Opinion
No. 98 C 2506
August 16, 2000
MEMORANDUM OPINION AND ORDER
Plaintiff Carol Kelly ("Kelly"), the former chief financial officer of Apollo Travel Services ("ATS") filed this employment discrimination and ERISA benefits action against ATS and Galileo International, L.L.C. ("Galileo") the company that acquired it. Plaintiff alleges that Defendants failed to pay severance benefits due to her under a welfare benefits plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001-1461. Plaintiff also alleges that Defendants discriminated against her based on her sex in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq. Specifically, Plaintiff claims that Defendants treated a similarly situated male ATS officer more favorably by amending his severance benefit plan while failing to similarly amend hers, and by failing to hire her for a new position at Galileo after it acquired ATS. Now before the court are the parties' cross motions for summary judgment filed pursuant to FED.R. Civ. P. 56. Plaintiff moves for summary judgment on her ERISA claim (Count I); Defendants seek summary judgment on Plaintiff's ERISA claim (Count I) and her sex discrimination claim (Count VI). For the reasons set forth below, Plaintiff's motion is denied, and Defendants' motion is granted with respect to both of Plaintiff's claims.
Plaintiff raised several other claims in Counts II through V and Count VII of her complaint. The parties have reached a tentative resolution of those claims, and they are not at issue on these motions for summary judgment.
FACTUAL BACKGROUND
The following facts are derived from the parties' local rule 56.1(a) and (b) statements of material facts and supporting materials.
A. Plaintiff's Employment With ATS
ATS, a general partnership, markets and distributes a computer reservation system for the travel industry. (Defendants' 56.1 Statement of Undisputed Material Facts in Support of their Motion for Summary Judgment (hereinafter "Defs.' 56.1") ¶ 5.) Plaintiff served as ATS' Chief Financial Officer ("CFO") for four years, from 1993 until 1997. (Plaintiff's Local Rule 56.1 Statement of Material Facts (hereinafter "Pl.'s 56.1") ¶ 2.) As CFO, Plaintiff had primarily responsibility for overseeing and managing ATS' financial status. (Defs.' 56.1 ¶ 9.) Paul Blackney ("Blackney") served as ATS' President and Chief Executive Officer ("CEO") and had overall managerial responsibility for ATS. ( Id. ¶¶ 7-8.) Pursuant to ATS' partnership agreement, ATS' business operations were governed by a Supervisory Board made up of ATS' partners. ( Id. ¶ 13.)
1. ATS' Employment Security Agreements
In early to mid 1996, Kelly, Blackney, and other ATS officers discussed the possibility of providing ATS officers with Employment Security Agreements ("ESAs") designed to retain well-qualified executives, and to ensure financial security for ATS executives in the event of a threatened or actual takeover. ( Id. ¶ 15.) In June 1996, ATS entered into ESAs with each of its officers, including Kelly and Blackney. ( Id. ¶ 17.) In general, the ESAs provided for severance pay and benefits, including bonuses, supplemental retirement pay, medical benefits, travel benefits, outplacement benefits, and legal and accounting fees, for executives whose employment was terminated because of an anticipated change of control or an actual change of control. ( Id. ¶¶ 20, 22.) The level of benefits due to each officer varied depending upon his or her stature within ATS; thus, Blackney, the President and CEO of ATS, received the most benefits under his ESA. ( Id. ¶ 23.) In April or May 1997, the ATS Supervisory Board amended Blackney's ESA to prevent any reduction in benefits that might occur if he were to be separated from his employment before age 55. ( Id. ¶ 24). Neither Plaintiff nor any other ATS officer received such an amendment. ( Id.)
2. ATS Severance Plan
In addition to the ESAs, ATS also maintained a severance plan for eligible employees as a welfare benefit plan within the meaning of ERISA. (Defs.' 56.1 ¶ 26.) The ATS Severance Plan was enacted to "provide eligible employees with severance pay for a specified period of time and in a specified amount in the event their employment with Apollo is terminated due to elimination . . . of their job." ( Id. ¶ 27.) The Plan contained a mandatory internal benefit claims procedure, and expressly reserved the right to terminate or amend the Plan by ATS' President, jointly by two ATS Vice Presidents, or by ATS' Director of Human Resources. ( Id. ¶¶ 30, 31.) The Plan provided for payment often weeks base salary plus two weeks of additional base salary for each year of service. (Pl.'s 56.1 ¶ 17.)
B. Galileo's Acquisition of ATS
Galileo, a Delaware limited liability corporation, operates a computerized reservation system that provides the travel industry with inventory, scheduling, and pricing information. (Defs.' 56.1 ¶ 11.) On July 30, 1997, ATS' partners sold their interests to Galileo. (Pl.'s 56.1 ¶ 3.) After the takeover, Galileo's senior management decided that the employment of certain ATS officer positions would be redundant because Galileo already had officers serving in similar capacities. (Plaintiff's Local Rule 56.1(b) Response to Defendants' Motion for Summary Judgment, (hereinafter "Pl.'s 56.1(b)") ¶ 65.) Specifically, Galileo decided to terminate Kelly (female); Blackney (male); Audrey Rubin (female), ATS' Vice President, General Counsel, and Vice President of Human Resources; and Lynne Rosenbaum (female), ATS' Senior Vice President of Human Resources. ( Id. ¶¶ 7, 60, 65.)
Although neither Plaintiff nor Defendants specify who at Galileo concluded that these positions were redundant, both parties agree that redundancy was a reason for the termination of Kelly, Blackney, Rubin, and Rosenbaum.
