Cornell v. BP America, Inc.

Filing 116

MEMORANDUM Opinion and Order signed by the Honorable Ronald A. Guzman on 9/30/2015: For the reasons stated below, BP's motion for summary judgment 68 is granted in part and denied in part. With respect to the IWPCA claim as it relates to the Share Value Plan, the Recovery Plan and the severance payment, the motion is granted. To the extent BP seeks summary judgment with respect to the Deferred Annual Bonus, it is denied. Cornell's motion for partial summary judgment as to E RISA preemption 76 is denied as it relates to the Share Value Plan, the Recovery Plan and the severance payment. The parties are directed to appear for a status on October 14, 2015 at 9:30 a.m. to discuss how they intend to proceed with the Deferred Annual Bonus aspect of the IWPCA claim. Mailed notice (cjg, )

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS

Stephen Cornell,
Plaintiff,

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)
)
)
)
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)

v.
BP America Inc.,
Defendant.

Case No: 14 C 2123

Judge Ronald A. Guzmán

MEMORANDUM OPINION AND ORDER
For the reasons stated below, BP’s motion for summary judgment [68] is granted in part
and denied in part. With respect to the IWPCA claim as it relates to the Share Value Plan, the
Recovery Plan and the severance payment, the motion is granted. To the extent BP seeks
summary judgment with respect to the Deferred Annual Bonus, it is denied. Cornell‘s motion for
partial summary judgment as to ERISA preemption [76] is denied as it relates to the Share Value
Plan, the Recovery Plan and the severance payment. The parties are directed to appear for a
status on October 14, 2015 at 9:30 a.m. to discuss how they intend to proceed with the Deferred
Annual Bonus aspect of the IWPCA claim.
STATEMENT
Plaintiff Stephen Cornell has filed suit against his former employer, BP America Inc. (“BP”),
claiming that its failure to pay him severance and other benefits upon his resignation constitutes a
violation of the Illinois Wage Payment Collection Act (“IWPCA”).
Facts
On November 21, 2007, BP extended Cornell a formal offer of employment for
the position of Vice President - U.S. Refining. (Pl.’s Resp. Def.’s Stmt. Facts, Dkt. # 90, ¶ 5.)

Cornell’s offer letter with BP states in part:
Although you are an employee “at will” like all other BP US executives, you will
be guaranteed employment or at BP’s option, equivalent pay and benefits in lieu
of active employment, for two years, ending on December 31, 2009, unless you
are terminated for good cause or you choose to resign from the Company. In
addition, in the event that BP terminates your employment (other than for good
cause) before Dec. 31 2011, you will be provided with BP’s standard separation
package terms as applicable to US executives on US employment terms. Those
terms will be no less than the separation terms provided to BP US executives
today.
...
This agreement, as well as all other terms and conditions of your employment,
shall be governed by BP Plans, policies and procedures applicable to BP
Corporation North America, Inc., except as modified by this agreement.
(Def.’s Resp. Pl.’s Stmt. Facts, Dkt. # 96, ¶ 6.) The offer letter included a four-page attachment
titled “BP Offer: Steve Cornell” that listed the additional elements of Cornell’s direct
compensation package and did not include any mention of severance benefits. (Pl.’s Resp. Def.’s
Stmt. Facts, Dkt. # 90, ¶ 8.)
At the time his employment ended on or about January 31, 2014, Cornell was the Chief
Operating Officer of Defendant BP America’s U.S. Fuels business. (Def.’s Resp. Pl.’s Stmt.
Facts, Dkt. # 96, ¶ 1.) BP is a corporation doing business in the oil industry, with its principal
place of business located in Houston, Texas. (Pl.’s Resp. Def.’s Stmt. Facts, Dkt. # 90, ¶ 2.) At
the time he was hired by BP, Cornell wanted to work until he was 65 years old and asked BP
about any circumstances that would prevent him from working until he was 65. (Def.’s Resp.
Pl.’s Stmt. Facts, Dkt. # 96, ¶ 2.) In his capacity as COO of U.S. Fuels, Cornell was a Band B
Group Leader. (Id. ¶ 4.) As a Band B Group Leader, Cornell was awarded options under BP’s
Recovery Plan and was granted shares under BP’s Share Value Plan. (Id. ¶ 5.)
In August 2013, Cornell was contacted by an executive recruiter about an employment
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opportunity at Sasol North America Inc. (Pl.’s Resp. Def.’s Stmt. Fact, Dkt. # 90, ¶ 13.) After
an interview with the Chief Executive Officer of Sasol, Cornell sent an email to the executive
recruiter on October 19, 2013, and attached a document entitled “Cornell Package Expectations.”
(Id. ¶ 15.) In the “Cornell Package Expectations” document, Cornell wrote:
Base Salary: My 2014 base with BP (already in the budget) will be $600k. To
make such a move of this type I would expect a minimum 15% uplift. Thus my
expectation for a base salary with Sasol is $700k. . . .
Current Commitments by BP: There are two current commitments outstanding
from BP that Sasol will need to address. The first obligation is three payments of
$322k each to be paid in July 2014, 2015 and 2016. These payments are in cash
and associated with my offer letter to join BP. The second obligation is stock
options currently valued at $500k. These options vest in September 2014 and will
be forfeited if I leave the Company before this date.
(Id.) With respect to the $500,000.00 referenced in the document, Cornell was referring to his
BP Recovery Plan 2011 stock option grants. (Id.) On October 23, 2013, Cornell emailed the
executive recruiter again, stating in part as follows: “If I leave BP now my pension value is
$922,582. If I continue to work until I am 65 (which I plan to do) with BP and get normal salary
adjustments, then my pension value will be $2,932,010. So the difference that I need to make
sure is covered through the Sasol pension plan or via some other mechanism is approximately
$2.0 million.” (Id. ¶ 16.) On November 8, 2013, Sasol offered Cornell a position as Executive
Vice-President: International Operations, with an anticipated start date of February 1, 2014, and
an annual base salary of $650,000. (Id. ¶ 17.) Cornell’s base salary at BP at that time was
$575,000. (Id.)
The Sasol offer of employment provided that Cornell would receive a sign-on payment in
the amount of $750,000.00 provided Cornell stayed with Sasol for three years, and a $500,000.00

