Summary
finding that an employer failed to comply with § 4311 where it chose to “adopt a policy of providing a benefit of employment equal to the difference between the activeduty employee's military pay” and job pay but, in practice, “denied” the employee that benefit
Summary of this case from Casey v. St. Mary's BankOpinion
Case No. 1:04cv742.
July 18, 2006
OPINION AND ORDER BACKGROUND
This matter came on for a bench trial on July 11th and 12th, 2006 pursuant to Plaintiff's Amended Complaint and Defendant's Answer thereto.
Plaintiff essentially alleges that PepsiAmericas (hereinafter referred to as "Pepsi") by either operation of their own policies or by a settlement of outstanding issues conferred a non-salary benefit upon Plaintiff and such benefit is protected by USERRA 38 U.S.C. § 4323, et seq. Plaintiff further alleges that Defendant subsequently withdrew said benefit resulting in a violation of the aforesaid Act, breach of contract and conversion of funds. The Defendant answered that any alleged benefit, which they deny agreeing to provide, would have been salary, in the first instance, and not protected by the Act and further that any alleged benefit was not actually provided to the Plaintiff as Pepsi's policies do not provide any such benefit nor was any such benefit promised as a result of settlement.
THE ISSUES
The Court is first called upon to determine if USERRA benefits are required pursuant to Pepsi's policy, second, whether a benefit was ever promised to and conveyed upon Plaintiff and, lastly, whether a conversion of funds took place. The determination of these issues is set forth below in the more specific Findings of Fact and Conclusions of Law.The Court is also called upon to determine what both counsel acknowledged and argued to be a paramount issue, that is, the credibility of the witnesses. The Court finds Plaintiff and Major Breiton to be credible witnesses and the Court does not find Nancy Carroll, who is pivotal to Pepsi's defense, to be a credible witness and observes that the testimony of Alan McGriff and W. Scott Nehs was largely based upon information supplied to them from Ms. Carroll. Ms. Carroll's credibility is strained for a number of reasons including but not limited to the following: her assertion that the June 17, 2003 meeting was initiated at her suggestion; her insistence that there was no agreement between the parties at the conclusion of the meeting regarding Plaintiff's pay differential; her representation to Mr. Nehs, counsel for Pepsi, that funds were never deposited into Plaintiff's account; her description of Plaintiff's Exhibit No. 52 as a "draft Pepsi document"; and, her failure to acknowledge that someone at Pepsi had to initiate the action that resulted in the deposit in Plaintiff's account.
FINDINGS OF FACT
1. In June of 2000, the Plaintiff, Kevin Koehler, became an employee of the Defendant, Pepsi and signed a direct deposit authorization agreement (Joint Exh. I). Plaintiff was employed by the Defendant first as a merchandiser and then as a bulk driver and finally as a route driver. On January 26, 2002 Plaintiff enlisted with the Armed Forces of the United States in the Army Reserve (Joint Exh. II). Plaintiff testified that he enlisted in support of his country in the aftermath of the September 11, 2001 terrorists attacks.
2. Thereafter, Plaintiff was ordered to initial active duty training of approximately 24 weeks with a reporting date of March 5, 2002 (Joint Exh. III). Plaintiff informed Defendant of his scheduled initial active duty training (Joint Exh. IV). At the time of the trial, Plaintiff was no longer employed by Defendant but works in Iraq for a motor vehicle deployment firm.
3. Plaintiff routinely kept his employer apprised of his military status by providing Pepsi copies of orders and notices (Joint Exh. VI, Joint Exh. VIII, Joint Exh. XII, Joint Exh. XIII, Joint Exh. XIV, Joint Exh. XXI). Plaintiff was in initial active duty from March, 2002 until late August, 2002 during which time he was classified by the company, effective March 4, 2002, as on "leave with pay" based upon "paid leave of absence" (Plaintiff Exh. 6).
4. Upon his return from leave in September, 2002, the company returned Plaintiff to active status (Joint Exh. VII). At various times over the next months he was ordered by his Unit Commanders to appear in anticipation of deployment for active duty, which, for various reasons such deployments were later cancelled (Joint Exh. IX, Joint Exh. X).
5. Plaintiff's direct supervisor at Defendant company was Don Ostelhoff. Nancy Carroll was the Human Resource Manager and Alan McGriff was the Cincinnati Branch Manager. As a route driver, Plaintiff generally worked a 10 to 12 hour day, typically commencing between 5:30-6:30 A.M. (Joint Exh. IXX).
6. Defendant Pepsi maintains attendance records for its employees and assesses points for alleged violations of company policy. Certain violations result in written reprimands followed by suspension without pay and, finally, accumulation of a certain amount of points (8) results in the termination of an employee. The foregoing Pepsi attendance policy is set forth in Joint Exh. V.
