Summary
In Barsky, Judge Kelly held that "[l]ost future earnings, due to an alleged improper termination, are more appropriately categorized as expectation damages.
Summary of this case from TAMBAY v. PEEROpinion
Civil Action No. 04-1303.
August 30, 2004
MEMORANDUM
Before this Court is Defendants', Beasley Mezzanine Holdings, L.L.C. and Beasley Broadcast Group, Inc., Motion for Partial Judgment on the Pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. For the reasons that follow, Defendants' Motion will be granted in part and denied in part.
I. BACKGROUND
Plaintiff Paul Barsky is a morning radio show personality in the Philadelphia Metropolitan Area. Defendants Beasley Mezzanine Holdings, LLC ("BMH") and Beasley Broadcast Group, Inc. ("BBG") are the owners and operators of WPTP, 96.5 FM (hereinafter the "Radio Station"), a radio station in that market. The parties entered into a five-year employment agreement in March, 2003. The terms of that relationship were memorialized in a written Proposal signed and dated March 3, 2003. (Compl. _ 8, Ex. A). The terms of the written Proposal conditionally guaranteed employment to Barsky. The Proposal provides in relevant part:
[t]he Company will guarantee the Artists's employment for Year One of the Agreement. Beginning in Year Two and continuing throughout the remainder of the Agreement, should the Morning Drive, Monday — Friday 6AM — 10AM program fail to achieve a 3.0 AQH Metro Share or a #13 rank or above for Adults 25-54 for two consecutive rating periods, the Company would have the option to cancel the Agreement with an immediate payment equivalent to six (6) months of the Base Salary then in effect.
. . . .
In the event the Company should choose to change the format of the station to a format that is by mutual agreement, incompatible with the Artist, the Agreement shall terminate and the Artist shall receive an immediate payment equivalent to six (6) months of the Base Salary then in effect with no post employment restrictions.
(Id. at Ex. A).
On November 17, 2003, BMH and BBG changed the format of the Radio Station from an "adult pop" format to a format with a "rhythmic contemporary sound." (Id., _ 9). Barsky was removed from the air effective with the format change, and the parties entered discussions regarding Barsky's compatibility with the new station format. (Id., __ 11-13). Barsky was paid his salary for the entire time he was employed, including the period during which the parties were in discussions regarding Barsky's compatibility with the new format. (Id., __ 20, 41). Defendants terminated Barsky's employment effective December 30, 2003 by letter. (Id., _ 20, Ex. E). Barsky filed the instant action seeking to recover the residual value of the employment agreement, alleging breach of contract in Count I and a violation of Pennsylvania's Wage Payment and Collection Law in Count II.
II. STANDARD
Federal Rule of Civil Procedure 12(c) allows any party to move for judgment on the pleadings after the pleadings have closed, but not within such time as to delay trial. In order to prevail on such a motion, the movant must show "that there is no material issue of fact to resolve, and that it is entitled to judgment in its favor as a matter of law." Mele v. Fed. Reserve Bank of N.Y., 359 F.3d 251, 253 (3d Cir. 2004). In considering a motion for judgement on the pleadings, this Court views the facts alleged in the pleadings as true and any inferences to be drawn therefrom in the light most favorable to the non-movant. Id. III. DISCUSSION
Regarding Count II, violation of Pennsylvania's Wage Payment and Collection Law, Defendants argue that Pennsylvania's Wage Payment and Collection Law does not apply to this case and that they are entitled to Judgment on the Pleadings as to that Count. As for Barsky's breach of contract claim in Count I, Defendants argue that recovery should be limited to Year One of the agreement and seek a Partial Judgment on the Pleadings to that effect. These arguments will be considered in turn.
A. PENNSYLVANIA WAGE PAYMENT AND COLLECTION LAW
The Pennsylvania Wage Payment and Collection Law ("WPCL") requires employers to pay a separated employee his or her "wages or compensation earned" at the time of separation no later than the employer's next regular payday. 43 PA. CONS. STAT. ANN. _ 260.5. The WPCL defines wages as "all earnings of an employe" regardless of how they are determined. Id. _ 260.2a. Wages also include fringe benefits provided by an employer, as well as separation or termination pay. Id. Whether the particular monies sought are wages depends upon the terms of the contract between the parties. Sendi v. NCR Comten, Inc., 619 F. Supp. 1577, 1579 (E.D. Pa. 1985). The contract between the parties also determines whether the wages or compensation have been earned.Id.
The WPCL does not create a right to compensation, rather it provides additional protection to employees should their employer breach a contractual obligation to pay wages. Allende v. Winter Fruit Distribs., Inc., 709 F. Supp. 597, 599 (E.D. Pa. 1989). The WPCL applies only to "`back wages already earned.'" Id. (quoting Weingrad v. Fischer Porter Co., 47 Pa. D. C.2d 244 (C.P. Bucks County 1968)). Lost future earnings, due to an alleged improper termination, are more appropriately categorized as expectation damages. These lost earnings arise when the employee is prevented from performing the required services by reason of the alleged improper termination and are not covered by the statutory remedy. Regier v. Rhone-Poulenc Rorer, Inc., No. 93-4821, 1995 WL 395548, at *8 (E.D. Pa. Jun. 30, 1995). As a result, Barsky may only pursue a WPCL claim on wages and other payments due at the time he was separated from Defendants' payroll.
