Opinion
2:20-CV-00704-WSH-CRE
07-08-2021
BRUCE SOMERS, INDIVIDUALLY AND ON BEHALF OF ALL OTHER SIMILARILY SITUATED; Plaintiff, v. GENERAL ELECTRIC COMPANY, Defendant,
REPORT AND RECOMMENDATION
Cynthia Reed Eddy Chief United States Magistrate Judge.
I. RECOMMENDATION
This civil action involves Plaintiff Bruce Somers, who was formerly employed by Defendant General Electric Company (“GE”). Plaintiff brings this lawsuit on behalf of himself and others similarly situated to recover wages for earned but unused vacation time from Defendant. Plaintiff's complaint sets forth claims for breach of contract, unjust enrichment, and a violation of the Pennsylvania Wage Payment and Collection Law (“WPCL”), 43 P.S. § 260.1 et seq. See Compl. (ECF No. 1-2). This court has subject matter jurisdiction over the controversy pursuant to 28 U.S.C. § 1332(d)(2).
Presently before the court is a motion by Defendant for summary judgment with respect to all claims. (ECF No. 23). For the reasons that follow, it is respectfully recommended that Defendant's motion for summary judgment be granted.
II. REPORT
A. Factual and Procedural Background
Plaintiff began working for Defendant on July 9, 1990, at its facility in Grove City, Pennsylvania. Defendant's Concise Statement of Material Facts (“CSMF”) (ECF No. 25) at ¶1.Prior to February 25, 2019, “Plaintiff was classified as a non-exempt employee and paid on an hourly basis at an hourly rate of $33.86.” Id. at ¶ 3. Plaintiffs employment was governed by an employment handbook (“Handbook”), which provided vacation and time-off policies. The Handbook provided the following policy for employees who leave the company: “If you earn vacation under the Annual Vacation Allotment Method, you (or your estate) will be paid for any unused vacation days when you leave the Company for any reason, including resignation, discharge, retirement, layoff, disability or death.” Id. at ¶ 5. “Under the Hourly Vacation and Other Time Off Policy, employees who were hired before June 18, 2007, including Plaintiff, accrued paid vacation benefits under the Annual Vacation Allotment Method.” Id. at ¶ 10.
Unless otherwise indicated, these facts are admitted in Plaintiff's Counter Statement of Material Facts (“CSMF”) (ECF No. 27).
“Effective February 25, 2019, [Defendant] and Westinghouse Air Brake Technologies Corporation (“Wabtec”) closed a corporate transaction in which Wabtec acquired the [Defendant].” Id. at ¶ 14. “Prior to the closing of the [] transaction on February 25, 2019, Plaintiff received a letter signed by Scott Wahlstrom, Executive Vice President, Human Resources for Wabtec, which indicated that ‘Wabtec plans to offer employment to all [Defendant] employees who are actively employed on the date that the transaction closes.'” Id. at ¶27. That letter indicated that there would be no changes to the number of vacation days earned and that vacation would not reset on the date the transaction closes. Id. At ¶¶ 29-30. That letter provided that Plaintiff's employment would automatically transfer to Wabtec unless Plaintiff affirmatively rejected the offer. Id. at ¶ 33. Plaintiff did not reject the offer and began working for Wabtec. Id. at ¶ 36.
“GE and Wabtec had an agreement relating to [Defendant] employees' earned but unused vacation under the Hourly Vacation and Other Time Off Policy.” Id. at ¶ 18. The agreement provided the following with respect to “Continuing Employees, ” such as Plaintiff:
Vacation and Paid Time Off. ...Direct Sale Purchaser... shall... provide vacation benefits to Continuing Employees for so long as they are employed with. Direct Sale Purchaser. that are at least as favorable as those provided to Continuing Employees under the applicable vacation program of the Company or its Affiliates immediately prior to [February 25, 2019]. Effective as of [February 25, 2019]. Direct Sale Purchaser. shall. honor all obligations of the Company. for the accrued, unused vacation and paid time off as of [February 25, 2019] for Continuing Employees.Id. at ¶ 23.
