Sardiga v. the Northern Trust Co.

• Decision Date: 15 March 2011
• Docket Number: No. 1–09–2930.,1–09–2930.
• Citation: 948 N.E.2d 652,409 Ill.App.3d 56,350 Ill.Dec. 372
• Parties: Darren SARDIGA, Plaintiff–Appellant,v.The NORTHERN TRUST COMPANY, Defendant–Appellee.
• Court: United States Appellate Court of Illinois

409 Ill.App.3d 56

948 N.E.2d 652

350 Ill.Dec. 372

32 IER Cases 463

Darren SARDIGA, Plaintiff–Appellant,

v.The NORTHERN TRUST COMPANY, Defendant–Appellee.

No. 1–09–2930.

Appellate Court of Illinois, First District, Second Division.

March 15, 2011.

Barry A. Gomberg & Associates, Ltd., Chicago, IL (Barry A. Gomberg, of counsel), for Appellant.Vedder Price P.C., Chicago, IL (Edward C. Jepson, Jr. and Elizabeth N. Hall, of counsel), for Appellee.

[350 Ill.Dec. 373 , 409 Ill.App.3d 57] OPINION

Justice HARRIS delivered the judgment of the court, with opinion.

After less than a year on the job, Darren Sardiga, the plaintiff-appellant, was fired from his position as vice-president of defendant Northern Trust's Financial Consulting

[350 Ill.Dec. 374 , 948 N.E.2d 654]

group. He filed a two-count complaint alleging retaliatory discharge and a violation of the Illinois Whistleblower Act (740 ILCS 174/1 et seq. (West 2004)). He claims that he was fired as a result of his repeated complaints and questions to supervisors which expressed his belief that Northern Trust was engaged in deceptive illegal practices. Sardiga appeals from the trial court's summary judgment to Northern Trust on the Illinois Whistleblower Act count. The court held that the Act requires a “refusal to participate” and Sardiga failed to plead facts showing his refusal to participate in an alleged illegal activity. Further, the court found that no material issue of fact existed demonstrating Sardiga's refusal to participate. We are now called upon to resolve a matter of statutory interpretation and determine whether Sardiga's repeated complaints and questions to his supervisors about what he believed to be illegal practices are sufficient to meet the Act's requirement of “refusal to participate.” For the following reasons, we find Sardiga's actions fail to meet the Act's required refusal to participate. Because Sardiga has failed to establish an issue of material fact regarding whether he refused to participate in an activity that would result in a violation of a state or federal law, rule, or regulation, we affirm the summary judgment of the circuit court of Cook County.

JURISDICTION

The trial court entered summary judgment in favor of Northern Trust with respect to count II of Sardiga's complaint on March 12, 2009, and denied Sardiga's motion to reconsider that judgment on September 1, 2009. The trial court subsequently issued a Rule 304(a) (Ill.S.Ct. R. 304(a) (eff. Jan. 1, 2006)) finding on October 15, 2009, and Sardiga filed his notice of appeal on October 21, 2009. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rules 301 and 304(a) governing appeals from final judgments entered below. Ill. S.Ct. R. 301 (eff. Feb. 1, 1994); R. 304(a) (eff. Jan. 1, 2006).

BACKGROUND

Sardiga began working as a vice-president and senior financial consultant in Northern Trust's financial consulting group on February 28, 2004, and he was fired less than a year later on January 3, 2005. During his tenure at Northern Trust, Sardiga repeatedly complained to his supervisor, Thomas Hines, about what he believed to be illegal or improper practices there.

Sardiga's concerns touched upon several different aspects of Northern Trust's business practices. First, Sardiga questioned whether financial planners such as himself, who were not licensed to sell securities, should be presenting clients with investment sales literature. Sardiga approached Hines on multiple occasions to raise his concerns about securities licensing for financial planners at Northern Trust.

Second, Sardiga complained to Hines that members of the wealth strategy department were sometimes present during meetings between financial planners and their clients. Because financial planners' role is to give objective investment advice and wealth strategists instead seek to sell various securities, upon which sale they would earn a commission, Sardiga believed that the presence of both a financial planner and a wealth strategist at a client meeting posed a conflict of interest. Sardiga complained to Hines that the presence of wealth strategists at his meetings with clients interfered with his ability to provide independent, objective advice to the clients.

