773 F.2d 1073 (10th Cir. 1985), 82-2020, Weir v. Anaconda Co.
|Citation:||773 F.2d 1073|
|Party Name:||Robert A. WEIR, Plaintiff/Appellant, v. The ANACONDA COMPANY, Atlantic Richfield Company, and the Anaconda Company Savings Fund Plan for Salaried Employees, the Chemical Bank, Trustee, Defendants/Appellees.|
|Case Date:||August 09, 1985|
|Court:||United States Courts of Appeals, Court of Appeals for the Tenth Circuit|
[Copyrighted Material Omitted]
Michael E. Whitsitt, Overland Park, Kan., for plaintiff/appellant.
Ernest N. Yarnevich, Dear, Yarnevich & Carey, Kansas City, Kan., Jack L. Whitacre, Mark P. Johnson, of Spencer, Fane, Britt & Browne, Kansas City, Mo., for defendants/appellees.
Before HOLLOWAY, Chief Judge, and McWILLIAMS and BARRETT, Circuit Judges.
HOLLOWAY, Chief Judge.
After examining the briefs and the appellate record, this three-judge panel has determined unanimously that oral argument would not be of material assistance in the determination of this appeal. See Fed.R.App. 34(a); Tenth Circuit R. 10(e). The cause is therefore ordered submitted without oral argument.
Robert Weir (plaintiff) is the former employee of The Anaconda Company (Anaconda or defendant). Plaintiff brought suit against Anaconda for various employee benefits after he was terminated.
During his employment with Anaconda, he participated in company stock option and savings plans. Plaintiff's rights under these plans are the subject of this appeal. The district court granted summary judgment for Anaconda as to the issues now before this court. Plaintiff has appealed. We affirm.
Plaintiff was an employee of Anaconda from 1957 until his termination on September 10, 1979, which became effective November 30, 1979. II R. 222. When Anaconda terminated him, plaintiff was Anaconda's Marketing Manager for Telephone Cables and Small Wire Sales. Exhibit 25.
Jerry White became plaintiff's supervisor in May of 1978. III R. 11. White and plaintiff did not have a good working relationship. In January of 1979 White evaluated plaintiff's performance during the latter half of 1978 as inadequate. I R. 98. White also stated that: "[plaintiff's] approach to his job is highly reactive and ultra-conservative. He gets bogged down in detail and is reluctant to delegate decision making to subordinates." Id. The disagreements between White and plaintiff continued, and White eventually terminated plaintiff.
Plaintiff brought suit against Anaconda to recover benefits under the savings fund and the stock option plans. Defendant removed the action to federal court on diversity and federal question grounds. Plaintiff's complaint alleged four counts. II R. 230. First, he asserted a claim for benefits under the stock option plan. Second, he claimed that some benefits under the savings plan were unjustly withheld. Third,
he asserted a claim for tortious interference with contractual rights. Fourth, he averred that benefits under the stock option plan and savings plan were wages under Kansas law.
Anaconda moved for summary judgment. I R. 76. Plaintiff also moved for summary judgment and filed a response to Anaconda's summary judgment motion. I R. 153.
The court granted Anaconda summary judgment on Counts I, III and IV. II R. 244. As to Count II, which was plaintiff's claim under the savings plan, the court remanded to the Administrative Committee responsible for reviewing claims under the savings fund plan for their decision and a report to the court. II R. 244. 1 The Committee determined that plaintiff was entitled to benefits under the plan. The district court, therefore, granted plaintiff summary judgment on Count II. II R. 336.
Plaintiff does not raise any issue on appeal as to either Count II or Count III (tortious interference with contractual relations). See Appellant's Brief 1. He challenges the district court's decision granting Anaconda summary judgment on his claim under the stock option plan (Count I) and his claim that benefits under the stock option plan and savings fund plan are wages under Kansas law (Count IV).
The district court's opinion
In granting summary judgment for Anaconda on plaintiff's claim under the stock option plan, the court concluded that it must uphold the action of the policy committee unless it acted arbitrarily, in bad faith, or fraudulently in denying plaintiff's claim. The court rejected plaintiff's argument that he was entitled to a de novo hearing. Because plaintiff had offered no evidence, by affidavit or otherwise, that the policy committee had acted arbitrarily, in bad faith or fraudulently, the district court granted Anaconda's motion for summary judgment.
