Court Opinion

ID: 2997113
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:33:49.204892+00
Date Added: 2024-06-11T09:19:06.465367
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 03-1875
ATHANASIOS SEMBOS,
                                                  Plaintiff-Appellant,
                                  v.

PHILIPS COMPONENTS,
                                                  Defendant-Appellee.

                          ____________
             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
             No. 00 C 4651—Blanche M. Manning, Judge.
                          ____________
      ARGUED OCTOBER 30, 2003—DECIDED JULY 19, 2004
                          ____________

  Before RIPPLE, MANION, and DIANE P. WOOD, Circuit
Judges.
  MANION, Circuit Judge. Athanasios Sembos sued his
former employer, Philips Components, for age discrimina-
tion after Philips fired him. Sembos also alleged state law
claims for breach of contract and promissory estoppel. The
district court granted Philips summary judgment. Sembos
appeals. We affirm.

                                   I.
2                                                         No. 03-1875

  Athanasios Sembos began working for Philips
Components, a division of Philips Electronics North Amer-
                  1
ica Corporation, in 1978. In September 1998, Philips
notified Sembos that it was selling a substantial portion of
the Philips Components division to Beyerschlag Centralab
Components (“BCC”). Many jobs at Philips were lost due to
this sale, although many of the former Philips employees
were hired by BCC, including Sembos’ former supervisor,
Guiseppe Corti. After Philips announced the sale to BCC,
Corti and another executive, Nigel Blakeway, approached
Sembos and offered him a position at BCC. Sembos told
them that he would accept the position at BCC only if his
pension benefits with BCC would be the same as they were
under Philips’ pension plan. Sembos claims that the two
men promised him equivalent pension benefits, or alterna-
tively that, if BCC’s pension plan did not provide him the
same benefits, he could remain employed at Philips.

1
  Philips Components is a division of Philips Electronics North
America Corporation. Sembos wrongly named the unincorpo-
rated division, Philips Components, as a defendant, as opposed
to the corporate entity. See Spearing v. National Iron Co., 770 F.2d
87, 88-89 (7th Cir. 1985) (stating that an unincorporated division
of a corporation is not suable in its own right). However, Philips
Electronics North America Corporation received actual notice of
the suit and defended the case up to this point without seeking
dismissal based on Sembos’ failure to name the proper defendant.
Given that we are affirming, dismissing this case because Sembos
named the corporate division and not the corporate entity would
only unnecessarily prolong the proceedings. Therefore, we
address the merits of the claims as if Philips Electronics had been
properly named, and we refer to the defendant as Philips
throughout. See, e.g., Continental Ins. Co. v. Illinois Dept. of Transp.,
709 F.2d 471, 473 (7th Cir. 1983) (reaching merits of case where
plaintiff apparently named wrong governmental defendant).
No. 03-1875                                                3

  On December 13, 1998, Sembos learned that BCC’s pension
plan did not offer benefits equal to those he had through his
pension plan with Philips. Apparently, the problem from
Sembos’ perspective was that Philips’ pension plan adopted
the “Rule of 85,” which allowed employees to retire with full
pension and medical benefits when the employee’s age plus
years of service equaled 85, whereas BCC’s plan did not
adopt this rule. (At that time, Sembos was about six years
away from eligibility under the Rule of 85.)
  After learning that BCC’s pension plan did not provide
him the benefits of the Rule of 85, Sembos rejected BCC’s
offer and decided to continue his employment with Philips.
Shortly thereafter, Philips and BCC agreed that Sembos
would work for BCC for six months as a loaned employee
but would remain on Philips’ payroll. Sembos was informed
of this arrangement in a February 1, 1999 email:
    Effective immediately, your services will be contracted
    out to BC Components. You will remain a Philips em-
    ployee, and you will be paid by Philips. As you are per-
    forming work for BC Components, Philips will bill your
    cost back to BC Components. Philips and BC
    Components have agreed to this temporary work
    arrangement for a period of up to six months. During
    this time, Philips will actively look for other employ-
    ment opportunities for you within Philips. If you find a
    suitable employment opportunity, you will be fully
    supported in a quick transition. If, at the end of six
    months (August 1, 1999), you have been unable to find
    a suitable employment opportunity, Philips reserves the
    right to terminate your employment with the Company.
  Over the next six months, Sembos expressed an interest in
eight positions at Philips, but he was not hired for any of
those positions. Philips claims that Sembos never actually
applied for the jobs and that is why it did not hire him;
4                                                  No. 03-1875

