Barwin v. Vill. of Oak Park

• Citation: 54 F.4th 443
• Decision Date: 22 November 2022
• Docket Number: 21-2007
• Parties: Thomas BARWIN, Plaintiff-Appellant, v. VILLAGE OF OAK PARK, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

54 F.4th 443

Thomas BARWIN, Plaintiff-Appellant,

v.VILLAGE OF OAK PARK, Defendant-Appellee.

No. 21-2007

United States Court of Appeals, Seventh Circuit.

Argued December 7, 2021

Decided November 22, 2022

Ruth I. Major, Attorney, Law Offices of Ruth I. Major, PC, Chicago, IL, for Plaintiff-Appellant.

Caroline K. Kane, Michael A. Warner, Jr., Attorneys, Franczek, PC, Chicago, IL, Paul L. Stephanides, Attorney, Village of Oak Park, Oak Park, IL, for Defendant-Appellee.

Before Rovner, St. Eve, and Jackson-Akiwumi, Circuit Judges.

Rovner, Circuit Judge.

This diversity case presents questions concerning the contractual rights of an at-will village manager, Thomas Barwin, who resigned under threat of termination two and one-half years before his pension rights vested. Barwin alleges that his former employer, the Village of Oak Park, Illinois, breached its contractual duty of good faith and fair dealing in two ways: first, by forcing him out of his job in order to prevent his pension from vesting, and second, by refusing to honor its practice of allowing senior employees to purchase out-of-state pension credits in order to meet the vesting threshold. We agree with the district court that Barwin has no plausible contract claim for breach of the duty of good faith and fair dealing based on an expectation that the Village would not fire him or force him to resign in order to prevent him from reaching retirement eligibility, and so that claim was properly dismissed at the pleading stage. As an at-will employee, Barwin had no enforceable expectation that he would remain employed long enough to meet the vesting threshold. However, we conclude that the district court erred in entering summary judgment against Barwin on the claim that his employer breached its duty of good faith and fair dealing by not allowing him to purchase out-of-state pension credits as it had historically done with other employees. His employment contract entitled him to the same benefits that other senior employees of the Village enjoyed "by practice," and based on the facts presented, a finder of fact could reasonably conclude that the Village had a practice of allowing such employees to purchase out-of-state pension credits.

I.

Oak Park recruited Barwin to serve as its village manager in 2006. (He previously worked as a city manager in Michigan.) He was employed by Oak Park on an at-will basis; in other words, he was hired for no particular term and his employment agreement imposed no restrictions on the Village's ability to replace him at any time. Barwin was around 50 years old at the time of his hiring, and he was concerned about his prospective retirement income. The parties agreed that Barwin would participate in the Illinois Municipal Retirement Fund (the "IMRF" or "Retirement Fund") and that they would each make contributions to that Retirement Fund, but it would be eight years before his pension rights vested under that system, see 40 ILCS 5/7-141(a)(4), and because Barwin was hired as at an-will employee, he had no guarantee that he would be employed with the Village for that length of time. Barwin alleges that he raised his concern with Village President David Pope, who assured him that if he left his position with the Village before the eight-year threshold, he would be able to purchase reciprocal out-of-state pension credits that would satisfy the 8-year minimum. See 40 ILCS 5/7-139(a)(6).¹ Any such request would require the approval of the Village Board of Trustees, which was Oak Park's governing body. See id. Pope advised Barwin that the Village had granted such a request from the previous Village manager, who had likewise been recruited from out of state. Following his discussion with Pope, Barwin looked into the matter and independently confirmed what Pope had told him. R. 94 at 1–2 ¶ 2, 8–9 ¶ 21. Indeed, a total of at least five Village employees (including Barwin's predecessor) had made requests to purchase out-of-state pension credits, and the requests of all five had been granted. R. 94 at 9 ¶ 22.²

The terms of Barwin's employment were memorialized in a written employment agreement. Section 7 of the agreement provided that Barwin would become a member of the IMRF and that both he and the Village would make the requisite contributions to that Retirement Fund. R. 44-1 at 2, § 7. However, the agreement did not say anything about Barwin's right to purchase out-of-state pension credits. Moreover, the agreement contained an integration clause which expressly provided that:

This Agreement sets forth and establishes the entire understanding between the Employer and the Employee relating to the employment of the Employee by the Employer. Any prior discussions or representations by or between the Employer and the Employee not specifically stated in this Agreement are rendered null and void by this Agreement....

