Labor & Employment Law Daily Wrap Up, STATE-LAW CLAIMS—C.D. Ill.: OB-GYN practice breached employment agreement by withholding physician's salary increases and bonuses, (Jul 23, 2026)

By Mandavi Singh, LL.M.

The employment agreement unambiguously required specified salary increases and annual bonuses, making the unpaid wages and bonuses recoverable under the Illinois Wage Payment and Collection Act.

A federal district court in Illinois largely ruled in favor of a former obstetrician-gynecologist in a compensation dispute, holding that her physician-owned medical practice violated the Illinois Wage Payment and Collection Act (IWPCA) by failing to pay contractually required salary increases and annual bonuses and by delaying repayment of a pandemic-era salary reduction. The court also found the practice liable for breach of contract, although disputes remain over damages, one physician-shareholder’s individual liability, and the value of shares the physician should have received under the employment agreement (Cameron v. Teverbaugh Croland and Mueller OB/GYN Associates, S.C., No. 1:24-cv-01432 (C.D. Ill. July 20, 2026)).

Employment agreement. The board-certified physician joined the obstetrics and gynecology practice in 2013 and entered into a five-year employment agreement in 2016. The agreement set her annual salary at $300,000 and provided that, assuming her performance remained satisfactory, the practice “will increase” her salary by $52,000 in 2017 and by $42,667 annually thereafter until it reached $480,000.

The agreement also stated that she would be eligible for an annual bonus calculated through two reconciliations performed by the practice’s outside accountant: one based on her individual financial performance and another based on the practice’s annual financial performance, of which she would receive a 12.5 percent share. A separate provision stated that she was subscribing for 48 shares when she executed the agreement and could subscribe for additional shares each year while she remained employed.

The physician alleged that the practice never paid the full contractual salary increases, never paid annual bonuses, never transferred the promised shares or paid related distributions, and reduced her salary by approximately 50 percent for several pay periods during the COVID-19 pandemic. She asserted four IWPCA counts against the practice and its three physician-shareholders and a breach-of-contract claim against the practice.

Pandemic reduction. The court first found that the practice and two physician-shareholders were liable for statutory interest and attorney fees arising from the temporary salary reduction. The undisputed evidence showed that they reduced the physician’s pay without her consent in April and May 2020, resulting in an underpayment of $28,269.23. The practice repaid $9,329 in August 2020 and the remaining $18,940.23 in February 2021, but did not pay statutory penalties.

The practice argued that the physician could not recover interest and fees because her attorney did not demand them when the delayed wages were paid. The court rejected that position under Section 9 of the IWPCA, which requires an employer to pay wages it concedes are due and preserves the employee’s remedies for the disputed balance. Relying on Schultze v. ABN AMRO, Inc., 83 N.E.3d 1053 (Ill. App. Ct. 2017), the court explained that an employee’s acceptance of disputed wages does not release statutory claims. The physician, therefore, was entitled to summary judgment on liability under Section 14 of the IWPCA.

Salary increases. The practice also argued that the agreement gave it discretion to determine the amount of each annual salary increase because it could evaluate whether the physician’s performance matched the level expected of existing shareholders. The court found the contract unambiguous and noted that the agreement conditioned the increases on satisfactory performance but fixed the amount of each increase in definite terms. Because the practice admitted that the physician’s performance was satisfactory, it lacked discretion to award only partial increases.

The court rejected an attempt to read the shareholder-performance language in isolation. Citing Asta, L.L.C. v. Telezygology, Inc., 629 F. Supp. 2d 837 (N.D. Ill. 2009), the court read the provision in context and concluded that the language defined what satisfactory performance meant rather than permitting the practice to alter the promised amounts. The court therefore granted the physician summary judgment on liability for unpaid salary increases in 2019 and 2020.

Earned bonuses. The physician also prevailed on liability for unpaid bonuses for 2016 through 2020. The practice argued that the word “eligible” made the bonuses discretionary and therefore outside the IWPCA’s protection for earned bonuses.

