Folz v. Marriott Corp.

• Decision Date: 31 August 1984
• Docket Number: No. 82-0219-CV-W-5.,82-0219-CV-W-5.
• Parties: John R. FOLZ, Plaintiff, v. MARRIOTT CORPORATION, and Marriott Hotel Corporation, Defendants.
• Court: U.S. District Court — Western District of Missouri

594 F. Supp. 1007

John R. FOLZ, Plaintiff, v. MARRIOTT CORPORATION, and Marriott Hotel Corporation, Defendants.

No. 82-0219-CV-W-5.

United States District Court, W.D. Missouri, W.D.

August 31, 1984.

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Stephen P. Dees, Stinson, Mag & Fizzell, Kansas City, Mo., for plaintiff.

Dennis D. Palmer, Shughart, Thomson & Kilroy, Kansas City, Mo., Carlton J. Trosclair, Asst. Gen. Counsel, Washington, D.C., for defendants.

ORDER AND MEMORANDUM

SCOTT O. WRIGHT, District Judge.

Plaintiff John R. Folz has brought this action pursuant to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., alleging that his employer, the Marriott Corporation, terminated his employment as a hotel general manager because it was learned that the plaintiff suffered from multiple sclerosis. Plaintiff contends that Marriott discharged him to avoid the economic consequences that would result due to his continued participation in certain medical benefits plans self-funded by Marriott. Plaintiff claims that such conduct was in violation of ERISA § 510, 29 U.S.C. § 1140, and constituted a prima facie tort under Missouri law as stated in Porter v. Crawford & Co., 611 S.W.2d 265, 268 (Mo.App.1980). In addition, plaintiff claims that Marriott issued a false service letter in connection with his discharge in violation of Mo.Rev.Stat. § 290.140 (1978).

Jury trial was held, and a punitive damage award was returned in favor of the plaintiff on the service letter count in the amount of $250,000. In addition, plaintiff received a verdict of $100,000 under the prima facie tort theory. Pending before the Court is plaintiff's ERISA claim. For the following reasons, the Court concludes that Marriott violated plaintiff's rights under ERISA and that the plaintiff is entitled to remedies pursuant to this Court's equitable jurisdiction.

I. Findings of Fact

1. The Marriott Corporation is a corporation engaged in the hotel and restaurant business in the State of Missouri and throughout the world.

2. The Marriott Corporation owns and operates the Marriott Hotel at the Kansas City International Airport in Kansas City, Missouri (hereinafter KCI Hotel).

3. During the time period relevant to this case, the Marriott Corporation provided various employee benefit programs to its management employees, including a pension and profit-sharing plan, a deferred stock bonus plan, a sick leave plan, a medical benefits plan, a long-term disability and salary continuation plan, a stock option plan, and a life insurance plan.

4. Plaintiff was employed by Marriott from 1965 until July 17, 1981.

5. During the course of his employment, the plaintiff held numerous managerial positions with Marriott, culminating in the position of general manager of the KCI Hotel from November 18, 1977 until July 17, 1981.

6. During the term of his employment and at the time of termination of his employment with Marriott, plaintiff participated in or was a beneficiary of Marriott's employee benefit plans for management employees, including its pension and profit-sharing plan, stock bonus plan, medical benefits plan, long-term disability and salary continuation plan, sick leave plan and others. As an employee of Marriott, the plaintiff had rights or expectations of rights under these plans.

7. Marriott's personnel policies and procedures required that periodic written performance reviews be conducted with each management employee.

8. Until March 12, 1981, periodic written performance reviews of plaintiff's job performance rated his performance throughout the term of his employment as "competent" or better.

9. Prior to March 12, 1981, plaintiff had never been placed on probation, or told his performance was unsatisfactory.

10. Effective upon becoming general manager at KCI Hotel in November, 1977, plaintiff received a salary increase of $39.50 (5%) per week. Effective November 18, 1978, plaintiff received a salary increase of $58.00 (7%) per week. Effective April 19, 1980, plaintiff received a salary increase of $62.50 (7%) per week.

11. Plaintiff's increase on April 19, 1980 was a merit increase which was granted even though it put plaintiff's salary over the maximum range set by Marriott for his position.

12. During his term as general manager of the KCI Hotel, plaintiff received annual bonuses in 1979 and 1980 which amounted to $7,500 and $3,800, respectively.