C. Facts Surrounding Plaintiff's Sex Discrimination Claim
Following ATS' acquisition by Galileo, each ATS senior officer was assigned to report to and work for his or her Galileo counterpart for a temporary transition period, after which time the redundant positions were to be eliminated. (Defs.' 56.1 ¶ 59.) Accordingly, Plaintiff was assigned to assist Galileo's CFO, Paul Bristow ("Bristow"), on transition-related projects. ( Id.) In August 1997, Bristow went to Plaintiff's office to discuss, among other things, her future at Galileo. (Kelly Dep., at 125.) Specifically, Bristow asked if he could "support" her in her attempt to find a position within Galileo. ( id.) Plaintiff and Bristow discussed several possible positions, including a management position for a potential new function — distributor operations/customer service delivery — which Galileo's senior management team had "bantered around." (Defs.' 56.1 ¶ 62; Kelly Dep., at 125-31.) Kelly believed that the new position would require extensive travel and relocation, however; she therefore chose not to pursue the position, and declined Bristow's invitation to support her for the position. ( Id. ¶ 62.) The responsibilities of the position Bristow discussed with Kelly were ultimately assigned to a newly created position, the Senior Vice President of Customer Service Delivery, filled in July 1998 by Babetta Gray, a woman, who also serves as Galileo's General Counsel. (Defendants' Local Rule 56.1(b)(3)(B) Response to Plaintiff's Statement of Additional Facts (hereinafter "Defs.' 56.1(b)(3)(B)") ¶ 17.)
The briefs do not specifically explain what it means that Bristow offered to "support" Kelly for a position. In her deposition, Kelly states that Bristow asked if he could "support" her for a non-CFO position at Galileo (Kelly Dep., at 125-31); Defendants also use the same terminology when characterizing the conversation between Kelly and Bristow. (Defs.' 56.1 ¶ 61.) The parties appear to mean that Bristow expressed a desire to help her secure a non-CFO position at Galileo by discussing with Galileo's Senior Management options regarding her continued employment.
Following Galileo's takeover of ATS, Galileo Japan hired John McIntyre, ATS' former Vice President of International Business Development. (Defs.' 56.1 ¶ 71.) Although Galileo's relationship with Galileo Japan is not entirely clear from the record, it is undisputed that Galileo had no ownership interest in Galileo Japan and that the relationship was based on a contract under which McIntyre performed services for Galileo Japan pursuant to a contract it had with Galileo. (Bristow Dep., at 121-22.) Defendants refer to McIntyre is a "pass through" employee, by which they appear to mean that although he was actually on Galileo's payroll, Galileo has no decision-making control over him, and Galileo is reimbursed by Galileo Japan for McIntyre's compensation and associated costs. ( Id.) Also shortly after the acquisition, the Premier Group, a United Airlines affiliate, hired Randolph Hannon, who had been ATS' Vice President of Corporate Services. (Defs.' 56.1 ¶ 72.) Kelly had not expressed interest in Hannon's position. ( Id.)
Kelly filed her sex discrimination charge with the EEOC on or about June 1, 1998, in which she charged that Defendants treated similarly situated male employees more favorably by retaining the male employees or helping them secure employment elsewhere, and by giving Blackney a better compensation package upon termination. (Defs.' 56.1 ¶ 76.) Following the issuance of a right-to-sue letter on June 30, 1998, Kelly brought Count VI of this suit.
D. Facts surrounding Kelly's ERISA claim
In connection with its acquisition of ATS, Galileo executed a transaction agreement pursuant to which certain ATS contracts, including ATS' partnership agreement, were terminated. (Pl.'s 56.1(b) ¶ 37.) In June 1997, also in connection with its acquisition of ATS, Galileo formed two wholly-owned subsidiaries as Delaware corporations: ATS Sub I, Inc. ("ATS Sub I"), and ATS Sub II, Inc. ("ATS Sub II"), appointing James Bartlett, CEO and President of Galileo, Bristow and Gray, to the board of directors of each subsidiary. ( Id. ¶ 38.) In July 1997, the Board of Directors of ATS Sub I and ATS Sub II signed Unanimous Written Consents that appointed Bartlett as Chairman of the Board, President, and Chief executive officer, Bristow as Senior Vice President, Chief Financial Officer and Treasurer, and Gray as Senior Vice President, General Counsel and Secretary of both ATS Sub I and ATS Sub II. ( Id. ¶ 39.) On July 30, 1997, ATS Subs I and II formed a new Apollo Travel Services partnership ("New ATS"). ( Id. ¶ 40.)
Both Unanimous Written Consents appear to have approved a document titled "Amended and Restated Partnership Agreement" to create a partnership between ATS Sub I and ATS Sub II. (Defs.' 56.1, Exs. 3-4, at 3-4.) The Consents leave a blank space where the month and day of execution of the new partnership agreement should be entered, however, providing merely that the agreement purported to be approved in 1997. Further, the Consents indicate that only a draft of the agreement had been submitted to the board, and further provides that the agreement be delivered on behalf of the corporation, "with such changes, additions and modifications thereto as the officer or officers of the Corporation executing and delivering the same shall approve, such execution and delivery to be conclusive evidence of such approval[.]" ( Id. at 4.) Indeed, Defendants contend that the agreement referred to in the Unanimous Written Consents never developed beyond the draft stage, and Defendants instead formed a partnership by oral agreement, as permitted under Delaware corporate law. (Defs.' 56.1 ¶ 41.) Gray states in her deposition that the Board of Directors had an oral partnership agreement, and that at all times they acted properly pursuant to that oral agreement. (Gray Dep. at 86-87; 90-91.)
