The opinion of the court was delivered by: Gettleman, District Judge.
CORRECTED MEMORANDUM OPINION AND ORDER
Plaintiff Glen O. Jones ("plaintiff') has filed a 13 count complaint
against multiple defendants, alleging that he was wrongfully terminated
from employment in violation of federal and Illinois law. The complaint
(in a classic case of over-pleading) names 17 defendants: (1) SABIS
Enterprises, Inc.; (2) International School of Minnesota, Inc.; (3) SABIS
International School; (4) SABIS School Network; (5) Chicago International
Charter School; (6) Chicago Charter School Foundation, Inc. ("the
Foundation");. (7) James Murphy ("Murphy"); (8) Karla Livney ("Livney");
(9) Leila Saad ("Saad"); (10) Ralph Bistany; (11) Al Bistany; (12) Udo
Schulz ("Schulz");. (13) Nadia Reda ("Reda"); (14) Fern Bistany; (15) Joy
N'Dauo ("N'Dauo"); (16) Jim Bowden ("Bowden"); and (17) Sam Reddick
("Reddick").*fn1 The complaint alleges 13 causes of action: (1) Title
VII (count V(A)); (2) 42 U.S.C. § 1981 (count V(B)); (3) 42 U.S, C.
§ 1985 (count V(C)); (4) 42 U.S.C. § 1986 (count V(D)); (5)
42 U.S.C. § 1983 (count V(E)); (6) failure to provide "COBRA" notice
(count V(F)); (7) slander (count VI(A));, (8) false light (count VI(B));
(9) tortious interference with contract (count VI(C)); (10) tortious
interference with prospective business advantage (count VI(D)); (11)
breach, of employment contract (count VI(E)); (12), wrongful discharge
(count VI(F)); and (13) wage collection (count, VI(G)).
The International School of Minnesota, Inc., SABIS Educational
Systems, Inc., SABIS International Charter School, and the Chicago
International Charter School (collectively, "SABIS") have moved to
dismiss counts V(B), V(C), V(E), VI(C) and VI (E). Al Bistany, Schulz,
Reda, Fern Bistany, N'Dauo, Bowden and Reddick (the "individual SABIS
defendants") have moved to dismiss counts V(B), V(C), V(E), VI(C),
VI(D), VI(E) and VI(F). The Foundation has moved to dismiss counts V(A),
V(B), V(E), V(F), VI(C), VI(E), and VI(F). Murphy and Livney (the
"individual Foundation defendants") have moved to dismiss counts V(B),
V(C), V(E), VI(C), VI(E) and VI(F). All the motions described above are
filed under Rule 12(b)(6). Reddick and Schulz have moved to dismiss all
counts under Rule 12(b)(2) for lack of personal jurisdiction.
As discussed below, SABIS's motion is granted in part and denied in
part, the individual SABIS defendants' motion is granted, the Foundation's
motion is granted, the individual Foundation defendants' motion is
granted in part and denied in part, and Reddick and Schulz's motion is
granted in part and denied in part as moot.
According to the complaint and attached exhibits, the Foundation
entered into an agreement with the Chicago Reform Board of Trustees in
1997 to open two charter schools in Chicago — the North Campus and
South Campus.*fn2 The Foundation then entered into an agreement with
SABIS for SABIS to provide education programs and otherwise operate the
schools. Both agreements specified that all instructional. providers and
other employees of the schools would be employees of SABIS, and not the
Foundation. The campuses operated under the name Chicago International
Charter School (the "School").
Defendant Ralph Bistany, SABIS's Director General, hired plaintiff as
principal/director of the School's South Campus. This position entailed
hiring administrative and teaching staff, procuring basic materials for
the School's operation, and increasing enrollment through meetings with
parents of prospective students and advertising through the local media.
Plaintiff was formerly a school administrator in Georgia.
The South Campus opened in August 1997 for the 1997-98 academic year.
Profits for the first year exceeded SABIS's expectations. To reward
plaintiff for his performance, Ralph Bistany gave him a $5,000 bonus and
informed him that additional bonuses would be forthcoming should his
performance and the School's enrollment continue to grow.
