Robinson v. Ada S. McKinley Community Services, Inc.
| Decision Date | 07 July 1994 |
| Docket Number | No. 93-2492,93-2492 |
| Citation | 19 F.3d 359 |
| Parties | 127 Lab.Cas. P 57,646, 9 Indiv.Empl.Rts.Cas. (BNA) 461 Claudine ROBINSON, Plaintiff-Appellant, v. ADA S. McKINLEY COMMUNITY SERVICES, INC., an Illinois corporation, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
James A. Murphy, Jeffrey N. Cole, Andrew T. Staes (argued), Cole & Staes, Chicago, IL, for plaintiff-appellant.
Ronald L. Lipinski (argued), Sarah Elizabeth Rudolph, Seyfarth, Shaw, Fairweather & Geraldson, Marian C. Haney, Mayer, Brown & Platt, Chicago, IL, for defendant-appellee.
Before POSNER, Chief Judge, ROVNER, Circuit Judge, and MIHM, District Judge. *
On April 30, 1979, Ada S. McKinley Community Services, Inc. ("McKinley") hired Claudine Robinson ("Robinson") as director of foster care services. At the time she was hired, Robinson received a letter dated March 29, 1979, from the Director of Children's Services confirming her appointment. The letter stated, "Please be advised that tenure is achieved after the successful completion of 6 (six) months of service with our agency." At this same time, Robinson also received a copy of McKinley's 1978 Personnel Policies Manual (the "1978 Manual"). The 1978 Manual provided:
[p]ermanent employment status is attained upon successful completion of the tenure probation period with the Agency.
The 1978 Manual defined tenure probation as the period of the first six months of employment. The 1978 Manual also provided that at the end of the tenure probation, the Agency would decide if the employee was to be awarded permanent employment status. In addition, the 1978 Manual outlined the procedures McKinley would follow when disciplining, discharging, or terminating an employee. Robinson successfully completed her six month probationary period.
Years later, McKinley published a new manual. The 1986 Personnel Policies Manual (the "1986 Manual") contained a disclaimer stating:
The Agency reserves the right to modify or change any of the provisions of this manual at any time without notice to employees. This manual is intended as a general guideline for its employees, however, the Agency may at times depart from the guidelines set forth herein, when it deems such departure to be warranted by circumstances. Nothing contained in this manual is or shall be construed to be a part of any agreement or contract between the Agency and its employees.
In October 1989 McKinley terminated Robinson. See McKinley's Statement of Material Facts as to Which There is No Genuine Issue p 8 and Plaintiff's Response to Ada S. McKinley's Statement of Material Facts p 8.
Robinson filed a complaint alleging that McKinley's termination of her breached their employment contract. McKinley moved for summary judgment. The magistrate judge recommended that McKinley's motion for summary judgment be granted, and the district judge adopted the magistrate judge's recommendation with one exception. This appeal followed. On appeal, McKinley argues that the March 29, 1979, letter and the 1978 Manual do not constitute an employment contract. In the alternative, McKinley argues that if an employment contract was formed between Robinson and McKinley based on the letter and the 1978 Manual, then the 1986 Manual containing the express disclaimer effectively modified the 1978 Manual. We review a district court's grant of summary judgment de novo. Lister v. Stark, 942 F.2d 1183, 1187 (7th Cir.1991).
An employment relationship without a fixed duration is presumed terminable at will by either party. Duldulao v. St. Mary of Nazareth Hospital Center, 115 Ill.2d 482, 106 Ill.Dec. 8, 11, 505 N.E.2d 314, 317 (1987). This presumption can be overcome. In Illinois, an employee handbook can create an enforceable contract if the traditional requirements for contract formation are present. Id. 106 Ill.Dec. at 12, 505 N.E.2d at 318. For an employee handbook or other policy statement to form a contract, three requirements must be met 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. Id.
The magistrate judge concluded that Robinson failed to satisfy the first requirement of Duldulao because the 1978 Manual and letter contained language too ambiguous to create a contract. The district court agreed with the magistrate judge except that the district court thought the letter was not ambiguous.