7. Plaintiff had points assessed against him as a result of certain absences and received a written reprimand on May 14, 2003 (Joint Exh. XV). Shortly thereafter he received a one-half point violation for leaving prior to the completion of his shift. By May 16, 2003 Plaintiff had accumulated 6.5 points against him, 1.5 of which were documented by Pepsi to be related to his military duties.
8. In March, 2003 Plaintiff filed a grievance with Defendant (Joint Exh. XI). Plaintiff's grievance was not addressed by Pepsi and he later filed a complaint with the Department of Labor who then contacted Nancy Carroll at Pepsi (Joint Exh. XXI).
9. In May, 2003 Plaintiff sent an e-mail message to the Pepsi's corporate information email address (Plaintiff Exh. 19). Dennis Berger, Pepsi's Vice President of Human Resources for America requested more information (Plaintiff Exh. 51) and at this invitation, Defendant submitted a more detailed complaint to Mr. Berger at Pepsi's Chicago office (Plaintiff Exh. 22). Mr. Berger's office then contacted Plaintiff and asked for several days to respond and shortly thereafter a meeting was arranged to be held on June 17, 2003 at the Pepsi offices in Cincinnati. Several days prior to that meeting Mr. Berger's secretary, Tami Guyot sent Plaintiff, at Mr. Berger's direction, Pepsi's Military Reservists Policy (Plaintiff Exh. 52). The meeting on June 17, 2003 was attended by Nancy Carroll, Darlene Kaufman-Weber, Alan McGriff and Don Ostelhoff on behalf of Pepsi, Plaintiff, then-Captain Brierton and a union representative on behalf of Plaintiff.
10. At the June 17, 2003 meeting, the parties and associated attendees discussed military procedure in terms of orders and notifications, Plaintiff's complaint to the Department of Labor, Plaintiff's absences from work, time requirements to prepare for weekend military service and/or deployment. Major Brierton supplied Pepsi with copies of Plaintiff's orders and outlined what he felt to be adequate preparation time for Plaintiff. This preparation time was fewer hours than Plaintiff himself felt necessary. Also at the meeting Plaintiff supplied Cincinnati Pepsi with the information that Dennis Berger's office in Chicago had provided and Plaintiff requested the pay differential for his initial active training time. Ms. Carroll testified that she had not seen that information previously but reviewed it at that time. Ms. Carroll acknowledged what the policy said and indicated to Plaintiff that Pepsi would pay what was the appropriate differential.
11. The parties left the June 17, 2003 meeting with the following agreement and meeting of the minds: Plaintiff's employment record would have two absent days expunged; he would be given a floating holiday; he would receive his appropriate differential pay for his initial active duty training; and Plaintiff would dismiss his complaint with the Department of Labor.
12. In furtherance of this settlement Plaintiff dismissed his complaint with the Department of Labor and supplied Defendant with his military pay records and Defendant, consistent with Plaintiff's testimony regarding the resolution and agreement reached at the meeting, paid to Plaintiff the gross amount of $16,962.86 (Joint Exh. XXIII) and after deducting tax withholding, deposited, on July 3, 2003, the amount of $10,820.22 into the Plaintiff's Fifth Third Bank account (Plaintiff Exh. 57). This money was then later withdrawn from Plaintiff's account, without his authorization or permission, on July 7, 2003.
13. Upon learning of the withdrawal, Plaintiff contacted Ms. Carroll's office and spoke to her subordinate, Darlene Webber-Kaufman who informed Plaintiff in language that approximated, "we have changed our minds, you can let your attorney speak to our attorney".
14. Plaintiff did contact an attorney, Steven R. Hicks who then communicated with Pepsi attorney, W. Scott Nehs. Mr. Nehs responded to Hicks by letter (Plaintiff Exh. 42) and on Page 1 of this November 7, 2003 correspondence, acknowledges that the Military Active Leave Policy and Procedure submitted to Plaintiff by Mr. Berger was, in fact, an internal Pepsi guideline document and he additionally provided another document labeled Treatment of Employees Called Up for Military Duty. In his correspondence, Mr. Nehs suggests that employees who voluntarily enlist into active duty are not covered by these policy guidelines, however, Plaintiff did not enlist into active duty but rather, enlisted into the Army Reserve. He was then called for initial active duty training, a guideline (and USERRA) covered event pursuant to Plaintiff's Exhibit 52. Further, relying upon representations made to him by Ms. Carroll, Mr. Nehs went on to state that no funds were ever deposited into Plaintiff's account (Plaintiff Exh. 42, p. 2). The records clearly show that the funds were deposited on July 3, 2003 and that Ms. Carroll was made aware of this fact at least by, on or about August 1, 2003.
CONCLUSIONS OF LAW
1. The Court has proper jurisdiction over this matter pursuant to 38 U.S.C. § 4323(b) and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367. The Southern District of Ohio is the proper venue pursuant to 38 U.S.C. § 4323(2). The Defendant, Pepsi is an employer as defined by the USERRA 38 U.S.C. § 4303(4)(a).
