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Chambers v. Shayne & Co.

JUNE 30, 1961.




Appeal from the Municipal Court of Chicago; the Hon. NORMAN N. EIGER, Judge, presiding. Judgment affirmed.


This is an action for a breach of an oral contract of employment for one year and the implied renewal for the subsequent year. The plaintiff, Emma Chambers, seeks as damages her full salary until the end of the second year following the termination of her employment and a full bonus for each of the two years. Defendant denied the making of or the existence of the contract. The jury returned a verdict in favor of the plaintiff for $8,106.19, an amount equal to her claimed salary and her bonus for the fiscal year 1956-7. Defendant appeals from the judgment entered on the verdict. In a cross-appeal, plaintiff urges that the court's sole error was in denying her motion for judgment notwithstanding the verdict in the sum of $11,736.19, and she requests a judgment in her favor for this amount.

Defendant is a family-owned corporation engaged in the retail of women's clothes. Their main store is on the corner of Michigan Avenue and Randolph Street in Chicago. Plaintiff started working for the store in 1927, and since 1941, was the buyer for the coat and suit department. Her duties required her to make "buying trips to New York, taking care of merchandise, seeing that it was properly shown, sold and advertised and doing considerable selling."

On July 15, 1957, upon her return from a two-week buying trip in New York, the plaintiff was called into the office of the defendant's president, Thomas Considine, Jr. and informed that she was discharged as a buyer for the company. She was not given any advance notice of this decision to replace her in mid-season, nor was she given any special termination pay. Upon inquiring whether the discharge was due to a dissatisfaction with her work, she was told that it was because business was bad and that it was not her fault. Considine asked her to stay on as a saleslady at $75.00 a week, which she declined. Her basic salary at that time was $8,000 a year, or $666.66 per month.

The plaintiff's claim is for her salary for the remainder of the year and her bonus for the two years. The company is on a fiscal year extending from February 1 and terminating on January 31. The bonus is determined around February 10th, on the basis of the prior year. The plaintiff says that her bonus is computed on the basis of 1 1/2% of the net sales in her department over $200,000, which would amount to $3,772.90 for the 1956 fiscal year, and $3,630.00 for the 1957 fiscal year.

The plaintiff testified that in 1941, when she first assumed her duties as a buyer, she was told by Tom Considine that her percentage would be 2 1/2% over $150,000 and her salary "was about $475.00 a month, and that would be it for the coming year." Her basic salary gradually increased over the years, and every year from 1941 to 1956, on about February 10th, Thomas Considine, Jr. would come to her office and personally present to her the bonus based on the previous fiscal year. She testified that this bonus was conditioned on the sales in her department, and was not dependent on the company's overall profit. Thomas Considine, Jr. and his brother, Vincent Considine, the former manager, said that it was conditioned on the company's overall profit margin.

She testified that on February 14, 1956, she had a conversation with Tom Considine at the store when he handed plaintiff her bonus check, as was the custom. Her testimony was that at that time, Considine informed her that the bonus arrangement would be changed from 2 1/2% over $150,000 to 1 1/2% of the net sales over $200,000. She told Considine that she "had better make a note of that" and pulled out the envelope and make the following penciled notation on it: "2/14/56 After 200 1 1/2 perce".

The plaintiff testified that in February 1957, at the close of the 1956 fiscal year, she failed to receive her bonus. Tom Considine had been ill, so she talked to the comptroller, a Mr. Wangnett (who was deceased at the time of the trial) and was advised that no bonus checks had been issued for the fiscal year 1956. She subsequently had a conversation with Vincent Considine about her failure to receive a bonus. Vincent Considine told her that there wouldn't be any bonuses because the firm didn't make any money. The plaintiff thereupon vigorously denied that her bonus was based on profits and told him that "Mr. Tom Considine always made it very emphatic my bonus was made on certain figures, not on profit." Vincent Considine then said: "I am going to talk to my brother about it and find out what the arrangements were." The plaintiff said that there were no further conversations on the terms of her employment.