Sembos claims that because Philips’ Human Resource de-
partment had his resume, his expression of interest was
enough. In the end, however, Sembos did not find another
job with Philips and, on August 21, 1999, Philips fired him.
At that time, Sembos was 51.
   Sembos responded by suing Philips for age discrimi-
nation. He later amended his complaint to add breach of
contract and promissory estoppel claims. Philips moved
for summary judgment. The district court granted Philips
summary judgment on Sembos’ age discrimination claim,
concluding that Sembos failed to establish that he was qua-
lified for any open position at Philips. The district court also
granted Philips summary judgment on Sembos’ breach of
contract and promissory estoppel claims, holding that those
claims were preempted by the Employment Retirement
Income Security Act, 29 U.S.C. §§ 1001, et seq. (“ERISA”).
Sembos appeals.

                              II.
  On appeal, Sembos argues that the district court erred in
granting Philips summary judgment on his age discrimi-
nation claim. Sembos also challenges the district court’s rul-
ing that ERISA preempted his breach of contract and
promissory estoppel claims. We consider each issue in turn.

A. Age Discrimination
  Sembos sued Philips under the Age Discrimination in
Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), alleging
that Philips refused to hire him for any of the vacancies
within the company due to his age. Sembos attempted to
prove his age discrimination claim solely under the indirect
method of McDonnell-Douglas. Under the indirect method,
No. 03-1875                                                      5

Sembos must first present a prima facie case of discrimina-
tion by establishing that he (1) was a member of the pro-
tected group; (2) sought a position or a transfer for which he
was qualified; (3) was not hired; and (4) a substantially
younger person who was similarly situated was hired.
Zaccagnini v. Charles Levy Circ. Co., 338 F.3d 672, 675 (7th Cir.
2003).
  The district court concluded that Sembos failed to es-
tablish the second and fourth prongs of the prima facie case,
namely that he was qualified but denied another position
within Philips, while substantially younger applicants were
hired for those positions. On appeal, Sembos claims that he
presented sufficient evidence to satisfy these prongs. First,
Sembos points to eight positions with Philips for which he
                                                             2
submitted his resume, but for which he was not hired.
However, as the district court noted, Sembos failed to
present any evidence that he was qualified for those jobs,
beyond his own subjective opinion that he “may” have been
qualified. Conversely, Philips presented evidence that
Sembos was not qualified for these positions, pointing to the
deposition testimony of Bob Akers, the recruiter who
worked with Sembos in regard to these eight openings.
Akers stated that those jobs “required very highly qualified
people with certain skill sets, and those skill sets involved

2
   Philips argues that Sembos did not apply for these jobs and
therefore Sembos cannot claim he was discriminatorily denied
those positions. However, as the district court noted, Philips’ po-
licy allowed current employees to apply for openings by sub-
mitting their resumes to the Human Resource department and
Sembos had submitted his resume to Human Resources and then
inquired about those eight openings. Viewing the facts in the
light most favorable to Sembos, we conclude that Sembos applied
for those eight jobs.
6                                                    No. 03-1875

either knowing the flat display world or having some
reasonable technical experience with embedded software or
ACIX design. [Plaintiff] didn’t have those.”
  Sembos responds by claiming that Akers had in fact stated
that he was qualified for those positions. In support of this
claim, Sembos cites his own deposition testimony, wherein
he stated that Akers’ “general response was, you don’t want
to consider this job. You’re qualified for this job. This job is
not good. You’re overqualified for—under qualified for this
job. I don’t remember job by job the response, but the
general response that he left me with is overqualified or
underqualified, don’t want any of these jobs, there will be
other stuff down the road.”
   In context, then, what Akers said was not that Sembos was
qualified, but that he was overqualified. Of course, if he
were overqualified, then, at a minimum, he would have also
been qualified for the positions. The problem for Sembos,
however, is that this testimony fails to establish which of the
eight positions Akers believed Sembos was overqualified
for. That is significant because of those eight jobs, Philips
                                                        3
hired younger individuals to fill only two openings. Thus,
Akers’ testimony that Sembos was overqualified for some
jobs and underqualified for others is insufficient to establish
that he was qualified for the two positions which Philips
                                 4
filled with younger applicants. Therefore, Sembos failed to