The relationship between plaintiff and SABIS deteriorated, however,
when plaintiff began objecting to a number of Ralph Bistany's hiring and
administrative decisions. First, after the Chicago Public School had
rejected the School's disciplinary code, concluding that it was illegal
under the Individuals with Disabilities in Education Act, ("IDEA"),
20 U.S.C. § 1400, et. seq., Ralph Bistany nevertheless insisted that
the School implement the code. Bistany informed plaintiff that SABIS did
not want to become a "school for the disabled." Plaintiff objected to
this course of action, arguing that it violated the rights of disabled
Next, after plaintiff offered a kindergarten teacher position to an
African American male, Ralph Bistany forced plaintiff to refrain from
hiring him. Bistany explained to plaintiff that "it is not the SABIS way"
to hire male teachers for lower school positions because they are prone
to sexually molest their own students. Despite plaintiffs objection,
Bistany insisted that the male not be hired. Ralph Bistany also forced
plaintiff, over plaintiffs objection, to refrain from hiring a male for a
first grade teaching position (for identical reasons).
Then, after plaintiff had hired an African American female as a Spanish
teacher, Ralph Bistany criticized plaintiff for his choice. Bistany
informed plaintiff that it is the "SABIS way to hire only native speakers
to teach foreign languages." Subsequently, over plaintiffs objection,
Ralph Bistany, N'Dauo and Reda pressured plaintiff into terminating the
Finally, in December 1997 and February 1998, plaintiff made numerous
objections to Ralph Bistany and N'Dauo that the School's education of
disabled students violated the IDEA. In response, Ralph Bistany told
plaintiff to go along with "the SABIS way," and threatened to terminate
plaintiff if he did not cease his objections.
On February 5, 1998, at Ralph Bistany's direction, plaintiff took a
personal leave of absence from the School. On February 6, N'Dauo called
plaintiff and advised him not to retain legal counsel or "go around
blabbing" his objections to employment decisions. Plaintiff informed
N'Dauo that he had already contacted legal counsel, that he was preparing
a letter outlining his objections, and that three of his subordinates
were preparing a memorandum (the "memo") raising objections to SABIS's
employment practices. On February 9, plaintiff transmitted the letter and
memo to SABIS (addressed to Ralph Bistany), objecting to SABIS's race and
gender-based employment decisions and education of disabled students.
When Ralph Bistany learned of the letter and memo, he instructed
Reddick, SABIS's General Counsel, to travel to Chicago and fire plaintiff
for objecting in writing to SABIS's discriminatory hiring practices. In
cooperation with Bistany, Livney, the Foundation's Executive Director,
came to the School and advised SABIS and the Foundation on how to
terminate plaintiff and what to tell staff, parents, and the Chicago
Public Schools. Livney also assisted in interrogating two of the memo's
three authors. On February 10, Reddick met with plaintiff at the School
and terminated him.
Thereafter, several defendants allegedly took actions to cover up
SABIS's true motivations for terminating plaintiff and to prevent others
from making written objections to SABIS's employment practices. First, on
the day of plaintiffs termination, one of the memo's authors was put on
administrative leave. Second, Livney, Murphy, Reda, N'Dauo and Ralph
intimidated another of the memo's authors for making written
objections. Third, SABIS, the Foundation and Livney conducted a "sham"
audit of the South Campus to create support and justification for their
retaliatory actions against plaintiff. Finally, to avoid informing the
parents of the real reason for plaintiffs termination, N'Dauo and Al
Bistany suggested to parents of the students that plaintiff had embezzled
money from the School.
I. STANDARDS FOR A MOTION TO DISMISS
In ruling on a motion to dismiss for failure to state a claim, the
court considers "whether relief is possible under any set of facts that
could be established consistent with the allegations." Bartholet v.
Reishauer A.G., 953 F.2d 1073, 1078 (7th Cir. 1992). A claim may be
dismissed only if it is beyond doubt that under no set of facts would the
plaintiffs allegations entitle him to relief. See Travel All Over the
World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1429-30 (7th Cir.
1996). The purpose of a motion to dismiss is to test the sufficiency of
the complaint, not to decide its merits. See Gibson v. City of Chicago,
910 F.2d 1510, 1520 (7th Cir. 1990). For purposes of a motion to
dismiss, the court accepts the factual allegations of the complaint as
true and draws all reasonable inferences in favor of the plaintiff. See
Travel All Over the World, 73 F.3d at 1428.
All defendants move to dismiss count V(B), which alleges that SABIS,
the Foundation, and the individual SABIS and Foundation defendants
violated plaintiff's rights under 42 U.S.C. § 1981 to "make and
enforce contracts," by terminating plaintiffs employment contract because
of his objections to SABIS's race-based hiring decisions.