Authorization of and Restated Partnership Agreement
RESOLVED, that the form, terms, and provisions of the Amended and Restated Partnership Agreement, dated _____________, 1997 between the Corporation and ATS Sub II, Inc, . . . . a draft of which has been submitted to the Board of Directors of the Corporation, be, and they hereby are approved, and that the President and any Senior Vice President of the Corporation be, and each of them acting alone hereby is, authorized and directed to execute and deliver the Partnership Agreement in the name and on behalf of the Corporation, with such changes, additions, and modifications thereto as the officer or officers of the Corporation executing and delivering the same shall approve, such execution and delivery to be conclusive evidence of such approval on behalf of the Corporation.
Relying only on the existence of a draft version of a partnership agreement, Plaintiff contends that Defendants adopted a written agreement, as the Unanimous Written Consents suggest. (Pl.'s 56(n) ¶ 41.) During discovery, Defendants produced an unsigned, draft-stamped version of a document titled "General Partnership Agreement, Amended and Restated as of September 16, 1993." (Pl.'s 56.1, Ex. U.) The draft does not refer to ATS Sub I or Sub II, but instead refers to a partnership entered into by Galileo, Covia Corporation, USAM Corp., and Resnet Holdings, Inc. ( Id. at 1.) The latter three, the document states, were all wholly-owned subsidiaries of Galileo at the time the document was drafted. ( Id.) This document required that each member of the contemplated partnership would appoint in writing an "authorized representative," who together would constitute the Supervisory Board of the ATS partnership. ( Id. at 10.) According to this draft agreement, any partnership action, including appointments of officers, is to be taken pursuant to an affirmative vote of the majority of the Supervisory Board. (Pl.'s 56.1 ¶ 26.)
According to Gray, the ATS partners orally agreed among themselves to be governed by a Supervisory Board. (Gray Dep., at 98-99.) According to a document entitled "Written Consent of the Supervisory Board of Apollo Travel Services Partnership," Bristow, Bartlett, and Gray served as the Supervisory Board. (Defs.' 56.1, Ex. 5.) Signed on July 30, 1997, this document purports to name Bartlett as Chairman of the Board, President, and CEO of the new ATS Partnership; Bristow as Senior Vice President and Chief Financial Officer of the Partnership; and Gray as Senior Vice President, Legal and General Counsel and Secretary of the Partnership. ( Id.)
On August 21, 1997, Barlett met with in-house counsel and Lyn Bulman, Galileo's Vice President of Human Resources, to discuss termination of the ATS Severance Plan. (Defs.' 56.1 ¶ 43.) That same day, he signed and executed a document titled "Termination of the Apollo Travel Services Severance Plan," which purported to terminate the Severance Plan in accordance with Article XII of the Plan. ( Id. ¶ 44.) Article XII states that the Plan may be amended by, inter alia, the President of ATS. (Defs.' 56.1, Ex. T, at 15.) This same article also provides that unless the Plan is properly amended, it would remain in effect until December 31, 1999. ( Id.)
After the takeover of ATS, Galileo established a transition team to oversee transition-related issues and communicate with Galileo and ATS employees. (Defs.' 56.1 ¶ 43.) This team periodically sent newsletters to all ATS and Galileo employees to update them about the latest transition-related issues. ( Id.) One of these newsletters, dated July 17, 1997, stated that after the takeover, severance benefits would be provided under the terms of the Galileo severance plan, which are comparable to the terms of the ATS Plan. (Pl.'s 56.1 ¶ 17.) The newsletter also stated that Galileo intended to keep current Galileo and ATS benefits plans in place until January 1, 1998. ( Id.) On September 15, 1997, the transition team at Galileo disseminated another newsletter informing former ATS employees that their severance benefits would be determined under the Galileo plan. ( Id.) Subsequently, on September 26, 1997, Galileo amended its severance plan, making ineligible for benefits any employee eligible to receive separation-related benefits under another agreement, such as an ESA. (Pl.'s 56.1(b)(3) ¶ 11.) Like the ATS severance plan, the Galileo severance plan provides that the plan can be amended or terminated by the President of Galileo. (Defs.' 56.1, Ex. V.)
Galileo officially terminated Kelly's employment on October 31, 1997. ( Id. ¶ 64.) In response to a September 26, 1997 letter sent to Kelly by Lyn Bulman, Galileo's Vice President of Human Resources, outlining her separation benefits pursuant to her ESA, on October 2, 1997, Kelly sent Defendants a letter requesting severance pay pursuant to ATS' Severance Plan. (Pl.'s 56.1 ¶ 24.) Kelly's attorney sent two more letters asserting Kelly's alleged entitlement to ATS severance plan, and demanding payments. ( Id.) Kelly never received a response to her claims for severance pay. ( Id.) When she was terminated in 1997, Kelly had a base salary of $158,000, and had twenty-three years and one month of eligible service with Apollo and its affiliates Covia and United Airlines. (Pl.'s 56.1 ¶ 15.) Pursuant to her ESA, Galileo paid Plaintiff over $800,000 in separation-related benefit payments. (Defs.' 56.1 ¶ 77.) Kelly filed this lawsuit seeking payment of $170,661 in severance benefits under the ATS Severance Plan in addition to the benefits she received pursuant to her ESA. (Compl. ¶ 47(a).)
