Court Opinion

ID: 9940665
Source: CourtListenerOpinion
Date Created: 2024-02-14 21:06:10.779649+00
Date Added: 2024-06-11T13:45:19.869248
License: Public Domain

2024 IL App (1st) 230127-U

                                                                                THIRD DIVISION
                                                                                 February 14, 2024

                                          No. 1-23-0127

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
limited circumstances allowed under Rule 23(e)(1).

                                         IN THE
                              APPELLATE COURT OF ILLINOIS
                                FIRST JUDICIAL DISTRICT

 SHEILA O’GRADY,                                            )   Appeal from the Circuit Court of
                                                            )   Cook County.
        Plaintiff-Appellee,                                 )
                                                            )
 v.                                                         )   No. 2020 L 013005
                                                            )
 SSI (U.S.), INC. d/b/a SPENCER STUART; and                 )
 DAVID RASMUSSEN;                                           )
                                                            )   Honorable Jerry A. Esrig,
        Defendants-Appellants.                              )   Judge, presiding.

       JUSTICE D.B. WALKER delivered the judgment of the court.
       Justices Lampkin and Van Tine concurred in the judgment.

                                             ORDER

¶1     Held: This court improvidently granted the interlocutory appeal under Supreme Court
             Rule 308 because the question presented encompasses factual issues inappropriate
             for consideration under Rule 308 and the matter does not otherwise satisfy Rule
             308 requirements. We vacate our previous order and dismiss this appeal.

¶2     Plaintiff Sheila O’Grady filed a complaint alleging, inter alia, violations of the Illinois

Wage Payment and Collection Act (the Act) against her former employer, defendant SSI (U.S.),

Inc. (SSI), and SSI’s general counsel, defendant David Rasmussen. Defendants moved to dismiss

the complaint, which the trial court denied in part as to plaintiff’s claim brought under the Act and
No. 1-23-0127

granted in part as to other claims. 1 The court then denied defendants’ motion to reconsider but

certified the following question for interlocutory appeal pursuant to Illinois Supreme Court Rule

308 (eff. Oct. 1, 2019): “Does an employer violate the *** Act when it refuses to pay an earned

bonus to a former employee because the amount of the bonus could not be calculated until after

the termination of the employee’s employment and after the next regularly scheduled payday?”

¶3     On February 17, 2023, a different panel of this division granted defendants’ application for

interlocutory appeal. For the following reasons, we vacate our prior order that granted defendants’

application, deny defendants’ application, and dismiss this appeal. 2

¶4                                       BACKGROUND

¶5     On December 30, 2021, plaintiff filed her second amended complaint, which is the

operative pleading in this appeal. Count III of plaintiff’s second amended complaint alleged that

SSI violated the Act for failure to pay her final compensation, including her “earned bonuses.”

Count IV was substantially the same as count III but alleged that Rasmussen violated the same

provisions of the Act “in the manner set forth in Count III.” Our factual recitation therefore

primarily relies upon both the allegations common to all counts and those with respect to count III.

¶6     Plaintiff’s complaint alleged that she began working for SSI in April 2012 as a consultant

providing executive searches and related services to SSI’s corporate clients. Plaintiff worked

continuously for SSI until September 9, 2019, when she provided notice of her resignation and her

intention to start working for another employer. Although plaintiff stated that she would continue

to work at SSI for “several more weeks” to finish various outstanding projects and transition her

       1
           Although the court also denied defendants’ motion to dismiss a claim alleging a
fraudulent filing of Internal Revenue Service (IRS) Form 1099B (count VII), it subsequently
granted plaintiff’s voluntary dismissal of that count.
       2
         This appeal has been resolved without oral argument upon the entry of a separate written
order pursuant to Illinois Supreme Court Rule 352(a) (eff. July 1, 2018).

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No. 1-23-0127

clients to other SSI consultants, plaintiff discovered that she could no longer access her work files

or e-mail at the end of September 9, 2019. On September 12, 2019, plaintiff met with Rasmussen,

who informed her that SSI would waive various restrictive covenants in her employment

agreement with SSI, and that SSI would consider her resignation effective as of September 9, 2019.

