Opinion
No. X04-CV-03-0102891S
March 2, 2005
MEMORANDUM OF DECISION RE MOTION TO STRIKE
The plaintiffs, Dodie Butler and Michael Smiley, brought this action against NexClaim Technologies, Inc. ("NexClaim") and Shawmut Equity Partners, L.P. ("Shawmut") for damages for alleged breach of contract to pay severance and bonuses, and for wrongful termination in violation of public policy. NexClaim has moved to strike counts two, four, six, eight, ten, fifteen, seventeen, nineteen, twenty-one and twenty-three of the amended complaint dated August 10, 2004, claiming they fail to state a claim upon which relief can be granted. Specifically, NexClaim asserts that the claimed bonuses are not covered by Conn. Gen. Stat. Sec. 31-72, that the claimed severance pay is not covered by Conn. Gen. Stat. Sec. 31-76k and that the claimed fringe benefits are not covered by Conn. Gen. Stat. Sec. 31-76k. The court concludes that the facts as alleged in the complaint support these causes of action and therefore denies the motion to strike.
DISCUSSION A. Legal Standard
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any [complaint] . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Peter-Michael, Inc. v. Sea Shell Associates, 244 Conn. 269, 270, 709 A.2d 558 (1998). In ruling on a motion to strike, the trial court examines the complaint "construed in favor of the plaintiffs, to determine whether the [pleading party has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997). When deciding the motion, "the court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) CT Page 3859 Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). "This includes the facts necessarily implied and fairly provable under the allegations." Forbes v. Ballaro, 31 Conn.App. 235, 239, 624 A.2d 389 (1993). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . ." (Citation omitted; internal quotation marks omitted.) Lombard v. Edward J. Peters, Jr., P.C., 252 Conn. 623, 626,749 A.2d 630 (2000).
B. Counts Two and Fifteen
In counts two and fifteen, the plaintiffs Butler and Smiley, respectively, allege that they were not paid their 2001 and 2002 annual bonuses by NexClaim. The failure to pay the bonuses is a claimed violation of section 31-72 of the Connecticut General Statutes. The defendant claims that the claimed bonuses are not "wages" covered by the statute because they were predicated on a combination of overall company and individual performance. The plaintiffs claim the bonuses are "wages" because they were based on plaintiffs' performance of additional services.
Sec. 31-72. Civil action to collect wage claim, fringe benefit claim or arbitration award.
When any employer fails to pay an employee wages in accordance with the provisions of sections 31-71a to 31-71i, inclusive, or fails to compensate an employee in accordance with section 31-76k . . . such employee . . . may recover, in a civil action, twice the full amount of such wages, with costs and such reasonable attorneys fees as may be allowed by the court . . .
Conn. Gen. Stat. section 31-71a defines "wages" as "compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation." There is little case law addressing the issue of bonuses as qualifying as "wages" under the statute. In Cook v. Alexander Alexander of Connecticut, Inc., 40 Conn.Sup. 246, 488 A.2d 1295 (1985), the court denied a motion to strike where the complaint alleged that the "wages" withheld in violation of section 31-72 consisted of bonuses based on a "management by objective" approach. The plaintiff alleged that he was told by his employer that he would be entitled to earn additional compensation though bonuses based on individual bonus production. The court held that the pleadings were sufficient to state a cause of action for violation of section 31-72.
In Pelton v. Olin Corporation, Superior Court, judicial district of Stamford/Norwalk at Stamford, 1991 Ct.Sup. 6189, No. CV-88-0092063 (July 30, 1991, Ryan, J.), the issue was whether certain benefits under a Management Incentive Compensation Plan, promised to the plaintiff if he performed certain employer objectives by staying with the employer until a certain Division of the employer was sold or liquidated, constituted "wages" under section 31-72. The court concluded that the issue was a genuine issue of material fact in dispute and denied the defendant's motion for summary judgment.
In Wuerth v. Schott Electronics, Inc., Superior Court, judicial district of Ansonia/Milford at Milford, 1992 Ct.Sup. 2476, No. CV-91-036406 (March 13, 1992, Flynn, J.) ( 6 Conn. L. Rptr. 167), the court denied a motion to strike where the plaintiff alleged a connection between additional work he performed and the promise of a bonus to be paid in exchange for those additional services. In Mislow v. Continuing Care of South Windsor, Inc., Superior Court, judicial district of New Haven at New Haven, 2001 Ct.Sup. 4896, No. CV-00-0443654 (April 2, 2001, Jones, J.), the court likewise denied a motion to strike where the plaintiff alleged a connection between additional work he performed and the promise of a bonus in exchange for the additional work.
In Ziotas v. The Reardon Law Firm, Superior Court, judicial district of New London at New London, 2000 Ct.Sup. 13053, No. 550776 (October 23, 2000, Corradino, J.) ( 28 Conn. L. Rptr. 431), cited by the defendant in support of its motion to strike, the court concluded that a certain claimed bonus did not constitute "wages" because "[t]he bonus was determined by the success or lack of success of all members of the firm and . . . was an arbitrary figure reflecting . . . a percentage of the firm's net income." The court did note that the allegations did not "describe a bonus that accrued as a result of the plaintiff's personal efforts alone" and, emphasizing the fact that it was an arbitrary figure with no relation to any actual services performed by the plaintiff, granted the motion to strike.