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deferred sign-on payment payable over a five-year period subject to the achievement of certain
agreed-upon milestones. (Id. ¶ 17.) Both of these sign-on payments were designed to offset
Cornell’s loss of $966,000 in sign-on payments from BP from when Cornell left Total, his
previous employer, to join BP. (Id. ¶ 18.) Cornell accepted the Sasol offer of employment on
November 8, 2013. (Id. ¶ 19.) When Cornell signed the employment offer letter from Sasol, he
understood that part of the package was intended to make up for the pro rata BP Recovery Plan
benefit that he might lose. (Id. ¶ 22.) Cornell also received from BP upon his departure a
“completion payment” of $200,000.00, which he understood to cover part of his loss of BP
Recovery Plan stock options. (Id. ¶ 32.) In addition, in March 2014, Cornell received from BP,
after his departure, a bonus for 2013 in the amount of $589,922.00. (Id. ¶ 37.) Cornell’s last day
with BP was January 31, 2014.
In June 2009, Cornell received an email from Sally Bott (“Bott email”), BP Group
Human Resources Director, with the subject “Changes to US Group Leader Severance Terms.”
(Id. ¶ 38.) The Bott email provided, in part, as follows:
BP’s guidelines concerning US Group Leaders are as follows: BP generally offers
a separation agreement to US Group Leaders if BP terminates their employment
before they planned to retire or resign of their own accord. Instead of participating
in a formal severance program with a payment schedule, we use a consistent
method to calculate the separation payment. In recent years, that formula has been
1.5 times base salary plus target bonus for Band D and 2 times base salary plus
target bonus for Band C and above.
For Group Leader separation agreements entered into from January 1st, 2010, the
payment formula will include only base pay, and not target bonus. Band D
separation payments will be 1.5 times base salary and Band C and above will be 2
times base salary. This will not affect any agreements currently in place or
formally entered into before December 31st, 2009. The new severance formula is
very competitive across all industries. We therefore do not expect variances to the
formula. In addition, please note that we do not provide a separation payment in
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the event of a voluntary resignation nor in the event termination arises from
serious misconduct, breach of the Code of Conduct, or poor performance.
(Id.)
Cornell does not have a signed severance agreement with BP. (Id. ¶ 40.) The parties
agree that rather than “participating in a formal severance program with a payment schedule,” BP
uses a “consistent method to calculate the separation payment.” (Def.’s Resp. Pl.’s Stmt. Facts, ¶
20.) BP’s lump sum severance paid out to a departing executive does not come from a trust. (Id.
¶ 26.) Any lump sum severance owed to a departing executive comes from the business budget
of the division that the executive worked under. (Id. ¶ 25.)
Other relevant facts will be discussed in the text of the order as necessary.
Summary Judgment Standard
Both Cornell and BP move for summary judgment. When a party files a motion for
summary judgment, it is the party’s “contention that the material facts are undisputed and the
movant is entitled to judgment as a matter of law.” Hotel 71 Mezz Lender LLC v. Nat. Ret. Fund,
778 F.3d 593, 601 (7th Cir. 2015) (citing Fed. R. Civ. P. 56(a)). If the evidence on record could
not lead a reasonable jury to find for the non-movant, then no genuine issue of material fact
exists and the movant is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). In ruling on a motion for summary judgment, the Court must view the
evidence in the light most favorable to the nonmoving party. SMS Demag Aktiengesellschaft v.
Material Scis. Corp., 565 F.3d 365, 368 (7th Cir. 2009).
Analysis
Under the relevant portion of the IWPCA:

