Thomas Barwin v. Village of Oak Park ( 2022 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 21-2007
THOMAS BARWIN,
Plaintiff-Appellant,
v.
VILLAGE OF OAK PARK,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:14-cv-06046 — Mary M. Rowland, Judge.
____________________
ARGUED DECEMBER 7, 2021 — DECIDED NOVEMBER 22, 2022
____________________
Before ROVNER, ST. EVE, and JACKSON-AKIWUMI, Circuit
Judges.
ROVNER, Circuit Judge. This diversity case presents ques-
tions concerning the contractual rights of an at-will village
manager, Thomas Barwin, who resigned under threat of ter-
mination two and one-half years before his pension rights
vested. Barwin alleges that his former employer, the Village
of Oak Park, Illinois, breached its contractual duty of good
faith and fair dealing in two ways: first, by forcing him out of
2 No. 21-2007
his job in order to prevent his pension from vesting, and sec-
ond, by refusing to honor its practice of allowing senior em-
ployees to purchase out-of-state pension credits in order to
meet the vesting threshold. We agree with the district court
that Barwin has no plausible contract claim for breach of the
duty of good faith and fair dealing based on an expectation
that the Village would not fire him or force him to resign in
order to prevent him from reaching retirement eligibility, and
so that claim was properly dismissed at the pleading stage.
As an at-will employee, Barwin had no enforceable expecta-
tion that he would remain employed long enough to meet the
vesting threshold. However, we conclude that the district
court erred in entering summary judgment against Barwin on
the claim that his employer breached its duty of good faith
and fair dealing by not allowing him to purchase out-of-state
pension credits as it had historically done with other employ-
ees. His employment contract entitled him to the same bene-
fits that other senior employees of the Village enjoyed “by
practice,” and based on the facts presented, a finder of fact
could reasonably conclude that the Village had a practice of
allowing such employees to purchase out-of-state pension
credits.
I.
Oak Park recruited Barwin to serve as its village manager
in 2006. (He previously worked as a city manager in Michi-
gan.) He was employed by Oak Park on an at-will basis; in
other words, he was hired for no particular term and his em-
ployment agreement imposed no restrictions on the Village’s
ability to replace him at any time. Barwin was around 50 years
old at the time of his hiring, and he was concerned about his
prospective retirement income. The parties agreed that
No. 21-2007 3
Barwin would participate in the Illinois Municipal Retirement
Fund (the “IMRF” or “Retirement Fund”) and that they
would each make contributions to that Retirement Fund, but
it would be eight years before his pension rights vested under
that system, see 40 ILCS 5/7-141(a)(4), and because Barwin was
hired as at an-will employee, he had no guarantee that he
would be employed with the Village for that length of time.
Barwin alleges that he raised his concern with Village Presi-
dent David Pope, who assured him that if he left his position
with the Village before the eight-year threshold, he would be
able to purchase reciprocal out-of-state pension credits that
would satisfy the 8-year minimum. See 40 ILCS 5/7-139(a)(6). 1
Any such request would require the approval of the Village
Board of Trustees, which was Oak Park’s governing body. See
id. Pope advised Barwin that the Village had granted such a
request from the previous Village manager, who had likewise
been recruited from out of state. Following his discussion
with Pope, Barwin looked into the matter and independently
confirmed what Pope had told him. R. 94 at 1–2 ¶ 2, 8–9 ¶ 21.
Indeed, a total of at least five Village employees (including
Barwin’s predecessor) had made requests to purchase out-of-
state pension credits, and the requests of all five had been
granted. R. 94 at 9 ¶ 22. 2
1 In order to purchase such credits, an individual must have worked
for an Illinois municipality for a minimum of two years, previously
worked for an out-of-state local governing body and participated in that
body’s public employee pension system, and he must agree to forfeit his
right to obtain a pension under that other State’s system. 40 ILCS 5/7-
139(a)(6).
2 There may have been additional individuals who were authorized
to purchase such credits. Five is the number alleged in the complaint, and
which the Village has in turn admitted, but Barwin did not seek to
4 No. 21-2007
The terms of Barwin’s employment were memorialized in
a written employment agreement. Section 7 of the agreement
provided that Barwin would become a member of the IMRF
and that both he and the Village would make the requisite
contributions to that Retirement Fund. R. 44-1 at 2, § 7. How-
ever, the agreement did not say anything about Barwin’s right
to purchase out-of-state pension credits. Moreover, the agree-
ment contained an integration clause which expressly pro-
vided that:
This Agreement sets forth and establishes the
entire understanding between the Employer
and the Employee relating to the employment
of the Employee by the Employer. Any prior
discussions or representations by or between
the Employer and the Employee not specifically
stated in this Agreement are rendered null and
void by this Agreement. …
R. 44-1 at 8, § 21A. In short, there was no express promise that
Barwin would be able to purchase pension credits in the event
he needed them, and the agreement’s integration clause pre-
cluded resort to extrinsic evidence in order to establish such a
promise.
There is, however, another provision of the agreement that
has a bearing on this question. Section 19 of the agreement,
setting forth “Other Terms and Conditions of Employment,”
provided in relevant part that “the Employee shall be entitled
to the highest level of benefits that are enjoyed by other de-
partment heads or equivalent-level employees of the
determine in discovery whether there were additional instances of such
purchases. See Barwin Br. 42–43.
No. 21-2007 5
Employer as provided in the Oak Park Village Code, Person-
nel Rules and Regulations or by practice.” R. 44-1 at 7, § 19A
(emphasis supplied). 3 As discussed in greater detail below,
Barwin argues that because it was the Village’s historical
practice to grant employee requests for out-of-state pension
credits, he had a contractual right and expectation to be able
to purchase such credits under this provision of the contract.
Finally, pursuant to section 21A of the agreement, the par-
ties reserved the right to amend any provision of the contract
during its lifetime by mutual agreement. R. 44-1 at 8, § 21A.
The agreement was in fact amended by the parties on occa-
sion, most recently in June 2011, some eight or nine months
prior the events giving rise to this suit. See Barwin Aff. ¶¶ 5–
6, R. 141-2 at 3.
Barwin served as the Oak Park Village Manager for five
and a half years, from June 2006 until February 2012, when he
resigned under threat of termination. Barwin touts a number
of accomplishments as Manager and substantial satisfaction
among Oak Park residents with Village services during his
tenure, and the Village Board itself was apparently satisfied
in the main with his performance until early 2012, when the
Board undertook his annual evaluation for 2011. A previous
mid-year review finalized in November 2010, although not-
ing areas of strength in Barwin’s track record, had flagged
several aspects of Village operations and Barwin’s perfor-
mance that were of ongoing concern to the Trustees, R. 138-4,
3 This section of the contract was patterned after a similar provision
in a 2003 model employment agreement promulgated by the International
City/County Management Association, of which Barwin was a member.
R. 138-6 at 13, § 19A; see Barwin Dep. 8-11-2020 at 52, R. 138-5 at 8.
6 No. 21-2007
and Barwin himself would later acknowledge that he under-
stood this review of his performance to have been “mixed.”
Barwin Dep. Feb. 14, 2019 at 68, R. 138-2 at 15. The Board did
not undertake a mid-year review of Barwin’s work in 2011. In
early 2012, the Board members individually completed an-
nual-review forms rating Barwin’s performance in 2011, and
Barwin prepared a written assessment of his own. On Febru-
ary 13, 2012, the Village President and the other members of
the Board of Trustees met in closed session to discuss the re-
sults, having excluded Barwin, the Village legal counsel, and
the Village Clerk from the meeting. The meeting was recorded
and later transcribed. R. 138-3. The collated ratings of Bar-
win’s performance submitted by the Board members indi-
cated continuing dissatisfaction in a number of areas, and sev-
eral members of the Board indicated frustration that Barwin’s
own positive written assessment of his performance diverged
from their own in these areas.
During this discussion, the subject of Barwin’s eligibility
for retirement came up. One of the Trustees understood a pas-
sage in Barwin’s self-assessment concerning the completion
of his public service career to mean that Barwin hoped to con-
tinue as Village Manager for several more years and then re-
tire. The Trustee remarked, “It was like he was saying, give
me the three years and then I’ll be done.” R. 138-3 at 9. To
which another Trustee responded, “If you’ve been here for
twelve years, then you can do that … but you can’t do that
when you’ve been here for five. You can’t. Can’t afford it.”
R. 138-3 at 9. 4 That prompted a brief exchange as to when
4 The ellipsis appears in the transcript of the meeting. The record does
not reflect whether it is meant to signify a deletion from the Trustee’s re-
marks or merely a pause.
