Kramer v. Franklin Covey Co.
| Decision Date | 09 February 2021 |
| Docket Number | Civil Action No. 2:18-cv-1599 |
| Court | U.S. District Court — Western District of Pennsylvania |
| Parties | SHELBY KRAMER, Plaintiff, v. FRANKLIN COVEY CO, Defendant. |
Hon. William S. Stickman IV
Defendant, Franklin Covey Co., filed its Motion for Summary Judgment (ECF No. 34), together with an accompanying Brief in Support (ECF No. 35), requesting that the Court grant summary judgment against Plaintiff, Shelby Kramer, on all counts. After consideration of the parties' pleadings and their positions at oral argument, the Court grants in part and denies in part Defendant's Motion for Summary Judgment (ECF No. 34).
I. FACTUAL BACKGROUND
Defendant is an organizational improvement company. Defendant's clients often engage it to improve several aspects of their operational schemes, including improving the effectiveness of employees, leadership capabilities, execution of strategy, and overall company culture. Defendant employed Plaintiff, Shelby Kramer, from 2007 to 2014 as an Associate Client Partner (ECF No. 36, ¶¶ 1-2); (ECF No. 43, ¶¶ 1-2). Client Partners are commission-based and usually earned commissions of 8% on account revenue generated and could earn up to 12% if they achieved all quarterly bonuses. (ECF No. 45, ¶ 64); (ECF No. 52, ¶ 64). Plaintiff gave birth to her first child while employed by Defendant.1 In 2014, Plaintiff resigned from her employment with Defendant to pursue employment with SkillSoft. (ECF No. 36, ¶¶ 3-4); (ECF No. 43; ¶¶ 3-4).
In 2015, Defendant rehired Plaintiff as a Sales Manager for its northeast region. Her duties as a Sales Manager included managing a group of Associate Client Partners, coaching and teaching them, holding them accountable to sales goals, attending client visits, and creating strategy for penetrating accounts. Plaintiff's supervisor at the time was General Manager Elise Roma ("GM Roma"). That same year, Defendant consolidated its sales regions, and Plaintiff's title transitioned from Sales Manager to Managing Director. (ECF No. 36, ¶¶ 6-10); (ECF No. 43, ¶¶ 6-10). As a Managing Director, Plaintiff had a total target annual compensation of $240,000. (ECF No. 46-18, p. 2); (ECF No. 52, ¶ 65). At the same time, Defendant appointed General Manager Mark Josie ("GM Josie") as a new supervisor for Plaintiff. (ECF No. 36, ¶ 9); (ECF No. 43, ¶ 9).
Plaintiff was generally known as a diligent worker and strong performer who routinely fulfilled her job responsibilities in a satisfactory manner. (ECF No. 45, ¶ 6); (ECF No. 52, ¶ 6). Plaintiff did not have performance issues, and her superiors believed her to be a hard worker and a good manager. (ECF No. 45, ¶¶ 6, 8, 50-53); (ECF No. 52, ¶¶ 6, 8, 50-53). GM Josie told Plaintiff that he planned to expand Plaintiff's team to include twelve to thirteen Client Partners. (ECF No. 45, ¶ 9); (ECF No. 52, ¶ 9).
In October of 2016, Plaintiff informed GM Josie that she was pregnant and planned to take an eight-week maternity leave beginning in April of 2017.2 (ECF No. 37-1, p. 14); (ECF No. 52, ¶ 10). According to Plaintiff, GM Josie's treatment of her changed after she revealed her pregnancy and planned leave. (ECF No. 45, ¶ 11); (ECF No. 52, ¶ 11). She claims that the following events and circumstances adversely affected her employment: (1) GM Josie began to generally ignore Plaintiff after revealing her pregnancy, and specifically, he ignored emails, requests to join meetings remotely, and stopped having scheduled meetings with her to discuss her team3 (ECF No. 45, ¶ 12); (ECF No. 52, ¶ 12); (2) although GM Josie previously promised to "scramble" the Client Partner teams (i.e., put seasoned Client Partners on each ManagingDirector's team) to give each team a fair chance to produce revenue, GM Josie "scrambled" all teams except for Plaintiff's (ECF No. 37-1, p. 14); (ECF No. 45, ¶ 13); (ECF No. 52, ¶ 13); (3) although the company's operating guidelines prohibited doing so, GM Josie permitted other teams to take account targets from Client Partners on her team (ECF No. 45, ¶ 15); (ECF No. 52, ¶ 15); (4) GM Josie did not provide Plaintiff's team with gift cards for achieving substantial growth in the prior fiscal year, despite awarding other teams gift cards (ECF No. 45, ¶ 17); (ECF No. 52, ¶ 17); and (5) GM Josie cancelled hiring on Plaintiff's team because he believed it would not be a good idea to hire employees shortly before Plaintiff began her leave (ECF No. 53-3, pp. 3-6); (ECF No. 52, ¶ 18).
