Hany v. General Elec. Co.

• Decision Date: 14 November 1991
• Docket Number: No. 4-91-0165,4-91-0165
• Citation: 221 Ill.App.3d 390,581 N.E.2d 1213
• Parties: , 163 Ill.Dec. 790, 124 Lab.Cas. P 57,279 Wilbur HANY, Jake Sophie, Ronald Monkman, Virgil Malinkowski, Gene Schaab, Martha Bailey, Art Patterson, Alfred Feathers, Robert Bonebrake, Delbert King, William O'Dell, Mary Jane Hunter, John F. Phillips, James Samsel, Joseph W. Callahan, Joseph Klem, Ronald Secord, Don Bier, Robert O'Neil, Vernon Brickey, Allen Gibson, Glenn Goecke, Robert Threlfall, and Jack Allen, on behalf of themselves and on behalf of all others similarly situated, Plaintiffs-Appellants, v. GENERAL ELECTRIC COMPANY, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 1213

581 N.E.2d 1213

221 Ill.App.3d 390, 163 Ill.Dec. 790,

124 Lab.Cas. P 57,279

Wilbur HANY, Jake Sophie, Ronald Monkman, Virgil Malinkowski, Gene Schaab, Martha Bailey, Art Patterson Alfred Feathers, Robert Bonebrake, Delbert King, William O'Dell, Mary Jane Hunter, John F. Phillips, James Samsel Joseph W. Callahan, Joseph Klem, Ronald Secord, Don Bier Robert O'Neil, Vernon Brickey, Allen Gibson, Glenn Goecke Robert Threlfall, and Jack Allen, on behalf of themselves and on behalf of all others similarly situated, Plaintiffs-Appellants, v. GENERAL ELECTRIC COMPANY, Defendant-Appellee.

No. 4-91-0165.

Appellate Court of Illinois, Fourth District.

Nov. 14, 1991.

Davis, Miner, Barnhill & Galland, P.C., Chicago, George F. Galland, Jr., Charles Barnhill, Jr., Davis, Miner, Barnhill & Galland, P.C., Madison, Wis., for plaintiffs-appellants.

Roy G. Davis, Janet L. Jannusch, Linda L. Laugges, Keck, Mahin & Cate, Peoria, for defendant-appellee.

Justice STEIGMANN delivered the opinion of the court:

Plaintiffs, salaried employees at General Electric's Bloomington, Illinois, facility, sued General Electric (GE) for failing to compensate them for vast amounts of overtime worked since 1982. After trial, the jury returned a general verdict for GE. Plaintiffs appeal, arguing that they proved GE had formed and breached a valid employment contract to pay overtime to its salaried employees under Duldulao v. Saint Mary of Nazareth Hospital Center (1987), 115 Ill.2d 482, 106 Ill.Dec. 8, 505 N.E.2d 314. Plaintiffs specifically argue that the trial court erred by (1) submitting GE's "modification defense" to the jury; (2) improperly instructing the jury on how an employer must disseminate a written policy in order to form or modify a Duldulao contract; and (3) denying them judgment n.o.v.

We affirm.

I. FACTS

GE established a policy designed to uniformly compensate its salaried employees for overtime, which was announced in a memo entitled "General Purpose Control Department Instruction No. 0-1; Subject: Overtime Payment to Exempt Salaried Employees" (Instruction 0-1). Instruction 0-1 distinguishes "casual overtime" from "payable" overtime. Casual overtime is defined as "intermittent, occasional overtime * * * necessary to accomplish the requirements and responsibilities of [a salaried employee's] position." After listing examples of casual overtime, Instruction 0-1 then defines payable overtime as time worked when management would require employees to work in order to respond to the "unusual demands of the business which require that an individual's work be scheduled beyond his normal hours of work. Payable overtime is usually worked under a predetermined and definitely planned overtime work schedule approved in advance."

GE first distributed Instruction 0-1 to its Bloomington plant in 1976 and reissued it in 1983. Although GE never distributed Instruction 0-1 to its nonmanagement employees, the substance of that policy had spread by both word of mouth and a 1981 memo sent by D.A. Hall, the payroll manager, to salaried employees. That memo referred all employees to Instruction 0-1 for a definition of payable overtime. In addition, GE allowed employees to read Instruction 0-1 if they so requested, although GE claims it did not allow them to copy Instruction 0-1 or take it with them from a manager's office.

In 1982, a new general manager, Jesse Lawrence, took over the Bloomington facility, which apparently had undergone some economic troubles. Although GE redistributed a new version of Instruction 0-1 to its management after Lawrence's arrival, Lawrence held monthly meetings at which he consistently stated that the salaried employees needed to work longer hours for which they would not receive overtime pay. Many employees testified that they understood as a result of these meetings that they would not receive compensation for these extra hours of work. While a few employees who did not receive advance approval submitted unsuccessful applications for payable overtime to "test the waters" on how Lawrence viewed payable overtime, every employee who received advance approval for payable overtime received overtime pay. However, Lawrence essentially stopped approving requests for payable overtime.