¶7     SSI’s compensation system provided that plaintiff earned credit for executive placements

that were invoiced and paid during the fiscal year. The compensation model, which plaintiff

characterized as “commission-based,” focused on three factors: “O” (for “Origination,” the

developing of “personal and institutional relationships that lead to new business opportunities”),

“C” (for “Conversion,” the persuading of a client that SSI has “the best team to execute a given

assignment and thereby win the mandate”), and “E” (for “Execution,” the rewarding of the team

that “together, manage the specific client relationship and deliver the solution to the client”).

¶8     SSI would then take a weighted average (“WA”) of the three factors (resulting in the

ungainly acronym “WAOCE”) and further multiply this weighted average by an additional

coefficient (the “MRI factor”) to account for, inter alia, “economic differences” across SSI offices.

According to plaintiff, SSI selected the MRI factor “at the outset of each fiscal year.” The eventual

“MRI-Adjusted WAOCE” value of a consultant would then be placed within one of several

categories (termed, “competitive bands”) from which a “gross payout rate” would be applied.

¶9     Plaintiff alleged that she had learned early on that the MRI-Adjusted WAOCE was merely

multiplied by the gross payout rate to arrive at a consultant’s overall compensation, from which

deductions were made for the base salary and certain employee benefits provided by SSI. This

resulting difference constituted the “OCE Bonus.” Plaintiff added that the bonus payments were

a significant part of her compensation and that she would receive a monthly report entitled, “OCE

for Bonus Model Report.” She attached to her complaint the report dated August 31, 2019, which

reflected a WAOCE of $1,876,787 and a MRI-adjusted WAOCE of $2,815,182 for the period

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beginning October 1, 2018, and ending August 31, 2019. This latter amount placed plaintiff in the

middle of the competitive bands, resulting in a 2019 gross payout rate of between 41%-43%.

Plaintiff thus stated that she was entitled to an OCE earned bonus (net of her base salary of various

SSI-paid benefits) of $614,000, as well as other statutory damages, costs, and attorney fees.

¶ 10   Defendants filed a motion to dismiss plaintiff’s second amended complaint.3 On June 27,

2022, the trial court granted defendants’ motion in part. The court denied defendants’ motion as

to counts III and IV (alleging a failure to pay “earned bonuses” in violation of the Act against SSI

and Rasmussen, respectively) and as to count VII (alleging the fraudulent filing of IRS Form 1099-

B against SSI). The court granted defendants’ motion in all other respects.

¶ 11   On June 28, 2022, defendants filed a motion to reconsider. In their motion and at the

December 2, 2022 hearing on their motion, defendants argued in part that the trial court’s finding

that plaintiff’s bonus at issue was not calculable at the time of separation was “fundamentally

incompatible” with the court’s additional finding that the bonus was recoverable as “final

compensation” as defined in the Act. In the alternative, defendants asked the trial court “for

certification of the [o]rder [sic]” denying their motion to dismiss counts III and IV for immediate

interlocutory appeal pursuant to Rule 308.

¶ 12   On December 6, 2022, the trial court entered an order denying defendants’ motion to

reconsider. The court, however, continued defendants’ motion, in the alternative, to certify for

immediate interlocutory appeal to December 21, 2022. The court further directed defendants to

submit their proposed certified question by December 9, 2022. Defendants subsequently sought a

certification of the following question for interlocutory appeal pursuant to Rule 308:

       3
           Defendants have not included their motion to dismiss in the record on appeal.

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No. 1-23-0127

                “Whether a former employee may state a claim for final

                compensation under Section 5 of the *** Act for an allegedly

                ‘earned bonus,’ where she voluntarily resigned her employment, and

                the amount of the alleged bonus was not ascertainable at the time of

                her resignation or by her next regularly scheduled payday; or,

                instead, whether the bonus cannot constitute final compensation

                (and thus cannot constitute an ‘earned bonus’ under the *** Act),

                where the amount of the allegedly ‘earned bonus’ is not

                ascertainable within the timeframe required for payment of final

                compensation set forth in Section 5 of the *** Act, as the Appellate

                Court held in McLaughlin v. Sternberg Lanterns, Inc., 395 Ill. App.

                3d 536, 545 (2d Dist. 2009)?”

Defendants’ proposed order further stated that there was a substantial ground for difference of

opinion based upon a purported conflict between McLaughlin and Camillo v. Wal-Mart Stores,

Inc., 221 Ill. App. 3d 614 (1991).

