Schultze v. ABN AMRO, Inc.

2017 IL App (1st) 162140

SECOND DIVISION
July 18, 2017

No. 1-16-2140

ROBERT D. SCHULTZE, ) Appeal from the
) Circuit Court of
Plaintiff-Appellee, ) Cook County
)
v. ) No. 10 L 7045
)
ABN AMRO, INC. and THE ROYAL BANK ) Honorable
of SCOTLAND, N.V., ) Margaret Ann Brennan,
) Judge Presiding.
Defendants-Appellants. )

JUSTICE MASON delivered the judgment of the court, with opinion.

Presiding Justice Hyman and Justice Neville concurred in the judgment and opinion.

OPINION

¶1 Plaintiff-appellee Robert D. Schultze filed a complaint alleging defendants-appellants

ABN AMRO, Inc. (ABN) and The Royal Bank of Scotland, N.V. (RBS) (formerly known as

ABN AMRO Bank, N.V.) violated the Illinois Wage Payment and Collection Act (Act) (820

ILCS 115/1 et seq. (West 2008)) by failing to pay him the proper amount of his earned bonus

and severance pay. After trial, the trial court ruled in favor of Schultze, ordering ABN to pay $2

million as an earned bonus and $375,000 as severance, offset by amounts already paid, plus 5%

interest and attorney fees. 1 On appeal, ABN contests the judgment award because it contends (1)

the bonus paid to Schultze was discretionary and not pursuant to a contract and (2) Schultze

failed to execute a separation agreement and general waiver that was a prerequisite to receiving

any severance in accordance with ABN’s written policy. Finding no merit in ABN’s claims, we

affirm.

1
After briefing on attorney fees, the trial court entered judgment against ABN for a total of
$2,838,968.22.
 No. 1-16-2140

¶2 BACKGROUND

¶3 In 1983, Schultze began working for LaSalle National Bank (LaSalle), formally a

subsidiary of ABN. Through his many promotions and advancements at ABN, Schultze was

never offered a written employment contract detailing his salary and bonus; instead, his

employment agreements were always oral. Even after he became an officer of the bank, Schultze

did not receive a written contract detailing his bonus. When ABN later promoted Schultze to vice

president, there again was no written contract, but Schultze knew the range of what a bonus

would be if he performed satisfactorily.

¶4 Although Schulze’s salary was fixed, his annual performance bonus was not. But because

bonuses were calculated as a multiple of an executive’s salary and given the history of his

employment at ABN, Schultze knew that if he and his team met their performance goals, he

would receive a multiple of his salary as a bonus. An employee’s performance was objectively

analyzed annually using specific, measurable, achievable, realistic targets (referred to internally

at ABN as SMART), which provided the employee with measurable goals to attain during the

performance year that would be assessed for achievement at year-end. Each aspect of the

SMART analysis was weighted based on varying levels of importance. To determine a bonus

amount for senior executives, ABN also considered (1) personal performance, (2) team

performance, (3) the larger group (bank) performance, (4) compensation paid to executives in

similar roles globally, (5) competitors’ bonuses (because ABN was a highly competitive

organization), (6) performance of the overall market, and (7) bonuses paid the previous year for

the same position. For nearly 25 years, ABN adopted the same process to determine bonuses

except for performance year 2008. Historically, the bank’s profitability was an important

component used to evaluate performance, but starting in performance year 2007 and in

-2­
 No. 1-16-2140

anticipation of an upcoming sale of LaSalle to Bank of America, goals were focused on safety,

soundness, meeting regulatory hurdles, disintegrating operations and information technology

platforms, and managing the rotation of risk.

¶5 Computation of a specific employee’s bonus began by reviewing a spreadsheet provided

by human resources detailing the employee’s history of bonus awards, predecessors’ bonuses for

the same position, benchmark bonuses from competitors (third-party sources) and the

employee’s SMART performance rating. The individual determining bonuses used this

spreadsheet along with ABN’s profitability and the pool of bonuses allocated to a business unit

to determine an employee’s bonus, which was then submitted to division leaders for approval.

