In the
United States Court of Appeals
For the Seventh Circuit
Nos. 10-2114, 10-2243, 10-2814 & 10-2921
JOHN M ARCATANTE, et al.,
Plaintiffs-Appellees,
v.
C ITY OF C HICAGO, ILLINOIS,
a municipal corporation,
Defendant-Appellant.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 06 C 0328—Charles P. Kocoras, Judge.
A RGUED M AY 2, 2011—D ECIDED A UGUST 24, 2011
Before P OSNER, K ANNE, and T INDER, Circuit Judges.
T INDER, Circuit Judge. The plaintiffs are retired City
of Chicago employees who were members of several
trade unions. They were offered incentives to retire early
under an Early Retirement Incentive Program (ERIP)
and did so in early 2004 while their unions were still
negotiating new Collective Bargaining Agreements
(CBAs) for the 2003-2007 period. During the negotiation
2 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
process, the 1999-2003 CBAs governed the parties’ relation-
ships. In 2005, after two years of negotiations, the City
and unions agreed to make raises retroactive to July 2003,
but only for current employees, employees laid off with
recall rights, and seasonal employees eligible for rehire,
not for the plaintiff retirees. The plaintiffs brought this
class action claiming entitlement to retroactive wage
increases between July 2003 and their retirement dates.
The certified class consists of coalition union members
who retired under the ERIP between July 2003 and
July 2005.
The parties filed cross-motions for summary judg-
ment. The district court granted the City’s motion on the
plaintiffs’ federal claims (due process and equal protection)
and state law breach of express contract claim. The court,
however, granted summary judgment to the plaintiffs
on their state law implied contract claim and awarded
the class $1,773,502 in retroactive pay, plus attorney’s
fees. The City appeals the district court’s grant of sum-
mary judgment on the plaintiffs’ implied contract claim
and the plaintiffs cross-appeal on their due process and
breach of express contract claims; the plaintiffs do not
challenge the adverse judgment on their equal protec-
tion claim. The district court’s original jurisdiction
derives from the federal claims, see 28 U.S.C. § 1331, and
the accompanying state law claims fall within the court’s
supplemental jurisdiction, see 28 U.S.C. § 1367(a).
We reverse the district court’s entry of summary judg-
ment in favor of the plaintiffs on their implied contract
claim and otherwise affirm. Because express contracts—
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 3
the 1999-2003 CBAs—governed the plaintiffs’ wages,
their implied contract claim cannot succeed. Before the
plaintiffs accepted the ERIP benefits, there was uncer-
tainty as to whether they would receive retroactive
wages under the 2003-2007 CBAs. The ERIP provided
enhanced pension benefits, but conspicuously missing
from it was any suggestion of entitlement to retroactive
wage increases. No doubt the plaintiffs hoped for wage
increases, but they had no right to them. A June 2003
letter agreement between the City and the unions didn’t
confer such a right; it merely extended the 1999-2003
CBAs (and existing wages) during contract negotia-
tions and made agreed-upon wage increases, if any,
retroactive. The City and the union negotiated and
didn’t agree to give the plaintiffs wage increases; this
was entirely consistent with the 2003 letter agreement.
Accordingly, the plaintiffs’ claims for breach of implied
and express contract fail as a matter of law. The plaintiffs’
due process claim similarly fails because there is no
evidence that the City made misrepresentations to
induce them to retire early.
I. Facts
The plaintiffs, as City of Chicago employees, were
members of trade unions that joined together as a
coalition during collective bargaining with the City. The
plaintiffs were covered under the 1999-2003 CBAs as
“prevailing wage rate” employees—those employees
working at jobs classified as prevailing wage jobs. “Pre-
vailing wage rate” is a term that the City and the unions
use to refer to the hourly rate paid to crafts or job classi-
4 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
fications doing similar kinds of work in Cook County
pursuant to the formula used by the United States De-
partment of Labor (DOL) in administering the Davis-
Bacon Act. Certain other employees received a negoti-
ated wage rate.
