Court Opinion

ID: 3146487
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:17:03.40179+00
Date Added: 2024-06-11T12:07:28.844728
License: Public Domain

Second Division
                                              November 13, 2007

No. 1-06-0239

GARY ROSS,                          )    Appeal from the
                                    )    Circuit Court
          Plaintiff-Appellant,      )    of Cook County.
                                    )
                                    )
     v.                             )    No. 04 L 005796
                                    )
MAY COMPANY d/b/a                   )    Honorable
Marshall Field'S and Company,       )    Abishi C. Cunningham
                                    )    Judge Presiding.
          Defendant-Appellee.       )

     JUSTICE HALL delivered the opinion of the court:

     Plaintiff-employee Gary Ross appeals from the trial court's

order dismissing his third amended complaint pursuant to sections

2-615(a) and 2-619(a)(9) of the Illinois Code of Civil Procedure

(Code) (735 ILCS 5/2-615(a), 2-619(a)(9) (West 2002)).     Plaintiff

argues that defendant-employer, May Company, d/b/a Marshall

Field's and Company, breached his employment contract when it

wrongfully terminated him by failing to discharge him in

accordance with terms set forth in defendant's 1968 employee

handbook, which, he maintains, created an implied-in-fact

employment contract between him and defendant.    He also argues

that his termination was in violation of certain oral

representations made by an agent of defendants.

     The pleadings, affidavit, and other documentary information

presented to the trial court reveal the following facts relevant

to this appeal.   Plaintiff was suspended and later terminated
1-06-0239

apparently as a result of drawing pictures depicting a female

coworker in various violent situations.

     Plaintiff drew stick figures depicting the coworker being

electrocuted, boiled, guillotined, run over by a train, shot out

of a canon, tied to a rocket, and standing precariously under a

10,000 pound weight.   The coworker's son brought the pictures to

the attention of defendant.   Defendant suspended plaintiff and

told him to see a psychologist.

     Plaintiff alleged that after two visits, the psychologist

found he was not a threatening individual and determined that he

required no treatment other than perhaps treatment for suffering

from depression as a result of the suspension and possible loss

of a job he had held for nearly 40 years.   Shortly thereafter,

defendant terminated plaintiff.

     Plaintiff claimed he was terminated without cause and was

not afforded an appeal or review of the decision.   Plaintiff

sought recovery under a theory of breach of contract based upon

the 1968 employee handbook.   Plaintiff also sought recovery under

a theory of promissory estoppel, contending that he reasonably

relied on promissory language contained in the employee handbook

and on certain oral representations made by defendant's agent.

     The overriding issue in this appeal is whether, even if the

1968 employee handbook defendant issued to plaintiff gave rise to

an employment contract altering plaintiff's status from an at-

will employee to an employee who could only be terminated through

                                  -2-
1-06-0239

the use of progressive discipline as articulated in the handbook,

did disclaimers inserted in revised handbooks modify the

employment contract and convert him to an at-will employee.    Our

review convinces us that the disclaimers did not modify

plaintiff's employment contract because he received no

consideration.

     Under Illinois law, an employee hired without a fixed term

is presumed to be an at-will employee whose employment may be

terminated for any cause or reason, provided the employer does

not violate clearly mandated public policy. Duldulao v. Saint

Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 489, 505
N.E.2d 314 (1987).   Our supreme court crafted an exception to

this rule where " 'an employee handbook or other policy statement

creates enforceable contractual rights if the traditional

requirements for contract formation are present.' " Vickers v.

Abbott Laboratories, 308 Ill. App. 3d 393, 407, 719 N.E.2d 1101

(1999), quoting Duldulao, 115 Ill. 2d at 490.

     Three requirements must be met for an employee handbook or

policy statement to form an employee contract.   "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

                                -3-
1-06-0239

work after learning of the policy statement." Duldulao, 115 Ill.
2d at 490.   When these requirements are met, "then the employee's

continued work constitutes consideration for the promises

contained in the statement, and under traditional principles a

valid contract is formed." Duldulao, 115 Ill. 2d at 490.

