Bryant v. Food Lion Inc.

• Decision Date: 26 May 2000
• Docket Number: No. Civ.A. 2:90-0505-11.,Civ.A. 2:90-0505-11.
• Citation: 100 F.Supp.2d 346
• Parties: Rickey B. and Brenda S. BRYANT, individually and as Guardians ad Litem for Chrystal R. and Stephanie Windham Bryant, minors under the age of 17), and Bonny L. Arnold, Stephen L. Bannister, Genevie W. Bannister, Kenneth R. Barney, Clifford Clark, Elizabeth Anne Daniel, William C. Flockhart, Paul B. Hawkins, Donald T. Maloney, Pamela K. Maloney, John Mawyer, Carol S. Mawyer and Scottie Neal Philbeck, and on behalf of all others similarly situated, Plaintiffs, v. FOOD LION INC.; Profit-Sharing Retirement Plan of Food Lion, Inc., The Food Lion, Inc. Group Benefit Plan, Ralph W. Ketner, Tom E. Smith, and Eugene R. McKinley, Defendants.
• Court: U.S. District Court — District of South Carolina

100 F.Supp.2d 346

Rickey B. and Brenda S. BRYANT, individually and as Guardians ad Litem for Chrystal R. and Stephanie Windham Bryant, minors under the age of 17), and Bonny L. Arnold, Stephen L. Bannister, Genevie W. Bannister, Kenneth R. Barney, Clifford Clark, Elizabeth Anne Daniel, William C. Flockhart, Paul B. Hawkins, Donald T. Maloney, Pamela K. Maloney, John Mawyer, Carol S. Mawyer and Scottie Neal Philbeck, and on behalf of all others similarly situated, Plaintiffs, v. FOOD LION INC.; Profit-Sharing Retirement Plan of Food Lion, Inc., The Food Lion, Inc. Group Benefit Plan, Ralph W. Ketner, Tom E. Smith, and Eugene R. McKinley, Defendants.

No. Civ.A. 2:90-0505-11.

United States District Court, D. South Carolina, Charleston Division.

May 26, 2000.

COPYRIGHT MATERIAL OMITTED

Nicholas W. Clark, Assistant General Counsel, Peter J. Ford, UFCW, Legal Department, Washington, DC, Ian Lanoff, Julia Penny Clark, Bredhoff & Kaiser, Washington, DC, James Lee Bell, The Bell Law Firm, PA, Charleston, SC, for Rickey B. Bryant, Brenda S. Bryant, Chrystal R. Bryant, Stephanie Windham Bryant.

Nicholas W. Clark, Assistant General Counsel, Peter J. Ford, UFCW, Legal Department, Washington, DC, Ian Lanoff Julia Penny Clark, Bredhoff & Kaiser, Washington, DC, for Stephen L. Bannister, Genevie W. Bannister, Scottie Neal Philbeck.

Celeste Tiller Jones, Charles S. Porter, Jr., Jane W. Trinkley, Julianne Farnsworth, McNair Law Firm PA, Columbia, SC, for Food Lion Corporate, defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

HAWKINS, District Judge.

This case came on for a bench trial before this court in May of 1997 in Charleston, South Carolina. The suit was originally filed by Rickey Bryant and his family in March of 1990 on behalf of themselves and a proposed class of similarly situated persons.

In 1991, the complaint was amended to delete several common law claims, and the court granted summary judgment to the defendants on one of four claims arising under the Employee Retirement Income Security Act (ERISA). Following three (3) years of discovery, the court found that the plaintiffs failed to satisfy the prerequisites of Rule 23, Fed.R.Civ.P., and denied class certification on April 2, 1996. Discovery was reopened in the summer of 1996. Plaintiffs dismissed their COBRA claims against the individual defendants, Ketner, Smith and McKinley and, on December 10, 1996, summary judgment was granted to these individual defendants on the claim of discrimination under Section 510 of ERISA. During the trial in May 1997, stipulations of dismissal with prejudice, pursuant to Fed.R.Civ.P. 41, were filed by plaintiffs Pamela Clark Turner (a/k/a Pamela J. Clark), Elizabeth Anne Daniel, Clifford Clark, Bonny L. Arnold, John Mawyer and Carol S. Mawyer, Donald T. Maloney, Pamela Maloney Faucett (a/k/a Pamela K. Maloney), William C. Flockhart and Kenneth R. Barney.

Thus, Rickey and Brenda Bryant, for themselves and their two children, Stephen L. and Genevie W. Bannister, and Scottie Neal Philbeck were the remaining plaintiffs who proceeded to trial against the corporate Food Lion defendants on May 12, 1997. Rickey Bryant, Stephen Bannister and Scottie Philbeck, as former employees of Food Lion, Inc., proceeded on claims of alleged discrimination under Section 510 of ERISA, 29 U.S.C. § 1140, and pretextual termination to induce forfeiture of their vested benefits in the corporation's Profit Sharing Retirement Plan. These plaintiffs, together with their dependents, also proceeded on alleged violations of ERISA under 29 U.S.C. §§ 1161-1166, commonly referred to as "COBRA." Rickey Bryant and Stephen Bannister claim they were wrongfully denied the right to continue their health insurance coverage from the Food Lion Group Benefit Plan after the termination of their employment because Food Lion improperly classified the grounds for their terminations as "gross misconduct." Philbeck claims that he was not given notice of his right to continue his health insurance coverage. Only the Bryants have claims for medical bills that would have been paid as COBRA benefits had they been offered, elected and paid for coverage. The Bannisters and Philbeck merely seek to recover the statutory penalty under 29 U.S.C. § 1132(c) for the alleged failure to give required notice. The Bryants also seek reimbursement of certain medical bills incurred before Rickey Bryant's termination.