R. 44-1 at 8, § 21A. In short, there was no express promise that Barwin would be able to purchase pension credits in the event he needed them, and the agreement's integration clause precluded resort to extrinsic evidence in order to establish such a promise.

There is, however, another provision of the agreement that has a bearing on this question. Section 19 of the agreement, setting forth "Other Terms and Conditions of Employment," provided in relevant part that "the Employee shall be entitled to the highest level of benefits that are enjoyed by other department heads or equivalent-level employees of the Employer as provided in the Oak Park Village Code, Personnel Rules and Regulations or by practice. " R. 44-1 at 7, § 19A (emphasis supplied).³ As discussed in greater detail below, Barwin argues that because it was the Village's historical practice to grant employee requests for out-of-state pension credits, he had a contractual right and expectation to be able to purchase such credits under this provision of the contract.

Finally, pursuant to section 21A of the agreement, the parties reserved the right to amend any provision of the contract during its lifetime by mutual agreement. R. 44-1 at 8, § 21A. The agreement was in fact amended by the parties on occasion, most recently in June 2011, some eight or nine months prior the events giving rise to this suit. See Barwin Aff. ¶¶ 5–6, R. 141-2 at 3.

Barwin served as the Oak Park Village Manager for five and a half years, from June 2006 until February 2012, when he resigned under threat of termination. Barwin touts a number of accomplishments as Manager and substantial satisfaction among Oak Park residents with Village services during his tenure, and the Village Board itself was apparently satisfied in the main with his performance until early 2012, when the Board undertook his annual evaluation for 2011. A previous mid-year review finalized in November 2010, although noting areas of strength in Barwin's track record, had flagged several aspects of Village operations and Barwin's performance that were of ongoing concern to the Trustees, R. 138-4, and Barwin himself would later acknowledge that he understood this review of his performance to have been "mixed." Barwin Dep. Feb. 14, 2019 at 68, R. 138-2 at 15. The Board did not undertake a mid-year review of Barwin's work in 2011. In early 2012, the Board members individually completed annual-review forms rating Barwin's performance in 2011, and Barwin prepared a written assessment of his own. On February 13, 2012, the Village President and the other members of the Board of Trustees met in closed session to discuss the results, having excluded Barwin, the Village legal counsel, and the Village Clerk from the meeting. The meeting was recorded and later transcribed. R. 138-3. The collated ratings of Bar-win's performance submitted by the Board members indicated continuing dissatisfaction in a number of areas, and several members of the Board indicated frustration that Barwin's own positive written assessment of his performance diverged from their own in these areas.

During this discussion, the subject of Barwin's eligibility for retirement came up. One of the Trustees understood a passage in Barwin's self-assessment concerning the completion of his public service career to mean that Barwin hoped to continue as Village Manager for several more years and then retire. The Trustee remarked, "It was like he was saying, give me the three years and then I'll be done." R. 138-3 at 9. To which another Trustee responded, "If you've been here for twelve years, then you can do that ... but you can't do that when you've been here for five. You can't. Can't afford it." R. 138-3 at 9.⁴ That prompted a brief exchange as to when Barwin would be eligible to retire and whether, in lieu of him reaching the eight-year vesting threshold, Barwin had obtained reciprocal credits for his Michigan service with the IMRF or was otherwise eligible for a Michigan pension—as to which Village President Pope professed ignorance. R. 138-3 at 9.⁵

After discussing their assessments of Barwin, the evident consensus among all seven members of the Board, including Village President Pope, was that the time had come for a change of Village Manager. On the following day, Pope and a Trustee (both of whom were members of the Village's Personnel Committee) met privately with Barwin and presented him with a choice: resign as Village Manager or face an official Board vote to terminate him.⁶ In the interim between the receipt of his mid-year evaluation in November 2010 and this meeting on February 14, 2012, no member of the Board had communicated a complaint or criticism to Barwin regarding his performance nor had the Personnel Committee met with him to advise him of any such concern.

Presented with the ultimatum to resign or be fired, Barwin opted to resign. The Village granted him severance pay equal to nine months of his salary pursuant to the Termination and Severance provisions of the employment contract. R. 44-1 at 4–5 §§ 9–10. The Village also offered to grant him additional severance...