doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to
relief.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

B. Breach of Contract

McDermott's complaint alleges that the Handbook constituted a contract of employment between
himselfand Alcoa. Alcoa argues that McDermott's complaint fails to state a claim for breach of contract
because the Handbook does not constitute a contract as a matter of law. We agree. In order for an
employee handbook to constitute a contract of employment, the following three elements must be
present:

First, the language of the policy statement must contain a promise clear enough that an

employee would reasonably believe that an offer has been made. Second, the statement

must be disseminated to the employee in such a manner that the employee is aware of

its contents and reasonably believes it to be an offer. Third, the employee must accept

the offer by commencing or continuing to work after learning of the policy statement.

Doe v, First Nat'l Bank of Chicago, 865 F.2d 864, 872 (7th Cir. 1989) (quoting Duldulao

v. St. Mary of Nazareth Hosp. Center, 505 N.E.2d 314, 318 (Ill. 1987).

A disclaimer in an employee handbook, however, can foreclose contract formation by demonstrating that
the employer did not make a clear promise of continuing employment. See Workman v. United Parcel
Serv., Inc., 234 F.3d 998, 1000 (7th Cir. 2000). Indeed, “a disclaimer, if clear and forthright ... is a
complete defense to a suit for breach of contract based on an employee handbook.” Jd.; see also
Freeman v, Chicago Park District, 189 F.3d 613, 617 (7th Cir. 1999).

The Handbook Alcoa provided to McDermott contains a disclaimer that is both clear and
forthright. The disclaimer appears on the first page of the Handbook under the heading “Introduction.”
The disclaimer explicitly states that the Handbook “is not intended to be an employment contract,
promise, or guarantee of any kind or to contain all information employees need to know.” In Workman

v. United Parcel Service, Inc., the Seventh Circuit explained that where an employee handbook

expressly disclaims creating an employment contract, the handbook need not additionally state that the

9 rr ere pr ST ee ir cine tam


published or of some other person is involved; or (3) a recognized interest of the public is involved. See
Kuwik v. Starmark Star Marketing & Admn., Inc., 619 N.E.2d 129, 133 (Ill. 1993) (citing S. Harper et
al., The Law of Torts §5.25, at 216 (2d ed. 1986)). In order “[t]o overcome the privilege, the plaintiff
has to plead . . . that the statements were made with actual malice.” Krasinski v. United Parcel Serv.,
Inc., 530 N.E.2d 468, 471 (il. 1988). The plaintiff must therefore “plead . . . that the statement was
made with knowledge of its falsity or in reckless disregard of whether it was true or false.” Jd. (citations
omitted).

We agree with Alcoa's contention that a qualified privilege applies to Glazer’s comments to
Benning. Glazer, as the director of the personne} department, had an interest in articulating the reasons
for McDermott's termination. Benning had a similar interest in the reasons for McDermott's termination
given his dual role as McDermott's supervisor and the person who informed McDermott that he was
being fired. Conversely, we find that McDermott has not sufficiently pled that Glazer made the
statements to Benning with actual malice. McDermott's complaint states that Alcoa's “actions were
undertaken with the malicious intent to harm McDermott's reputation and lower him in the eyes of the
community or deter third-persons from associating with or hiring him.” McDermott's complaint does
not aver that Glazer made the remarks to Benning knowing they were false, or in reckless disregard of
their truth or falsity. Indeed, McDermott's complaint fails to even allege that Glazer's statements were

false. Accordingly, we dismiss McDermott's claim for defamation.


reasonably justify immediate discharge.” The Handbook states that “[vJiolations of Company policies
or rules, unproductive or incompetent performance, or other actions that are detrimental to the Company
cannot be condoned.” Consequently, the Handbook explains that misconduct involving “a violation of
Company policy, procedures, programs, rules, instruction, past practice, etc., or that is detrimental to the
Company, customers, or employees, or performance that does not meet standards may result in discipline
up to and including discharge.”

On February 22, 2002, Robert Benning, McDermott's supervisor, told McDermott that he was
being fired. Benning explained that Jeff Glazer, then director of the personnel department, had told him
that McDermott was being terminated because he “talked back” and was “disrespectful to his
supervisor,” that he “lost product” and was “incompetent” in inventory control and employee
supervision, and that he was “authorizing excessive overtime” and allowing others to “sleep on the job.”
McDermott subsequently filed the two count amended complaint presently before us. McDermott first
claims that the above described Handbook constitutes an employment contract, which Alcoa breached
when it fired him on February 22, 2002. McDermott secondly alleges that Alcoa defamed him per se
when Glazer explained to Benning why McDermott was being fired.

