Klaus v. Hilb, Rogal & Hamilton Co. of Ohio
| Decision Date | 30 June 2006 |
| Docket Number | No. C2-04-034.,C2-04-034. |
| Citation | 437 F.Supp.2d 706 |
| Court | U.S. District Court — Southern District of Ohio |
| Parties | Angela KLAUS, Plaintiff, v. HILB, ROGAL & HAMILTON CO. OF OHIO (a/k/a Berwanger Overmyer Associates). Defendant. |
Richard T. Robol, Robol Law Office, Columbus, OH, for Plaintiff.
Andrew Christian Smith, Michael Charles Griffaton, Vorys Sater Seymour & Pease, Columbus, OH, for Defendant.
Plaintiff, Angela Klaus (Klaus), brings this action against her former employer, Defendant Hilb, Rogal & Hamilton Co. of Ohio, a/k/a Berwanger Overmyer Associates, claiming gender discrimination in violation of Title VII, 42 U.S.C. § 2000e et seq., and Ohio Revised Code § 4112.02, as well as a violation of the Equal Pay Act, 29 U.S.C. § 201 et seq. Klaus also alleges retaliatory discharge, breach of contract and promissory estoppel. BOA asserts a Counter-Claim for breach of the covenant not to compete contained in her Employment Agreement. This matter is before the Court for consideration of the parties' Cross-Motions for Summary Judgment and BOA's Motions to strike supporting affidavits. For the reasons that follow, BOA's Motion for Summary Judgment on Plaintiff's claims is granted in part and denied in part; Klaus's Motion for Summary Judgment on the Counter-Claims is denied; and BOA's Cross-Motion for Summary Judgment on the Counter-Claims is denied.
Defendant, Hilb Rogal & Hobbs of Ohio (a/k/a Berwanger Overmyer Associates)("BOA"),1 provides financial and insurance products, planning and services to businesses and individuals in the Central Ohio area. BOA specializes in various types of commercial property and casualty insurance, together with professional liability, homeowner and automobile insurance. BOA is also involved in employee benefits and corporate retirement planning.
During the time Angela Klaus worked at BOA, the company sold financial planning services, mutual funds, and retirement plans to individual investors through BOA's Financial Services Division. On April 16, 2001, BOA hired Klaus as a producer in its Financial Services Division to sell insurance and financial products to individuals and businesses.
Klaus executed a written contract of employment with BOA, which the company drafted. The employment agreement requires 30 days written notice as a condition precedent to termination, absent termination for fraud or misconduct: "The Producer's employment hereunder may be terminated, at any time, by either party, with or without cause, upon thirty (30) days written notice." (Empl.Agmt., p. 5, ¶11.)
The employment agreement further prohibited Klaus from disclosing "confidential information," which is defined as information (a) acquired by during the course of employment and (b) not generally known in the insurance business or relevant trade or industry. In particular, the agreement defines confidential information:
... information and know-how acquired by Producer during or as a result of past, present or future employment by BOA, which is not readily available to the general public, and which relates to the existing, proposed or anticipated business, services, or commercial activities of BOA or its customers, clients, policyholders, or referral sources, including but not limited to BOA's methods of operation and training, business plans, financial information, personnel information, customer or prospective customer lists, and expiration lists, obtained by Producer in the course of his/ her employment under this Agreement which are not generally known in the insurance business or relevant trade or industry.
(Empl.Agmt., ¶ 12(a).) The agreement provided that Klaus "... shall not at any time, either during or after employment, directly or indirectly, disclose or disseminate to any third party or use any Confidential Information ..." (Empl.Agmt., ¶ 12(b).)
The employment agreement also contained a covenant not to compete, which stated in relevant part:
b. For a period of twenty-four (24) months following termination of employment, Producer shall not, directly or indirectly, for the benefit of Producer or others, either as principal, agent, manager, consultant, owner, employee, or otherwise, engage in any of the following:
I) solicit or attempt to solicit any person or entity who was a customer, client, or policyholder of BOA at any time during the one year period immediately preceding the termination of Producer's employment, for the purpose of providing or selling products or services provided by BOA at the time of Producer's termination.
ii) Provide or sell products or services provided by BOA at the time of Producer's termination, to any person or entity who was a customer, client, or policyholder of BOA at any time during the one (1) year period immediately preceding the termination of Producer's employment.
iii) Solicit, attempt to solicit, or hire any employee of BOA, or provide any information regarding individual employees of BOA to any individual, agency or company for the purpose of facilitating the recruitment of said employees.