In 1986, four years after Lawrence arrived at the Bloomington plant, plaintiffs filed this class action lawsuit against GE for breaching its promise to pay overtime demanded of them by management. The trial court certified the class as GE's nonmanagement, salaried employees at the Bloomington plant. At the end of the trial, plaintiffs submitted but then withdrew special verdict forms. Defendant then submitted a general verdict form with special interrogatories for the jury, to which plaintiffs strenuously objected. The trial court agreed with plaintiffs and gave the jury only a general verdict form, which the jury returned in favor of defendant.

II. THE DULDULAO

EMPLOYMENT CONTRACT

In Duldulao, the Illinois Supreme Court held that when an employer makes a clear policy statement to its employees, an enforceable contract right may arise between the employer and its employees. (Duldulao, 115 Ill.2d at 490, 106 Ill.Dec. at 12, 505 N.E.2d at 318.) The court set forth the following elements a plaintiff must prove to establish such a contract:

"First, the language of the policy statement must contain a promise clear enough that an employee would reasonably believe that an offer has been made. Second, the statement must be disseminated to the employee in such a manner that the employee is aware of its contents and reasonably believes it to be an offer. Third, the employee must accept the offer by commencing or continuing to work after learning of the policy statement." Duldulao, 115 Ill.2d at 490, 106 Ill.Dec. at 12, 505 N.E.2d at 318.

Though Duldulao and most of its progeny involved a contract that limited an employer's ability to fire or discipline an employee (Duldulao, 115 Ill.2d at 484, 106 Ill.Dec. at 9, 505 N.E.2d at 315; see also Daymon v. Hardin County General Hospital (1991), 210 Ill.App.3d 927, 929, 155 Ill.Dec. 316, 317, 569 N.E.2d 316, 317; Anders v. Mobil Chemical Co. (1990), 201 Ill.App.3d 1088, 1090, 147 Ill.Dec. 779, 779-80, 559 N.E.2d 1119, 1119-20), a Duldulao contract can create other employee rights under a clearly worded, sufficiently disseminated policy that creates expectations in a reasonable employee. We conclude that such a contract could create a right to receive overtime pay.

A. The Requirement of Dissemination

Duldulao requires that an employer must disseminate the policy statement in question to its employees in order for that policy statement to constitute an offer to the employees. At least one court has held that an "employer's handbook" that sets out guidelines for supervisors and managers, distributed only to supervisors, does not meet this first condition. (See Koch v. Illinois Power Co. (1988), 175 Ill.App.3d 248, 256-57, 124 Ill.Dec. 461, 467, 529 N.E.2d 281, 287.) However, while not all the employees in Koch could view the guidelines, in the present case GE not only allowed employees to view Instruction 0-1, it also informed its employees that they could do so. Thus, a factual issue arose at trial as to whether GE had disseminated the policy to a sufficient degree among its employees so as to constitute an offer.

At trial, GE admitted that it did distribute other information manuals to its salaried employees, such as insurance booklets and a salaried employee handbook, but the manuals neither contained nor referred to Instruction 0-1, and GE never gave nonmanagement employees a copy of Instruction 0-1. Plaintiffs argued at trial that GE did disseminate Instruction 0-1 because, although GE did not give each employee a copy of Instruction 0-1, GE did allow them to view and copy it, and many employees did, in fact, have a copy. GE replied that the employees, without authorization, received their copies from plaintiff Ronald Monkham, a nonmanagement, salaried employee. Monkham testified that he knew GE did not want the salaried employees to receive a copy of Instruction 0-1, so he obtained a copy from a friend of his, a manager in another department, instead of going to his own supervisor for a copy. He then copied Instruction 0-1 and distributed it to other salaried employees.

We find the jury could reasonably have concluded that GE did not disseminate the policy. As such, sufficient grounds exist to affirm the jury's general verdict. See Moore v. Jewel Tea Co. (1970), 46 Ill.2d 288, 294, 263 N.E.2d 103, 106 (holding that any one ground out of many submitted to jury for a general verdict will sustain the verdict), cited with approval in Peterson v. Henning (1983), 116 Ill.App.3d 305, 309-10, 72 Ill.Dec. 203, 206-07, 452 N.E.2d 135, 138-39.

B. Modification of the Employer's Policy Statement

Plaintiffs argue that the trial court erred in submitting defendant's "modification defense" to the jury because no material fact existed as to whether GE modified the contract.

1. Under Duldulao,

An Employer Policy Creates A Continuing Offer,

Not An Interminable Contract

Plaintiffs essentially argue that GE and its employees formed a contract because GE distributed Instruction 0-1 to its management, the employees learned of that policy through reading it or through word of mouth at the plant, and the employees worked extended schedules after learning of the contract. Because Instruction 0-1 never changed, plaintiffs argue that GE never modified the Duldulao contract Instruction 0-1 created. GE argues in response that if a contract was entered into, Lawrence modified it by telling the employees they would not receive overtime pay for the extra hours worked.

Assuming arguendo that GE did, in fact, sufficiently disseminate Instruction 0-1 in the first place so as to create a Duldulao contract, plaintiffs misconstrue the nature of the contract created. On this record, an employer distributing...