Before the plaintiffs’ 1999-2003 CBAs were set to expire
on June 30, 2003, the coalition’s representative provided
notice that the unions would not renew the existing
agreement. The unions and the City began negotiating
successor agreements for 2003-2007. Because the parties
were unable to reach an agreement by the 1999-2003
CBA expiration date, they agreed to extend the current
CBAs while negotiations continued. The City and the
unions entered into the following letter agreement on
June 26, 2003:
This will confirm our conversations regarding
the extension of the Coalition Unions’ contracts
which are due to expire at midnight June 30, 2003.
It is understood and the parties agree to extend
the terms of all current agreements through mid-
night July 30, 2003. Thereafter, the agreements
shall continue on a day-to-day basis subject to
termination by either party upon ten (10) days
written notice.
During the extension period the terms of such
agreements shall continue without change.
In consideration of the extension of the current
agreements, the City agrees that wage increases,
if any, agreed to by the parties shall be retroac-
tive to July 1, 2003, unless the parties mutually
agree to another date.
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 5
(A28-29) (emphasis added). The City handwrote “if any”
into the agreement; the City and unions signed this
modified agreement.
The City and the unions had begun discussions for
new CBAs in the spring of 2003. The unions wanted
wage increases, but because the City was facing a serious
budget deficit, it wasn’t prepared to commit to wage
increases without certain work rule concessions. The
City initially offered two proposals that included raises
for “prevailing wage rate employees”: (1) defer raises
for six months until January 2004 at which point the
prevailing wage rate would be increased on a yearly
basis; and (2) provide rate increases as of July 2003 on a
one-time, one-year basis (but no raise guarantee after
July 1, 2004). Both proposals included a number of
work rule changes designed to offset the cost of the
raises, such as unpaid furlough days, changes in work
hours, and reductions in reporting and call-in pay. The
unions rejected these proposals.
In late 2003, while negotiations for the 2003-2007 CBAs
were still ongoing, the City offered employees an
incentive package to retire early under the ERIP. The
incentives included the ability to purchase up to five
years of credited services for one-half the usual cost
to increase the employee’s annuity (each year of service
purchased would allow the retirees’ age to be deemed
one year older than it actually was) and the ability to
receive an annuity that was not discounted for retire-
ment before age sixty. After attending seminars to
learn about the ERIP, each named plaintiff took ad-
6 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
vantage of the program and retired in either February or
March 2004.
At the time of the plaintiffs’ retirements, negotiations
between their unions and the City were still ongoing.
During negotiations, the unions and the City discussed
whether any pay raises would be given, who would
receive them, and whether they would be applied retro-
actively. Among other proposals, the City proposed
retroactive pay increases effective various dates. The
unions and the City specifically discussed whether
former employees, including plaintiff retirees, should be
given retroactive pay raises. The unions pushed for
employees who retired after June 2003 to get the in-
crease. In July 2005, the City offered to give retroactive
raises to those retirees in exchange for active employees
taking two unpaid furlough days, but the unions
rejected this proposal.
The parties finally reached a tentative agreement in
July 2005. In the 2003-2007 CBAs, the unions agreed to
various work rule concessions and the City agreed to
the hourly “prevailing wage rate” of pay, as established
by the DOL for similar job classifications in Cook
County, effective July 1, 2003, for employees who had
received that rate under prior agreements. The raise,
however, was retroactive only for employees who were
either on the payroll, were on layoff with recall rights,
or were seasonal employees eligible for rehire as of
July 18, 2005. Shortly thereafter, the parties also agreed
to a wage increase for non-prevailing rate employees. The
City Council ratified the successor CBAs in October 2005.
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 7
The City’s chief labor negotiator, Michael Duffee, testi-
fied that with every CBA “[t]he City does something
different . . . as to who gets—if there is retroactivity,
who gets it and how much.” The named plaintiffs
attested that when they retired, they understood that
their rate of pay was still being negotiated. They be-
lieved they would eventually receive the “prevailing
wage rate” for the work they performed after June 30,
2003, because they had received retroactive wage in-
creases under prior contracts and have historically
received the same “prevailing wage rate” as persons in
their unions who worked in identical job classifications.
