower. Below are some implications of this ruling for both employers and employees going forward.
What Are the Implications for Employers?
- Employers should thoroughly document all progressive discipline, warnings, and coaching provided to employees prior to a termination, which reduces the risk of a valid termination being construed as discriminatory or retaliatory. This is particularly important, given that the Illinois Personnel Records Review Act (“IPRRA”) requires an employer to disclose, upon request, documents supporting its decision to terminate an individual’s employment.
- Upper management should thoroughly review the rationale provided by an employee’s direct manager(s) for termination. This should include interviewing at least one person with relevant knowledge, aside from the decision-making manager when possible, to confirm the basis for discharge.
- If an employer conceals discriminatory motives, any waiver signed under such circumstances may be invalidated. For employers with resources to do so, having an internal equal employment opportunity officer that can receive reports of discrimination, the process of which is clearly communicated to all employees, will go a long way in ensuring a discrimination-free workplace. Even smaller employers should have clear policies outlining the process for reporting discrimination, retaliation, and harassment and should engage in training the necessary employees on handling complaints.
- Employers should provide employees with adequate time to review severance agreements and encourage them to seek legal counsel.
- Employers should avoid only using blanket, boilerplate severance agreements, and rather speak with counsel to craft an iron-clad agreement that complies with any applicable legal requirements.
What Are the Implications for Employees?
- Employees should exercise caution when signing severance agreements and be sure to fully understand the rights they may be waiving. When possible, it is best to speak to an attorney before signing a severance agreement to avoid potential legal pitfalls.
- Employees should always ask their employer for the reasons for their termination and request documentation supporting the termination.
- This court decision is significant because it reinforces the principle that an employer cannot circumvent anti-discrimination laws through deceptive employment practices. If an employee suspects that their firing could have been retaliatory due to protected activity or due to a protected category, they should file an administrative charge with the EEOC or IDHR. If possible, consult with an attorney before doing so.
What’s Next?
Moving forward, the principle is clear in Illinois that an employee may not sign away legal rights as a result of having been misled about a discriminatory termination. The employer, in a sense, forfeits the game.
As for Mr. Ball and the White Sox, now that the appeals court has made its ruling, the matter is sent back to the trial court for adjudication, or the parties may attempt to reach a confidential settlement. As they say: play ball!