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ATC Healthcare Services, Inc. v. RCM Technologies, Inc.

United States District Court, N.D. Illinois, Eastern Division

August 5, 2019

ATC HEALTHCARE SERVICES, INC. Plaintiff,
v.
RCM TECHNOLOGIES, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          EDMOND E. CHANG JUDGE

         Plaintiff ATC Healthcare Services, Inc. provided temporary nursing staffing services to the Chicago Public School District from 2006 until August 2015, when CPS terminated its contract. ATC has now sued the agency that replaced it, RCM Technologies, Inc., for intentional interference with prospective economic advantage, claiming that RCM improperly interfered with the employment relationship between ATC and the nurses whom it staffed at CPS schools. R. 51, First Am. Compl.[1] After a period of discovery, RCM filed a motion for summary judgment. R. 140, Mot. Summ. J.[2] For the reasons explained below, RCM's motion is granted.

         I. Background

         In setting out the facts, the Court views the evidence in the light most favorable to ATC (the non-movant) and, where important, also describes the parties' competing factual contentions. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Before the summer of 2015, ATC and two other agencies provided nursing services to schools in the Chicago Public School District. R. 155, Pl.'s Resp. DSOF ¶ 10; R. 166, Def.'s Resp. PSOF ¶ 1. During the 2014-2015 school year, ATC provided 147 nurses to CPS, for a total of about 2, 800 hours each week. Def.'s Resp. PSOF ¶ 2. ATC's contract for the school year was set to expire on June 30, 2016. Def.'s Resp. PSOF ¶¶ 1, 7; R. 154-2, PSOF Exh. A, ATC-CPS Contract Renewal at 1.

         In November 2014, CPS issued a request for proposal (RFP) for nursing services. Pl.'s Resp. DSOF ¶ 11; R. 154-4, PSOF Exh. E, Nov. 2014 RFP. The RFP did not specifically state whether it sought proposals for an exclusive nursing services provider, or for a more limited contract. See Def.'s Resp. PSOF ¶ 5 (calling the RFP a request for “non-exclusive, nurse staffing services.”); Pl.'s Resp. DSOF ¶ 11. It did state, however, that CPS might try to bundle as many schools as possible under the same provider. Def.'s Resp. PSOF ¶ 5; Nov. 2014 RFP at 27 (“It is the intention of the Board to award these contract(s) in whole or in part or by item as may be in the best interest of the Board. … The Board may award multiple sections or all sections of this request for proposal to a qualified Proposer. It is the Board's desire to bundle as many zones as possible, where it is in the Board's best interest.”). Both ATC and RCM submitted proposals. Pl.'s Resp. DSOF ¶¶ 11, 41.

         In April or May of 2015, RCM learned that the CPS Procurement Department planned to recommend that the CPS Board grant the new contract to RCM.[3] Pl.'s Resp. DSOF ¶ 12; see also Def.'s Resp. PSOF ¶ 16; R. 154-14, PSOF Exh. K, Hay Dep. Tr. at 60:8-16. The Board approved that proposal at its meeting on June 24, 2015. Pl.'s Resp. DSOF ¶ 13; Def.'s Resp. PSOF ¶ 9; R. 154-10, PSOF Exh. G, CPS Board Action at 4. Both CPS and RCM issued press releases announcing that the contract was awarded to RCM. Def.'s Resp. PSOF ¶ 9; R. 154-11, PSOF Exh. H, Board Press Release; R. 154-12, PSOF Exh. I, RCM Press Release. RCM's press release stated that it would be the new “exclusive vendor” of nursing services and would provide around 170 nurses to staff CPS schools. RCM Press Release at 1-2. Neither press release, however, stated exactly when RCM's contract would begin. Def.'s Resp. PSOF ¶ 10. ATC learned that RCM had been awarded the contract at some point that same month-June 2015-though ATC disputes whether it understood that news to mean that ATC's existing contract would be terminated. Pl.'s Resp. DSOF ¶ 14.[4] CPS officially terminated ATC's existing contract almost two months later on August 13, 2015. R. 154-13, PSOF Exh. J, Termination Letter; Def.'s Resp. PSOF ¶ 11.