Count Two of the Complaint alleges that Defendants have refused to make wage payments since January 1, 2004, after Barsky was terminated and separated from Defendants' payroll. (Compl., _ 41). As these monies are for lost future earnings, they are not covered under the statutory remedy and cannot be recovered in a WPCL action. Rather, they must be recovered through a common law breach of contract action. Regier, 1995 WL 395548, at *8.
Barsky contends that the entire amount due to him under the proposal qualifies as separation pay collectable through a WPCL action. However, wages and other compensation must be determined under the terms of the contract between the parties. The agreement between the parties provides for a separation payment equivalent to six months of the base salary in two incidences, either the failure of the radio show to attain a minimum rating after Year Two or a mutually agreed to separation following a change in station format incompatible with the artist. Neither of these conditions is implicated here.
The ratings condition does not apply to this count. Barsky was not terminated for unacceptable ratings. As a result, he does not qualify for the separation payment under the ratings provision of the contract. As the ratings separation condition did not apply at the time of termination, it cannot be collected through a WPCL action. The format change condition requires the mutual agreement of the parties to be effective, something obviously withheld in this case. As Barsky does not agree that his show is incompatible with the new station format, the separation payment for a change in format is not applicable either. Therefore, neither of these conditional payments was due or payable under agreement at the time of termination and neither can be collected under the WPCL.
As the payments sought under Count Two are for either lost future wages and payments, or for separation pay that does not qualify for collection under the WPCL, Defendants' Motion for Partial Judgement on the Pleadings as to Count Two will be granted.
B. BREACH OF CONTRACT
Defendants seek an order limiting Barsky's Breach of Contract claim to Year One of the employment agreement, asserting that the conditions governing the guaranteed employment of the agreement are insufficient to overcome Pennsylvania's presumption of employment at will and that the same conditions preclude Barsky from proving damages beyond Year One.
1. At-Will Employment
Under Pennsylvania law, there is a strong presumption that employment is at-will and terminable by either party for any reason, unless there is a statutory or contractual provision to the contrary. Geary v. U.S. Steel Corp., 456 Pa. 171, 175, 319 A.2d 1132, 1135 (1974). A plaintiff may rebut the presumption through evidence that the employee had a contract with the employer which stated that he would be employed for a specified and defined period of time, or that the employee had a contract which stated that he could only be fired for cause. Buckwalter v. ICI Explosives USA, Inc., No. 96-4795, 1998 WL 54355, at *5 (E.D. Pa. Jan. 8, 1998). The question of whether an undisputed set of facts establishes a contract is a matter of law. Id. (citing Refuse Mgmt. Sys., Inc. v. Consol. Recycling Transfer Sys., Inc., 448 Pa. Super. 402, 671 A.2d 1140 (1965). In order to obtain judgment on the pleadings, it must be shown that the contract is "reasonably capable of only one construction." See Am. Flint Glass Workers Union, AFL-CIO v. Beaumont Glass Co., 62 F.3d 574, 580 (3d Cir. 1995). "If a contract can be interpreted in two different ways, neither contracting party is entitled to summary judgment." Id. at 581.
There are two other methods to overcome the presumption of at-will employment that are inapplicable to this case, including the provision of extra consideration by the employee and a provision of public policy.
For the purposes of this Motion, Defendants have conceded that a contract exists between the parties and the terms of that contract are contained within the written Proposal. As the Proposal is written, there is an apparent gap between Year One and Year Two of the agreement. Defendants urge this Court to fill in this gap with the at-will presumption, while Barsky urges the application of the ratings and format guarantees applicable to Year Two. As either of these interpretations is reasonable, it is inappropriate to grant judgement solely on the pleadings. Thus, Defendants' motion on this count will be accordingly denied.
2. Damages
Defendants urge that the contractual conditions contained in the agreement render Barsky's damages speculative beyond Year One and seek partial judgement on this count. Pennsylvania law requires that a plaintiff seeking to proceed with a breach of contract action must establish "`(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract, and (3) resultant damages.'" Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003) (quoting CoreStates Bank, N.A. v. Cutillo, 773 A.2d 1053, 1058 (Pa.Super.Ct. 1999)). To prove damages, the plaintiff must give the factfinder evidence from which damages may be calculated to a "reasonable certainty." Id. at 226 (quoting ATACS Corp. v. Trans World Communications, Inc., 155 F.3d 659, 668 (3d Cir. 1998)).
At this stage of the litigation, it is entirely possible that Barsky can present evidence to calculate damages with a reasonable certainty beyond Year One of the agreement. Judgment on the Pleadings in this matter is therefore inappropriate, and this portion of Defendants' Motion will therefore be denied.
An appropriate Order follows.
ORDER
AND NOW, this 30th day of August, 2004, upon consideration of Defendants', Beasley Mezzanine Holdings, L.L.C., and Beasley Broadcast Group, Inc., Motion for Partial Judgment on the Pleadings (Doc. No. 7) and the Response thereto, it is hereby ORDERED that:
1. Defendants' Motion is DENIED as to Count I of the Complaint (Breach of Contract); and
2. Defendants' Motion is GRANTED as to Count II of the Complaint (Wage Payment and Collection Law Violation)