Plaintiff-employee Gary Ross (“Ross”) argued that the defendant-employer, May Company d/b/a Marshall Field’s and Company (“Marshall Field’s”), breached his employment contract when it wrongfully terminated him from the job he held for almost 40 years by failing to discharge him in accordance with certain terms set forth in Marshall Field’s 1968 employee handbook.
In this case, the trial court determined that the promissory language set forth in the 1968 employee handbook issued to Ross, together with oral assurances of job security by Marshall Field’s agent, created an employment contract between Ross and Marshall Field’s, thereby altering Ross’s prior at-will status and binding Marshall Field’s to certain procedures before it could terminate his employment. (If Ross was an at-will employee, he would be deemed to have assented to a unilateral modification of the terms and conditions of his employment by Marshall Field’s if he continued his employment following the issuance of a later handbook.
Marshall Field’s maintained that disclaimers set forth in employee handbooks issued to Ross in the late 1980s, together with new benefits, modified Ross’s 1968 employment contract, converting him to an at-will employee, and, thus, they were not obligated to follow the termination procedure set forth in the 1968 employee handbook. The new benefits consisted of paid personal days, short, and long-term disability, an insurance reimbursement plan, and a supplemental retirement savings plan. Ross accepted the new benefits and enrolled in the new long-term disability plan and in the enhanced supplemental retirement savings plan.
Ross countered that the disclaimers in the 1980 handbook did not modify his employment status because they were not supported by consideration. Ross acknowledged that he received a benefit from the enhanced pension and other new benefits; however, he maintained that such benefits from Marshall Field’s did not serve as consideration supporting the unilateral modification of his employment contract because they were offered to all eligible employees and there was never any bargained-for exchange between him and Marshall Field’s in which he agreed to modify or terminate his prior contract rights in exchange for the benefits.
The Appellate Court in this case agreed with Ross and concluded the disclaimers in revised handbooks issued after 1968 did not modify Ross’s employment contract because he received no consideration. The court stated that, in the employer-employee context, “consideration will be found when an employer and its employees make a bargained-for exchange to support [the employees’] relinquishment of the protections they were entitled to under the existing contract.
”Here, Marshall Field’s did not contend that it bargained for Ross to modify his employment status and become an at-will employee. In this case, there was no bargained-for exchange, nor did Marshall Field’s make any promises in exchange for Ross’s agreement to relinquish his contractual rights with respect to the new benefits. The additional benefits, which were offered in 1990, were in no way related to, bargained for, or referenced to any preexisting contractual rights; the benefits were offered to all eligible employees whether or not they possessed contractual rights.
Thus, Marshall Field’s acted unilaterally when it offered the additional benefits to its employees. Accordingly, no consideration flowed from Marshall Field’s to Ross to compensate him for relinquishing the protections he enjoyed under the 1968 employee handbook.
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