“As of February 24, 2019, Plaintiff had 184 hours of accrued, unused vacation benefits available to him.” Id. at ¶ 39. Plaintiff utilized 184 hours of vacation benefits during the rest of calendar year 2019, and he received full pay for that time. Id. At ¶¶ 41-42.
On May 24, 2020, Plaintiff commenced this lawsuit on behalf of himself and others similarly situated arguing that because Plaintiff separated from Defendant on February 24, 2019, Defendant should have paid Plaintiff and others like Plaintiff, who then commenced employment with Wabtec, for earned but unused vacation time. Plaintiff has set forth claims for breach of contract, unjust enrichment, and a violation of the WPCL.
It is undisputed that those employees who chose leave Defendant and not to continue a relationship with Wabtec were paid for accrued but unused vacation time. Pl.'s CSMF (ECF No. 27) at ¶ 65.
On June 26, 2020, Defendant filed an answer, and the parties engaged in discovery. On March 31, 2021, Defendant filed the pending motion for summary judgment, a supporting brief, the CSMF, and an Appendix. (ECF Nos. 23-26). On April 30, 2021, Plaintiff responded with a brief in opposition, a response to Defendants' concise statement of material facts, and an Appendix. (ECF Nos. 27-28). Defendant filed a reply thereto. (ECF Nos. 33-35). As the present motion for summary judgment has been fully briefed, it is now ripe for disposition. The court's analysis follows.
B. Standard of Review
Summary judgment is appropriate when the moving party establishes “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. Pro. 56(a). A genuine issue of material fact is one that could affect the outcome of litigation. Willis v. UPMC Children's Hosp. of Pittsburgh, 808 F.3d 638, 643 (3d Cir. 2015) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). However, “[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” N.A.A.C.P. v. North Hudson Reg'l Fire & Rescue, 665 F.3d 464, 475 (3d Cir. 2011) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
The initial burden is on the moving party to adduce evidence illustrating a lack of genuine, triable issues. Hugh v. Butler Cnty. Family YMCA, 418 F.3d 265, 267 (3d Cir. 2005) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)). Once the moving party satisfies its burden, the non-moving party must present sufficient evidence of a genuine issue, in rebuttal. Santini v. Fuentes, 795 F.3d 410, 416 (3d Cir. 2015) (citing Matsushita Elec. Indus. Co., 475 U.S. at 587). When considering the parties' arguments, the court is required to view all facts and draw all inferences in the light most favorable to the non-moving party. Id. (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)). The benefit of the doubt will be given to allegations of the non- moving party when in conflict with the moving party's claims. Bialko v. Quaker Oats Co., 434 Fed.Appx. 139, 141 n.4 (3d Cir. 2011) (citing Valhal Corp. v. Sullivan Assocs., 44 F.3d 195, 200 (3d Cir. 1995)).
Nonetheless, a well-supported motion for summary judgment will not be defeated where the non-moving party merely reasserts factual allegations contained in the pleadings. Betts v. New Castle Youth Dev. Ctr., 621 F.3d 249, 252 (3d Cir. 2010) (citing Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir. 1989)). The non-moving party must resort to affidavits, depositions, admissions, and/or interrogatories to demonstrate the existence of a genuine issue. Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 773 (3d Cir. 2013) (citing Celotex Corp., 477 U.S. at 324).
C. Discussion
i. Breach of Contract Claim
Defendant first contends it is entitled to summary judgment with respect to Plaintiff's breach of contract claim. Def.'s Br. (ECF No. 24) at 4-7. According to Plaintiff, the Hourly Vacation and Other Time Off Policy set forth in the Handbook is the sole contract that allegedly governed the relationship between Plaintiff and Defendant. Def.'s CSMF (ECF No. 25) at ¶ 6. Defendant contends that the Handbook did not create a contract because it specifically states that it does not. See id. at ¶ 7 (“Under the header of “Important Information About This Handbook, ” the Hourly Vacation and Other Time Off Policy provided, inter alia: “This handbook does not create a contract of employment between [Defendant] and any individual.”) (emphasis in original)).