U. ANALYSIS

A. Standard of Review

The purpose of a motion to dismiss under Rule 12 (b)(6) is to decide the adequacy of the
complaint, not the merits of the case. See Gibson v. City af Chicago, 910 F.2d 1510, 1520 (7th Cir.
1990). In considering a motion to dismiss, we must accept all well-pled allegations in the complaint as
true and draw all reasonable inferences in the plaintiff's favor. See MCM Partners, Inc. v. Andrews-
Bartlett & Assoc., Inc., 62 F.3d 967, 972 (7th Cir. 1995), aff'd 161 F.3d 443 (7th Cir. 1998), cert. denied

528 U.S. 810 (1999). Therefore, a complaint should not be dismissed “unless it appears beyond all


employment is at will. See 234 F.3d at 1001. Nonetheless, the Handbook at issue in this case
additionally states that “employment is ‘at-will’ and is for no definite or specified period, regardless of
the time and manner of payment of wages or salary.”

McDermott insists that Alcoa fired him without notice and without an opportunity to contest
Alcoa's accusations that he violated Company rules or policies. However, the very nature of at-will
employment dictates that “an employee can be discharged for any reason or none at all.” Brandon v.
Anesthesia & Pain Management Associates Ltd., 277 F.3d 936, 940 (7th Cir. 2002) (citing Pratt v.
Caterpillar Tractor Co., 500 N.E.2d 1001, 1002 (1986)). Indeed, the Handbook does not require Alcoa
to take certain steps when disciplining an employee. Although the Handbook contains “Disciplinary
Action Guidelines,” which list various types of inappropriate conduct, it notes that the list is “not
intended to include all rules of conduct and the Company shall, when it deems appropriate, change them,
establish additional rules or eliminate some with or without notice.” The Handbook also lists
“Corrective Action Procedures,” which it describes as “guidelines,” that may be applied in instances of
employee misconduct. The Handbook explains that misconduct involving “a violation of Company
policy, procedures, programs, rules, instruction, past practice, etc., or that is detrimental to the Company,
customers, or employees, or performance that does not meet standards may result in discipline up to and
including discharge.” Alcoa exercised its discretion to hire and fire when it terminated McDermott for
his misconduct. In light of the Handbook's clear and forthright disclaimer and its provision for at-will

employment, we dismiss McDermott's claim for breach of contract.”

?McDermott asserts that Alcoa's failure to provide him with any separation pay, benefits, or
other compensation effect upon his termination breached the Huck International, Inc. Employee
Separation Plan (“Plan”). The introductory paragraph on the first page of the Plan states “[i]n the
event of involuntary job loss due to a reduction in force, the Company provides separation pay
benefits as unemployment income assistance.” The Plan specifically lists that it does not provide
benefits for an “[iJnvoluntary termination of employment for violation of a Company rule of conduct
or policy.” McDermott was not entitled to any benefits under the Plan because Alcoa terminated

5



D. CONCLUSION

For the foregoing reasons, Alcoa's mi

granted. It is so ordered.

Dated l Vi 30/0 3

ISD amended complaint is

MARVIN E. ASPEN _

United States District Judge



Minute Order Rorm (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge i Sitting Judge if Other
OF Magistrate Judge Marvin Aspen than Assigned Judge
CASE NUMBER 02 C 8063 DATE 1/30/2003
CASE Mark McDermott vs. Continental/Midland, Inc., et al
TITLE
[in the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.] °
DOCKET ENTRY:
qd) im Filed motion of [ use listing in “Motion” box above.]
(2) a Brief in support of motion due
(3) oO Answer brief to motion due, ; Reply to answer brief due. .
(4) q Ruling/Hearing on set for at
(5) Q Status hearing[held/continued to] [set for/re-set for} on set for at
(6) Oo Pretrial conference{held/continued to] [set for/re-set for} on set for at :
(7) a) Trial{set for/re-set for] on at
(8) Oo [Bench/Jury trial] [Hearing] held/continued to at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to)
COFRCP4(m) OLocal Rule 41.1 COFRCP41(a\(1) CFRCP4i(a)(2).
ao [Other docket entry} Enter Memorandum Opinion and Order: Alcoa’s motion to dismiss (3-1) is
granted,
(a1) @ [For further detail see order attached to the original minute order.]

No notices required, advised in open court.
No notices required.

Notices mailed by judge's staff.

Notified counse! by telephone.

Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

courtroom
GL deputy’s
initials

Luna J

60:2 td OF usr tu

ceabatcick ome 4

Document.

mailing deputy initials



Cc Defamation

McDermott's complaint also alleges that Alcoa defamed him per se when Jeff Glazer, then
personnel department director, told Robert Benning, McDermott's supervisor, that McDermott was being
terminated because he “talked back” and was “disrespectful to his supervisor,” that he “lost product” and
was “incompetent” in inventory control and employee supervision and that he was “authorizing
excessive overtime” and allowing others to “sleep on the job."> McDernott's complaint adds that
Alcoa's “actions were undertaken with the malicious intent to harm McDermott's reputation and lower
him in the eyes of the community or deter third-persons from associating with or hiring him.” To state
aclaim for defamation, a plaintiff must allege that “(1) the defendant made a false statement about the
plaintiff, (2) there was an unprivileged publication of a defamatory statement to a third party with fault
by the defendant, and (3) the publication damaged the plaintiff.” Parker v. House O'Lite Corp., 756
N.E.2d 286, 291-92 (IH. App. Ct. 2001). McDermott's complaint fails to sufficiently plead the first and
second elements ofa claim for defamation. McDermott's complaint first fails to allege that the Glazer's
remarks about him were false. That failure alone warrants the dismissal of McDermott’s claim for
defamation. However, McDermott's complaint secondly fails to sufficiently plead the that the statements
Glazer made to Benning were unprivileged.

Under Illinois law, a qualified privilege exists when: (1) some interest of the person who

publishes the defamatory matter is involved; (2) some interest of the person to whom the matter is

him for violations of Alcoa's rules of conduct and policies.

IMcDermott's complaint does not document any other publication of these or other
accusations to a third party. In his response to Alcoa's motion to dismiss, McDermott asserts that the
“statements made by Alcoa regarding McDermott's employment performance and conduct, were
published throughout the management structure, including the human resources personnel, at
McDermott's place of employment.” The only publication to a third party McDermott's complaint
contains is Glazer's conversation with Benning regarding the reasons for McDermott's termination.
As discussed infra, however, these statements were neither defamatory per se nor unprivileged,

6


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

MARK McDERMOTT,

DOCKETED

Plaintiff, JAN 3 1 2003

Case No. 02 C 8063

CONTINENTAL/MIDLAND, INC.,

a Delaware corporation, individually and d/b/a
HUCK FASTENERS, HUCK INTERNATIONAL,
INC., a Delaware corporation, KORE II, INC.,

an Illinois corporation d/b/a HUCK FASTENERS II,
and ALCOA, INC., a Pennsylvania corporation,

Nee eee)

Defendants.

Mi (DUM.
MARVIN E. ASPEN, District Judge:

Plaintiff, Mark McDermott, filed a complaint against Defendants alleging breach of contract and
defamation in the Circuit Court of Cook County, Illinois, Because of the diversity of the parties and the
amount in controversy, Defendant Alcoa removed the case to this Court pursuant to 28 U.S.C. §§1332
and 1441. Before us is Alcoa's motion to dismiss both counts of McDermott's amended complaint. For
the reasons stated below, we grant Alcoa's motion.

L BACKGR« ID

The following factual allegations are taken from McDermott's amended complaint and are
deemed true for the purpose of Alcoa's motion. In September 1986, Midwest Fastener Corporation
(“Midwest”) hired Mark McDermott as a Manufacturing Supervisor. Midwest promoted McDermott

to the position of Distribution Manager in June 1989. In early January 2001, Alcoa acquired possession

\(0



of and assumed control over Midwest, its accounts, workforce, and other assets.! McDermott continued
to work as a Distribution Manager until February 22, 2002 at which time Alcoa terminated his
employment.

While employed by Alcoa, McDermott received an employee handbook (“Handbook”). The
Handbook contains a disclaimer that appears on the bottom of the first page under the heading
“Introduction.” The disclaimer sets forth that the “Handbook is intended to provide employees with a
general understanding of the Company's personnel policies, work rules and benefits and itis not intended
to be an employment contract, promise, or guarantee of: any kind or to contain all information employees
need to know.” The Handbook adds that Alcoa “reserves the Tight to change or revoke any of its
benefits, conditions or privileges of employment, policies, practices, procedure or guidelines contained
[here]in . . . at any time with or without notice or for any reason and without a written revision of the
Handbook.” The Handbook explains that “employment is ‘at-will’ and is for no definite or specified
period, regardless of the time and manner of payment of wages or salary.”

The Handbook contains “Disciplinary Action Guidelines.” According to the guidelines, “[i]t is
the responsibility of every Supervisor to fairly evaluate employees conduct and to administer discipline
when necessary.” Although the Handbook lists various types of inappropriate conduct, it notes that the
list is “not intended to include all rules of conduct and the Company shall, when it deems appropriate,
change them, establish additional rules or eliminate some with or without notice.” The Handbook
further lists “Corrective Action Procedures.” The Handbook does not mandate that the procedures be
applied in an instance of employee misconduct. Rather, the Handbook describes the procedures as

“guidelines,” noting that “[s]ome forms of misconduct are normally considered so improper as to

‘At the time, Continental/Midland, Inc., Kore II, Inc. and Huck International, Inc. were
subsidiaries of Alcoa, Upon its purchase of Midwest Fastener Corporation, Alcoa renamed its new
acquisition Huck Fasteners, Inc.