Thomas v. Guardsmark, Inc.

• Decision Date: 27 August 2004
• Docket Number: No. 03-1593.,03-1593.
• Citation: 381 F.3d 701
• Parties: Carl E. THOMAS, Plaintiff-Appellant, v. GUARDSMARK, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

381 F.3d 701

Carl E. THOMAS, Plaintiff-Appellant, v. GUARDSMARK, INC., Defendant-Appellee.

No. 03-1593.

United States Court of Appeals, Seventh Circuit.

Argued November 3, 2003.

Decided August 27, 2004.

Appeal from the United States District Court for the Northern District of Illinois, 2003 WL 259024, Suzanne B. Conlon, J.

COPYRIGHT MATERIAL OMITTED

Timothy Huizenga (argued), Legal Assistance Foundation of Chicago, Chicago, IL, for Plaintiff-Appellant.

Arthur J. Howe (argued), Schopf & Weiss, Chicago, IL, for Defendant-Appellee.

Before POSNER, DIANE P. WOOD, and EVANS, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

On November 16, 2001, Guardsmark, Inc. indefinitely suspended its employee, security officer Carl Thomas, after he suggested in a televised interview that Guardsmark did not adequately screen its employees for prior felony convictions. Almost a year later, Thomas filed suit against Guardsmark, alleging retaliatory discharge in violation of Illinois public policy. After removing to federal district court, Guardsmark successfully moved for judgment on the pleadings pursuant to FED. R. Civ. P. 12(c). Guardsmark argued, and the district court agreed, that Thomas was "effectively discharged" at the time he was suspended, and thus his action was barred by a six-month limitations period found in his Employment Agreement with Guardsmark. For the reasons discussed below, we reverse and remand to the district court for development of the record regarding Thomas's employment status after Guardsmark indefinitely suspended him in November 2001.

I

In September 1998, Guardsmark hired Thomas to work as a security officer for a CITGO oil refinery in Lemont, Illinois. As a condition of his employment, Thomas signed an Employment Agreement, which detailed the terms and conditions of his employment. The Agreement specified that "[e]xcept for charges or claims filed with the Equal Employment Opportunity Commission or under any of the statutes enforced by said agency, any legal action or proceeding related to or arising out of this Agreement or the employment of Employee by Guardsmark must be brought by Employee within six months of the date the cause of action arose or it shall be time-barred." It also provided that Tennessee law would "govern the interpretation, validity, and effect of this Agreement." Thomas and a Guardsmark representative signed the Agreement on September 21, 1998.

In November 2001, an investigative reporter for a local news station contacted Thomas in connection with a story about regulation of the security industry in Illinois. In an on-camera interview, Thomas stated that a fellow Guardsmark security officer at the CITGO refinery had bragged about his felony record. Thomas also opined that convicted felons should not be trusted to provide security at installations that are likely terrorist targets, such as oil refineries. The story was broadcast on November 8, 2001, and eight days later, Edward Healy, Vice President and Manager of Guardsmark's Chicago office, informed Thomas that his employment was indefinitely suspended because of his unauthorized interview with the news station. Since then, Guardsmark has not compensated Thomas or allowed him to perform services for the company.

On October 31, 2002, Thomas filed a one-count complaint against Guardsmark and Healy in the Circuit Court of Cook County, alleging retaliatory discharge in violation of the public policy of the State of Illinois. Guardsmark removed to federal district court, arguing that Thomas, an Illinois citizen, had improperly joined Healy, also an Illinois citizen, and that full diversity would exist if the latter were dismissed. When Thomas filed suit, Guardsmark was a Delaware corporation with its principal place of business in Tennessee; by the time it filed its notice of removal, it had converted into a limited liability corporation, with members who are citizens of New York and Tennessee. See Kanzelberger v. Kanzelberger, 782 F.2d 774, 776 (7th Cir.1986) (providing that "diversity must exist both when the suit is filed—as the statute itself makes clear, see 28 U.S.C. § 1441(a)—and when it is removed"). The court granted Guardsmark's motion to dismiss Healy and then denied Thomas's motion to remand. After filing its answer, to which it attached the Employment Agreement, Guardsmark moved for a judgment on the pleadings pursuant to FED. R. Civ. P. 12(c). The court granted the motion, finding Thomas's claim barred by the six-month limitations period provided in the Agreement. This appeal followed.

