Raquet v. Allstate Corporation, The

Filing 214

MEMORANDUM Opinion and Order Signed by the Honorable John Robert Blakey on 11/20/2020. Mailed notice(gel, )

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JEANINE M. RAQUET,
Plaintiff,

Case No. 18-cv-2347

v.

Judge John Robert Blakey

THE ALLSTATE CORPORATION,
Defendant.
MEMORANDUM OPINION AND ORDER
Plaintiff Jeanine Raquet sues Defendant The Allstate Corporation pursuant to
this Court’s diversity jurisdiction, alleging various violations of Illinois law. Plaintiff,
a former senior vice president at the Defendant insurance company, claims
Defendant unlawfully divested her of various stock options and denied her a year-end
bonus when she left the company and assumed a new position at a different company.
Defendant moves for summary judgment on all four counts of Plaintiff’s third
amended complaint. [160]. For the reasons explained below, this Court grants
Defendant’s motion.
I.

Plaintiff’s Motions to Strike and Local Rule 56.1
As a preliminary matter, Plaintiff moves to strike Defendant’s statement of

facts, arguing that it fails to comply with the local rules in various ways. [185] at 1–
3.

This Court maintains broad discretion to enforce the local rules governing

summary judgment motions, Petty v. City of Chicago, 754 F.3d 416, 420 (7th Cir.
2014); Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371,
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382 n.2 (7th Cir. 2008), and addresses Plaintiff’s motion before turning to the facts of
the case.
Plaintiff first argues that Defendant failed to meet and confer before filing its
statement of facts, requiring her “to expend substantial time and resources disputing
same.” [185] at 1. This argument lacks merit because, even though motions must be
predicated with a meet-and-confer, neither Local Rule 56.1 nor this Court’s own
standing order demands that the parties confer before a party moving for summary
judgment files its statement of facts. And expending time and resources is, of course,
a consequence of Plaintiff filing a lawsuit and seeing it through to the summary
judgment stage.
Plaintiff next complains that, when Defendant attached deposition transcripts
as exhibits to its statement of facts, it failed to also attach exhibits to those
transcripts. Id. at 1. Again, however, Plaintiff fails to point to any rule demanding
such compliance, and thus, this argument fails as well.
Plaintiff also contends that, although Defendant filed a statement containing
59 separately-numbered facts, it nonetheless exceeded Local Rule 56.1’s 80-fact limit
because each paragraph “consist[s] of multiple alleged statements of facts bundled
together.” Id. at 2. But Local Rule 56.1(a) requires only that Defendant’s statement
“consist of short numbered paragraphs, including within each paragraph specific
references to the affidavits, parts of the record, and other supporting materials relied
upon to support the facts set forth in that paragraph.” Nothing in Rule 56.1 instructs
parties to include only one fact per paragraph. And while some of Defendant’s

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paragraphs contain multiple facts, such facts “are logically grouped and the
combinations make sense in context.” Maher v. Rowen Grp., Inc., No. 12 C 7169, 2015
WL 273315, at *7 (N.D. Ill. Jan. 20, 2015); see, e.g., [163] at ¶¶ 26, 27.
Plaintiff also argues that Defendant’s statement “consist[s] of narratives,” “are
argumentative, which makes them disputed,” “assert . . . incorrect conclusions,” “are
questions of fact, “include incorrect facts,” and “allege facts without reference to
supporting materials.” [185] at 2. This Court disagrees and finds that Defendant’s
statement comprises factual assertions set forth without argument and supported by
record cites. Further, to the extent Plaintiff believes Defendant’s facts are incorrect
or that the record cites do not support an assertion of fact, it remains, of course, her
prerogative to highlight those deficiencies in her response brief. In any case, these
alleged failures provide no basis to strike Defendant’s statement. See Aberman v. Bd.
of Educ. of City of Chicago, 242 F. Supp. 3d 672, 677 (N.D. Ill. 2017) (in the interests
of justice and efficiency, courts may exercise their discretion “in the direction of
leniency” and consider statements and responses that “arguably” satisfy the rules).
Finally, Plaintiff moves to strike Defendant’s responses to her Local Rule
56.1(b)(3)(C) statement of additional facts on the basis that some or all of Defendant’s
responses 1 constitute purely argumentative, unsupported denials. [209]. This Court
has reviewed Defendant’s responses, and once again disagrees with Plaintiff, as

Plaintiff does not clearly set forth which responses she moves to strike. At one point in her brief,
Plaintiff moves to strike Defendant’s responses in their entirety, [209] at 1, while at another, she lists
only certain facts she argues this Court should strike, id. at 19–20.
1

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Defendant’s responses are neither argumentative nor unsupported by record
citations.
Now having addressed Plaintiff’s arguments, this Court notes that if any party
has flouted the Local Rules governing summary judgment, it is Plaintiff, whose Local
Rule 56.1(b)(3) responses to Defendant’s statement of facts “are uniformly improper
and intended to complicate rather than simplify the court’s task.” Portis v. City of
Chicago, 510 F. Supp. 2d 461, 463–64 (N.D. Ill. 2007).
Just to provide one example, Defendant asserts in one paragraph that “Allstate
sells personal lines insurance products, including homeowners insurance and
automobile insurance, through exclusive independent agents located in communities
nationwide.” [163] at ¶ 24. In response, Plaintiff should simply state that she does
not dispute this fact, or alternatively, that she does dispute the fact and cite to
supporting materials.