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Every employer shall pay the final compensation of separated employees in full, at
the time of separation, if possible, but in no case later than the next regularly
scheduled payday for such employee. Where such employee requests in writing
that his final compensation be paid by check and mailed to him, the employer
shall comply with this request.
820 Ill. Comp. Stat. Ann. 115/5. Further:
Payments to separated employees shall be termed “final compensation,” and shall
be defined 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 Ill. Comp. Stat. Ann. 115/2. Wages, in turn, are defined as “any compensation owed an
employee by an employer pursuant to an employment contract or agreement between the 2
parties, whether the amount is determined on a time, task, piece, or any other basis of
calculation.” Id.
Cornell argues that upon his departure from BP, he was entitled to the standard separation
package offered by BP, which included: (a) a lump sum payment of either 2 or 1.5 times the base
salary, depending on the Band level of the departing executive; (b) retention of stock grants
under the Share Value Plan; (c) retention of the executive’s Deferred Annual Bonus; and (d) pro
rata retention of options granted under the BP Recovery Plan. According to Cornell, BP’s failure
to make these payments violated the IWPCA.
Before proceeding to the merits, the Court notes that BP fails to address the Deferred
Annual Bonus aspect of the purported separation package in any of its briefing. While it is
undisputed that Cornell received a bonus in March 2014 of $589,922.00, it is not clear from the
record whether this was, in part or in whole, the Deferred Annual Bonus. Because the Deferred
Annual Bonus is not discussed in any detail by either party, the Court cannot address whether it
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is preempted by ERISA or if Cornell has any claim to it under the IWPCA.
English Law
As to the BP Share Value Plan and the BP Recovery Plan, each of these documents
contains a choice of law provision stating that English law governs. According to BP, this means
that Cornell’s IWPCA claim must necessarily fail. Cornell first argues that BP has waived this
argument by not asserting earlier that English law applied. As an initial matter, the Court notes
that Cornell wholly failed to address the English law issue in its reply in support of its motion for
for summary judgment, despite BP’s discussion of the issue in its response brief, suggesting that
Cornell has no argument in reply to BP’s assertion. See MindGames, Inc. v. W. Pub. Co., 218
F.3d 652, 659 (7th Cir. 2000) (finding failure to respond in reply brief to argument made by
opposing party in response brief “eloquent”). In any event, the Court is not persuaded by the
cases cited by Cornell. In Lott v. Levitt, 556 F.3d 564, 567 (7th Cir. 2009), for example, the
plaintiff expressly agreed in his response to the motion to dismiss that Illinois law applied, but
then several months later, tried to assert that Virginia law applied after summary judgment had
been granted. That is not the case here. In CMFG Life Ins. Co. v. RBS Sec. Inc., No.
12-CV-037-WMC, 2014 WL 3696233, at *5 (W.D. Wis. July 23, 2014), the party filed an initial
motion to dismiss under Wisconsin law then filed a second motion to dismiss under New York
law. The Court refused to allow the defendant a “free peek” at how the claims would pan out
under Wisconsin law and then take a second bite of the apple under New York law. Id. Again,
the circumstances here are different as there is no indication that BP sought one ruling under
Illinois law, lost, and now seeks a different ruling under English law.
Cornell also argues that the English choice of law provision cannot apply because an
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employee cannot waive or release his rights under the IWCPA. Again, however, in the cases
Cornell relies upon, the employees signed express waivers. See O'Brien v. Encotech Const.
Servs., Inc., 183 F. Supp. 2d 1047 (N.D. Ill. 2002) (concluding that releases under IWCPA are
void); Ladegaard v. Hard Rock Concrete Cutters, Inc., No. 00 C 5755, 2001 WL 1403007, at *7
(N.D. Ill. Nov. 9, 2001) (“[R]eleases under the IMWL and IWPCA as well as the FLSA are void
as a matter of law”). Here, however, no express waiver or release was signed. Moreover, as BP
points out, the Illinois Department of Labor indicates on its website that:
You may not have a claim . . . [i]f the employment contract has a “choice of law”
clause requiring you to bring all claims in a state other than Illinois. You must
pursue your remedies under the choice of law clause in your agreement and the
Department will defer to that process.1
Ultimately, however, absent any discussion of or citation to relevant English law by BP,
the Court cannot make a determination with respect to the effect of English law on this claim.
Perhaps, under a choice of law analysis, English law would allow Cornell to bring an IWPCA
claim regarding the grants provided in the Share Value Plan and the BP Recovery Plan. Because
BP has provided no basis on which the Court can make such a decision, the Court rejects this
argument.
ERISA Preemption
BP next contends that Cornell’s claim for compensation under the Share Value Plan, the
BP Recovery Plan, the Deferred Annual Bonus and the severance payment are preempted by
ERISA. ERISA vests the federal district courts with exclusive jurisdiction over actions arising
1

