Geary v. Telular Corp.

• Decision Date: 26 June 2003
• Docket Number: No. 1-02-0951.,1-02-0951.
• Citation: 341 Ill. App.3d 694,793 N.E.2d 128,275 Ill.Dec. 648
• Parties: Kevin GEARY, Plaintiff-Appellant, v. TELULAR CORPORATION, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

793 N.E.2d 128

341 Ill. App.3d 694

275 Ill.Dec. 648

Kevin GEARY, Plaintiff-Appellant, v. TELULAR CORPORATION, Defendant-Appellee.

No. 1-02-0951.

Appellate Court of Illinois, First District, Fourth Division.

June 26, 2003.

Rehearing Denied July 28, 2003.

Galliani, Doell & Cozzi, Ltd., Chicago (Thomas J. Doell, of counsel), for Appellant.

Much, Shelist, Freed, Denenberg, Ament & Rubenstein, P.C., Chicago (Dawn M. Cassie, of counsel), for Appellee.

Justice HARTMAN delivered the opinion of the court:

Plaintiff Kevin Geary brought a declaratory judgment action against his former employer defendant Telular Corporation. Count I alleged that defendant breached an agreement to pay plaintiff commissions by modifying plaintiff's commission plan. Count II alleged that defendant breached the modified commission plan. In count III, plaintiff alleged retaliatory discharge claiming that defendant terminated him because he asserted his rights under, inter alia, the Illinois Wage Payment and Collections Act (IWPCA) (820 ILCS 115/1 et seq. (West 2000)). Count IV, which named Motorola, Inc. (Motorola) as a respondent in discovery, was non-suited on August 5, 1999.

Plaintiff was employed as a regional sales manager by defendant in October 1993. Plaintiff signed an employment agreement on May 3, 1994, which stated that his employment was at-will. In March 1995, plaintiff was assigned to the Motorola Account Team. In March 1995 plaintiff was informed that his commissions were to be "paid on a monthly basis for product shipped to Motorola at a rate of .3% based on revenue generated." (Emphasis in original.) On September 6, 1995, plaintiff's compensation plan provided for monthly commissions equal to .5% "of all Motorola revenues generated by the Motorola Account Team."

The Motorola Account Team, including plaintiff, was working to have defendant selected as Motorola's supplier of fixed wireless terminals (FWTs) to Motorola's customer in Hungary. This was referred to as the Motorola-Hungary project. On September 29, 1995, Motorola awarded defendant the contract for the supply of FWTs for Motorola-Hungary. The award stated that it was contingent on defendant's ability to do certain things. John Schoen, a Motorola executive, testified by deposition that the September 29, 1995 document was an offer of an award to which a counteroffer was made by defendant. He further stated that negotiations continued between the parties until March 7, 1996, when the parties entered into a purchase order.

Defendant underwent a reorganization in late 1995 and early 1996. All members of the Motorola Account Team except for plaintiff were terminated. On February 29, 1996, as part of the reorganization, plaintiff was promoted to the position of director of business development-Motorola. On April 12, 1996, defendant informed plaintiff that his compensation plan in the new position would consist of a base salary of $65,000 and a quarterly commission based on a percentage of a target plan rather than a percentage of revenues generated. Plaintiff verbally objected to the change.¹ Plaintiff received payments of $6,000 each in July and November 1996 under the new plan.

Kenneth E. Millard, president of defendant, testified by deposition that when the April 1996 plan was introduced, plaintiff was told that he would not get commissions based on the old plan. Everyone, including plaintiff, had been paid commissions earned up until that point and were then put on the new plan going forward. Millard explained that as part of the April 1996 plan, plaintiff was given a guaranteed minimum commission of $6,000 for the first few quarters in recognition of his prior work on the Motorola account. Plaintiff was the only employee given the guaranteed minimum commission.

Plaintiff was fired on February 12, 1997.

Defendant successfully moved for summary judgment on counts I and III.² Plaintiff unsuccessfully moved for reconsideration with regard to count I. Plaintiff appeals both the grant of summary judgment on counts I and III and the denial of his motion to reconsider with regard to count I.

Summary judgment will be granted when the pleadings, depositions, exhibits, and affidavits on file reveal no genuine issue as to any material fact and establish that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005 (West 2000); Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill.2d 90, 180 Ill.Dec. 691, 607 N.E.2d 1204 (1992) (Outboard Marine). All evidence must be construed in the light most favorable to the nonmoving party and most strictly against the moving party. Gatlin v. Ruder, 137 Ill.2d 284, 148 Ill.Dec. 188, 560 N.E.2d 586 (1990). Appellate review of orders granting summary judgment is de novo (Outboard Marine, 154 Ill.2d at 101, 180 Ill.Dec. 691, 607 N.E.2d 1204), and such an order will be reversed only if a material issue of fact is found to exist. Finn v. Dominick's Finer Foods, Inc., 244 Ill.App.3d 278, 185 Ill.Dec. 224, 614 N.E.2d 358 (1993).