No. 21-2007 7
Barwin would be eligible to retire and whether, in lieu of him
reaching the eight-year vesting threshold, Barwin had ob-
tained reciprocal credits for his Michigan service with the
IMRF or was otherwise eligible for a Michigan pension—as to
which Village President Pope professed ignorance. R. 138-3 at
9. 5
After discussing their assessments of Barwin, the evident
consensus among all seven members of the Board, including
Village President Pope, was that the time had come for a
change of Village Manager. On the following day, Pope and a
Trustee (both of whom were members of the Village’s Person-
nel Committee) met privately with Barwin and presented him
with a choice: resign as Village Manager or face an official
Board vote to terminate him. 6 In the interim between the
5 The parties dispute what inferences can be drawn from this discus-
sion, including whether the remark “Can’t afford it” should be under-
stood to mean that Barwin could not afford to assume that he would con-
tinue in the Village’s employ until he reached pension eligibility (as the
Village argues) or that the Village could not afford the financial burden
that it would incur should Barwin attain pension eligibility. For purposes
of the issues raised in this appeal, and consistent with the allegations that
Barwin has made in his complaint, we shall assume that the latter inter-
pretation is the correct one.
6 Barwin’s complaint has cited a number of circumstances surround-
ing the February 13 meeting of the Board of Trustees and the follow-up
meeting with Barwin the next day—including the closed nature of the
meetings, the exclusion of legal counsel and other individuals, the lack of
public notice, the lack of official record-keeping, and the Trustees’ use of
personal email accounts to communicate about the decision to oust Bar-
win from the Village Manager post—as contrary to Village practice and
the Illinois Open Meetings Act, 5 ILCS 120/1, et seq., and as evidence of the
Village’s bad faith in deciding to force his resignation. Although, as dis-
cussed below, the Village admitted the factual allegations of the complaint
8 No. 21-2007
receipt of his mid-year evaluation in November 2010 and this
meeting on February 14, 2012, no member of the Board had
communicated a complaint or criticism to Barwin regarding
his performance nor had the Personnel Committee met with
him to advise him of any such concern.
Presented with the ultimatum to resign or be fired, Barwin
opted to resign. The Village granted him severance pay equal
to nine months of his salary pursuant to the Termination and
Severance provisions of the employment contract. R. 44-1 at
4–5 §§ 9–10. The Village also offered to grant him additional
severance benefits in exchange for a waiver of all claims
against the Village, but Barwin declined the offer.
At the time of his resignation, Barwin was still two and a
half years shy of the eight-year vesting threshold for his Illi-
nois pension. After he communicated his decision to resign
but while he was still within the Village’s employ (see Barwin
Dep. Feb. 14, 2019 at 136, 139, R. 125-3 at 25–26; Barwin Aff.
¶ 4, R. 141-2 at 2), Barwin asked Village President Pope if he
would be given permission to purchase out-of-state pension
by failing to file a timely answer, any legal issues raised by the complaint
are for the court to decide irrespective of the Village’s failure to timely
answer the complaint. See 10A Charles A. Wright & Arthur R. Miller, Fed.
Prac. & Proc. § 2688.1 & n. 11 (4th ed. 2016) (“a party in default does not
admit conclusions of law”). For its part, the Village denies any impropri-
ety and contends that the Board of Trustees convened in executive session
to discuss Barwin’s performance and likewise communicated its decision
to replace him in private in order to protect his confidentiality and pre-
serve his future employment prospects. Had Barwin refused to resign, the
Village represents that the Board of Trustees would have convened in a
public meeting to vote on whether to terminate him. Because the propriety
of the form of the meetings on February 13 and 14 do not affect our eval-
uation of Barwin’s two contract claims, we need not consider the issue.
No. 21-2007 9
credits in order to bring himself up to the eight-year vesting
minimum. Pope said he would take the request to the Village
Board, but he did not do so, and the Village Board of Trustees
never took a vote on whether to authorize Barwin to purchase
the credits. R. 94 at 4–5 ¶ 9, 14–15 ¶ 38. As a result, Barwin
was unable to purchase the credits and thus did not satisfy
the eight-year vesting threshold for pension eligibility. 7
Barwin filed suit in diversity (he is now a citizen of Flor-
ida 8)against the Village for breach of contract. The district
judge originally assigned to the case dismissed Barwin’s orig-
inal complaint with prejudice (R. 19) but later granted (R. 39)
his request for leave to file a first amended complaint, which
alleged that the Village breached the implied covenant of
good faith and fair dealing by interfering with Barwin’s ex-
pectation that the Village would not fire him (or force him to
resign) in order to prevent him from reaching the eight-year
vesting threshold for pension benefits (R. 44). The Village
again moved to dismiss, and the district court, following as-
signment of the case to a new judge, again granted the
7 Barwin could have made his request to purchase the out-of-state
credits at any point after he had been in the Village’s employ for two years,
but he did not do so until he was forced to resign. Barwin explained that
he had not done so previously because, given the financial burden of hav-
ing multiple children in college, he was attempting to “narrow th[e] gap”
between his years of actual work for the Village and the eight years re-
quired for pension vesting (and thereby reduce the cost of purchasing the
necessary credits). Barwin Dep. Feb. 14, 2019 at 135, R. 125-3 at 24. As we
discuss below, we are not persuaded that the timing of Barwin’s request
defeats his claim for breach of contract regarding his ability to purchase
the credits.
8 Following his departure from Oak Park, Barwin was hired as the city
manager of Sarasota, Florida.
10 No. 21-2007
Village’s motion. R. 91. The court acknowledged that alt-
hough Barwin was an at-will employee, the Village was none-
theless constrained by the implied duty of good faith and fair
dealing. R. 91 at 9, 11. But the court found nothing in the
agreement that guaranteed Barwin a pension or required the
Village to keep Barwin in its employ until such time as his
pension vested. R. 91 at 11. Further, although Illinois cases do
recognize that an employer may violate the duty of good faith
and fair dealing by taking action with an “improper motive,”
for example by discharging an employee in order to prevent
him from receiving benefits that he had already earned (R. 91
at 12), the allegations in this case did not fit that profile. Here,
the Village fired Barwin two and one-half years before he met
the pension-vesting threshold, and “there is no contract lan-
guage indicating that Barwin is entitled to his pension bene-
fits two and half years before it vests.” R. 91 at 13. In short,
Barwin had not alleged a plausible claim for breach of the cov-
enant of good faith and fair dealing.
The district court did, however, grant Barwin leave to file
a second amended complaint alleging that the Village, in re-
fusing to allow him to purchase pension credits, breached the
duty of good faith and fair dealing by interfering with his
right under section 19A of the agreement to the “highest level
of benefits” enjoyed by other department heads and compa-
rable employees “by practice.” Barwin’s theory was that the
Village had historically and uniformly allowed other senior
employees to purchase pension credits, that such employees
included the Village Manager who preceded Barwin, and that
Pope had assured Barwin he would be able to purchase such
credits if he did not attain enough years of service in order to
meet the vesting criteria. The court deemed it a “close call”
whether the new complaint presented a viable claim for
No. 21-2007 11
breach of the duty of good faith and fair dealing (R. 91 at 19),
but it determined that the facts alleged supported a reasona-
ble expectation that Barwin would be able to purchase pen-
sion credits if needed, and that the Village Board had acted
arbitrarily and with an improper motive in refusing to allow
him to do so (R. 91 at 19–20).
The Village neglected to file a timely answer to Barwin’s
second amended complaint and did not seek leave to file such
an answer until eight months after the district court author-
ized Barwin to file the complaint. After some sparring over
this issue, the court ultimately denied the Village’s belated re-
quest to file an answer (R. 136) and as a result it deemed the
Village to have admitted the factual allegations of that com-
plaint, see Fed. R. Civ. P. 8(b)(6).
When the parties subsequently filed cross-motions for
summary judgment on this claim, the district court granted
the Village’s motion and denied Barwin’s motion. R. 145. The
court agreed with the Village that section 19A of the agree-
ment did not grant Barwin a right to purchase additional pen-
sion credits, because the evidence did not support the notion
that there actually was a Village practice of allowing senior
employees to do so. The court agreed with the parties that the
term “practice” should be understood to mean “repeated or
customary action” or the “usual way of doing something”
(R. 145 at 8–9), but it also read the contract’s reference to rights
that “are enjoyed” “by practice” to “limit[ ] the span of time
that a reasonable reader may examine in order to determine
the ’practice’” (R. 145 at 8). Here, the evidence indicated that
over a course of multiple decades, some five Oak Park em-
ployees had been permitted to purchase out-of-state pension
credits, but the last known date for such a purchase was 2001,
12 No. 21-2007
five years before Barwin was hired and 11 years prior to his
resignation.
On these facts, the court concluded that no factfinder
could reasonably find that there was an established “practice”
of allowing employees to purchase such credits. R. 145 at 9.
This was so notwithstanding the absence of evidence that
such a request had ever been refused, and despite evidence
that the prior Village Manager himself (among other employ-
ees) had been allowed to make such a purchase.
The court reasoned further that this reading of “practice”
was consistent with a principle of Illinois law holding that
elected officials should not be bound by their predecessors’
decisions as to the welfare of the political subdivision they
govern. R. 145 at 9–10. See Grassini v. DuPage Twp., 665 N.E.2d
860, 864–65 (Ill. App. Ct. 1996) (deeming four-year contract for
employment of township administrator void ab initio because
the term of the contract extended beyond term of township
board and supervisor who approved it).