Also, employees who retired during contract negotia-
tions for the 1999-2003 CBAs received retroactive pay
increases for work they performed after July 1999.
II. Discussion
Before diving into the merits, we first address the
propriety of plaintiffs’ cross-appeal. In their initial brief,
the plaintiffs didn’t indicate they were seeking to
expand or modify the judgment in their favor. They
requested that “the Court affirm the district court’s
decision in this matter in its entirety. Alternatively, if, and
only if, the Court reverses the district court’s decision
that Plaintiffs are entitled to summary judgment on
[their implied contract claim], Plaintiffs request that the
Court reverse the district court’s decision granting sum-
mary judgment to the City, and denying summary judg-
ment to Plaintiffs, on [their breach of contract and due
process claims], and that the Court remand this matter
for further proceedings.”
8 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
It is improper to file a cross-appeal to merely assert an
alternative ground of affirmance. See Stone Container Corp.
v. Hartford Steam Boiler Inspection & Ins. Co., 165 F.3d 1157
(7th Cir. 1999). “A cross-appeal is necessary and proper
only when the appellee wants the appellate court to
alter the judgment (the bottom line, not the grounds or
reasoning) of the district court.” Id.; see also Jones Motor
Co. v. Holtkamp, Liese, Beckemeier & Childress, P.C., 197
F.3d 1190, 1191 (7th Cir. 1999) (“The cross-appeal (which
is contingent because the ruling is of no consequence if
we affirm the judgment for the defendants) is improper,
because it does not seek an alteration of the judgment.”).
When plaintiffs are arguing alternative grounds for
affirmance they can do so in their response brief without
cross appealing. See Am. Land Holdings of Ind., LLC v.
Jobe, 604 F.3d 451, 453 (7th Cir. 2010); see also Singletary
v. Cont’l Ill. Nat’l Bank & Trust Co. of Chi., 9 F.3d 1236,
1240 (7th Cir. 1993).
The plaintiffs concede they are not seeking any ad-
ditional relief on their breach of contract claim, so their
cross-appeal on that count is improper. In their reply
brief on cross-appeal and at oral argument, they argue
that they are seeking a modified judgment as to their
due process claim. If successful on their due process
argument, the plaintiffs contend they would be entitled
to prejudgment interest and statutory attorney’s fees
under 42 U.S.C. § 1988 (as opposed to the attorney’s
fees awarded on their state law claim under the common
fund doctrine). The City also concedes that if the plain-
tiffs succeed on due process grounds, the case must be
remanded so the district court can determine an appro-
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 9
priate measure of damages. Accordingly, the due pro-
cess claim would have provided a proper basis to cross-
appeal, but the plaintiffs never indicated they were
seeking any type of modified relief or alteration in the
judgment until their reply brief. Issues raised for the
first time in a reply are waived. See In re Sokolik, 635
F.3d 261, 268 (7th Cir. 2011). The plaintiffs ask for the
district court’s opinion to be affirmed in its entirety.
They seek an alternative ground for relief, but they didn’t
follow that up with a request for a modified judgment.
Because they didn’t seek additional relief, their cross-
appeal is improper and must be stricken. Even con-
sidering the plaintiffs’ breach of contract and due
process claims as alternative grounds for affirmance, see
Jones Motor Co., 197 F.3d at 1191-92 (dismissing improper
cross-appeal but considering the alternative ground
for affirmance), we find that the district court properly
dismissed these claims.
Now on to the merits. We review a district court’s
grant of summary judgment de novo, construing all
facts and reasonable inferences in the light most
favorable to the non-moving party. Spivey v. Adaptive
Mktg. LLC, 622 F.3d 816, 822 (7th Cir. 2010). Summary
judgment is appropriate if “the movant shows that 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). Cross-motions for summary judgment
do not waive the right to a trial; rather, we treat the
motions separately in determining whether judgment
should be entered in accordance with Rule 56. McKinney
v. Cadleway Props., Inc., 548 F.3d 496, 504 n.4 (7th Cir.