Thomas Considine, Jr., testifying for the defendant, denied that he presented the plaintiff with a bonus check for 1954 or 1955, that he had a conversation with her on February 14, 1956, or that he discussed with Mrs. Chambers the terms of employment in 1955 or 1956. He further said that he never promised to pay Mrs. Chambers a bonus in connection with her duties for the fiscal year, during the course of any fiscal year, or before the fiscal year began. He said that he never had any agreement with the buyers to pay them a percentage of the sales, however, upon further examination, it was revealed that he did have an arrangement with a Rudolph Schlam, a buyer for the fur department, wherein he agreed to pay him a salary of $4,500.00 a year and 2 1/2% of the net sales of the fur department in excess of $400,000. Considine at first contended that it must have been conditioned on profits, but finally concluded with some reluctance that the agreement with Schlam was based on a percentage of the net sales in his department. He referred to the plaintiff's discharge as a "discussion of the status of her employment". He recalled her dismissal as taking place after she had returned from her vacation and prior to a buying trip.

Vincent Considine, a member of the Illinois Bar, testified that he handled defendant's fiscal matters; that in 1955, he became the general manager and assumed the duties of his brother, Thomas Considine, Jr., who had become seriously ill; and that in February, 1956, he presented plaintiff with a bonus check for the prior fiscal year. He said that he was in daily contact with the plaintiff, but that she never discussed the matter of the nonpayment of the bonus with him. He said that Mrs. Chambers never told him about the agreement she had with his brother, nor did he have any recollection about her asking him to talk to Tom about any agreement.

The financial data of the corporation pertinent to the case included the profit-and-loss position of the defendant, the gross business done by it, the aggregate bonuses paid to its employees, the bonuses paid to plaintiff, and the sales of the department under plaintiff's jurisdiction year by year. These exhibits were introduced to controvert the plaintiff's position that her bonus arrangement with the company was not dependent upon the overall profit margin of the company. This documentary evidence did indicate that the plaintiff was not properly compensated in the past in accordance with her special arrangement with Considine; however, it also established that her bonus was not conditioned on the company's overall profit margin. For example, in the fiscal year 1948-9, the plaintiff had an increase in the amount of her bonus, reflecting the increase in the sales of her department, although the total profits decreased as did the total bonuses paid to employees. And in the fiscal year 1950-51, her bonus was decreased, corresponding to the decrease in the sales in her department, although the total profits showed an increase as did the total amount of bonuses paid to all employees for that year. No evidence was introduced as to whether the total number of employees participating in the bonus plan fluctuated over the years in question. This evidence, taken with all favorable inferences for the plaintiff, would seem to substantiate her special arrangement with the company.

Plaintiff said she was fired in mid-season without any special termination pay. Defendant introduced in evidence the plaintiff's earning record which showed that she was paid her normal monthly payment of $666.66 on July 15, 1957, the date of her discharge. Mr. Blommaert, the present comptroller for the defendant, testified that the plaintiff was paid on the 15th of the month, for the entire month. The witness admitted that the earning statement did not indicate the pay period, but that the period was shown on a confidential payroll which was not introduced into evidence. The defendant took the position that it customarily paid the plaintiff two weeks in advance and that the payment in the middle of the month was for the entire month. However, even if we were to assume that this was the procedure, it would seem that such an arrangement supports the plaintiff's position, which was that her salary was on a yearly basis, payable monthly.

Defendant asserts that the plaintiff was impeached by numerous contradictory statements in her pretrial deposition and in the trial. A fairly typical example was the plaintiff's answer to the question in the pretrial hearing relative to the year the commission was changed from 2 1/2% over $150,000 to 1 1/2% over $200,000:

"Q. For how long has it been 1 1/2% over $200,000?

A. Oh, that was, could have been around 1954, when they ...

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