The court added that although Barwin pointed to Village
President Pope’s oral assurances at the time of his hiring that
the Village had allowed Barwin’s predecessor to purchase
out-of-state pension credits and that Barwin would be permit-
ted to do the same if the need arose, the agreement’s integra-
tion clause prevented the court from considering any such
promise or representation. R. 145 at 10–11.
In the absence of evidence sufficient to establish a practice
of allowing senior employees to purchase pension credits, the
court found that Barwin had no reasonable expectation under
section 19A of the employment agreement of having his own
request granted. Accordingly, the court found no need to
No. 21-2007 13
reach the question of whether the Village breached its duty of
good faith in declining to consider and grant his request.
R. 145 at 10, 15–16. The court found the additional allegations
of irregularities concerning the meeting where the decision to
discharge Barwin was made to be immaterial to his claim.
R. 145 at 12 & n.13.
Finally, the court rejected Barwin’s argument that the
court was violating the law of the case doctrine by retreating
from its prior analysis in allowing him to file his second
amended complaint. “The Court’s decision to allow an
amended complaint under Fed. R. Civ. P. 15 in no way guar-
antees success on the merits. Although the Court found Bar-
win alleged a plausible theory of liability in his proposed [Sec-
ond Amended Complaint] and the facts in that Complaint
have been admitted, the legal conclusions in that SAC were
not admitted.” R. 145 at 12.
II.
Barwin contends on appeal that he has a valid claim for
breach of contract against the Village under either of two the-
ories. First, he posits that under the terms of his employment
agreement, which obligated both parties to make pension
contributions to the IMRF, he had a reasonable expectation
that he would attain eligibility for a pension and that the Vil-
lage breached its contractual duty of good faith and fair deal-
ing when it decided to force his resignation in order to pre-
clude him from reaching the eight-year pension-vesting
threshold. Second, he contends that because the agreement
granted him such benefits as were enjoyed by senior employ-
ees “by practice” and the Village had a cognizable “practice”
of allowing such employees to purchase out-of-state pension
credits, the Village breached the duty of good faith and fair
14 No. 21-2007
dealing by refusing to abide by that practice and approve his
own request to purchase such credits. For the reasons that fol-
low, we affirm the district court’s decision to dismiss, for fail-
ure to state a claim, the first amended complaint which set
forth the first claim challenging the Village’s decision to oust
him as Village Manager. But we reverse the court’s decision
to grant summary judgment as to the second claim regarding
his asserted right, as a matter of Village practice, to purchase
out-of-state pension credits.
A. Good faith and fair dealing: reaching the pension-vesting
threshold.
As the foregoing discussion reveals, there are two breach-
of-contract claims at issue in this appeal, both based on the
duty of good faith and fair dealing: one that was dismissed at
the pleading stage, and one that was resolved against Barwin
at the summary judgment stage.
The claim that was dismissed at the pleading stage was the
claim in the First Amended Complaint that the Village forced
Barwin out as the Village Manager under threat of termina-
tion in order to prevent him from reaching the pension-vest-
ing threshold. The agreement obligated the Village and Bar-
win both to make regular contributions to the IMRF and, in
view of that provision, Barwin alleged that he had an expec-
tation that his pension would eventually vest and, more spe-
cifically, that the Village, notwithstanding its broad discretion
over his continuing employment, would not exercise that dis-
cretion in an opportunistic way so as to prevent him from
reaching pension eligibility. 9
9
Although both of Barwin’s contractual claims implicate his right to
a pension, we note that the Employee Retirement Income Security Act of
No. 21-2007 15
We review de novo the district court’s decision to dismiss
the First Amended Complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim on which
relief might be granted. E.g., Dean v. Nat’l Prod. Workers Union
Severance Trust Plan, 46 F.4th 535, 543 (7th Cir. 2022). To sur-
vive a motion to dismiss, a plaintiff need allege “only enough
facts to state a claim to relief that is plausible on its face.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974
(2007). A claim satisfies that criterion when “the plaintiff
pleads factual content that allows the court to draw the rea-
sonable inference that the defendant is liable for the miscon-
duct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct.
1937, 1949 (2009) (citing Twombly, 550 U.S. at 556, 127 S. Ct. at
1965). We accept as true all well-pled facts alleged in the com-
plaint. E.g., Heredia v. Capital Mgmt. Servs., L.P., 942 F.3d 811,
814 (7th Cir. 2019). Barwin attached his employment agree-
ment to the complaint, and consequently we deem the con-
tract to be part of the pleading, Fed. R. Civ. P. 10(c), and we
may consider the provisions of that contract in evaluating the
sufficiency of the complaint. Bible v. United Student Aid Funds,
Inc., 799 F.3d 633, 639–40 (7th Cir. 2015); Chicago Dist. Council
of Carpenters Welfare Fund v. Caremark, Inc., 474 F.3d 463, 466
(7th Cir. 2007).
The parties agree that Illinois law governs Barwin’s
claims, and because the employment agreement between Bar-
win and the Village did not specify a duration of employment
or otherwise impose conditions on the Village’s ability to
1974 (“ERISA”), 29 U.S.C. § 1001 et seq., does not come into play here, be-
cause ERISA expressly exempts from its coverage any “governmental
plan,” 29 U.S.C. § 1003(b)(1), and such a plan is defined to include a plan
established by a State or any political subdivision thereof, § 1002(32).
16 No. 21-2007
discharge Barwin, he was an at-will employee under Illinois
law. See Meade v. Moraine Valley Cmty. Coll., 770 F.3d 680, 687
(7th Cir. 2014); Burford v. Accounting Practice Sales, Inc., 786
F.3d 582, 586 (7th Cir. 2015), overruled on other grounds by LHO
Chicago River, L.L.C. v. Perillo, 942 F.3d 384, 387–89 (7th Cir.
2019); Robinson v. BDO Seidman, LLP, 854 N.E.2d 767, 770 (Ill.
App. Ct. 2006). 10 As a result, the Village was free to discharge
him for a good reason, a bad reason, or on a whim. Wilson v.
Career Educ. Corp., 729 F.3d 665, 674 (7th Cir. 2013) (Darrow,
J., concurring) (“An employer can terminate an at-will em-
ployee for almost any reason.”); LaScola v. U.S. Sprint
Commc’ns, 946 F.2d 559, 567 (7th Cir. 1991) (“as an at-will em-
ployee, LaScola could be discharged for any reason—good or
bad”); Jordan v. Duff & Phelps, Inc., 815 F.2d 429, 438 (7th Cir.
1987) (“An [at-will] employer may be thoughtless, nasty, and
mistaken.”); Robinson, 854 N.E.2d at 770 (“an employee at will
may be discharged for any reason or no reason at all”). The
freedom was not one-sided: as an at-will employee, Barwin
himself was free to terminate his relationship with the Village
for any reason without breaching his employment contract.
Id.; Stevenson v. ITT Harper, Inc., 366 N.E.2d 561, 566 (Ill. App.
Ct. 1977). 11
10
Unless otherwise indicated, all federal cases cited in this opinion
applied Illinois law.
11
Illinois does recognize a narrow limitation on an employer’s other-
wise unbounded discretion to discharge an at-will employee, allowing
such an employee to pursue a claim of retaliatory discharge when he has
been terminated in violation of public policy. See Blount v. Stroud, 904
N.E.2d 1, 9 (Ill. 2009); Palmateer v. Int’l Harvester Co., 421 N.E.2d 876, 878–
79 (Ill. 1981). There is no contention that Barwin’s discharge might sup-
port such a claim. Federal and state anti-discrimination statutes, including
Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., and the
No. 21-2007 17
A duty of good faith and fair dealing is implied into every
Illinois contract. LaScola, 946 F.2d at 565 (citing Triad Assocs.,
Inc. v. Chicago Hous. Auth., 892 F.2d 583, 589 (7th Cir. 1989),
abrogated on other grounds by Bd. of Cnty. Comm’rs, Wabaunsee
Cnty., Kan. v. Umbehr, 518 U.S. 668, 116 S. Ct. 2342 (1996)); Jor-
dan, 815 F.2d at 438. As relevant here, that obligation pre-
cludes an employer from making an “avowedly opportunis-
tic” decision to discharge an at-will employee. See Jordan, 815
F.2d at 438; LaScola, 956 F.2d at 566. But the obligation is not a
source of rights independent of the parties’ contract, nor does
the duty supply a discharged employee with a separate cause
of action against his former employer. Instead, the duty of
good faith and fair dealing functions as an interpretive aid,
ensuring that the employer, as “a party vested with contrac-
tual discretion [in this case, to discharge its employee for vir-
tually any reason] to exercise [that discretion] reasonably, and
not arbitrarily or capriciously, or in a manner inconsistent
with the reasonable expectations of the parties.” Reserve at
Woodstock, LLC v. City of Woodstock, 958 N.E.2d 1100, 1112 (Ill.