Kelly claims that her termination was not effective October 31, 1997. Rather, she argues, when Galileo acquired ATS, the old ATS no longer existed and therefore she was effectively terminated, and her rights to claim severance pay "vested." Plaintiff has waived this argument, however, as she did not make such a contention in her complaint, or in counsel's letters to Galileo requesting a pay out under the ATS Severance Plan. Those documents all reference October 31, 1997 as her termination date. (Pl.'s 56.1, Exs. N, 0, P; Defs.' 56.1, Ex. J.)
DISCUSSION
A. Summary Judgment Standard
A motion for summary judgment should be granted where the record shows that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. See Sirvidas v. Commonwealth Edison Co., 60 F.3d 375, 377 (7th Cir. 1995). In opposing such a motion, a party may not merely rest upon the allegations and denials in the pleadings, but must produce affirmative evidence raising a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57 (1986). When a motion for summary judgment arises in the context of an employment discrimination case, the court must conduct its examination with added rigor because of crucial intent and credibility issues. See Sarsha v. Sears, Roebuck Co., 3 F.3d 1035, 1038 (7th Cir. 1993). In considering a summary judgment motion, the court accepts as true the facts set forth by the non-movant, and draws all justifiable inferences in that party's favor. Anderson, 477 U.S. at 248. The court is not required, however, to "draw every conceivable inference from the record — only those inferences that are reasonable." Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991) (citations omitted). When considering cross motions for summary judgment, the court considers the motions simultaneously, "extend[ing] to each party the benefit of any factual doubt when considering the other's motion." See Buttitta v. City of Chicago, 803 F. Supp. 213, 217 (N.D. Ill. 1992), aff'd, 9 F.3d 1198 (7th Cir. 1993). This "Janus-like perspective sometimes forces the denial of both motions," but only where there are material facts in dispute. See id.
B. Plaintiff's Sex Discrimination Claim
A plaintiff alleging sex discrimination may attempt to prove her claim in one of two ways: either by presenting direct evidence of discrimination or by proceeding under the burden-shifting method set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04 (1973). Under the McDonnell Douglas burden-shifting test, a plaintiff must first create a presumption of discrimination by establishing a prima facie case after which the burden shifts to the employer to proffer a legitimate, non-discriminatory reason for its actions. See St. Mary's Honor Center v. Hicks, 509 U.S. 502, 506-507 (1993); Wolf v. Buss (America) Inc., 77 F.3d 914, 919 (7th Cir. 1996), cert. denied, 519 U.S. 866 (1996). If the defendant's stated rationale supports a finding that the termination was not motivated by unlawful discrimination, then the presumption of discrimination dissolves. See Wolf, 77 F.3d at 919. The plaintiff then carries the burden to prove, by a preponderance of the evidence, that the articulated reason is merely pretextual. See Fuka v. Thomson Consumer Elec., 82 F.3d 1397, 1404 (7th Cir. 1996). At all times, the burden of persuading the trier of fact that the defendant engaged in intentional discrimination remains with the plaintiff. See Taylor v. Canteen Corp., 69 F.3d 773, 780 (7th Cir. 1995).
Kelly advances two sex discrimination theories: (1) a disparate treatment theory alleging that Blackney, a male ATS officer, received better termination pay and benefits because of his gender; and (2) a failure to hire theory alleging that she applied for and was rejected for a position with Galileo based on her sex.
1. Differential Treatment
To establish a prima facie case for differential treatment based on gender, Kelly must show that she was treated differently than a similarly-situated male employee. See Sarsha v. Sears, Roebuck Co., 3 F.3d 1035 (7th Cir. 1993). Kelly can meet this burden by showing (1) that she was a member of a protected class, (2) that she performed her job satisfactorily, (3) that she suffered an adverse employment decision, and (4) that Defendants treated similarly situated employees outside her classification more favorably. See Oates v. Discovery Zone, 116 F.3d 1161, 1171 (7th Cir. 1997). Here, Kelly easily establishes the first two elements. First, as a woman, she is a member of a protected class. Second, Defendants do not contend, nor do any facts in the record indicate, that Kelly did not perform her job satisfactorily. For purposes of this decision, this court will assume, further, that Kelly can meet the third prong of the test by showing that she suffered an adverse employment action when ATS amended Blackney's ESA, while failing to similarly amend her own.
Where Kelly's case falters is on the issue of whether employees treated more favorably were similarly situated to Plaintiff. The Seventh Circuit has held that employees are similarly situated only if their employment responsibilities are equal. See Stopka v. Alliance of Amer. Insurers, 141 F.3d 681, 686 (7th Cir. 1998). In Stopka, the court concluded that the plaintiff, a female corporate vice president, did not have similar skills and responsibilities to her comparative employees, who were higher-paid vice presidents. Stopka held that job content and responsibilities — not titles and classifications — must be considered when determining whether two jobs are "substantially equal." See Stopka, 141 F.3d at 686.
Although the claim in Stopka was brought under the Equal Pay Act, which is governed by more stringent standards with respect to the "same job" requirement than in Title VII, it is nevertheless instructive because the Seventh Circuit has engaged in responsibility-based analyses in Title VII cases as well. For example, in Kennedy v. Schoenberg, Fisher Newman, Ltd., 140 F.3d 716, 726-27 (7th Cir. 1998), cert. denied, 525 U.S. 870 (1998), the Seventh Circuit held that the attorney plaintiff was not similarly situated to other attorneys at the firm who performed different functions. An even more recent Seventh Circuit decision further supports the proposition that Kelly must show her responsibilities and skills were substantially equal to her comparative employees in order to show that they were similarly situated. In Ulreich v. Ameritech Cellular Communications, Inc., 202 F.3d 275, (Table, Text in WESTLAW), No. 99-1820, 2000 WL 10280, at *3 (7th Cir. Jan. 4, 2000), the court held that a discharged female employee was not similarly situated to her male superiors, even though their responsibilities were similar, because she had some responsibilities that differed from theirs.