¶6 In 2000, ABN promoted Schultze to executive vice president and chief financial officer

(CFO) of ABN Wholesale Client Services Division for North America. Schultze served in that

position from late 2000 to approximately the first quarter 2006. During that time, Schultze’s base

salary increased approximately $100,000 through a series of raises. Typically, Schultze allocated

his salary increase to the pool of funds available for raises for his team, finding it unnecessary to

take a one or two percent salary increase for himself. But Schultze was compensated, as he

always had been, with a bonus and salary.

¶7 For approximately six months in 2006, Schultze acted as interim CFO of LaSalle while

the bank searched for a permanent CFO. After LaSalle filled the position, Schultze returned to

his position as CFO of the Wholesale Client Services Division of ABN. Schultze remained in

that position until February 2007 when ABN promoted him to managing director and chief

operating officer (COO) of ABN’s Global Markets North America Division. When Schultze

accepted this position, ABN provided him with a range of what his bonus would be, which was

more than his salary as CFO but something less than $1 million because he would no longer be

-3­
 No. 1-16-2140

running a trading desk. Schultze’s understanding was that his combined salary and bonus would

be around $1 million if he performed satisfactorily. Schultze remained in the managing director

and COO of ABN’s Global Markets North America positions until he was terminated by ABN in

April 2009.

¶8 In spring 2007, ABN announced that LaSalle would be sold to Bank of America with an

anticipated closing date of October 1, 2007. In mid-October 2007, a consortium of banks, which

included RBS along with two other banks, won a tender offer and began the process of acquiring

ABN. John Nelson, head of ABN Global Markets North America and chief executive officer

(CEO) of ABN North America, asked Schultze to manage both the $21 billion sale of LaSalle to

Bank of America and the $93 to $94 billion sale of ABN to the consortium. Schultze’s title

became executive vice president and executive lead of the ABN North America Transition

Leadership Team.

¶9 For the year ending December 2007, Schultze’s base salary was a little over $300,000

and his combined salary and bonus was approximately $1 million to $1.1 million. Also during

2007, Schultze received two retention bonuses, which were intended to keep him at the bank

while the bank was undergoing its divesture, but not to compensate him for his performance. 2

Schultze received (1) $200,000 relating to the sale of LaSalle to Bank of America and (2) $1

million relating to the sale of ABN to the consortium if Schultze remained at the bank or its

successor until December 31, 2008.

2
The retention offer letter expressly stated that the retention bonus “does not replace, supersede or
offset any other bonus program in which you may be eligible to participate including any business unit
incentive plan or corporate bonus plan.” ABN paid the retention bonuses to Schultze and those bonuses
are not part of this appeal.

-4­
 No. 1-16-2140

¶ 10 The sale of ABN was the largest financial services transaction up to that time. ABN was

being dismantled, broken up into pieces, and sold to four different counterparties, all within a

predetermined period of time. Nelson offered Schultze the $1 million retention bonus because he

believed that ABN was exposed to a series of systematic risks and needed someone with a high

degree of business acumen who was intelligent, capable, knew the organization well, and could

work in a very complex regulatory environment. Nelson considered it essential for Schultze to

remain at ABN as long as possible. Schultze became the technical expert and dealt with the

purchasing banks, many of the regulatory bodies, and his own people in accomplishing the sale.

Nelson described Schultze’s job during that time as “a huge job with a massive amount of

responsibility and highly complicated.” Nelson explained that the purpose of the retention

bonuses was to ensure that ABN had the best possible people in the organization through the

transition and sale of ABN to the purchasing banks. According to Nelson, all of the transition

issues that ABN faced supported Schultze’s $1 million retention bonus.

¶ 11 In March 2008, Dennis McHugh, head of ABN Global Markets North America, left ABN

and Brad Kopp, an RBS executive “seconded” 3 to ABN as CEO of ABN North America, asked

Schultze to assume McHugh’s duties, which included transitioning the global markets business

from ABN to RBS. Nelson left ABN a few weeks before McHugh left and Kopp replaced

Nelson as CEO of ABN North America. Schultze retained all of his current responsibilities as

COO of ABN Global Markets North America and executive lead of the ABN North America

Transition Leadership Team but assumed McHugh’s responsibilities as well. Schultze’s new title

was head of ABN Global Markets North America.