13. Between the time of plaintiff's job performance evaluation dated March 5, 1980, which rated his performance as "competent," and March 12, 1981, plaintiff had no discussions with his supervisors about his job performance, and plaintiff received no warnings or indications that his job performance was unsatisfactory in any way.

14. In January, 1981, plaintiff was diagnosed as suffering from "definite" multiple sclerosis.

15. In mid-January, 1981, plaintiff notified his supervisor, Lewis Sherer, Regional Vice President for Marriott, that plaintiff had multiple sclerosis.

16. Multiple sclerosis is a generally progressive disease of the nervous system.

17. While the effect of multiple sclerosis on any individual cannot be predicted with certainty, the disease is often characterized by multiple episodes of exacerbation and remission. Over a ten-year period, one-third to one-half of individuals who are diagnosed as having definite multiple sclerosis will be incapacitated from performing gainful employment outside the home.

18. Sherer was aware that multiple sclerosis was an incurable disease. He identified multiple sclerosis with muscular dystrophy, which he understood was a crippling disease.

19. Sherer informed his immediate supervisor, Marriott's senior Vice President Paul Reed, that plaintiff was suffering from multiple sclerosis.

20. Sherer and Reed made the decisions to place plaintiff on probation and to terminate his employment.

21. On March 12, 1981, Sherer met with plaintiff and presented plaintiff with a written "management development appraisal form" which had been filled out in advance, rating plaintiff's job performance as unsatisfactory and placing plaintiff on ninety-day probation.

22. The "management development appraisal form" is required by Marriott's written personnel policy to be filled out on each management employee each year, in addition to a written performance evaluation. A management development appraisal form, however, had not been filled out on plaintiff since May, 1977.

23. During the meeting on March 12, 1981, Sherer informed plaintiff that plaintiff would be terminated from Marriott thirty days after the end of the ninety-day probation period.

24. Marriott has a written policy governing implementation of probation for managers. According to the written policy, the purpose of probation is to retrain or further develop managers whose performance is below satisfactory standards.

25. The Marriott policy governing probationary managers requires that the probationary manager's supervisor meet at least weekly with the probationary employee regarding the manager's performance and progress and that "every effort should be made to lend support and direction to the manager."

26. From March 12, 1981 until May 15, 1981, plaintiff's supervisor Lewis Sherer did not at any time counsel with plaintiff or discuss plaintiff's performance or his probationary status, either in person or by phone.

27. In April, 1981, the KCI Hotel was for the first time awarded a four-diamond rating by the American Automobile Association (AAA). This is the highest award granted by the AAA and is granted only to those hotels which significantly exceed AAA requirements in most physical and operational categories.

28. In April, 1981, Marriott's senior Vice President Paul Reed prepared a report on his April trip to the KCI Hotel, which Lewis Sherer considered a favorable report about the KCI Hotel.

29. Although one of the subjects of criticism on the March 12, 1981 appraisal form was plaintiff's alleged poor listening ability and speech habits, Sherer admitted that plaintiff's communications with Sherer after March 12, 1981 were clear and understandable.

30. On May 15, 1981, in a meeting between plaintiff and Sherer, Sherer started the meeting by inquiring about plaintiff's efforts to find other employment. Sherer then told plaintiff nothing had changed since their last meeting on March 12, 1981, and asked plaintiff how he wished his separation from Marriott's employment to be handled.

31. On May 29, 1981, during a meeting between Lewis Sherer and plaintiff at the KCI Airport, Sherer informed plaintiff that if plaintiff did not resign his employment, Marriott would demand his resignation.

32. Other general managers who have been placed on probation for alleged poor performance have been given the opportunity during probation to improve their performance and to return to their position as general manager or to transfer to another position with Marriott. These included an individual who completed his three-months probation commencing September, 1978, and continued as general manager at his hotel; another individual who completed his two-months probation commencing September 4, 1981, and was thereafter demoted to a position at defendant's New York national sales office; and a third individual who completed his three-months probation and thereafter was transferred as general manager to another hotel.

33. Plaintiff was treated disparately from other general managers placed on probation for alleged poor performance in that plaintiff was not given the opportunity to improve his performance and remain employed by Marriott, and in that Marriott did not follow its written policy governing implementation of probation for managers.

34. Marriott's medical benefits plan is self-funded by Marriott as it is financed by contributions from participating employees and Marriott itself, with Marriott contributing from its general assets whatever funds are necessary...