     In this case, the trial court determined that promissory

language set forth in the 1968 employee handbook defendant issued

to plaintiff along with oral assurances of job security by

defendant's agent created an employment contract between

defendant and plaintiff, altering plaintiff's at-will status and

binding defendant to certain procedures before it could terminate

plaintiff's employment.   However, the court went on to dismiss

plaintiff's breach of contract claim pursuant to section 2-

619(a)(9) of the Code, finding that disclaimers contained in

revised employee handbooks issued to plaintiff served to

invalidate his previously existing employment contract.    The

trial court also dismissed plaintiff's promissory estoppel claim

pursuant to sections 2-615(a) and 2-619(a)(9) of the Code,

concluding that disclaimer language set forth in revised employee

handbooks issued to plaintiff made it impossible for him to

establish that his reliance on defendant's agent's oral

assurances of job security was reasonable.

     Review of the record and relevant case law indicates the

trial court erred in dismissing plaintiff's breach of contract

claim pursuant to section 2-619(a)(9) of the Code.   A motion to

                                -4-
1-06-0239

dismiss brought under this section of the Code admits the legal

sufficiency of the claim but asserts an affirmative matter that

defeats the claim or operates to avoid its legal effect. Smith v.

Waukegan Park District, 373 Ill. App. 3d 626, 629, 869 N.E.2d
1093 (2007).   Affirmative matter in this context "encompasses any

defense other than a negation of the essential allegations of the

plaintiff's cause of action." Kedzie & 103rd Currency Exchange,

Inc. v. Hodge, 156 Ill. 2d 112, 116, 619 N.E.2d 732 (1993).     If a

cause of action is dismissed pursuant to a section 2-619(a)(9)

motion, the question on appeal is whether the "existence of a

genuine issue of material fact should have precluded the

dismissal or, absent such an issue of fact, whether dismissal is

proper as a matter of law." Kedzie & 103rd Currency Exchange,

Inc., 156 Ill. 2d at 116-17.   Our standard of review is de novo.

Adams v. American International Group, Inc., 339 Ill. App. 3d
669, 673, 791 N.E.2d 26 (2003).

     The affirmative matter defendant raises in this case is

disclaimer language inserted in revised handbooks issued to

plaintiff in 1987 or 1989.   Defendant maintains that disclaimers

set forth in employee handbooks issued to plaintiff in the late

1980s unilaterally modified plaintiff's employment contract,

converting him to an at-will employee.   Plaintiff counters that

the disclaimers did not modify his employment status because they

were not supported by consideration.

     The trial court determined that new benefits defendant

                                  -5-
1-06-0239

offered to plaintiff and his coemployees in 1990 constituted

consideration for the unilateral modification of plaintiff's

employment contract.   The new benefits consisted of paid personal

days, short, and long-term disability, an insurance reimbursement

plan, and a supplemental retirement savings plan.   Plaintiff

accepted the new benefits and enrolled in the new long-term

disability plan and in the enhanced supplemental retirement

savings plan.   The trial court found that plaintiff benefitted

from the new employee benefits while there was a detriment to

defendant in that it incurred costs in implementing the new

benefits.

     Plaintiff acknowledges that he experienced a benefit by

receiving the enhanced pension and other new benefits.   However,

he maintains that the new benefits he received from defendant did

not serve as consideration supporting the unilateral modification

of his employment contract because they were offered to all

eligible employees and there was never any bargained-for exchange

between him and defendant in which he agreed to modify or

terminate his contract rights in exchange for the benefits.     We

agree.

     "[M]odification of a contract is a change in one or more

respects that introduces new elements into the details of the

contract and cancels others, but leaves the general purpose and

effect undisturbed." Nebel, Inc. v. Mid-City National Bank of

Chicago, 329 Ill. App. 3d 957, 964, 769 N.E.2d 45 (2002).   "[N]o

                                -6-
1-06-0239

contract can be modified [or amended] in ex parte fashion by one

of the contracting parties without the knowledge and consent of

the remaining party to the agreement." Schwinder v. Austin Bank

of Chicago, 348 Ill. App. 3d 461, 469, 809 N.E.2d 180 (2004).     "A

valid modification must satisfy all criteria essential for a

valid contract, including offer, acceptance, and consideration."

