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COLE v. KOBS & DRAFT ADVERTISING

April 9, 1996

PATRICIA COLE, Plaintiff, against KOBS & DRAFT ADVERTISING, INC., Defendant.


The opinion of the court was delivered by: KRAM

 SHIRLEY WOHL KRAM, U.S.D.J.

 In this action for fraudulent inducement, defendant Kobs & Draft Advertising, Inc. ("Kobs") moves, pursuant to Federal Rule of Civil Procedure 56, for summary judgment dismissing the complaint. For the reasons outlined below, Kobs's motion is denied.

 BACKGROUND1

 Kobs is a company in the business of direct market advertising, which involves communicating with the general public for the purpose of eliciting consumer responses. In June 1991, Kobs hired plaintiff Patricia Cole ("Cole") to work in its New York City office as an account supervisor overseeing its business with a major client, Fidelity Investments ("Fidelity").

 At the time of her hiring, Cole received and signed a "Standard Form of Employment Agreement," which provided that her employment "shall remain at all times terminable at will by [Kobs]." See Standard Form of Employment Agreement, annexed to the Affidavit of John B. Grant, Jr., sworn to on Dec. 14, 1995 (the "Grant Aff."), as Exh. "D." The Standard Form of Employment Agreement also provided that Cole would not solicit business from any of Kobs's clients for at least one year after leaving its employ. Id. As part of her orientation, Cole received an "Employee Handbook," which stated, in part:

 
EMPLOYMENT AT WILL
 
[Kobs] has no express or implied contract with its employees concerning the terms and conditions of employment. [Kobs] and its employees each have the right to terminate the employment relationship at any time, with or without cause, and with or without notice. No officer or employee of [Kobs] has the authority to alter or amend this express policy except the Chairman, who may do so only in writing. Any earlier oral or written policy or statements regarding employment termination that may have been made are void and superseded.

 See Employee Handbook, annexed to the Grant Aff. as Exh. "E," at 1.

 In October 1992, Cole was interviewed for a position at J. Walter Thompson Direct ("JWT Direct"), a Kobs competitor in the direct market advertising business. After several interviews, JWT Direct offered Cole the position of vice-president and management supervisor with a salary of $ 98,000 per year, an amount larger than the annual salary of $ 82,000 she received at Kobs. According to Cole, the position offered by JWT Direct provided an opportunity to accelerate the development of her career in part because the vice-president title would be a significant stepping stone for advancement in the industry.

 On October 23, 1992, Cole telephoned her supervisor, the head of Kobs's New York City office, Lynn Fantom ("Fantom"), to inform her that she had received an offer from JWT Direct and intended to communicate her acceptance. Fantom asked Cole to delay her decision until they could meet, but Cole decided to tender her written resignation immediately in order to provide Kobs with two-weeks notice of her departure. See Letter from Cole to Fantom, dated Oct. 23, 1992, annexed to the Grant Aff. as Exh. "G."

 Nonetheless, on October 29, 1992, Cole met with Fantom to discuss her plans to leave Kobs. At that meeting, Cole stated that she would remain at Kobs if the firm would agree to several conditions, including a salary increase, a two-year employment contract, promotions to the positions of vice-president and account director, a commission for her client billings and a change in the reporting structure such that Cole would report directly to Fantom. See Affidavit of Lynn Fantom, sworn to on Dec. 13, 1995, at P 6. The following day, Fantom again met with Cole and offered her an increase in salary to $ 140,000 per year, a review in December 1992 to consider a promotion to vice-president, a promotion to the position of account director in February 1993 and a guarantee that Cole would report directly to Fantom. Id. at P 7. According to Cole, Fantom encouraged her to accept this counteroffer, informing her that she would have "a great future here" if she chose to remain. Complaint at P 31.

 According to Cole, Kobs intended neither to continue to employ her nor to promote her in February 1993 to the position of account director despite Fantom's promises and the assurance that she would have "a great future" at Kobs. Rather, Cole alleges that Fantom's statements were part of a larger scheme to transfer the Fidelity account to a new employee, Greg DiLorenzo ("DiLorenzo"), before terminating her employment in order to prevent the loss of Fidelity's business. Cole claims that Kobs intentionally scheduled meetings with Fidelity when she was unavailable so that DiLorenzo could establish a relationship with that client, assigned her to a new client in order to distract her from the ...


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