McGrath v. CCC Information Services, Inc.

731 N.E.2d 384, 314 Ill. App. 3d 431, 246 Ill. Dec. 856
CourtAppellate Court of Illinois
DecidedJune 6, 2000
Docket1-99-0655
StatusPublished
Cited by24 cases

This text of 731 N.E.2d 384 (McGrath v. CCC Information Services, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McGrath v. CCC Information Services, Inc., 731 N.E.2d 384, 314 Ill. App. 3d 431, 246 Ill. Dec. 856 (Ill. Ct. App. 2000).

Opinion

JUSTICE McBRIDE

delivered the opinion of the court:

Plaintiff Martin G. McGrath filed a complaint against his employer, defendant CCC Information Services, Inc. (CCC), in the wake of a dispute over plaintiff’s stock options and a bonus. The complaint included counts alleging violations of the Illinois Wage Payment and Collection Act (820 ILCS 115/1 et seq. (West 1996)), breach of contract and counts seeking declaratory judgment, specific performance, and other relief against CCC. On the same day plaintiff filed his complaint, he filed an administrative claim with the Illinois Department of Labor that also alleged violations of the Illinois Wage Payment and Collection Act. Plaintiff was terminated by CCC after he failed to withdraw his lawsuit as requested by CCC. Plaintiff subsequently amended the complaint to add a count for retaliatory discharge and added as individual defendants CCC executives David M. Phillips, Leonard L. Ciarrocchi, and Gerald E Kenney. Defendants filed a motion to dismiss the retaliatory discharge count for failure to state a cause of action. The circuit court granted defendants’ motion. Plaintiff now appeals, contending that the trial court erred in dismissing the retaliatory discharge count.

Plaintiff began his employment with CCC in September 1992. While working for CCC in various capacities, plaintiff’s compensation consisted of a base salary plus a bonus and incentives. From time to time, the incentive portion of McGrath’s compensation included the award of stock options.

In October 1993, plaintiff was granted an unconditional option for 200 shares of common stock in the company. At that same time, he was offered a conditional option on an additional 250 shares. To earn the option on the conditional shares, plaintiff needed to meet certain performance goals for the fiscal year ending in April 1994.

In December 1993, plaintiff was promoted to a new position in a different division of the company. The performance goals that had been set to allow plaintiff to earn the option on the 250 shares of stock were not applicable to the new position and plaintiff was thus prevented from being able to meet the goals. Plaintiff met with Glenn Tullman, the president and chief operating officer of CCC at the time of plaintiffs promotion, to discuss the conditional options. According to the complaint, Tullman told plaintiff he would no longei have to satisfy the performance goals applicable to the old position in order to earn the options. Tullman told plaintiff that he would either set new performance goals relating to the new position or, in the absence of new goals, would grant plaintiff the option on the 250 shares if plaintiffs performance in the new position through April 1994 was considered successful.

No new performance goals were established. At the conclusion of the fiscal year in April 1994, Tullman informed plaintiff that he considered plaintiffs performance in the new position to have been successful and that plaintiff had therefore satisfied the condition for earning the option on the 250 shares. Thereafter, CCC listed plaintiffs entitlement to the 450 shares (the 200 shares earned unconditionally and the 250 shares earned through his successful performance in the new position) in its stock option ledger until at least June 1996. Tull-man later left the company.

CCC completed an initial public offering (IPO) of its stock and became a publicly held company on August 16, 1996. Due to a 40 to 1 stock split resulting from the IPO, plaintiffs option on the 450 shares was converted to an option on 18,000 shares.

In February 1997, plaintiff received a company memorandum listing his number of stock options at an amount that was 10,000 shares less than the amount previously listed. In response to an inquiry from plaintiff, CCC’s general counsel, defendant Gerald Kenney, informed plaintiff that the option on the 250 conditional shares, since converted to 10,000 shares through the stock split, was no longer being recognized by CCC. Plaintiff then met with defendant David Phillips, CCC’s chairman, president, and chief executive officer, to request that CCC honor its agreement for the conditional shares. That request was denied.

On April 24, 1997, plaintiffs counsel served a written demand on CCC demanding that the company honor the options on the disputed shares. Attached to the demand was a letter written by Tullman confirming that the options had been promised to plaintiff and had been successfully earned.

Plaintiff’s demand letter of April 24, 1997, also contained a demand for an additional bonus amount plaintiff believed he was due. Plaintiff’s complaint alleged that in the fiscal years ending in April 1994, 1995, and 1996, he had been paid annual bonuses calculated at 40% of his base salary. In June 1996, CCC adjusted its fiscal year to end in December of each year. Thus, the fiscal year-end bonuses for the fiscal year ending in December 1996 were to be calculated on the eight-month period from May 1996 through December 1996. The shortened period is referred to in the record as the “stub year.” In mid-December of 1996, plaintiff was informed that his bonus for the stub year would be calculated on 25% of his base salary for the stub year rather than 40%. On April 24, 1997, after receiving the bonus calculated on 25% of his base salary rather than 40%, plaintiff served a written demand on CCC for the difference between the bonus paid (25%) and the bonus to which plaintiff believed he was entitled (40%).

In a June 6, 1997, memorandum from defendant Leonard Ciarrocchi, CCC’s chief financial officer and executive vice president, to other CCC executives, Ciarrocchi detailed a discussion between himself and plaintiff that had been an attempt “to bring closure to” plaintiff’s questions regarding the disputed stock options and bonus. In the memorandum, Ciarrocchi stated that he had informed plaintiff that “the Company did not feel that a relationship between a senior executive and the company can exist if one is suing the other” and that Ciarrocchi had “clarified that this meant separation in the event we cannot work something out.”

Plaintiff filed his initial complaint against CCC on July 11, 1997. The complaint sought a declaratory judgment and specific performance related to the disputed stock options and also contained counts for breach of contract and promissory estoppel regarding both the stock options and the disputed bonus. The complaint also contained counts alleging violation of the Illinois Wage Payment and Collection Act (the Act) (820 ILCS 115/1 et seq. (West 1996)) regarding both the options and the bonus. That same day, plaintiff filed a claim for wages with the Illinois Department of Labor (IDOL) pursuant to the Act.

The copy of the complaint forwarded to CCC was accompanied by a letter from plaintiffs counsel cautioning CCC not to retaliate against plaintiff for filing the complaint or wage claim. On July 17, 1997, outside counsel for CCC wrote a letter to counsel for plaintiff. In the letter, counsel stated that he had been provided with a copy of the private lawsuit filed on behalf of plaintiff.

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Bluebook (online)
731 N.E.2d 384, 314 Ill. App. 3d 431, 246 Ill. Dec. 856, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcgrath-v-ccc-information-services-inc-illappct-2000.