She does neither, instead writing that she “disputes the

significance, relevancy and materiality” of this statement “since at the time of her
retirement she was the [Senior Vice President] of the Field Business Conduct Division
and did not sell or service personal lines insurance products and there is no overlap
between her job duties than and in her current AAA position.” [185] at ¶ 24.
This response is deficient in two respects.

First, it unhelpfully fails to

controvert Defendant’s fact, as required under Local Rule 56.1. Smith v. Lamz, 321
F.3d 680, 683 (7th Cir. 2003).

Second, Plaintiff improperly introduces a new

additional fact. De v. City of Chicago, 912 F. Supp. 2d 709, 715 (N.D. Ill. 2012) (“the
nonmoving party’s additional facts belong in a separate statement”). Under these

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circumstances, this Court exercises its discretion to: (1) deem Defendant’s fact
admitted; and (2) disregard Plaintiff’s additional factual assertion. Smith, 321 F.3d
at 683; Portis, 510 F. Supp. 2d at 465; De, 912 F. Supp. 2d at 714–15. Many of
Plaintiff’s other responses—or portions of those responses—suffer from the same
deficiencies. E.g., [185] at ¶¶ 6, 7, 18, 25, 29, 34, 37, 39. This Court disregards any
additional facts improperly introduced in Plaintiff’s responses, and also deems
admitted any of Defendant’s facts that Plaintiff fails to properly controvert.
II.

Background
A.

Plaintiff’s Employment With Defendant

This Court now turns to the facts of this case, which it takes from Defendant’s
statement of undisputed facts [163], Plaintiff’s responses to Defendant’s statement of
undisputed facts [185], Plaintiff’s statement of additional facts [189], and Defendant’s
responses to Plaintiff’s statement of additional facts [200].
Defendant, a publicly held personal lines property and casualty insurer, sells
its insurance products throughout the United States. [163] at ¶ 1. Defendant’s sales
of personal lines products—including homeowners insurance, automobile insurance,
boat insurance, personal umbrella insurance, and renters insurance—accounts for a
substantial majority of Defendant’s revenue. Id. at ¶¶ 26, 27. Defendant’s top selling
product remains automobile insurance. Id. at ¶ 27. Defendant maintains a number
of business units, including “personal lines,” “emerging businesses,” and “Allstate
Investments,” each of which offers its own products and services, and is organized
under its own leaders. Id. at ¶ 25.

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Plaintiff worked for Defendant from 1985 until 2016. Id. at ¶ 2. Between 2009
and 2013, Plaintiff served as Vice President of Agency Operations, and then as Senior
Vice President of Agency Operations between 2013 and September 2016. Id. at ¶ 28.
In September 2016, Defendant promoted Plaintiff to the position of Senior Vice
President, Field Business Conduct Officer—a position she held until she left the
company three months later. Id. In this last role, Plaintiff reported directly to Kathy
Mabe, who reported directly to Matt Winter. Id. at ¶¶ 28, 48; [163-20] at 3. Between
2012 and 2018, Matt Winter served as the leader of personal lines, reporting directly
to the company’s CEO. [163] at ¶ 26; [163-1] at 18–19.
Defendant maintains that, at all relevant times, Plaintiff worked in
Defendant’s personal lines division. [163] at ¶ 28. Consistent with this assertion,
Plaintiff testified she based her own interpretation of the term “division” upon
reporting structures, and ultimately the “leader” of the reporting structure. [163-1]
at 19 (“I defined [division] more based on probably leader.”). Plaintiff confirmed
through her testimony that she ultimately reported to Winter. Id.
Notwithstanding, Plaintiff asserts that personal lines does not exist as a
“division” because Defendant does not refer to it as such in its own annual meetings
and SEC filings. [185] at ¶ 28. She asserts instead that the term “personal lines”
refers only to lines of insurance Defendant sells, and that more than twenty
“divisions” exist within personal lines, including the “Field Business Conduct
division” to which she belonged. Id. at ¶ 27. Plaintiff cites the testimony of Harriet
Harty, a former HR executive for the company, who stated that the “major divisions”

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within the company included personal lines, life, HR, finance, legal, and technology,
[163-3] at 26, and that personal lines was further “divided into . . . other areas” such
as “Field Business Conduct,” id. at 31. Defendant’s internal organizational charts for
2016 also depict “Field Business Conduct” as an area within personal lines. [189] at
¶¶ 25–26; [200] at ¶¶ 25–26.
According to Plaintiff, her work for the “Field Business Conduct” unit did not
involve selling any insurance products. [185] at ¶¶ 27, 40.
B.

