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Thursday, March 13, 2014

Park Director Had Authority to Offer Severance Agreement

The question in this case was whether a park district director had authority to enter into a binding severance agreement to terminate an employee without formal action of the park board. An appellate court recently said yes, finding that the severance agreement did not create any new debt or obligation, so did not require formal approval of the park board.  Wheeling Park District v. Arnold, 2014 IL App (1st) 123185.

The executive director of the park district wanted to discharge a park district employee, but gave the employee the opportunity to voluntarily resign in lieu of discharge. The director presented a severance package and agreement and a resignation letter. The employee signed the resignation letter but asked for more time before signing the severance agreement. Eventually, the employee sent a signed copy of the severance agreement to the director, who signed it that same day.

A month later, however, the employee "revoked" the agreement and filed a charge of discrimination against the district. The district then filed a declaratory judgment complaint asking the court to enforce the severance agreement against the employee.

The employee argued that the agreement was not enforceable because the director did not have authority to enter into the agreement without park board approval.  Specifically, the employee claimed that Section 4-6 of the Illinois Park District Code provides that only the park board has the "power to create any debt, obligation, claim or liability."  

The court ruled in favor of the park district, finding that the severance agreement did not create  new debt or obligations, but simply settled an existing disputed claim. As a result, Section 4-6 did not apply, and formal board action was not required. 

Post Authored by Julie Tappendorf, Ancel Glink


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