The stock option plan agreement gave an employee the right to purchase Anaconda's stock at a fixed price per share for ten years, and if terminating employment, for three months after termination of employment. I R. 14-15. The agreement also provided that
If, however, you are dismissed from the employ of the company or a subsidiary for cause, of which the Committee shall be the sole judge, this option shall forthwith expire.
I R. 15.
Plaintiff attempted to exercise his option on January 23, 1980. The Anaconda Compensation Policy Committee denied the exercise of the option reasoning that plaintiff was terminated for cause and was therefore precluded from exercising the option. II R. 231.
The court first rejected plaintiff's argument that he was entitled to a trial de novo, holding that the scope of review of a decision properly within the discretion of the plan committee is limited to determining whether it acted arbitrarily, in bad faith, or fraudulently. II 231-32. Believing that there was no issue over whether the decision was within the discretion of the plan committee, the court concluded it was faced with the narrow question whether the committee's decision was made arbitrarily, in bad faith, or fraudulently. II R. 232.
The court rejected plaintiff's argument that Anaconda had to afford him due process protections under the stock option plan. II R. 232, 234. The court then noted that plaintiff had made no argument that either committee acted fraudulently or in bad faith. He did claim that the committee
actedarbitrarily in that they reached the wrong decision, and the court therefore concluded that the only issue before it as to Count I was whether the committee's decision that plaintiff was terminated for cause was arbitrary in the sense that it was not supported by sufficient evidence. II R. 234.
The court held that there was sufficient evidence for the committee to determine that plaintiff was terminated for cause. An affidavit attached to Anaconda's motion for summary judgment stated that the committee relied on a memorandum from Jerry White plaintiff's supervisor. In the memorandum White stated that plaintiff was unable to provide the level of professional management necessary and was lacking in the analytical and planning skills essential to the position. White also commented that plaintiff was hostile and argumentative, and he was "either unwilling or unable to perform the critical mission of marketing manager." II R. 234.
The court concluded that the White memorandum made it clear that the committee's decision that plaintiff was terminated for cause was not arbitrary. II R. 235. There was also ample evidence from plaintiff's deposition that the White memorandum was not prepared as a pretext to justify plaintiff's termination as for cause. II R. 235-36. Nor was there any evidence or claim that the reasons for plaintiff's termination in White's memorandum were fabricated to deny plaintiff his rights under the plan. Accordingly, the court granted Anaconda summary judgment on Count I.
The district court also granted Anaconda summary judgment on Count IV. The court rejected plaintiff's argument that benefits demanded under the stock option plan and savings fund plan were wages under Kansas law, thereby making Anaconda's failure to pay those benefits a violation of Sec. 44-315. Kan.Stat.Ann. (1981). Section 44-315 requires that an employer pay an employee for earned wages when the employee resigns or is discharged. Under Kansas law wages are defined as "compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis less authorized withholding and deductions." Kan.Stat.Ann. Sec. 44-313(c) (1981). The court rejected the argument that benefits under the stock option plan were like commissions or vacation pay, both of which had been held to be within the definition of wages. See Holder v. Kansas Steel Built, Inc., 224 Kan. 406, 582 P.2d 244 (1978); Benjamin v. Manpower, Inc., 3 Kan.App.2d 657, 600 P.2d 148 (1978).
The court reasoned that to obtain benefits under the stock option plan an employee had to exercise an option. Such benefits the court believed were not contemplated by the drafters of Secs. 44-313 and 44-315, Kan.Stat.Ann. (1981), to be included in the term wages; they do not fit the statutory definition of wages, nor do they fall within the common understanding of that term. II R. 244. Accordingly, the district court granted Anaconda summary judgment on Count IV.
On appeal the plaintiff argues that: (1) Anaconda's failure to provide him with any due process safeguards before refusing to permit him to exercise his stock option requires that the district court review the decision de novo, and therefore the decision should not be permitted to stand where the district court apparently determined that plaintiff was actually discharged for cause; 2 and (2) benefits under the stock option plan and savings fund plan are wages under Kansas law entitling him to payment for stock option benefits and penalties for delay in payment of stock option benefits and savings...
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