## Facts

- Holy Cross Hospital employed Mary Doyle, Leni Serra, Susan Valderrama, and Valerie Zorek as registered nurses for many years.
- In 1971, the hospital distributed an employee handbook containing “Policy 7-G, Economic Separation,” which described job-security commitments and stated that specified criteria would be used for permanent job eliminations (e.g., classification, seniority, ability, expertise).
- The nurses continued working after receiving the 1971 handbook.
- In 1983, the hospital issued language stating personnel policies were subject to change, did not create an express or implied contract, and that employment could be terminated at any time with or without notice.
- In 1991, the hospital laid off the nurses effective November 1, 1991.
- The nurses alleged the hospital did not follow Policy 7-G’s layoff criteria.
- The nurses sued for breach of contract (handbook as enforceable contract) and promissory estoppel.
- The circuit court dismissed under section 2-619(9); the appellate court reversed; the Illinois Supreme Court granted leave to appeal.

## Issues

1. Whether handbook provisions that satisfy the unilateral-contract requirements can be unilaterally modified by a later employer-issued disclaimer that converts employment to at-will.
2. Whether employees’ continued employment after the disclaimer constitutes sufficient consideration to support a modification that removes previously conferred handbook protections.
3. Whether dismissal was proper where plaintiffs alleged the hospital failed to follow handbook layoff procedures.

## Decision

- The Illinois Supreme Court affirmed the appellate court’s reversal of the dismissal and remanded for further proceedings.
- The court held that once a handbook forms a unilateral employment contract, the employer cannot unilaterally modify it to employees’ detriment without additional consideration, unless the employer previously reserved a clear right to make such changes.
- Continued employment alone after the 1983 disclaimer was not consideration for a modification eliminating the nurses’ handbook-based protections.
- The plaintiffs stated a viable claim that Policy 7-G was enforceable and was not extinguished by the later disclaimer.

## Legal Principles

- An employee handbook may create an enforceable unilateral contract when (1) it contains a clear promise, (2) it is disseminated so employees know its terms, and (3) employees accept by commencing or continuing employment.
- After formation, handbook-based contractual rights are governed by ordinary contract rules; an employer may not withdraw or reduce them by unilateral post hoc disclaimer.
- Contract modification that disadvantages one party requires new consideration, absent a prior, clearly expressed reservation of the right to modify.
- Continued employment, without any new benefit or bargained-for exchange, is not new consideration for a modification that strips existing job-security or procedural protections.
- A clear reservation of rights included from the outset can prevent contractual formation or limit enforceability of handbook promises.

## Conclusion

The court ruled that employees who plausibly alleged an enforceable handbook-based layoff procedure could proceed because the employer’s later at-will disclaimer could not eliminate those rights without a previously reserved power to change the terms or new consideration supporting the modification.


Doyle v. Holy Cross Hosp., 186 Ill. 2d 104, 708 N.E.2d 1140 (Ill. 1999)