II

As a preliminary matter, we briefly address Guardsmark's motion to strike, which asks that we disregard several pages of Thomas's supplemental appendix that were not included in the record before the district court. These materials document his efforts to access his Guardsmark 401(k) retirement plan following his indefinite suspension. We deny Guardsmark's motion, on the ground that Thomas provided these materials not for evidentiary, but rather for illustrative purposes—that is, not to establish the truth of their contents, but to show that there might be a set of facts consistent with his allegations in the complaint, such that the Agreement's six-month limitations period would not bar his claim. In any event, as the discussion that follows makes clear, we have not taken these documents into account in holding that Guardsmark cannot prevail on its motion for judgment on the pleadings.

We review de novo Rule 12(c) motions for judgment on the pleadings. Midwest Gas Servs., Inc. v. Ind. Gas Co., 317 F.3d 703, 709 (7th Cir.2003). Such a motion should be granted "only if it appears beyond doubt that the plaintiff cannot prove any facts that would support his claim for relief. In evaluating the motion, we accept all well-pleaded allegations in the complaint as true, drawing all reasonable inferences in favor of the plaintiff." Id. (internal citations and quotation marks omitted); Forseth v. Vill. of Sussex, 199 F.3d 363, 368 (7th Cir.2000) ("A complaint may not be dismissed unless it is impossible to prevail under any set of facts that could be proved consistent with the allegations." (internal quotation marks omitted)).

Thomas presents three arguments in support of his position that his retaliatory discharge claim is not barred by the six-month limitations period provided in the Employment Agreement. First, he contends that the Agreement does "not constitute a binding and enforceable contract." In order to evaluate this point, we must determine what body of law governs the validity of the Agreement. The Agreement itself provides that Tennessee law "govern[s] the interpretation, validity, and effect of this Agreement." In a diversity case, the federal court must apply the choice of law rules of the forum state to determine applicable substantive law. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Illinois respects a contract's choice-of-law clause as long as the contract is valid and the law chosen is not contrary to Illinois's fundamental public policy. Fulcrum Fin. Partners v. Meridian Leasing Corp., 230 F.3d 1004, 1011 (7th Cir.2000). As an abstract matter, we see nothing in Illinois's choice-of-law rules that would preclude recognizing the selection of Tennessee law on the question of the validity of the contract. (No one is disputing that the Agreement exists, or that both parties signed it.) Nonetheless, Guardsmark concedes in its brief that "[u]ntil the district court had determined that a valid contract containing a choice of law clause existed, it was appropriate for the court to apply Illinois law to the contract to determine the threshold question of validity." Appellee's Brief at 9 n. 4. This concession makes it unnecessary for us to decide whether Illinois or Tennessee law applies to this threshold issue, or if those two laws differ in any material sense.

Thomas argues that the Agreement is unenforceable both because Guardsmark did not review and approve the Agreement, as required by the Agreement itself, and because the Agreement "create[d] no obligation on Guardsmark." Neither of these arguments is persuasive. The preamble of the Agreement says that "[t]he Agreement shall not become binding upon Guardsmark until reviewed and approved by the Compliance Control Officer in Guardsmark's Executive Offices in Memphis, Tennessee." Thomas asserts that "[t]here is no evidence to show that Guardsmark ever fulfilled this lone obligation," but the record indicates otherwise. Guardsmark attached to its answer to Thomas's complaint a document entitled, "Guardsmark: Personnel File Review," which lists Thomas's name and date of hire. This document is initialed by a "Selection Controller" and has a check next to the heading "APPROVED." Thomas nonetheless insists that Guardsmark cannot rely on this document because its "purpose and authenticity ... is completely unexplained." See N. Ind. Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 456 (7th Cir.1998) (holding that, for purposes of Rule 12(c), courts need not accept as legitimate "documents that do not by their nature imply some level of credibility"). We need not verify this document's authenticity or otherwise confirm Guardsmark's approval of Thomas's application, however, because "[p]arties to a contract have the power to waive provisions placed in the contract for their benefit and such a waiver may be established by conduct indicating that strict compliance with the contractual provisions will not be required." In re Liquidation of Inter-Am. Ins. Co. of Ill., 329 Ill.App.3d 606, 263 Ill.Dec. 422, 768 N.E.2d 182, 193 (2002). As Guardsmark's approval of Thomas's employment application was exclusively for the company's benefit, Thomas cannot now use this term as a ground for invalidating the Agreement.

Thomas also argues that the Agreement is invalid because "[t]here is simply nothing that Guardsmark agrees...