Here, Kelly admits that while she was responsible for ATS' finances, Blackney "had overall managerial responsibility for ATS and greater overall responsibility than Kelly." (Pl.'s 56(n) ¶ 8; see also Kelly Dep., at 207.) Accordingly, no genuine issue of fact exists regarding whether Kelly and Blackney had substantially different job content and responsibilities. Furthermore, not only Plaintiff, but all six other ATS officers with ESA's, including four men, failed to receive the pension-related ESA amendment given to Blackney. Kelly has failed to establish that she was similarly situated to Blackney, and therefore cannot meet her burden of establishing a prima facie case of differential treatment.
Defendants also argue that Kelly's differential treatment claim is time-barred. Because the court finds that her claim fails substantively, however, it need not reach that argument.
2. Failure to Hire
Kelly may establish an inference of discrimination on her failure to hire claim by showing (1) that she was a member of a protected class, (2) that she applied for and was qualified for the position in question, (3) that she was rejected for the position, and (4) that the employer hired or promoted someone outside the protected group, or the position remained open. See Mills v. Health Care Serv. Corp., 171 F.3d 450, 454 (7th Cir. 1999). As with her disparate treatment claim, Plaintiff, as a woman, easily meets the first element of her prima facie case. Considering the evidence in the light most favorable to Plaintiff, the court concludes that Plaintiff was also qualified for the Senior Vice President of Customer Service Delivery position because Bristow specifically asked Kelly if he could "support" her in securing that position. (Kelly Dep., at 125.)
a. Application
Kelly has not made a showing with respect to the application aspect of the second element of her prima facie case, however, because she has not identified a genuine issue of material fact regarding whether her conversation with Bristow constitutes a job application. Kelly argues that her expression of interest in the Senior Vice President of Customer Service Delivery position constitutes an application. Merely expressing interest in or inquiring about a position does not per se constitute an application for that position. Under certain circumstances, however, an expression of interest in a position can qualify as a constructive application for that position, even if the plaintiff has not formally applied. For example, in Kamberos v. GTE Automatic Elec., Inc., 603 F.2d 598, 602 n. 4 (7th Cir. 1979), the Seventh Circuit concluded that the plaintiff had constructively applied for a position after her attempt to formally apply was prevented by defendant's discriminatory conduct. See id. In Kamberos, the plaintiff, an attorney, and her employment recruiter telephoned the defendant's office to inquire about a corporate attorney position it had advertised. See id. at 600. After discussing the plaintiff's qualifications for the job, the defendant responded, "That's exactly the background we're looking for." See id. Upon learning that the plaintiff was a woman, however, defendant then stated it could not hire her based on an Illinois state law that prevent women from working more than eight hours in a day, which at the time of the phone conversation had been amended to exclude professionals from the restriction. See id. at 601. The court held that this phone conversation constituted a constructive application, or in the alternative, that a technical application is not necessary when the defendant's conduct prevents a plaintiff from applying. See id. at 602 n. 4.
Actually, Kelly's own testimony suggests she expressed little interest in the position. (Kelly Dep., at 125-28.) Bristow testified, however, that Kelly expressed some interest in learning more about the position, so the court will proceed under the assumption that she expressed an initial interest in the position.
Kelly's case here is distinguished from the plaintiff's case in Kamberos in several important ways. First, the job offered in Kamberos was a specific, identified position for which the defendant was actively seeking applicants. In contrast, the position Kelly discussed with Bristow had not yet been created, and its actual duties were unknown. Indeed, Kelly herself acknowledged as much in her deposition when she stated that the position was something "bantered around" by Defendants at the time Bristow approached her. (Kelly Dep., at 127.) As such, Defendants were not actively seeking applicants; rather, Bristow approached Kelly solely to determine whether she would be interested in such a position were it actually created.
Furthermore, Kelly testified that she understood that the job had not yet been created nor had its duties been outlined. As such, Kelly knew there were other Galileo officers involved in the formulation of the position, and there were other avenues for her to obtain information regarding the position. She has offered no evidence to suggest she inquired about the position or its requirements with anyone else to confirm Bristow's comments. Indeed, according to her own testimony, Plaintiff herself rejected the position almost out of hand. (Kelly Dep., at 128.)