“In Pennsylvania, a breach of contract claim requires (1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages.” Knapp v. Susquehanna Vill. Facility Operations, LLC, 2019 WL 4671108, at *3 (M.D. Pa. 2019) (internal quotation marks omitted). “A handbook distributed to employees as inducement for employment may be an offer and its acceptance a contract.” Morosetti v. Louisiana Land & Expl. Co., 564 A.2d 151, 152 (Pa. 1989). “Generally, explicit disclaimers of contract formation in an employee handbook preclude a breach of contract claim.” Caucci v. Prison Health Servs., Inc., 153 F.Supp.2d 605, 611 (E.D. Pa. 2001); see also McElroy v. Sands Casino, 593 Fed.Appx. 113, 117 (3d Cir. 2014) (granting “summary judgment on [plaintiff's] breach of contract claim because the employee handbook expressly disclaimed that it established a contractual right. Courts have rejected such claims when this disclaimer language alerts the employee to the employer's intent that the policies set forth do not constitute a contract.”).
In this case, the language in the disclaimer set forth in the Handbook clearly put Plaintiff on notice that the policies in it do not create a contract. See Your Benefits Handbook (ECF No. 26-3) at 9. Thus, because the Handbook did not create a contract between Plaintiff and Defendant, Plaintiff has not established the existence of a contract and therefore cannot prevail on his breach of contract claim. Accordingly, it is respectfully recommended that Defendant's motion for summary judgment on Plaintiff's breach of contract claim be granted.
Even assuming arguendo that the Handbook did create a contract between Plaintiff and Defendant, Plaintiff has failed to demonstrate that there was any breach by Defendant that resulted in damages to Plaintiff. It is undisputed that at the time Defendant was sold to Wabtec, Plaintiff had accrued, but not used, 184 hours of vacation time. Def.'s CSMF (ECF No. 25) at ¶ 40. It is Plaintiff's position that Defendant should have paid him the value of that time when he ended his employment with Defendant and commenced employment with Wabtec. Pl.'s Br. (ECF No. 28) at 11. However, Plaintiff entered into a new agreement with Wabtec where he agreed to accept Wabtec's offer to not reset vacation upon commencement of employment. Under that agreement, Plaintiff was able to utilize and be compensated by Wabtec for those 184 hours of vacation during the rest of 2019.
Defendant and Wabtec entered into an agreement whereby Wabtec would honor the vacation policies of Defendant. “There is a presumption of assignability of contractual rights and duties in Pennsylvania. Absent an express provision against assignment, the rights and duties under an executory bilateral contract which does not involve personal skill, trust, or confidence may be assigned without the consent of the other party so long as it does not materially alter the other party's duties and responsibilities.” Kalian at Poconos, LLC v. Saw Creek Ests. Cmty. Ass'n, Inc., 275 F.Supp.2d 578, 595 (M.D. Pa. 2003).
Plaintiff sets forth a series of hypothetical situations in support of the proposition that once he commenced employment with Wabtec, those 184 hours of vacation were no longer accrued, but had to be re-earned. He claims that had he left employment with Wabtec in 2019, he would not have been paid for the entire 184 days he had earned. Pl.'s Br. (ECF No. 38) at 15. Those hypothetical claims are not supported by the record. Defendant informed its employees that “Wabtec agreed to honor all obligations of [Defendant] for accrued, unused vacation and paid time.” Def.'s CSFM (ECF No. 25) at ¶ 25.
Based on the foregoing, even if there was a contract between Plaintiff and Defendant, Defendant did not breach that contract, and even if Defendant did breach the contract, Plaintiff did not suffer any damages because he was paid by Wabtec for all of the vacation time he was owed by Defendant. Accordingly, it is respectfully recommended that Defendant's motion for summary judgment on Plaintiff's breach of contract claim be granted.
ii. WPCL Claim
Defendant contends that, as with the breach of contract claim, the WPCL claim must fail because there is no contract between Plaintiff and Defendant, and even if there were a contract, Wabtec carried out Defendant's responsibilities. Def.'s Br. (ECF No. 24) at 4-7.