3
A seconded employee is on “loan” from one company to another. Schanfield v. Sojitz Corp. of
America, 663 F. Supp. 2d 305, 337 (S.D.N.Y. 2009).

-5­
 No. 1-16-2140

¶ 12 Although Kopp was generally aware of ABN’s policies, he did not ask Schultze how he

was compensated at ABN when he promoted Schultze to McHugh’s position. In fact, Schultze

never had a conversation with Kopp addressing how executives were compensated at ABN.

Likewise, Kopp never informed Schultze to change his expectations regarding the amount of his

performance bonus for 2008. Kopp was very complimentary of Schultze’s performance and

never indicated that his performance was inadequate in any way.

¶ 13 Schultze held the same position (head of Global Markets North America) that both

McHugh and Nelson previously held, but Schultze also served as executive lead of the ABN

North America Transition Leadership Team—a position that no one else held before. Based on

Schultze’s understanding of the bonuses paid to Nelson and McHugh for the same position, he

expected a bonus in excess of $2 million and in the range of $2 to $5 million for 2008, given the

additional position and responsibilities that he had compared to both Nelson and McHugh. In

fact, McHugh’s bonuses were typically five times or more of his salary. In 2006, McHugh

received a $2 million bonus and a $3 million bonus for 2007, both to be paid over three years.

¶ 14 In a letter dated March 9, 2009, Schultze was informed that his 2008 bonus was

$200,000, which would be released “subject to and in accordance with the rules of the RBS

Group Deferral Plan.” Schultze was shocked because the bonus was not commensurate with the

type of risk and responsibilities he had undertaken during the preceding year, and he had not

received a bonus that low in over a decade.

¶ 15 A few days later, Schultze contacted Kopp to discuss the bonus amount and express his

dissatisfaction. Kopp responded to Schultze that he did not know why that was the bonus amount

(even though he was the individual who decided Schultze’s bonus) but would look into it and get

back to him. As a follow-up, Schultze sent Kopp and other executives an e-mail on March 17

-6­
 No. 1-16-2140

setting forth in detail the reasons he believed his bonus had been miscalculated. Schultze

received a response from Kopp on April 7 (Kopp’s last day at ABN) informing Schultze that “we

concluded that your discretionary bonus was in line with your comparators and that the same

process was followed for you as for others. We can also confirm that the management team did

not take your retention bonus award into account in their decision making.” Kopp’s letter did not

identify (1) anyone else he had consulted with, (2) who comprised the “management team,” (3)

what “process” was used to set Schultze’s bonus, or (4) who were the “comparators” with whom

Schultze’s bonus was compared.

¶ 16 According to Kopp, he followed ABN’s policies regarding bonuses and his method of

calculating a bonus was consistent with ABN’s typical process. Kopp determined the annual

bonuses for his 10 direct reports, who included Schultze, for performance year 2008 and used the

same process for all the direct reports. To determine bonuses, Kopp solicited a broad sample of

comments about an employee’s performance by talking to as many people as possible who

worked with the employee and reviewed the performance report completed by the employee.

Based on the allocated bonus pool assigned to his business unit (North America), Kopp then

allocated bonuses to all the employees in the business unit, including his 10 direct reports. But

Kopp indicated that he gave no consideration to what an employee’s predecessor with the same

title previously earned because this factor would be irrelevant given that performance bonuses

were determined based on the employee’s performance in that fiscal year.

¶ 17 As part of Kopp’s reconsideration of Schultze’s bonus, he discussed the bonus amount

with individuals at RBS to ensure that the bonus was as fair as possible, and, in particular, he

spoke with Helen Finnegan in the human resources department, who was another seconded

executive. Everyone Kopp consulted with was comfortable that Schultze’s bonus was in line

-7­
 No. 1-16-2140

with others at his level. Kopp did not know the amount of Schultze’s prior bonuses when he

determined the 2008 bonus nor did he ask Schultze how ABN historically determined bonuses.

