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LAMASTER v. CHICAGO & NORTHEAST ILLINOIS DIST. COU

June 17, 1991

CLIFFORD H. LAMASTER, Plaintiff,
v.
CHICAGO AND NORTHEAST ILLINOIS DISTRICT COUNCIL OF CARPENTERS APPRENTICE AND TRAINEE PROGRAM, Defendants


James B. Moran, Chief United States District Judge.


The opinion of the court was delivered by: MORAN

JAMES B. MORAN, CHIEF UNITED STATES DISTRICT JUDGE

 On September 7, 1989, plaintiff Clifford Lamaster ("Lamaster") was fired from his position as director of the Apprentice and Trainee Program by the defendant in this action, the Chicago and Northeast Illinois District Council of Carpenters Apprentice and Trainee Program ("the Program"). In a three-count complaint brought against the Program, Lamaster charges that this termination violated the Age Discrimination in Employment Act (ADEA), 29 U.S.C. ยง 623 (1988) (Lamaster was sixty years old when he was fired), effected a breach of his oral contract with the Program, and transgressed Illinois law principles of promissory estoppel. Now before this court is the Program's motion to dismiss the two pendent claims. For the following reasons, that motion is denied.

 FACTS

 The relevant facts are gleaned from the allegations in Lamaster's complaint, which, for the purposes of this motion to dismiss, we assume to be true. Zinser v. Rose, 868 F.2d 938, 939 (7th Cir. 1989). Until 1987, the Chicago and Northeast Illinois District Council of Carpenters Apprentice and Trainee Program was affiliated with the Chicago Board of Education ("the Board"). Employed by the Program since 1966, Lamaster was a tenured department chairman with the Board when the Program separated from the Board in 1986. Around this time, the Program offered Lamaster a position as Director of the Program. Before he accepted this offer, Lamaster alleges, Adolf Dardar ("Dardar"), the Coordinator of the Program and an authorized agent and representative, expressly represented to Lamaster that if he accepted the position of Director, he would hold this position for as long as he chose to do so. Relying on this representation, Lamaster accepted the offer and agreed to provide the Program with his knowledge and expertise, resigned from his position with the Board and refused a substantial promotion that the Board had offered him. Without just cause, Lamaster complains, he was discharged from his position with the Program on September 7, 1989, effective October 20, 1989.

 DISCUSSION

 A. Alleged Breach of Oral Contract for Permanent Employment

 Lamaster asserts that Dardar's promise that Lamaster would be employed by the Program for as long as he wished created an enforceable oral contract for permanent employment, which the Program breached by firing him without cause. The Program points to three defects with this alleged contract at the formation stage in urging this court to dismiss the breach-of-contract claim: a lack of a clear and definite promise; insufficient consideration; and an absence of mutuality of obligation. In addition, the Program contends that the alleged contract is rendered unenforceable by virtue of the one-year clause of the Illinois Statute of Frauds, an argument that we reach infra in section C. A consideration of those contentions takes us into areas of Illinois law that have been for years and remain murky. The Illinois cases, even from the same appellate districts, cannot be reconciled in a principled manner, and differing appellate panels do not pretend that they can be. We are left, then, with the responsibility of making a best guess of what the Illinois Supreme Court would do in similar circumstances.

 Illinois law presumes employment contracts to be "at will" -- that is, "terminable by either party for good reason, bad reason, or no reason at all." Tolmie v. United Parcel Service, Inc., 930 F.2d 579, 580 (7th Cir. 1991) (citing Duldulao v. Saint Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 489, 505 N.E.2d 314, 317-18, 106 Ill. Dec. 8 (1987)). This general rule is interpreted as a rule of construction, however, and can be overcome by demonstrating that the parties contracted otherwise. Duldulao, 115 Ill. 2d at 489, 505 N.E.2d at 318. Illinois courts have generally imposed two requirements that a plaintiff must satisfy to overcome the presumption of at-will employment: first, the promise of permanent (or other fixed duration) employment must be clear and definite. See Wilder v. Butler Manufacturing Co., 178 Ill. App. 3d 819, 821, 533 N.E.2d 1129, 1130, 128 Ill. Dec. 41 (3d Dist. 1989); Eastman v. Chicago, Central & Pacific Railroad Co., 930 F.2d 1173, 1177 (7th Cir. 1991); Simmons v. John F. Kennedy Medical Center, 727 F. Supp. 440, 443 (N.D. Ill. 1989); Hindley v. Seltel, Inc., 672 F. Supp. 1093, 1095 (N.D. Ill. 1987); Yocum v. Showbiz Pizza Time, Inc., No. 88 C 3128, 1989 WL 15961 at 1 (N.D. Ill. Feb. 21, 1989). This factor is evaluated by an objective inquiry, see Tolmie, 930 F.2d at 501, and will be satisfied "only if the 'language contains a promise clear enough that an employee would reasonably believe that an offer has been made.'" Hindley, 672 F. Supp. at 1095 (quoting Duldulau, 115 Ill. 2d 482, 505 N.E.2d at 318). Second, the plaintiff must establish that the contract is supported by valid consideration. See Ladesic v. Servomation Corp., 140 Ill. App. 3d 489, 491, 488 N.E.2d 1355, 1356, 95 Ill. Dec. 12 (1st Dist. 1986); Hindley, 672 F. Supp. at 1095; Wilcox v. Alamo Group, Inc., No. 85 C 4595, 1986 WL 15136 at 5 (N.D. Ill. 1986).

