DISCUSSION
I. Contract Implied in Fact (Count IT)

According to Watts, he turned down another employment offer based on an
assurance by his boss at ATC that Watts would be handling labor relations for ATC
after the proposed layoff. Watts claims that these circumstances show that a contract
implied in fact was formed. Where there is an at will employment contract an

employer can terminate the employee for good cause, bad cause, or no cause. Shelton

v. Ernst & Young, LLP, 143 F. Supp. 2d 982, 991 (N.D. Ill. 2001); Veit v. Village of
Round Lake Park, 521 N.E.2d 145, 147 (Ill. App. Ct. 1998). Under Illinois law, oral
employment contracts are presumed to be “at will” contracts. Kalush v. Deluxe Corp.,
171 F.3d 489, 492 (7th Cir. 1999) (citing McInerney v. Charter Golf, Inc., 680 N.E.2d
1347, 1349 (Ill. 1997)).

However, the presumption that an oral employment contract is “at will” can be
rebutted by showing that: 1) the employer made a “clear and definite promise”, and
2) there was adequate consideration to create a valid contract. Kalush, 171 F.3d at 492
(citing McInerney, 680 N.E.2d at 1349). Also, to have a valid implied in fact contract
under Illinois law there must be a “meeting of the minds,” Barefield v. Village of
Winnetka, 81 F.3d 704, 709(7th Cir. 1996), and the consideration must constitute a

“bargained-for exchange of mutual obligations.” Kalush, 171 F.3d at 492; see also

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contract implied at law and is not applicable where a contract governs parties’ rights);
LaThrop v. Bell Fed. Sav. & Loan, 370 N.E.2d 188, 195 (Ill. 1977). Watts is seeking
to recover in equity for unjust enrichment in addition to his damages recovery and no
such remedy exists in equity or at law. Therefore, we grant ATC’s motion to dismiss
Count IIT.
CONCLUSION
Based on the foregoing analysis, we grant the motion to dismiss Counts II and

Ii.

Charles P. Kocoras

Chief Judge
United States District Court
Dated: _October 17,2002 _
-9-


318 Cll. 1987). However, the clear and definite requirement refers to more than simply
a definite offer of future employment. An employer could promise an employee future
employment for an indefinite term, retain discretion to terminate the employee without
cause, and the contract would still be an at will contract.

The essence of the “clear and definite” requirement can be gleaned from
McInerney which states that the “terms” of the employment contract must be clear and
definite. 680 N.E.2d at 1349. See also Tolmie v. United Parcel Service, Inc., 930 F.2d
579, 580 (7th Cir. 1991) (indicating that terms of an offer of employment must be clear
and definite). There are two separate ways that a contract can be prevented from being
an at will contract. First, the employer could promise not to terminate the employee
without good cause or otherwise limit its ability to terminate the employee. See
Hudson y. Allstate Insurance Co., 93 F.3d 296, 299 (7th Cir. 1996) (addressing
whether there was a clear and definite promise not to terminate without good cause).
Second an employer could agree to a definite duration for the contract which would
also prevent the contract from being an at will contract. See Geva v. Leo Burnett Co.,
Inc., 931 F.2d 1220, 1222 (7th Cir. 1991) (stating that employment relationship is at
will unless there is a defined duration for the employment contract or if contract
“permits termination of employment by employer only under specified

circumstances”); Jespersen v. Minnesota Minning and Manufacturing Co.,700N.E.2d


Barefield, 81 F.3d at 709 (stating that a contract implied in fact must contain all
elements of an express contract).

We note that in support of its assertion that the Watts’ employment was
terminable at will, ATC repeatedly cites Cruse v. Chicago Park District, 95 F.3d 1154
(7th Cir. 1996), and engages in an in depth factual comparison between that case and
the case before us. Cruse however, is an unpublished decision and, pursuant to Local
Circuit Rule 53 of the Seventh Circuit, should not be cited or used as precedent in any
federal court in the Circuit except where there is a claim of res judicata or collateral
estoppel. ATC’s citation of this case and the failure to provide an explanation in a
parenthetical or otherwise indicate that it is an unpublished opinion is to say the least
somewhat misleading. We also note that ATC does not dispute Watts’ assertion that
there was adequate consideration to support a contract implied in fact.