10 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
2008). Finding no genuine issues of material fact, we
conclude that the district court erred in granting sum-
mary judgment to the plaintiffs on their implied con-
tract theory and hold that summary judgment should
have been entered in favor of the City. We otherwise
affirm the district court’s grant of summary judgment
in favor of the City on the plaintiffs’ breach of express
contract and due process claims.
A. State Law Claims
The plaintiffs’ primary argument on appeal is that they
continued to work for the City after the 1999-2003
CBAs expired with the mutual understanding and ex-
pectation that the City would later reach a final agree-
ment regarding their wage rate. They claim an implied
contract formed because “the City had entered into an
agreement with Plaintiffs under which the City accepted
Plaintiffs’ work but left the final rate of pay unstated
pending agreement at a later date.” Because no final
agreement was ever reached for their wages, they assert
that the court must imply a contract term for a rea-
sonable rate of pay. The plaintiffs claim that the
following facts gave rise to an implied contract for raise
increases: employees who continued working for the
City in the same job classifications received retro-
active wage increases for the time period at issue; the
plaintiffs’ wages were generally tied to “prevailing wage
rates”; the City offered wage increases shortly before
and after the 1999-2003 CBAs were set to expire; the City
agreed to make any wage increases retroactive in the
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 11
June 26, 2003 letter agreement; and the plaintiffs, and
past retirees who had retired during contract negotia-
tions, had historically received retroactive pay in-
creases. The district court found the plaintiffs’ argu-
ment persuasive, concluding that the City breached an
implied contract under Illinois law and reasoning that
the City’s acceptance of plaintiffs’ services entitled them
to reasonable pay from July 2003 through the date of
their retirement. Reasonable pay, the court found, was
the rate the City was willing to pay retroactively to
other employees. For the reasons set forth below, we
conclude that the district court’s finding of an implied
contract was in error.
The plaintiffs initially contend that the City waived
its arguments that (1) “[p]laintiffs’ employment could not
be altered by an implied contract because it was covered
by an express contract,” and (2) “there was no implied
contract giving plaintiffs retroactive wage increases,”
because the City did not sufficiently develop these argu-
ments before the district court with proper citations to
relevant legal authority.1 We disagree. The City raised
both in its memorandum in support of summary judg-
ment, see Doc. 66, and raised similar arguments in
response to the plaintiffs’ motion for summary judg-
ment, see Doc. 97. The burden on the moving party is
1
The plaintiffs also assert that the City waived its argument
that “the implied contract is not legally binding on the City
pursuant to 65 ILCS 5/8-1-7(a)” (prior appropriations statute).
Because we find that there was no implied contract, we need
not address the prior appropriations statute.
12 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
discharged by “showing”—that is, pointing out to the
district court—that there is an absence of evidence to
support the nonmoving party’s case. See Crawford v.
Countrywide Home Loans, Inc., ___ F.3d ___, No. 10-3135,
2011 WL 2906157, at *5 (7th Cir. July 21, 2011) (citing
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Once the
City challenged the factual support and legal soundness
of plaintiffs’ claim, the plaintiffs acquired the burden of
demonstrating that genuine issues remained for trial.
See Boumehdi v. Plastag Holdings, LLC, 489 F.3d 781, 787
(7th Cir. 2007) (“To survive summary judgment, [the
plaintiffs] must make a sufficient showing of evidence
for each element of [their] case that [they] bear[ ] the
burden of proving at trial.”). They didn’t meet that burden.
Pursuant to Illinois law (the parties agree that the state
law claims are controlled by Illinois law), an implied
contract is created by law as a result of the parties’ con-
duct. Zadrozny v. City Colls. of Chi., 581 N.E.2d 44, 47 (Ill.
App. Ct. 1991). It can either be implied in fact or in law.
Id. The plaintiffs appear to rest their claim on an implied-
in-fact contract, but for completeness, we address both.
