Redick v. Kraft, Inc.

• Decision Date: 16 August 1990
• Docket Number: Civ. A. No. 89-2971.
• Citation: 745 F. Supp. 296
• Parties: Michael E. REDICK v. KRAFT, INC.
• Court: U.S. District Court — Eastern District of Pennsylvania

745 F. Supp. 296

Michael E. REDICK v. KRAFT, INC.

Civ. A. No. 89-2971.

United States District Court, E.D. Pennsylvania.

August 16, 1990.

COPYRIGHT MATERIAL OMITTED

Harold K. Cohen, Philadelphia, Pa., for plaintiff.

Joseph J. Costello, Philadelphia, Pa., for defendant.

MEMORANDUM

WALDMAN, District Judge.

I. INTRODUCTION

Plaintiff Michael Redick brought this action against his former employer Kraft, Inc. ("Kraft") after he was terminated by Kraft on December 22, 1988. Plaintiff is a citizen of Pennsylvania and was employed in the Commonwealth by Kraft, an Illinois corporation. Redick's complaint asserts four separate causes of action against Kraft: Count I — breach of contract; Count II — fraudulent misrepresentation; Count III — violation of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1140 ("ERISA"); and, Count IV — violation of the Pennsylvania Wage Payment and Collection Law, 43 Pa.Stat.Ann. § 260.1, et seq. Redick claims four losses: (1) a 1988 bonus from Kraft in an amount of $14,059.74; (2) two weeks of salary for the period from December 22 through January 6 (the "notice period") in an amount of $1,953.85; (3) a contribution to his Section 401K Plan for the notice period; and, (4) a liquidated damages claim for the salary payment pursuant to the WPCL.

Kraft now moves for summary judgment on all four counts of the complaint. For the reasons that follow, the court will grant Kraft's motion for summary judgment with respect to Redick's claims for salary during the notice period and alleged violation of ERISA, and will deny Kraft's motion with respect to Redick's claims for his 1988 bonus and liquidated damages under the WPCL.

The plaintiff seeks leave to amend his complaint to add a claim for wrongful discharge. For the reasons set forth in section IV. D. of this Memorandum, such leave will be denied. Finally, defendant has requested sanctions against plaintiff based on averments in his complaint and for filing an allegedly frivolous motion to amend.

II. SUMMARY JUDGMENT STANDARD

Federal Rule of Civil Procedure 56(c) directs the court to enter summary judgment when the record reveals that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Summary judgment is inappropriate, however, where the evidence before the court reveals a genuine factual disagreement requiring submission to a jury. An issue is "genuine" only if the evidence is such that a reasonable jury could find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). At the summary judgment stage, the judge's function is not ... to weigh the evidence and determine the truth of the matter but to determine whether "there is a genuine issue for trial." Anderson, at 250, 106 S.Ct. at 2511. However, "if the evidence is merely colorable ..., or is not significantly probative ..., summary judgment may be granted." Anderson, at 249-50, 106 S.Ct. at 2511. Only facts that affect the outcome of a trial under applicable law are deemed to be material. Anderson, at 248, 106 S.Ct. at 2510.

The moving party bears the initial burden of identifying for the court those portions of the record that it believes demonstrate the absence of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). Once the moving party has made such a showing, the adverse party "must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). When deciding a summary judgment motion, the court must view all inferences in a light most favorable to the non-moving party, U.S. v. Diebold, 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962), and "the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 256, 106 S.Ct. at 2514 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970)).

III. FACTS

The record before the court consists of the pleadings, affidavits, depositions and exhibits submitted by the parties. The following facts are not in dispute.

Redick was first employed by Kraft in April of 1987 as an engineering manager for the Kraft Dairy Group. Redick's supervisor was Mark Buchheim, the director of production for Kraft. In September of 1988, Mr. Buchheim submitted his resignation with two weeks' notice to Kraft. When Kraft determined that he would be leaving to work for a competitor, John LaBatt, Ltd. ("LaBatt"), Buchheim was told to leave immediately. Following his departure from Kraft, Buchheim telephoned Redick every week or two to keep in touch. In the middle of November, 1988, Buchheim was authorized to hire an engineering manager for one of the dairy subsidiaries of LaBatt. He telephoned Redick to suggest that he apply for the position. Redick was interested in pursuing the opportunity with LaBatt and sent his resume to Buchheim.