Watts argues that the presumption that the contract between himself and ATC
is at will is rebutted by allegations showing that there was a clear and definite promise
by ATC assuring Watts that he could work for them in the future. Watts bases his
argument on a literal reading of Duldulao v. Saint Mary of Nazareth Hospital Center
where the Illinois Supreme Court first explained the “clear and definite” requirement

Yes,

by stating that the employer’s “statement must contain a promise clear enough that an

employee would reasonably believe that an offer has been made.” 505 N.E.2d 314,

-5-


merit such an inference. See Kalush, 171 F.3d at 492 (holding that at will presumption
was not rebutted because there was no clear and definite promise that the employer
would be “restricted in any way from terminating [the employee’s] employment. . .”).
Thus even when considering the allegations in the light most favorable to Watts, the
terms of the contract for future employment allegedly made by ATC were not clear and
definite enough to justify a finding that the at will presumption is rebutted. Therefore,
we grant the motion to dismiss Count II.

IL. Contract Implied at Law (Count I)

Watts also includes a claim that there was an employment contract implied at
law. A claim based on a contract implied at law is synonymous with a claim involving
unjust enrichment or quantum meruit. Johnson v. Gudmundsson, 35 F.3d 1104, 1114
(7th Cir. 1994). However, Watts defeats its own claim in its response to the motion to
dismiss. Watts states that “ATC’s promise created an enforceable oral contract for
permanent employment . . .” and in the next sentence states “[tJhis is precisely the
situation that calls for the creation of an equitable remedy in the form of an implied-in-
law contract to make certain that injustice does not occur.” An unjust enrichment claim
is not appropriate where a valid contract governs the rights of the parties. Murray v.
Abt Assoc., Inc., 18 F.3d 1376, 1379 (7th Cir. 1994); U.S. v. Broadway Constr., Inc.,

1998 WL 246385, *5-6 (N.D. Ill. 1998) (stating that unjust enrichment is based on a


Minuis Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge Sitting Judge if Oth
or Magistrate Judge Charles P. Kocoras than Aselgned Judge
CASE NUMBER 02 C 4603 DATE 10/17/2002
CASE Watts vs. Advance Transformer Co
TITLE
[In the fotlowing 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:
ql) QO Filed motion of [ use listing in “Motion” box above.]
(2) Oo Brief in support of motion due
(3) Qa Answer brief to motion due. . Reply to answer brief due. .
(4) Oo Ruling/Hearing on _ set for at :
(5) | Status hearing set for 2/18/2003 at 9:30 A.M..
(() a} Pretrial conference[held/continued to] [set for/re-set for] on set for at .
(7) im) Trial{set for/re-set for] on at
(8) o (Bench/Jury tial] [Hearing] held/continued to at
(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) CO Local Rule 41.1 O FRCP41(a\(1) CO FRCP41(a)(2).
a0) 4 {Other docket entry) Ruling held. ENTER MEMORANDUM OPINION; We grant defendant’s
motion (Doc 6-1) to dismiss Counts II and III. All discovery to be completed by February 18, 2003.

al) @ [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required. amber o ties

Notices mailed by judge's staff.

Notified counsel by telephone. OFT dk 2002
wv | Docketing to mail notices. NI ,

Mail AO 450 form. ee Sts dexdtrhany nl

Copy to jude paistrate judge. ieee

 eéetoom za dove si
scT deputy's ae
initials
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1014, 1016 (Ill. 1998) (stating that an agreement is not terminable at will if it is for a
fixed duration, is terminable upon a fixed event, or is terminable only for cause).