Under 56 Ill. Admin. Code § 300.500(a), a bonus is considered earned when the employer made an unequivocal promise, and the employee satisfied the stated conditions. By contrast, a bonus is discretionary when the conditions for earning it are indefinite or depend on a subjective performance assessment.

Unlike the contingent bonus language in McLaughlin v. Sternberg Lanterns, Inc., 917 N.E.2d 1065 (Ill. App. Ct. 2009), the physician’s agreement did not state that a bonus would be paid only if a threshold event occurred. Nor did it resemble Kemp v. Leidos, Inc., 2022 WL 748489 (C.D. Ill. Mar. 11, 2022), where the bonus program expressly stated that participation did not guarantee a payout. Instead, the agreement described objective calculations for determining the amount of an annual bonus and required an outside accountant to perform them.

The court emphasized that it would not insert discretionary language that the parties omitted, and would presume against adding provisions that could readily have been included in an integrated agreement. The practice, therefore, was liable for failing to pay earned bonuses throughout the five-year term.

Individual liability. The court declined to resolve whether the third physician-shareholder was individually liable under the IWPCA. Section 13 treats corporate officers or employer agents who knowingly permit an IWPCA violation as employers.

The physician-shareholder testified that he did not negotiate the agreement, did not participate in bonus decisions, and was not involved in the pandemic pay reduction. Other evidence, however, indicated that he was one of the physician’s supervisors, participated in discussions concerning her proposed contract, and remained a shareholder during the relevant period. Those competing facts required a trial on whether he knowingly permitted the violations.

Shares and contract claim. Further, the court rejected the physician’s effort to pursue unissued shares and shareholder distributions under the IWPCA because her complaint pled those allegations only in the contract count. Citing Ollison v. Gossett, 136 F.4th 729 (7th Cir. 2025), it refused to allow her to amend the complaint through summary judgment briefing.

The physician nevertheless prevailed on the underlying breach-of-contract theory. Section 3.4(e) stated that, simultaneously with execution of the agreement, she “is subscribing” for 48 shares. The court found that the language required no further action by her and that the practice breached the agreement by failing to transfer the shares.

However, the court denied specific performance. Under Abrams v. Rapoport, 516 N.E.2d 943 (Ill. App. Ct. 1987), specific performance is an extraordinary remedy available only when damages are inadequate, and enforcement is feasible. Because the agreement terminated the physician's shareholder status upon her cessation of services to the practice and her resignation effective June 12, 2020, issuing shares now would accomplish nothing. Her remedy, therefore, lies in money damages.

Good faith covenant. Further, the court was unpersuaded by the practice’s contention that the physician was attempting to create an independent claim for breach of the implied covenant of good faith and fair dealing. Instead, the physician invoked the covenant as part of her contract claim, alleging that the practice frustrated her contractual right to bonuses by failing to direct an outside accountant to perform the required reconciliations and by withholding financial information. The record showed that the practice conducted calculations internally rather than through an outside accountant. Relying on Northbrook Bank & Trust Co. v. 2120 Division LLC, 46 N.E.3d 783 (Ill. App. Ct. 2015), the court held that the practice could not act in a way that destroyed the physician’s right to receive the contract’s benefits.

Thus, the court granted the physician partial summary judgment on liability under the IWPCA and on breach of contract for unpaid salary increases, annual bonuses, and delayed pandemic wages. It granted the practice summary judgment only on the physician’s attempted IWPCA theory concerning shares and distributions.

The physician may petition for statutory interest and attorney fees. The court will separately address expert challenges and set a trial on damages, the third physician-shareholder’s individual liability, and damages attributable to the bonus and share provisions.

The case is No. 1:24-cv-01432-JEH-RLH.

Attorneys: Christina Mesco (The Prinz Law Firm PC) for Vanessa M. Cameron. Stephen M. Buck (Quinn, Johnston, Henderson, Pretorius & Cerulo) for Teverbaugh Croland and Mueller OB/GYN Associates, S.C., Lori A. Teverbaugh, Joshua A. Croland and John C. Mueller.

Companies: Teverbaugh Croland and Mueller OB/GYN Associates, S.C.

Cases: WageHour ContractClaims StateLawClaims CoverageLiability RemediesDamages IllinoisNews