United States District Court, Northern District of Illinois, E.D
February 25, 1981
THOMAS E. BARTINIKAS, PLAINTIFF AND COUNTER-DEFENDANT,
CLARKLIFT OF CHICAGO NORTH, INC., DEFENDANT AND COUNTER-PLAINTIFF.
The opinion of the court was delivered by: Aspen, District Judge:
MEMORANDUM OPINION AND ORDER
Plaintiff, Thomas E. Bartinikas ("Bartinikas"), brought this
three-count action against defendant, Clarklift of Chicago North,
Inc. ("Clarklift") alleging contract violations and unjust
enrichment arising from Bartinikas' employment as a salesman for
Clarklift.*fn1 Clarklift has filed a counterclaim in which it asks
the Court for a declaration that a document entitled "Salesman's
Agreement and Compensation Policy" governed Bartinikas'
employment relationship with Clarklift. This matter is now before
the Court on cross motions for summary judgment as to the
counterclaim and Clarklift's motion for summary judgment on Count
II of plaintiff's complaint.
The following facts are undisputed. In September, 1976,
Bartinikas became employed by Clarklift as a commissioned
salesman. Bartinikas' employment was governed by an oral
agreement which provided for Bartinikas to receive commissions
based on equipment sales and leases procured from customers. No
agreement regarding the term or duration of plaintiff's
employment was reached at any time.
Some time prior to May, 1978, Clarklift tendered a written
employment contract embodying new terms and conditions of
employment to each of its salespersons, including Bartinikas.
Clarklift insisted that each salesperson sign the tendered
contract as a condition of continued employment. Bartinikas
objected to the terms of the tendered contract and refused to
sign it. Bartinikas, however, continued to work as a Clarklift
employee and Clarklift continued to pay Bartinikas and to honor
and derive profit from all sales and leases procured from
customers by Bartinikas. On August 8, 1978, Bartinikas gave David
Larson, vice-president of Clarklift, thirty days' notice that he
would resign from his position effective September 5, 1978.
Bartinikas' employment with Clarklift ended on September 5,
1978, and in October, 1978, Clarklift sent Bartinikas a
commission statement detailing his outstanding commissions. After
receiving the statement, Bartinikas notified David Larson that he
had not been credited with all commissions earned. At a December,
1978, meeting with Larson and during telephone conversations
after his resignation, Bartinikas told Larson that he needed
payment of his outstanding commissions in order to make a
downpayment on a home in Florida.
Under Illinois law, which must be applied in this diversity
case, an employment relationship that does not specify a time or
duration of employment is terminable at will by either employer
or employee. Sargent v. Illinois Institute of Technology,
78 Ill. App.3d 117, 121, 33 Ill.Dec. 937, 939, 397 N.E.2d 443, 445
(1st Dist. 1979); Criscione v. Sears, Roebuck & Co.,
66 Ill. App.3d 664, 667, 23 Ill.Dec. 455, 457, 384 N.E.2d 91, 93 (1st
Dist. 1978); Scaramuzzo v. Glenmore Distilleries Co., 501 F. Supp. 727,
732 (N.D.Ill. 1980). It is undisputed that Bartinikas'
employment relationship with Clarklift was not for a specific
time or duration, and therefore his employment was terminable at
Clarklift contends, however, that because Bartinikas'
employment was terminable at will, Clarklift had the right not
only to terminate him at will, but also to unilaterally modify
the terms of his employment at will. Thus, Clarklift argues, when
Bartinikas was tendered a new, written contract of employment,
his only options were to quit or to accede to the new terms.
Indeed, Clarklift's argument goes even further, contending that
even if Bartinikas specifically rejected the unilateral
modification, he still
would be held to its terms if he continued working. This
contention is not only contrary to Illinois law, but it is
contrary to the most basic principles of contract law and
contrary to modern notions of fairness in the workplace.
In support of its argument, Clarklift relies on three cases.
Gebhard v. Royce Aluminum Corp., 296 F.2d 17 (1st Cir. 1961);
Swalley v. Addressograph Multigraph Corp., 158, F.2d 51 (7th Cir.