“A contract implied in fact is one in which a contractual
duty is imposed by a promissory expression which may
be inferred from the facts and circumstances and the
expressions [on] the part of the promisor which show an
intention to be bound.” Estate of Jesmer v. Rohlev, 609
N.E.2d 816, 820 (Ill. App. Ct. 1993). Such a contract “con-
sists of obligations arising from an agreement where
an agreement has not been expressed in words.” In re
Marriage of Bennett, 587 N.E.2d 577, 580 (Ill. App. Ct. 1992).
It is “a true contract, containing all necessary elements
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 13
of a binding agreement; it differs from other contracts
only in that it has not been committed to writing or
stated orally in express terms, but rather is inferred from
the conduct of the parties in the milieu in which they
dealt.” A.E.I. Music Network, Inc. v. Bus. Computers, Inc., 290
F.3d 952, 956 (7th Cir. 2002) (quotations omitted) (Illinois
law); Al’s Serv. Ctr. v. BP Prods. N. Am., Inc., 599 F.3d 720,
726 (7th Cir. 2010) (“That is the significance of ‘in fact’:
the circumstances allow an inference that the parties had
a deal (a ‘meeting of the minds’) even though there
was no statement to that effect.”) (Illinois law).
“[A]n implied contract cannot coexist with an express
contract on the same subject.” Maness v. Santa Fe
Park Enters., Inc., 700 N.E.2d 194, 201 (Ill. App. Ct. 1998)
(holding that express contract negated the existence
of any implied-in-fact contract and rejecting contention
that alleged implied-in-fact contract supplemented ex-
press written contracts). “[P]romises should not be
found by process of implication if they would be incon-
sistent with express provisions that there is no reason to
set aside or to hold inoperative.” Barry Mogul & Assocs.,
Inc. v. Terrestris Dev. Co., 643 N.E.2d 245, 253 (Ill. App. Ct.
1994) (quoting Corbin on Contracts § 564 at 297 (1960)).
The express contract, however, must govern the same
subject matter as that at issue. Id.; see also Gadsby v. Health
Ins. Admin., Inc., 522 N.E.2d 865, 871 (Ill. App. Ct. 1988).
The plaintiffs cite Ekl v. Knecht, 585 N.E.2d 156 (Ill. App.
Ct. 1991) in support of their claim that the court must
impose an implied contract term because there was
no agreement that governed their rate of pay after
14 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
July 2003. In Ekl, the plaintiffs called a plumber to
perform work and were invoiced for that work at
what plaintiffs believed was a ridiculous amount. 585
N.E.2d at 160. The court found that there was an implied-
in-fact contract to pay for the plumber’s services, but
regardless of what the plaintiffs anticipated paying, there
was no evidence of an express or implied promise to
pay defendants’ regular charges at the time the contract
was formed. Id. at 162. The court therefore held that
the implied-in-fact contract obliged the plaintiffs to pay
a reasonable price for the services rendered, not the
amount charged by the plumber. Id.
Unlike the oral contract in Ekl, which did not specify
payment terms, the issue of the plaintiffs’ pay in this
case was the subject of an express agreement. During
negotiations, the plaintiffs’ pay was governed by the 1999-
2003 CBAs that were allowed to continue in effect
through the date of their retirement. That agreement
was then replaced with the 2003-2007 CBAs, which unfor-
tunately for the plaintiffs, didn’t give them raises. Be-
cause there was an express agreement that addressed rate
of pay for retirees, there can be no implied contract.
For similar reasons the plaintiffs’ reliance on Martin
v. Campanaro, 156 F.2d 127 (2d Cir. 1946) is misplaced.
First, it’s not precedential authority; it was not decided
under Illinois law. Second, it’s readily distinguishable. In
Martin, when the employees’ collective bargaining agree-
ment expired, they continued to work for the rate of pay
set forth in the expired CBA while the employer and
union negotiated new wage terms. 156 F.2d at 128. When
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 15
those negotiations reached a stalemate, the dispute was
referred to the National War Labor Board, but shortly
thereafter, the employer was adjudicated bankrupt. Id.
