## Facts

- Joel Gordon worked as a law-book sales representative for Matthew Bender & Company beginning in 1973 under an employment agreement with no definite term.
- Gordon alleged he was a successful employee who met or exceeded sales goals.
- In 1980, the employer reduced Gordon’s sales territory but allegedly kept the prior sales goals in place.
- Gordon was warned he would be terminated if he failed to meet the unchanged goals in the reduced territory.
- Gordon failed to meet the goals and was terminated in January 1981.
- Gordon alleged age discrimination, nonpayment of earned commissions, and improper interference with employee benefits, and sought damages including for emotional distress.

## Issues

1. Whether an implied covenant of good faith and fair dealing can convert an indefinite, at-will employment relationship into a “just cause” employment contract or support an independent wrongful-discharge claim.
2. Whether state-law claims seeking relief tied to an employee benefit plan are preempted by ERISA.
3. Whether claims for unpaid, allegedly earned commissions can proceed despite the at-will nature of the employment relationship.
4. Whether the complaint sufficiently stated an emotional-distress claim at the Rule 12(b)(6) stage.

## Decision

- The court granted the motion to dismiss as to multiple state-law counts premised on a free-standing “bad faith” or wrongful-discharge theory in an at-will employment relationship.
- The court dismissed state-law claims to the extent they sought relief relating to an employee benefit plan, holding those claims preempted by ERISA.
- The court allowed commission-related claims to proceed where the allegations supported an inference that termination was used to avoid paying commissions already earned.
- The court allowed at least one emotional-distress count to proceed, finding the allegations sufficient at the pleading stage.
- The ADEA counts and certain commission/account-stated counts were not resolved by the motion because the defendant had answered them.

## Legal Principles

- Indefinite-term employment is presumptively at will; absent a definite term or recognized exception, an employer may terminate the relationship without establishing “good cause.”
- The implied covenant of good faith and fair dealing operates as a rule of contract performance and generally does not create an independent cause of action for wrongful discharge or impose a general “just cause” requirement in at-will employment.
- ERISA broadly preempts state-law claims that “relate to” an employee benefit plan, displacing state remedies aimed at plan benefits or plan administration.
- At-will status does not necessarily bar contract-based claims for compensation allegedly earned before termination; allegations that termination was timed or used to deny earned commissions may state a claim.
- Emotional-distress claims may survive a motion to dismiss where the complaint alleges conduct that could be deemed extreme and outrageous and alleges resulting severe distress.

## Conclusion

The court treated the employment as at will and rejected attempts to plead a general wrongful-discharge or independent “bad faith” theory, and it dismissed benefits-related state claims as ERISA-preempted, but it permitted the case to proceed on unpaid-commission theories and an emotional-distress claim based on the alleged manipulation of territory and sales goals.


Gordon v. Matthew Bender & Co., 562 F. Supp. 1286 (N.D. Ill. 1983)