 1. " Additional Consideration" Requirement

 The consideration requirement, most courts agree, is not fulfilled by a promise on the part of the plaintiff-employee to perform the services required by the employment. See Heuvelman v. Triplett Electrical Instrument Co., 23 Ill. App. 2d 231, 235, 161 N.E.2d 875, 877 (1st Dist. 1959); Smith v. Board of Education, 708 F.2d 258, 263 (7th Cir. 1983); Bordenkircher v. Burlington Air Express, No. 87 C 3897 (N.D. Ill. July 19, 1989); Wilcox, 1986 WL 15136 at 5. This practice of requiring "additional consideration," however, has been the subject of some dispute in recent years. Relying on a decision of the First Illinois Appellate District, Martin v. Federal Life Ins. Co., 109 Ill. App. 3d 596, 440 N.E.2d 998, 65 Ill. Dec. 143 (1st Dist. 1982), this court held in Kula v. J.K. Schofield & Co., 668 F. Supp. 1126 (N.D. Ill. 1987), that as long as the parties bargained for and exchanged promises for permanent employment, no additional consideration would be necessary. 668 F. Supp. at 1131-32. Additional consideration, such as evidence that the parties agreed, as part of their bargain, that the plaintiff would leave his job and the benefits that went with it, we held, would be useful in determining the parties' intent but not necessary if the intent to enter into a permanent employment contract is clear from other evidence. 668 F. Supp. at 1132. Other Illinois courts, while not following Martin's holding, have similarly interpreted that case as dispensing with the requirement of consideration in addition to the basic promise to perform services if the parties' intent is manifest. See Tolmie, 930 F.2d at 582 & n. 7; Thompson v. American Geriatrics Society, Inc., 83 C 3370, 1986 WL 11363 at 2 (N.D. Ill. Oct. 6 1986); Wilcox, 1986 WL 15136 at 5.

 This understanding perhaps misinterprets the Martin decision. The court in that case addressed itself primarily to reexamining the proposition that forgoing alternative offers of employment does not constitute sufficient consideration. Rejecting that proposition, the Martin court held that if the parties bargained for and exchanged promises to employ permanently on one hand and to forgo alternative employment opportunities on the other, the consideration element would be satisfied. 109 Ill. App. 3d at 601, 440 N.E.2d at 1002-1003. Additional consideration, the Martin court held, is unnecessary; the court appears to interpret "additional consideration," however, to signify consideration in addition to the promise to forgo other offers of employment rather than in addition to the mere promise to provide services. In Kula, by contrast, we understood the additional consideration concept to include the relinquishment of the right to accept competing offers of employment. Although the Martin court cites, without apparent disapproval, decisions of other jurisdictions that have enforced contracts for permanent employment "'even though the only consideration for it [the contract], so far as the employer is concerned, is the promise of the employee to render the service called for by the contract,'" Martin, 109 Ill. App. 3d at 602, 440 N.E.2d at 1003 (quoting Eggers v. Armour & Co., 129 F.2d 729, 731 (8th Cir. 1942)), the court's reasoning and conclusion do not seem fully to endorse that approach. The court stresses elsewhere in the opinion that no additional consideration would be necessary if the parties exchanged bargained-for promises and observes that "consideration is an essential element for the creation of an enforceable contract," 109 Ill. App. 3d at 603, 440 N.E.2d at 1004; the consideration in that case was found in the plaintiff's promise not to accept an attractive job offer with a competing company. Without the commitment to forgo that offer, the promise on the part of the defendant to employ the plaintiff permanently would not be bargained for and would not constitute consideration, for a promise simply to perform services is illusory where the plaintiff is free to leave the defendant's employ whenever he chooses. See Annotation, Validity and Duration of Contract Purporting to be for Permanent Employment, 60 A.L.R.3d 226, 233 (1974 & Supp. 1990). Indeed, the Martin court suggests, when addressing the defendant's argument that the contract in that case was unenforceable under the mutuality of obligation doctrine, that if the contract were not supported by consideration in the form of the plaintiff relinquishing his right to accept the competing job offer, the remaining promise -- to perform services -- would be illusory in light of the plaintiff's ability to terminate the employment relationship at any time and would not support the contract. See Martin, 109 Ill. App. 3d at 603-04, 440 N.E.2d at 1004.

