Thomas Barwin v. Village of Oak Park

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.