Nebel, Inc., 329 Ill. App. 3d at 964; Doyle v. Holy Cross

Hospital, 186 Ill. 2d 104, 113, 708 N.E.2d 1140 (1999).

     The essential element of consideration is a bargained-for

exchange of promises or performances that may consist of a

promise, an act, a forbearance, or the creation, modification, or

destruction of a legal relation. Restatement (Second) of

Contracts §71 (1981); Martin v. Federal Life Insurance Co., 109
Ill. App. 3d 596, 601, 440 N.E.2d 998 (1982).   A bargained-for

exchange exists if one party's promise induces the other party's

promise or performance. Boomer v. AT & T Corp., 309 F.3d 404, 416

(7th Cir. 2002) (applying Illinois law).

     "A performance or return promise is bargained for if it is

sought by the promisor in exchange for his promise and is given

by the promisee in exchange for that promise." Hartbarger v. SCA

Services, Inc., 200 Ill. App. 3d 1000, 1012, 558 N.E.2d 596

(1990), quoting Restatement (Second) of Contracts §71, at 172

(1981).   In the employer-employee context, consideration will be

found when an employer and its employees make a "bargained for

exchange to support [the employees'] *** relinquishment of the

                                -7-
1-06-0239

protections they were entitled to under the existing contract."

Doyle v. Holy Cross Hospital, 289 Ill. App. 3d 75, 80 (1997),

aff'd, 186 Ill. 2d 104, 708 N.E.2d 1140 (1999).

     Here, defendant does not contend that it bargained for

plaintiff to modify his employment status and become an at-will

employee.    In this case, there was no bargained-for exchange, and

no promises were made where plaintiff agreed to relinquish his

contractual rights in exchange for the new benefits.     The

additional benefits, which were offered in 1990, were in no way

related to, bargained for, or referenced to any preexisting

contractual rights; the benefits were offered to all eligible

employees whether or not they possessed contractual rights.

     Defendant acted unilaterally, not in a bargained-for

exchange, when it offered the additional benefits to its

employees.   No consideration flowed from defendant to plaintiff

to compensate him for relinquishing the protections he enjoyed

under the 1968 employee handbook.      Under these circumstances, the

additional benefits defendant offered plaintiff and his

coemployees did not constitute consideration for the unilateral

modification of plaintiff's employment contract. See Robinson v.

Ada S. McKinley Community Services, Inc., 19 F.3d 359 (7th Cir.

1994) (employer's issuance of a revised employee handbook

containing a disclaimer did not have the effect of modifying an

original employment contract in the absence of a bargained-for

exchange).

                                 -8-
1-06-0239

     "In the typical bargain, the consideration and the promise

bear a reciprocal relation of motive or inducement: the

consideration induces the making of the promise and the promise

induces the furnishing of the consideration." Restatement

(Second) of Contracts §71, Comment b, at 173 (1981).     Here, there

was no reciprocal agreement or consideration.

     When defendant distributed the 1987/1989 revised handbooks

containing the disclaimers allowing for the unilateral

modification or termination of plaintiff's employment contract,

it did not bargain with him or other pre-1987 employees who had

contractual rights under the old employee handbooks, did not ask

for or obtain their assent, and did not purport to provide any

consideration other than their continued employment.   However,

our courts have determined that mere continued employment,

standing alone, does not constitute consideration supporting the

unilateral modification of an existing employment contract.

Doyle, 186 Ill. 2d at 113-14.   In sum, the trial court erred in

dismissing plaintiff's breach of contract claim pursuant to

section 2-619(a)(9) of the Code.

     Before leaving this issue, we note that defendant has

expressed concern that adopting plaintiff's arguments would lead

to a logistical nightmare for employers where they would be

required to individually bargain with each employee any time they

wished to change policies or give better benefits.   Defendant's

concerns are exaggerated.