At the conclusion of the trial on May 30, 1997, plaintiffs and defendants were instructed to submit to the court proposed Findings of Fact and Conclusions of Law.

Pending Evidentiary Issues

Before issuing its ruling, however, the court must address three evidentiary issues that remained pending at the conclusion of the trial: (1) Motion by defendant Food Lion, Inc. to exclude the testimony of Moak, Peninger and Vance, which included a motion to exclude portions of the testimony of Ken Decker, or to preserve confidentiality of their deposition testimony; (2) Food Lion, Inc.'s oral motion to exclude the testimony of Margaret Smith on May 12, 1997, and (3) Admissibility of defendants' exhibit 160A.

Food Lion, in its filed motion of May 28, 1997, seeks to exclude from evidence the deposition testimony of Michael Moak, Paul Larry Peninger and Randy Vance and portions of the 1996 deposition of Ken Decker. Additionally, on May 14, 1997, Food Lion orally moved to strike the trial testimony of Margaret Smith given on May 12, 1997. It is Food Lion's contention that Moak, Peninger, Vance and Smith were not similarly situated to any of the named plaintiffs because they worked in different locations under different supervisors and that they offered no testimony concerning discharges of the individual plaintiffs or any supervisor responsible for any plaintiff's discharge, nor does this testimony establish a pattern of discriminatory conduct by these supervisors. Pursuant to the ruling by the Fourth Circuit Court of Appeals in Henson v. Liggett Group, Inc., 61 F.3d 270, 276 (4th Cir. 1995), the court agrees with the defendants that the testimony sought to be stricken is not probative of discrimination against any of the named plaintiffs. The court similarly finds that the testimony of Decker regarding sanitation, product dating and working off the clock in stores in Shelby and Kings Mountain, North Carolina, is not relevant to the allegations of these plaintiffs. Therefore, the court grants defendants' motion to exclude from the record those portions of the testimony of Moak, Peninger, Vance and Decker set out in the memorandum in support of its motion to exclude at pages 7 and 8 thereof. Additionally, the court grants defendants' oral motion to exclude the testimony of Margaret Morris Smith on May 12, 1997, on the same grounds. Inasmuch as the court has ruled to strike this testimony on the grounds of irrelevancy, it is unnecessary for it to address the issue on the asserted ground of untimely notice as to the testimony of Moak, Peninger, Vance and Smith.

As to the admissibility of defendants' exhibit 160A, the court grants the admission of this exhibit as credible evidence and a document created and kept in the ordinary course of Food Lion's business.

Upon hearing the testimony and gauging the credibility of the witnesses, and after reviewing the exhibits, the evidence presented, and the post-trial briefs of the parties, the court makes the following Findings of Fact and Conclusions of Law.

I. FINDINGS OF FACT

A. Corporate Management Structure

1. I find that Food Lion, Inc. operates a large chain of grocery stores, principally in the Southeastern United States, and during the times at issue it had more than 663 stores and 40,000 employees in five states; that it was expanding at the rate of slightly less than 100 stores and more than 5,000 employees, net of employee turnover, per year.

2. I find that at the times of plaintiffs' employment, Food Lion's retail operations were divided into three departments: market (meat, poultry, seafood and, in some stores, deli), perishable (dairy, frozen, produce) and grocery (dry goods and customer service). Each department was headed by a departmental vice-president. Reporting to each respective vice president were a number of regional supervisors who had a number of area supervisors reporting to them. In each store, the department head reported to his department's respective area supervisor. In the grocery department, each store also had a grocery department manager, a customer service manager, an assistant store manager and a store manager.¹ Over all of the store departments was the store manager. The assistant store manager served as manager in the store manager's absence and also directly supervised the grocery department.² The grocery manager reported to the assistant store manager. The customer service manager reported to the store manager.³

3. I find that the grocery industry has a relatively high employee turnover rate. During the years the plaintiffs were employed, Food Lion was growing rapidly, and the rapid growth and frequent new store openings created a serious need for experienced, competent employees.⁴

4. I find that in an effort to reduce turnover, Food Lion created several incentives for experienced, trained employees to stay with the company.⁵

B. The Profit Sharing Plan

5. I find that Food Lion's Profit Sharing Plan was voluntarily created by Food Lion in 1960 and has been maintained ever since to provide employees with retirement security,⁶ and to encourage employees to make a career with Food Lion.⁷ I further find that the company pays 100% of the contribution, which for all relevant years was the maximum amount deductible allowed by law — 15% of every employee's annual wages.⁸ Numerous documents were distributed to employees and posted on employee bulletin boards which emphasized the long term benefits of maintaining employment with Food Lion.⁹

6. I find that prior to December 18, 1988, Food Lion had a 5-to-15 year...