Ragan v. BP Prods. N. Am., Inc.

• Decision Date: 25 November 2019
• Docket Number: No. 1:17 C 9208,1:17 C 9208
• Parties: KATHLEEN RAGAN, Plaintiff and Counter-Defendant, v. BP PRODUCTS NORTH AMERICA, INC. and BP AMERICA, INC. Defendant and Counter-Plaintiff.
• Court: U.S. District Court — Northern District of Illinois

KATHLEEN RAGAN, Plaintiff and Counter-Defendant,
v.
BP PRODUCTS NORTH AMERICA, INC. and BP AMERICA, INC. Defendant and Counter-Plaintiff.

No. 1:17 C 9208

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

November 25, 2019

Hon. Marvin E. Aspen

MEMORANDUM OPINION AND ORDER

MARVIN E. ASPEN, District Judge:

Presently before us is Defendants BP Products North America, Inc.'s and BP America, Inc.'s (collectively "BP") motion for summary judgment as to the entirety of Plaintiff Kathleen Ragan's ("Ragan") complaint, and summary judgment as to their counterclaim for repayment of a signing bonus from Ragan. (Def. Mot. for Summary Judgment (Dkt. No. 68); Def. Mem. in Resp. to Pl.'s Cross-Mot. for Summary Judgment ("Def. Resp. Mem.") (Dkt. No. 87.)) Also before us is Ragan's motion for summary judgment on Defendant's counterclaim for repayment of her signing bonus. (Pl. Mot. for Summary Judgment ("Pl. MSJ") (Dkt. No. 72.)), cross-motion for summary judgment as to BP's liability on her breach of contract, Illinois Wage Payment and Collection Act ("IWCPA"), and declarative relief claims. (Pl. Cross-Mot. for Summary Judgment ("Pl. Cross-MSJ") (Dkt. No. 46.)) Parties both filed Rule 56.1 statements of material facts. (Def.'s Statement of Material Facts ("Def. SOF") (Dkt. No. 69); Pl.'s Statement of Material Facts ("Pl. SOF") (Dkt. No. 74.)) In addition, each party also submitted a response to the other party's statement of facts. (Def.'s Resp. to Pl.'s Statement of Material Facts ("Def. SOF

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Resp.") (Dkt. No. 88); Pl.'s Resp. to Def.'s Statement of Material Facts ("Pl. SOF Resp.") (Dkt. No. 91.))

BACKGROUND

The factual record in this case is extensive and many of the particular incidents prior to Plaintiff's termination are disputed. This section will enumerate all of the relevant disputes before turning to the law.

Kathleen Ragan is a current resident of New York, New York who BP Products North America Inc. previously employed as an Emissions trader from June 8, 2015 to March 16, 2017. (Def. SOF ¶ 1; Pl. SOF Resp. ¶ 1.) BP terminated Ragan on December 14, 2016, although she was placed on "Garden Leave" through March 2017, meaning she was compensated for three months following her notice of termination. (Pl. SOF ¶¶ 10-11; Def. SOF ¶¶ 76, 79.) The dispute her largely turns on whether Ragan was fired "for cause."

Prior to joining BP, Ragan worked at Shell as an emissions trader. (Def. SOF ¶ 5.) Shell granted Ragan deferred bonus compensation of Shell stock, which she forfeited before their vesting date when she left Shell for BP. (Def. SOF ¶ 6.) Ragan understood BP's offer of "restricted stock units" ("RSU") to be a buyout of her forfeited, unvested Shell stock. (Pl. SOF Resp. ¶ 7.)

A. BP's Offer of Employment

The parties dispute the exact nature of BP's offer to Ragan. Daniel Barry, the then-head of the Global Environmental Products ("GEP") group at BP called Ragan on April 17, 2015 to discuss an offer of employment at BP. (Def. SOF ¶ 7.) Barry emailed Ragan following their conversation with a summary of the compensation package BP was offering her. (Def. SOF ¶ 7; Pl. SOF Resp. ¶ 7.) The email refers to three categories of bonus: "Buyout," "Minimum Bonus

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subject to My plan," and "Sign-on Bonus." (Id.) The term "Guarantee" is substituted in the "Total Sign-on" descriptor for the minimum bonus and sign-on bonus. (Id.) Ragan did not respond to Barry's email with an acceptance of these terms. (Def. SOF ¶ 9; Pl. SOF Resp. ¶ 9.) On April 23, 2015, BP sent Ragan a written offer letter for her to work as an Emissions Trader for the Integrated Supply and Trading ("IST") group, which Ragan signed on April 27, 2015. (Def. SOF ¶ 10; Pl. SOF Resp. ¶ 10.) The parties dispute whether the offer letter contained all the terms and conditions of Ragan's employment with BP, Ragan's position is that Barry's prior email was incorporated into the agreement. (Def. SOF ¶ 10; Pl. SOF Resp. ¶ 10.) Ragan therefore believes that the April 23rd letter does not constitute the complete offer. (See Def. SOF ¶¶ 11-24; Pl. SOF Resp. ¶¶ 11-24.) Ragan also points out that the letter references policies and codes to which she did not have access prior to her employment with BP. (Pl. SOF Resp. ¶¶ 10, 11, 13, 15, 19, 20, 21.)