3
  Five of the other positions were never filled because of down-
sizing or restructuring, and the sixth position was actually filled
before Sembos expressed an interest in the position.
4
  Furthermore, even if Akers’ testimony established that Sembos
was qualified for the two positions filled by younger individuals,
the testimony was actually that he was overqualified. Although
that means Sembos was qualified for purposes of the prima facie
                                                    (continued...)
No. 03-1875                                                      7

establish a prima facie case of discrimination based on those
eight positions.
   Moreover, the hiring managers for those two positions
stated in their sworn affidavits that Sembos was not well-
qualified for the jobs and that “they would not have con-
sidered him to be a viable candidate.” Accordingly, even if
we were to assume that Sembos was, in fact, qualified for
those positions, and thus established a prima facie case of
discrimination, Philips presented evidence of a legitimate
non-discriminatory reason for its refusal to hire Sembos,
namely the hiring managers’ belief that Sembos was not a
viable candidate given his credentials and work experience.
Sembos failed to present any evidence that those asserted
reasons were pretextual. Therefore, even assuming Sembos
established a prima facie case for these job openings, Philips
is nonetheless entitled to summary judgment. See Helland v.
South Bend Comm. Sch. Corp., 93 F.3d 327, 330 (7th Cir. 1996)
(“Because a Title VII claim requires intentional discrimina-
tion, the pretext inquiry focuses on whether the employer’s
stated reason was honest, not whether it was accurate.”). See
also Mills v. Health Care Serv. Corp., 171 F.3d 450, 458-59 (7th
Cir. 1999) (stating that plaintiff must present evidence that
employer did not honestly believe that he was unqualified
for the position).

4
  (...continued)
case, once the burden shifts to Philips, Sembos’ over-qualification
constitutes a legitimate, non-discriminatory reason for rejecting
him for the open positions. Coleman v. Quaker Oats Co., 232 F.3d
1271, 1290 (9th Cir. 2000). Therefore, even if Sembos established
a prima facie case of discrimination, Philips was nonetheless
entitled to summary judgment because he was overqualified for
the job. Id. (holding employer is entitled to summary judgment
on a plaintiff’s ADEA claim where the plaintiff was rejected for
a position because he was overqualified).
8                                                No. 03-1875

  Sembos contends that in addition to the eight positions in
which he indicated an interest, he also applied for ten other
jobs that he learned about on the Philips Electronics internet
site. Philips maintains that, because those positions were
with other divisions, Philips Components had no authority
to make hiring decisions and thus is not responsible for any
alleged discrimination. However, as noted earlier, the
appropriate defendant is Philips Electronics, the corporate
entity, and not the individual divisions. Just as Philips
Components’ actions may create liability for Philips Elec-
tronics, so too may the actions of another division.
  But Sembos once again failed to present evidence to
support his allegation that he was qualified for those ten
positions. Although Sembos claims in his brief, “[i]n regard
to those positions, Sembos testified that he was qualified
and Philips did not and cannot refute his qualification,” the
record to which Sembos cites does not support this asser-
tion. In fact, in support of this proposition, Sembos cites
paragraph 160 of record item 50, which is Philips’ response
to Sembos’ Rule 56.1(B)(3) statement, and in that paragraph,
Philips denies Sembos’ assertion that he was qualified for
the open positions. Nonetheless, for the sake
of completeness, we have looked to the record citations
underlying Sembos’ Rule 56.1(B)(3) statement, and those
portions of the record also fail to support Sembos’ conten-
tion that he was qualified for the ten positions at issue.
Rather, throughout his deposition testimony, when asked
whether he was qualified for those open positions, Sembos
responded along the lines of “In my mind, I could be,” and
when further questioned about his background and how he
could be qualified for positions unrelated to his experience,
Sembos answered to the effect that the skill “was something
that could be achieved.” Similarly, in other portions of his
deposition, Sembos stated that “I thought that it may be
something that I could do,” and that “based on the limited
No. 03-1875                                                        9

knowledge I had, I could be considered for” the open
positions. The remaining deposition testimony cited by
Sembos followed in a similar vein. In short, Sembos’ tes-
timony failed to establish that he was qualified for the open
positions, only that he may be, or that he could do some of
the jobs after receiving additional training. Sembos’ sub-
jective belief that he “may” be able to perform the job is
insufficient to establish that he is qualified for the position,
especially in light of Sembos’ own admission that he would
need additional training for some of the positions. There-
fore, Sembos’ claims premised on the ten positions in other
divisions also fail.
   Finally, Sembos claims that he should be treated as if he
applied for 89 other positions within Philips which were
filled in 1999, during the time period in which he was
searching for a new position—even though he never applied
for any of those jobs. We reject this argument. An employer
cannot be liable for failing to hire a person who does not
                5
apply for a job. See Konowitz v. Schnadig Corp., 965 F.2d 230,
234 (7th Cir. 1992) (concluding that an employer’s failure to
consider the plaintiff for other openings with the company
after a reduction in force “does not lead to an inference of
discrimination, since nothing in the record suggests that he