The Court notes that the first sentence appears to refer to a forum selection clause rather
than what it describes as a choice of law provision. Nevertheless, the second sentence appears to
indicate that the Department of Labor believes parties are bound to proceed under the choice of
law as stated in the relevant agreement.
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under the employee benefit plans it governs. See 29 U.S.C. § 1132(e). In his reply, Cornell notes
that BP admitted that the Share Value Plan, the Recovery Plan, the Bott email and the Deferred
Annual bonus are not ERISA plans, and therefore it cannot assert that they are preempted by
ERISA. Indeed, inexplicably, BP admits in its response to Plaintiff’s statement of facts that it is
“undisputed” that those documents are not ERISA Plans. (Def.’s Resp. Pl.’s Stmt. Facts, Dkt. #
96, ¶¶ 14-16) (emphasis added.) However, “[f]actual admissions can be binding as judicial
admissions; admissions of legal conclusions cannot.” Sulkoff v. United States, No. IP
01-1341-C-T/L, 2003 WL 1903349, at *5 (S.D. Ind. Jan. 29, 2003). Thus, the admissions by BP
are not determinative.
“Case law establishes that an ERISA plan requires an ongoing administrative scheme, and
that its terms must be reasonably ascertainable.” Young v. Am. Junkie River N., LLC, No. 13 C
8901, 2014 WL 1493354, at *2 (N.D. Ill. Apr. 14, 2014). “Separating ERISA plans from other
benefits arrangements is a ‘matter of degrees’ and often requires drawing fine distinctions.”
Malone v. Leaf, Inc., No. 97 C 168, 1997 WL 583072, at *4 (N.D. Ill. Sept. 12, 1997) (citation
omitted). “[S]imple or mechanical determinations do not necessarily require the establishment of
. . . an administrative scheme; rather, an employer’s need to create an administrative system may
arise where the employer, to determine the employees's eligibility for and level of benefits, must
analyze each employee's particular circumstances in light of the appropriate criteria.” Cvelbar v.
CBI Ill. Inc., 106 F.3d 1368, 1373 (7th Cir. 1997) (abrogated on other grounds by Int’l Union of
Operating Eng’rs v. Rabine, 161 F.3d 427, 430 (7th Cir. 1998)). “One factor to be considered in
deciding ‘which obligations are complex enough to require an ongoing administrative program’
is whether the employer’s obligation requires managerial discretion in its administration.”
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Clevenger v. Securitas Sec. Servs. USA, Inc., No. 07-CV-2219, 2008 WL 2168742, at *11 (C.D.
Ill. May 22, 2008).
The “Rules of the BP Recovery Plan 2011" (“Rules”) is a 16-page document setting forth
when a Designated Corporate Officer may grant an Eligible Employee an Option to acquire “such
number of Shares as the Designated Corporate Officer may determine.” (Def.’s Ex. 12, Dkt. #
71-12, § 1.1.1.) The Rules lay out when Options may be granted, which may be “at any time,
subject to the application of Dealing Restrictions.” (Id., § 1.2.) They further discuss the
Designated Corporate Officer’s power to adjust the number of Shares included in each Option,
under certain circumstances, “in any way . . . which the Designated Corporate Officer considers
appropriate,” when and how Options may be exercised, and relevant definitions of terms used in
the Rules, among other things. (Id. §§ 3.1, 4-6, 12.) For example, the Rules detail what happens
when an Option vests if an employee is on a “Career Break,” which is defined as an “extended
period of unpaid leave from normal work . . . and which is designated by the Designated
Corporate Officer as a Career Break for the purposes of these rules.” (Id. § 12.) Similar
discretionary rules exist under the Share Value Plan. (See Def.’s Ex. 14, The Prospectus and
Grant Documents for US Participants B.P. p.l.c. Share Value Plan (2012 Grant), at 3 (“[T]he
SVP is a discretionary plan which BP may vary or withdraw at any time”); id. (“Under the SVP,
BP has granted you a number of Restricted Share Units (‘RSUs’)” and “[e]ach RSU represents a
conditional payment to receive on BP American Depositary Share (‘ADS’ or ‘share’) at a date in
the future, provided that the specified terms and conditions are met”) (emphasis in original)); id.
at 6 (“Participation in the SVP is at BP’s discretion”); id. at 14 (“The BP p.l.c. Board of Directors
ir its duly appointed delegates have authority to make decisions under the SVP.. . . which are
10

