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CASSEL v. ANCILLA DEV. GROUP

February 8, 1989

J. C. CASSEL, Plaintiff,
v.
ANCILLA DEVELOPMENT GROUP, LTD., an Illinois corporation, Defendant



The opinion of the court was delivered by: BUA

 NICHOLAS J. BUA, UNITED STATES DISTRICT JUDGE.

 This order concerns defendant's motion to dismiss plaintiff's one-count amended complaint. For the reasons stated herein, the court finds some of plaintiff's allegations sufficient to maintain a breach of contract action against defendant. However, the court also finds that other allegations in the amended complaint do not establish any contractual rights. Accordingly, defendant's motion to dismiss is granted in part and denied in part.

 I. FACTS

 Plaintiff J. C. Cassel was hired as an industrial engineer by defendant Ancilla Development Group, Ltd. ("Ancilla") on December 6, 1984. Ancilla fired Cassel on June 29, 1985. At the time he began employment for Ancilla, Cassel was given an employee handbook entitled, "Your Personnel Policy Handbook." In addition, Cassel received from Ancilla a letter dated December 6, 1984, describing the terms of his employment, including his responsibilities and compensation. Among other things, the letter promised Cassel "A guaranteed salary of $ 37,000 based upon annualized client billings of $ 63,000." (Emphasis in the original.) The employee handbook which Cassel received outlines the policies of the company. These policies include providing periodic performance evaluations and procedures for handling employee grievances and taking disciplinary action against an employee.

 In his amended complaint, Cassel alleges that the employee handbook and the December 6 letter were made part of a "contract of employment" between himself and Ancilla. Cassel further alleges that Ancilla breached the contract in several ways. Specifically, Cassel claims that Ancilla failed to comply with the terms of the December 6 letter by refusing to reimburse him for his business expenses or pay him the remainder of his "guaranteed" salary. Cassel also claims that Ancilla violated the terms of the handbook by failing to provide him with periodic performance evaluations and by failing to follow the proper procedures for implementing any termination or disciplinary action against him.

 Ancilla has moved to dismiss Cassel's amended complaint on the grounds that Cassel's allegations do not establish the existence of an employment contract between Ancilla and Cassel. Ancilla takes the position that, as a matter of law, the terms of the employee handbook and December 6 letter do not create binding and enforceable contract rights.

 II. DISCUSSION

 A. The Ancilla Employee Handbook

 In Duldulao v. St. Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 505 N.E.2d 314, 106 Ill. Dec. 8 (1987), the Illinois Supreme Court held that an employee handbook creates enforceable contract rights when the following three conditions are present:

 
First, the language of the [handbook] must contain a promise clear enough that an employee would reasonably believe that an offer had been made. Second, the [handbook] must be disseminated to the employee in such a manner that the employee is aware of its contents and reasonably believes it to be an offer. Third, the employee must accept the offer by commencing or continuing work after learning of the [contents of the handbook].

 505 N.E.2d at 318. The plaintiff in Duldulao, a former employee of St. Mary of Nazareth Hospital, sued for breach of contract claiming that the hospital discharged her in violation of provisions in the hospital's employee handbook. Id. at 315-16. The hospital's handbook provided that employees could not be terminated unless certain conditions were met and particular procedures were followed. *fn1" Applying the above test, the Duldulao court found that the provisions in the hospital's handbook restricting termination were sufficient to create an employment contract that altered the employee's at-will status. Id. at 318. Therefore, the court found that plaintiff had a valid contractual claim.

 In the instant case, the Ancilla employee handbook, like the handbook at issue in Duldulao, restricts Ancilla's right to terminate its employees. Specifically, the ...


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