App. Ct. 2011); see also Wilson, 729 F.3d at 674 (Darrow, J. con-
curring); McArdle v. Peoria Sch. Dist. No. 150, 705 F.3d 751, 755
(7th Cir. 2013); City of Rockford v. Mallinckrodt ARD, Inc., 360
F. Supp. 3d 730, 769 (N.D. Ill. 2019); Zewde v. Elgin Cmty. Coll.,
601 F. Supp. 1237, 1250 (N.D. Ill. 1984); Gordon v. Matthew
Bender & Co., 562 F. Supp. 1286, 1289–90 (N.D. Ill. 1983).
Thus, “[w]here a party acts with improper motive, be it a
desire to extricate itself from a contractual obligation to bring
Illinois Human Rights Act, 775 ILCS 5/1-101, et seq., also apply to at-will
employees. See Carter Coal Co. v. Human Rights Com’n, 633 N.E.2d 202, 207
(Ill. App. Ct. 1994). Barwin has not alleged that he was discharged in vio-
lation of any such statutory protections.
18 No. 21-2007
about a condition precedent or a desire to deprive an em-
ployee of reasonably anticipated benefits through termina-
tion, that party is exercising contractual discretion in a man-
ner inconsistent with the reasonable expectations of the par-
ties and therefore is acting in bad faith.” Dayan v. McDonald’s
Corp., 466 N.E.2d 958, 991 (Ill. App. Ct. 1984). So, for example,
if an employment agreement provides that an at-will em-
ployee is entitled to a commission under specified conditions,
and those triggering conditions have been met, the employer
may not evade its obligation to pay the commission by exer-
cising its otherwise wide discretion to fire the employee be-
fore the date payment is due: that would constitute avowedly
opportunistic behavior. Jordan, 815 F.2d at 438–39; see also Wil-
son, 729 F.3d at 67–75 (Darrow, J., concurring); id. at 681 (Ham-
ilton, J., concurring in part and dissenting in part); La-Scola,
946 F.2d at 566; McCleary v. Wells Fargo Sec., L.L.C., 29 N.E.3d
1087, 1093–95 (Ill. App. Ct. 2015) (plaintiff adequately alleged
that his employer breached duty of good faith and fair dealing
by unilaterally altering terms of bonus plan in order to deny
him eligibility after he had already met former criteria for bo-
nus); Reserve at Woodstock, 958 N.E.2d at 1113–14 (city violated
duty of good faith and fair dealing it owed to developer under
annexation agreement by exercising its discretion to re-zone
property for agricultural use and blocking proposed develop-
ment, after developer had already expended hundreds of
thousands of dollars and essentially complied with all criteria
to proceed with development).
But apart from ensuring that the employer does not take
undue advantage of an at-will employee by acting contrary to
the terms of the employment agreement, the duty of good
faith and fair dealing does not require that the employer have
cause to discharge the employee nor does it otherwise limit
No. 21-2007 19
the employer’s duty to let the employee go for whatever rea-
son: the employer retains its otherwise unfettered ability to
terminate its relationship with the at-will employee for any
reason, good or bad. See Jordan, 815 F.2d at 438; Gordon, 562
F. Supp. at 1289–90; Wilson, 729 F.3d at 688 (Wood, J., concur-
ring in part and dissenting in part).
Barwin’s theory, as we have said, is that the duty of good
faith and fair dealing, in view of the employment agreement’s
provision for payments toward his pension eligibility, barred
the Village from exercising its discretion to oust him from the
Village Manager role in order to interfere with his pension
rights. Drawing from the transcript of the Village Board meet-
ing where the decision was made to replace him, Barwin al-
leges that the Board decided to oust him so as to avoid incur-
ring the expense of paying him a pension. The complaint
highlights the remark by a Trustee to the effect that Barwin,
having only held the position of Village Manager for five and
a half years, could not assume that he would continue in that
position until he reached pension eligibility, concluding with
the observation, “Can’t afford it.” Barwin alleges that this re-
mark was meant to convey the notion that the Village could
not afford to have him become eligible for a pension. That
may not be the only reasonable way to interpret the remark,
but it is one plausible construction, and because this claim
was dismissed at the pleading stage, we accept the truth of
this allegation. 12 Consistent with that allegation, Barwin has
12 As we noted above, the actual remarks of the Village official as tran-
scribed are ambiguous as to whether the Trustee was referring to the Vil-
lage’s ability to afford Barwin reaching pension eligibility or Barwin’s abil-
ity to assume that he would remain employed until he reached the eligi-
bility threshold, and the parties dispute what significance we should at-
tach to those remarks. See supra n.5. But given that we are evaluating the
20 No. 21-2007
separately alleged that Pope had previously made remarks to
him over the course of his tenure regarding the cost of em-
ployee pensions. R. 94 at 12 ¶ 34. We can therefore assume, in
assessing the viability of this claim, that the Village Board in-
deed did decide to demand his resignation under threat of
discharge in whole or in part to prevent his pension from vest-
ing and thus to avoid the corresponding financial obligation.
Even so, we agree with the district court that the complaint
does not state a plausible claim for breach of the contractual
duty of good faith and fair dealing.
Whatever else the contract provided, it did not state that
the Village and Barwin were agreeing to a minimum employ-
ment term of eight years; had that been the case, Barwin
would not have been an at-will employee. True enough, the
agreement obligated both Barwin and the Village to make
contributions to the municipal pension fund, a necessary but
not sufficient condition on his eventual eligibility to receive a
pension. From Barwin’s perspective, that obligation only
makes sense if the parties intended for him to serve as Village
Manager until such time as his pension rights vested. Put an-
other way, in agreeing that Barwin would participate in the
IMRF and that both parties would make periodic contribu-
tions to the Retirement Fund, the Village, in Barwin’s view,
implicitly agreed not to weigh the costs of his prospective
pension in exercising its otherwise unfettered discretion to re-
place him as Village Manager at any time. But we do not think
that provision of the contract can bear the weight Barwin
places upon it. The parties agreed to make contributions to
dismissal of this claim at the pleading stage, and our focus is necessarily
confined to the four corners of the complaint, we shall set aside the ambi-
guity in the transcript (which is not attached to the complaint).
No. 21-2007 21
the IMRF toward Barwin’s eventual pension eligibility, but no
more. It is by no means unusual for an employee to quit or be
discharged before his pension rights vest, and that does not
render worthless any prior pension contributions made on his
behalf. Had Barwin obtained employment with another Illi-
nois municipality participating in the IMRF, his years of ser-
vice with Oak Park and the contributions made during that
time would have continued to count toward his pension eli-
gibility, and he might have reached the 8-year vesting thresh-
old in his new position. 13 We also understand from the parties
that Barwin had a right to request a refund of the contribu-
tions he had made to the IMRF, and for its part the Village
could allocate the contributions it had made for Barwin to its
other pension obligations. 14 So the contributions were not ren-
dered pointless with Barwin’s ouster, and we do not read the
provision dictating that the parties make such contributions
as reflecting a shared expectation, let alone commitment, that
Barwin would continue in the Village Manager position long
enough for his pension rights to vest.
That being the case, the duty of good faith and fair dealing
did not preclude the Village from discharging Barwin even if
it did so in whole or in part because it did not want him to
become eligible for a municipal pension and for the Village
coffers to incur the substantial cost of that pension. This case
is not analogous to the earned-benefit cases, given that the
triggering event for Barwin’s pension eligibility had not yet
13 Indeed, Barwin testified at his deposition that he made unsuccessful
efforts to find a job with another Illinois municipality. Barwin Dep. Feb.
14, 2019 at 140, R. 125-3 at 27.
14 See Barwin post-argument memorandum at 1–2, 7th Cir. docket No.
34 (Dec. 21, 2021).
22 No. 21-2007
come to pass and, in fact, was still two and a half years away.
See Criscione v. Sears, Roebuck & Co., 384 N.E.2d 91, 94 (Ill. App.
Ct. 1978) (“Plaintiff’s complaint alleges only that pension ben-
efits had accrued during [his] 10 years at Sears and that the
benefits were lost as a result of his dismissal. There is no alle-
gation regarding agreements pertaining to pension benefits or
that his rights to the benefits had vested.”); Stevenson, 366
N.E.2d at 566 (where employment agreement provided that
company would pay an annual pension to plaintiff in event
he remained in company’s employ until he reached age of 65,
there was no undertaking by company to retain employee‘s
services until he reached age of 65 or for any other period:
“Terminating of the employment relationship was and re-
mained the exclusive privilege of the employer precisely as
plaintiff retained the concurrent right to leave the com-
pany.”). Even if we assume arguendo that the duty of good
faith might foreclose the Village from firing Barwin on the eve
of the vesting threshold in order to keep him from earning a
pension, cf. K Mart Corp. v. Ponsock, 732 P.2d 1364, 1370 (Nev.