According to Kopp, no ABN executive after he became CEO of ABN North America told him

that ABN routinely considered the bonus paid to the person who previously held the executive’s

position in computing a bonus amount. Kopp believed that Schultze’s $200,000 bonus was fair

factoring in Schultze’s performance for the year and the limited size of the bonus pool available

for allocation to the business unit. According to Kopp, Schultze’s bonus was in the top 25% of

bonuses given to his 10 direct reports. ABN introduced no evidence of the size of the bonus pool

at trial. Kopp did not promise Schultze that his bonus would be similar to his predecessors,

which Kopp did not believe would have been an appropriate commitment to make because, in his

view, bonuses focused on an executive’s performance in that fiscal year and how the company

and the business unit performed.

¶ 18 Effective April 17, 2009, ABN terminated Schultze and offered him $300,000 as

severance representing 52 weeks of his salary. Schultze, however, asserted that his severance

should have been $375,000 based on his 25 years of service. To receive severance, ABN

required Schultze to sign a separation agreement and general waiver (“release”). 4 Schultze and

ABN exchanged drafts of the release with Schultze executing a modified release on September

24, 2009, which expressly waived any and all claims, except his claim relating to the 2008 bonus.

Because Schultze was not satisfied with his $200,000 bonus, he did not sign the release required

by ABN, and ABN did not pay him any severance.

4
ABN’s “Severance Pay Plan Document” states: “In order to receive the severance available
under the Plan, an eligible employee must submit a signed Waiver and Release Agreement form to the
Plan Administrator on or within forty five (45) days after his/her date of termination of employment.”

-8­
 No. 1-16-2140

¶ 19 After Schultze’s request to reconsider his 2008 bonus and payment for severance proved

unsuccessful, he filed a complaint in the trial court requesting payment under the Act and for

attorney fees under the Attorneys Fees in Wage Actions Act (705 ILCS 225/1 (West 2008)).

Schultze sought final compensation totaling at least $2,375,000, consisting of at least $2 million

in earned but unpaid bonus compensation, and $375,000 in earned but unpaid severance

compensation. Following a bench trial, the trial court entered judgment in favor of Schultze in

the amount of $2,375,000, less the $200,000 bonus already paid by ABN, plus 5% prejudgment

interest, finding that ABN’s condition that Schultze sign a release before paying his severance

resulted in an unjustified delay. The trial court also awarded attorney fees and costs. ABN timely

appealed the trial court’s judgment award.

¶ 20 ANALYSIS

¶ 21 ABN first claims that the trial court erred in awarding Schultze a $2 million bonus

because a discretionary bonus is not recoverable under the Act. ABN contends that there was no

unequivocal promise to pay a bonus pursuant to an employment contract or agreement and the

trial court instead erroneously awarded a bonus based on Schultze’s expectations and ABN’s

past practices.

¶ 22 The Act allows employees to sue for the timely and complete payment of earned wages

or final compensation. Andrews v. Kowa Printing Corp., 351 Ill. App. 3d 668, 675 (2004). The

Act defines “final compensation” as “wages, salaries, earned commissions, earned bonuses, and

the monetary equivalent of earned vacation and earned holidays, and any other compensation

owed the employee by the employer pursuant to an employment contract or agreement between

the 2 parties.” 820 ILCS 115/2 (West 2008). To establish a violation of the Act, a plaintiff must

allege that “(1) the defendant was an ‘employer’ as defined in the Wage Payment Act; (2) the

-9­
 No. 1-16-2140

parties entered into an ‘employment contract or agreement’; and (3) the plaintiff was due ‘final

compensation.’ ” Catania v. Local 4250/5050, 359 Ill. App. 3d 718, 724 (2005). Because we

must determine whether the Act applies to Schultze’s claim of an earned but unpaid bonus, we

review that question of law de novo. Andrews, 351 Ill. App. 3d at 672.

