Boswell v. Panera Bread Co.
| Decision Date | 24 March 2016 |
| Docket Number | Case No. 4:14-CV-01833-AGF |
| Parties | MARK BOSWELL, et al., Plaintiffs, v. PANERA BREAD COMPANY, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
This class action is before the Court on the motion (Doc. No. 133) for summary judgment filed by Defendants Panera Bread Company and Panera, LLC seeking summary judgment on all counts of Plaintiffs' amended complaint: a classwide breach of contract claim (Count I); a classwide fraud claim (Count II); and individual claims by named Plaintiffs Mark Boswell and David Lutton for fraud (Count III) and unjust enrichment (Count IV). Also before the Court are Plaintiffs' second amended motion1 (Doc. No. 205) for summary judgment on their classwide breach of contract claim (Count I), and Plaintiffs' motion (Doc. No. 110) for summary judgment on Defendants' affirmative defenses. The Court heard oral argument on these motions on February 23, 2016.
At oral argument, the Court raised the question of whether Cook v. ColdwellBanker, 967 S.W.2d 654 (Mo. Ct. App. 1998), applied to Plaintiffs' breach of contract claim, involving what is essentially Defendants' promise to pay a bonus. Although neither side cited Cook, either in their summary judgment briefing or at the earlier class certification stage, Cook appeared to be directly relevant to Plaintiffs' contract claim, in that it held that "[a] promise to pay a bonus in return for an at-will employee's continued employment is an offer for a unilateral contract which becomes enforceable when accepted by the employee's performance" and which cannot be revoked once the offeree has made substantial performance. Cook, 967 S.W.2d at 657. Following oral argument, the parties submitted, at the Court's request, simultaneous supplemental briefs as to (1) whether Cook applied to Plaintiffs' contract claim, and (2) if so, whether and how that finding impacts the class action.
Upon review of the supplemental briefs and the rest of the record in this case, and for the reasons set forth below, the Court will grant Defendants' motion for summary judgment as to Plaintiffs' classwide breach of contract claim against Panera Bread Company only, and as to Plaintiffs' classwide and individual fraud claims; deny Defendants' motion as to Boswell and Lutton's individual unjust enrichment claims; grant Plaintiffs' motion for summary judgment on their classwide breach of contract claim against Panera, LLC only; and grant Plaintiffs' motion for summary judgment on Defendants' affirmative defenses.
For purposes of the motions before the Court, the record establishes the following. Named Plaintiffs Boswell, Lutton, and Vickie Snyder represent a class of 67 individualsemployed as Joint Venture General Managers ("JV GMs") by Defendants Panera, LLC, and Panera Bread Company (collectively, "Panera"), who signed a JV GM Compensation Plan ("Compensation Plan") and who received a capped buyout payment from Panera during the relevant time period. A "capped" buyout payment is a buyout payment made to an employee in an amount less than the total buyout amount determined in accordance with the formula set forth in Section 3(b) of the Compensation Plan.
In 2002, to recruit and retain cafe general managers, Panera created the JV GM program. JV GMs were at-will employees responsible for managing all aspects of their respective cafes and were ultimately accountable for the profit, sales, and costs in their cafes. The JV GM program was initially overseen by Panera's JV Board, comprised of several Panera executives.
Named Plaintiffs Boswell and Lutton began their employment with Panera as JV GMs in 2004. Named Plaintiff Snyder began her employment with Panera as a JV GM in 2007. All were employed at will.
The JV GM program included three compensation components: a base salary, monthly bonuses, and a long-term incentive bonus, known as a "buyout payment." In 2007, Panera determined that the JV GM program was not sufficiently compensating JV GMs, and Panera believed that changes to the buyout payment calculation were necessary to recruit and retain top talent.
Thus, in 2007, Panera began offering a standard JV GM Employment Agreement ("Agreement"), which expressly referenced the Compensation Plan and which provided that the Compensation Plan shall be executed "concurrently" with the Agreement. Theparties agree that the Agreement and Compensation Plan should be considered together, as a single agreement. The Agreement and Compensation Plan were drafted by Panera, and both contain a Missouri choice-of-law provision.
