Summary
In Young, the Massachusetts Appeals Court affirmed summary judgment for the employer on the plaintiff's Gram claim because the plaintiff's culpable or inappropriate behavior constituted good cause to terminate his employment and no reasonable factfinder could have disbelieved the employer's stated reason for discharging the plaintiff.
Summary of this case from Fine v. The Guardian Life Ins. Co. of Am.Opinion
14-P-688
05-21-2015
MICHAEL C. YOUNG v. FIDELITY RESEARCH AND ANALYSIS COMPANY & others.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Following the termination of his at-will employment contract, plaintiff Michael C. Young filed an action in the Superior Court to recover bonus payments he claims that the defendants (referred to collectively as Fidelity) wrongfully withheld from him. Acting on the defendants' motion under Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974), a judge dismissed Young's claim under the Massachusetts Wage Act, G. L. c. 149, § 148. A second judge later entered summary judgment for the defendants on the remaining counts in the complaint. We affirm.
Contract-based claims. "Employment at will is terminable by either the employee or the employer without notice, for almost any reason or for no reason at all." Jackson v. Action for Boston Community Dev., Inc., 403 Mass. 8, 9 (1988). A claimed ambiguity in an at-will contract will not defeat a motion for summary judgment "if the documents do not reflect ambiguity on the point in question, and the party resisting summary judgment adduces no evidence of ambiguity or fraud." USTrust v. Henley & Warren Mgmt., Inc., 40 Mass. App. Ct. 337, 343 (1996). Whether the contract is ambiguous is a matter of law. Basis Technology Corp. v. Amazon.com, Inc., 71 Mass. App. Ct. 29, 36 (2008).
Young is barred from recovering under the express terms of his employment contract. The employee commission incentive provisions of the contract unambiguously required Young to be actively employed on December 1 of the bonus year, and in November of the following year, to receive compensation under the program. He was not. Nor does the summary judgment record support Young's claim that his termination was "a result of a job elimination or a reduction of force," which would have allowed him to be "considered" for a prorated bonus payment. The division of his job responsibilities among three less experienced, existing Fidelity employees after his involuntary termination does not amount to a reduction in force within the meaning of the contract.
Young admitted at his deposition that he understood the explicit terms of the contract, including the provisions for bonuses. His claim that a Fidelity executive told him that the company "consistently" paid bonuses at eighty-five percent of the targeted level does not alter the terms of the contract, nor does it support a claim for negligent misrepresentation. See Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43, 59-60 (2004); Masingill v. EMC Corp., 449 Mass. 532, 541 (2007).
For the same reasons the contractual claims fail, Young does not have a cause of action under the Wage Act, which applies "so far as apt, to the payment of commissions when the amount of such commissions . . . has been definitely determined and has become due and payable to [the] employee" (emphasis supplied). G. L. c. 149, § 148. The bonus payments are contingent and discretionary and therefore not "earned wages" under the Wage Act. See Weems v. Citigroup Inc., 453 Mass. 147, 150-154 & n.10 (2009).
Breach of implied covenant of good faith and fair dealing. "We do not question the general principles that an employer is entitled to be motivated by and to serve its own legitimate business interests [and] that an employer must have wide latitude in deciding whom it will employ in the face of the uncertainties of the business world." Fortune v. National Cash Register Co., 373 Mass. 96, 101-102 (1977). However, we do impose on the employer the obligation to deal fairly and in good faith with its employees. See id. at 101; Gram v. Liberty Mut. Ins. Co., 384 Mass. 659, 666-672 (1981).
Where the evidence permits the inference that an employee's discharge was for the purpose of denying the employee compensation earned but not yet payable, see RLM Assoc., Inc. v. Carter Mfg. Corp., 356 Mass 718, 718 (1969); Fortune v. National Cash Register Co., supra at 104-105, or depriving the employee of reasonably ascertainable future compensation for past services, see Zapatha v. Dairy Mart, Inc., 381 Mass. 284, 299-300 (1980); Gram v. Liberty Mut. Ins. Co., supra at 671-673, "[t]he jurors [are] not required to believe [the employer's] testimony that the plaintiff was discharged for legitimate business reasons." Maddaloni v. Western Mass. Bus Lines, Inc., 386 Mass. 877, 882 (1982). "When evidence on a contested matter is conflicting, the issue is for the trier of fact." Ibid. Largely for the reasons given by the motion judge in allowing summary judgment for the defendants, this is not such a case.
In April, 2006, less than one year after Young began working at Fidelity, the New York Stock Exchange (NYSE) initiated disciplinary proceedings against him based on his conduct in 2002 when working in a similar capacity for a former employer. The parties dispute whether, in the course of applying for employment at Fidelity, Young had fully disclosed the circumstances of his resignation from the former employer and the existence of the NYSE's preliminary investigation. However, it is undisputed that when Young informed Fidelity in May, 2006, about the direction that the NYSE proceedings had taken, Fidelity considered terminating Young at that point, but instead elected to await the results of the proceedings. Fidelity made it known to Young that an adverse result would likely result in his termination. Approximately one year later, in May, 2007, the NYSE found Young guilty of violating its rules and officially censured him. Within two to three weeks of being informed of the NYSE's adverse decision, Fidelity dismissed Young.
Indeed, during Young's hearing before the NYSE, his attorney represented to the hearing board that "[i]n all likelihood, any finding here will effectively end his career as a securities analyst."
Because "culpable or inappropriate behavior" is "a reasonable basis for employer dissatisfaction with a new employee," York v. Zurich Scudder Invs., Inc., 66 Mass. App. Ct. 610, 615-617 (2006), Fidelity had "good cause" for Young's discharge. "Certainly good cause to discharge an employee would tend to negate the existence of bad faith in the decision to discharge an employee." Gram v. Liberty Mut. Ins. Co., 384 Mass. at 668.
Young contends that Fidelity's true motive for discharging him was to avoid paying his bonus that would become payable several months later, and that Fidelity's reliance on the NYSE censure as grounds for his termination was merely pretextual. Viewed in the light most favorable to Young, the facts do not support this inference. "[T]he bare assertion of inferences on appeal -- or, for that matter, before the trial judge -- raises no genuine issue of material fact." Community Natl. Bank v. Dawes, 369 Mass. 550, 559 (1976). Fidelity did not seek to deprive Young of his bonus when he was "on the brink" of earning it. Contrast Fortune v. National Cash Register Co., 373 Mass. at 105. To the contrary, Fidelity terminated Young six months before his bonus payments became due, after having made it clear to him one year earlier that termination could well follow an adverse finding by the NYSE. A jury could not rationally conclude that Fidelity fabricated the excuse of the NYSE censure to avoid paying him his future bonuses. See York v. Zurich Scudder Invs., Inc., supra. Contrast Maddaloni v. Western Mass. Bus Lines, Inc., 386 Mass. at 882 (where there was evidence of poor profits both before and after plaintiff's commissions became payable, but plaintiff was not discharged until after the commissions became payable, jurors could disbelieve employer's testimony that discharge was for legitimate business reasons).
To support his pretext claim, Young points to evidence that at the time of his discharge, the Securities and Exchange Commission had fined a number of high-level executives and traders at Fidelity -- a level of discipline more serious than his NYSE censure -- yet Fidelity retained these employees. Moreover, Fidelity replaced Young with less experienced and considerably less generously compensated employees.
Judgment affirmed.
By the Court (Cohen, Grainger & Massing, JJ.),
The panelists are listed in order of seniority.
--------
Clerk Entered: May 21, 2015.