¶ 23 ABN claims that Schultze’s bonus was discretionary and not pursuant to any

“employment contract or agreement,” thus defeating application of the Act. But contrary to

ABN’s position, a formal contract is not required to recover under the Act. Landers-Scelfo v.

Corporate Office Systems, Inc., 356 Ill. App. 3d 1060, 1067 (2005). This court has recognized

that a plaintiff must prove the existence of a valid and enforceable contract to recover under a

breach of contract claim, but no such requirement exists to recover under the Act. Id. at 1068;

Catania, 359 Ill. App. 3d at 724. Significantly, the legislature purposely included the term

“agreement” in the definition of “final compensation” (820 ILCS 115/2 (West 2008)), and an

“agreement” is more expansive than a contract because an “agreement” merely requires a

manifestation of mutual assent by the parties without requiring the formalities and accompanying

legal protections of a contract. 56 Ill. Adm. Code 300.450 (2014); Landers-Scelfo, 356 Ill. App.

3d at 1067-68 (quoting Zabinsky v. Gelber Group, Inc., 347 Ill. App. 3d 243, 249 (2004), citing

Black’s Law Dictionary 35 (abridged 5th ed. 1983), and Restatement (Second) of Contracts § 3

cmt. a at 13 (1981)). In essence, in order to recover under the Act, a plaintiff is only required to

demonstrate facts displaying mutual assent to terms. Landers-Scelfo, 356 Ill. App. 3d at 1068.

Importantly, employers and employees may manifest mutual assent by conduct alone, including

past practice. Id.; 56 Ill. Adm. Code 300.450 (2014).

¶ 24 There was ample evidence presented at trial demonstrating a long history of ABN’s

manifestation of mutual assent and “unequivocal promise” to award Schultze a bonus according

- 10 ­
 No. 1-16-2140

to ABN’s standards in exchange for his quality performance. Apart from the first two years of

Schultze’s nearly 25-year career with ABN when he was not an executive, Schultze always

received a salary and bonus. Indeed, there is no evidence indicating that Schultze’s

compensation, as an executive of the bank, did not consist of both a salary and bonus component.

Notably, even Kopp recognized that ABN, and every firm, paid compensation based on the

combination of a salary and bonus. Moreover, ABN sent Schultze a letter notifying him that he

was entitled to a bonus for performance year 2008 but nevertheless contends that there was no

“unequivocal promise” to pay a bonus. ABN’s express statement that Schultze was entitled to a

bonus in 2008 cannot be reasonably interpreted to mean anything other than an unequivocal

promise to pay a bonus. Moreover, ABN’s past conduct of awarding Schultze an annual bonus

for more than two decades manifested an agreement to award a bonus as a component of

Schultze’s total compensation. Consequently, there was an “agreement” and “unequivocal

promise” that Schultze’s compensation included a bonus and payment of that bonus as part of

Schultze’s compensation was not discretionary.

¶ 25 Likewise, the record reveals that Schultze’s 2008 earned bonus totaled at least $2 million,

and not the $200,000 awarded to him. There is no dispute that 2007 and 2008 were transition

years as ABN was being dismantled and sold as part of what was then the largest financial

services transaction in history. During this critical time, Schultze took on additional

responsibilities and became the executive head of the bank’s transition leadership team—a

position described as entailing massive amounts of responsibility and highly complicated tasks

given the bank’s complex and heavily regulated environment.

¶ 26 Kopp later promoted Schultze to McHugh’s prior role as head of Global Markets North

America, and Schultze retained his existing responsibilities as COO of Global Markets North

- 11 ­
 No. 1-16-2140

America and transition head. Importantly, at the time Schultze took on this additional role, Kopp

did not inform Schultze that there would be any change in ABN’s longstanding policy regarding

the calculation of bonuses.

¶ 27 The evidence presented at trial overwhelmingly demonstrated that in setting Schultze’s

2008 performance bonus, Kopp deviated from the longstanding methodology ABN had used to

calculate executive bonuses. Nothing in the record indicates that Kopp completed the SMART

analytical framework as Schultze’s supervisors had in the past, and Kopp did not cause to be

prepared spreadsheets containing the detailed information ABN typically compiled before setting

an executive’s bonus.