¶ 13   At the hearing on defendants’ motion to certify, defendants reiterated their argument that

the court’s finding that the OCE bonus was not calculable was fundamentally incompatible with

its earlier ruling that the bonus was earned, and thus final compensation pursuant to the Act. The

court then responded, “Well, then I agree with [plaintiff’s counsel] that there is no appropriate 308

question to certify here, because if the issue is *** that this isn’t an earned bonus, then we’re

talking about a huge complex factual finding that the Appellate Court would have to make and

which is not addressed in your question.”

¶ 14   Defense counsel recalled that the trial court found that the bonus was incapable of

calculation because it was “dependent upon firm-wide performance for the year,” which was not

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No. 1-23-0127

known on September 23, 2019 (the final date under the Act that defendants had to pay plaintiff her

final compensation). The trial court responded that, in its view, whether it was calculable and

whether it was earned were “two different things.” The court further explained, “Whether or not

[the bonus is] final compensation under the Act may or may not depend upon whether it can be

calculated as of the date of the last regularly scheduled employment. But I don’t think the question

of whether it’s earned or not turns upon whether it can be calculated or not.” The court then stated

that it would include the term “earned” before bonus in the certified question.

¶ 15   On December 21, 2022, the court issued a written order certifying the question that is the

subject of this appeal, namely, whether an employer violates the Act for failure to pay “an earned

bonus” to a former employee because the amount of that bonus allegedly could not be calculated

until after both (1) the employee’s final workday and (2) the next regularly scheduled payday. The

court agreed that the question involved a question of law on which there were substantial grounds

for a difference of opinion, based primarily upon the court’s view that a decision of the second

district of this court (McLaughlin v. Sternberg Lanterns, Inc., 395 Ill. App. 3d 536, 545 (2009))

conflicted with both a decision of the fifth district (Camillo v. Wal-Mart Stores, Inc., 221 Ill. App.

3d 614 (1991)) and also “the policy concerns underlying the *** Act.” The court added that an

immediate appeal would materially advance the ultimate termination of the litigation because the

only remaining claims related to an alleged failure to pay an earned bonus under the Act.

¶ 16   This court granted defendants’ application for interlocutory appeal prior to the filing of the

record on appeal and the parties’ briefs.

¶ 17                                        ANALYSIS

¶ 18   At the outset, we must discuss the scope of our jurisdiction as to interlocutory appeals

brought pursuant to Rule 308. As a general rule, reviewing courts have jurisdiction to review only

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No. 1-23-0127

final judgments entered in the trial court, absent a statutory exception or supreme court rule. See

In re Marriage of Verdung, 126 Ill. 2d 542, 553 (1989).

¶ 19   Supreme Court Rule 308(a) provides one such exception. See Ill. S. Ct. R. 308(a) (eff.

Oct. 1, 2019). In particular, rule 308 allows for the permissive appeal of an interlocutory order not

otherwise appealable that “involves a question of law as to which there is substantial ground for

difference of opinion” and for which “an immediate appeal from the order may materially advance

the ultimate termination of the litigation.” Id. The rule further provides that this court may in its

discretion allow the appeal. Id. Nonetheless, appeals brought pursuant to this rule should be

reserved for “exceptional circumstances, and the rule should be sparingly used.” Rozsavolgyi v.

City of Aurora, 2017 IL 121048, ¶ 21 (citing Voss v. Lincoln Mall Management Co., 166 Ill. App.

3d 442, 450 (1988)). Additionally, we may reconsider our jurisdiction if our earlier ruling seems

erroneous. See Voss, 166 Ill. App. 3d at 451 (“The question of jurisdiction is always open.”).

¶ 20   Our scope of review in a Rule 308 interlocutory appeal is limited to the certified question.

Wesly v. National Hemophilia Foundation, 2020 IL App (3d) 170569, ¶ 8. Furthermore, we

should only answer a certified question if it asks a question of law and decline to answer where

the ultimate disposition depends upon “ ‘the resolution of a host of factual predicates.’ ” Spears

v. Ass’n of Illinois Electrical Co-operatives, 2013 IL App (4th) 120289, ¶ 15 (quoting Dowd &

Dowd, Ltd. v. Gleason, 181 Ill. 2d 460, 469 (1998)). As such, certified questions may not seek an

application of the law to the facts of a specific case. Rozsavolgyi, 2017 IL 121048, ¶ 21. Thus,

certified questions are questions of law we review de novo. Id.