Plaintiff Leaves For AAA

Since January 19, 2017, Plaintiff has worked for AAA in Dearborn, Michigan,
serving as the Executive Vice President, Insurance Operations & Distribution. [163]
at ¶ 34. Her transition from Defendant to AAA traces back to September 2016, when
Plaintiff interviewed and discussed potential employment with AAA in Dearborn,
Michigan. Id. at ¶ 44. One month later, in October 2016, Plaintiff received a formal
job offer from AAA; and in November 2016, Plaintiff accepted that offer. Id. at ¶¶
45–46.
On December 13, 2016, Plaintiff met with Mabe and told her she was “retiring”
from the company effective December 31, 2016. Id. at ¶ 48. Plaintiff did not tell
Defendant that she had accepted a position at AAA at the time, and in fact, did not
inform Defendant of this fact until mid-January 2017. Id. at ¶ 50; [163-1] at 30.
AAA, like Allstate, sells personal lines property and casualty insurance as well
as roadside assistance services throughout the United States. [163] at ¶ 33. In
Michigan specifically, where AAA is headquartered, AAA and Allstate compete for
market share in sales of automobile insurance. Id. at ¶ 37; [185] at ¶ 37.
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C.

Plaintiff’s Participation in the EIP

Since 2001, Defendant has sponsored the “Allstate Corporation 2001 Equity
Incentive Plan” (EIP or the Plan), which Defendant has renamed and amended from
time to time. [163] at ¶¶ 4, 6. Under the EIP, certain employees, like Plaintiff, could
receive stock option awards at Defendant’s discretion. Id. at ¶ 4. The EIP does not
require that Defendant notify participants of amendments unless the revisions
adversely impact a participant’s outstanding awards, in which case Defendant must
obtain a participant’s consent. [163] at ¶ 6; [185] at ¶ 6. Indeed, each version of the
EIP has contained the following provision:
Article 15. Amendment, Modification and Termination
The Board may, at any time and from time to time, alter, amend,
suspend or terminate the Plan in whole or in part, provided that no
amendment shall be made which shall increase the total number of
shares of Stock that may be issued under the Plan, materially modify
the requirements for participation in the Plan, or materially increase
the benefits accruing to Participants under the Plan, in each case unless
such amendment is approved by the stockholders of the Company.
No termination, amendment, or modification of the Plan shall adversely
affect in any material way any Award previously granted under the
Plan, without the written consent of the Participant holding such
Award, unless such termination, modification or amendment is required
by applicable law and except as otherwise provided herein.
[163-7] at 26; [163-8] at 20; [163-10] at 20.
Plaintiff received a number of awards pursuant to the EIP during her
employment with Defendant. [163] at ¶ 16. Each award is reflected in an award
agreement, which expressly states that the award is “SUBJECT TO FORFEITURE
AS PROVIDED IN THIS . . . AWARD AGREEMENT AND THE PLAN.” Id. at ¶ 14.
Each award agreement also states that an award is “deemed accepted if the
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participant does not decline this Award by accessing the Fidelity [the Plan
administrator] NetBenefits website.” [185] at ¶ 16. Plaintiff accepted each of her
awards, either by going to Fidelity’s website to affirmatively accept them, or by
automatically receiving them by not accessing Fidelity’s website to decline them. Id.
Effective February 1, 2012, Defendant amended the EIP to include a two-year
non-competition provision (the Forfeiture Provision) applying prospectively to all
awards granted after February 21, 2012. [163] at ¶ 7. The Forfeiture Provision states
specifically:
17.3 Non-Competition. Any Participant who has received an Award
under the Plan on or after February 21, 2012, . . . shall not, for the twoyear period following Termination of Employment, directly or indirectly
engage in, own or control an interest in or act as principal, director,
officer, or employee of, or consultant to, any firm or company that is a
Competitive Business. ‘Competitive Business’ is defined as a business
that designs, develops, markets, or sells a product, product line, or
service that competes with any product, product line, or service of the
division in which Participant works. This section is not meant to prevent
Participant from earning a living, but rather to protect the Company’s
legitimate business interests. A Participant is not subject to this noncompetition provision if: (i) employed in any jurisdiction where the
applicable law prohibits such non-competition provision.
***
If a Participant violates the non-competition provision set forth above,
the Board or a committee thereof may, to the extent permitted by
applicable law, cancel or cause to be cancelled any or all of the
Participant’s outstanding Awards granted on or after February 21, 2012,
that remain subject to a Period of Restriction or other performance or
vesting condition as of the date on which the Participant first violated
the non-competition provision.
[163-8] at 23–24. On March 12, 2012, Defendant emailed all Plan participants to
inform them of the amendment, stating in pertinent part: “The second change relates
to the inclusion of a 24 month post-retirement non-compete provision. All unvested
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equity at the time of retirement may be forfeited for violation of the non-compete.”
[163] at ¶ 10; [163-13] at 13. Plaintiff received this email. [163] at ¶¶ 10, 11.
On May 21, 2013, Defendant amended the EIP again, this time reducing the
non-competition period from two years to one year for any awards issued after May
21, 2013. Id. at ¶ 8; [163-10] at 23.
Under Article 3.2 of the EIP, Defendant’s Compensation and Succession
Committee retained authority to award, modify, or cancel awards, and could also
delegate such responsibilities to other employees. [163-7] at 8–10; [163-8] at 8–9;
[163-10] at 8. In 2013, the Committee delegated such authority to the “senior most
officer with responsibility for the human resource function at [the company].” [16311] at 6; [163-3] at 16. As of February 2017, that officer was Harty, who served as
Defendant’s head of HR. [163] at ¶ 55; [163-3] at 13.
On February 10, 2017, after learning that Plaintiff left the company for AAA,
Harty canceled Plaintiff’s outstanding, unvested awards granted on or after February
21, 2012. [163] at ¶ 56. In a letter dated that same day, Harty wrote to Plaintiff that
“your employment with a competitor of [Defendant], AAA . . . violates the terms of
The Allstate Corporation 2013 Equity Incentive Plan (the ‘Plan’) awards referenced
below.” [163-19] at 2.
D.

