of the Illinois Statute of Frauds, Ill. Rev. Stat. ch. 59, sec. 1 (1989) ("the Statute"), which directs that "no action shall be brought . . . upon any agreement that is not to be performed within the space of one year from the making thereof, unless the promise or agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing . . . ."
There is no dispute that the alleged agreement of permanent employment was not memorialized by a writing; instead, Lamaster disputes the applicability of the Statute of Frauds by arguing that the agreement was capable of full performance within one year as that concept is understood by Illinois courts. If Lamaster can allege a valid contract claim with bargained-for exchange, we agree that it would not fall within the parameters of the statute.
Although the Statute speaks in actual terms, requiring a writing for any agreement "that is not to be performed within" one year, it has been interpreted by Illinois courts on a more hypothetical level so that any agreement that is capable of being performed within a year, whether or not that contingency is likely, falls outside the Statute's reach. See Sinclair v. Sullivan Chevrolet Co., 45 Ill. App. 2d 10, 14, 195 N.E.2d 250, 252 (3d Dist.) (" Sinclair I "), aff'd, 31 Ill. 2d 507, 202 N.E.2d 516 (1964) (a contract is unenforceable under the Statute "'only if it is impossible of performance within one year'" (quoting Balstad v. Solem Machine Co., 26 Ill. App. 2d 419, 168 N.E.2d 732 (1960))); Evans v. Fluor Distribution Cos., 799 F.2d 364, 366 (7th Cir. 1986); Goldstick v. ICM Realty, 788 F.2d 456, 464 (7th Cir. 1986). There is some disagreement among Illinois appellate courts (the Illinois Supreme Court has been silent on this issue) over whether a contract for permanent or lifetime employment is capable of performance in one year. On one hand, the death or voluntary resignation of the employee may be understood as fulfilling the terms of the agreement and rendering it fully performed. A competing interpretation, however, construes those events as terminating the agreement, cutting short the contemplated life of the employment relationship. A review of the caselaw in this area convinces this court that the former interpretation more properly addresses the specific agreement in this case.
The only Illinois Supreme Court case dealing with the one-year provision in the context of employment contracts presents the most easily resolved scenario and the least controversial result. The contract at issue in that case, Sinclair v. Sullivan Chevrolet Co., 31 Ill. 2d 507, 202 N.E.2d 516 (1964) (" Sinclair II "), was an oral agreement that the plaintiff would work for the defendant for a period of one year to begin about a week after the parties entered into the contract. Unlike the contracts of indefinite duration in the permanent employment cases, the agreement in Sinclair was for a specified duration, and the parties anticipated that it would last that long. The Sinclair plaintiff, moreover, was not free to leave the defendant's employ any time he chose. The court had little trouble holding that the contract was unenforceable under the Statute of Frauds. The lower court's opinion offers insight into the reasoning behind this holding. Although the death of the employee would terminate the agreement (as is true in every employment contract), the appellate court held, termination and performance are not synonymous; that continued performance may be excused and that the employer may not have any remedies to pursue "does not mean the contract has been performed in full." Sinclair I, 45 Ill. App. 2d at 15, 195 N.E.2d at 252. See also Goldstick, 788 F.2d at 464 ("A promise to work for an employer for five years really cannot be performed within a year."); E. Farnsworth, supra p. 13, at 395.
Application of the Statute of Fraud's one-year provision becomes trickier as we leave the narrow and rather unambiguous confines of Sinclair and consider the provision with respect to contracts for an indefinite duration. It is generally agreed that contracts to employ individuals until the age of 65 or until retirement are covered by the Statute. Thus in Evans, the Seventh Circuit held that a contract to employ a 62-year old plaintiff until he was 65 was not capable of being fully performed within one year and therefore violated the Statute of Frauds. 799 F.2d at 366. See also Brudnicki v. General Electric Co., 535 F. Supp. 84, 86-87 (N.D. Ill. 1982) (contract for employment that "would extend over 24 years until plaintiff retired at age 65" found void under the Statute of Frauds); Palmateer v. International Harvester Co., 85 Ill. App. 3d 50, 52, 406 N.E.2d 595, 597, 40 Ill. Dec. 589 (3d Dist. 1980), aff'd in part, rev'd in part on other grounds, 85 Ill. 2d 124, 421 N.E.2d 876, 52 Ill. Dec. 13 (1981) (agreement to employ plaintiff until his retirement found unenforceable under the Statute of Frauds); cf. Hodge v. Evans Financial Corp., 262 U.S. App. D.C. 151, 823 F.2d 559, 563 (D.C. Cir. 1987). In these cases, the agreement of employment is intended to run for a certain period of years, and any contingency that terminates the agreement cuts that contemplated period short, preventing full performance. Although this approach appears to be fairly unanimously adopted by Illinois courts, we note that it is not compelled by the Sinclair decision. The plaintiffs in these cases can generally leave the defendant's employ at any time, and just as at-will employment relationships do not trigger the one-year provision, the plaintiff's relinquishment of his job in these cases arguably effects full performance and falls outside the reach of the Statute. See Balstad v. Solem Machine Co., 26 Ill. App. 2d 419, 422, 168 N.E.2d 732, 734 (2d Dist. 1960). But it is significant that the agreement establishes a contemplated term, and the plaintiff's departure would cut that term short, thereby frustrating the intent of the contract. Cf. Restatement (Second) of Contracts § 130 comment b, illustration 6 (1979).
