Irwin v. Fed. Express Corp.
| Decision Date | 05 December 2016 |
| Docket Number | 1:14-cv-00557 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | DAVID IRWIN, Plaintiff, v. FEDERAL EXPRESS CORPORATION, Defendant. |
This case involves multiple claims by David Irwin arising from the termination of his employment by Defendant Federal Express Corporation ("FedEx"). Both parties have moved for summary judgment. Irwin seeks summary judgment on his claims for breach of contract and violations of the North Carolina Wage and Hour Act ("WHA"), N.C. Gen. Stat. § 95-25.1 et seq. (Doc. 56.) FedEx seeks summary judgment on all of Irwin's claims, which also include claims for violations of North Carolina's Unfair and Deceptive Trade Practices Act ("UDTPA"), N.C. Gen. Stat. § 75-1.1, and common law fraud. (Doc. 58.) For the reasons set forth below, the court will grant FedEx's motion as to Irwin's claims under the UDTPA, the WHA, and for common law fraud. Because a genuine dispute of material fact exists as to the breach of contract claims, the parties' cross motions for summary judgment will be denied.
The parties have submitted an extensive record. In short, it reflects the following:
In 1999, FedEx acquired an air freight forwarding company then renamed Caribbean Transportation Services ("CTS"). (Doc. 7, ¶ 5; Doc. 57-2 at 6.) Irwin was one of CTS's three officers and, after the acquisition, became its senior vice president. (Doc. 7, ¶ 5; Doc. 57-2 at 6.)
Around June 1, 2009, FedEx merged with CTS, turning CTS into a division of FedEx, now named FedEx Latin America. (Doc. 57-2 at 5-6.) As a result of the merger, many positions were eliminated — including Irwin's. (Doc. 7, ¶ 6.) Irwin began negotiating a severance package with FedEx but stopped when the president of FedEx Latin America persuaded him to remain employed as managing director of Caribbean operations. (Id.)
In late 2012, FedEx sought to reduce costs and announced a voluntary buyout program - which it shorthanded as "VBO" - to be offered to selected employees. (Doc. 57-7 at 12; Doc. 57-8 at 1-3; Doc. 63-4 at 1-67.) As part of that program, in February 2013, FedEx offered, and Irwin signed, a "Confidential Severance Agreement General Release and Waiver" (the "Agreement"). (Doc. 63-4 at 61-67.) He signed this Agreement after his supervisor, Julio Columba, told him that FedEx "would likely be going through a restructuring process" and that Irwin's employment "may be inimmediate jeopardy if the agreement was not signed." (Doc. 7, ¶ 8; Doc. 63-1 at 11-12.)
Under the Agreement, Irwin made several promises, including to continue working for FedEx until November 30, 2013, and not to compete against the company for one year following the end of his employment. (Doc. 63-4 at 61-66.) "[I]n return for [Irwin's] promises contained in this Agreement," FedEx agreed, among other things, to pay him "severance benefits" of approximately $275,000 (comprising a $199,041.23 lump sum severance benefit, a $25,000 health reimbursement account payment, an annual incentive compensation ("AIC") bonus of $10,486, and a $40,000 prorated long term incentive payment).1 (Doc. 7, ¶¶ 8, 14; Doc. 63-4 at 61-62.) The Agreement contained a provision that permitted Irwin to revoke the Agreement before the expiration of seven days, and further stated that "[o]nly when the revocation period has expired and the Agreement has been fully executed by both parties will the special severance payment be made by FEDEX as set forth in the Agreement." (Doc. 63-4 at 67.) The Agreement also provided in section 13(n): "[I]f after executing this Agreement, but prior to the effective date, [Irwin] engages in conduct or has performance deficiencies that would normally result in termination, he will be terminatedand his Agreement will be null and void." (Id. at 66.) The Agreement did not define what conduct would "normally result in termination." (Id.; Doc. 7, ¶ 19.)
After the seven-day expiration period, FedEx Senior Vice President Connie Lewis Lensing sent Irwin a letter dated February 25, 2013, stating, (Doc. 63-4 at 68.)
Later, in the summer of 2013, FedEx invited Irwin to end his employment on August 31, 2013, rather than on November 30, 2013, as provided in the Agreement. (Doc. 63-6 at 7-8.) Irwin was told that this request came because of FedEx's desire "to get further savings from the VBO." (Doc. 58-5 at 4.) Irwin claims he was told that "if he accepted the offer, his Employment Agreement would be honored." (Doc. 7, ¶ 9.) Irwin declined the invitation, to ensure that the management transition "went smoothly." (Doc. 63-6 at 9.)
