Margaret Kalush v. Deluxe Corporation

171 F.3d 489, 14 I.E.R. Cas. (BNA) 1872, 1999 U.S. App. LEXIS 4803, 75 Empl. Prac. Dec. (CCH) 45,818, 1999 WL 150883
CourtCourt of Appeals for the Seventh Circuit
DecidedMarch 22, 1999
Docket98-2246
StatusPublished
Cited by23 cases

This text of 171 F.3d 489 (Margaret Kalush v. Deluxe Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Margaret Kalush v. Deluxe Corporation, 171 F.3d 489, 14 I.E.R. Cas. (BNA) 1872, 1999 U.S. App. LEXIS 4803, 75 Empl. Prac. Dec. (CCH) 45,818, 1999 WL 150883 (7th Cir. 1999).

Opinion

FLAUM, Circuit Judge.

Margaret Kalush, an Illinois resident, appeals from summary judgment in favor of Deluxe Corporation (“Deluxe”), a Minnesota corporation, on her diversity suit for breach of employment contract and promissory estoppel. We now affirm.

I. BACKGROUND

Margaret Kalush began working for Deluxe Corporation in its Bensenville, Illinois plant on January 22, 1973 as an order entry clerk. After numerous promotions, Kalush became a manager in 1980. In June 1994, Deluxe began a plant consolidation at the Bensenville facility. As a result of this consolidation, Deluxe notified certain “affected” employees that they might lose their jobs and explained severance packages that might be available to them. In January 1995, Deluxe began a company-wide restructuring and notified employees of their potential displacement and their severance options. Deluxe only planned to offer these severance benefits to employees who were not terminated for poor performance.

In June 1995, Bernard Sponsel, Kalush’s supervisor, met with Kalush to discuss the company’s restructuring and its effect on her. Kalush was informed that, as an “affected” employee, she had two options: she could quit and take what was called the “Business System’s” severance package worth one year’s salary (approximately $50,000) or she could remain employed at the company in the Customer Interface Project (“CIP”) in a position that would eventually be phased out as well at which time she would be eligible for a severance package worth approximately $25,000. Sponsel encouraged Kalush to take the $50,000 Business System’s package. Ka-lush, however, chose to remain with the company in the CIP. Kalush was given a copy of the company’s Employee Handbook which explained that employment at Deluxe was on an at-will basis, and she later admitted that Deluxe never promised not to terminate her prior to completion of the CIP.

In August 1995, Deluxe’s human resource managers audited the Bensenville plant and concluded, among other things, that Kalush’s performance as a manager was deficient because of her weak counseling and coaching skills. 1 As a result of the audit, Deluxe put Kalush on probation. At that time, Sponsel began a review of Ka-lush’s performance and, after five months, found other deficiencies — none of which are disputed by Kalush — and fired her effective January 31, 1996. Kalush was not offered a severance package because she was terminated for poor performance.

Kalush filed a complaint against Deluxe for breach of an oral employment contract and promissory estoppel. 2 Deluxe removed the suit to federal court and moved for summary judgment. The district court granted Deluxe’s motion and Kalush now appeals.

II. ANALYSIS

A. Standard of Review.

This court reviews a grant of summary judgment de novo, construing the evidence in the light most favorable to the non-moving party. See Bragg v. Navistar Internat’l Transp. Corp., 164 F.3d 373, 376 (7th Cir.1998); Drake v. Minnesota Mining & Mfg. Co., 134 F.3d 878, 883 (7th *492 Cir.1998). Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Bragg, 164 F.3d at 376; Salima v. Scherwood South, Inc., 38 F.3d 929, 931 (7th Cir.1994).

B. Existence of an Employment Contract.

The district court granted summary judgment for Deluxe on Kalush’s breach of contract claim because it found that no employment contract existed. Kalush argues that this was error and that she should be able to proceed to trial on her breach of contract theory. In Illinois, employment contracts are presumed to be at-will and terminable by either the employee or the employer. McInerney v. Charter Golf, Inc., 176 Ill.2d 482, 223 Ill. Dec. 911, 680 N.E.2d 1347, 1349 (Ill.1997). In order to rebut this presumption and to establish her oral employment contract claim, Kalush had to present evidence sufficient to establish the existence of (1) a clear and definite promise and (2) adequate consideration. Id. Kalush failed to do so. Kalush’s own deposition testimony established that Deluxe never made a clear and definite promise. When she was asked whether any supervisor ever indicated that Deluxe was restricted in any way from terminating her employment prior to the completion of the CIP, Kalush responded “no.”

The district court also correctly determined that Kalush failed to establish adequate consideration to support the existence of an oral contract. Under Illinois law, an oral employment contract must be supported by consideration adequate to suggest that the alleged agreement involved a bargained-for exchange of mutual obligations. Id. at 1350. We agree with the district court’s finding that there was no consideration to support this alleged contract.

First, there was no bargained-for exchange between the parties. Kalush claims that she gave up the first severance package worth $50,000 in consideration for employment until the CIP position was phased out. However, the record shows that Deluxe, through Sponsel, encouraged Kalush to take the first severance package rather than remain employed with the CIP. Thus, Ka-lush has not shown that she gave up anything of value in consideration of Deluxe’s offer of continued employment. Second, as Kalush testified that she was free to quit her employment at any time, there was no mutuality of obligation. Finally, the evidence shows that Kalush received a copy of Deluxe’s Employee Handbook which expressly provides that employment at Deluxe is at will. Thus, the district court was correct in concluding that there was no oral employment contract between the parties.

C. Collateral Estoppel.

Next, Kalush challenges the district court’s conclusion that even if a contract existed, there were adequate grounds to terminate her for poor performance. Deluxe responds that Kalush is estopped from arguing that she was not terminated for poor performance based on the findings made in an age discrimination proceeding filed by Kalush in the Illinois Department of Human Rights (“IDHR”). Deluxe defended Kalush’s age discrimination claim by arguing that Kalush was terminated for poor performance. The IDHR found in favor of Deluxe and the Illinois Appellate Court affirmed. The Illinois Supreme Court denied Kalush’s petition for review. Deluxe relies on DiAngelo v. Illinois Department of Public Aid, 891 F.2d 1260

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Krueger v. Petrak
C.D. Illinois, 2025
Bd. of Educ. of Chi. v. Monarrez (In re Monarrez)
588 B.R. 838 (N.D. Illinois, 2018)
Baermann v. Ryan (In Re Ryan)
408 B.R. 143 (N.D. Illinois, 2009)
In Re Kelly
350 B.R. 778 (N.D. Illinois, 2006)
Eveland v. Stelbrink (In re Stelbrink)
331 B.R. 790 (C.D. Illinois, 2005)
Athanasios Sembos v. Philips Components
376 F.3d 696 (Seventh Circuit, 2004)
Hanania v. Loren-Maltese
319 F. Supp. 2d 814 (N.D. Illinois, 2004)
Fosco v. Fosco (In Re Fosco)
289 B.R. 78 (N.D. Illinois, 2002)
Brokaw, A.D. v. Weaver, Karen
Seventh Circuit, 2002

Cite This Page — Counsel Stack

Bluebook (online)
171 F.3d 489, 14 I.E.R. Cas. (BNA) 1872, 1999 U.S. App. LEXIS 4803, 75 Empl. Prac. Dec. (CCH) 45,818, 1999 WL 150883, Counsel Stack Legal Research, https://law.counselstack.com/opinion/margaret-kalush-v-deluxe-corporation-ca7-1999.