Pennsylvania's WPCL provides:
Whenever an employer separates an employee from payroll, or whenever an employee quits or resigns his employment, the wages or compensation earned shall become due and payable not later than
the next regular payday of his employer on which such wages would otherwise be due and payable.43 Pa. Cons. Stat. § 260.5(a) (2019). Est. of Accurso v. Infra-RedServs., Inc., 805 Fed.Appx. 95, 100 (3d Cir. 2020). “[A] prerequisite for relief under the WPCL is a contract between employee and employer that sets forth their agreement on wages to be paid.... Relief under the WPCL is implausible without [the] existence of a contract.” Giuliani v. Polysciences, Inc., 275 F.Supp.3d 564, 577 (E.D. Pa. 2017) (internal quotation marks omitted).
As discussed supra, there is no enforceable, written contract between Plaintiff and Defendant, which in and of itself entitles Defendant to summary judgment on the WPCL claim. Moreover, even if there were a contract between the parties, that contract was assigned to Wabtec, which fulfilled the obligation to pay the wages to Plaintiff. Therefore, Defendant does not owe any additional wages. Accordingly, it is respectfully recommended that Defendant's motion for summary judgment on Plaintiff's WPCL claim be granted.
iii. Unjust Enrichment Claim
Finally, Defendant contends it is entitled to summary judgment on Plaintiff's claim for unjust enrichment. Def.'s Br. (ECF No. 24) at 15-17. It is Defendant's position that Plaintiff “received full payment for all 184 hours of vacation benefits at issue” and that Defendant “did not retain the value of Plaintiff's vacation.” Id. at 17. Plaintiff responds that Defendant was unjustly enriched “by not having to compensate Plaintiff for 184 of the 200 hours he was entitled to as earned vacation in 2019.” Pl.'s Br. (ECF No. 28) at 20.
Should it be determined that there is an enforceable, written contract between Plaintiff and Defendant, then the unjust enrichment claim must be dismissed on that basis. See Benefit Tr. Life Ins. Co. v. Union Nat'l Bank, 776 F.2d 1174, 1177 (3d Cir. 1985) (“In Pennsylvania, the unjust enrichment doctrine is inapplicable when the relationship between the parties is founded on a written agreement or express contract.”) (internal quotation marks omitted).
“Unjust Enrichment is a quasi-contract remedy. Such an implied contract in law imposes a duty, not as a result of any agreement, whether express or implied, but in spite of the absence of an agreement when one party receives an unjust enrichment at the expense of another.” McGoldrick v. TruePosition, Inc., 623 F.Supp.2d 619, 624 (E.D. Pa. 2009) (internal quotation marks omitted). “In order to show unjust enrichment, a claimant must show that the party against whom recovery is sought either wrongfully secured or passively received a benefit that would be unconscionable for the party to retain without compensating the provider.” Id.
The elements necessary to prove unjust enrichment are:
(1) benefits conferred on defendant by plaintiff; (2) appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value ... The application of the doctrine depends on the particular factual circumstances of the case at issue. In determining if the doctrine applies, our focus is not on the intention of the parties, but rather on whether the defendant has been unjustly enriched.Hollenshead v. New Penn Fin., LLC, 447 F.Supp.3d 283, 292 (E.D. Pa. 2020) (quoting Durst v. Milroy Gen Contracting, Inc., 52 A.3d 357, 360 (Pa. Super. 2012)).
Here, it has been established that Wabtec paid Plaintiff for the 184 hours of vacation time. Thus, to the extent Defendant was unjustly enriched, Defendant would not owe that money to Plaintiff, it would owe that money to Wabtec, who actually paid Plaintiff. Accordingly, any unjust enrichment claim vis-a-vis Plaintiff fails. Accordingly, it is respectfully recommended that Defendant's motion for summary judgment on Plaintiff's unjust enrichment claim be granted.
Presumably, these costs were taken into account and encompassed in the agreement when Defendant sold the business to Wabtec.
D. Conclusion
Based on the foregoing, it is respectfully recommended that Defendant's motion for summary judgment be granted.
Accordingly, pursuant to 28 U.S.C. § 636(b)(1)(B)-(C), Federal Rule of Civil Procedure 72, and the Local Rules for Magistrates, the parties have until July 22, 2021, to file objections to this report and recommendation. Unless Ordered otherwise by the District Judge, responses to objections are due August 5, 2021. Failure to file timely objections may constitute a waiver of any appellate rights. Brightwell v. Lehman, 637 F.3d 187, 193 n. 7 (3d Cir. 2011).