1987) (recognizing tort claim for bad faith discharge decision
made by large nationwide employer to prevent employee
from claiming contractual retirement benefits which were six
months away from becoming 100 percent vested), abrogated by
Ingersoll-Rand Corp. v. McClendon, 498 U.S. 133, 111 S. Ct. 478(1990) (holding that ERISA preempts state-law claims relating
to private benefit plans, including common law wrongful dis-
charge claims premised on employer’s desire to avoid making
contributions to pension fund on employee’s behalf); Hurst v.
IHC Health Servs., Inc., 817 F. Supp. 2d 1202, 1208 (D. Id. 2011)
(“The paradigmatic example of a breach of the covenant is
where an employer terminates an at-will employee weeks be-
fore the employee’s retirement vests in order to avoid paying
No. 21-2007 23
the employee’s retirement benefits; although the employment
contract permits termination without cause, termination to
avoid paying benefits due the employee would amount to a
breach.”) (Idaho law); Stevenson, 366 N.E.2d at 567 (noting
that duty of good faith did not assist plaintiff “because the
record does not suggest that plaintiff’s termination was a bad
faith effort by ITT Harper to avoid its conditional duty to pay
15
pension benefits”), two and a half years short of the vesting
threshold does not qualify as the eleventh hour. And at a
15 Barwin cites the Illinois Appellate Court’s decision in
Stevenson for the proposition that discharging an employee in
order to prevent his pension rights from vesting violates the
covenant of good faith and fair dealing, regardless of whether
the vesting threshold is imminent. But the passage we have
quoted from Stevenson, which rejected such a claim based on
a factual determination that the employer had not let the
plaintiff go in order to escape its conditional obligation to pay
pension benefits, constitutes nearly the entirety of the court’s
analysis. Barwin presumes that had the court found that the
plaintiff was discharged in order to avoid paying him a pen-
sion, the court would have concluded that the employer
breached the duty of good faith and fair dealing. We agree it
is possible that the Stevenson court might have come to that
conclusion, but given the brevity of the court’s analysis, we
are not convinced that such an outcome was certain or even
likely. It is not unusual for a court to reject a particular claim
on the ground that the factual premise of the claim has not
been established, without addressing the legal merits of the
claim.
24 No. 21-2007
substantial remove from that hour, the Village was free to
make a decision that it deemed to be in its own economic self-
interest, however detrimental that was to its at-will employee
and however unfair or distasteful that decision might seem.
See Wilson, 729 F.3d at 688 (Wood, J., concurring in part and
dissenting in part) (“Opportunism exists only if one side has
sunk costs that cannot be recovered by the time the other side
acts[.]”); Rodio v. R.J. Reynolds Tobacco Co., 416 F. Supp. 2d 224,
235 (D. Mass. 2006) (“The implied covenant of good faith and
fair dealing ‘does not protect interests contingent on an event
that has not occurred,’ such as continued employment.”)
(quoting Harrison v. NetCentric Corp., 744 N.E.2d 622, 631
(Mass. 2001)) (Massachusetts law); Wagenseller v. Scottsdale
Mem. Hosp., 710 P.2d 1025, 1040 (Ariz. 1985) (“The covenant
does protect an employee from a discharge based on an em-
ployer’s desire to avoid the payment of benefits already
earned by an employee, … but not the tenure required to earn
… pension and retirement benefits … .”), superseded in other
respects by Ariz. Rev. Stat. § 23-1501, et seq.; accord, Metcalf v.
Intermountain Gas Co., 778 P.2d 744, 749 (Id. 1989), modified in
other respects by Sorensen v. Comm Tek, Inc., 799 P.2d 70, 75 (Id.
1990). It would be no different had the employment agree-
ment specified a pay increase for each additional year that
Barwin worked for the Village: at some point, the Village
might have concluded that it was in its interest to let Barwin
go and replace him with a more modestly compensated em-
ployee. See Edwards v. Mass. Mut. Life Ins. Co., 936 F.2d 289,
292 (7th Cir. 1991) (Mass. law). This is the nature, and some
might say the point, of at-will employment: the employer is
free to discharge the employee even on a rationale that a rea-
sonable observer might find unfair. As Judge Wood observed
in Wilson with respect to the doctrine of at-will employment,
No. 21-2007 25
“Some people might not mourn its passing, but it is firmly en-
trenched in Illinois law, and it is our duty to follow Illinois in
this respect.” Id.In short, construing the duty of good faith and fair dealing
to limit the Village’s discretion as to Barwin’s continued em-
ployment—even if only to require that it be blind to the costs
of his prospective pension—cannot be reconciled with his sta-
tus as an at-will employee. For better or worse, the at-will doc-
trine remains a feature of Illinois law, and short of a contrac-
tual obligation to continue employing Barwin until his pen-
sion rights vested, the Village remained free, with the vesting
threshold more than two years off, to discharge him even if
solely to prevent him from reaching that threshold.
B. Good faith and fair dealing: purchase of out-of-state pension
credits.
Barwin’s second good faith and fair dealing claim—this
one asserted in the Second Amended Complaint and allowed
by the court to proceed beyond the pleading stage—has its
foundation in section 19A of the agreement, which entitled
Barwin to the highest level of benefits that “are enjoyed” by
department heads and similar employees “by practice.” Bar-
win asserts that it was the Village’s practice to allow senior-
level employees to purchase out-of-state pension credits, and
that consequently, it was his reasonable expectation that he
would be permitted to do so in the event he needed such cred-
its in order to reach the 8-year vesting threshold. Yet, when
the Village forced him to resign, it departed from that practice
and effectively refused his request to purchase pension cred-
its. That decision, he asserts, was taken with malice to specif-
ically deprive him of a right that other employees, including
26 No. 21-2007
a prior Village Manager, had been granted by practice, in
breach of the implied duty of good faith and fair dealing.
We review the district court’s decision to grant summary
judgment to the Village on this claim de novo. E.g., Stockton v.
Milwaukee Cnty., 44 F.4th 605, 614 (7th Cir. 2022). Summary
judgment is properly granted to the moving party when
“there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a); Stockton, 44 F.4th at 614. In assessing the eviden-
tiary record underlying the district court’s decision, we grant
the non-moving party the benefit of conflicting evidence and
any reasonable inferences that may be drawn from the evi-
dence. Id. We shall affirm the district court’s summary-judg-
ment decision in this case so long as no reasonable finder of
fact could conclude that there was a practice of allowing sen-
ior Oak Park employees to purchase out-of-state pension
credits. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252,
106 S. Ct. 2505, 2512 (1986); Cloutier v. GoJet Airlines, LLC, 996
F.3d 426, 441 (7th Cir. 2021).
As relevant here, section 19A entitled Barwin to the high-
est level of benefits that “are enjoyed” by department heads
and like employees “by practice.” So there are two inter-re-
lated questions presented: (1) was there a practice of allowing
senior employees to purchase out-of-state pension credits,
and (2) was the practice sufficiently current, such that it
would have been recognized as one as continuing or prece-
dential, so to speak, at the time of Barwin’s hiring and during
his tenure as a Village employee.
There are multiple undisputed facts that are relevant to
these questions: (1) As set forth in the Second Amended Com-
plaint (the factual allegations of which the Village has
No. 21-2007 27
admitted as true), Village President Pope told Barwin that his
immediate predecessor had purchased pension credits; (2) a
total of five Village employees in the decades preceding Bar-
win’s hiring had asked to purchase pension credits and were
permitted to do so; (3) so far as the record reveals, no such
previous request was ever denied; (4) apparently, the last time
such a request was made was in 2001, some five years before
Barwin was hired (that request was made by Barwin’s prede-
cessor) and some 11 years before he was forced to resign; and
(5) no request to purchase an out-of-state pension credit was
made between the time Barwin was hired as Village Manager
and the time he was advised to resign or face termination. 16
As we have noted, the district court was not convinced
that a total of five requests, made over a period of decades,
was sufficient to constitute a practice, i.e., a customary or
usual way of doing something. The court also reasoned that
the “are enjoyed” language of section 19A referred to benefits
that are currently enjoyed by employees, and that the five-year
time gap between the last time a request to purchase pension
16 A printout from the Illinois Municipal Retirement Fund’s database
indicates that a total of 12 Oak Park employees submitted applications to
purchase out-of-state pension credits from 1990 to 2019. R. 125-6 at 4. One
of the 12 applications was submitted by Barwin himself in 2012 and there
was one subsequent application submitted by another Village employee
in 2019. Thus, a total of 10 applications were filed in the 22 years prior to
Barwin’s resignation. Apart from knowing that five of those 10 applica-
tions were granted, we do not know what happened with the other five.
Some number of those applications may have been granted. See n.2, supra.
As noted previously, it is undisputed that no such application—apart
from Barwin’s—was ever denied by a vote of the Village Board of Trustees
or, as in this case, a refusal to submit the request to the Board. We can only
assume that the other applications were withdrawn or not acted upon be-
cause the applicants chose not to pursue them.
28 No. 21-2007
credits had been granted in 2001 and Barwin’s hiring, and the
passage of 11 years between that last prior purchase and Bar-
win’s forced resignation in 2012, was too great to establish a
right that was enjoyed by employees at the time of his hiring
and/or ouster.