Second, the plaintiff in Kamberos was aware that the position was formally available to her — e.g., through a newspaper advertisement — and she contacted the defendant with the intent to make a formal application. Here, Kelly knew the position was not being formally offered to her, and that Bristow merely suggested that he would assist her if she chose to pursue the position. Third, the plaintiff in Kamberos was unambiguous about her desire to apply for the position by having an agent call the defendant company to describe her qualifications and arrange an interview. Kelly, on the other hand, expressed little interest in the position, and expressed no desire to apply for it. Neither did she show enough interest in the position to learn more about it from sources other than Bristow. Finally, the plaintiff in Kamberos could not actually apply for the position because the defendant rebuffed her attempts to complete a formal application. In this case, Kelly herself decided not to pursue the position. She did not indicate to Bristow or any Galileo officer that she would like to apply for the position, nor did she make any effort to negotiate its terms or responsibilities. In short, she expressed so little interest in the position that she never gave anyone at Galileo an opportunity to rebuff an attempt to apply for it. Consequently, her case is distinguished from Kamberos, and does not warrant a finding that she constructively applied for the position in question.
b. Rejection
Regarding the third element of her prima facie case, Plaintiff offers a novel interpretation of the term "rejection." She contends that Galileo "de facto" rejected her for the position "by leading her to believe that relocation was a requirement, when it was not, and bay [sic] failing to offer her the job solely because she didn't want to relocate." (Pl.'s Memo in Opp'n to Defs.' Mot. for Summ. J., at 13.) The court's research has not revealed a case in which an employer's undesirable description of a job constituted a rejection, express or implied. Even if the law did recognize a constructive rejection based upon a misleading description intended to make a job appear so undesirable as to dissuade a particular applicant from pursuing the position, Kelly has provided no evidence that suggests Defendants intentionally misled her. Indeed, even considering the evidence in a light most favorable to Kelly, the sum total of evidence in support of her rejection argument amounts to (1) Plaintiff's testimony that Bristow commented that he thought she probably would not be interested in the job because it would require relocation (Kelly Dep., at 127), and (2) Plaintiff's testimony that he presented the job in "quite a negative way." ( Id. at 128.) This self-serving testimony is insufficient to show that Defendants intentionally misled Plaintiff about the position with the hopes she would reject it.
In a footnote, Kelly also argues in the alternative that Galileo falsely led her to believe the job required relocation and travel — conditions the Defendants allegedly knew would be unattractive to Kelly — but offered men, presumably Hannon and McIntyre, jobs with qualities known to be attractive to them. (Pl.'s Opp'n Mem., at 13 n. 25.) In her Second Amended Complaint, Plaintiff advances this same theory, alleging that Galileo offered employment to two male ATS officers, either at Galileo or at another company affiliated with Galileo. (Second Am. Compl. ¶¶ 38-39.) Plaintiff's relegation of this theory to a brief footnote, however, leads the court to conclude that at this stage, Plaintiff has effectively abandoned this claim. Notably, Plaintiff has submitted no evidence that shows how Defendants made the offers particularly attractive to the men, nor any evidence that Defendants even knew what Hannon and McIntyre would find attractive in a position. Accordingly, the court rejects this argument as both abandoned and as meritless.
Plaintiff argues that because she and Bristow dispute the specifics of their conversation — e.g., Bristow testified that he did not tell her the position would require relocation or travel — there is a dispute of material fact precluding summary judgment. Even assuming that Plaintiff's version of the conversation is true, however, Plaintiff has not established that Defendants acted with the intent to mislead her.
Kelly argues, further, that Bristow misled her by failing to correct her misapprehension that the position required relocation. Again, however, Plaintiff offers no evidence showing an intent to mislead on Bristow's part.
Finally, according to Kelly's theory, Bristow simultaneously volunteered information to her about the position and sought to reject her for the position. This court is not required to draw inferences from the record that are unreasonable, and Kelly has failed to provide evidence that suggests this inference is reasonable. See Bank Leumi Le-Israel, 928 F.2d at 236. The court rejects the notion that such a short, informational conversation about a job still in the formulation phase, and not even formally offered to Kelly, amounts to an application and subsequent rejection. Accordingly, Kelly has failed to establish the third element of the prima facie case.
Kelly also argues that because the position in question ultimately "did not require relocation . . . Kelly could not have rejected the position because it required relocation." (Pl.'s Memo in Opp'n to Defs.' Mot. for Summ. J., at 13.) This circular argument is purely an exercise in semantics. As the position had not yet been created at the time Kelly rejected it, she certainly could not have predicted what the job would ultimately become — she rejected it based upon her initial understanding that it would require relocation, and has offered no evidence that her understanding was based on any intentional effort to mislead her.
c. Person Hired for Position in Question
Even if Plaintiff could satisfy the second and third elements of a prima facie case of discrimination, her sex discrimination claim fails because she cannot satisfy the fourth element. The position for which Kelly claims to have applied and been rejected, was ultimately filled in July 1998 by Gray, another woman. Citing Mills v. Health Care Serv. Corp., 171 F.3d 450, 454 n. 1 (7th Cir. 1999), Kelly argues that the fourth element of the prima facie case is "neither a sufficient nor a necessary condition." Consequently, Plaintiff entirely ignores the fourth element in her analysis. Although Mills does quote that language from Carson v. Bethlehem Steel Corp., 82 F.3d 157, 159 (7th Cir. 1996), Kelly mischaracterizes the language. In Carson, the Seventh Circuit stated that the controlling question in a Title VII case is "whether the plaintiff has established a logical reason to believe that the [adverse employment] decision rests on a legally forbidden ground," and that although one's replacement by another someone outside of Plaintiff's class "may help to raise an inference of discrimination," it is not necessary. Neither Carson nor Mills stand for the proposition that the Seventh Circuit has entirely abolished the fourth element of the prima facie case for a Title VII action. It simply means that if a plaintiff has established a logical reason to believe she was discriminated against, she will not be prevented from establishing her prima facie case simply because the defendant later filled the position with someone who is also a member of the plaintiff's protected class. That the Seventh Circuit has retained the fourth element as part of the prima facie case is evidenced by the Mills court's observation that the fourth element may be overlooked only in "certain circumstances." See Mills, 171 F.3d at 454 n1.