1946), cert. denied, 330 U.S. 845, 67 S.Ct. 1086, 91 L.Ed. 1290
(1947); and Carter v. Kaskaskia Community Action Agency,
24 Ill. App.3d 1056, 322 N.E.2d 574 (5th Dist. 1974). These decisions
hold for the proposition that where the term of employment is at
the will of the parties, and the employer modifies the terms of
the contract, the employee is bound by the terms of the
modification if he fails to reject the modification and continues
to work for the employer. This proposition is nothing more than
a reiteration of the longstanding common law contract doctrine
which recognizes that subsequent to an offer, silence plus
additional circumstances may constitute acceptance as a matter of
law. As Professor Corbin has stated:
Frequently, services are rendered under circumstances
such that the party benefitted thereby knows the
terms on which they are being offered. If he receives
the benefit of the services in silence, when he had a
reasonable opportunity to express his rejection of
the offer, he is assenting to the terms proposed and
thus accepts the offer. (Emphasis added, footnotes
A. Corbin, Corbin on Contracts, § 75 at 121 (One Volume Ed.
This doctrine is entirely consistent with the rule in Illinois
that an employer acting ex parte, without the consent of the
employee, cannot modify the terms of the employment contract.
Sterba v. Blaser, 33 Ill.App.3d 1, 337 N.E.2d 410, 415-416 (1st
Dist. 1975); Simpson v. Norwesco, Inc., 583 F.2d 1007, 1012 (8th
Cir. 1978) (applying Illinois law). The only issue is whether the
employee assented to the modification. Had Bartinikas remained
silent and continued to work for Clarklift after being notified
of the proposed modification, the Court and Clarklift could
reasonably have presumed that Bartinikas assented to the proposed
modification in terms and thus accepted the offer. But Bartinikas
did not remain silent. He specifically and repeatedly rejected
the modification. Nonetheless, Clarklift asks this Court to
ignore the explicit rejection and to presume that Bartinikas
accepted the terms of the modification merely because he
continued working. To do so would ignore an essential element of
contract law: acceptance.*fn2
Once Bartinikas rejected the modification, Clarklift could have
fired Bartinikas, but it could not enforce its modification ex
parte. Sterba v. Blaser, supra. Clarklift, however, chose not to
fire Bartinikas, but rather to continue taking advantage of his
talents, and by so doing, continued to be bound by the terms of
the contract in existence between the parties prior to the
proposed modification. Accordingly, Bartinikas' motion for
summary judgment on the
counterclaim is granted and Clarklift's motion for summary
judgment is denied.
Clarklift also has moved for summary judgment on Count II of
plaintiff's complaint. In Count II Bartinikas claims that
subsequent to his resignation, Bartinikas had an opportunity to
purchase certain real estate in Florida. Because Clarklift
refused to pay Bartinikas' commissions, Bartinikas alleges that
he was unable to purchase the intended real estate and as a
result suffered damages, measured by the "profits" he claims he
would have earned had he been able to invest the commissions in
Since Hadley v. Baxendale, 9 Ct. of Exch. 341 (1854), it has
been established that damages for breach of contract are limited
to those that "may reasonably be supposed to have been in the
contemplation of the parties, at the time they made the contract,
as the probable result of the breach of it." Recent Illinois
decisions continue to follow this doctrine:
When the profits which are sought are those arising
out of the breached contract, those profits are
considered one of the elements of the contract, and
are presumed to have been within the contemplation of
the defaulting party at the time he entered into the
contract; they are recoverable if proved with
reasonable certainty. However, when the profits
sought are those which would have arisen only out of
a collateral transaction, not only must these profits
be proved with reasonable certainty, but also it must
be shown that they were reasonably made within the
contemplation of the defaulting party when the
contract was made. H.G. Holloway & Bro. v.
White-Dunham Shoe Co., 151 F. 216 (7th Cir. 1906,
Ill.) Notice of the possible existence of collateral
profits, given after execution of the contract, will
not satisfy this requirement.
Rivenbark v. Finis P. Ernest, Inc., 37 Ill. App.3d 536, 539,
346 N.E.2d 494, 497 (5th Dist. 1976).
It is undisputed that Bartinikas did not inform Clarklift of
his investment opportunity until well after the making of the
contract. Indeed, Clarklift did not learn of plaintiff's alleged
opportunity until after he had left its employ. Since Bartinikas
has failed to show that his investment opportunity was within the
contemplation of the parties when the contract was made,
Bartinikas cannot base a cause of action upon these alleged
damages. Accordingly, Clarklift's motion for summary judgment on
Count II of plaintiff's complaint is granted.
It is so ordered.