¶ 21   After now reviewing the briefs and the record in this case, as well as conducting our

independent research, we do not believe the interlocutory order involves a pure question of law,

and we therefore lack jurisdiction to consider this matter. The certified question here involves

certain provisions of the Act. It is well established that the primary objective of the Act is “to

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No. 1-23-0127

ensure employees receive all earned benefits upon leaving their employer and the evil it seeks to

remedy is the forfeiture of any of those benefits.” Mueller Co. v. Department of Labor, 187 Ill.

App. 3d 519, 524 (1989). Section 5 of the Act provides in pertinent part that an employer “shall

pay the final compensation of separated employees in full, at the time of separation, if possible,

but in no case later than the next regularly scheduled payday for such employee.” 820 ILCS 115/5

(West 2022). Section 2 states in part that “[p]ayments to separated employees shall be termed

‘final compensation’ and shall be defined as wages, salaries, earned commissions, [and] earned

bonuses, ***.” 820 ILCS 115/2 (West 2022). “Earned bonuses” is not defined in the Act.

¶ 22   As defendants point out, the term “earned bonus” is considered to be a part of the “final

compensation” that an employer must pay to a separated employee, either at the time of separation

or no later than the next regularly scheduled pay period. See 820 ILCS 115/2, 5 (West 2022). The

Act, however, charges the Illinois Department of Labor (Department) with enforcement of the Act

(820 ILCS 115/11 (West 2022)) and authorizes the Director of Labor and her representatives to

promulgate regulations to administer and enforce the provisions of the Act (820 ILCS 115/11(d)

(West 2022)).    It is well established that we give substantial weight and deference to an

interpretation of an ambiguous statute by the agency charged with the administration and

enforcement of the statute. People v. Marshall, 242 Ill. 2d 285, 295 (2011) (citing Illinois

Consolidated Telephone Co. v. Illinois Commerce Comm’n, 95 Ill. 2d 142, 152 (1983)).

¶ 23   The regulations created by the Department provide that in order to receive payment under

the Act, a bonus must be “earned” and not “discretionary or gratuitous.” 56 Ill. Adm. Code

300.500 (2014). An employee is entitled to an “earned bonus” under the Act when there is “an

unequivocal promise by the employer and the employee has performed the requirements set forth

in the bonus agreement between the parties and all of the required conditions for receiving the

bonus set forth in the bonus agreement have been met.” Id. § 300.500(a). By contrast, a

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discretionary bonus is defined as one where “the terms associated with the earning of the bonus

are indefinite or uncertain, such as [a] bonus being [based] upon a positive evaluation of the

‘employee’s performance’ and not when the earning of a bonus is based on objective factors such

as length of service, attendance, or sign-on or relocation incentives.” Id. § 300.500(d). A

gratuitous bonus “does not obligate the employee to do or forgo something in return for the bonus,”

so the employee has no right to make any demand for that type of bonus. Id. § 300.500(c). The

Department’s regulations further provide that former employees are entitled to a proportionate

share of bonuses earned “by length of service, regardless of any provision in the contract or

agreement conditioning payment of the bonus upon employment on a particular date, when the

employment relationship was terminated by mutual consent of the parties or by an act of the

employer through no fault of the former employee.” Id. § 300.500(b).

¶ 24   Although the failure of an employer to pay an “earned” bonus as part of the final

compensation would seem to be a violation of the Act, there are various conditions that could allow

an employer to avoid paying an otherwise “earned” bonus without violating the Act. For example,

even assuming, arguendo, that the bonus was “earned” pursuant to the Act, we would have to

determine whether SSI made an unequivocal promise to plaintiff, and if so, whether plaintiff

performed all of the requirements in the bonus agreement with SSI and all required conditions for

receiving the bonus were met. If, however, the terms associated with earning the bonus were

indefinite or uncertain, then plaintiff’s bonus was merely discretionary, which would not entitle

her to payment under the Act. Finally, plaintiff resigned on September 9, 2019, but she alleged

that her intended final day of employment would be effective some time after September 30, 2019,

and perhaps her final workday would be “several more weeks” after September 30. If her

termination were found to be based upon mutual consent (such as SSI’s acceptance of her

resignation letter) or based upon an act of SSI through no fault of plaintiff (such as SSI’s

