The complaint includes a copy of selected guidelines which
require that at least two weeks' written notice be given prior to
employee termination along with supporting documentation of
unsatisfactory performance, attitude, or attendance, and warnings
by division managers prior to an employee's dismissal by
Continental. The guidelines provide exceptions for employee
dismissal due to serious situations such as insubordination,
dishonesty, and drug use.
Enis alleges that Continental breached the employment agreement
when it dismissed her for a relatively minor offense, for which
Enis denies wrongdoing, without giving prior appropriate notice.
She claims that Continental has refused her demand for
reinstatement and back pay and characterizes such refusal as
unreasonable and vexatious. As to this Count, Enis also alleges
economic damages and seeks compensatory damages, prejudgment
interest, attorneys' fees and costs.
Continental has moved to dismiss Count III of Enis' complaint
for failure to state a claim upon which relief can be granted. It
claims there is no basis in Illinois law for a breach of contract
claim based upon provisions of an employee handbook. In the
alternative, defendant alleges that the state law claim in Count
III does not share a common nucleus of operative fact with the
Title VII and § 1981 claims of Counts I and II, and that
therefore, no basis for pendent jurisdiction exists. The
contentions of Continental regarding dismissal of Count III will
be discussed seriatim.
In its motion to dismiss, Continental first contends that
contrary to Enis' allegations, Illinois law does not provide for
a breach of contract claim based upon provisions of an employee
handbook. This Court agrees.
A motion to dismiss for failure to state a claim upon which
relief can be based is governed by Fed.R.Civ.P. 12(b)(6). For
purposes of such a motion, all well pleaded allegations of fact
are deemed admitted with all questions of reasonable doubt
resolved in favor of the pleader. See Jenkins v. McKeithen,
395 U.S. 411, 421-22, 89 S.Ct. 1843, 1848-49, 23 L.Ed.2d 404 (1969);
Burns v. Paddock, 503 F.2d 18, 25 (7th Cir. 1974). Dismissal is
warranted only if "it appears beyond doubt that the plaintiff can
prove no set of facts in support of his claim which would entitle
him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct.
99, 101-02, 2 L.Ed.2d 80 (1957).
Under Illinois law, an employment contract, whether written or
oral, which is of no specific duration is considered an at-will
contract and may be terminated by either the employer or the
employee, with or without cause, subject only to independent
contractual or statutory provisions. Rynar v. Ciba-Geigy Corp.,
560 F. Supp. 619, 642 (N.D.Ill. 1983); Sargent v. Illinois
Institute of Technology, 78 Ill. App.3d 117, 121, 33 Ill.Dec. 937,
397 N.E.2d 443 (1st Dist. 1979). In Count III, Enis complains
only of violations of terms contained within the contract and not
of statutory violations, which are addressed in the first two
counts. Thus, in order to resolve the motion to dismiss Count
III, it must first be determined just what comprises the
contract. Specifically, the Court must consider whether the
employee handbook altered the at-will relationship between the
In Illinois, the general rule is that an employment handbook is
not part of an employment contract. Rynar, 560 F. Supp. at 624;
Sargent, 78 Ill.App.3d at 121-122, 33 Ill.Dec. 937,
397 N.E.2d 443. Illinois views the employee handbook as a gratuity which
merely serves as a code of conduct and to define general duties.
The handbook does not alter the at-will relationship even if it
was given to the employee when hired and both employer and
employee agreed to follow the handbook provisions. Id.
Illinois recognizes two exceptions to this general rule. The
first exception occurs where the handbook is adopted as a
modification of a pre-existing employment contract and sufficient
to create mutuality of obligation. Carter v. Kaskaskia Community
Action Agency, 24 Ill. App.3d 1056, 1059, 322 N.E.2d 574 (1974).
In Carter, the plaintiff employee began working for the
defendant employer in 1967 and was terminated in 1972. No written
employment contract existed. In 1971, the defendant employer
compiled a "Personnel Policy Manual" which included provisions
for grievances and disciplinary action including dismissal and
review. The Manual was reviewed and accepted by employees. The
board of directors of the defendant employer also approved the
The Carter court found that the Manual became part of the
employment contract as a modification of the existing at-will
employment contract. In support thereof, the court noted that the
Manual was adopted after the employee was hired, that the
employee had accepted the Manual, and that the employee's
continuing to work after the modification constituted assent to
and consideration for the modification of the existing contract.
The allegations of Enis in Count III of her complaint do not
trigger application of this exception. Unlike in Carter, the
employee handbook in the case at bar was given to Enis at the
time she became employed by Continental. There was no
modification of a pre-existing employment contract. In addition,
as was the case in Sargent, the guidelines in the handbook in the
case at bar were not bargained for but merely defined the duties
of the employee's position. By accepting the handbook, Enis
merely agreed to properly perform her required duties and nothing
more. As Enis did not provide additional consideration to support
the discharge procedures set out in the handbook, the handbook
did not rise to the level of a mutually enforceable agreement.
See Sargent, 78 Ill.App.3d at 122, 33 Ill.Dec. 937,
397 N.E.2d 443.
The second exception to the general rule occurs where another
document exists which can be construed as an express employment
contract and the contract can be construed as subject to the
"policies" of the employer. In this situation, the personnel
policies contained in an employee handbook will be deemed
incorporated into the contract. Piper v. Board of Trustees of
Community College District No. 514, 99 Ill. App.3d 752, 55
Ill.Dec. 287, 426 N.E.2d 262 (1981); Rynar v. Ciba-Geigy Corp.,
560 F. Supp. 619, 624 (1983).
The second exception is inapplicable to the case at bar. Enis
makes no allegations about a separate written employment contract
and attaches no written contract to her pleadings. She merely
alleges that the written portion of her contract was the handbook
itself. Clearly, there is no written employment contract into
which the employee handbook could be incorporated.
Since neither of the exceptions applies to Enis' situation, the
employee handbook does not have contractual status. Thus, an
at-will employment relationship exists between Enis and
Continental. Count III thus fails to state a claim upon which
relief can be granted since it is based upon the employee
handbook which does not rise to the status of a contract.
Defendant's argument that pendent jurisdiction does not exist
over the state law claims of Count III is without merit. Each
Count of the complaint arises from the same fact situation in
that each involves the employment relationship and the same
conduct or types of conduct on the part of the parties. Clearly,
each claim and hence each Count arises from the same common
nucleus of operative fact. See Gibbs v. United Mine Workers,
383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966); Goodman v. Board
of Trustees, 511 F. Supp. 602, 604-5 (N.D.Ill. 1981).
For the reasons set out herein, it is clear that Count III of
Enis' complaint fails to state a claim upon which relief can be
based. Continental's motion to dismiss Count III is therefore
IT IS SO ORDERED.
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