Liquidated Damage Clauses can be included in any employee's
contract. Inclusion of such a provision may decrease the chance
of a surprise early termination. However, the limited legal
authority in Illinois relating to this issue and statutory traps for
the unwary school district make implementation of such provisions
challenging.
I. Legal Authority for Liquidated Damage Provisions
A. No express statutory authority
B. Arduini v. Board of Education of Pontiac Township High School (418
N.E. 2D, 104 III. App. Ct. 1981)
II. Scope of Liquidated Damage Clauses
A. Should bear some relationship to
actual cost of early termination
B. Should be “Uniform” for Teachers (105 ILCS 5/24-11)
1. Fixed Amount
2. Percentage of Salary
III. Traps for the Unwary
A. Non-uniform provisions may violate
Section 24-11
B. Should be made concurrently with other “favorable” contract changes
C. Adjustments should be made prior to statutory renewal and “RIF”
deadlines