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February 25, 1981


The opinion of the court was delivered by: Aspen, District Judge:


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 will.

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. 1952).

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 the property.

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 ...

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