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09/28/89 Robert Harrell Et Al., v. Montgomery Ward & Company

September 28, 1989





545 N.E.2d 373, 189 Ill. App. 3d 516, 136 Ill. Dec. 849 1989.IL.1535

Appeal from the Circuit Court of Cook County; the Hon. Willard J. Lassers, Judge, presiding.


PRESIDING JUSTICE JIGANTI delivered the opinion of the court. JOHNSON and LINN, JJ., concur.


The plaintiff, Robert Harrell, *fn1 brought this action alleging that the defendant, Montgomery Ward & Co. (Ward), discharged him from its employ in violation of the terms of certain policy statements issued by Ward. The trial court granted Ward's motion to dismiss the complaint for failure to state a cause of action (Ill. Rev. Stat. 1987, ch. 110, par. 2-615), and Harrell has appealed. The issue on appeal is whether the allegations of the complaint sufficiently state a claim for breach of an employment contract pursuant to Duldulao v. Saint Mary of Nazareth Hospital Center (1987), 115 Ill. 2d 482, 505 N.E.2d 314, which held that an employer's policy statement creates enforceable contractual rights if the traditional requirements for contract formation are present.

Harrell was an upper-level management employee of Ward until the termination of his employment in 1981. As such, he supervised other management employees. Harrell's amended complaint contained the following allegations. During the course of his employment, Ward promulgated a personnel manual which it updated and supplemented at various times with additional policy statements. Harrell bases his breach of contract claim upon statements contained in three documents: a chapter in the 1981 personnel manual entitled "Types of Separation"; a supplemental policy entitled "Employee Probation/Termination Procedure" (Probation Procedure); and a special program called the "Voluntary Separation Program" .

Briefly, the "Types of Separation" chapter in the personnel manual described several ways in which an employee could be separated from his employment at Ward, including resignation, layoff, discharge, retirement, disability, death and deactivation. Under the heading "Discharges" appeared the statement that "[a]n employee is discharged when [his] conduct or actions are determined to be detrimental to the best interests of the Company." This statement was followed by a section which listed the following reasons for discharge: attendance, performance, cause and "Discharge Other." Further details regarding the manual will be provided later in connection with our Discussion of the issues.

The probation procedure, the second document upon which Harrell relies, was disseminated to all "Supervisors of Management (Ledger) Employees" in August of 1981. It outlined a specific and detailed procedure to correct significant performance deficiencies and stated that the procedure "must be taken" with any employee "rated 'MM' or lower." The procedure essentially consisted of probation and counseling followed by termination of employment where rehabilitation was not achieved.

The VSP was a special program targeted at top-level management employees. Through this program, Ward offered separation pay and other benefits in exchange for the employee's voluntary separation from employment. The letter accompanying the VSP offer stated that "[a]s the title implies, your participation is voluntary . . . [s]ince the program is voluntary, you do have the right to accept or reject the offer." Attached to the letter was "an application form to accept or reject the Voluntary Separation Program offer."

The plaintiff alleged that these three policy statements were circulated to him, that he reasonably believed that they governed the circumstances under which he could be separated from employment and that he accepted the "offer" formed by the policy statements by continuing to work after learning of their existence. In September of 1981, Ward attempted to coerce Harrell into resigning by defaming his business reputation, indicating to him that he was not wanted and searching for his successor while he intended to remain at Ward. Harrell alleged that these actions caused him to believe that he was being forced to resign and that he was required to accept participation in the VSP before Ward would pay him the benefits which he was entitled.

Harrell further alleged that the VSP document was a "sham," and that his termination violated the terms of the personnel manual, the probation procedure and the VSP.

The sole question before us is whether the allegations of Harrell's complaint are sufficient to state a claim for breach of an employment contract.

The complaint was dismissed pursuant to a motion filed under section 2-615 of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2-615). For purposes of a section 2-615 motion to dismiss, all facts well pleaded must be taken as true and interpreted in the light most favorable to the plaintiff. (Free v. Holy Cross Hospital (1985), 153 Ill. App. 3d 45, 49, 505 N.E.2d 1188.) A complaint is properly dismissed for failure to state a cause of action only where it appears that ...

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