deemed final and conclusive.”).) It is clear from a reading of the terms for both the Recovery
Plan and the Share Value Plan that not only must BP analyze each employee’s circumstances in
light of the appropriate criteria to determine the employee’s eligibility for and level of benefits,
but a certain amount of managerial discretion is required in the administration of the program.
As to the ascertainability of the plan’s terms, the Court must determine “whether from the
surrounding circumstances a reasonable person could ascertain the intended benefits,
beneficiaries, source of financing, and procedures for receiving benefits.” Cvelbar, 106 F.3d at
1378 (citation and internal quotation marks omitted). The detailed Rules of both the Recovery
Plan and the Share Value Plan satisfy the ascertainability requirement.
Accordingly, the Court finds that the BP Recovery Plan and the Value Share Plans are
ERISA plans. The Court’s conclusion is not altered by Cornell’s claim that BP admitted that
Form 5500s were not filed with the United States Department of Labor for those plans. “The
filing of a proper form has no bearing . . . on whether a plan is covered by ERISA,” and “courts
have consistently rejected the argument that the failure to comply with formal requirements can
prevent the establishment of an ERISA plan.” Bolssen v. Unum Life Ins. Co. Of Am., 629 F.
Supp. 2d 828, 882-83 (E.D. Wis. 2009).
ERISA preempts any state-law claim that “relate[s] to” any such employee benefit plan.
See 29 U.S.C. § 1144(a). A state-law claim relates to an ERISA plan if it “requires the court to
interpret or apply [its] terms.” Collins v. Ralston Purina Co., 147 F.3d 592, 595 (7th Cir. 1998);
Aurelius v. Jones, Lang, Lasalle, Inc., No. 04 C 7502, 2005 WL 3042676, at *1 (N.D. Ill. July
11, 2005). In order to determine whether Cornell is entitled to benefits under these plans
pursuant to the IWPCA, the Court would be required to interpret the terms of the plans.
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Therefore, the Court finds that ERISA preempts the IWPCA claim with respect to the BP
Recovery Plan and the Value Share Plan.
As to a separation agreement and severance payment, pursuant to Bott’s email:
BP generally offers a separation agreement to US Group Leaders if BP terminates
their employment before they planned to retire or resign of their own accord. . . .
[P]lease note that we do not provide a separation payment in the event of a
voluntary resignation nor in the event terminations arises from serious
misconduct, breach of the Code of Conduct, or poor performance.
Further, the email stated that “instead of participating in a formal severance program with a
payment schedule, we sue a consistent method to calculate the separation payment.”
Specifically, a lump-sum payment is provided, which for Cornell, as a Band B Group Leader,
would be two times his base salary plus the target bonus. BP contends that any IWPCA claim
based on this email is also preempted by ERISA.
Cornell, relying on Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987), contends the
separation payment set forth in the Bott email is not preempted by ERISA. Id. at 12. In Fort
Halifax, the “Supreme Court analyzed whether a Maine statute that required an employer that
closed its plants to pay a one-time lump-sum severance payment to its employees was preempted
by ERISA.” Young v. Am. Junkie River N., LLC, No. 13 C 8901, 2014 WL 1493354, at *2 (N.D.
Ill. Apr. 14, 2014). The Fort Halifax court concluded that application of the Maine statute was
not preempted by ERISA, stating that:
The employer may well never have to pay the severance benefits. To the extent
that the obligation to do so arises, satisfaction of that duty involves making a
single set of payments to employees at the time the plant closes. To do little more
than write a check hardly constitutes the operation of a benefit plan. Once this
single event is over, the employer has no further responsibility.
Fort Halifax, 482 U.S. at 12.
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The facts in this case, however, differ from those in Fort Halifax. Here, the Bott email
indicates that BP contemplates an ongoing commitment to pay severance benefits whenever BP
terminates a Group Leader and it is not for serious misconduct, breach of the Code of Conduct,
or poor performance. Further, some managerial discretion is required to determine the reason for
the departure and if, therefore, the employee is eligible for a severance payment. In addition,
while not elaborate, the terms of an agreement and payments are reasonably ascertainable in
regards to eligibility and amount. Accordingly, the Court concludes that the separation payment
and severance agreement terms as set forth in the Bott email constitute an ERISA plan. Because
Cornell’s claim for severance benefits under the IWPCA requires the Court to apply the term set
forth in the Bott email, the Court concludes that the separation agreement and severance payment
are preempted by ERISA.
For the first time in his reply brief, Cornell asserts that employee stock awards such as
BP’s Share Value Plan, the Recovery Plan 2011, and the Deferred Annual Bonus are stock option
plans that are not governed by ERISA. However, arguments raised for the first time in a reply
brief are waived. See U.S. v. Peel, 668 F.3d 506, 508 (7th Cir. 2012) (arguments raised for the
first time in reply brief are waived). Moreover, Cornell’s argument in this respect, while
plausible, is perfunctory and undeveloped. Because Cornell raised the issue for the first time in a
reply brief and provided only a superficial discussion in support, the argument is waived. The
Court further notes that the lack of input from BP (due to the argument having been raised for the
first time in Cornell’s reply) on what is a fact-specific and potentially nuanced issue deters a
proper determination by the Court.
However, even if the claims related to the the Share Value Plan, the BP Recovery Plan,
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and the severance payment are not ERISA plans and are therefore not preempted, as Cornell
contends, they would fail under the IWPCA.
IWPCA
Cornell asserts that the agreement under the IWPCA in this case are the “actions and
statements of its executives . . . together with the relevant documents.” (Pl.’s Mem. Opp. Def.’s
Mot. Summ. J. & Support Partial Mot. Summ. J., Dkt. # 80, at 1.) “Illinois courts have
interpreted the term ‘agreement’ to be broader than a contract and to require only a manifestation
of mutual assent.” Enger v. Chicago Carriage Cab Co., 77 F. Supp. 3d 712, 716 (N.D. Ill. 2014)
(citations omitted).
The contours of the alleged agreement under the IWPCA are not entirely clear.
According to Cornell, he and BP had an “agreement that differed from the Company’s formal
written policies.” (Pl.’s Mem. Opp. Def.’s Mot. Summ. J., Dkt. # 80, at 6.) Specifically, Cornell
refers to the following in contending that he and BP had a verbal agreement:
•

