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David Wiggins v. Hain Pure Protein Corporation

November 9, 2011


The opinion of the court was delivered by: Denise Cote, District Judge:


Plaintiff David Wiggins ("Wiggins") brings this action against his former employer, Hain Pure Protein Corporation ("HPPC"), for breach of contract and violation of the New York Labor Law. Wiggins was fired in April of 2009 and seeks payment of a 2008 bonus, severance pay, rights in an equity plan, and payment for unused vacation. Following the close of discovery, HPPC filed a motion for summary judgment on May 27, 2011. For the following reasons, HPPC's motion for summary judgment is granted.*fn1


I. The Formation of HPPC and Hiring of Wiggins as CEO The following facts are undisputed unless otherwise indicated. Prior to the time period at issue here, Wiggins was retained as a consultant by Pegasus Capital Advisors, L.P. ("Pegasus"), a private equity firm. One of Wiggins's tasks for Pegasus was advising it on the acquisition of the College Hill Division of Premium Pure Protein. Around July 2005, Pegasus and Hain Celestial Group, Inc. ("Hain") entered into a joint venture and established HPPC to acquire the College Hill Division. Pegasus and Hain jointly owned HPPC, Hain owning, initially, slightly more than 50%. Irwin Simon ("Simon"), Ira Lamel ("Lamel") and Benjamin Brescher ("Brescher"), represented Hain on the HPPC board of directors ("HPPC Board"). Representing Pegasus on the HPPC Board were Wiggins and Rodney Cohen ("Cohen"). After Cohen's resignation from the HPPC Board sometime in 2008, David Cunningham ("Cunningham") joined in his place.

Upon HPPC's formation, Wiggins was named chairman of the HPPC Board, but continued to serve as a consultant to Pegasus on HPPC and other ventures. During this time, Wiggins billed the time he spent on HPPC matters to Pegasus. Wiggins claims that Pegasus then billed HPPC for his services to the joint venture. Simon, on the other hand, claims that Pegasus was only reimbursed by HPPC for Wiggins's expenses, and that HPPC Board members' time was not charged to HPPC.

On March 4, 2008, Wiggins made a presentation to the HPPC Board during a meeting in Minneola, New York, about the acquisition of Pilgrim's Pride. The HPPC Board approved the acquisition, and appointed Wiggins the CEO of HPPC. Wiggins did not make any mention at the HPPC Board meeting that he wanted HPPC to agree to a one-year severance payment in the event of his discharge as CEO.

Wiggins does not have an employment contract reduced to writing, but he did discuss his requests about compensation with certain HPPC Board members. On March 4, prior to the HPPC Board meeting, Wiggins met with Cohen, then a member of the HPPC Board; Cunningham, who was not yet a member of the HPPC Board; and Shaun Collyer ("Collyer"), a Pegasus employee also not on the HPPC Board. In this meeting, Wiggins relayed his request that he be compensated by HPPC no less than what he was receiving from Pegasus as a consultant, as well as for a one-year severance payment. Cohen and Cunningham let him know he would need approval from the HPPC Board for these requests. Wiggins claims that Cohen and Cunningham informed him that they supported his request for a severance payment, but they do not recall telling him this. Cunningham testified that the HPPC Board did not approve Wiggins's request for a severance payment.

After the March 4 HPPC Board meeting, Wiggins met one-onone with Simon. Wiggins claims that during their conversation, Simon agreed to his request for a one-year severance payment. Simon, on the other hand, testified that he does not recall discussing a severance payment with Wiggins.

Wiggins does not have any documentation that he was granted a one-year severance payment during his employment at HPPC. Nor was he ever told that there was a HPPC Board meeting at which his severance payment request was approved. Cunningham testified only that he had conversations with Lamel and Simon agreeing to Wiggins's salary amount and that the HPPC Board also agreed that he should be given an opportunity to receive a bonus, based on the performance of the business and at the discretion of the HPPC Board.

Between March and July 2008, Wiggins began serving as the CEO of HPPC, but continued to be paid by Pegasus until July 1, when Wiggins completed an employment application form with HPPC, was put on HPPC's payroll, and began taking a salary from that company. July 1, 2008 was the first day of HPPC's 2009 fiscal year.

II. Subsequent Discussions About HPPC Employee Benefits Sometime after the acquisition of Pilgrim's Pride, Wiggins discussed putting into place a management equity plan at HPPC with Cunningham, Cohen and Collyer. In April 2008, Cunningham was involved in discussions about a possible HPPC management equity plan with other HPPC Board members. On August 13, Wiggins sent Cunningham an email asking about the status of the development of a management equity plan. Cunningham responded by email the next day that he was still trying to get such a plan approved by the HPPC Board. Wiggins admits that he does not know if HPPC ever adopted an equity plan, and that no one ever told him that the HPPC Board had agreed to such a plan.*fn2

Cunningham explained that as "significant losses" were incurred by HPPC, the discussion of a management equity plan died out. Simon confirmed that no management equity plan was ever put into place, and testified that as of March 2011, HPPC was still wholly owned by Hain and Pegasus because no stock had ever been distributed to employees.

On September 8, 2008, Wiggins emailed Lamel and Cunningham a proposal for fiscal year 2008 bonuses for HPPC employees. This proposed bonus chart did not list any 2008 bonus for Wiggins, although his name and salary is listed alongside other HPPC employees. The minutes from the September 10 HPPC Board meeting indicate that Collyer was directed to finalize the employee 2008 bonuses with Lamel and Cunningham.

Wiggins stated that he discussed his own 2008 bonus with Cunningham, and that he agreed that a $100,000 bonus, as suggested by Wiggins, was an appropriate amount. But Wiggins was never informed if his 2008 bonus was ever discussed at a HPPC Board meeting.*fn3 Cunningham recalled that 2008 bonuses for employees were paid, but does not recall if a 2008 bonus amount was set for Wiggins. Lamel and Cohen could also not recall if a bonus amount for Wiggins was ever discussed or approved.

On February 19, 2009, Wiggins signed a memo regarding HPPC's employee vacation policy. This policy states that unused vacation would only be paid out to those that voluntarily left the company.*fn4

While CEO of HPPC, Wiggins worked primarily out of its corporate headquarters in New Oxford, Pennsylvania, living out of a nearby hotel. On the weekends, he lived at his residence in Florida. Between July 1, 2008 and April 21, 2009, Wiggins worked between 30 and 45 days in New York locations,*fn5 and less than five days at an HPPC location ...

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