¶ 28 In particular, the record demonstrates that ABN had consistently calculated bonuses

taking into consideration the bonus paid to an executive’s predecessor. But Kopp believed that a

predecessor’s bonus was irrelevant because a bonus depended upon the individual’s performance

in a particular fiscal year and how the bank and business unit performed. Kopp’s methodology is

particularly troubling because he gave no consideration to the bonuses paid to Schultze’s

predecessors (McHugh and Nelson) and did not know the amount of Schultze’s prior bonuses—

information that had historically been included in the spreadsheet analysis. We cannot ignore the

fact that Schultze’s predecessors received bonuses in excess of $2 million for Schultze’s same

position, but Kopp determined that a $200,000 bonus to Schultze for assuming the same

responsibilities as his predecessors, in addition to the substantial responsibilities associated with

the sale transactions, was proper.

¶ 29 Comparatively speaking, the bonus paid to Schultze’s immediate predecessor—

McHugh—for 2006 was $2 million and for 2007 was $3 million (as head of Global Markets

North America). Accordingly, ABN’s bonus award of $200,000 was a fraction of the bonuses it

- 12 ­
 No. 1-16-2140

previously paid for Schultze’s same role. Indeed, even Nelson (Kopp’s predecessor) believed

that the $200,000 bonus fell below what he considered reasonable given (1) the complex

environment at ABN during that time and (2) the additional responsibilities given to Schultze.

Importantly, ABN paid McHugh a $3 million bonus in 2007—also described as a “transition

year” for ABN. Particularly noteworthy is the fact that the bonus letter dated March 8, 2009,

addressed to Schultze stated that the bonus would be paid according to RBS’s deferred

compensation policy—rather than ABN’s policy.

¶ 30 Not only did Kopp change the longstanding methodology used to calculate bonuses by

ignoring the bonuses paid to Schultze’s predecessors and otherwise failing to follow ABN’s

bonus policy, but he also did not communicate the change to Schultze before Schultze fully

performed his employment responsibilities to earn his bonus for 2008. Under the Act, “[a]n

employee has a right to an earned bonus when there is an unequivocal promise by the employer

and the employee has performed the requirements set forth in the bonus agreement between the

parties and all of the required conditions for receiving the bonus set forth in the bonus agreement

have been met.” (Emphasis added.) 56 Ill. Adm. Code 300.500(a) (2014). When ABN awarded

Schultze a $200,000 bonus, Schultze had already fully performed the requirements to earn the

bonus that was unequivocally promised to him as part of his compensation. Moreover, nothing in

the record demonstrates that Schultze’s performance was inadequate or not deserving of a bonus.

In fact, ABN acknowledges that Schultze “was highly regarded in 2008 and prior years.”

Consequently, ABN’s change to the long-standing methodology used to calculate Schultze’s

bonus after he had already earned it directly violated the Act. ABN cannot, following Schultze’s

full performance, alter his compensation by awarding him a drastically reduced bonus. See cf.

- 13 ­
 No. 1-16-2140

McLaughlin v. Sternberg Lanterns, Inc., 395 Ill. App. 3d 536, 544 (2009) (pro rata bonus denied

where employee did not perform employment responsibilities for the full bonus period).

¶ 31 ABN also argues that because 2008 was such a disastrous year for the financial industry

as a whole—with banks, including ABN, sustaining losses across the board—Schultze could not

reasonably have expected a 2008 performance bonus in line with past bonuses. But this argument

overlooks the undisputed fact that during performance year 2008, the profitability of the business

sectors managed by Schultze was not a performance goal. Instead, given the impending sale of

(1) LaSalle to Bank of America and (2) ABN to the consortium, Schultze’s primary

responsibility was to preserve assets and reduce risk while overseeing the disentanglement of

ABN’s and La Salle’s operations. According to the evidence, Schultze succeeded in those goals.

