Appeal from the Circuit Court of Williamson County. No. 98-L-130. Honorable Phillip G. Palmer and Honorable Ronald R. Eckiss, Judges, presiding.
The opinion of the court was delivered by: Justice Kuehn
Francis Denis (Denis) appeals from the trial court's March 25, 2003, judgment following a bench trial in which the trial court concluded that the conduct that led to his employment termination amounted to insubordination and was, therefore, not subject to the termination process mentioned in the employee handbook. P&L Campbell, Inc. (Campbell), cross-appeals from the trial court's earlier denial of its motion to dismiss, in which the trial court concluded that the employee handbook amounted to an employment contract.
An at-will employee can essentially be terminated without reference to a specific termination process. Some employee handbooks, if sufficiently clear on a termination procedure, can convert an at-will employment situation into a contractual employment situation. Once an employee is deemed a contractual employee, then for situations covered in the handbook, any termination must occur at the conclusion of the process set forth in the handbook.
At issue in this case is whether the employee handbook amounted to a contract of employment or whether Denis was an at-will employee. If we determine that the handbook constituted a contract, then we must determine if Denis's behavior fell outside the coverage of the employee handbook, so that an automatic termination was appropriate.
Campbell owned and operated a Harley-Davidson shop in Marion, Illinois. Denis had been employed by Campbell for more than 14 years. As of May 1998, Denis was the service manager and also served as an unpaid officer of the Harley Owners Group, a nonprofit corporation sponsored by Campbell. Upset over Campbell's handling of another employee, Denis resigned his position as an unpaid officer of the nonprofit corporation. In doing so, he allegedly had a confrontation on May 11, 1998, with Linda Campbell, during which he told her to stick certain books "up her ass." As a result of this conduct, Denis's employment was terminated.
Prior to Denis's termination, Campbell had drafted and implemented an employee handbook. The handbook had general provisions, as well as pages dedicated to each named employee, detailing each employee's job duties. One of Denis's job duties was to "[b]e polite and courteous to customers and coworkers." The same requirement was also listed in the general section. Another general provision stated:
"Failure to follow any of the guidelines set forth in the Employee Handbook or the Job Descriptions will result in disciplinary action which is:
3. Grounds for dismissal[.]"
Denis filed suit against Campbell for lost income, lost benefits, and damages, alleging that his termination by Campbell was improper and violated the employee handbook provisions for disciplinary action. As the case proceeded toward a trial, each side filed a motion for a summary judgment. In an order dated April 19, 2000, and file-stamped April 24, 2000, Judge Palmer denied both motions, stating that because the disciplinary language of the employee handbook was subject to more than one interpretation, the interpretation should be left to the jury. The parties and the judge who heard the trial, Judge Eckiss, all contend that Judge Palmer had entered an order concluding that the employee handbook created a contract between the employer and the employee. From later orders and comments made by Judge Eckiss just before and during the trial, we believe that the order denying the summary judgment motions is the order claimed to be the one in which Judge Palmer ruled that the employee handbook was a contract. In this order, Judge Palmer does not make an explicit finding that the employee handbook was a contract between the employer and the employee. However, Judge Palmer does consider whether language contained within the employee handbook was ambiguous. Because Judge Palmer could not have considered extrinsic evidence absent a contract, it appears that, without a specific ruling, Judge Palmer implicitly found that the employee handbook created a contract. In ruling on motions in limine on March 19, 2002, Judge Eckiss indicated: "[A]ccording to Judge Palmer's ruling there is a contract. The jury issue is[,] [W]hat is the intent of the parties as to discipline[?]" Later, during the trial, Judge Eckiss noted, "[T]here is no question that this was a binding, enforceable agreement based on Judge Palmer's ruling."
Thereafter, on May 15, 2002, Campbell filed a motion to dismiss Denis's first amended complaint, alleging again that the employee handbook did not constitute a contract. On July 1, 2002, Judge Eckiss denied the motion.
The case was tried without a jury before Judge Eckiss. Following the trial, he entered a judgment on March 25, 2003, in which he stated, "The employee handbook *** is an enforceable contract." He further indicated that the contract contained a three-step disciplinary process but that the handbook did not cover all the matters that could arise between an employer and his employee. Therefore, if the handbook covered a specific matter and discipline was warranted, then the employer would be obligated to follow the three-step process. The order went on to state that the issue to be determined was whether Denis's actions were covered by the handbook, which would necessitate the three-step disciplinary process. Judge Eckiss concluded that the alleged behaviors were not covered by the employee handbook. He then went on to determine that based upon the witnesses and testimony he heard, he believed that Denis did tell his employer to shove books "up her ass" and that such a statement constituted insubordination not covered by the employee handbook. Judge Eckiss explained that this level of ...