The Board issued a “directive order” for retroactive pay
increases to the employees. On review, the court in
Martin held that the Board didn’t create rights that were
enforceable by the claimants, but nevertheless found a
contract implied-in-fact for the reasonable value of their
services after the expiration of the CBA. Id. at 129.
The court in Martin stated that “[w]hen an agreement
expires by its terms, if, without more, the parties con-
tinue to perform, . . . an implication arises that they have
mutually assented to a new contract containing the
same provisions as the old.” Id. But based on the par-
ticular facts of the case—the employer’s agreement to
negotiate new wage terms, the resulting unsuccessful
negotiations, the hearings before the Board, and the
wartime no-strike pledge given by organized labor—the
court found that no reasonable person could believe
that the employees agreed to work, in the interval, at
their old rates. Id. The court held: “We think that here
there was a contract ‘implied in fact’ to pay the rea-
sonable value of the services unless a new contract
definitizing the wage-rates should be negotiated . . . .” Id.
at 130 (emphasis added).
Although the plaintiffs place heavy reliance on Martin,
it gets them nowhere. Here, there was “a new contract
definitizing [their] wage-rates” and that contract failed
to provide them with pay increases. Despite these facts,
the plaintiffs point to the City’s past performance and
16 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
argue that it was unreasonable to believe that they
agreed to work under the old rates. They present evi-
dence that they received retroactive wages increases
under prior contracts, they had historically received the
same “prevailing wage rate” as persons in their unions
who worked in identical job classifications, and under
the 1999-2003 CBAs, retired employees received retro-
active pay increases. This past performance, however,
doesn’t create an implied contract because the terms of
the CBAs are up for re-negotiation at the end of each
contract term, providing the City and the unions with
the opportunity to negotiate new terms that vary from
past practices and agreements. The City’s addition of
the words “if any” in the 2003 letter agreement
illustrates this point. The plaintiffs participated in the
ERIP with the knowledge and understanding that retro-
active wage increases were still being negotiated.
They may have hoped for retroactive raises, but such
a unilateral expectation is insufficient to create an
implied contract. See Zadrozny, 581 N.E.2d at 48 (“In order
to recover on an implied contract, the facts and circum-
stances must show that, at the time the services were
rendered, one party expected to receive payment and
the other party intended to make payment.”). The facts
in this case don’t lead to the conclusion reached in Martin.
We pause here to consider the plaintiffs’ express contract
claim because it dovetails into their argument that there
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 17
was a mutual understanding for retroactive wages.2 The
plaintiffs contend that the 2003 letter agreement required
the City, if it agreed to give raises, to apply them retroac-
tively to all employees as of July 2003 and that by only
giving active or laid-off employees retroactive wage
increases, the City violated the agreement. The district
court properly rejected this argument.
The letter states in relevant part: “In consideration of
the extension of the current agreements, the City agrees
that wage increases, if any, agreed to by the parties [the
unions and the City] shall be retroactive to July 1, 2003,
unless the parties mutually agree to another date.” The
letter is unambiguous; it merely contemplated that the
City and the unions would continue to negotiate wage
2
The City raises an exhaustion defense to the plaintiffs’ breach
of contract claim. The City asserts that this claim should be
dismissed because the plaintiffs failed to exhaust the grievance
procedures set forth in the 1999-2003 CBAs. The plaintiffs
respond that as retirees they weren’t required to grieve their
complaint, citing Rossetto v. Pabst Brewing Co., 128 F.3d 538, 540
(7th Cir. 1997) (holding that retirees’ claims “for benefits . . .
belong to the retirees individually, and the retirees may deal
directly with [the employer] in pursuing such claims”). See
also Carnock v. City of Decatur, 625 N.E.2d 1165, 1169 (Ill. App.
Ct. 1993) (holding that because the plaintiff was retired,
he wasn’t required to exhaust grievance procedures before
bringing suit for unused accumulated sick leave). Because
we can swiftly dispose of the plaintiffs’ breach of express
contract claim on the merits, we do not need to address this
issue.
18 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
increases and made agreed-upon wage increases, if any,
retroactive to July 2003 (unless they agreed otherwise).