2. Pursuant to 38 U.S.C. § 4303(2)
The term "benefit", "benefit of employment", or "rights and benefits" means any advantage, profit, privilege, gain, status, account, or interest (other than wages or salary for work performed) that accrues by reason of an employment contract or agreement or an employer policy, plan, or practice and includes rights and benefits under a pension plan, a health plan, an employee stock ownership plan, insurance coverage and awards, bonuses, severance pay, supplemental unemployment benefits, vacations, and the opportunity to select work hours or location of employment.
3. Pursuant to Section 4303(a)(4), Pepsi is an employer pursuant to Section 4303(3) and the Plaintiff is an employee, both of whom are subject to the jurisdiction of act. Pursuant to Section 4303(13), service in uniform services includes initial active duty for training, such as the training for which Plaintiff participated from March — August, 2002.
4. 38 U.S.C. § 4311 prohibits an employer from denying "any benefit of employment" to a person who "has. . . . served in a uniformed service." While an employer is not obligated to pay the wages of an employee who is called for active military service, an employer may, as Pepsi did in this case, adopt a policy of providing a benefit of employment equal to the difference between the active-duty employee's military pay. If the employer adopts such a policy, USERRA protects the employee's rights under that policy.
5. 38 U.S.C. § 4323 provided for a private right of action by an employee claiming rights or benefits protected by USERRA and permits the court to require the employer to compensate the aggrieved employee for any benefits of employment suffered by reason of the employer's failure to comply with USERRA. 38 U.S.C. § 4323(d)(1)(B). For willful violations, the court may award double damages. 38 U.S.C. § 4323(d)(1)(c). The Court is also authorized by USERRA to award attorney's fees and litigation expenses in favor the Plaintiff. 38 U.S.C. § 4323(h).
6. The Court finds that a benefit was conferred upon Plaintiff by operation of Pepsi's own policy and that this policy was reinforced by its own practice in the agreement that was reached at the June 17th meeting. As a member of the Army Reserves, Plaintiff was entitled to this benefit. Since Pepsi denied this benefit to Plaintiff in violation of 38 U.S.C. § 4311 the Court finds that Plaintiff is entitled to differential pay in the gross amount of $16,962.86. The Court further finds that this benefit was improperly and wilfully withheld from Plaintiff entitling Plaintiff to double damages. Thus, Defendant is ordered to pay Plaintiff double damages in the amount of $33,925.72.
7. A contract is an agreement between two or more people, founded upon sufficient consideration, to do or refrain from doing a particular thing. Saum v. Moenter, 101 Ohio App. 3d 48, 654 N.E.2d 1333 (3d Dist. Van Wert County 1995); Hawgood v. Hawgood, 33 Ohio Misc. 227, 62 Ohio Op. 2d 427, 294 N.E.2d 681 (C.P. 1973). As previously stated above, this Court finds that the parties reached an agreement at the June 17, 2003 meeting wherein Nancy Carroll agreed to pay Plaintiff his differential pay among other items and Defendant agreed to refrain from pursing his complaint with the Department of Labor. Based on this finding, the Court further finds that Defendant Pepsi then breached its oral contract with Plaintiff by failing to meet its agreed upon obligations. Plaintiff has been damaged in the amount of $16,962.86 by Defendant's breach of contract, however, such damage is cumulative and included in the above award.
8. Plaintiff also claims damage because of Defendant Pepsi's conversion. Conversion is the "wrongful exercise of dominion over property to the exclusion of the rights of the owner, or withholding it from his possession under a claim inconsistent with his rights" Joyce v. General Motors Corp, (1990), 49 Ohio St.3d 93, 96, 551 N.E.2d 172. Because Pepsi withdrew $10,820.22 from Plaintiff's personal bank account without his authorization, the Court finds that this action amounts to a conversion of his property. Although Plaintiff is damaged in the amount of $10,820.22 by Defendant's conversion, this damage is cumulative and included in the above award. However, Plaintiffs does seek an award of punitive damages against Pepsi because of the conversion. Based on the clear and convincing evidence admitted at trial, the Court finds that Pepsi's actions demonstrate malice, egregious fraud, oppression and insult and the Court awards punitive damages in the amount of $50,000.00.
9. Finally, because of Pepsi's violations of 38 U.S.C. 4311 and because punitive damages have been awarded, this Court finds that an award to Plaintiff of his reasonable attorney's fees and litigation expenses is appropriate under 38 U.S.C. § 4323(h) and under the common law of Ohio.
10. It is hereby ordered that Defendant shall pay to Plaintiff the following award:
A. $33,925.72 in damages;
B. $50,000.00 in punitive damages; and
C. Reasonable attorney's fees and litigations expenses.
It is Interesting to note that Nancy Carroll was on an email distribution list dated December 18, 2001 that included an almost identical document to that which Mr. Berger provided to Plaintiff and that which Plaintiff provided to Carroll at the June 17th meeting. See Plaintiff Exh. 42, page 4.
IT IS SO ORDERED.