On October 31, 2013, Irwin's manager asked him to attend a meeting the next day, which Irwin thought could be for a retirement party. (Doc. 7, ¶ 10.) As it turned out, that next day Irwin was told that he was being suspended, but was not told why. (Doc. 57-1 at 6.) Roughly two weeks later, on November 14, Irwin was called into the office to meet with internal company auditors. (Doc. 7,¶ 11; Doc. 57-3 at 7.) The auditors asked him about company operations occurring roughly five years earlier. (Doc. 7, ¶ 11.) Irwin explained that he was not involved in the matters they raised. (Id.)
Shortly thereafter, on November 27, 2013, FedEx informed Irwin that he would be terminated, effective November 29, 2013, and that the Agreement was "null and void in its entirety." (Doc. 57-4 at 49; Doc. 58-1 at 3; Doc. 63-6 at 25-26.) Irwin says that FedEx did not cite any "facts or evidence" for terminating him or for declaring the Agreement void (Doc. 7, ¶ 13), although he claims the company ultimately relied on the above-quoted section 13(n) of the Agreement (id., ¶ 18). Irwin denies ever having engaged in conduct that would "normally result in termination" under the terms of the Agreement. (Id., ¶¶ 19-20; Doc. 58-8 at 3.)
Irwin sought to review the evidence supporting his alleged misconduct so that he could respond, because he had so far carried "an unblemished record, with no prior warnings or write-ups of any kind." (Doc. 7, ¶ 15.) FedEx refused, and Irwin filed internal appeals, which FedEx denied. (Doc. 57-4 at 54.) According to Irwin, had he worked one more day, he would have been entitled to $275,000 in severance compensation under the Agreement. (Doc. 7, ¶ 14.)
Irwin alleges that he has honored all of his obligations under the Agreement and that FedEx has wrongfully refused to honor itsobligations. (Id. ¶ 21.) He filed this lawsuit initially in the Superior Court of Guilford County, North Carolina. (Doc. 1-2 at 1.) FedEx removed the action to this court based on diversity jurisdiction. (Doc. 1.) The complaint, following this court's ruling on a prior motion to dismiss (Doc. 14), now contains six claims for relief: two claims for breach of the employment contract; two claims for violations of North Carolina's WHA; one claim for violation of North Carolina's UDTPA; and one claim for common law fraud.
Summary judgment is appropriate where the pleadings, affidavits, and other proper discovery materials demonstrate that no genuine dispute as to any material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-33 (1986). The party seeking summary judgment bears the burden of initially demonstrating the absence of a genuine dispute as to any material fact. Celotex, 477 U.S. at 323. If this burden is met, the nonmoving party must then affirmatively demonstrate a genuine dispute of material fact which requires trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). There is no issue for trial unless sufficient evidence favoring the nonmoving party exists for a factfinder to return a verdict for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 257 (1986).
In addition, the nonmoving party is entitled to have the "credibility of his evidence as forecast assumed, his version of all that is in dispute accepted, [and] all internal conflicts in it resolved favorably to him." Metric/Kvaerner Fayetteville v. Fed. Ins. Co., 403 F.3d 188, 197 (4th Cir. 2005) (quoting Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979)) (initial quotation marks omitted). Because there are cross motions for summary judgment, the court must be careful to apply this test to each motion, thus viewing the evidence in the light most favorable to the non-moving party.
The parties dispute whether FedEx entered into a bilateral contract with Irwin or, alternatively, whether FedEx made a unilateral offer of payment to him in exchange for his performance of continued employment. In addition, even if either of the foregoing were to be proved, the parties dispute whether FedEx's termination of Irwin constituted a breach. The parties seem to agree, however, that in the absence of any contract between them, FedEx was free to terminate Irwin as an at-will employee.
Irwin argues that the Agreement is binding under alternative legal theories: as a unilateral contract that was accepted by his performance (Doc. 59 at 8), and as a bilateral contract that FedExagreed to (Doc. 63 at 20). FedEx argues that the Agreement is a bilateral contract that is not binding because the company never executed it, and that Irwin's claims fail even under a unilateral contract theory because as the offeror, FedEx was free to withdraw the offer before its effective date. (Doc. 57 at 24-25.)
Because this case is based on the court's diversity jurisdiction, the choice of law rules of the forum state apply. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 495-97 (1941). For a contract claim, North Carolina's choice of law rule is lex loci contractus - the law of the place where the...
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