Here, special circumstances allowing the fourth element to be ignored are not present. In order to shift the burden without satisfying the fourth element of the four-pronged test, Kelly must have at least established a "logical reason" for believing that Galileo did not hire her because of her sex. See Mills, 171 F.3d at 454. Stated another way, Kelly must show a logical reason to believe that the employer would not have taken the same action had the employee been a male and everything else remained the same. See Carson, 82 F.3d at 158.
Kelly has offered no evidence whatsoever that suggests a man in her position would have been treated differently with respect to the position in question; indeed, she doesn't argue this element at all. Because she has failed to establish that her case involves special circumstance warranting a relaxed prima facie standard, Kelly's failure to satisfy the fourth element defeats her prima facie case.
Kelly argues, albeit almost indiscernibly, that Hannon and McIntyre were in comparable positions, and treated more favorably. As discussed previously, however, she failed to present any evidence tending to show that they were offered more attractive positions, or positions which Defendants knew would be more attractive to them. Furthermore, in her failure to hire claim, the focus is on the position for which she claims she was rejected, not other positions offered to other ATS employees — such a focus would relate to a disparate treatment argument, which the court has already determined Plaintiff has abandoned.
As Plaintiff is unable to establish a prima facie case of sex discrimination either under a failure to hire theory or a disparate treatment theory, the court grants Defendants' motion for summary judgment on Count VI.
C. Plaintiff's ERISA Claim
1. Bartlett's Ultra Vires Act
Kelly argues that she is entitled to summary judgment because Galileo did not follow its own corporate procedures and therefore Bartlett acted ultra vires, or without authority, when he terminated the ATS severance plan and amended the Galileo severance plan. More specifically, Kelly argues that because Galileo never formally appointed Bartlett as president of the New ATS, his August 21, 1997 cancellation of the ATS Severance Plans was ineffective. To support her argument, Kelly points to a document titled "General Partnership Agreement of the Apollo Travel Services Partnership" that is not signed, is clearly marked "draft," bears a 1993 date, and does not refer to ATS Sub I or ATS Sub II. (Pl.'s 56.1, Ex. U, at 10). That document requires that each ATS partner appoint in writing an "authorized representative," who together would constitute the Supervisory Board of the ATS partnership. According to this draft agreement, any partnership action, including appointments of officers, is to be taken pursuant to an affirmative vote of the majority of the Supervisory Board.
Plaintiff is unclear about which severance plan may have been applicable to her at the time she alleges she was entitled to benefits. Nevertheless, she argues that Bartlett's action with respect to both plans — e.g., the termination of ATS' plan and the modification of Galileo's plan to exclude persons such as herself who would receive separation benefits under another plan — was ineffective as he was not properly named CEO/President. Because Plaintiff lacks standing to make this argument with respect to either plan, see infra, the court need not determine here which plan indeed may have applied to her in October 1997.
Kelly argues that if Galileo's corporate officers adopted this agreement as the controlling partnership agreement for ATS, they are bound by Delaware law to act according to its provisions. Kelly contends that they did not act in accordance with this agreement, because the Defendants never in writing appointed Authorized Partner Representatives pursuant to the agreement. Following Kelly's argument, if no Supervisory Board was ever formally appointed in accordance with the Partnership Agreement, then the board's appointment of Bartlett as President of ATS was legally ineffective because the board lacked power to make the appointment. Consequently, Kelly argues that Bartlett's cancellation of the severance plans on August 21, 1997 was ineffective because he had never been formally appointed as President of ATS. To establish that the Partnership Agreement was valid, Kelly points to a signed document dated effective as of June 11, 1997, titled "Unanimous Written Consents of the Board of Directors of ATS Sub I and ATS Sub II," both of which reference an "Amended and Restated Partnership Agreement," and stated that such agreement "be, and they hereby are approved." This provision, Kelly contends, is evidence that the draft Partnership Agreement was subsequently adopted. Defendants' only argument in response is that they never adopted that document, but instead entered into an oral partnership agreement as allowed under Delaware law.
Although Defendants do not make the argument, the court notes that the "Written Consent of the Supervisory Board of Apollo Travel Services Partnership," see Pl.'s 56.1, Ex. W, by which the Supervisory Board purports to appoint the officers of the new ATS, could constitute the requisite written notice from each of the partners that they have appointed themselves as their authorized representatives pursuant to the partnership agreement. As such, Bartlett's appointment as CEO/President would be effective even under the Plaintiff's version of the governing partnership agreement. Because the claim is ultimately resolved as a matter of standing, however, the court need not decide whether this document actually served this purpose.
Although neither Plaintiff nor Defendants address this issue, the court has determined that Plaintiff lacks standing to bring this claim. Under Delaware law of corporations, "[n]o act of a corporation . . . shall be invalid by reasons of the fact that the corporation was without capacity or power to do such act[.]" See 8 Del. C. § 124. When a corporation acts ultra vires, the action can be only be challenged by one of three persons: (1) a stockholder to enjoin the act; (2) the corporation itself, acting directly or acting through a receiver, trustee or other legal representative or through a stockholder derivative action against an officer or director for an unauthorized act; or (3) the Attorney General to dissolve the corporation or enjoin the act. See id. As Plaintiff was merely an employee, she has no standing to challenge an ultra vires action that resulted in the termination of her severance plan.