 The Martin decision, then, can be read broadly as requiring nothing more than a promise to perform where the parties' intent is clear, or more restrictively as dispensing with the "additional consideration" requirement only when the contract is otherwise supported by a non-illusory promise. This latter interpretation of Illinois law is admittedly narrower than we espoused in Kula but appears to reflect more accurately the actual holding of Martin, to account for the fierce criticism that Martin, broadly construed, has attracted, see, e.g., Ladesic, 140 Ill. App. 3d at 492, 488 N.E.2d at 1357, and to incorporate more faithfully the reasoning of the latest opinion of the Illinois Supreme Court's in this area. The issue presented in that case, Duldulao v. St. Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 505 N.E.2d 314, 106 Ill. Dec. 8 (1987), was whether and under what conditions an employee handbook distributed by an employer could become a binding contractual agreement. Holding that such handbooks could, in some circumstances, rise to the level of contract, the court embraced the "traditional requirements for contract formation" -- offer, acceptance, and consideration -- to determine whether a contract was created. 115 Ill. 2d at 482, 505 N.E.2d at 318. The court thereby reaffirmed the importance of the traditional consideration concept when a plaintiff is urging an interpretation of an employment relationship that deviates from the presumed "at will" paradigm. An illusory promise, which imposes no obligation on the promisor, cannot constitute consideration, see Martin, 109 Ill. App. 3d at 603, 440 N.E.2d at 1004 ("'Where there is no other consideration for a contract the mutual promises of the parties constitute the consideration, and these promises must be binding on both parties.'" (quoting Armstrong Paint and Varnish Works v. Continental Can Co., 301 Ill. 102, 108, 133 N.E. 711 (1921))); Buian v. J.L. Jacobs and Co., 428 F.2d 531, 533 (7th Cir. 1970), and therefore a plaintiff's promise to work for an employer as long as the plaintiff desires cannot alone support a contract under Duldulau.1 Where the plaintiff's right to terminate the employment relationship is somehow fettered, however, the promise to work can constitute consideration. See Barry Gilberg, Ltd. v. Craftex Corp., 665 F. Supp. 585, 594 (N.D. Ill. 1987).

 Following Martin, and with reference to Duldulao, then, we hold that a mere promise to perform the services of employment alone cannot support a contract for permanent employment. The promises must be bargained for and must be binding for the contract to be enforceable; once the parties have exchanged bargained-for, non-illusory promises, the consideration requirement is satisfied. Leaving aside the question of what constitutes bargained-for, non-illusory promises for the moment, we think no court would quibble with the proposition that additional consideration may be useful in demonstrating the intent of the parties. Such a construction would not lead to the abolishment of the consideration requirement, cf. Ladesic, 140 Ill. App. 3d at 492-93, 488 N.E.2d at 1357, because underlying consideration will still be required. We need not decide whether the Illinois Supreme Court would allow the presence of such evidence to obviate the need for a clear and definite promise, for, as discussed infra, we find the promise in this case to be sufficiently certain to satisfy the "clear and definite" requirement for the purpose of this motion.

 2. Forgoing Alternative Employment as Consideration

 In Heuvelman v. Triplett Electrical Instrument Co., 23 Ill. App. 2d 231, 161 N.E.2d 875 (1st Dist. 1959), the plaintiff was offered a position with a competitor of the defendant-employer. After the plaintiff discussed the matter of his leaving with the defendant, the president of the defendant company told the plaintiff "that their arrangement was a permanent one." 23 Ill. App. 2d at 235, 161 N.E.2d at 877. Finding the alleged permanent employment contract to fail for, among other deficiencies, lack of consideration, the court held that "it is not sufficient consideration for a contract of permanent employment to forego another employment opportunity." 23 Ill. App. 2d at 236, 161 N.E.2d at 878 (citations omitted). The Martin court reexamined and rejected this categorical statement, reasoning that "the essential element of consideration is a bargained-for exchange of promises or performances," and a promise "to relinquish a more lucrative offer with another employer in ...


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