I

Plaintiff first contends that the circuit court erred in granting summary judgment in favor of defendant on count I. Defendant responds that summary judgment properly was granted because plaintiff, an at-will employee, accepted the modified compensation plan when he continued to work and receive commissions under the April 1996 plan.

When an employment agreement is terminable at will, it may be modified by the employer as a condition of its continuance. Ohlemeier v. Community Consolidated School District No. 90, 151 Ill. App.3d 710, 104 Ill.Dec. 652, 502 N.E.2d 1312 (1987); Wyatt v. Dishong, 127 Ill. App.3d 716, 83 Ill.Dec. 1, 469 N.E.2d 608 (1984) (Wyatt); Garber v. Harris Trust & Savings Bank, 104 Ill.App.3d 675, 60 Ill. Dec. 410, 432 N.E.2d 1309 (1982). This right to modify unilaterally at-will employment terms applies to modifying compensation terms. Wyatt, 127 Ill.App.3d at 720, 83 Ill.Dec. 1, 469 N.E.2d 608. When an at-will employee continues to work after a change in commission plan, he is deemed to have accepted the change. Schoppert v. CCTC International, Inc., 972 F.Supp. 444 (N.D.Ill.1997) (Schoppert).

In Schoppert, plaintiff, an at-will employee, alleged that his employer unilaterally modified his compensation plan once in 1991 and again in 1994. With regard to the 1991 modification, the employer held a meeting and announced that the commission structure would change. Plaintiff objected and was told that was the plan. Despite subsequent verbal objections, plaintiff continued to work after the change in commission structure. The court found that plaintiff's "continuing to work over two and one half years while receiving commissions under the new structure must be seen in legal terms as an acceptance of the 1991 Modification, grudging and protest-filled as that acceptance may have been." Schoppert, 972 F.Supp. at 447.

Plaintiff argues that the present case is more akin to the second modification (1994 modification) in Schoppert, on which summary judgment was not granted. The court found a question of fact regarding plaintiff's acceptance of the 1994 modification where it was proposed via letters which sought plaintiff's signature as evidence of acceptance and plaintiff never signed the letters. Moreover, even though the 1994 modification was proposed in July 1994, the employer continued to operate under the former plan until March 1995 and continued to negotiate with plaintiff until January 1996. Such facts simply are not present in the case at bar.

It is undisputed that plaintiff was an at-will employee. It is further undisputed that plaintiff continued to work for defendant for nine months after the April 1996 modification to his commission plan. Moreover, plaintiff accepted commissions paid under the new plan.

Plaintiff does not dispute defendant's right to make prospective changes to plaintiff's compensation plan. Rather, plaintiff argues that when defendant unilaterally changed plaintiff's compensation plan in April 1996, the commissions on the Motorola-Hungary project already were earned. Plaintiff concedes that pursuant to all the compensation plans, the commissions were payable when the product shipped as long as he was employed by defendant, but argues that they were earned when the buyer "agreed to purchase," here September 29, 1995, when Motorola awarded defendant the contract to supply FWTs for the Motorola-Hungary project. Plaintiff claims, therefore, that he was entitled to commissions for any product that shipped to Motorola-Hungary between September 29, 1995, and February 12, 1997, when he was terminated.

The record establishes that the sale was not complete on September 29, 1995. The September 29, 1995 award indicated that it was contingent on defendant's ability to do several things. John Schoen, a Motorola executive, testified by deposition that the September 29 document was not a contract, but an offer of an award to which defendant presented a counter-offer. He further stated that negotiations continued between defendant and Motorola from September 29, 1995 until at least March 7, 1996, when Motorola presented an initial purchase order.

Defendant responds that plaintiff's commissions were not tied to the completion of sales discussions or to a commitment to purchase. Rather, per the written compensation plans, commissions were not earned until the product was shipped. The March 1995 plan stated that commissions would be "paid on a monthly basis for product shipped to Motorola at a rate of .3% based on revenue generated." (Emphasis in original.) The September 6, 1995 plan increased the rate to .5%. Millard, president of defendant, testified by deposition that sales meant product shipped. If product did not ship, an employee was not entitled to any commission.

In support of his position regarding when commissions were earned, plaintiff presents only his affidavit which states "that my understanding of [defendant's] use of the term ...