The AIP

Defendant also maintains an Annual Incentive Plan (AIP) pursuant to which
eligible employees may receive annual cash incentive bonuses.

[163] at ¶ 17.

Defendant pays out these bonuses in the March following a particular performance
year. Id. at ¶ 23.
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Defendant provided AIP-eligible employees, including Plaintiff, a guide setting
forth the terms of the AIP. Id. at ¶ 18. The AIP guide provides: “All awards, including
pro-rata eligibility, are distributed on a discretionary basis,” and “[n]o one, regardless
of eligibility, is guaranteed an award.” Id. The AIP also provides: “Allstate reserves
the right to make adjustments and can, at its discretion, reduce or eliminate
individual awards.” Id. The AIP further states that it “creates no contract, implied
or otherwise between you, Allstate Insurance Company, and any of its affiliates. The
final decision as to whether an award is paid to an eligible participant is solely at the
discretion of Allstate.” Id. at ¶ 19.
In early January 2017, Mabe recommended that Plaintiff receive an AIP bonus
for 2016 notwithstanding her retirement. Id. at ¶ 57. But after Defendant became
aware that Plaintiff was working for AAA, Defendant’s CEO and EVP of Human
Resources rejected the recommendation and declined to award Plaintiff an AIP bonus
for 2016. Id. at ¶ 59.
III.

Legal Standard
Summary judgment is proper where there is “no dispute as to any material fact

and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A
genuine dispute as to any material fact exists if “the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). The party seeking summary judgment has the
burden of establishing that there is no genuine dispute as to any material fact. See
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

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In determining whether a genuine issue of material fact exists, this Court must
construe all facts and reasonable inferences in the light most favorable to the nonmoving party. King v. Hendricks Cty. Commissioners, 954 F.3d 981, 984 (7th Cir.
2020). The non-moving party bears the burden of identifying the evidence creating
an issue of fact. Hutchison v. Fitzgerald Equip. Co., Inc., 910 F.3d 1016, 1021–22 (7th
Cir. 2018). To satisfy that burden, the non-moving party “must do more than simply
show that there is some metaphysical doubt as to the material facts.” Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Barnes v. City
of Centralia, Illinois, 943 F.3d 826, 832 (7th Cir. 2019). Thus, a mere “scintilla of
evidence” supporting the non-movant’s position does not suffice; “there must be
evidence on which the jury could reasonably find” for the non-moving party.
Anderson, 477 U.S. at 252.
IV.

Analysis
Defendant moves for summary judgment on all four counts of Plaintiff’s third

amended complaint. [160]. This Court considers each count in order below.
A.

Count I: Breach of Contract (Award Agreements Under EIP)

In Count I, Plaintiff alleges that Defendant’s cancelation of Plaintiff’s unvested
2012 through 2016 awards amounted to a breach of the EIP. [140] at ¶¶ 133–58.
Specifically, Plaintiff claims that the Forfeiture Provision is unenforceable, and thus
Defendant breached by canceling the awards based upon that provision.

Id.

Alternatively, Plaintiff asserts that, even if the Forfeiture Provision is enforceable,
Plaintiff did not violate it by working for AAA, and therefore Defendant breached by
improperly relying upon that provision. Id.
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1.

Governing Law

As a threshold matter, this Court determines which state’s law applies to
Plaintiff’s claim for breach of the EIP. Federal courts sitting in diversity apply the
choice-of-law rules of the forum state—here, Illinois. W. Side Salvage, Inc. v. RSUI
Indem. Co., 878 F.3d 219, 223 (7th Cir. 2017). Under Illinois law, courts engage in a
choice-of-law analysis only where a difference between Illinois law and the law of
another state “will make a difference in the outcome.” Bd. of Forensic Document
Examiners, Inc. v. Am. Bar Ass’n, 922 F.3d 827, 831 (7th Cir. 2019) (quoting W. Side
Salvage, 878 F.3d at 223). A party seeking a choice-of-law determination must
identify the existence of an outcome-determinative conflict; in the absence of such
proffer, this Court applies the law of the forum state. Id.
Neither party here identifies an outcome-determinative conflict.

Plaintiff

alleges in her third amended complaint that Illinois law applies to interpreting the
Forfeiture Provision, [140] at ¶ 132, but cites to both Illinois and Delaware law in her
brief, apparently conceding that no outcome-determinative conflict exists between
Delaware and Illinois law on this issue. [187] at 3–9. Defendant also concedes that
the choice between Illinois and Delaware law does not affect the outcome. [198] at 8.
Because neither party has identified the existence of an outcome-determinative
conflict between Illinois and Delaware law, this Court applies the laws of Illinois. See
Bd. of Forensic, 922 F.3d 827; Santa’s Best Craft, LLC v. St. Paul Fire & Marine Ins.
Co., 611 F.3d 339, 345 (7th Cir. 2010) (applying forum law where no party raised a
conflict of law issue).