Looking at the alleged practice in context, however, we
conclude that it would be possible for the factfinder to resolve
these points in Barwin’s favor and find that there was a prac-
tice of allowing senior Village employees to purchase out-of-
state pension credits. For that reason, it was error to enter
summary judgment against Barwin on this claim.
The contract itself does not define the term “practice,” and
the parties’ briefs do not point us to any informative prece-
dents on the matter; but as it happens, the question comes up
regularly in labor arbitration. Workplace practices or “the law
of the shop” can shed light on the meaning of ambiguous
terms in a collective bargaining agreement and, in appropri-
ate cases, supplement the written agreement with implied but
nonetheless binding terms. See United Steelworkers of Am. v.
Warrior & Gulf Nav. Co., 363 U.S. 574, 581–82, 80 S. Ct. 1347,
1352 (1960) (“The labor arbitrator’s source of law is not con-
fined to the express provisions of the contract, as the indus-
trial common law—the practices of the industry, and the
shop—is equally a part of the collective bargaining agreement
although not expressed in it.”); BLET GCA UP v. Union Pac.
R.R. Co., 988 F.3d 409, 413–14 (7th Cir. 2021) (“any well estab-
lished practices that constitute a course of dealing between
the [rail] carrier and employees form part of the agreement
the same as do any specific terms set out in the text of the
agreement”) (cleaned up); Bhd. of Maint. of Way Employees
Div./IBT v. Norfolk So. Ry. Co., 745 F.3d 808, 813 (7th Cir. 2014)
No. 21-2007 29
(“An employer’s contractual claim may rely upon implied
contractual terms, which the parties established through past
practices.”). Arbitrators are thus frequently called upon to de-
cide what constitutes a practice (or “past practice,” as it is of-
ten referred to) for this purpose. In this case, of course, section
19A of the agreement not only invites but requires the court
to consider what benefits the Village had established for sen-
ior employees via practice. See Carlton J. Snow, Contract Inter-
pretation: The Plain Meaning Rule in Labor Arbitration, 55
FORDHAM L. REV. 681, 695 n.95 (1987) (“The most familiar way
to incorporate past practices into a contract by reference is
through a so-called ‘past practices’ clause or a ‘freeze’ or
‘maintenance of benefits’ clause.”) (quoting Moore Co. v. Di-
rectly Affiliated Local Union No. 22804, 79-2 Lab. Arb. Awards
(CCH) ¶ 8337, at 4410 (Bornstein, Arb., 1979)).
Of course, Barwin was not a union member and his em-
ployment was not subject to a collective bargaining agree-
ment. But his employment agreement expressly granted him
the benefit of rights that comparable Village employees en-
joyed as a matter of practice, and so we take guidance from
these cases as to the criteria that inform whether a particular
practice can be recognized.
“Something qualifies as a practice if it is shown to be the
understood and accepted way of doing things over an ex-
tended period of time.” Richard Mittenhall, Past Practice & the
Admin. of Collective Bargaining Agreements, 59 MICH. L. REV.
1017, 1019 (1961). Criteria that arbitrators look to in assessing
whether prior actions amount to a practice include clarity and
consistency, longevity and repetition, acceptability (i.e., the
parties are aware of the practice and regard it as the correct
and customary way of handling the particular issue or
30 No. 21-2007
circumstance), and mutuality (i.e., it is the product of a joint
understanding between the parties). Id.; see also Kenneth May,
ed., Elkouri & Elkouri, HOW ARBITRATION WORKS, ch. 12.2 at
12–4 (8th ed. 2016) (quoting Celanese Corp. of Am., 24 LA 168,
172 (Justin, Arb.,1954) (a past practice generally must be
“(1) unequivocal, (2) clearly enunciated and acted upon, [and]
(3) readily ascertainable over a reasonable period of time as a
fixed[ ] and established practice accepted by both [p]arties”)).
Single, isolated, or sporadic incidents are typically rejected as
insufficient to establish a past practice. See id. at 12–15 & n.23
(collecting cases); Mittenhall, at 1019. However, a limited
number of instances may nonetheless be deemed sufficient to
establish a practice when the relevant situation to which the
purported practice applies occurs only on occasion. See, e.g.,
In re arbitration between Grievant 1 and Respondent 1 (Servs., Not
Elsewhere Classified), 2019 WL 3766458, at *7 (Perea, Arb., May
20, 2019) (“It may be argued the before-mentioned instances
when National Days of Mourning as proclaimed by the Pres-
ident were treated by the parties as ‘holidays’ … are too infre-
quent to constitute a valid past practice. It must be noted,
however, that the death of a United States President is not a
matter which occurs with frequency. … Where the incidents
giving rise to the issue of binding past practice are found to
be infrequent, as in this instance, the gauge for measuring the
repetition of such occurrences must be adjusted accord-
ingly.”); In re Earthgrains Co. (Marquette, Mich.) & RWDSU, Lo-
cal 665, 2007 WL 8319142, at *7 (Roumell, Jr., Arb., Jan. 22,
2007) (“This Arbitrator appreciates, as suggested by the Un-
ion’s advocate, that a ‘past practice’ means a long-standing
practice that is frequently recognized and mutually adopted
by the parties. The suggestion was that the examples used
were too infrequent to arise to a standard of a binding past
No. 21-2007 31
practice. Yet, the fact is, when a conversion of a full-time to a
part-time position did occur, it was not challenged by the Un-
ion. As Arbitrator Brodsky in Monroe County Intermediate
School District, 105 LA [565] (1995) at 567, observed: ‘[A] prac-
tice can be established if, when one circumstance occurs, it is
consistently treated in a certain way. The occurrence need not
be daily or weekly, or even yearly. But when it happens, a
given response to that occurrence always follows.’”) (addi-
tional citation omitted); In re Bi-State Dev. Agency of the Mis-
souri-Illinois Metro. Dist. (Transit Div.) & IBEW, Local 2, 2004
WL 6344102, at *11 (Block, Arb. Apr. 8, 2004) (“I find merit in
the Agency’s position that a past practice can be found in a
consistent response to a situation that occurs infrequently.
The record establishes that, for these parties, in every situa-
tion when the Agency determined that it was necessary that
electricians work a shift other than their bid shift, it was han-
dled by requesting volunteers to work the shift with the time-
and-one-half compensation for the first day.”); In re arbitration
between Respondent & Grievant-1, Labor Union (Elec. Gas & San-
itary Servs.), 2000 WL 36095728, at *12 (Keenan, Arb., Apr. 20,
2000) (“[W]ith respect to the Union’s task of establishing a
past practice of a limit on management’s prerogatives vis-à-
vis assigning the task of unloading unexpected incoming
trucks, it gets some assistance from the arbitral principle to
the effect that fewer instances are required to establish a ‘prac-
tice’ where the situation (as here) arises only infrequently.”)
(but ultimately concluding evidence insufficiently specific to
establish alleged practice); In re Nat’l Coop. Refinery Assoc.,
McPherson, Kan., & Oil, Chem. & Atomic Workers Local 5-558,
1997 WL 34982504, at *3 (Allen, Jr., Arb., Oct. 1, 1997) (“this is
a ‘classic’ case wherein contract language has been modified
via a very long and consistent past practice, even though this
32 No. 21-2007
situation arises relatively infrequently”). Thus, in appropriate
circumstances, arbitrators have determined that a past prac-
tice exists even when only a handful of instances are cited as
evidence of that practice.
In reviewing the district court’s summary-judgment deci-
sion in this case, we must ask whether a factfinder reasonably
could find that there was a practice of allowing senior Village
employees to purchase out-of-state pension credits when
there were only five precedents identified over a period of
multiple decades. That is a small number of priors, we agree,
but as the foregoing cases reveal, it matters to the determina-
tion how frequently the underlying circumstance occurs. Oak
Park is a mid-sized municipality with just under 52,000 resi-
dents as of the 2010 census, see U.S. Census Bureau, Quick
Facts, Oak Park Village, Illinois, https://www.census.gov/
quickfacts/oakparkvillageillinois, and has a total workforce of
roughly 350 municipal employees, see “About Oak Park’s Mu-
nicipal Government,” https://www.oak-park.us/your-gov-
ernment/village-manager/about-oak-parks-municipal-gov-
ernment. 17 We do not know how many people in that work-
force qualify as department heads or their equivalent, but
whatever the number might be, it is necessarily a modest por-
tion of the Village workforce. The number among that group
who have had out-of-state work experience and have sought
to purchase out-of-state pension credits would logically be
even smaller. What we know, however, based on Barwin’s in-
vestigation is that in the two decades or so prior to his forced
resignation, five individuals had sought to purchase out-of-
17 The record indicates that the Village workforce was reduced sub-
stantially during Barwin’s tenure owing to the Great Recession and its fis-
cal fallout for the Village. Barwin Dep. Aug. 11, 2020 at 41, R. 125-4 at 17.
