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RAND v. CF INDUS.

July 27, 1992

JOSEPH L. RAND, Plaintiff,
v.
CF INDUSTRIES, INC. and ROBERT C. LIUZZI, Defendants.


HOLDERMAN


The opinion of the court was delivered by: JAMES F. HOLDERMAN

JAMES F. HOLDERMAN, District Judge:

 Plaintiff Joseph L. Rand, an attorney, filed this action against defendants CF Industries, Inc. ("CF Industries") and Robert C. Liuzzi, alleging violations of the Age Discrimination in Employment Act (ADEA) (Count I) and breach of contract (Counts II and III). Defendants have moved, pursuant to Fed. R. Civ. P. 12(b)(6), to dismiss plaintiff's complaint. For the reasons stated in this memorandum opinion and order, defendants' motion is denied as to Count I, is granted as to Count II, and is denied in part and granted in part as to Count III.

 FACTUAL BACKGROUND

 In ruling on a motion to dismiss, the court must take the allegations of the complaint as true and view them in a light most favorable to the plaintiff. See e.g., Tolmie v. United Parcel Service, Inc., 930 F.2d 579, 580 (7th Cir. 1991). The facts as stated in plaintiff Rand's complaint are as follows.

 Plaintiff Joseph L. Rand, an attorney, was hired by defendant CF Industries in November, 1988. (Complaint, Count I, P 6.) During his tenure at CF Industries, Rand served as Assistant General Counsel and Assistant Secretary. (Count I, P 10.) On December 7, 1990, defendant CF Industries dismissed Rand, who was 49 years old at the time. (Count I, PP 6, 8.) Rand was replaced by John J. Scott, then age 40. (Count I, P 12.)

 Plaintiff Rand alleges that he accepted employment at CF Industries in reliance upon assurances made to him by defendant Liuzzi, the corporation's Chief Executive Officer, and other CF Industries employees. According to the Complaint, Liuzzi assured Rand that plaintiff would be promoted to General Counsel after one or two years of employment as Assistant General Counsel. (Count II, PP 5-6.) Plaintiff claims that defendants breached contractual obligations by failing to fulfill these assurances.

 The Complaint also alleges that defendant CF Industries issued to Rand a personnel handbook which outlined procedures for termination of employees and contained more general statements regarding employee relations. (Count III, 6-11.) According to Rand, the corporation's treatment of him did not comply with the policies set forth in the handbook. (Count III, PP 8, 10, 14, 16.) Rand claims that the failure of the company to follow the practices described in the handbook constitutes breach of contract.

 DISCUSSION

 I. ADEA CLAIM-COUNT I

 Under Illinois law, a client may discharge his attorney at any time, with or without cause. See Rhoades v. Norfolk & Western Railway Co., 78 Ill. 2d 217, 227-228, 35 Ill. Dec. 680, 399 N.E.2d 969, 974 (1979). The Illinois Supreme Court has further stated that this at-will discharge principle applies to in-house counsel, such as plaintiff Rand, as well as to attorneys who are not employees of their clients. Balla v. Gambro, Inc., 145 Ill. 2d 492, 503, 164 Ill. Dec. 892, 584 N.E.2d 104, 109 (1991). Defendants contend that, as a result of the at-will discharge rule, they had absolute power to dismiss plaintiff Rand for any reason and consequently cannot be held liable for age discrimination.

 Defendants' argument is premised on the contention that a client's legal right to dismiss his or her attorney prevails over any other concern, including federal employment discrimination statutes. The court must disagree. The at-will discharge principle cited by defendants is a tenet of state law. See Rhoades, supra, 78 Ill. 2d at 228, 399 N.E.2d at 974. Consequently, under the Supremacy Clause of Article VI, cl. 2 of the Constitution, it must give way if it conflicts with a federal statute such as the ADEA. See E.E.O C. v. Commonwealth of Massachusetts, 858 F.2d 52, 53 (1st Cir. 1988).

 Because the ADEA predominates, the court cannot, as defendants urge, simply dismiss plaintiff's suit on the basis of the at-will discharge rule. Instead, the inquiry must focus on whether the federal statute encompasses a company's treatment of its in-house counsel and/or whether the ADEA incorporates the at-will discharge rule as an exception to its terms.

 A court construing a federal statute must begin with the language of the statute itself. See Orrego v. 833 West Buena Joint Venture, 943 F.2d 730, 734 (7th Cir. 1991). The operative provision of the ADEA states:

 It shall be unlawful for an employer- . . . to discharge any individual . . . because of ...


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