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2.

Validity of the Forfeiture Provision

Plaintiff’s primary theory for relief in Count I rests upon the proposition that
the Forfeiture Provision is invalid, and thus Defendant breached the EIP by relying
upon it in canceling Plaintiff’s awards. [187] at 3–13. As detailed below, Plaintiff
advances several arguments in support of that theory, but none is persuasive.
a.

Unreasonable Restraint on Competition

First, Plaintiff contends that the Forfeiture Provision constitutes an
unreasonable restraint on competition. Id. at 7–9. The Forfeiture Provision states:
17.3 Non-Competition. Any Participant who has received an Award
under the Plan on or after February 21, 2012, . . . shall not, for the twoyear period following Termination of Employment, directly or indirectly
engage in, own or control an interest in or act as principal, director,
officer, or employee of, or consultant to, any firm or company that is a
Competitive Business. ‘Competitive Business’ is defined as a business
that designs, develops, markets, or sells a product, product line, or
service that competes with any product, product line, or service of the
division in which Participant works. This section is not meant to prevent
Participant from earning a living, but rather to protect the Company’s
legitimate business interests. A Participant is not subject to this noncompetition provision if: (i) employed in any jurisdiction where the
applicable law prohibits such non-competition provision.
***
If a Participant violates the non-competition provision set forth above,
the Board or a committee thereof may, to the extent permitted by
applicable law, cancel or cause to be cancelled any or all of the
Participant’s outstanding Awards granted on or after February 21, 2012,
that remain subject to a Period of Restriction or other performance or
vesting condition as of the date on which the Participant first violated
the non-competition provision.
[163-8] at 23–24.
Under Illinois law, courts enforce non-competition clauses so long as they are
reasonable. Tatom v. Ameritech Corp., 305 F.3d 737, 745 (7th Cir. 2002); Advent
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Elecs., Inc. v. Buckman, 112 F.3d 267, 274 (7th Cir. 1997). In Tatom, the Seventh
Circuit considered the enforceability of a forfeiture provision that stated:
[If the participant] has, without the consent of the Company or any
subsidiary, become associated with, is employed by, renders services to,
or owns a substantial interest in any business that is competitive with
the Company or its subsidiaries,
....
then, his participation in the Plan shall immediately cease and all
undistributed awards and grants previously made to him under the Plan
and all rights to payments of any kind under the Plan, exclusive of any
amount voluntarily deferred shall be immediately forfeited.
305 F.3d at 740. When the Tatom plaintiff left his company to work for a competitor,
the company invoked this provision, canceling his vested and unvested stock options.
Id. at 741. The Seventh Circuit affirmed the district court’s grant of summary
judgment in favor of the company on the plaintiff’s breach of contract claim,
concluding that a “provision that calls for the forfeiture of a bonus in the form of stock
options does not strike us as an unreasonable restraint on competition.” Id. at 745–
46. The court reasoned:
Stock options, in contrast to other types of regular and bonus
compensation, give an employee the right to acquire an ownership
interest in a company; that interest in turn gives the employee a longterm stake in the company and supplies him an incentive to contribute
to the company’s performance. A provision calling for the forfeiture of
such options in the event that the holder goes to work for a competitor
thus serves to keep the option holder’s interests aligned with the
company’s.
Id. at 745 (internal citations omitted). The court also noted the distinction in case
law between non-compete provisions that prevent an employee from working for a
competitor (which might be illegal) and those that merely result in the forfeiture of

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certain benefits should an employee work for a competitor (which are legal). Id. at
744.
Tatom controls here. Like the provision in that case, the Forfeiture Provision
here simply divests employees from stock options if they do, in fact, compete. And
unlike traditional non-competes that the Seventh Circuit cautioned might constitute
illegal restraints, this one neither threatens the loss of regular or bonus compensation
nor prevents Plaintiff from competing. This Court thus finds the Forfeiture Clause
enforceable as a matter of law. See Tatom, 305 F.3d at 745; see also Viad Corp v.
Houghton, No. 08-CV-6706, 2010 WL 748089, at *7 (N.D. Ill. Feb. 26, 2010) (forfeiture
clause enforceable because employee “was able to go into competition despite the
clause, and the effect of the clause did not impoverish” the employee).
b.

Notice and Consent

Next, Plaintiff argues that the Forfeiture Provision is invalid because
Defendant neither provided her notice nor obtained her written consent before
including it in the 2012 EIP. [187] at 6. This Court rejects this argument, too.
By its plain terms, and as the parties agree, the EIP does not require that
Defendant notify participants of amendments unless the revisions adversely impact
a participant’s outstanding awards, in which case Defendant must obtain a
participant’s consent.

[163] at ¶ 6; [185] at ¶ 6.

Here, though, the 2012 EIP

amendment applied only to awards issued after its effective date of February 21,
2012; it did not impact any outstanding awards already issued.

[163] at ¶ 7.

Defendant thus possessed no contractual obligation to provide notice or obtain

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consent from Plaintiff before including the Forfeiture Provision in the 2012 EIP
amendment.