SABIS argues that the court should dismiss plaintiffs § 1981 claim
against it for two reasons: (1) there was no "contract" between SABIS and
plaintiff, and (2) plaintiff lacks standing.
1. Contractual Relationship
Section 1981 governs contractual relationships, guaranteeing to all
persons in the United States "the same right . . . to make and enforce
contracts . . . as is enjoyed by white citizens." 42 U.S.C. § 1981(a).
To assert a § 1981 claim, "there must at least be a contract."
Gonzalez v. Ingersoll Milling Machine Co., 133 F.3d 1025, 1034 (7th Cir.
1998). SABIS argues that plaintiff was an at will employee, and
therefore, did not have a "contract" under § 1981. In response,
plaintiff contends that a provision in SABIS's teaching staff handbook
limits his at will status. Alternatively, plaintiff argues, even if his
employment was at will, he nevertheless has a protected "contract" for
purposes of § 1981. To resolve these arguments, the court must
determine if plaintiff's employment was at will and, if so, whether an at
will employee may state a claim under § 1981.
a. Plaintiffs At Will Status
The employment at will doctrine allows an employer "to discharge an
employee at will for any reasons or for no reasons, except when the
discharge violates clearly mandated public policy." Talley v. Washington
Inventory Service, 37 F.3d 310, 311 (7th Cir. 1994). In Illinois, there
is a presumption that employment without a fixed term is employment at
will. See Duldulao v. Saint Mary of Nazareth Hosp. Ctr., 115 Ill.2d 482,
106 Ill.Dec. 8, 505 N.E.2d 314, 318 (111. 1987). An employee handbook or
other policy statement may serve to rebut this presumption only if it
creates enforceable contractual rights. See id. at 318. Under Duldulao, a
handbook or policy statement must satisfy
three conditions in order to create an enforceable contract:
First, the language of the policy statement must
contain a promise clear enough that an employee would
reasonably believe that an offer has been made.
Second, the statement must be disseminated to the
employee in such a manner that the employee is aware
of its contents and reasonably believes it to be an
offer. Third, the employee must accept the offer by
commencing or continuing to work after learning of the
policy statement. Id.
The first prong of the Duldulao test requires an examination of the
handbook itself. SABIS's handbook contains three sections that are
relevant for deciding whether it creates a sufficiently clear contract
offer. The first page of the Handbook, entitled "Introduction,"
This Employee Handbook is intended as a guide to
introduce SABIS teachers to the policies, rules and
regulations under which the school operates. It is not
intended to be a contract or a promise of employment
or of specific terms, benefits, or duration of
employment . . . Employment at The School is "at
will," and the Employee Handbook and Policies and
Procedures Manual does not create a contract or
promise of employment or of any specific terms of
The second relevant section, entitled "Termination," states:
Employment at The School is "at-will" and this
Employee Handbook and the Policies and Procedures
Manual are not intended to and do not create a
contract or promise of employment or of any specific
terms, benefits, or duration of employment. A teacher
can be terminated at any time, without notice, and for
Finally, the "Employee Social Responsibility Act" section, on which
plaintiff relies to argue that the handbook creates an enforceable
An employer may not discharge, discipline, threaten,
discriminate against, or penalize an employee
regarding the employee's compensation, conditions, or
privileges of employment because:
The employee, in good faith, reports a violation or
suspected violation of any state or federal law to any
The employee is requested by a public body to
participate in an investigation, hearing, or inquiry;
The employee refuses an employer's order to perform an
action the employee has an objective basis in fact to
believe violates any state or federal law, and the
employee informs the employer that the order is being
refused for that reason.
Reading the handbook as a "coherent whole," Barder v. City of Crystal
Lake, 75 F.3d 270, 274 (7th Cir. 1996), the court concludes that it fails
the first prong of the Duldulao test, which requires the language to
contain a sufficiently clear contract offer. The disclaimer language both
at the beginning of the handbook and repeated in the "Termination"
section is clear: the handbook "is not intended to be a contract or a
promise of employment or of specific terms, benefits, or duration of
employment." Plaintiff could not reasonably have believed by reading the
handbook that it had made an employment contract offer. See Border, 75
F.3d at 273 ("Illinois courts have recognized that a disclaimer within an
employee handbook can be sufficient to show that no "clear promise' of
continuing employment was made, and thus that [a] handbook [does] not
create a legitimate claim of entitlement to employment").