Opinion ID: 787039
Heading Depth: 2
Heading Rank: 2

Heading: Breach of Contract & Promissory Estoppel Claims

Text: 18 In addition to suing for age discrimination, Sembos also alleged breach of contract and promissory estoppel claims. Specifically, Sembos contends that he had two contracts with Philips, the first being the September agreement in which Corti promised him that his pension benefits would remain the same if he accepted a position with BCC, or that if the benefits were not the same, he could continue his employment with Philips. Sembos also contends that Philips' email of February 1, 1999, constituted a contract in that Philips promised to actively look for other employment opportunities for Sembos. Alternatively, Sembos claims he relied on these promises to his detriment and thus has stated a promissory estoppel claim. 19 The district court granted Philips summary judgment on these claims, concluding that they were preempted by ERISA. Section 514(a) of ERISA preempts any and all State laws insofar as they may now or hereafter relate to any employee benefit plan. 29 U.S.C. § 1144(a). A state law claim relates to an employee benefit plan if it has a connection with or reference to such a plan. Ingersoll-Rand, Co. v. McClendon, 498 U.S. 133, 139, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990). 20 Whether Sembos' breach of contract and promissory estoppel claims are preempted by Section 514(a) is a difficult question. Compare Dranchak v. Akzo Nobel Inc., 88 F.3d 457, 459 (7th Cir.1996) (concluding § 514(a) preempts breach of contract claim because the alleged contract promised the plaintiff extra pension credits and the continuation of health benefits under the firm's welfare plan) and Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1294 (5th Cir.1989) (holding that, because to evaluate the plaintiffs' breach of contract claims the court would have no choice but to refer to the ERISA plans, those claims had a connection with or reference to employee benefit plans and were thus preempted by ERISA); with Pizlo v. Bethlehem Steel Corp., 884 F.2d 116, 120 (4th Cir.1989) (holding that the plaintiffs' breach of contract and promissory estoppel claims were not preempted by ERISA even though the plaintiffs were seeking pension benefits because [t]he claims do not bring into question whether Plaintiffs are eligible for plan benefits, but whether they were wrongfully terminated from employment after an alleged oral contract of employment for a term); Rozzell v. Security Services, Inc., 38 F.3d 819, 822 (5th Cir.1994) (stating that it cannot be that any lawsuit in which reference to a benefit plan is necessary to compute plaintiff's damages is preempted by ERISA and that the plaintiff's state law claim alleging that he was wrongfully fired for filing a worker's compensation claim is not preempted). However, because, as discussed below, Sembos' state law claims fail on the merits and because we can affirm on any basis in the record, Ortloff v. United States, 335 F.3d 652, 661 (7th Cir.2003) (citing Rothner v. City of Chicago, 929 F.2d 297, 303 n. 9 (7th Cir.1991)), we need not delve into the intricacies of ERISA preemption in this case.
21 As noted above, Sembos claims that Philips breached two separate contracts. First, Sembos claims that he had a contract with Philips formed in September 1998 when Corti and Blakeway promised that Sembos would either obtain a position at BCC with the same pension benefits, or that Philips would continue to employ him. Sembos claims that Philips breached this contract by subsequently stating in a February 1, 1999, email that his employment with Philips would end if he did not find suitable employment within six months, and then later by firing him. Sembos also claims that the February 1, 1999, email constituted a second contract and that, in this contract, Philips committed that it would actively look for other employment opportunities for [Sembos] ... within Philips. Sembos claims that Philips also breached this contract by failing to actively seek other employment opportunities for him. 22 Under Illinois law, for a binding contract of employment to exist, the employer must make a clear and definite promise and there must be valid consideration. See Kalush v. Deluxe Corp., 171 F.3d 489, 492 (7th Cir.1999); Tolmie v. United Parcel Service, Inc., 930 F.2d 579, 580 (7th Cir.1991). In this case, in the two alleged contracts Sembos identifies, Philips did not provide any definite assurance of continued employment. The alleged promises did not state a position, a salary, or the duration of any employment. The second alleged promise is also not sufficiently definite to create contractual liability. It is impossible to know what actively means for purposes of determining a breach. Therefore, under Illinois law, Sembos' breach of contract claims fail.
23 Alternatively, Sembos argues that Philips' two promises form the basis of a suit based on the theory of promissory estoppel. Under Illinois law, promissory estoppel requires proof of the existence of an unambiguous promise; reliance on that promise; that the reliance be reasonable and foreseeable; and that the promisee actually rely on the promise to his detriment. Vajda v. Arthur Anderson & Co., 253 Ill.App.3d 345, 191 Ill.Dec. 965, 624 N.E.2d 1343, 1350 (1993). 24 Here, Sembos' case falters again because the alleged promises were too indefinite, as a matter of law, to constitute unambiguous promises supporting liability on the theory of promissory estoppel. See Demos v. National Bank of Greece, 209 Ill.App.3d 655, 153 Ill.Dec. 856, 567 N.E.2d 1083, 1088 (1991) (holding that because alleged promise to enter into a loan agreement failed to contain the interest, duration, or terms of repayment, it was too indefinite to be enforceable, and the doctrine of promissory estoppel was inapplicable as a matter of law). Because Philips did not promise Sembos any specific position, salary, or other terms of employment, it was unreasonable for Sembos to rely on Philips' alleged promise of employment. See M.T. Bonk Co. v. Milton Bradley Co., 945 F.2d 1404, 1408 (7th Cir.1991) (affirming judgment on jury verdict and holding that reliance on a promise with uncertain terms that could be cancelled at any time was not reasonable); Demos, 153 Ill.Dec. 856, 567 N.E.2d at 1087 (holding that reliance on a promise to lend money at an indefinite interest rate was not reasonable). Additionally, even assuming the alleged promises were sufficiently definite, it was unreasonable for Sembos to believe that Philips would employ him indefinitely. Morever, Sembos failed to present any evidence indicating that he detrimentally relied on Philips' alleged promises: Sembos does not claim that he would have accepted the position with BCC but did not because of Philips' alleged promise that it would continue to employ him. Rather, Sembos stated unequivocally that if BCC's pension plan was not equivalent to the one offered by Philips, he would not have accepted the position with BCC. Sembos also does not claim that the alleged promises prompted him to refuse other job offers. Under these circumstances, Philips was entitled to summary judgment on Sembos' promissory estoppel claim as well.