Some of these circumstances prompted Plaintiff to have phone discussions with Chief People Officer, Todd Davis ("CPO Davis"). During Plaintiff's first conversation with CPO Davis, she complained of GM Josie allowing other teams to take accounts and alleged that there was "favoritism" at play. (ECF No. 45, ¶ 16); (ECF No. 52, ¶ 16). In Plaintiff's second conversation with CPO Davis, she told CPO Davis that she was not comfortable with GM Josie's cancelling of the hiring on her team because of her pregnancy. (ECF No. 45, ¶ 22); (ECF No. 52, ¶ 22). During the same conversation, Plaintiff also informed CPO Davis of the instance in which GM Josie refused to provide her team with gift cards, and she further noted that she was "getting scared" because GM Josie "was starting to ignore [her] emails and cancel [her] one-on-ones."4 (ECF No. 36, ¶ 90); (ECF No. 43, ¶ 90). Neither GM Josie nor Executive Vice President of Global Salesand Delivery, Paul Walker ("EVP Walker") were informed of these discussions. (ECF No. 37-2, p. 6); (ECF No. 36, ¶¶ 91, 93); (ECF No. 43, ¶¶ 91, 93).
Around the same time that Plaintiff disclosed her pregnancy, Defendant began introducing a subscription-based product labeled "All Access Pass," which allowed clients to obtain subscriptions to all of Defendant's content and solutions simultaneously. (ECF No.36, ¶ 11); (ECF No. 43 ¶ 11). Defendant began transitioning its business model to accommodate changes in its business strategy, including implementing changes in its hiring practices to suit different methods of selling. (ECF No. 36, ¶ 12); (ECF No. 43, ¶ 12). The new business model would include the use of more experienced senior sales employees, while the prior model generally utilized junior sales employees. (ECF No. 36, ¶¶ 13-14); (ECF No. 43, ¶¶ 13-14). The restructuring was planned and discussed by top-level management, including EVP Walker; Chief Executive Officer Robert Whitman ("CEO Whitman"); CPO Davis; and Chief Financial Officer Stephen Young ("CFO Young"). (ECF No. 36, ¶¶ 16-17); (ECF No. 43, ¶¶ 16-17). EVP Walker was ultimately the executive charged with implementing the restructuring. (ECF No. 37-2, p. 6); (ECF No. 43, ¶ 16).
Pursuant to the restructuring, Defendant consolidated its three sales regions (East, Central, and West) into two sales regions (Pacific and Atlantic). (ECF No. 36, ¶ 18); (ECF No. 43, ¶ 18). Prior to consolidating the regions, GM Josie managed the East Region, Mike Heinold managed the Central Region, and General Manager Jennifer Colisomo ("GM Colisomo") managed the West Region. (ECF No. 36, ¶ 19); (ECF No. 43, ¶ 19). Going forward, each sales region was organized into pods, which functioned as the primary operating unit of the company. (ECF No. 37-2, p. 18); (ECF No. 43, ¶ 20). Although Managing Directors were typically charged with overseeing salespeople, under the new pod structure, Managing Directors were responsible for more revenue and functions because of the transition into a general-manager type role instead of a sales leaderrole. (ECF No. 37-2, p. 8); (ECF No. 43, ¶ 22). Managing Directors would have more employees reporting to them, including inside business partners, sales assistants, client service coordinators, regional practice leaders, and implementation specialists. (ECF No. 37-2, pp. 11, 12); (ECF No. 43, ¶ 23).
The restructuring also included the transition of employees into different roles because, according to EVP Walker, some employees then serving as Managing Directors did not have the leadership skills and experience necessary for the restructured role. (ECF No. 37-2, p. 12); (ECF No. 43, ¶ 25). EVP Walker, CEO Whitman, GM Colisomo, and GM Josie were responsible for deciding which employees would be affected by the restructuring. (ECF No. 37-2, p. 14); (ECF No. 43, ¶ 26). They met to discuss changes to the company's structure in connection with reorganization. (ECF No. 45, ¶ 28); (ECF No. 52, ¶ 28). During that meeting, they put together an initial list of individuals—Plaintiff, Andrew Jeppson, Adriana Coury, and Jessica Farnsworth5—that would be transitioned in the restructuring, which was subsequently revised and approved of by Defendant's Chairman and HR Department. (ECF No. 45, ¶ 29); (ECF No. 52, ¶ 29); (ECF No. 48-3, p. 2). According to GM Josie, each person charged with putting together the list had their own criteria for evaluating employees. (ECF No. 45, ¶ 34); (ECF No. 52, ¶ 34). For instance, GM Josie identified a number of criteria that he may have considered, including chemistry, personal situations, capacity to run a large organization, track record with the company, business acumen and educational level, the type of client partners managed, and the ability to work with different clients. (ECF No. 45, ¶ 35); (ECF No. 52, ¶ 35); (ECF No. 46-9, pp. 9-10). EVP Walker considered Plaintiff's transition because she had previously been managing a group ofjunior salespeople, and junior salespeople would be leaving the company as a result of the restructuring. (ECF No. 37-2, p. 9); (ECF No. 43, ¶ 28).
As part of the restructuring, the company also considered hiring Coral Rice6 and John Harding as Managing Directors. (ECF No. 37-2, pp. 10, 12); (ECF No. 43, ¶ 31). Coral Rice was ultimately hired as a Managing Director while John Harding was not. (ECF No. 36, ¶ 37); (ECF No. 43, ¶ 37). CEO Whitman and GM Josie evaluated the remaining Managing Directors serving in the East Region and decided on ...
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