5
   Sembos also complains that Philips did not notify him of the
vacancies. However, Sembos does not claim that this lack of
notice was motivated by his age or that younger employees were
informed of the other job openings while he was not. Therefore,
even if Philips had an obligation to inform Sembos of all available
positions, its failure to do so does not support an age discrimina-
tion claim. See Radue v. Kimberly-Clark Corp., 219 F.3d 612, 615 (7th
Cir. 2000) (holding that during a reduction in force, an em-
ployer’s obligation under the ADEA is limited to providing older
employees with the same job placement opportunities it offers
younger employees).
10                                                   No. 03-1875

applied for any jobs or informed the company of his
interest”). Accordingly, Sembos’ reliance on those 89
positions filled by other people as proof of the second
element of the prima facie case is misplaced. See Box v.
A & P Tea Co., 772 F.2d 1372, 1377 (7th Cir. 1985) (holding
that a plaintiff’s failure to express more than a “vague
interest” in an open position prevented her from establish-
ing a prima facie case of discrimination). Therefore, Philips
was entitled to summary judgment on Sembos’ age discrim-
               6
ination claim.

B. Breach of Contract & Promissory Estoppel Claims
   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 em-

6
   On appeal, Sembos also points to three age-based statements
allegedly made by Philips employees, including one purportedly
made by the former CEO that Philips wanted to hire “young and
angry men”; that a co-worker referred to him as an “old man”;
and that Akers told Sembos to delete dates from his resume to
remove details indicating his age. But Sembos does not attempt
to prove discrimination through the direct method, so these
statements are irrelevant as to whether Sembos established a
prima facie case of age discrimination. And although Sembos
points to them as evidence of pretext, without establishing a
prima facie case the question of pretext never arises. Moreover,
none of these comments can be attributed to the decisionmakers,
so they are irrelevant in any event. See Rogers v. City of Chicago,
320 F.3d 748, 754 (7th Cir. 2003).
No. 03-1875                                               11

ployment 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.
  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 con-
nection with or reference to such a plan. Ingersoll-Rand, Co.
v. McClendon, 498 U.S. 133, 139 (1990).
  Whether Sembos’ breach of contract and promissory
estoppel claims are preempted by Section 514(a) is a diffi-
cult 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 prom-
ised 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 ben-
efits, but whether they were wrongfully terminated from
employment after an alleged oral contract of employment
12                                                  No. 03-1875

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 pre-
empted). 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.

     1.   Breach of Contract
  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.
  Under Illinois law, for a binding contract of employment
to exist, the employer must make a clear and definite prom-
ise and there must be valid consideration. See Kalush v.
Deluxe Corp., 171 F.3d 489, 492 (7th Cir. 1999); Tolmie v.
No. 03-1875                                                 13

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 “ac-
tively” means for purposes of determining a breach.
Therefore, under Illinois law, Sembos’ breach of contract
claims fail.

    2.   Promissory Estoppel
  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 fore-
seeable; and that the promisee actually rely on the promise
to his detriment. Vajda v. Arthur Anderson & Co., 624 N.E.2d
1343, 1350 (Ill. App. Ct. 1993).
  Here, Sembos’ case falters again because the alleged
promises were too indefinite, as a matter of law, to consti-
tute unambiguous promises supporting liability on the
theory of promissory estoppel. See Demos v. National Bank of
Greece, 567 N.E.2d 1083, 1088 (Ill. App. Ct. 1991) (holding
that because alleged promise to enter into a loan agreement
failed to contain the interest, duration, or terms of repay-
ment, it was too indefinite to be enforceable, and the doc-
trine 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
14                                                No. 03-1875

F.2d 1404, 1408 (7th Cir. 1991) (affirming judgment on jury
verdict and holding that reliance on a promise with uncer-
tain terms that could be cancelled at any time was not
reasonable); Demos, 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 unreason-
able 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.

                             III.
  Sembos failed to present sufficient evidence to establish a
prima facie case of age discrimination. Therefore, the district
court properly granted Philips summary judgment on his
ADEA claim. Sembos’ state law breach of contract and
promissory estoppel claims, even if not preempted by
ERISA, also fail, and the district court properly granted
Philips summary judgment on those claims because the
alleged promises were too vague and indefinite to support
relief. For these and the foregoing reasons, we AFFIRM.
No. 03-1875                                            15

A true Copy:
       Teste:

                      _____________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit

                USCA-02-C-0072—7-19-04