Third, Sardiga requested that Hines disclose to financial consulting clients that

[350 Ill.Dec. 375 , 948 N.E.2d 655]

financial planners received bonuses derived from sales of Northern Trust financial products. Although Northern Trust's bonus policy did not state that this was the case, Sardiga believed that financial planners such as himself had their bonuses calculated in part based on how much sales revenue they generated for Northern Trust. Sardiga never received any bonus during the course of his employment with Northern Trust.

Fourth, Sardiga informed Hines that he believed Northern Trust's marketing literature to be misleading. Subsequently, Hines allowed Sardiga to revise the marketing literature that he used in his presentations to clients.

Finally, Sardiga spoke with Hines regarding his concerns about a lack of confidentiality protections in Northern Trust's contact management system, a computerized database containing information about Northern Trust clients. The generally accepted practice at Northern Trust was to place confidential client information into the contact management system unless a client specifically requested otherwise. Members of various departments within Northern Trust had access to this data. After making Hines aware of his concerns, Sardiga continued to use the contact management system but did not input confidential information. Instead, he put in a note stating that he had conducted a confidential meeting with a the client and that notes from the meeting could be found in the confidential file.

Sardiga testified at his deposition that he did not consider Northern Trust's use of the contact management system to be illegal; he merely considered it to be a “poor business practice.” In addition, Sardiga testified that he never spoke with anyone from Northern Trust's legal or compliance departments about his concerns with the system.

During Sardiga's tenure at Northern Trust, he reported his concerns about the various business practices only to Hines. Hines would usually respond by either saying that he would bring Sardiga's concerns to the attention of the legal department or informing Sardiga that the legal department had already approved of the practice and directing Sardiga to leave matters alone.

On December 5, 2004, Sardiga approached Hines and threatened to take his concerns to the National Association of Securities Dealers (NASD) if Hines did not adequately address Sardiga's concerns about Northern Trust's rules about who could sell securities. Specifically, Sardiga threatened to approach the NASD over the fact that financial planners at Northern Trust were not licensed. Northern Trust terminated Sardiga's employment on January 3, 2005, and Sardiga argues that his threat to contact the NASD was the catalyst for his termination.

Northern Trust presented a more complex version of events in its motion for summary judgment. In addition to Sardiga's repeated complaints about Northern Trust's business practices, Hines also received numerous complaints from employees and clients of Northern Trust about Sardiga's job performance. Sardiga's troubles began in his first weeks of employment with Northern Trust when he made a presentation that even he agrees was not of professional quality to a group of some 200 executives at a large prospective corporate client. Sardiga also arrived over half an hour late to an important client meeting. In addition, he made remarks to several different clients or prospective clients that the clients found offensive or objectionable and complained about to Northern Trust.

[948 N.E.2d 656 , 350 Ill.Dec. 376]

Hines documented complaints that he had received about Sardiga's performance in Sardiga's mid-year performance review in August 2004. As the year progressed, Hines informed his immediate supervisor and the human resources department at Northern Trust of continuing complaints against Sardiga and Hines' lack of confidence in Sardiga's ability to successfully complete client engagements. In October 2004, Hines gave Sardiga a written final warning and performance improvement plan. Hines continued to receive complaints about Sardiga's performance and interaction with clients in November 2004, and he recommended that Northern Trust terminate Sardiga's employment.

Sardiga filed the instant lawsuit on August 12, 2005, with a two-count complaint. Count I alleged a common law claim of retaliatory discharge. Count II alleged a violation of the Illinois Whistleblower Act (740 ILCS 174/1 et seq. (West 2004)). In support of his allegations under count II, Sardiga asserted that “Plaintiff refused to participate in Northern Trust's violations of public policy against its customers, to which Northern Trust responded by terminating Plaintiff in retaliation for his refusal.” No more specific allegations appear in the complaint.

On March 12, 2009, the trial court granted summary judgment in favor of Northern Trust on count II of plaintiff's complaint. Count I remains pending with the circuit court. Sardiga filed a motion to reconsider the trial court's order granting summary judgment, which the trial court denied on September 1, 2009. The trial court made a Rule 304(a) finding on October 15, 2009, and Sardiga filed this timely appeal. Ill. S.Ct. R. 304(a) (eff. Jan. 1, 2006).

ANALYSIS

On appeal, Sardiga argues that the trial court erred in granting summary judgment in favor of Northern Trust on count II of his complaint, which alleged a violation of the Illinois Whistleblower Act. 740 ILCS 174/20 (West 2004).

We review a trial court's granting of summary judgment de novo. Zuccolo v. Hannah Marine Corp., 387 Ill.App.3d 561, 564, 326 Ill.Dec. 717, 900 N.E.2d 353 (2008). Under...