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Law School Case Brief

Duldulao v. Saint Mary of Nazareth Hosp. Ctr - 115 Ill. 2d 482, 106 Ill. Dec. 8, 505 N.E.2d 314 (1987)

Rule:

An employee handbook or other policy statement creates enforceable contractual rights if the traditional requirements for contract formation are present. First, the language of the policy statement must contain a promise clear enough that an employee would reasonably believe that an offer has been made. Second, the statement must be disseminated to the employee in such a manner that the employee is aware of its contents and reasonably believes it to be an offer. Third, the employee must accept the offer by commencing or continuing to work after learning of the policy statement. When these conditions are present, then the employee's continued work constitutes consideration for the promises contained in the statement, and under traditional principles a valid contract is formed.

Facts:

Plaintiff Nora E. Duldulao filed a lawsuit in Illinois state court alleging that defendant St. Mary of Nazareth Hospital Center ("Hospital"), discharged her from its employ in violation of the terms of an employee handbook. Duldulao claimed that the handbook, distributed by the Hospital, created enforceable contractual rights. Both parties filed motions for summary judgment. The trial court denied Duldulao's motion but granted the Hospital's motion, entering judgment in favor of the Hospital. The appellate court reversed both rulings. The Supreme Court of Illinois allowed the Hospital's petition for leave to appeal.

Issue:

Did the Hospital's employee handbook create contractual obligations on the part of the Hospital?

Answer:

Yes.

Conclusion:

The court affirmed the court of appeals and held that the Hospital's employee handbook was a binding contract on the Hospital, and the Hospital breached its contract by terminating Duldulao in a manner inconsistent with the handbook. The court reasoned that the employee handbook created enforceable contractual rights because the traditional requirements for contract formation were present. The court found that the handbook was clear enough for Duldulao to believe an offer had been made, the handbook was disseminated to Duldulao in such a manner that she was aware of its contents, and Duldulao accepted the offer by continuing to work with the Hospital.

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