The terms of the offer letter and the various BP policies referenced within it are undisputed. (See Def. SOF ¶¶ 11-24; Pl. SOF Resp. ¶¶ 11-24.) The offer letter stated, in relevant part, the following:

Trader and Originator Bonus Plan

As part of your compensation package, you are eligible to earn an annual bonus in accordance with the BP Trader and Originator Bonus Plan. . . . Annual bonuses are typically payable on or before March 15th following each performance year, and may be subject to deferral under the IST Deferred Annual Bonus Plan . . .
This offer letter confirms that, subject to you remaining eligible to participate in the IST Trader and Originator Bonus Plan (the "Plan"), and the conditions outlined below, you will be eligible for a minimum bonus for the 2015 performance year (January 1st to December 31st 2015) in the amount of $500,000.
This potential bonus amount, which is provided at the sole discretion of BP, is strictly subject to the requirements of the Plan. Please note that the Plan is discretionary and all awards under the Plan are at the absolute discretion of BP. The Plan can be varied or withdrawn at any time, including part way through the performance year. . . .

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The determination of any bonus you receive is linked to an assessment of your performance as measured against BP's performance and behavioral expectations. In particular and without prejudice to the rules of the Plan, you will lose your eligibility for this bonus opportunity if, in the sole discretion of BP, you:

• Fail to comply with any of BP Policies, the BP Code of Conduct, BP Trading Guidelines, and any Federal or state laws or regulations;
• Fail to achieve the deliverables outlined in your MyPlan and other relevant performance documentation (as determined in the sole discretion of BP management);
• Your performance is rated as "Below Expectations" for the 2015 performance year;
• Otherwise fail to meet BP's expectations.

BP reserves the right to make you no award or a bonus award of less than that stated above . . . if, in the absolute discretion of BP, you fail to meet the conditions outlined in this agreement . . . .
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Restricted Stock [Share] Units
In addition to the other elements of your compensation package, you will also be granted Restricted Stock [Share] United ("RSUs") representing BP plc American Depositary Shares ("ADSs") valued at $500,000 at the time of grant. Your grant will be issued in the quarter following your start date with BP, and will vary in amount with the price of BP's stock [shares] over time. 25% of the grant will vest 2 years after the grant date and the remaining 75% will vest 3 years after the grant date, both calculated at the then-current value of the stock [shares]. In general, in order for the RSUs to vest, you must be employed by BP on the vesting date. . . . all awards are subject to the terms of the plan under which they are granted. You will receive . . . a link to the plan prospectus, which you should read in its entirety.
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Sign-on Payment
Should you accept this offer, you are eligible to receive a one-time sign-on payment of $200,000 (gross). . . . You agree to repay 100% of this Sign-on Payment to BP if you resign or your employment is terminated with cause (e.g. breaching or non-compliance with the company's policies, guidelines, code of conduct, or not meeting performance requirements due to misbehaviours or willful disregards of BP rules or procedures) at any time within 24 months from the commencement date of this employment. In this case, the amount of the bonus must be fully repaid in cash in gross at least one day prior to the last date of employment. Your signature on this letter indicates your consent for BP to deduct the full or any remaining unpaid amounts of the Sign-on Payment (if owed under the terms of this letter agreement) from any wages, payments, bonuses, vacation, etc., that would have otherwise been paid to you at the time of termination.

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(Def. SOF ¶¶ 11, 18, 23.)

The policies referenced included the Trader and Originator Bonus Plan, which contained the following provisions:

• The BP Trader and Originator Bonus Plan is a discretionary annual incentive bonus plan.
• "Discretionary[.]" Eligibility for an Award and amount of any Award is in the sole judgment and discretion of the Company up to and including Bonus Payment Date;
• 4.1.3 Nothing in this Plan or fact or circumstances of it being in operation shall entitle any Participant or other person to any claim or right to an Award under this Plan . . . .
• 5.2.1 Awards are purely Discretionary . . . .
• 5.3.2 Where applicable, some payments . . . shall be deferred and paid subject to the IST Deferred Annual Bonus Plan . . . Award amounts subject to the IST Deferred Annual Bonus Plan are not accrued, earned or vested unless the conditions of the IST Deferred Annual Bonus Plan are met. For details of the current deferral rates please refer to Appendix IV.
• Appendix IV[.] Bonus awards of $200,000 or greater . . . are subject to and governed by the IST DAB Plan. . . .
• The current rates of deferral for Performance Year 2013 and onwards are as follows:

Deferral rates
Band	Deferral Rate
Up to $100,000	0%
$100,000 to $250,000	15%
$250,000 to; $1,500,000	25%
$1,500,000 to; $5,000,000	35%
Above $5,000,000	50%

(Def. SOF ¶ 15.) The Deferred Annual Bonus ("DAB") plan included the following language:

• Your participation in the Plan is subject to the rules of the Plan . . . Please note that the Plan is a discretionary plan . . . .
• The main terms and conditions for this grant are your continued employment with BP until the end of the restricted period . . . .
• The

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