The defendant claims that the Ziotas case stands for the proposition that a bonus cannot qualify as "wages" for purposes of section 31-72 unless it is alleged that the bonus is based on the plaintiff's "personal efforts alone." The court does not agree. The isolated statement referenced above in Ziotas was not the focal point of the court's decision. Further, no other court has indicated that a bonus can constitute "wages" only if it is claimed that the plaintiff's personal services alone are considered in determining the amount of the bonus. Indeed, the Ziotas court does not make that statement.
As to the allegations in counts two and fifteen of the complaint, it is claimed that the plaintiffs were entitled to bonuses "based on the performance of additional services by [them] for NexClaim" and that the bonuses were "based on achievement of individual and corporate goals." Construing the allegations in the complaint in the manner most favorable to the plaintiff, as the court must do in considering a motion to strike, the court concludes that the plaintiff has sufficiently pleaded a cause of action for violation of Conn. Gen. Stat. section 31-72. Accordingly, the court denies the motion to strike counts two and fifteen of the complaint.
C. Counts Four, Six, Eight, Seventeen, Nineteen and Twenty-One
In counts four, six, eight, seventeen, nineteen and twenty-one, the plaintiffs allege that NexClaim failed to pay them severance pay due upon termination of employment. The failure to pay this benefit is a claimed violation of section 31-76k of the Connecticut General Statutes. The defendant claims that the severance pay demanded by the plaintiffs is based upon their individual employment agreements rather than a general employer policy. For this reason, NexClaim moves to strike these counts on the grounds that such pay is not covered under the statute.
Sec. 31-76k. Payment of fringe benefits upon termination of employment.
If an employer, policy or collective bargaining agreement provides for the payment of accrued fringe benefits upon termination, including but not limited to paid vacations, holidays, sick days and earned leave, and an employee is terminated without having received such accrued fringe benefits, such employee shall be compensated for such accrued fringe benefits exclusive of normal pension benefits in the form of wages in accordance with such agreement or policy but in no case less than the earned average rate for the accrual period pursuant to sections 31-71a to 31-71i, inclusive.
Section 31-76k requires that an employer pay an employee certain fringe benefits upon termination of employment where an employer policy provides for the payment of accrued benefits upon termination. In determining the meaning of "employer policy," which is not defined by statute, the appellate court in Fulco v. Norwich Roman Catholic Diocesan Corp., 27 Conn.App. 800, 609 A.2d 1034 (1992), looked to the common meaning of the term as expressed in the law and in dictionaries. The Fulco court concluded that the term "relates not to the employer's intent with regard to a single employee, but to its intentions regarding either its employees generally or discrete classes of employees." Id., 806-07. Our Supreme Court adopted the appellate court's interpretation of the term in Fennell v. City of Hartford, 238 Conn. 809, 821, 681 A.2d 934 (1996).
The defendant claims the severance pay sought by the plaintiffs is not covered under section 31-76k because it was provided for in an individual agreement and not by any general employer policy. The short answer is that as long as sufficient allegations are in the complaint, the court will not make a determination as to the merits of the claims simply because the defendant disagrees with the facts as alleged. A motion to strike is not the proper vehicle to resolve disputed issues of fact.
In counts four, six, eight, seventeen, nineteen and twenty-one, the plaintiffs allege that "NexClaim has a general policy to pay its terminated employees severance or salary continuation based on their tenure, position, and the provisions of any applicable employment agreements," that the plaintiffs "constituted the only members of a discrete class of employees known as the executive class" and that "NexClaim's policy was to pay its executive class of employees severance and salary continuation according to the provisions of their employment contracts." The defendant may strongly disagree with these allegations, but they are in the complaint and clearly are sufficient to plead a cause of action for violation of Conn. Gen. Stat. section 31-76k. Accordingly, the defendant's motion to strike counts four, six, eight, seventeen, nineteen and twenty-one of the complaint is denied.
D. Counts Ten and Twenty-Three
In counts ten and twenty-three, the plaintiffs allege that NexClaim failed to pay them accrued fringe benefits due upon termination of employment. The failure to pay these benefits is a claimed violation of section 31-76k of the Connecticut General Statutes. The defendant makes the identical argument set forth in the previous section, that there is no general employer policy to make such payments and such benefits are therefore not covered under the statute.
In counts ten and twenty-three, the plaintiffs make the same allegations as to fringe benefits as were made with respect to severance pay. For the reasons stated in section C of this decision, the court finds that the plaintiffs have sufficiently pleaded a cause of action for violation of Conn. Gen. Stat. section 31-76k and denies the motion to strike counts ten and twenty-three of the complaint.
CONCLUSION
For all of the aforementioned reasons, the court concludes that the facts as alleged in the complaint are sufficient to support causes of action in violation of section 31-72 and section 31-76k of the Connecticut General Statutes. Accordingly, the court denies the defendant's motion to strike counts two, four, six, eight, ten, fifteen, seventeen, nineteen, twenty-one and twenty-three of the amended complaint dated August 10, 2004.
BY THE COURT
BARBARA M. QUINN, Judge