And indeed, after Plaintiff started working for AAA, Defendant

canceled only those awards issued to Plaintiff after February 21, 2012. Id. at ¶ 56.
And in any case, despite not having any contractual obligation to do so,
Defendant did email Plaintiff (along with other EIP participants) to notify them of
the amendment; this email, dated March 12, 2012, informed Plaintiff that the Plan
had been amended to include “a 24 month post-retirement non-compete provision”
and that “unvested equity at the time of retirement may be forfeited for violation of
the non-compete.” [163] at ¶¶ 10, 11; [163-13] at 13. Defendant’s actions in this
regard further undermine Plaintiff’s suggestion that she lacked notice of the
Forfeiture Provision.
Nor does Plaintiff support her argument that Defendant failed to obtain
shareholder approval before amending the EIP. Contra [187] at 6. The EIP requires
stockholder approval only where an amendment increases the total number of shares
issued under the EIP, materially modifies requirements for participation in the EIP,
or materially increases the benefits accruing to participants. [163-7] at 26; [163-8] at
20; [163-10] at 20. The Forfeiture Provision does none of these things, so Defendant
possessed no contractual obligation to obtain shareholder approval before including
it in the 2012 EIP amendment.
c.

Acceptance and Consideration

Plaintiff also claims that the Forfeiture Provision is invalid because Defendant
failed to obtain Plaintiff’s acceptance and additional consideration as to the 2012 EIP

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amendment containing the Forfeiture Provision. [187] at 3–5. A valid contract
amendment under Illinois law requires mutual assent and consideration. Melena v.
Anheuser-Busch, Inc., 847 N.E.2d 99, 109 (Ill. 2006); Urban Sites of Chicago, LLC v.
Crown Castle USA, 979 N.E.2d 480, 492 (Ill. App. Ct. 2012). Both elements exist
here.
As the undisputed evidence shows, each award to which Plaintiff asserts
entitlement is reflected in an award agreement expressly stating that the award was
“SUBJECT TO FORFEITURE AS PROVIDED IN THIS . . . AWARD AGREEMENT
AND THE PLAN.” [163] at ¶ 14. Each award agreement also stated that the award
is “deemed accepted if the participant does not decline this Award by accessing the
Fidelity NetBenefits website.” [185] at ¶ 16. Plaintiff concedes, as she must, that
she accepted each of her awards either by going to Fidelity’s website to affirmatively
accept them, or by automatically receiving them by not declining them. Id. Thus,
because each of the award agreements incorporated the terms of the EIP (including
the Forfeiture Provision), Plaintiff accepted the Forfeiture Provision when she
accepted each of the awards. See 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 736
(7th Cir. 2002) (“When the contract incorporates a specific document by name, both
parties are on notice and are bound by the terms of that document.”); Gupta v. Morgan
Stanley Smith Barney, LLC, 934 F.3d 705, 713 (7th Cir. 2019) (under Illinois law, a
party to a contract may, by her acts and conduct, indicate her assent to its terms and
become bound by its provisions even though she has not signed it).

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The 2012 EIP amendment is also supported by additional consideration.
Illinois law characterizes consideration as “some detriment to the offeror, some
benefit to the offeree, or some bargained-for exchange between them.” Wigod v. Wells
Fargo Bank, N.A., 673 F.3d 547, 563–64 (7th Cir. 2012) (quoting Dumas v. Infinity
Broad. Corp., 416 F.3d 671, 679 n.9 (7th Cir. 2005)). Clearly, under the 2012 EIP
amendment, Plaintiff received benefits in the form of additional awards, and
Defendant suffered detriment by giving away those awards to Plaintiff. [185] ¶ 16.
Plaintiff’s arguments otherwise are wholly unconvincing.
d.

Harty’s Authorization

Plaintiff next contends that Harty lacked authorization to cancel Plaintiff’s
awards. [187] at 7. Plaintiff failed to fully develop this argument, see id., but it lacks
merit anyway.

Under Article 3.2 of the EIP, Defendant’s Compensation and

Succession Committee retained authority to award, modify, or cancel awards, and
could also delegate such responsibilities to other employees. [163-7] at 8–10; [163-8]
at 8–9; [163-10] at 8. In 2013, the Committee delegated such authority to the “senior
most officer with responsibility for the human resource function at [the company].”
[163-11] at 6; [163-3] at 16. As of February 2017, Harty served as Defendant’s head
of HR. [163-3] at 13; [163] at ¶ 55. Harty thus possessed authorization to cancel
Plaintiff’s awards.
3.

