Illinois Appellate Court Dismisses Claims Against Employer Regarding Confidentiality of Internal Investigation

On May 1, 2026, in the case of Henry v. Ace Hotel, the Illinois Appellate Court dismissed an employee’s breach of contract claim that her employer violated the employee handbook, which stated complaints would be investigated confidentially, when the employer sent a company-wide email informing that she would be investigated for racial bias, but did not announce that the investigation resulted in no finding of wrongdoing. The employee also brought an intentional infliction of emotional distress claim against her employer on the same facts, which the Court also dismissed.

Background

Beginning in 2017, Ace Hotel employed Claire Henry as a “Cultural Engineer,” a role which involved coordinating public events and acting as a liaison between the hotel and the community.

In June of 2020, during nationwide protests of the murder of George Floyd, an employee of the Ace Hotel sent an email with a petition to all staff alleging racism, sexism, and homophobia in the workplace. The petition demanded, among other things, that Henry as Cultural Engineer be terminated. The president of Ace Hotel, Brad Wilson, responded to the message the next day, copying all staff. The response stated that the demands were reasonable, and, among other assurances, that Henry would be investigated. Specifically, Wilson stated: “We will fully investigate the ‘Cultural Engineering’ department and current head at Ace Hotel Chicago, Claire Henry, and if an independent investigation shows any inappropriate bias or racism we will demand her removal.”

After Ace Hotel’s independent investigation into Henry resulted in no findings of inappropriate bias or racism, the Hotel did not make a company-wide announcement of the results. The Hotel’s reasoning was twofold: they felt the lack of findings would not be received well by staff given the climate at the time, and they did not want to expose Henry to intensified attacks. Thereafter, Henry’s position was eliminated, and although she was told she could apply for a new position, she did not do so.

Henry filed suit against Ace Hotel in 2022. Henry alleged breach of contract in Ace Hotel failing to abide by the employee handbook provisions regarding confidentiality during internal investigations. Henry also alleged intentional infliction of emotional distress. Specifically, she alleged the announcement that Henry would be investigated, combined with the failure thereafter to announce the findings of the investigation, was “extreme and outrageous conduct.”

The trial court granted Ace Hotel’s motion for summary judgment dismissing Henry’s claims. Henry appealed.

Breach of Contract Analysis

As an initial matter, the Appellate Court noted that there was no dispute that the employee handbook signed by the parties created a binding contract. In one section, titled “All Complaints are Investigated,” the handbook stated that any complaints of discrimination and harassment would be “confidentially investigated” and that “complaints will be kept confidential to the extent possible, but confidentiality cannot be guaranteed.” Another section titled “Ace Hotel is an Equal Opportunity Employer,” stated that the hotel prohibited race discrimination and that “Ace Hotel treats every employee with dignity and respect.”

Henry alleged that Ace Hotel breached the confidentiality provision when it sent the company-wide email announcing that she would be investigated. Further, she alleged that the Hotel failed to treat her with dignity and respect in breach of the other provision when, after sending the company-wide email, they failed to announce that the investigation found no evidence of racial discrimination.

The Court found that Henry could not demonstrate a breach of contract claim premised on the handbook language for two reasons.

First, there was no evidence that the matter was not “confidentially investigated” as stated in the handbook. This was because the substance of the investigation itself was never revealed. All that was announced in the email was that an investigation was going to occur.

Second, the Court found that the language in the handbook “[a]ll complaints will be kept confidential” did not apply because the complaint in Henry’s investigation was the email that the employee sent to all staff alleging racism in the workplace. Thus, the complaint was already made public by the complainant. 

The Court also found that the language “to the extent possible” when referring to confidentiality was too “uncertain or indefinite” to provide a basis for a breach of contract claim.

Similarly, the language assuring that the company would treat employees with “dignity and respect” was too vague, and also appeared in the handbook in relation to unlawful employment discrimination, which is not what Henry alleged, rather than procedures for investigating complaints. As such, this language could also not provide a basis for a breach of contract claim.

Intentional Infliction of Emotional Distress Analysis

To prove a claim for intentional infliction of emotional distress, a plaintiff must demonstrate that the conduct at issue was “extreme and outrageous,” along with intent and proximate cause. This is a very high standard for employees to meet.

The Court found that although the Hotel president’s email to all staff could be perceived as careless or insensitive by specifically referencing Henry and that she would be investigated, there was no “extreme or outrageous” conduct. Factors the court considered included that the Hotel did not initiate the discussion of Henry, and Wilson simply responded to a complaint that was already made public. There was no public accusation by the company itself, merely assurance that Henry would be investigated. Further, the Court found it was not extreme or outrageous when the Hotel failed to publicly announce that the investigation resulted in no findings of discrimination by Henry. There was no evidence that the Hotel was required to do so under the employee handbook. Finally, the Court found no evidence to conclude that the Hotel intended to harm Henry.

Takeaways

Although the Appellate Court’s decision is favorable for employers, it serves as a reminder to carefully consider public personnel announcements. There was no evidence of malintent on the part of Ace Hotel or the president, but a more strategic response, such as a general assurance that all complaints would be handled in accordance with company policy, could have avoided costly litigation.

It is also worth noting that the Appellate Court found that statements such as “dignity and respect” and “to the extent possible” were too vague to provide a basis for actionable claims if an employee alleges that an employer violated this language. This ruling provides clarity and insight regarding the impact of general language in binding documents such as an employee handbook.

Please contact your Robbins Schwartz attorney with questions regarding this case.