BP’s “highest level executives routinely referred to the standard package
in correspondence among themselves (including Cornell) when discussing
potential separation benefits for departing employees” (id.);

•

Andrew Ditty, BP’s Head of Human Resources, and Helmut Schuster,
Executive Vice-President of Human Resources, “verbally promised
Cornell at the outset of his employment that he would be treated the same
as all other departing executives if his employment with BP ended” (id. at
7);

•

Ditty and Schuster “assured Cornell that he would receive the same
standard separation package [as other departing executives]” (id.);

•

“[D]uring a Human Resources Sub-Committee (‘HRSC’) meeting on July
17-18, 2013, which Cornell attended, BP specifically announced that the
employment terms, including the terms and eligibility for a severance
package, shall remain the same going forward for Group Leaders Band
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B,C, and D as long as they remain in their current band.” (id.)
Even assuming the truth of these statements and actions, none of these demonstrates
assent on BP’s part that, regardless of the circumstances of his departure or his eligibility under
the terms of the relevant plan or severance payment, he would receive those benefits without
question. In other words, a statement that he would “receive” the same standard separation
package or be treated like other departing executives does not establish that he had an agreement
for a guaranteed payment under the various plans and severance payment terms without reference
to eligibility requirements.
This conclusion is supported by Cornell’s selective disavowal of the “formal written
documents.” Specifically, although he refers to “formal written documents” as part of the
agreement, he rejects that the terms of the policies actually apply to him. Cornell contends that
his “right to the standard separation package stems from BP’s verbal promises, informal
correspondence, and other actions – which together with the formal documents form the basis of
the parties’ agreement.” (Id. at 9) (emphasis added). However, when BP argues that Cornell
does not qualify for any of the benefits he seeks under the express terms of the formal
documents, Cornell rejects reliance on those documents as “misplaced, as these documents do
not accurately reflect BP’s actual practice for awarding separation benefits, or incorporate the
verbal promises made to Cornell.” (Id. at 8.) Thus, as noted by BP, Cornell apparently wants the
benefits provided under the formal plan documents but contends that the documents should be
disregarded to the extent they establish that he is not actually entitled to those benefits. Not only
is this argument illogical, but Cornell points to no record evidence establishing that this was the
agreement between the parties.
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Cornell goes on to argue that the formal plan documents do not foreclose a finding that
Cornell and BP had come to a separate agreement to pay Cornell the standard separation
package. In support, Cornell notes that the BP Recovery Plan 2011 states that “the rights and
obligations arising from the employment relationship are separate from, and are not affected by
the Plan” and that the Share Value Plan states that “your participation in the SVP does not
constitute or form a part of any contract of employment.” (Id.) But BP is not arguing that the
plan documents foreclose another agreement; it is asserting that no other agreement existed.
Indeed, even assuming that an agreement existed to provide Cornell the “standard
separation package,” he is not entitled to benefits under the individual elements that purportedly
make up the standard separation package.2
The June 2009 Bott email provides that BP “generally” offers separation payments but
expressly states that BP does not provide separation payments in the event of a voluntary
resignation. (Pl.’s Resp. Def.’s Stmt. Facts, Dkt. # 87 , ¶ 38.) Moreover, it is undisputed that at
the time Cornell left BP, none of his options under the BP Recovery Plan had vested, and he
understood that his entitlement to benefits under the BP Recovery Plan was subject to the terms
of the plan and that BP had made a final and conclusive determination, according to the terms of
the plan, that Cornell was not entitled to any Recovery Plan benefits. (Id. ¶ 56.) Specifically, the
Option Agreement Under the BP Recovery Plan 2011 (US Optionholders), which is applicable to
Cornell, provided that if he ceased to be employed by BP before the vesting date, his options
would lapse unless his employment ended due to disability or involuntary termination, in which
2

