of a corporate in-house legal staff are less likely to touch on matters sensitive to the attorney-client relationship than are issues arising in a retaliatory discharge suit brought by a similarly situated in-house lawyer. Consequently, the concerns underlying the Illinois Supreme Court's Balla decision are, to a large extent, inapplicable to this case.
In summary, the ADEA, as a federal statute, preempts defendants' rights under state law to discharge their in-house attorney/employees for any reason. Nothing in the ADEA or its legislative history indicates that in-house attorneys are to be excluded from the statute's protection, and neither Seventh Circuit nor Illinois caselaw mandates such a conclusion. As a result, plaintiff's ADEA claim will not be dismissed.
II. BREACH OF CONTRACT--COUNTS II AND III
In contesting plaintiff's breach of contract claims, defendants renew their arguments based on a client's right to discharge an attorney for any reason or for no reason. Defendants contend that, because they possessed an absolute right to terminate Rand's employment, they could not have breached any contract by dismissing him. Because a common law breach of contract claim does not raise concerns relating to the preemptive force of a federal statute, defendants' contentions regarding the breach of contract counts have more merit than their arguments for dismissal of plaintiff's ADEA claim. Thus, fuller examination of the at-will discharge rule is warranted.
The primary Illinois Supreme Court case regarding clients' rights to dismiss their attorneys is Rhoades v. Norfolk & Western Railway Co., 78 Ill. 2d 217, 35 Ill. Dec. 680, 399 N.E.2d 969 (1979). In Rhoades, the Illinois Supreme Court ruled that an attorney who had been discharged by his client could not recover for damages possibly due him on the basis of a contingency fee contract, but rather was only entitled to be paid on a quantum meruit basis for the reasonable value of services rendered before dismissal. Id., 78 Ill. 2d at 230, 399 N.E.2d at 975.
The Illinois Supreme Court premised its conclusion in Rhoades on the client's right to discharge his attorney for any reason, ascribing special value to this principle in light of the trust and confidence which must characterize the attorney-client relationship. Id., 78 Ill. 2d at 288, 399 N.E.2d at 974. The Court reasoned that the client's right to discharge is a term of the attorney-client contract implied by law. Id., 78 Ill. 2d at 229-30, 399 N.E.2d at 975. A client's exercise of the right to discharge is therefore not a breach and could not be penalized. Id.
As an implied term of the contract, defendants' right to discharge their attorney/employee remained part of their agreement with plaintiff Rand unless the right was expressly disavowed. Cf. Foster Enterprises, Inc. v. Germania Federal Savings & Loan Assoc., 97 Ill. App. 3d 22, 28, 52 Ill. Dec. 303, 421 N.E.2d 1375, 1378 (3d Dist. 1981) (implied covenant of good faith is part of contract unless expressly disavowed). Therefore, plaintiff's contract claim in Count II, which is based on the assurances allegedly given by defendant Liuzzi and other CF Industries employees, cannot survive unless the defendants' statements could be interpreted as an express disavowal of the right to discharge Rand at will.
In evaluating the question of whether the alleged assurances given by defendants could operate as a disclaimer of their right to discharge, the court takes note of principles of Illinois law regarding oral employment contracts. First, Illinois courts regard such contracts with skepticism. See Tolmie v. United Parcel Service, 930 F.2d 579, 581 (7th Cir. 1991). In order to rebut the presumption of at-will employment, the oral offer of employment cannot be vague, but must encompass terms that are "clear and definite." Id.
In the attorney-client context, the client's right to discharge an attorney bears public policy implications which are absent in an ordinary employment relationship. Consequently, the requirement that an employer's abrogation of its right to discharge be "clear and definite" is heightened. Cf. La Rocco v. Bakwin, 108 Ill. App. 3d 723, 439 N.E.2d 537, 64 Ill. Dec. 286 (2d Dist. 1982) (in light of at-will discharge rule, lawyer could not rely upon assurances of continued employment).
Given these considerations, the court concludes that the verbal assurances alleged by plaintiff are, as a matter of law, not clear or definite enough to operate as an express disavowal of defendants' right to discharge Rand as their attorney. Plaintiff does not allege that defendants explicitly promised him that he would not be dismissed, or that defendants expressly guaranteed him employment for a definite period of time.
In light of the importance accorded by the Illinois courts to a client's right to discharge a lawyer, these failures are fatal.
If clients are to abandon their rights to discharge an attorney, they must do so expressly. Plaintiff has not alleged such an express renunciation. His claim based on the alleged oral assurances (Count II) is consequently dismissed.
The dismissal of Count II leaves only plaintiff's Count III contract claim based on the employee handbook. Under Illinois law, statements made in an employee handbook can create contractual obligations if: 1) the language of the statements contains a promise clear enough that an employee would reasonably believe that an offer has been made; 2) the statement is disseminated to the employee in such a manner that the employee is aware of its contents and reasonably believes it to be an offer; 3) the employee must accept the offer by commencing or continuing to work after learning of the policy statement. See Duldulao v. St. Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 490, 505 N.E.2d 314, 318, 106 Ill. Dec. 8 (1987).
Plaintiff's handbook-based claims relate to two types of alleged statements. The first type are representations made regarding procedures for termination. (Count III, PP 7-10) Under the requirements of Duldulao, plaintiff Rand has adequately stated a claim based on these statements, since the alleged termination policies are clear enough to be possibly understood as an offer. Plaintiff Rand, however, has also rested his claim in Count III on statements regarding policies of "fairness," "sincerity," "courtesy" and "professionalism." (Count III, P 11.) These statements are not definite enough to create contractual obligations. As a result, plaintiff's handbook claim, insofar as it based on statements regarding termination procedures, is sufficient to withstand a Rule 12(b)(6) motion. In other respects, however, the claim is dismissed.
Contrary to defendants' assertions, the client's right to discharge an attorney does not mandate dismissal of all claims based on the handbook. First, the handbook is comprised of written statements and therefore does not present the problems of proof raised by vague oral assurances. Secondly, the language relied upon by plaintiff does not abrogate or substantively limit the client's right to discharge his attorney, it only suggests a set procedure by which the dismissal can be accomplished. The at-will discharge rule is therefore not directly implicated.
For the reasons stated in this memorandum opinion and order, defendants' motion to dismiss is DENIED as to Count I, GRANTED as to Count II, and GRANTED in part and DENIED in part as to Count III. Parties are urged to discuss settlement of this case and are to report for status on August 4, 1992 at 10 a.m.
JAMES F. HOLDERMAN
United States District Judge
DATED: July 27, 1992