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ARADO v. GENERAL FIRE EXTINGUISHER CORP.

United States District Court, Northern District of Illinois, E.D


August 7, 1985

AUGUST ARADO, PLAINTIFF,
v.
GENERAL FIRE EXTINGUISHER CORPORATION, DEFENDANT.

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

MEMORANDUM OPINION AND ORDER

August Arado ("Arado") charges General Fire Extinguisher Corporation ("General") terminated him in violation of the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621-634. In addition to that Count I cause of action (captioned "Age Discrimination Claim"), Arado's Complaint asserts two unlabeled claims (Counts II and III), each of which realleges (via incorporation by reference) all of Count I's 17 paragraphs of allegations. General now moves under Fed.R.Civ.P. ("Rule") 56 for "partial" summary judgment as to Complaint Counts II and III and portions of the prayer for relief in Count I. For the reasons stated in this memorandum opinion and order, the motion is granted in part and denied in part.

Facts*fn1

Resolution of the current motion requires only a brief treatment of the facts. Arado was General's Treasurer. At the time of his termination in October 1983, he was 54 years old and had worked at General for 12 1/2 years.

Complaint Count I ¶ 9 alleges General's President Harry Haulman ("Haulman") had announced in the summer of 1983 he was planning a "youth movement" at General because he was dissatisfied with the performance of older employees.*fn2 Haulman's strategy was to harass older workers into resigning by either demoting them or adding significantly to their workloads (id. ¶ 3). Arado asserts he was given the work of two other employees in addition to his own normal full-time duties (Arado Deposition ("Dep.") 48-50, 70).

Arado met twice with Haulman in mid-August 1983 to explain the new duties were impossibly burdensome and plead for assistance in carrying them out (Dep. 49-57). Each time Haulman refused to lighten Arado's load (Dep. 50, 56). At the first meeting Haulman told Arado to "quit, quit, quit, quit" if he could not perform all the functions (Dep. 50), and at the second meeting Haulman threatened Arado with termination if Arado did not take on the new duties within a week (Dep. 57).

In mid-September the dispute between Arado and Haulman intensified when Arado took a vacation without making arrangements for anyone to cover his duties (Dep. 75-76). Finally, on October 4 Haulman told Arado "this couldn't go on any longer" and terminated him, giving Arado his remaining vacation pay and four weeks' severance pay (Dep. 80). Haulman also asked Arado whether Arado wanted a letter of recommendation (id.). Arado responded affirmatively and Haulman returned 15-20 minutes later with the letter (Dep. 80-81), which read:

To Whom It May Concern:

  August Arado has worked with me for the past twelve
  years. During that time, he has been Treasurer of the
  company for the past five years. Unfortunately,
  through cutbacks caused by present economic
  conditions, we have had to eliminate his position.

  I would particularly recommend Arado in the Cost
  field, Inventory Control, and Lifo accounting. I
  doubt if you will find anyone to match his expertise
  in these fields.

Arado's Claims

Complaint Count I charges Arado was fired because of his age, in violation of ADEA. It prays for actual, compensatory, consequential and liquidated damages as well as attorneys' fees. Count II charges General's award of only four weeks' severance pay to Arado was an "intentional and willful" violation of General's "standard practice" of awarding at least one week's pay for each year of employment. Count III charges Haulman's letter of recommendation is actually more harmful than helpful to Arado, so that Arado has not been able to use it and has suffered a "loss of his business reputation."

General's Motion

General seeks summary judgment as to Counts II and III. It also asks for what it terms a "partial" summary judgment as to Count I's prayers for compensatory, consequential and liquidated damages.

1. Count I

General's motion as to Count I simply misapprehends the purpose and functions of Rule 56.*fn3 As this Court has often repeated (most recently in Newman-Green, Inc. v. Alfonzo-Larrain, 612 F. Supp. 1434, 1439 (N.D.Ill. 1985)), Rules 56(a) and 56(b) simply do not permit the piecemealing of a single claim or the type of issue-narrowing sought here by General. This Court's colleague Judge Susan Getzendanner has just concurred in that analysis in Capitol Records, Inc. v. Progress Record Distributing, Inc., 106 F.R.D. 25 (N.D.Ill. 1985), explaining that despite Rule 56(a)'s reference to "all or any part" of a claim, the Rule authorizes only the granting of appealable "judgments" disposing of entire claims.*fn4

As Capitol Records and this Court's consistent opinions teach, Rule 56(d)'s issue-narrowing provision operates only in the wake of an unsuccessful (and proper) motion under Rule 56(a) or 56(b). Capitol Records, 106 F.R.D. at 29; SFM Corp. v. Sundstrand Corp., 102 F.R.D. 555, 558-59 (N.D.Ill. 1984). Rule 56(d)'s purpose is merely "to salvage whatever constructive results have come from the judicial effort" to resolve a full-fledged summary judgment motion. 6 Pt. 2 Moore, Moore's Federal Practice ¶ 56.20[3.-3], at 56-1223. There is no such thing as an independent motion under Rule 56(d).

Accordingly General's Count I motion is denied. That denial is (of course) without prejudice.