On November 21, 1988, Redick met with Buchheim and Neal Blackburn, LaBatt's Vice President for Engineering. This meeting was a technical engineering interview. At this meeting, Redick was not offered a position with LaBatt, and no salary figures or potential starting dates were discussed.

Redick was interviewed in early December 1988 by Richard Cliff, Vice President for Human Resources of Tuscan Dairies, a LaBatt subsidiary. During this interview, no job offer was made to Redick and again there was no discussion of salary or starting date. On December 10, 1988, Neal Blackburn contacted Redick and offered him a position with LaBatt. Blackburn and Redick discussed salary range and benefits at this time. Redick did not accept the offer at that time, indicating he would wait to see the offer in writing.

Redick subsequently received a written offer from LaBatt on December 14, 1988. He signed and dated the letter accepting employment with LaBatt and indicated a preferred starting date of January 16, 1989. Redick did not yet have a definite starting date or location for employment with LaBatt. Redick mailed his acceptance to LaBatt on December 17, 1988.

The following Wednesday, December 21, 1988, Redick traveled to Boston with Lawrence Gundrum, Redick's Supervisor and Vice President of Operations for the frozen products group of Kraft, and Hugh Mazza, Vice President and Director of Human Resources for the dairy division of Kraft, also happened to be in the Boston area that day on unrelated business. The three men were scheduled to fly back to Philadelphia together. While at Logan Airport in Boston, Mazza told Redick that they were aware that he had received an offer of employment from another company and were under the impression that he had accepted that offer. Redick responded that he had not accepted the offer of employment but was planning to make a decision over the Christmas holidays. Gundrum stated that he and Mazza needed to make plans for the coming year and to know Redick's plans by the following day. Gundrum commented to Redick about his annual bonus under the Kraft Management Incentive Plan.

Redick returned home that evening and prepared a letter of resignation dated December 22, 1988. Redick's resignation letter stated that "as of January 6, 1989 I will be terminating my employment with Kraft Dairy Group." He submitted the resignation to Gundrum and Mazza on December 22, 1988. At the time of Redick's resignation, the Kraft Employee Handbook provided that "to terminate in good standing, an employee should give at least two weeks' advance notice to his supervisor." The handbook did not provide that once notice was given the employee had a right to remain and be paid for two weeks. Upon learning of plaintiff's resignation, Gundrum and Mazza told him to leave immediately.

Plaintiff had access to proprietary and confidential information at Kraft. The defendant has a policy of immediately severing any employee who resigns to go to work for a competitor.

The Kraft Management Incentive Plan (the "Incentive Plan") provided that if an Incentive Plan participant resigned prior to December 31 of any year, the participant would not be eligible for an annual bonus. The plan further provided that an employee who was involuntarily terminated during the year "may" be paid a prorated bonus at the discretion of the committee which administered the plan. Hugh Mazza was responsible for the administration of the Incentive Plan. Kraft treated the resignation of Redick as effective immediately and declined to pay Redick a bonus for 1988 pursuant to the Incentive Plan.

Following his termination from Kraft, Redick received no bonus under the Incentive Plan and was not paid a salary for the notice period. As a result, Redick was unable to make the six percent contribution from his salary to the Kraft Section 401K Plan (the "401K Plan") for this period. Redick was not eligible for matching contributions by Kraft to his 401K Plan at the time of his termination, and Redick would not have become eligible for such matching contributions prior to January 6, 1989, the date of his intended departure from Kraft. Kraft did pay to Redick his accrued vacation pay.

The parties do dispute, however, the nature of Gundrum's comment to Redick on December 21, 1988 about the annual bonus. Redick alleges that Gundrum told him that if he was delaying his resignation until the turn of the year to secure a bonus, Gundrum would get him his bonus the next day.¹ Gundrum maintains that he merely mentioned to Redick that the annual bonuses might be available the following day, but denies that he promised plaintiff that his bonus would be secure if he promptly revealed his employment plans.

IV. DISCUSSION

A. Plaintiff's Contract and Misrepresentation Claims

Redick maintains that a binding contract to pay a bonus and two weeks of salary was formed as a result of his version of this discussion on December 21, 1988 at the...