After extensive negotiations, the parties didn’t agree to
give plaintiff retirees retroactive wage increases; this
deal was entirely consistent with the terms of the 2003
letter agreement, which in essence, was an agreement
to negotiate. “Illinois permits parties to agree to negotiate,
and to work toward some goal, without committing
themselves to its achievement—or to pay damages if it
is not achieved.” Murray v. Abt Assocs., Inc., 18 F.3d
1376, 1378 (7th Cir. 1994). Further, the letter is too indefi-
nite to create a contract for retroactive raises not set
forth in the more elaborate 2003-2007 CBAs. Id. (“Respect
for the parties’ autonomy in shaping their arrangements,
and for the allocation of risks they selected, mean[s] that
a court ought not find in a letter . . . the very promise
the more elaborate Proposed Term Sheet withheld.”).
The plaintiffs’ argument similarly falters under an
implied-in-law theory, sometimes referred to as a claim
in quantum meruit, quasi-contract, or one for unjust
enrichment. See, e.g., Yugoslav-Am. Cultural Ctr., Inc. v.
Parkway Bank & Trust Co., 763 N.E.2d 360, 367 (Ill. App. Ct.
2001). Unlike contracts implied in fact, contracts implied
in law arise notwithstanding the parties’ intentions,
Zadrozny, 581 N.E.2d at 48, and are no contracts at all,
Barry Mogul, 643 N.E.2d at 251. They are instead
governed by equitable principles. Klekamp v. City of
Burbank, 639 N.E.2d 241, 245 (Ill. App. Ct. 1994). Under
this theory, “a plaintiff asks the court to remedy the fact
that the defendant was ‘unjustly enriched’ by imposing
a contract.” Village of Bloomingdale v. CDG Enter. Inc., 752
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 19
N.E.2d 1090, 1101 (Ill. 2001). To succeed, the plaintiffs
must show (1) that they performed a service to benefit
the defendant; (2) they performed the service non-gratu-
itously; (3) the defendant accepted their services; and
(4) no contract existed to prescribe payment for this
service. Bernstein & Grazian, P.C. v. Grazian & Volpe, P.C.,
931 N.E.2d 810, 825 (Ill. App. Ct. 2010). Similar to the
implied-in-fact theory of recovery, there can be no
contract implied in law where an express contract or a
contract implied in fact exists between the parties
and concerns the same subject matter. Zadrozny, 581
N.E.2d at 48.
Because there is an express contract that governed the
plaintiffs’ wages, there can be no implied-in-law contract,
nor would equity require finding an implied contract
here. In Klekamp, the court rejected the plaintiffs’ argu-
ment of an implied-in-law contract under similar facts.
The plaintiffs in that case were firefighters/paramedics
hired by the city. 639 N.E.2d at 242. They were compen-
sated as firefighters during their first two years of proba-
tionary status, and then paid as paramedics pursuant
to the City’s then-existing policy. Id. at 243. The City
later changed its policy to pay firefighters/paramedics
a higher salary during the probationary period. Id. The
plaintiffs sought retroactive pay, arguing that there was
an implied contract for higher compensation during
their probationary period in accordance with the new
policy. Id. The court disagreed, stating that “[c]ases
which have addressed employees’ claims based on im-
plied contract theories for extra compensation beyond a
pre-determined salary are sparse and have held against
20 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
the employees.” Id. at 245 (citing cases). The plaintiffs
acknowledged that they were hired as firefighters and
would serve a two-year probationary period before
their job classification, and correspondingly their
salaries, would change. Id. at 246. Under these circum-
stances, the court couldn’t find that defendant was
unjustly enriched. Id.
Similar to Klekamp, at the time of their retirement, the
plaintiffs knew they were being paid at the 1999-2003
wage rates and that there was no certainty of retroactive
wage increases. Before accepting early retirement,
the plaintiffs could have discussed retroactive raises
with their union, and certainly should have if their deci-
sions to accept early retirement were contingent upon
increased pay. After agreeing to participate in the ERIP,
it was too late. The plaintiffs were stuck with the wage
rates in the 1999-2003 CBAs, unless the union and the
City agreed to give them retroactive wage increases in
the 2003-2007 CBAs, which they did not. See Mueller v.
