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Wehrenberg v. Federal Signal Corp.

August 7, 2006


The opinion of the court was delivered by: Matthew F. Kennelly, District Judge


Federal Signal Corporation ("FSC") and the Federal Signal Corporation Supplemental Savings and Investment Plan (the "Plan") moved to dismiss Counts 1, 2, 3 and 7 of the amended complaint of Kim Wehrenberg. Wehrenberg has voluntarily dismissed Count 1, concedes that Count 3 fails to state a claim but seeks leave to amend, and opposes dismissal of Counts 2 and 7.

For the reasons stated below, the Court dismisses Count 3 but denies defendants' motion as to Counts 2 and 7.


Wehrenberg was employed at FSC as general counsel. He says that in October 2003, it came to his attention that family members of a high ranking FSC officer had traded stock on inside information the officer provided to them. Wehrenberg reported this to FSC's board of directors. In February 2004, FSC informed Wehrenberg that his services were no longer required.

Upon learning that his employment was to be terminated, Wehrenberg negotiated a Separation Agreement that included a non-disparagement clause. Section 6(c) of the Separation Agreement stated that Wehrenberg would not disparage FSC and that FSC would not disparage Wehrenberg. Section 7 of the Agreement provided that FSC was to direct all requests for references to "Mr. Welding." Pursuant to the Separation Agreement, Wehrenberg remained employed by FSC until September 2004.

Wehrenberg alleges that after the Separation Agreement was signed but before he found new employment, FSC breached the non-disparagement clause. He contends that while he was seeking employment, a number of prospective employers contacted FSC with the intention of hiring him. Wehrenberg alleges that after these prospective employers contacted FSC, they decided not to hire him based on information they received.

Wehrenberg also alleges that FSC breached the Separation Agreement by a comment made to a member of the National Association of Manufacturers (NAM). According to Wehrenberg, the NAM member was told by someone at FSC that Wehrenberg was no longer employed there, though Wehrenberg was, at the time, still "of counsel" to FSC as provided in the Separation Agreement. Wehrenberg contends that as a result of this false statement, he lost the opportunity to explore other employment opportunities, which materially contributed to his remaining unemployed. has Wehrenberg filed an eight-count amended complaint. He alleges: 1) FSC fired him in retaliation for reporting insider trading by firing him; 2) FSC breached the non-disparagement clause of Wehrenberg's Separation Agreement; 3) FSC intentionally interfered with Wehrenberg's prospective economic advantage; 4) the Plan violated ERISA by failing to pay him benefits he says were due to him; 5) FSC, as Plan administrator, similarly violated ERISA; 6) FSC is obligated under the doctrine of promissory estoppel to pay him benefits; 7) FSC breached a provision of the Separation Agreement by failing to pay him the benefits he says were due; and 8) FSC violated the Illinois Wage Payment and Collection Act by failing to pay him for unused vacation days.

As noted earlier, defendants have moved to dismiss Counts 1, 2, 3, and 7. In response, Wehrenberg voluntarily dismissed Count 1, conceded that Count 3 was deficient but requested leave to amend, and argued that Counts 2 and 7 should not be dismissed.


When considering a motion to dismiss, the Court reads the complaint liberally, granting the motion only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that entitles him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). We accept the allegations in the complaint as true and draw reasonable inferences in the plaintiff's favor. Cler v. Illinois Education System, 423 F.3d 726, 729 (7th Cir. 2005).


FSC contends that Wehrenberg's allegation regarding disparaging comments to prospective employers fails to give FSC adequate notice of the basis of the claim to permit further investigation because it does not provide the identities of the makers and recipients of the disparaging comments. The Court disagrees; FSC cites no case supporting the contention that notice pleading standards require this level of specificity.

To the contrary, federal pleading standards require only a short and plain statement of the claim sufficient to give the defendant fair notice of the plaintiff's claim and the ground upon which it rests. ...

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