Less unanimous has been the treatment of contracts for permanent employment under the one-year provision of the Statute of Frauds. The majority of courts understand these contracts as contemplating a specified term, differing little from agreements to employ the plaintiff until his retirement. Death or the departure of the plaintiff therefore is seen as frustrating the terms of the contract. See Koch, 175 Ill. App. 3d at 254, 529 N.E.2d at 286; Bordenkircher, 1989 WL 84998 at 3. One Illinois appellate panel, however, understanding a contract to employ the plaintiff until retirement as a lifetime employment contract, found the contract to fall outside the purview of the Statute, see Martin, 109 Ill. App. 3d at 604, 440 N.E.2d at 1005, an approach espoused in other jurisdictions as well. See Hodge, 823 F.2d at 563 (recognizing a distinction between employment contracts for a specified period of time, such as contracts until the age of 65, and contracts for permanent employment; death would effect full performance with respect to the latter type of agreement); see also A. Corbin, Contracts § 446, at 549 (1950 & Supp. 1991). These courts apparently interpret permanent employment contracts as agreements to employ the plaintiff until his death; death, therefore, renders the contract fully performed. Cf. Sinclair I, 45 Ill. App. 2d at 15, 195 N.E.2d at 252.
Illinois courts have treated conditional contracts for specified periods of time or of indefinite duration -- that is, contracts that will continue for the specific period or indefinitely unless the plaintiff leaves or the defendant terminates for an agreed-upon reason -- similarly. In Gilliland v. Allstate Insurance Co., 69 Ill. App. 3d 630, 388 N.E.2d 68, 26 Ill. Dec. 444 (1st Dist. 1979), for example, the court found unenforceable under the one-year provision an agreement to employ the plaintiff until his retirement as long as he complied with all lawful directions of defendants. See also Brudnicki, 535 F. Supp. at 87; Payne v. AHFI/Netherlands, B.V., 522 F. Supp. 18 (N.D. Ill. 1980). Although the terms of these contracts specified that the contracts would end if the conditions came to pass, the contingencies apparently were interpreted as interfering with rather than effecting full performance of the contract.
The scenario presented in the instant case, however, is distinguishable from those situations that Illinois courts in the past have found to violate the one-year provision of the Statute of Frauds. The Program promised to employ Lamaster "for as long as [he] wanted to hold th[e] position" (Complaint para. 6). Although this alleged agreement is similar in significant respects, such as its indefinite duration, to contracts for permanent employment, Lamaster's contract, by its own terms, ends when Lamaster no longer wishes it to continue. In this respect, it resembles a contract that ends, by its own terms, upon one of the contractors' or a third parties' death or another contingency; when the contingency occurs, the full service contemplated by the agreement will have been rendered. The Sinclair I court explicitly acknowledged that this sort of contract would not be barred by the Statute of Frauds, observing that "where the contract extends to a point in time, be it death or some other circumstance, at which time the full service contemplated will have been rendered, and that point of time could occur within one year, the Statute of Frauds will not be a bar to enforcement of the action." Sinclair I, 45 Ill. App. 2d at 15, 195 N.E.2d at 252; see also E. Farnsworth, supra p. 13, at 393-94; A. Corbin, supra p. 26, § 446, at 546-47. The Gilliland-type of contract, moreover, which continues for a certain period or indefinitely unless some condition occurs, is also distinguishable. The terms of the agreements in those cases contemplate that the contract will continue indefinitely or for the specified period, and the contingency cuts short the contemplated period of performance. By contrast, the period of full performance in the alleged agreement between Lamaster and the Program is defined by the occurrence of the contingency. See E. Farnsworth, supra p. 13, at 395 (distinguishing termination from performance). The contract in Martin, which provided for the employment of the plaintiff until retirement "or until he no longer wished to be employed," can be understood as falling within this rubric, rendering that decision consistent with other Illinois precedent.
Although no Illinois court -- including the Illinois Supreme Court -- has laid out the analysis in this way, we think that the Supreme Court would likely agree with this approach. It is consistent with the dictum in the Sinclair I decision, which was affirmed by the Illinois Supreme Court, and with the "prevailing dislike" for the one-year clause, see Goldstick, 788 F.2d at 464, which is reflected in the interpretation of the Statute as barring only oral contracts that are not capable of performance within one year. See Goldstick, 788 F.2d at 464. And although the Seventh Circuit has inferred from the two most recent cases in which the Illinois Supreme Court has dealt with the Statute of Frauds that the court has not "been swept up in the 'constant erosion' that has eaten away the statute in other jurisdictions," Goldstick, 788 F.2d at 466; Evans, 799 F.2d at 368, neither do these cases indicate that the Supreme Court is likely to interpret the one-year provision expansively. See Sierens v. Clausen, 60 Ill. 2d 585, 328 N.E.2d 559 (1975) (holding that the contract at issue did not violate that clause requiring that contracts for the sales of goods in excess of $ 500 must be in writing); Lee v. Central National Bank & Trust Co., 56 Ill. 2d 394, 308 N.E.2d 605 (1974) (finding that a writing executed well after an oral antenuptial agreement and the marriage to which it pertained satisfied the Statute of Frauds' provision that agreements made upon consideration of marriage must be memorialized by a writing).
Whether the occurrence of a contingency would complete performance or frustrate it "depends in large part on the underlying purpose and specific terms of the agreement itself," Brudnicki, 535 F. Supp. at 87, and may not always be obvious, see Restatement (Second) of Contracts § 130 comment b (1979), but in the present case, we think that the language of the promise indicates that full performance would be effected when Lamaster no longer chooses to work for the Program. We therefore find that the Statute of Frauds does not preclude enforcement of the alleged oral contract in this case.
For the foregoing reasons, the Program's motion to dismiss Counts II and III of Lamaster's complaint is granted in part and denied in part. Count III is dismissed on consideration grounds, but without prejudice and with leave to amend.