No. 21-2007 33
state pension credits and all five were granted their requests
by the Village; no such request had been denied. See n.5, supra.
In sum, the relevant instances applied to a relatively small
group of Village employees, occurred only occasionally, and
were all resolved the same way. We cannot say as a matter of
law this was insufficient to constitute a practice for purposes
of section 19A.
The district court and the Village have placed emphasis on
the current tense of the “are enjoyed” language of section 19A.
It is true that the provision is phrased in the present tense, and
we presume that the parties chose that tense deliberately. The
language reasonably suggests, we agree, that the parties in-
tended to exclude practices that the Village had abandoned or
modified and to include only those workplace practices that
were still understood to represent the Village’s way of han-
dling particular benefit issues at the time Barwin was hired
and during his tenure.
As to benefits that are issued, applied for, or adjudicated
frequently, drawing a line between prior and current prac-
tices may be a relatively straightforward matter. How the Vil-
lage handled various types of leave requests (e.g., sick, paren-
tal, family, or personal leave) five years ago may be incon-
sistent with how such leave requests are handled today, and
to that extent, contract language referencing benefits that “are
enjoyed” by practice would tend to exclude the former in fa-
vor of the latter.
But as to benefit questions that come up only infrequently,
a rigid focus on the day the employee is hired or even the du-
ration of his tenure as an employee may not be appropriate.
Suppose, for example, that a particular issue of employment
benefits for senior employees comes up, on average, once in
34 No. 21-2007
five years (taking extended parental leave, for example), but
the evidence nonetheless establishes that it has been handled
in a particular way and there is a shared, ongoing understand-
ing between the employer and its workers that that is how the
matter has been and should be handled. Suppose further that
at the time of the plaintiff’s hiring, it had been five years since
the issue last arose. Does it necessarily follow that the passage
of time alone precludes a factfinder from determining that
there was a practice in effect at the time of the plaintiff’s hire?
Likewise, does the fact that the issue happens not to come up
during the plaintiff’s multi-year tenure as an employee pre-
clude the factfinder from concluding that a previously-recog-
nized practice had not been abandoned and remained in ef-
fect? We think the answer to these questions is “No.”
Certainly, workplace routines evolve, the circumstances
that inform them can change, and prior practices can be aban-
doned; whether or not that was true here presents a question
for the factfinder. The passage of time certainly allows an em-
ployer to argue to a factfinder that what it did in the past no
longer represents current practice, just as the limited number
of prior occurrences permits it to argue that, in fact, there
never was a recognized practice as to a particular benefit. But
as the line of labor cases we have cited makes clear, when the
relevant circumstance occurs only infrequently, one cannot
draw hard lines about what is a practice—or what constitutes
a current practice—based solely on the number of prior prec-
edents or the passage of time between or following those prec-
edents. Again, having in mind that the pool of eligible em-
ployees in this case was small and that the issue would come
up only infrequently, the fact that the last occasion on which
a request to purchase credits had occurred five years prior to
Barwin’s employment does not strike us as foreclosing the
No. 21-2007 35
notion of an ongoing practice, particularly when Barwin’s
predecessor in the Village Manager position himself had ben-
efitted from the practice. Indeed, a factfinder might construe
the fact that Village President Pope referred to that very in-
stance at the time of Barwin’s hiring (more on that in a mo-
ment) as an affirmation that the practice indeed was an ongo-
ing one.
More generally, notwithstanding the present tense of the
“are enjoyed” phrasing, section 19A refers to benefits that are
enjoyed “by practice.” What occurs as a matter of “practice”
is inevitably and necessarily backward-looking to some de-
gree. Cf. Star Tribune Co. v. Minn. Newspaper Guild Typograph-
ical Union, 450 F.3d 345, 349 (8th Cir. 2006) (“The CBA did not
define present practice [as used in the agreement’s preamble]
and the arbitrator therefore had to look at extrinsic evidence
to inform his interpretation, including an examination of the
past practices of the parties to the agreement.”) (emphasis
ours) (applying federal law). The parties themselves concur
on this point, as is evident from the district court’s decision,
which noted that both parties embraced a definition of the
term “practice” that, among other things, “looks back at what
has been done and whether it has been done consistently.”
R. 145 at 9. This reinforces the notion that one must neces-
sarily look backward in time to identify whether there has
been a “practice,” notwithstanding the current-facing “are en-
joyed” language of the contract. The use of one term that looks
to the past and a second clause that focuses on the present is
not inconsistent: “practice” focuses on what has consistently
been done in the past, whereas “are enjoyed” reflects an ex-
pectation that this past practice remains valid, i.e., that noth-
ing has interceded to render a past practice no longer binding.
36 No. 21-2007
Again, notwithstanding the relatively small number of
prior events in question (five), given the fact that these re-
quests were all resolved favorably to the employees, the fact
that the plaintiff’s immediate predecessor was permitted to
purchase credits, and the fact that the Village President em-
phasized to Barwin at the time of his hiring that his immediate
predecessor had been permitted to purchase such credits, the
record would support a finding that there was a practice of
granting such requests that was sufficiently ongoing (i.e., cur-
rent) at the time of Barwin’s hiring. So Barwin is entitled to
present his case on this claim to a factfinder.
A word is in order about Pope’s representation to Barwin
regarding his predecessor’s purchase of out-of-state pension
credits. The district court believed it was foreclosed from con-
sidering any such statements by the employment agreement’s
integration clause, which provides that “[a]ny prior discus-
sions or representations by or between the Employer and the
Employee not specifically stated in this Agreement are ren-
dered null and void by this Agreement.” R. 44-1 at 8, § 21A.
We agree that this clause excludes evidence of Pope’s assur-
ance that Barwin would be permitted to purchase pension
credits if needed: that was a promise that was not set forth in
the agreement itself. But we do not understand this clause to
preclude consideration of Pope’s additional statements to
Barwin as evidence of the very sort of “practice” that section
19A of the contract explicitly incorporates.
When the terms of a contract are clear, an integration
clause in conjunction with the parol evidence rule heeds the
four corners of the parties’ agreement and avoids misunder-
standings that may arise from extrinsic evidence of what the
parties may have talked about, contemplated, understood, or
No. 21-2007 37
intended yet failed to memorialize in writing. See Air Safety,
Inc. v. Tchrs Realty Corp., 706 N.E.2d 882 (Ill. 1999).
But when, for example, contract language is ambiguous,
parol evidence properly may be admitted to resolve the am-
biguity notwithstanding the contract’s integration clause. Id.at 884–85; see Bidlack v. Wheelabrator Corp., 993 F.2d 603, 608
(7th Cir. 1993) (en banc) (lead opinion) (federal law); Vallone
v. CNA Fin. Corp., 375 F.3d 623, 630 (7th Cir. 2004); Brooklyn
Bagel Bros., Inc. v. Earthgrains Refrigerated Dough Prods., Inc.,
212 F.3d 373, 380 (7th Cir. 2000); Pabst Brewing Co. v. Corrao,
161 F.3d 434, 440 (7th Cir. 1998) (federal law). Likewise, in the
past-practices labor cases that we have identified, parol evi-
dence is routinely admitted to establish the existence and na-
ture of past practices in a particular workplace. Logically, un-
less an agreement itself names and delineates the contours of
a given practice, extrinsic evidence is the only way a practice
can be identified. Judicial decisions reviewing arbitral awards
in turn recognize that when the arbitrator has turned to ex-
trinsic evidence to ascertain whether there is a past practice in
order to cast light on ambiguities or gaps in the parties’ writ-
ten contract, he or she is nonetheless interpreting their agree-
ment. See Jasper Cabinet Co. v. United Steelworkers of Am., AFL-
CIO-CLC, Upholstery & Allied Div., 77 F.3d 1025, 1030 (7th Cir.
1996) (in effort to resolve ambiguity of contract language re-
garding overtime work, arbitrator’s “comprehensive analy-
sis” resorting to extrinsic evidence including, inter alia, “cir-
cumstantial evidence relating to the practices of the Employer
which clearly demonstrate its lack of belief that overtime was
mandatory” confirmed that “the arbitrator was engaged in in-
terpretation of the agreement”) (federal law); Graphic Packag-
ing Int’l, Inc. v. Graphic Commc’n Conf. Int’l Bhd. of Teamsters,
Dist. Council 1, Local 77-P, 2010 WL 3699981, at *3 (E.D. Wis.
38 No. 21-2007
Sept. 13, 2010) (“[T]he fact that the arbitrator relied on extrin-
sic evidence does not mean the award did not draw its essence
from the agreement. … This was not a case of the arbitrator
imposing his own world view or his ‘notions of industrial jus-
tice’ on the parties; the arbitrator was looking to past practice
to give meaning to a provision he found ambiguous.”) (fed-
eral law); see also, e.g., United Steel, Paper & Forestry, Rubber,
Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union AFL-
CIO-CLC, USW Local 200 v. Wise Alloys, LLC, 807 F.3d 1258,
1274 (11th Cir. 2015) (“the presence of a zipper clause [in the
CBA] does not defeat the traditional rule that ambiguities can
be resolved by looking to extrinsic evidence[,]” of past prac-
tices) (federal law).