We hold that the March 29, 1979 letter and 1978 Manual contained language clear enough that an employee would reasonably believe that an offer of employment had been made. The letter confirming Robinson's appointment stated that "tenure" would be achieved after working six months with McKinley. The 1978 Manual provided in part:
1. Permanent Employment Status--Permanent employment status is attained upon successful completion of the tenure probation period with the Agency. Permanent status affords the employee full Agency benefits, except as they are qualified in this document.
2. Probationary Status--Probationary status is a trial period during which the Agency must decide if the employee is to be awarded permanent employment or permanent position status at the end of the period. All types of probationary status are subject to extension at the discretion of the program director and the Executive Director. The following are the types of probation:
a) Tenure Probation--Tenure probation is the period of the first six (6) months of employment. The purpose of tenure probation is to provide the supervisor an opportunity to evaluate the employee's capabilities. At the end of the period, the Agency shall decide if the employee is to be awarded permanent employment status.
After successfully completing a probationary period, a McKinley employee would clearly achieve "permanent employment status" and "tenure."
"Tenure" is "a right, term, or mode of holding or occupying, and 'tenure of an office' means the manner in which it is held, especially with regard to time." BLACK'S LAW DICTIONARY 1469 (6th ed. 1990). Tenure also describes the status afforded to professors upon completion of a trial period and protects them from dismissal without cause or economic reasons. Id. Tenure is "[a] faculty appointment for an indefinite period of time." Id. citing University Educ. Ass'n v. Regents of University of Minnesota, 353 N.W.2d 534, 540 (Minn.1984). "Tenure ... denotes relinquishment of the employer's unfettered power to terminate the employee's services." Zumwalt v. Trustees of California State Colleges, 33 Cal.App.3d 665, 674, 109 Cal.Rptr. 344, 349 (1973). "Permanent" is defined as:
continuing or enduring in the same state, status, place, or the like, without fundamental or marked change; not subject to fluctuation or alteration; fixed or intended to be fixed; lasting; abiding; stable; not temporary or transient. Webster's New International Dictionary 1824 (2nd ed. 1941).
An employee offered "tenure" and "permanent employment status" after completion of a trial period would reasonably conclude that she had attained something more than an at-will status.
McKinley argues that the magistrate judge correctly held that the use of the terms "permanent employment status" and "tenure" merely provided McKinley with a basis for distinguishing those employees entitled to benefits (permanent employees) from those employees not entitled to benefits (probationary employees). Although the 1978 Manual provided that "[p]ermanent status affords the employee full agency benefits, except as they are qualified in this document," the language of the 1978 Manual does not limit the meaning to such a narrow interpretation.
In addition to the use of words "tenure" and "permanent," the 1978 Manual provided a mandatory disciplinary process. With regard to disciplinary probation, the 1978 Manual stated:
An employee who has achieved permanent employment status may have that status suspended as a result of unacceptable conduct or job performance. Supervisors or directors placing employees on disciplinary probation must do so in writing stating: 1) the reasons for the action, and 2) a specific period of time for the employee to demonstrate satisfactory job performance. This action requires the written approval of the Executive Director. Disciplinary probation does not involve loss of benefits. At the end of the period, the Agency shall decide if the employee is to be returned to permanent employment status. (Emphasis added).
The disciplinary, discharge, and termination sections of the 1978 Manual provided sufficiently compulsory and definite terms that an employee would reasonably believe that an offer of something other than at-will employment had been made. Section X of the 1978 Manual provided:
DISCIPLINARY ACTIONS--Violations of Agency standards by an employee may warrant disciplinary action. Disciplinary action shall be based on objective evidence. The following are the types of disciplinary actions:
A. ORAL REPRIMAND--Oral reprimand shall be made by the employee's supervisor. A notation of this may be placed in the employee's file.
B. WRITTEN REPRIMAND--Written reprimand shall consist of formal notice to employees from their supervisor indicating the specific nature of the violation and a recommended plan for remediation. A copy, signed by the employee, shall be maintained in the employee's personnel file.
C. SUSPENSION--A suspension for disciplinary purposes shall be without pay. Suspensions must be approved by the Executive Director. Employees shall be informed of such action in writing by...
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