2. Count II

Count II's common law claim*fn5 for severance pay fails under this Court's analysis of Illinois law in Rynar v. Ciba-Geigy Corp., 560 F. Supp. 619 (N.D.Ill. 1983).*fn6 Rynar, id. at 624 explained an Illinois employer is not obligated to award severance pay unless that obligation arises from the employment contract. Even a written personnel policy setting forth guidelines for severance pay is not binding on the employer unless (id.):

    1. a separate document constituting an express
  employment contract can be construed as subject to
  the "policies" of the employer; or

    2. "the terms of the policy itself suggest that a
  mutuality of obligation was intended by employer and
  employees when the policy was given."

No written employment contract existed between Arado and General, and Arado does not claim an express oral contract (Rynar, 560 F. Supp. at 624) embodying a severance pay obligation. Those uncontested facts obviously preclude the first of the Rynar-identified possibilities.

Nor has Arado provided any basis for finding General otherwise adopted a personnel policy that entailed a mutuality of obligation. In fact, Arado has not even asserted a mutually binding policy exists. Instead Complaint Count II ¶ 18 alleges (but without the necessary Rule 56(e) evidentiary support) General had a "standard practice" of awarding severance pay ranging between one week's and one month's pay for each year of employment.

But Rynar, 560 F. Supp. at 625 and Carter v. Kaskaskia Community Action Agency, 24 Ill.App.3d 1056, 332 N.E.2d 574, 576 (5th Dist. 1974), on which Rynar relied, make it clear a personnel policy does not take on contractual status unless at a minimum it:

1. is communicated to the employees;

2. is accepted by the employees; and

    3. places obligations on both the employer and the
  employees.

It is profitable to compare (or contrast) the Rynar and Carter treatment of those factors with Arado's claimed situation.

As to the first element, in each of Rynar and Carter the policy was communicated to the employees in writing. As for the second factor, the cases reached opposite results:

    1. In Carter the policy was deemed accepted by the
  employees because (a) the employer reviewed it with
  them at the time it was implemented (24 Ill.App.3d at
  1058-59, 322 N.E.2d at 576) and (b) the employees
  continued to work after getting that explanation.

    2. In Rynar the plaintiff employee was found not to
  have accepted the policy as a contract because he had
  not been informed of or reviewed its terms until
  several months after he began working. Moreover,
  modifications in the policy were never presented to
  employees for their review or approval (560 F. Supp.
  at 625).

Finally, both cases found the mutuality-of-obligation requirement satisfied by an employee undertaking that provided consideration for the employer's severance pay obligation in the written personnel policy. In each instance the employee was obligated to provide adequate notice to the employer before resigning. Rynar, 560 F. Supp. at 625; Carter, 24 Ill.App.3d at 1059, 322 N.E.2d at 576.

By contrast, Arado meets none of the three criteria. He has neither asserted nor offered evidence tending to show communication or acceptance or mutuality of obligation as to General's asserted severance pay policy.

As a threshold matter, the very existence of a "policy" poses a real problem. Haulman testified severance pay was a purely discretionary matter left to his sense of what was "fair" (Haulman Dep. 59-60). Arado bases his counter-assertion of a "policy" entirely on inferences from amounts actually paid to terminated employees. But even aided by the required favorable inferences, Arado has not defined the "policy" with enough precision to render that term appropriate. Indeed Arado Mem. 9 puts it in terms of severance pay varying "between one month's pay and one week's pay for each year an employee was employed with [General]."

Even if this Court assumes arguendo that formulation could be termed a "policy,"*fn7 the record is utterly bereft of any hint that policy was ever communicated to or reviewed with the employees.*fn8 And finally there is no whisper of any evidence as to any obligation shouldered by the employees in return for General's asserted promise of severance pay. Under Illinois law the lack of such an obligation renders the policy a gratuity with no binding effect on the employer. Sargent v. Illinois Institute of Technology, 78 Ill.App.3d 117, 121-22, 33 Ill.Dec. 937, 397 N.E.2d 443, 446 (1st Dist. 1979). In short, Arado has failed utterly to raise a factual issue as to the existence of any enforceable severance pay claim.

3. Count III

Count III is simply not cognizable under Illinois law. Illinois does recognize a tort of injury to business reputation where oral or written statements call into question one's qualifications or competence to perform his or her work. 33A I.L.P. Slander & Libel § 27. But that cause of action is a form of defamation and thus requires publication of the injurious statements. Libert v. Turzynski, 129 Ill.App.2d 146, 150, 262 N.E.2d 741, 743 (1st Dist. 1970). Arado Complaint Count III ¶ 18 admits he never used Haulman's letter, so there has been no publication.

Even apart from that fatal defect, it is quite difficult to interpret the unambiguously favorable language of the letter as being in any way defamatory. Thus Count III cannot survive summary judgment viewed as a defamation claim. And if it purports instead to allege a different kind of tort, no such cause of action exists under Illinois law.

It may be Arado rather intended to state a contract-type claim in Count III.*fn9 Any such claim would have to be founded on General's obligations:

    1. to provide Arado with a letter of
  recommendation; and

    2. to write the letter in a highly complimentary
  (and not just a favorable) fashion.*fn10

Arado would fare no better in the realm of contract than in the realm of tort. He provides no shred of legal or factual support for the existence of such obligations.

However Count III is viewed, it is insufficient in law. Here too General is entitled to summary judgment.

Conclusion

There is no genuine issue of material fact (or indeed law) as to Counts II and III. General is entitled to a judgment as a matter of law as to those Counts. Accordingly Counts II and III are dismissed with prejudice. General's motion as to Count I is denied without prejudice.*fn11


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