Again, because none of the terms of the Deferred Annual Bonus are discussed by the
parties, the Court does not address the parties’ arguments as they relate to the Deferred Annual
Bonus.
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case his options would be reduced pro rata to reflect the period during which he was not an
employee. (Id. ¶ 53.) The Recovery Plan Option Agreement defines “involuntary termination”
as “termination of your employment by your employer” or “a termination considered by the
Designated Corporate Officer to have been initiated by your employer, in both cases where the
termination is not based on your conduct or performance.” (Id.) Cornell admits that BP did not
tell him he was terminated at the time of his separation. (Id. ¶ 33.)
In addition, the Prospectus and Grant Document for US Participants BP p.l.c. Share
Value Plan states that if an individual ceases to be an employee of BP before the vesting date,
then he will forfeit his shares, unless his employment with BP is terminated as a result of an
involuntary termination of employment. (Id. ¶¶ 56, 66.) Cornell was awarded grants under the
Share Value Plan in 2012 and 2013, but each award included a vesting period of three years. (Id.
¶¶ 63, 65.) Therefore, at the time of Cornell’s departure in January 2014, none of his Share
Value Plan awards had vested and were therefore forfeited. The Prospectus and Grant
Document gave BP sole discretion to waive the general forfeiture provision under certain
circumstances and, as previously noted, specifically states that the Share Value Plan “shall not
form any right for any contractual purpose.” (Id. ¶¶ 67, 70) (emphasis added). In light of these
provisions, any contention by Cornell that he is entitled to separation payments or benefits under
the BP Recovery Plan or the Share Value Plan are unavailing.
Cornell attempts to circumvent the terms of the plans and the separation payment
discussed in Bott’s email by arguing that he did not resign; rather, BP constructively terminated
him by forcing him to resign. “An employer constructively discharges an employee ‘only if it
makes an employee’s working conditions so intolerable that the employee is forced into an
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involuntary resignation.’” Cohn v. Guaranteed Rate Inc., No. 14 C 9369, 2015 WL 5307625, at
*8 (N.D. Ill. Sept. 10, 2015) (citation omitted).
The Seventh Circuit notes that:
Our circuit has recognized two different forms of constructive discharge. . . . In
the first form, an employee resigns due to alleged discriminatory harassment.
...
The second form of constructive discharge we have recognized occurs “[w]hen an
employer acts in a manner so as to have communicated to a reasonable employee
that she will be terminated.” . . . This form of constructive discharge, however,
does not eliminate the need for the plaintiff to show that his working conditions
had become intolerable.
Chapin v. Fort Rohr Motors, Inc., 621 F.3d 673, 679 (7th Cir. 2010) (internal citations omitted).
Cornell does not allege discrimination; therefore, the first type does not apply. As to the second,
Cornell points to insufficient evidence from which a jury could conclude that BP was going to
terminate him or that his working conditions had become intolerable.
The two cases Cornell cites in support are inapposite. In Neal v. Honeywell, Inc., 191
F.3d 827 (7th Cir. 1999), the court concluded that a jury could find that the plaintiff, a
whistleblower, had been constructively discharged:
[Plaintiff], who holds a Ph. D. in “Organizational Behavior,” worked for two
years at Honeywell, during which she coordinated training, helped departments to
resolve disputes and systemic morale problems, evaluated employees’
productivity, wrote the plant-wide newsletter and ghost-wrote management
communications, and conducted surveys. After blowing the whistle, she was left
with only the occasional training duty, and (ironically) the responsibility for
drafting a new discipline policy. For a highly educated employee, such a drastic
diminution of duties might suffice as a “constructive discharge.”
[Plaintiff’s] theory rests on more than just the reduction in her responsibilities,
however. Her immediate supervisor made her feel like a traitor for ratting on
fellow employees. Worse, [Plaintiff] worried that Honeywell would not be able to
guarantee her safety at work.

