Leeman v. Regions Ins., Inc., Cause No. 3:14-CV-1777 RLM

• Decision Date: 31 March 2017
• Docket Number: Cause No. 3:14-CV-1777 RLM
• Parties: PAMELA A. LEEMAN, Plaintiff v. REGIONS INSURANCE, INC., Defendant
• Court: U.S. District Court — Northern District of Indiana

PAMELA A. LEEMAN, Plaintiff v. REGIONS INSURANCE, INC., Defendant

Cause No. 3:14-CV-1777 RLM

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA SOUTH BEND DIVISION

March 31, 2017

OPINION AND ORDER

Pamela Leeman brought suit against her former employer, Regions Insurance, Inc., after she was terminated for refusing to sign an amendment to an employment agreements modifying the terms of compensation. In her third amended complaint, she seeks a declaration that two of the provisions in her original employment agreement are overly broad and unenforceable (Count 1) and asserts claims for breach of contract (Count 2), and employment discrimination under Title VII, the Age Discrimination in Employment Act, and the Equal Pay Act (Counts 3-8). Cross motions for summary judgment on Counts 1 and 2 [Doc. Nos. 34 and 53] currently pend before the court.¹ For the following reasons, Regions' motion is granted, and the plaintiff's motion is denied.

I. BACKGROUND

Pamela Leeman worked as an insurance agent ("producer") for Regions and its predecessor, Miles & Finch, from 1996 until April 1, 2015, when she was terminated.

On December 18, 2006, Ms. Leeman entered into a Producer Employment Agreement with Miles & Finch, which, among other things, set the rates of compensation, provided that "changes in the time of payments, rate and terms of compensation may be made from time to time by mutual agreement", and included restrictions on the disclosure of confidential information, the solicitation of "any Customer that [Ms. Leeman] was wholly or partially responsible for managing, supervising, or servicing . . . at the time of [her] termination", and hiring or soliciting to hire "any other producers of Miles & Finch". Under the Agreement, if a client purchased insurance from Ms. Leeman, she received a portion of Miles & Finch's commission (or "revenue") - generally 35 percent on business she handled alone. Ms. Leeman co-managed accounts with another Miles & Finch producer, Brett Cain, and worked out an arrangement whereby she and Cain each received 25 percent of the revenue on their shared accounts (a 50 percent shared commission).

Regions purchased a portion of Miles & Finch's assets in early 2007, and continued the employment of several of Miles & Finch's producers, including Ms. Leeman. The producers' job responsibilities and compensation structure remainedthe same, and Ms. Leeman and Mr. Cain were allowed to continue their split account arrangement.

In 2012, Regions began to make changes to the terms of compensation, reducing the rate of compensation on new co-managed property and casualty accounts from 25 percent to 17.5 percent. In 2014, it changed the compensation rate on accounts reassigned from departing producers from 35 percent to 20 percent, and reassigned all small accounts (accounts generating $1,500 or less in annual revenue) to its Small Accounts/RIG Select Unit.

In January 2015, Regions: (1) announced that it was going to reduce the rate of compensation on pre-existing co-managed accounts from 25 percent to 17.5 percent; (2) asked its producers to sign an "Amendment to Agreement" modifying the compensation and benefits provisions of the 2006 Producer Employment Agreement, effective January 1, 2015 [Doc. No. 26-2]; and (3) notified the producers that anyone who didn't sign the Amendment by March 31, 2015 would be terminated. The Amendment deleted paragraph 1 and Exhibit A (the Producer Compensation schedule) of the 2006 Producer Employment Agreement, and replaced it with a new "Compensation, Benefits and Expenses" provision that set the rates of compensation for all new, renewal, and assigned business beginning January 1, 2015, and provided that: "All commissions and fees are subject to adjustments for...commission sharing arrangements when other insurance producers or licensed insurance associates assist the Producer in obtaining new, renewal and/or assigned business..." (Amendment ¶ 1(a)(i) and (ii)).

After producers complained, Regions "reversed" the rate change for pre-existing co-managed accounts, and retroactively credited any lost compensation to the producers' accounts, including Ms. Leeman's. When Ms. Leeman and another producer, Chris Williamson, refused to sign the Amendment, Regions terminated their employment.

