7th Circuit Affirms Dismissal of Claim for Tortious Interference with Employment Contract under Illinois Law

On October 11, 2018, the 7th Circuit affirmed an order of the district court which dismissed an Illinois common law tort claim for tortious interference with an employment contract for failure to state a claim upon which relief may be granted pursuant to Fed.R.Civ. P. 12(b)(6).  Webb v. Frawley, No. 18-1607 (7th Cir. 10/11/2018).  The plaintiff sued a former co-worker for tortiously interfering with his employment contract, claiming that the interference resulted in the termination of his employment.  The district court granted the defendant's motion to dismiss.  The plaintiff alleged that the defendant intentionally induced a breach of his employment contract by his employer--the termination of his employment--by ordering him to pursue business that his employer refused to fulfill, and by reporting to his employer that he was not performing.  The plaintiff claimed that the defendant did so in an attempt to resurrect or save the defendant's commercial reputation.  The plaintiff was advised that his employer had terminated his employment for poor performance and a lack of productivity.

A claim for breach of contract induced by a third-party is well-established under Illinois law.  The tort recognizes that individuals have a property interest in their business relationships, and that those interests should be free from harm by others.  To state a claim for tortious interference with contract, a plaintiff must establish: (1) the existence of a valid contract; (2) the defendant's knowledge of the contract; (3) the defendant's intentional and unjustified inducement of a breach of the contract; (4) a subsequent breach of contract caused by the defendant's wrongful conduct; and (5) damages.  The district court concluded that the plaintiff failed to state a tortious interference with contract claim for two reasons.  The district court understood the plaintiff's claim to be premised on conduct that the defendant directed at the plaintiff, instead of at a third-party, as the law requires.  Under Illinois law, liability for tortious interference may only be premised on acts immediately directed at a third-party, which cause that party to breach its contract with the plaintiff.  In addition, the district court interpreted the plaintiff's complaint as alleging that the defendant intended the plaintiff's trades to succeed (so that the defendant would prosper), but the plaintiff needed to establish that the defendant intended to cause his termination, which, the district court concluded, required a showing that the defendant intended the plaintiff's trades to fail.  The intent to induce a contractual breach is an element of a tortious interference with contract claim.  The defendant must have intentionally and unjustifiably induced a breach of contract.  To survive the motion to dismiss, therefore, the plaintiff was required to show that the defendant intended to cause the breach--in this case--the plaintiff's termination of employment.  Intent to induce requires some active persuasion, encouragement or inciting that goes beyond merely providing information in a passive way.  The plaintiff failed to allege facts sufficient to establish the element of intentional inducement and, therefore, failed to state a claim for tortious interference with his employment contract.