Between 2007 and early 2010, each class member entered into identical Agreements and Compensation Plans with Panera, LLC.2 Nine of the class members executed their Agreements and Compensation Plans in 2007; 37 did so in 2008; 20 did so in 2009; and the last one did so in March 2010. The three named Plaintiffs were among the group of class members who entered into their Agreements and Compensation Plans in 2009.3
Each Agreement and Compensation Plan provided that the JV GM's employment by Panera was at-will, and that either the JV GM or Panera could terminate the Agreement at any time, with or without cause. Each Agreement and Compensation Plan also included several terms and conditions of employment. For example, the Compensation Plan included a waiver of the right to a jury trial for legal actions arising out of the Agreement and Compensation Plan, an agreement by the JV GMs not to disclose Panera's confidential information, an agreement by Panera to pay the JV GMs a base salary, and an agreement by Panera to pay the JV GMs, at the end of five years, a one-time buyout payment.
Section 3(a) of the Compensation Plan provided:
Panera shall, if it is required to do so pursuant to this Section 3, make a one-time JV GM Buyout for the Bakery-Cafe on the terms and conditions set forth herein and upon execution and delivery of such agreements as are reasonably requested by Panera.4 In order to receive the JV GM Buyout payment for the Bakery-Cafe, you must, as of the date on which the payment is made in accordance with this Section 3, (i) be an employee of Panera as of the date on which payment of the JV GM Buyout is made, (ii) be performing the duties of the position currently entitled JV GM as of this date, and (iii) not be in breach of any provision of your Employment Agreement or any other obligation owed to Panera or its affiliates.
The amount of the buyout payment was to be determined in accordance with a formula set forth in Section 3(b) of the Compensation Plan. The formula turned on the profitability of the JV GM's cafe during the last two years of a five-year period. One of the components of the buyout formula was a store profit hurdle, which was explicitly set forth in the Compensation Plan but for which Panera retained the sole discretion to change.
The "Buyout Date" was defined in each Compensation Plan as a date five years from when the Plan was executed. Section 3(c) of the Compensation Plan stated that "Panera shall make any JV GM Buyout payment that is due and payable . . . no later than the fifth fourteen day payroll after the fiscal period during which the Buyout Date occurs" and that "in no event will payment occur after March 15th of the calendar year following the calendar year in which the Buyout Date occurs." (Doc. No. 167 at 5.)
Section 5(d) of the Compensation Plan also included the following clause withrespect to modifications and waivers:
This Plan is the final, complete and exclusive agreement between [the JV GM] and Panera with respect to any bonus, incentive plan or other compensation, except as specifically set forth in [the JV GM's] Employment Agreement with Panera, and supersedes and merges all prior discussions and other agreements between us. No modification or waiver shall be valid unless in writing signed by the party against whom the same is sought to be enforced.
The Agreement, executed by the class members at the same time as the Compensation Plan, also included the following "waiver" provision in Section 15:
The failure of a party to enforce any term, provision, or condition of this Agreement at any time or times shall not be deemed a waiver of that term, provision, or condition for the future, nor shall any specific waiver of a term, provision, or condition at one time be deemed a waiver of such term, provision, or condition for any future time or times.
Panera considered the provisions of Section 3(a) of the Compensation Plan in determining whether to make buyout payments to the class members, and Panera ultimately made a buyout payment to every member of the class, but, as discussed below, in an amount that did not adhere to the written terms of Section 3(b) of the Compensation Plan.
In 2010, Panera decided to impose a $100,000 cap on all JV GM buyout payments. At oral argument, Panera stated that this cap was not due to a change in the store profit hurdle, the component of Section 3(b)'s buyout formula which Panera retained the discretion to alter, but was instead imposed uniformly across the board,regardless of Section 3(b)'s buyout formula.
Plaintiff did not communicate this change in the buyout program to the JV GMs until the first quarter of 2011, when Panera gave presentations to JV GMs in various markets about the cap. The presentations noted that, starting in January 2012, JV GM buyouts would be capped at $100,000. The presentation materials indicated that the change was the result of JV GMs making "in excess of what the program intended." (Doc. No. 169 at 5.) The presentations were not given in the Charlotte, North Carolina market where named Plaintiffs Boswell, Lutton, and Snyder worked, but these Plaintiffs were informed of the buyout cap around the same time by other methods. Specifically, documentation regarding the changes to the buyout program was made available to all...
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