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Id. at 830-31. Cornell has not pointed to such drastic circumstances in his case or even a
significant diminution in duties. It is undisputed that Cornell, as COO of U.S. Fuels, oversaw the
sale of two refineries (also referred to as Strategic Performance Units or “SPUs”) during his
tenure, thus reducing the number of SPUs for which Cornell had responsibility from four to two.
(Def.’s Resp. Pl.’s Stmt. Add’l Facts, Dkt. # 97, ¶ 20.) However, his supervisor, Iain Conn,
Chief Executive Officer of Refining and Marketing, testified that “the asset base [of the U.S.
Fuels business] today is larger than it was before [BP] sold the two refineries” and that “[t]oday,
the U.S. Fuels business, if standalone, would be a Fortune 500 Company.” (Id.) Indeed, for
2014, Cornell was slated to receive a $25,000.00 raise.
In any event, Cornell admits that during discussions he had with Conn in 2013 about
Cornell’s future, Conn mentioned Cornell as a possible candidate to run BP’s Petrochemical
business, which was another Band B position. (Id. ¶¶ 24-25.) While Cornell refers to the move
to the Petrochemical unit as a “demotion” because it involved running only one SPU and may
have required a move to Shanghai, Conn testified that it was a “large” SPU. More importantly,
Cornell points to no specific evidence in support of his contention that the position would be a
demotion. Further, Cornell refers to no evidence that BP had definitively made a decision
regarding his future at BP, let alone that his termination was imminent. Finally, while it is
undisputed that Conn told Cornell that he did not see him as a candidate for BP’s Executive
Management Team, providing an employee with a frank evaluation of his potential (or lack
thereof) for progression to higher-level positions is not the same thing as indicating that the
employee will be terminated. Jones v. Nat'l Council of Young Men's Christian Ass’ns of the
United States of Am., 48 F. Supp. 3d 1054, 1117 (N.D. Ill. 2014) (“[C]ourts have held that an
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employer has not effected a constructive discharge because an employee believes that she has lost
respect or credibility within the company or that she has limited opportunity for advancement.”)
(internal quotation marks and citations omitted).
Nor is Seisser v. Platz Flowers and Supply, Inc., 129 F. Supp. 2d 1130 (N.D. Ill. 2000),
also cited by Cornell, on point. In that disability discrimination case, the court addressed whether
an adverse action had taken place. An employee who developed health problems was told by her
boss that he thought she should take “early retirement,” and when she asked if there were any
other options, he said “no.” Id. at 1133-34. Moreover, on the employee’s termination report, her
boss checked “termination” instead of “resignation” or “mutual agreement.” Thus, the court
found a genuine issue of material fact as to whether she had been forced to resign. No such facts
exist here.
Because no facts support a finding that Cornell’s firing was an “imminent and inevitable
event,” the Court finds that no reasonable jury could conclude that Cornell was constructively
discharged. Chapin v. Fort Rohr Motors, Inc., 621 F.3d 673, 681 (7th Cir. 2010) (“To find that
one singular threat [of termination], followed by multiple reassurances that the employee has
retained his job, was a constructive discharge is to lower the threshold of the ‘intolerable’
workplace so far as to be unrecognizable.”). Here, there was not even a threat of termination.
On the contrary, Cornell admits that he discussed his “future” at BP with Conn several times
during 2013, and at no time was termination mentioned or discussed.3 Therefore, even if one
3

The Court further notes it is undisputed that on the same day Cornell told Conn that he
was leaving BP to take a job with Sasol, Conn sent Cornell a text stating, “I am presuming there
is no point in trying to talk you out of it? That was my clear sense. Hence, I didn’t try to. Let
me know if that’s not the case.” Cornell responded stating,”I have thought deeply about this
decision and am comfortable it is the better path for me and my family. So no, I am really not
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could construe the various components of the separation agreement as permitting benefits in the
event of a constructive discharge, an issue that this Court does not address, Cornell has failed to
establish a genuine issue of material fact as to whether such a constructive discharge occurred.
Finally, Cornell’s assertion that he is entitled to separation pay and benefits under the
IWCPA because other executives received them is unpersuasive. BP’s agreements or conduct
with respect to other employees does not bind BP to the same terms with Cornell. Stark v. PPM
Am., Inc., 354 F.3d 666, 672 (7th Cir. 2004) (rejecting plaintiff’s contention that “past practice
constitutes a contract” under the IWCPA and noting that plaintiff was “‘trying to . . . use the
employer’s practice ‘not to explicate a contract but to create one’”) (citation omitted).

interested in a conversation about staying. I do appreciate the thought.” (Pl.’s Resp. Def.’s Stmt.
Facts, Dkt. # 87, ¶ 25.) In addition, on December 5, 2013, Cornell sent an email to Sasol’s CEO,
notifying him that the news of Cornell’s departure from BP had been made public and that it was
a “shock to most of BP.” (Id. ¶ 29.) Finally, it is undisputed that during a December 2013
conversation between Cornell and Conn regarding a $200,000.00 payment BP was making to
Cornell to partially compensate him for part of the Recovery Plan that Cornell was forfeiting,
Conn told Cornell there were “serious consequences for someone who leaves BP to join another
company and all other elements of the separation package . . . would be forfeited.” (Id. ¶ 49.)
These comments do not indicate circumstances supporting a constructive discharge.
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Conclusion
For the reasons stated above, BP’s motion for summary judgment is granted in part and
denied in part. With respect to the IWPCA claim as it relates to the Share Value Plan, the
Recovery Plan and the severance payment, the motion is granted. To the extent BP seeks
summary judgment with respect to the Deferred Annual Bonus, it is denied. Cornell’s motion for
partial summary judgment as to ERISA preemption is denied as it relates to the Share Value
Plan, the Recovery Plan and the severance payment.

Date: September 30, 2015

__________________________________
Ronald A. Guzmán
United States District Judge

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