Ms. Leeman brought suit against Regions, alleging, among other things that:

(1) The confidentiality and "restrictions after termination" provisions in her 2006 Producer Employment Agreement (¶¶ 4 and 5) are overly broad and unenforceable and seeks declaratory relief to that effect (Count 1); and

(2) Regions breached the Employment Agreement by:

(a) unilaterally changing the rates of compensation on co-managed accounts in June 2012 and January 2015,

(b) unilaterally changing the compensation rate on accounts reassigned from departing producers, and

(c) reassigning small accounts (accounts generating $1,500 or less in annual revenue) to Region's Small Business Unit in July 2014. (Count 2). [Doc. No. 26].

II. STANDARD OF REVIEW

Summary judgment is appropriate when the record demonstrates that there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317,322 (1986); Protective Life Ins. Co. v. Hansen, 632 F.3d 388, 392 (7th Cir. 2011). The court construes the evidence, and all inferences that reasonably can be drawn from the evidence, in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The moving party bears the burden of informing the court of the basis for its motion and identifying the parts of the record that demonstrate the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. at 323. It can meet that burden by showing that there's no evidence to support the non-moving party's case. Id. at 325. Once the moving party has met its burden, the opposing party can't rest upon the allegations in the pleadings, but must "point to evidence that can be put in an admissible form at trial, and that, if believed by the fact-finder, could support judgment in his favor." Marr v. Bank of America, N.A., 662 F.3d 963, 966 (7th Cir. 2011); see also Hastings Mut. Ins. Co. v. LaFollette, No. 1:07-cv-1085, 2009 WL 348769, at *2 (S.D. Ind. Feb. 6, 2009)( "It is not the duty of the court to scour the record in search of evidence to defeat a motion for summary judgment; rather, the nonmoving party bears the responsibility of identifying the evidence upon which he relies."); Hammel v. Eau Galle Cheese Factory, 407 F.3d 852, 859 (7th Cir. 2005)(quoting Hammel v. Eau Galle Cheese Factory, No. 02-C-0405-C, 2003 WL 21665133, at *7 (W.D. Wis. June 26, 2003) ("Summary judgment is not a dress rehearsal or practice run; it 'is the 'put up or shut up' moment in a lawsuit, when a party must show what evidence it has that would convince a trier of fact to accept its version of events'").

III. DISCUSSION

Pursuant to paragraph 12 of the Employment Agreement, "[The] Agreement shall be interpreted and enforced in accordance with the laws of the State of Indiana." The parties agree that whether the provisions in question (¶¶ 4 and 5) are reasonable and enforceable is a question of law for the court to decide. See Bodemer v. Swanel Beverage, Inc., 884 F.Supp.2d 717, 730 (N.D. Ind. 2012); Licocci v. Cardinal Assocs., Inc., 445 N.E.2d 556, 561 (Ind. 1983). They also agree that there are no genuine issues of fact precluding the entry of judgment on either the declaratory judgment or the breach of contract claim.

A. The Confidentiality and Restrictions Provisions (Count 1)

Paragraphs 4 and 5 of the 2006 Employment Agreement provide in relevant part as follows:

4. Confidentiality. In exchange, and as consideration, for Producer's promises contained in this Agreement, Miles & Finch promises that, immediately upon the execution of the Agreement, Producer shall be provided access to Miles & Finch's Confidential Information.

(a) Producer agrees that Miles & Finch has a legitimate business interest in its Confidential Information. Producer acknowledges that the insurance business is highly competitive; that profitability depends, in large part, upon repeat business; that knowledge of an agency's customers' identities, needs, policy expiration dates, and related data is a valuable competitive tool which can be used by a competitor to that agency's substantial detriment; and that Producer will acquire such knowledge from Miles & Finch in the course of Producer's employment. As such, the Parties agree thatMiles & Finch is entitled to prevent the disclosure of its Confidential Information.

(b) For purposes of this Agreement, the Parties acknowledge and agree that "Confidential Information" means Miles & Finch's proprietary information that is not generally available to the public (unless such information has become available to the public through fault of Producer). Confidential Information includes, but is not limited to: (1) Miles & Finch's proprietary databases and information; (2) Miles & Finch's methods of operation, marketing strategies, and promotional materials; (3) Miles & Finch's contact and referral identity information; (4) Miles & Finch's carriers', customers', and potential customers' identities, needs, prices, services, and policy expiration dates; (5) documented proprietary systems and procedures; (6) logistical information and strategy implementation methodologies; (7) training provided to Producer by Miles & Finch in the techniques and methods of the sale of insurance; (8) research reports and internal documentation prepared by Miles & Finch; and (9) all other files, instruments, documents, papers and other materials used in connection with Miles & Finch's business....

5. Restrictions After Termination. Producer agrees that during his or her employment and for a period of two (2) years following termination of his or her employment...he or she

...