                                -9-
1-06-0239

     Our decision is not novel.    It is well settled that a

contract, once made, must be performed according to its terms and

that any modification of those terms must be made by mutual

assent and for consideration. Lindsey v. Rosen, 255 Ill. App. 21,

26 (1929).   In addition, we find instructive the approach taken

by another jurisdiction that has considered the issue. See Brodie

v. General Chemical Corp., 934 P.2d 1263, 1268 (Wyo. 1997)

(employer's concern about negotiating employment contracts on an

individual basis not significant enough to risk employees losing

their valuable contract rights if employer were allowed to

unilaterally modify handbook provisions and restore employees to

at-will status without additional consideration to employees).

     In regard to plaintiff's promissory estoppel claim, review

of the record and relevant case law indicates the trial court did

not err in dismissing this claim pursuant to sections 2-615(a)

and 2-619(a)(9) of the Code.    "A motion to dismiss brought

pursuant to section 2-615(a) of the Code attacks the legal

sufficiency of the complaint based on defects apparent on the

face of the complaint." W.W. Vincent & Co. v. First Colony Life

Insurance Co., 351 Ill. App. 3d 752, 756, 814 N.E.2d 960 (2004).

     The question to be decided when ruling on such a motion is

whether the allegations of the complaint, when viewed in the

light most favorable to the plaintiff, are sufficient to state a

cause of action upon which relief can be granted. W.W. Vincent &

Co., 351 Ill. App. 3d at 757.    "A cause of action should be

                                -10-
1-06-0239

dismissed pursuant to a section 2-615 motion only if it is

clearly apparent that no set of facts can be proven which will

entitle the plaintiff to recovery." Byung Moo Soh v. Target

Marketing Systems, Inc., 353 Ill. App. 3d 126, 129, 817 N.E.2d
1105 (2004).   Again, our standard of review is de novo. Adams,
339 Ill. App. 3d at 673.

     Promissory estoppel is "an equitable device invoked to

prevent a person from being injured by a change in position made

in reasonable reliance on another's conduct." Kulins v. Malco, a

Microdot Company, Inc., 121 Ill. App. 3d 520, 527, 459 N.E.2d
1038 (1984).   To establish a claim based upon promissory

estoppel, a plaintiff must allege and prove that "(1) defendants

made an unambiguous promise to plaintiff, (2) plaintiff relied on

such promise, (3) plaintiff's reliance was expected and

foreseeable by defendants, and (4) plaintiff relied on the

promise to its detriment." Quake Construction, Inc. v. American

Airlines, Inc., 141 Ill. 2d 281, 310, 565 N.E.2d 990 (1990).      A

plaintiff's reliance must be reasonable and justifiable. Quake

Construction, Inc., 141 Ill. 2d at 310.

     In his promissory estoppel claim, plaintiff alleged that he

detrimentally relied on a manager's statements that he would

remain employed as long as he wanted to work.   The trial court

determined that based upon these allegations, plaintiff had not

sufficiently alleged the elements for promissory estoppel because

he could not establish that he reasonably relied upon the

                               -11-
1-06-0239

statements in foregoing other possible employment opportunities,

where every employee handbook issued to plaintiff since 1990

contained an explicit disclaimer informing employees that the

only person who could alter their employment status was the

senior vice president of human resources.    The trial court also

held that plaintiff was unable to satisfy the third element of

promissory estoppel because he could not establish that

defendants would have expected or foreseen that he would rely on

the statements where disclaimers in every handbook plaintiff

received since 1990 contained an explicit disclaimer informing

employees that the only person who could alter their at-will

employment status was the senior vice president of human

resources.    The record indicates the trial court did not err on

this issue.

     Accordingly, for the reasons set forth above, we affirm that

portion of the circuit court's order dismissing plaintiff's

promissory estoppel claim pursuant to sections 2-615(a) and 2-

619(a)(9) of the Code; we reverse that portion of the circuit

court's order dismissing plaintiff's breach of contract claim

pursuant to section 2-619(a)(9) of the Code, and we remand the

cause for further proceedings consistent with this order.

     Affirmed in part and reversed in part; cause remanded.

     HOFFMAN, P.J., and SOUTH, J., concur.

                                -12-