By explicitly incorporating any rights that senior employ-
ees enjoyed as a matter of practice, the employment agree-
ment opened the door to appropriate evidence of what such
practices were. Pope’s statements as to what the Village had
done in the past with respect to requests to purchase out-of-
state pension credits are admissible not only because they are
relevant to whether there was a past practice concerning the
purchase of such credits, but also because, if there was such a
past practice, they could be construed as bringing that prac-
tice “up-to-date” as of the time of Barwin’s hiring. That is,
when Barwin specifically inquired about the point, Pope de-
scribed what the Village’s practice was: Pope was effectively
describing it as an ongoing, current, practice (or so a fact-
finder might conclude). The timing of these remarks strike us
as particularly important vis-à-vis the “are enjoyed” clause of
section 19A, because this is when the terms of Barwin’s em-
ployment were being struck and Pope, as President and a
member of the Board of Trustees, was in a position to know
No. 21-2007 39
what the practice, if any, with respect to out-of-state pension
credits was.
The integration clause should not block consideration of
Pope’s statements as to what the Village had done in the past,
because properly understood, Barwin is not relying upon
these statements as an enforceable promise—he is relying on
section 19A for that. What he is relying on Pope’s statements
for is evidence of what the practice (enforceable through sec-
tion 19A) was with regard to the purchase of out-of-state pen-
sion credits. Construing the integration clause to exclude
Pope’s statements to Barwin, when the contract otherwise re-
quires parol evidence as to the existence of Village benefit
practices, and when Pope was a logical source of evidence as
to the nature of such practices, would be nonsensical. To be
clear, we are not suggesting that Pope’s statements were nec-
essarily binding or authoritative as to whether there was such
a practice and, if so, what the practice was; his statements are
merely one piece of evidence on this point, and nothing pre-
cludes the parties from offering other relevant evidence on
this point.
Even if we are wrong as to the admissibility of Pope’s
statements, wholly apart from those statements we have Bar-
win’s representation that he independently looked into and
confirmed what Pope told him about his predecessor and
what the Village had done with respect to other pension-
credit requests. That allegation is in the Second Amended
Complaint and has been admitted by the Village. R. 94 at 1–2
¶ 2, 8–9 ¶ 21. The exclusion of Pope’s statements would there-
fore not deprive Barwin’s case of evidentiary support on this
point.
40 No. 21-2007
Finally, although the Village makes the point that all five
prior requests to purchase pension credits were made by in-
dividuals who were, at the time of their requests, current as
opposed to former employees, we do not view this as a mate-
rial distinction. Barwin made the request for the same reason
that all prior employees did, i.e., to get himself to the vesting
threshold, and although his decision to resign preceded his
request to purchase credits, Barwin has pointed out that he
technically was still a Village employee at the time he made
this request. Barwin Aff. ¶ 4, R. 141-2 at 2. We add that the
Village gives us no reason to believe that the imminence of
Barwin’s departure would have had any impact on the Vil-
lage Board’s ability to consider and act on his request or the
IMRF’s ability to credit him for his prior, out-of-state service.
In sum, the facts would permit a factfinder to conclude
that there was a practice, current as of the time of Barwin’s
hiring, of granting senior employees the right to purchase
out-of-state pension credits upon request. To be clear, alt-
hough we view the evidence as being sufficient to support a
finding in Barwin’s favor on this point, it does not compel
such a finding. Whether a practice exists is a case-by-case de-
termination dependent on the totality of the circumstances
and the inferences and conclusions the factfinder draws from
those circumstances. A factfinder might find that a practice
existed for the reasons we have noted, but it also might reach
a contrary conclusion, perhaps because it deems the prior
number of pension-credit approvals to be too few to support
a true practice, see Elkouri & Elkouri, , ch. 12.2 at 12-5 n.23 (col-
lecting examples of such cases), perhaps because it finds the
passage of time since the last approval prior to Barwin’s hir-
ing and ouster suggests any past practice was now moribund,
or because it views the prior approvals as merely representing
No. 21-2007 41
the unilateral, benevolent exercise of managerial discretion by
the Village President and Board as opposed to a mutually-rec-
ognized understanding as to how the matter should be han-
dled, see id. at 12-5 n. 21 (collecting cases citing managerial
discretion); see also Sperry Rand Corp., 54 L.A. 48, 52 (Volz,
1971) (distinguishing leniency by individual supervisors from
mutual agreement or acquiescence by the contracting parties
in a consistent course of action).
The district court thought that recognizing such a practice,
and a determination that Barwin was entitled to purchase out-
of-state pension credits consistent with that practice, would
be inconsistent with “the spirit if not the letter” of the princi-
ple recognized in Grassini v. DuPage Township. that it would
be “contrary to the effective administration of a political sub-
division to allow elected officials to tie the hands of their suc-
cessors with respect to decisions regarding the welfare of the
subdivision.” 665 N.E.2d at 864 (citing Milliken v. Edgar Cnty.,
32 N.E. 493 (Ill. 1892)); R. 145 at 10. Typically, cases in this line
of authority deal with multi-year employment contracts, but
the same rationale has been applied to other types of contrac-
tual undertakings as well. See M.R. Deyo v. Comm’r of High-
ways of Sheridan, 256 Ill. App. 3, 1930 WL 2992 (Ill. App. Ct.
1930) (multi-year installment contract for purchase of tractor).
We understand the Village’s position on this point to be that
the votes of prior Village Boards of Trustees to approve the
purchase of out-of-state pension credits cannot bind later
Boards to vote the same way, and to the extent that section
19A of Barwin’s employment contract represents that it does
so, it violates the Grassini principle. R. 142 at 6.
We disagree. The Village entered into an agreement with
Barwin that expressly granted him the highest level of
42 No. 21-2007
benefits that “are enjoyed” by other senior employees “by
practice,” which as discussed necessarily looks to what has
been done customarily in the past, whether by the Board or
other Village officials. Recognizing that practice in the agree-
ment did not tie the Village’s hands in perpetuity. We pre-
sume that if the Village wanted to disclaim any past practice
and announce that it would no longer be followed going for-
ward, it could have done so at any time (thereby terminating
the requisite mutual understanding between the Village and
its senior employees as to the practice) and yet there is no ev-
idence that it ever did so as to the purchase of pension credits.
For that matter, given that Barwin was an at-will employee,
the Village could have insisted that the written employment
agreement be modified to disclaim this or any other prior
practice and sent Barwin packing if he did not consent. (As
Barwin has noted, the terms of his employment had been
modified on other occasions.) But the Village did not do that
either. We can therefore infer that the members of the Village
Board in office at the time of Barwin’s discharge had accepted
the provisions of his contract and the employee-benefit prac-
tices it incorporates via section 19A. See Hostrop v. Bd. of Jr.
Coll. Dist. No. 515, 523 F.2d 569, 574 (7th Cir. 1975) (rejecting
argument that plaintiff’s original and superseding employ-
ment contracts with school district were void ab initio because,
inter alia, they were contrary to principle that one school
board should not be permitted to enter into contract that ex-
tends beyond election of successor board, noting that “the
new board did not object to plaintiff’s new contract [which
extended two years beyond term of old board] and permitted
him, on July 1, 1970, to commence serving under it,” thereby
adopting the contract); Vill. of Oak Lawn v. Faber, 880 N.E.2d
659, 672 (Ill. App. Ct. 2007) (“[T]he problem with contracting
No. 21-2007 43
beyond the term of the existing governing body is that the
new body will be unable to make the decisions and use the
discretion for which it was elected. This problem was never a
risk under the [employment] agreements in this case because
Faber was always terminable at will; neither the outgoing
board nor the new board was ever in a position where it had
to employ Faber against its better judgment.”). The
Grassini principle does not come into play here.
Finally, we note that Barwin repeats the argument he
made below that because the district court had denied the Vil-
lage’s motion to dismiss the Second Amended Complaint
based on alleged facts that the court deemed sufficient to state
a plausible claim for breach of the covenant of good faith and
fair dealing, and because the Village subsequently admitted
the truth of those facts by failing to timely answer the com-
plaint, the court was obligated to deny the Village’s motion
for summary judgment on the same rationale. Given our de-
cision to reverse the district court’s grant of summary judg-
ment to the Village on other grounds, we need not reach this
argument.
III.
For the reasons set forth above, we affirm the district
court’s dismissal of Barwin’s claim that the Village breached
its duty of good faith and fair dealing when it forced him to
resign in order to prevent his pension rights from vesting.
However, we reverse the court’s grant of summary judgment
in favor of the Village on the claim that the Village breached
the duty of good faith and fair dealing by refusing to approve
his request, at the time of his resignation, to purchase out-of-
44 No. 21-2007
state pension credits. We remand that claim to the district
court for further proceedings consistent with this opinion.
AFFIRMED IN PART, REVERSED IN PART,
and REMANDED.