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No. 1-23-0127

termination of her employment on the same day she resigned, well in advance of her proposed

resignation effective date), plaintiff could be entitled to a proportionate share of the bonus she had

earned prior to her resignation without regard to any provision requiring employment on a specific

date, but only if the bonus were based upon length of service. See id. § 300.500(b). All of these

factual matters remain to be resolved. Further complicating this matter is the fact that, despite

SSI’s somewhat byzantine formula, plaintiff alleged that she received monthly reports indicating

the year-to-date fees that were invoiced and paid, from which she could calculate her bonuses

based upon a purportedly pre-existing 2019 compensation grid. This creates a factual dispute as

to whether plaintiff’s bonus was truly incapable of being calculated.

¶ 25   In sum, numerous fact questions remain open at this point in the proceedings. As noted

above, we must decline to answer a certified question where, as here, the ultimate disposition

depends on the resolution of a host of factual predicates. Dowd & Dowd, Ltd., 181 Ill. 2d at 469.

¶ 26   In a footnote in its brief, defendants further ask that this court clarify that a claimed amount

cannot be an “earned bonus” within the meaning of section 2 of the Act when it cannot be

calculated within the time requirements set forth in section 5. In essence, defendants are asking

us to “edit” the certified question. Although there have been instances in which this court has

modified the certified question due to inartful wording (see James v. Geneva Nursing &

Rehabilitation Center, LLC, 2023 IL App (2d) 220180, ¶ 13, appeal allowed, No. 130042

(November 29, 2023)), it would be inappropriate to do so in this particular case. At the hearings

on defendants’ motion to reconsider and their subsequent motion to certify a question for

interlocutory appeal, there were extensive discussions between defendants and the trial court

regarding the propriety of including the term “earned” before “bonus” in the proposed question.

The trial court heard defendants’ arguments that, in essence, a bonus cannot be both “earned” and

also excluded from the statutory definition of “final compensation.” Nonetheless, the court

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No. 1-23-0127

rejected defendants’ arguments—twice—and explicitly stated that it had already found that

plaintiff’s bonus was earned. Therefore, modifying the question to excise the term “earned” would

answer a question the court below did not have, which is improper. See Wesly, 2020 IL App (3d)

170569, ¶ 8 (noting that the scope of our review is limited to the certified question).

¶ 27    Finally, we question whether there is substantial ground for a difference of opinion based

upon the purported conflict in the holdings in McLaughlin v. Sternberg Lanterns, Inc., 395 Ill.

App. 3d 536 (2009), and Camillo v. Wal-Mart Stores, Inc., 221 Ill. App. 3d 614 (1991). In

McLaughlin, the court held that the parties’ contract was not an unequivocal guarantee that the

plaintiff would receive the bonus as compensation; instead, according to the court, the bonus was

“clearly conditional, dependent on whether sales for the defendant increased over the previous

year.” McLaughlin, 395 Ill. App. 3d at 544. By contrast, in Camillo, the court observed that (1) the

amount of the bonus was based solely upon the defendant’s net profit and the plaintiff’s length of

service, and (2) at trial, the parties stipulated that, had the plaintiff worked the entire fiscal year,

he would have received a bonus of $6,045.22. Camillo, 221 Ill. App. 3d at 616-17. We thus do

not see a conflict between the two cases because (1) the bonus in Camillo was not clearly

conditional (unlike in McLaughlin) and (2) the parties’ stipulation in Camillo avoided the issue of

whether the plaintiff’s claimed pro rata bonus was calculable at the time of his termination.

¶ 28                                       CONCLUSION

¶ 29    For the above-described reasons, we vacate our order of February 17, 2023, which allowed

leave to appeal in this case, and we now deny defendants’ application for leave to appeal pursuant

to Rule 308. Finally, we dismiss this appeal. See Morrissey v. City of Chicago, 334 Ill. App. 3d

251, 258-59 (2002); Voss, 166 Ill. App. 3d at 453.

¶ 30    Appeal dismissed.

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