## Facts

- Nora E. Duldulao worked for St. Mary of Nazareth Hospital Center for many years and, after a 1981 reorganization, held the position of human resources development coordinator.
- The Hospital distributed an employee handbook described as a statement of employee rights and duties.
- The handbook provided a 90-day probationary period in which employees could be terminated for just cause without notice.
- For employees who completed probation, the handbook promised “permanent employee” status and stated termination would occur only with “proper notice and investigation,” except for “grave cases” of serious misconduct.
- The handbook set out progressive discipline, including written warnings before dismissal, except for immediate dismissal for serious offenses.
- After the reorganization, the Hospital asserted Duldulao’s new role placed her back on probation; she claimed the role was essentially unchanged.
- On December 11, 1981, the Hospital terminated her the same day using a probationary evaluation and final notice citing unsatisfactory performance, without prior written warnings or the promised investigation, and without claiming grave misconduct.
- Duldulao sued, alleging the handbook created enforceable limits on termination and required procedures the Hospital did not follow.

## Issues

1. When does an employee handbook create enforceable contractual terms limiting an employer’s termination rights?
2. Did the handbook’s language and dissemination create contractual rights for Duldulao, and did her continued work constitute acceptance and consideration?
3. Did disputed facts about Duldulao’s probationary status and the Hospital’s compliance with the handbook preclude summary judgment for the Hospital?
4. Did the appellate court commit reversible error by deciding the appeal without oral argument?

## Decision

- The Illinois Supreme Court held that an employee handbook can create enforceable contractual rights when traditional contract requirements are met.
- The court concluded the handbook’s promises could be binding on the Hospital, and the Hospital was not entitled to summary judgment.
- The court found factual disputes remained, including whether Duldulao was a probationary or permanent employee and whether the Hospital complied with the handbook’s termination procedures.
- The court affirmed in part and remanded for further proceedings.
- The court found no reversible error in the appellate court’s decision to proceed without oral argument.

## Legal Principles

- An employee handbook or policy statement may constitute an offer for a unilateral contract if:
  - the language contains a clear promise,
  - the policy is communicated so the employee is aware of it and reasonably believes an offer was made, and
  - the employee accepts by starting or continuing work after learning of the policy.
- Continued employment after learning of promissory handbook terms can supply both acceptance and consideration.
- The at-will presumption for indefinite employment may be modified by an express agreement or clear handbook promises.
- The presence or absence of an effective disclaimer or reserved discretion is relevant to whether handbook terms are contractual.
- Summary judgment is improper when material disputes exist about employee status under the handbook or compliance with promised procedures.

## Conclusion

The court recognized that clear, disseminated handbook promises can form a unilateral contract accepted by continued work, and it remanded because disputed facts could support a finding that the Hospital breached the handbook-based limits and procedures governing termination.


Duldulao v. St. Mary of Nazareth Hosp. Ctr., 115 Ill. 2d 482, 505 N.E.2d 314 (Ill. 1987)