Madison - St. Clair Record

Wednesday, August 21, 2019

Fifth District reverses Judge Rudolf's dismissal of suit involving severance pay for accumulated sick time

By Heather Isringhausen Gvillo | Mar 30, 2016

The Fifth District Appellate Court reversed St. Clair County Associate Judge Heinz Rudolf’s decision dismissing a former school administrator’s arbitration case against East St. Louis School District 189 for allegedly failing to pay accumulated sick leave as a severance upon retirement.

Justice S. Gene Schwarm delivered the March 24 Rule 23 decision, reversing and remanding the case to St. Clair County Circuit Court for further proceedings.

Plaintiff Daphne Brown-Wright filed the complaint against the East St. Louis School District alleging the defendant had a policy promising to pay a percentage of accumulated sick leave as severance pay for school administrators.

The appellate court concluded that Brown-Wright sufficiently pled actions for promissory estoppel, breach of implied contract and violation of the Illinois Wage Payment and Collection Act.

In her complaint, Brown-Wright claims she was employed by the school district from September 1975 until September 1999. She was then rehired by the school district in August 2002 and worked there until June 30, 2012, when she retired.

She alleges that her rate of pay was $421.23 per day when she retired and she had accumulated 69.5 days of sick leave from 2002 until 2012 and an additional 110.5 days of sick leave from 1975 until 1998.

Brown-Wright claims the district’s policy regarding retirement of its administrative employees states that accumulated sick leave will be included in severance pay, paying up to 75 percent of sick leave up to 180 days for those with 20 or more years of service.

As a result, the plaintiff sought $56,866.05 in severance pay when she retired. The district refused her request and Brown-Wright filed suit.

Then on Jan. 22, 2015, the school district filed a motion to dismiss the plaintiff’s second amended complaint. It argued that the plaintiff could not impose an implied contract upon it because it was a local governmental entity. It also claimed she failed to sufficiently allege an employment contract pursuant to the Wage Payment Act.

The district court agreed and dismissed the case on April 14, 2015. Brown-Wright appealed.

In her appeal, she argues that the circuit court improperly dismissed her case for promissory estoppel.

The appellate court agrees that the policy language provided a tiered structure for the percentage of accumulated sick leave to be paid based upon years of service.

“There is no indication in the record that the plaintiff could not establish that the District knew its employees would rely upon its policy when making decisions about continued employment with the District or that the plaintiff was aware of the District policy and understood the terms as a promise and reasonably relied on it in continuing her employment with the District,” Schwarm wrote.

Brown-Wright also argues that the circuit court erred in dismissing her claim for breach of implied-in-fact contract.

The appellate court agrees, stating that “the plaintiff has sufficiently alleged a contract implied in fact, a contractual duty by reason of the District’s promissory expression which may be inferred from the facts and circumstances and by expressions on the part of the District showing an intention to be bound.”

In regards to the Wage Payment Act, Brown-Wright argues that the circuit court erred when it dismissed her complaint on the basis that the school district did not assent to an agreement based on the policy.

Schwarm wrote that the district failed to provide an express, explicit or unequivocal statement showing an intent to disclaim or negate the promise to pay accumulated sick leave upon retirement.

“The plaintiff sufficiently alleged that in refusing her demand for severance pay under the District policy, the District violated its obligation to timely pay wages earned to her as an employee,” he continued.

The school district, however, argues that the complaint was properly dismissed because the language cited in the complaint was not adopted until June 2006, after the plaintiff returned to the district to work as an administrator in 2002.

Brown-Wright counters that the district promised in its policy to pay accumulated sick leave to retiring administrators as severance and she responded by continuing to work.

The appellate court agrees, stating that Brown-Wright’s continued work “demonstrated her reliance on the policy for purposes of promissory estoppel, constituted consideration for the promises contained in the District’s offer, and manifested her assent to the District’s policy.”

The school district also argues that its policy is governmental legislative action that cannot form the basis of reasonable reliance for purposes of promissory estoppel and cannot create contractual rights.

However, the appellate court concludes that the school district failed to address any language in its policy that discounts the clear, specific, written and disseminated promise found in the plaintiff’s complaint.

The Fifth District ruled that Rudolf improperly dismissed the plaintiff’s complaint, reversing the decision and remanding the case for further proceedings.

Justices Thomas M. Welch and James Moore concurred.

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