February 3, 2017
A recent case in the First District Appellate Court of Illinois is instructive about the kinds of claims that employees in high-level executive positions in public bodies may bring against municipalities following removal or constructive discharges, and reminds both employers and prospective employees that positions created by municipal ordinance will possibly create an employment contract where the ordinance (1) creates a defined term for the position; (2) has “for cause” removal protections; (3) contains specific notice and hearing rights for the employee that must be followed before removal may occur; and, (4) where the ordinance creates only a single or limited number of positions, as opposed to a large class of positions (such as merit employees). The case also reminds us that, in such cases, a plaintiff may – and should, if the facts merit it – state a claim for breach of employment contract and promissory estoppel, but may only recover damages under one theory.
In Boswell v. City of Chicago, 2016 IL App (1st) 150871, No. 1-15-0871 (1st Dist. 2016), the First District Appellate Court of Illinois ruled that a former City of Chicago employee may file suit seeking recovery under both breach of contract and promissory estoppel theories against the City after it dismissed him from his Executive Director position, although he could recover damages under both theories. The facts of the case are this:
In 2007, the plaintiff was named Executive Director of the City of Chicago’s Office of Compliance, a position created to oversee Chicago’s compliance with the Shakman consent decree, a court-overseen plan that sought, inter alia, to eliminate patronage from all aspects of hiring in the City of Chicago. The Plaintiff was appointed for a fixed term of office as Executive Director, and could not be removed except “for cause.” He resigned from that position in 2010, and filed a complaint in the Circuit Court of Cook County against the City of Chicago for (1) breach of employment contract; and (2) promissory estoppel.
In the Complaint, plaintiff alleged that during the interview process for the Executive Director position he was assured that his office would be kept clear of “political pressures” from the Daley Administration. Despite these assurances, once he began work as Executive Director, the Mayor’s Office subjected the plaintiff to resistance, harassment, and hostility, including, (1) ignoring his work altogether, despite his mandate to ensure the City’s compliance with the Shakman decree; (2) reprimanding him when he sought to insist that the City follow his advice with respect to Shakman compliance; and, (3) subjecting him to questionable inspector general recommendations criticizing his work and seeking his suspension, despite the Mayor’s office previously advising him that it had little confidence in the inspector general’s work. Further, while plaintiff was suspended from his position, the City made several changes to the Office of Compliance that undermined plaintiff’s ability to perform his job, including transferring half of his office’s staff to other City departments, and firing his first deputy director. Following all of this, the plaintiff resigned from his position and alleged “constructive discharge” as a result of the City’s intolerable and undermining work conditions.
Addressing his Complaint for breach of employment contract and promissory estoppel, the First District Appellate Court of Illinois inquired whether plaintiff was in valid contract with the City so as to entitle him to recover under a breach of contract theory. Because plaintiff’s Executive Director position was created by City ordinance, the Court ruled that he must “overcome the presumption that an ordinance is not intended to create a private contractual right.” In ruling that he had overcome this burden, and could pursue a breach of contract claim, the Court reasoned that the plaintiff could base such a claim on the language of the Chicago Municipal Code provisions creating the Executive Director position, namely, the provisions stating that the appointment was “for a term of four years,” that removal may only be “for cause,” that removal must follow written notice from the Mayor and a timely hearing before the City Council, and that there was a right to a vote from the City Council before removal. Given the presence of these elements, the Court found that the Code “manifests an intent to create a contract with the executive director and reflects an intent by the city council. . . .to set the executive director apart from every other City employee.” The Court was also moved by the fact that this particular ordinance governed a single position, rather than an entire class of employees (such as statutes or ordinances governing merit employees). Finally, the Court acknowledged that failing to find a contract within the Code provisions creating the Executive Director position – -essentially making the position at-will – would undermine the independence, discretion, and latitude needed to perform a job such as ensuring the City’s compliance with the Shakman decree, and, essentially make the position an empty one.
While the Court did not rule on the merits of plaintiff’s breach of contract claim, this case demonstrates that an employee in a position created by a local ordinance might bring a claim for breach of contract against an employer if the ordinance creating the position (1) creates a defined term for the position; (2) has “for cause” removal protection; (3) contains specific notice and hearing rights for the employee that must be followed before removal may occur, and, (4) concerns a single employee or limited class of employees, as opposed to large class.
Next, the Court ruled that plaintiff could overcome a motion to dismiss on his promissory estoppel claim. To review, promissory estoppel is a legal theory that enables a plaintiff to recover damages if it can be shown that his employer (1) made an unambiguous promise; (2) plaintiff relied on that promise; (3) plaintiff’s reliance was expected and foreseeable; and, (4) plaintiff’s reliance was to his detriment. Quake Construction, Inc. v. American Airlines, Inc., 141 Ill. 2d 281, 209-10 (1990). In Boswell, the Court recognized that “[e]stoppel against public bodies is disfavored and allowed only in rare circumstances, when necessary to prevent fraud and injustice,” and that such is especially true where “public revenues are involved.” Boswell, ¶ 31 (citing Rockford Life Insurance Co. v. Dep’t of Revenue, 112 Ill. 2d 174, 185-186 (1986)). This is an extremely high burden to overcome, so it is remarkable that the Court found that the plaintiff was able to do so in this case, reasoning that the harassing and undermining conditions plead by plaintiff showed that the City promised him employment under certain conditions, and he relied on such to his detriment. Specifically, the Court found that plaintiff stated a promissory estoppel claim by alleging (1) that his office would be free from political pressures during the interview process; (2) that his office would have support of the Mayor’s office; and, (3) that plaintiff would have full control over the Office of Compliance. Because plaintiff left his previous job and moved to Chicago “only to be stonewalled in the performance of his duties,” the Court found he was also able to show detrimental reliance on the City’s promise of employment under certain conditions. The lesson of this case with respect to promissory estoppel, then, is that a plaintiff seeking to recover under such a theory should be prepared to plead that he was so thoroughly misled by the employer’s promises about the conditions and functions of employment as to be “set up to fail,” and that his reliance on such promises were tangibly detrimental.
Finally, the Court ruled that plaintiff could properly include claims for breach of employment contract and promissory estoppel under the same set of facts, but could not expect to recover damages under both theories – a simple testament of the age-old legal maxim that “the law abhors double recovery.” The Court remanded the case to the Circuit Court of Cook County, where further litigation is likely.
Read the full case here.