(Empl.Agmt., ¶ 13.) BOA and Klaus further agreed that after she left BOA's employment, she could represent BOA clients who actively sought out her services without her interference or solicitation. (Empl.Agmt., § 13c.) If this situation occurred, Klaus agreed that she would "compensate BOA by paying to BOA two (2) times the first year's gross commissions and/or fees received by [her] after the termination of this Agreement from such business, or two (2) times the annual gross commissions and/or fees which has been received by BOA as an agency from such business, whichever is greater." (Id.) The covenants and agreements relating to Section 12, regarding confidential information, and Section 13, regarding non-competition, "survive the termination of employment of the Producer." (Id., at § 11.)
Under the terms of the Employment Agreement, BOA agreed to pay Klaus an initial "salaried" period, followed by 100% commission-based payments. For the first twelve months of her employment, Klaus was paid a salary of $4,000/month, or $48,000 annually, and a car allowance of $250/month.2
After graduating from college in 1998, Klaus gained experience in the financial services field by working as a financial analyst and financial planner. She had experience in servicing, promoting and marketing financial services and products. Klaus, however, had never worked on a commission basis and never sold financial services products such as mutual funds, securities, or qualified retirement plans before working at BOA in 2001. Prior to her employment at BOA, Klaus obtained her NASD Series 6 and NASD Series 63 licenses, which enabled her to sell securities.
BOA paid for Klaus to take the final examination necessary to obtain her Certified Financial Planner (CFP) designation, which relates to the sale of investments, and for her Chartered Life Underwriter (CLU) designation, which relates insurance and advanced insurance strategies. Klaus also held a license as an Investment-Advisor Representative (IAE). BOA paid for Klaus's mandatory continuing education to maintain her CFP and CLU designations, attendance at professional conferences, and her dues for membership in trade associations.
When she began her employment, Klaus's initial supervisor, Bob Ferris, met with her weekly in an effort to develop her career and train her as a producer. Ferris and her coworkers supported Klaus in business and career development as a producer by giving her referrals, leads and additional training. When Ferris passed away, BOA gave Klaus many of his clients. Approximately 80% of Klaus's business resulted from internal BOA referrals from other BOA producers. (Klaus Dep., 231-233.) The remaining 20% of Klaus's business came from clients she had obtained through her own efforts while at BOA. (Id.)
After the first twelve months of her employment, Klaus no longer received a base salary and instead was paid on a completely 100%-commission basis. Klaus was allowed to take $4,000/month as a draw against her potential commissions.3 Generally, a producer at BOA was required to generate enough business each month so that his or her commission is equal to or greater than the producer's monthly draw. If the producer failed to do so, the producer had a negative balance, and, in essence, would have taken more money from BOA than he or she was entitled, and would be "overdrawn" on commission ("overdrawn commission").
According to BOA, under a producer's employment agreement, overdrawn commissions are considered loans. (Overmyer Dec. 117, Employment Agmt., Section 3.b ()). Klaus understood that she could renegotiate the amount of her monthly draw for a higher or lower amount and, in fact, once considered decreasing it because her production was not covering her draw.
During her employment, Klaus received various performance awards, including membership in BOA's "Master's Club," and "Top 100 List." Admission to the Master's Club was highly desirable, as it entailed various benefits and rewards for top producers. Similarly, the Top 100 list recognized the top 100 out of the approximately 400 producers throughout the country. Membership in the Master's Club was awarded on an annual basis. Different divisions within BOA had different sales goals to qualify for membership. In 2002-2003, for example, financial services producers such as Klaus needed $95,000 to qualify. (Overmyer Dep. 129-131.) Producers in other divisions needed $55,000 to qualify.
In December, 2002, Klaus complained to her then supervisor, Ron Overmyer, that she had not been admitted to the Master's Club, despite her belief that she had...
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