In this case Watts claims that he was promised that he would handle labor
relations at ATC after the lay offs. Watts does not allege that he was specifically told
how long into the future that he would be working on labor relations for ATC. No
duration can be reasonably implied from the circumstances listed in the allegations.
Also since there is a presumption of an at will contract, as stated above Watts would
have to show that there was a clear and definite duration established for his assured
future employment. See Eastman v. Chicago Central & Pacific Railroad Co., 930 F.2d
1173, 1177 (7th Cir. 1991) (stating that presumption of at will employment contract
could be rebutted by clear and definite promise as to the duration of future
employment); Weeks v. Samsung Heavy Industries Co., Ltd., 933 F. Supp. 711, 714
(N.D. Ill. 1996) (stating that presumption of at will employment contract can be
overcome by clear and definite promise as to duration of employment); Schoeneck v.
Chicago National League Ball Club, Inc., 867 F. Supp. 696, 702 (N.D. Ill. 1994)
(stating that under Illinois law an offer of employment must be clear and definite as to
duration to avoid being an at will contract). The allegations in this case do not indicate
any definite duration. Also, there are no allegations that ATC promised that it would

not terminate Watts without good cause nor any allegations that would reasonably


“unless it appears beyond a 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). Nonetheless, in order to withstand a motion to dismiss, a complaint must
allege the “operative facts” upon which each claim is based. Kyle v. Morton High
School, 144 F.3d 448, 444-45 (7th Cir. 1998); Lucien v. Preiner, 967 F.2d 1166, 1168
(7th Cir. 1992). The plaintiff need not allege all of the facts involved in the claim and
can plead conclusions. Higgs v. Carter, 286 F.3d 437, 439 (7th Cir. 2002); Kyle v.
Morton High School, 144 F.3d 448, 455 (7th Cir. 1998). However, any conclusions
pled must “provide the defendant with at least minimal notice of the claim,” id., and
the plaintiff cannot satisfy federal pleading requirements merely “by attaching bare
legal conclusions to narrated facts which fail to outline the bases of their claims.”
Perkins, 939 F.2d at 466-67. In deciding a Rule 12(b)(6) motion the court shall
consider the entire complaint and is not required to overlook facts alleged that might
support a dismissal. Hamilton v. O'Leary, 976 F.2d 341, 343 (7th Cir, 1992); Jackson
v. Marion County, 66 F.3d 151, 153 (7th Cir. 1995) (stating that a “plaintiff can plead
himself out of court by alleging facts which show that he has no claim, even though he

was not required to allege them.”).

OQ QQ, ee


terminate the employment of any of the other human resources managers who were all
under 40 years of age. Watts also claims that he told ATC that he would take any
available position with ATC in order to remain employed, but that ATC did not offer
him another position or make any effort to find him another position for which he was
qualified. In addition Watts claims that he received a job offer in 2000 from another
company to be employed as a human resources manager and turned down the offer
because Watts’ boss at ATC assured Watts that he would be handling labor relations
for ATC after the general layoff. Count I of the complaint contains an ADEA claim.
Count II contains a claim based on a state contract implied in fact and Count III
contains a claim based on a state contract implied in law.
LEGAL STANDARD

The purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal
sufficiency of a complaint. Triad Associates, Inc. v. Chicago Hous. Auth., 892 F.2d
583, 586 (7th Cir. 1989). In ruling on a motion to dismiss, the court must draw all
reasonable inferences that favor the plaintiff, construe the allegations of the complaint
in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and
allegations in the complaint. Thompson v. Illinois Dep’t of Prof’ Regulation, 300 F.3d
750, 753 (7th Cir. 2002); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991).

The allegations of a complaint should not be dismissed for a failure to state a claim


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
GREG WATTS,
) pocnered
Plaintiff, ogi 38 nw
vs. ) 02 C 4603
)
ADVANCE TRANSFORMER CO., a division of )
Philips Electronics North America Corporation, —_)
)
Defendant. )
MEM ION

CHARLES P. KOCORAS, Chief District Judge:

This case is before the Court on a motion to dismiss Counts II and ITI of Plaintiff
Greg Watts’ complaint. For the reasons set forth below, we grant the motion to dismiss
Counts II and Il.

BACKGROUND

Plaintiff Greg Watts (“Watts”) was employed by Defendant Advanced
Transformer Company (“ATC”) as a human resources manager from March 1992 to
January 2001. Watts alleges that on or about January 17,2001, ATC laid off Watts and
31 other employees. According to Watts, he was 51 years old at that time and only 3

of the 31 employees terminated were under 40 years ofage. ATC admits that it did not