City of Highland Park, 519 N.E.2d 712, 716 (Ill. App. Ct.
1988) (a contract implied in law did not exist concerning
water supplied by a city to a village during the period of
negotiations between the two municipalities; “[i]f the
parties later enter[ ] into a valid contract, there cannot be
a recovery on an implied contract”). Nothing required
the City to give all employees the same pay increase;
the City and the union were free to negotiate as they
did. See 5 Ill. Comp. Stat. 315/7 (requiring the union and
the public employer to bargain in good faith but not
compelling either party to agree to proposals or make
concessions).
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 21
The City has not been unjustly enriched by accepting
the plaintiffs’ services in exchange for existing wage
rates. The plaintiffs were paid for their services, received
enhanced pension benefits for taking early retirement,
and were not subject to the new cost-saving concessions
that apply to active employees who received retroactive
raises. They essentially asked the district court to
rewrite the 2003-2007 CBAs, which were the subject of
two years of negotiation and concessions on both sides,
to provide them with additional compensation. This
result would be inequitable. During contract negotia-
tions, retroactive pay for employees who retired after
July 2003 was discussed and rejected in exchange for
more favorable work rules. The City is entitled to the
benefit of its bargain.
B. Due Process Claim
In Count V of their amended complaint, the plaintiffs
allege that the City failed to give them important and
material information to induce them to take early retire-
ments.3 They assert that the City concealed or withheld
its intention not to give them retroactive pay increases,
even though the City knew that plaintiffs participated in
3
The plaintiffs also make passing reference on appeal to a
procedural due process claim asserted in Count I of their
amended complaint. This argument is completely undeveloped
and so is waived. See Argyrpoulos v. City of Alton, 539 F.3d
724, 738 (7th Cir. 2008) (holding undeveloped claims are
waived).
22 Nos. 10-2114, 10-2243, 10-2814 & 10-2921
the ERIP with the expectation of receiving such increases
based on the City’s past practices. We assume without
deciding that the plaintiffs had a property interest in
their public employment; the City doesn’t contend other-
wise.
The plaintiffs cite Spreen v. Brey, 961 F.2d 109 (7th Cir.
1992) to support their due process claim. In that case,
we held that the plaintiff would be entitled to certain
procedural due process rights if the city made material
misrepresentations to induce her to resign. Id. at 112.
Spreen doesn’t help the plaintiffs because unlike in that
case, the plaintiffs haven’t brought forth any evidence
that the City made misrepresentations to induce them
to retire early. The City held meetings to explain the
ERIP, which the plaintiffs attended. The plaintiffs volun-
tarily took part in the ERIP with full knowledge that
negotiations for the 2003-2007 CBAs were underway
and accordingly, no agreement as to retroactive wage
increases had been reached. If any duty was owed to
the plaintiffs to inform them about the status of these
negotiations, it was owed by their union. See 5 Ill. Comp.
Stat. 315/6(c) (stating that the union “is the exclusive
representative for the employees . . . with respect to rates
of pay, wages, hours and other conditions of employ-
ment.”). As stated above, the City was open about its
intentions not to pay raises without cost-saving conces-
sions. Even though the plaintiffs had to choose whether
to accept early retirement when raises were uncertain,
such a choice doesn’t establish coerced resignation. See
Palka v. Shelton, 623 F.3d 447 (7th Cir. 2010) (finding no
coerced resignation even though plaintiff was forced to
Nos. 10-2114, 10-2243, 10-2814, & 10-2921 23
choose between resigning to protect his retirement
benefits or clearing himself before the Merit Board), cert.
denied, 131 S. Ct. 1680 (2011). Because their retirement
was voluntary, the plaintiffs were not deprived of a
protected property interest by state action.
III. Conclusion
We A FFIRM in part and R EVERSE and R EMAND in part
with instructions to the district court to enter summary
judgment for the City on the plaintiffs’ implied contract
claim.
8-24-11