Plaintiff Works for a Competitive Business

Having rejected Plaintiff’s arguments that the Forfeiture Provision is
unenforceable, this Court next considers whether Defendant properly invoked it after

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learning that Plaintiff works for AAA. The parties’ dispute here centers around
whether AAA “designs, develops, markets, or sells a product . . . that competes with
any product . . . of the division” in which Plaintiff worked, in which case AAA
constitutes a “competitive business” triggering the application of the Forfeiture
Provision. [163-8] at 23. Because the EIP does not define the term “division,” the
parties argue extensively about the relevant “division” in which Plaintiff worked.
Defendant says Plaintiff worked in the personal lines division, which sells products
that competes with AAA; and Plaintiff counters that she worked in the “Field
Business Conduct” division, which does not.
This Court gives undefined contract terms their plain, ordinary, and popular
meanings, such as those found in dictionary definitions. Hess v. Kanoski & Assocs.,
668 F.3d 446, 453 (7th Cir. 2012). A “division” is “an administrative or operating
unit of a governmental, business, or educational organization.”
Merriam-Webster.com

Dictionary,

Division, The

Merriam-Webster

Inc.,

https://www.merriamwebster.com/dictionary/division (last accessed June 15, 2020).
Applying this definition, this Court finds that the record firmly supports
Defendant’s argument that Plaintiff worked in Defendant’s personal lines “division.”
[161] at 19–20. Indeed, the undisputed evidence shows that Defendant maintains a
number of business units, including “personal lines,” “emerging businesses,” and
“Allstate Investments,” each of which offers its own products and services, and is
organized under its own leaders. [163] at ¶ 25. Between September 2016 and when
she left the company in December 2016, Plaintiff served as Senior Vice President,

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Field Business Conduct Officer. Id. at ¶ 28. In this role, Plaintiff reported directly
to Kathy Mabe, who then reported to Matt Winter—the head of personal lines. Id. at
¶¶ 26, 28, 48; [163-20] at 3; [163-1] at 18–19.
Plaintiff testified that she defines “division” by reference to reporting
structures, and ultimately the leader of a particular reporting structure. E.g., [1631] at 19 (“I defined [the term division] more based on probably leader.”). Plaintiff
acknowledged that she reported to Winter.

Id.

All of this evidence supports

Defendant’s position that personal lines constituted an operating unit—and hence
“division”—within the company, and that Plaintiff worked for that “division.”
Despite this evidence, Plaintiff disputes that “personal lines” constitutes a
“division” of Defendant’s business, positing that the term merely refers to a line of
products Defendant offers. [185] at ¶¶ 27–28. She asserts instead that twenty
“divisions” exist within personal lines, including the “Field Business Conduct
division” to which she belonged. Id. at ¶ 27. Plaintiff points to the testimony of Harty,
the company’s former HR head, who testified that personal lines “divided into . . .
other areas” such as “Field Business Conduct.” [163-3] at 31. But Harty also testified
that personal lines constituted one of the “major divisions” within the company. Id.
at 26. Further, consistent with Harty’s testimony, Defendant’s organizational chart
from 2016 reflects that “Field Business Conduct” exists within personal lines. [189]
at ¶¶ 25–26; [200] at ¶¶ 25–26.
At most, Harty’s testimony and Defendant’s organizational chart merely help
Plaintiff establish that she worked within a more granularly defined subdivision or

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department of personal lines. Such evidence, of course, simply bolsters the conclusion
that personal lines is the “division” at issue. And Plaintiff does not point to any other
evidence—beyond her own say-so—suggesting that “Field Business Conduct”
constitutes its own “division” at the company. She thus fails to raise a triable issue
on this point.
Having established personal lines as the relevant “division” in which Plaintiff
worked, AAA plainly constitutes a “competitive business.”

For instance, the

undisputed record shows that Defendant’s personal lines “division” sells automobile
insurance, [163] at ¶ 27, as does AAA, id. at ¶ 37. AAA thus sells a product that
competes with one of personal lines’ products, rendering AAA a “competitive
business” as defined by the Forfeiture Provision.

[163-8] at 23 (“‘Competitive

Business’ is defined as a business that designs, develops, markets, or sells a product,
product line, or service that competes with any product, product line, or service of the
division in which Participant works.”).

Accordingly, Defendant acted within its

contractual right to cancel Plaintiff’s unvested awards.
In short, Plaintiff fails to demonstrate that Defendant breached the EIP.
Swyear v. Fare Foods Corp., 911 F.3d 874, 886 (7th Cir. 2018) (setting forth the
elements for breach of contract under Illinois law). For that reason, this Court grants
summary judgment to Defendant on Count I.
B.

Count II: Breach of Contract (AIP)

In Count II, Plaintiff claims that Defendant breached the AIP by denying her
a bonus for the 2016 year. [140] at ¶¶ 159–86. Defendant argues that the language

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of the AIP guide forecloses Plaintiff’s claim because it expressly disclaims the
existence of enforceable contractual rights between the parties. [161] at 21.
The parties agree that Illinois law applies to this claim. [161] at 21–23; [187]
at 15–19. Under Illinois law, a plaintiff fails to establish a contractual right to a
bonus where the language of a bonus plan expressly disclaims the existence of a
contract. Tatom, 305 F.3d at 743 (an “express disclaimer [of a contract] forecloses
any reasonable expectation that [the plaintiff] had been promised a bonus.”); see also
Curran v. JP Morgan Chase, N.A., 633 F. Supp. 2d 639, 645 (N.D. Ill. 2009)
(dismissing breach of contract claim for alleged loss of a discretionary bonus where
the “branch profitability incentive plan” specifically disclaimed the existence of
contractual rights to the bonus); In re Comdisco, Inc., No. 02 C 7030, 2003 WL 685645,
at *4 (N.D. Ill. Feb. 27, 2003) (no contractual right to bonus where the plan document
“only communicates the plan’s provisions and that the plan should not be considered
a contract.”); Moore v. Ill. Bell Tel. Co., 508 N.E.2d 519, 520–21 (Ill. App. Ct. 1987)
(no enforceable contract created by incentive plan stating it “is a statement of
management’s intent and is not a contract or assurance of compensation.”).
Here, the AIP guide states that “[a]ll awards, including pro-rata eligibility, are
distributed on a discretionary basis,” and “[n]o one, regardless of eligibility, is
guaranteed an award.” [163] at ¶ 17. The AIP further states that it “creates no
contract, implied or otherwise between you, Allstate Insurance Company, and any of
its affiliates.