Amatuzio v. Gandalf Sys. Corp., 994 F. Supp. 253 (D.N.J. 1998) cannot save Plaintiff's claim. In that case, the ERISA plan at issue could only be terminated or modified by the company's CEO. See id. at 274. Because a material issue of fact existed about whether the CEO was at all involved in the challenged modification to the plan, the court refused to grant summary judgment. See id. at 275. In that case, only the defendants' adherence to the procedures of the plan itself were in question. Here, Plaintiff challenges Defendants' adherence to the corporation's governing agreement, a challenge which she has no standing to make. Accordingly, Plaintiff's motion for summary judgment on her ERISA claim on this theory must be denied.
2. Estoppel
In addition to Kelly's claim that the cancellation of her ATS severance plan was legally ineffective, she also claims that Defendants are estopped from terminating or amending the ATS severance agreements. Kelly asserts that the July 17, 1997 Transition Team Newsletter, sent to all ATS employees, was a promise in writing that ATS severance plans would remain in effect until January 1, 1998. She claims that she relied on this promise because had she known that her plan was in fact to be cancelled before October 1997, she would have left the company before the Defendants terminated her severance plan.
The Seventh Circuit Court of Appeals has repeatedly held that the law of estoppel applies as a matter of common law in at least some ERISA cases. See Black v. TIC Investment Corp., 900 F.2d 112 115 (7th Cir. 1990); see also Coker v. Trans World Airlines, 165 F.3d 579, 585 (7th Cir. 1999). The Black court expressly held that estoppel applies to unfunded, single-employer welfare benefit plans, which is the type of plan at issue in this case. To establish a prima facie case for estoppel in an ERISA case, Kelly must show the following: (1) knowing misrepresentation by the Defendants; (2) in writing; (3) with reasonable reliance by Plaintiff on the misrepresentation; (4) to Plaintiff's detriment. Downs v. World Color Press, 214 F.3d 802, 805 (7th Cir. 2000).
Before turning to the substance of her estoppel claim, the court pauses here to note that it is not entirely convinced that Defendants even suggested that the severance plan would remain in effect until January 1998. The Newsletter to which Plaintiff points informs employees first that "[s]everance benefits will be provided under the terms of the [Galileo] plan," and in the next paragraph states that "[Galileo] plans to keep current . . . ATS benefit plans in place until January 1, 1998." (Pl.'s 56.1, Ex. H.) It seems apparent to this court that in the later paragraph, Galileo is referring to benefits plans other than ATS' severance plan because the previous paragraph specifically states that the ATS severance plan was effectively being replaced by the Galileo severance plan. Nevertheless, because Defendants have not commented on this issue, for the purposes of these motions, the court accepts Plaintiff's version of the facts.
In any event, Plaintiff fails to establish the first element of her estoppel claim. She simply fails to offer any evidence whatsoever that suggests the Defendants made a knowing misrepresentation by stating that the ATS severance plan would remain in effect until January 1998. Kelly argues, however, that the knowledge aspect of the first prima facie element is non-essential. To support this contention, Kelly cites Black, suggesting it stands for the proposition that a plaintiff need only show a misrepresentation by the defendants, regardless of Defendants' knowledge that the statement was false. In advancing this argument, however, Kelly ignores that nine years after the Seventh Circuit decided Black, it noted that it had not been consistent in formulating the prima facie test for ERISA estoppel claims, and distilled previous versions of the test down to the form stated above. See Coker, 165 F.3d at 585. In the newly articulated test, the plaintiff is specifically required to show that the defendants made a knowing misrepresentation.
In their briefs, Plaintiff and Defendants cite a number of pre- Coker decisions to support their positions, including Black, Krawczyk v. Harnischfeger Corp., 41 F.3d 276, 280 (7th Cir. 1994), Decatur Mem. Hosp. v. Connecticut Gen. Life Ins. Co., 990 F.2d 925, 926-27 (7th Cir. 1993), and Thomason v. Aetna Life Ins. Co., 9 F.3d 645, 650 (7th Cir. 1993). These cases carry no weight here as the Coker court quite unambiguously states that the test formulated and applied in Coker is now the definitive test for ERISA estoppel claims in the Seventh Circuit. See Coker, 165 F.3d at 585 ("rather than delving into a discussion about the arcane `varieties' of estoppel under ERISA — if indeed there is a meaningful difference — we think it simpler to restate, clearly, what has been implicit in all of our estoppel cases in the ERISA context" (citations omitted)). Indeed, the Coker court briefly highlights some of the differences in ERISA estoppel tests used in previous decisions, including the Black two-part test cited by Kelly, as examples of the inconsistencies that the test articulated in Coker was intended to cure.
Moreover, Kelly argues that the Coker court does not reach the issue of whether a misrepresentation must be intentional, and discusses the element of intent only in dicta. Kelly's assertion is incorrect; in its analysis of the plaintiff's estoppel claim, the Coker court specifically stated that such claim "fails because there was no hint that [the defendants] intentionally set out to mislead her or anyone else." See id. at 586; see also Downs, 214 F.3d at 806 ("[The plaintiff] cannot establish that [the defendant's] written misrepresentation were intentional. . . . `[A] claim will not lie for every false statement reasonably and detrimentally relied upon by an unwitting plaintiff.'") (citing Coker, 165 F.3d at 585). Just like the plaintiff in Coker, Kelly has failed to come forward with any evidence of such intent. Accordingly, she cannot establish the first prima facie element, and her estoppel claim must fail.
Defendants advance Plaintiff's failure to exhaust her administrative remedies as a defense to her ERISA claim. Because Plaintiff cannot proceed on her ERISA claim for the reasons discussed here, however, the court need not address these arguments.