Therefore, the lack of profitability was anticipated and, indeed, inherent in the responsibilities

ABN asked Schultze to assume, and thus, ABN cannot rely on this factor as justification for

Schultze’s greatly diminished bonus award.

¶ 32 In sum, because Schultze fully performed the services required to earn his bonus and

ABN improperly and after the fact changed the methodology used to compute that earned bonus,

depriving Schultze of his compensation, the trial court did not err in awarding Schultze $2

million, representing the minimum bonus commensurate with his increased responsibilities and

undisputed satisfactory performance. Based on the record, an allowable bonus amount ranged

from $2 to $5 million. We therefore find no merit in ABN’s argument that the trial court

substituted its judgment for ABN’s given that the awarded $2 million bonus was not only within

the allowable range but was, in fact, the minimum bonus supported by the evidence.

¶ 33 Likewise, we are not persuaded by ABN’s argument that a ruling in favor of Schultze

would open the floodgates to claims under the Act by employees dissatisfied with a bonus award.

- 14 ­
 No. 1-16-2140

Schultze’s circumstances were unique and the multiple positions ABN asked him to fill are not

likely to recur. That said, Schultze established a clear violation of the Act due to ABN’s

demonstrated failure to follow the process it assured Schultze would be used to determine his

bonus.

¶ 34 ABN next claims that Schultze was not entitled to severance of $375,000 because he

failed to execute a release waiving all claims, which ABN asserts was a proper prerequisite to

receiving severance benefits. Absent Schultze’s execution of the release, ABN claims there was

no valid contract for severance.

¶ 35 A release is a contract that provides for the abandonment of a claim against another.

Borsellino v. Putnam, 2011 IL App (1st) 102242, ¶ 103. A release may be included in a

separation agreement, and requiring execution of a release in exchange for severance has been

upheld by this court. Hurd v. Wildman, Harrold, Allen & Dixon, 303 Ill. App. 3d 84, 92-93

(1999); Golden v. McDermott, Will & Emery, 299 Ill. App. 3d 982, 993 (1998). But settlement of

claims in the form of a release signed by an employee relating to an employer’s violation of the

Act is not permissible. 820 ILCS 115/9 (West 2008). We review de novo the legal issue of

whether ABN’s release improperly required Schultze to waive a claim brought under the Act.

Andrews, 351 Ill. App. 3d at 672.

¶ 36 As stated above, Schultze communicated his dissatisfaction with the $200,000 bonus

when he learned of the bonus amount and before ABN terminated his employment on April 17,

2009. Schultze refused to sign the release unless it was modified to exclude the release of his

2008 bonus claim. Accordingly, Schultze sent ABN a modified version of the release that he

executed specifying that he agreed to a release of all causes of action, claims, damages,

judgments or agreement of any kind, except claims relating to his earned bonus.

- 15 ­
 No. 1-16-2140

¶ 37 In essence, by requiring Schultze to release all claims, including those relating to his

2008 bonus, as a prerequisite to receiving severance that he was otherwise entitled to, 5 ABN was

seeking to preclude Schultze from pursuing his claim under the Act. Even though Schultze had

not yet filed a complaint asserting a violation of the Act, ABN was aware of his earned bonus

claim and improperly conditioned payment of severance on his release of that claim for no

consideration other than severance benefits to which Schultze was already entitled. Moreover,

Schultze executed a release modified to retain his rights to pursue payment of his earned bonus

but waiving all other claims. Because ABN improperly conditioned payment of severance on

Schultze’s release of his 2008 bonus claim based on a violation of the Act and Schultze

otherwise complied with all other conditions to receiving his severance pay, the trial court did

not err in awarding $375,000 as severance.

¶ 38 We affirm the trial court’s judgment in favor of Schultze awarding a $2 million bonus,

offset by the $200,000 payment already made, and severance of $375,000. We also affirm the

award of prejudgment interest and attorney fees as ABN has not challenged on appeal those

aspects of the trial court’s judgment.

¶ 39 Affirmed.

5
ABN does not argue that Schultze would not be entitled to severance benefits had he signed a
release of all claims.

- 16 ­