The final decision as to whether an award is paid to an eligible

participant is solely at the discretion of Allstate.” Id. at ¶ 19. As in the above cases,

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the AIP expressly disclaims the existence of any contractual rights or obligations,
thus foreclosing Plaintiff’s claim for breach of contract. Accordingly, based upon the
undisputed portions of the factual record, this Court grants summary judgment to
Defendant on Count II.
C.

Count III: IWPCA

Plaintiff next asserts that Defendant violated the Illinois Wage Payment and
Collection Act (IWPCA) by failing to pay her a 2016 bonus based upon the AIP. [140]
at ¶¶ 187–94.

The IWPCA requires an employer to pay the full amount of an

employee’s “final compensation” upon an employee’s separation. 820 ILCS 115/5.
The statute further defines “final compensation” as “wages, salaries, earned
commissions, [and] earned bonuses . . . owed the employee by the employer pursuant
to an employment contract or agreement between the 2 parties.” 820 ILCS 115/2
(emphasis added).
Plaintiff’s IWPCA claim fails for two reasons.

First, as discussed above,

Plaintiff fails to establish that the AIP guide amounts to an agreement entitling her
to a bonus. Because the IWCPA only supplies a right of action based upon an
“employment contract or agreement,” see id., this failure alone is fatal to Plaintiff’s
IWCPA claim, see Stark v. PPM Am., Inc., 354 F.3d 666, 672 (7th Cir. 2004) (no
IWCPA claim where no contract exists setting out the terms of a bonus); In re
Comdisco, 2003 WL 685645, at *3 (“Unless appellants can establish that Comdisco is
under a contractual obligation to pay the bonuses, the IWPCA has no application to
this case.”).

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Second, the IWCPA applies only to “earned” bonuses, not discretionary or
gratuitous bonuses. Sutula-Johnson v. Office Depot, Inc., 893 F.3d 967, 975 (7th Cir.
2018). An employee possesses a right to an “earned bonus” where “there is an
unequivocal promise by the employer” to that entitlement. Hess v. Bresney, 784 F.3d
1154, 1162 (7th Cir. 2015) (quoting 56 Ill. Admin. Code § 300.500 (2014)). In Hess,
the Seventh Circuit rejected the plaintiff’s argument that a compensation letter
amounted to an “unequivocal promise” to a bonus because it stated only that plaintiff
“will be eligible to receive” a bonus if he meets a certain revenue threshold. Id. The
court reasoned that “[e]ligibility, of course, is no guarantee. Hess might very well be
eligible for a bonus, but due to a host of factors, not receive one.” Id.
Here, as in Hess, the AIP guide states that “[a]ll awards, including pro-rata
eligibility, are distributed on a discretionary basis,” and reiterates that “[n]o one,
regardless of eligibility, is guaranteed an award.” [163] at ¶ 17. In other words,
although Plaintiff may have been eligible for a bonus, Defendant maintained full
discretion to award—or refuse to award—any bonuses. Plaintiff therefore fails to
establish her entitlement to an “earned bonus” under the IWCPA. Hess, 784 F.3d at
1162; see also Lillien v. Peak6 Investments, L.P., 417 F.3d 667, 670 (7th Cir. 2005)
(affirming summary judgment on IWCPA claim where an offer letter stated: “You will
be eligible for a year-end discretionary bonus.”).
judgment to Defendant on Count III.

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D.

Count IV: Unjust Enrichment

Finally, Plaintiff’s claim for unjust enrichment based upon the AIP also fails
as a matter of law. Under Illinois law, unjust enrichment “is not a separate cause of
action but is a condition brought about by fraud or other unlawful conduct.” Vanzant
v. Hill’s Pet Nutrition, Inc., 934 F.3d 730, 735 (7th Cir. 2019); see also Pirelli
Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co., 631 F.3d 436, 447
(7th Cir. 2011). Because no other standalone claim exists here, Plaintiff’s unjust
enrichment claim necessarily also fails. Benson v. Fannie May Confections Brands,
Inc., 944 F.3d 639, 648 (7th Cir. 2019). This Court grants summary judgment to
Defendant on Count IV. 2
IV.

Conclusion
For the reasons explained above, this Court grants Defendant’s motion for

summary judgment [160]. The Clerk is directed to enter judgment for Defendant on
all counts. All dates and deadlines are stricken. Civil case terminated.
Dated: November 20, 2020

Entered:
____________________________
John Robert Blakey
United States District Judge

Defendant also moved to dismiss Counts II, III, and IV pursuant to Rule 12(b)(6). [141]. Because
this Court grants summary judgment to Defendant on these counts, it denies the motion to dismiss
[141] as moot.

2

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