         ATC's version of events is that RCM knew all along-and long before ATC- that it would be receiving an exclusive contract, a deal much bigger than CPS let on in the RFP and beginning sooner than ATC could have guessed. Def.'s Resp. PSOF ¶¶ 17-19 (“RCM knew for months in advance of any public announcement they would receive a contract greater both in time and scope than initially advertised in CPS' original RFP.”). All public information, ATC argues, pointed toward RCM's new contract being supplemental to the existing nursing services that CPS already had in place-at least until after ATC's contract expired. Def.'s Resp. PSOF ¶¶ 5-6, 19-20 (“[N]o publicly available information contradicted ATC's belief that their contract with CPS expired on July 1, 2016 and that RCM would provide supplemental staffing services in advance of their New Contract.”). In contrast, RCM argues that all the parties knew that the contract being awarded to RCM was an exclusive one and that RCM would take over all nursing services for the 2015-2016 school year. See Def.'s Resp. PSOF ¶¶ 5-6 n.1 (providing a link to a June 2015 Chicago Reporter article in which Cindy Weiner, an outside staffing representative hired by ATC, stated that the ATC contract would be “phased out” in July 2015); PSOF Exh. B, Weiner Dep. Tr. Part 1 at 48:4-12 (testifying that she knew in June 2015 that RCM had been awarded an exclusive contract).

         In any event, ATC contends that it toiled away throughout the summer, continuing to train nurses and preparing to assign them to CPS locations. Def.'s Resp. PSOF ¶¶ 25-26 (“ATC conducted normal preparations for the upcoming school year and incurred expenses of approximately $10, 000 in doing so.”); id. ¶¶ 18-19 (“On June 9, 2015, CPS requested a ‘final list of nurse assignments' from ATC and was provided one shortly thereafter.'”) (quoting R. 154-17, PSOF Exh. N, CPS-ATC Emails 6/9/15 at 1); Def.'s Resp. PSOF ¶ 23 (“In the spring of 2015, ATC had 147 nurses assigned to CPS and reasonably expected to provide approximately the same number for the 2015-2016 school year.”); id. ¶ 27 (“ATC submitted their proposed [employment agreement] modifications to CPS on June 8, which were approved on June 10, 2015.”). After all, ATC points out, the existing contract required ATC to continue providing nursing services until CPS officially terminated it. Def.'s Resp. PSOF ¶¶ 20-21. In response, RCM argues that ATC has offered no evidence to prove that it did any work at all during the summer of 2015. Def.'s Resp. PSOF ¶ 25, [5] Pl.'s Resp. DSOF ¶ 52 (failing to dispute RCM's claim that “[d]uring the summer of 2015, ATC did not provide training to nurses who were assigned to CPS.”).

         After RCM was awarded the contract-and during the time when ATC (according to ATC) was still in the dark about the imminent contract termination- RCM began proactively reaching out to ATC's nurses to recruit them to work for it instead of for ATC. Def.'s Resp. PSOF ¶¶ 34-39; see also Pl.'s Resp. DSOF ¶¶ 24-26, 36. ATC argues that RCM's communications with the nurses were misleading and confused the nurses. Def.'s Resp. PSOF ¶¶ 34-35; R. 154-5, PSOF Exh. F, Weiner Aff. ¶¶ 19, 21. Specifically, ATC alleges that RCM misled nurses when it told them “to contact RCM to ‘continue their assignment, '” Def.'s Resp. PSOF ¶¶ 36-37 (quoting Weiner Aff. ¶ 21), and when it sent them an email instructing them to get fingerprinted, Def.'s Resp. PSOF ¶ 36; R. 154-7, Weiner Aff. Exh. 2, Fingerprinting Email. ATC also emphasizes that recruiting ATC's nurses was part of RCM's transition plan all along. Def.'s Resp. PSOF ¶¶ 13-15. In that sense at least, the plan worked: RCM ultimately hired many ATC nurses, including 41 nurses whom ATC claims had worked for ATC for at least two years before they left to join RCM's ranks. Def.'s Resp. PSOF ¶ 39.

         II. Legal Standard

         Summary judgment must be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine issue of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In evaluating summary judgment motions, courts must “view the facts and draw reasonable inferences in the light most favorable to the” non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007) (cleaned up).[6] The Court “may not weigh conflicting evidence or make credibility determinations, ” Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697, 704 (7th Cir. 2011) (cleaned up), and must consider only evidence that can “be presented in a form that would be admissible in evidence.” Fed.R.Civ.P. 56(c)(2). The party seeking summary judgment has the initial burden of showing that there is no genuine dispute and that it is entitled to judgment as a matter of law. Carmichael v. Vill. of Palatine, 605 F.3d 451, 460 (7th Cir. 2010); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Wheeler v. Lawson, 539 F.3d 629, 634 (7th Cir. 2008). If this burden is met, the adverse party must then “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256.

         III. Analysis

         ATC's claim against RCM is for tortious interference with a prospective business relationship. Under Illinois law, that tort has four elements: “(1) [the plaintiff's] reasonable expectation of entering into a valid business relationship; (2) the defendant's knowledge of the plaintiff's expectancy; (3) purposeful interference by the defendant that prevents the plaintiff's legitimate expectancy from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from such interference.” Fellhauer v. City of Geneva, 568 N.E.2d 870, 878 (Ill. 1991).

         A. ...


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