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Berkeley S. Scott v. Harris Interactive

March 19, 2012

BERKELEY S. SCOTT, PLAINTIFF,
v.
HARRIS INTERACTIVE, INC., DEFENDANT.



The opinion of the court was delivered by: Pitman, United States Magistrate Judge:

OPINION AND ORDER

I. Introduction

This is an action for breach of contract and violation of Article 6 of the New York State Labor Law, N.Y. Labor L. §§ 190, et seq., arising out of plaintiff Berkeley S. Scott's employment with defendant Harris Interactive, Inc. ("Harris Interactive") from approximately late May 2009 through mid-March 2010. Harris Interactive has asserted a counterclaim for breach of contract against plaintiff. The parties have consented to my exercising plenary jurisdiction pursuant to 28 U.S.C. § 636(c).

By notice of motion dated April 15, 2011 (Docket Item 13), Harris Interactive moves for summary judgment (1) dismissing plaintiff's breach of contract and Labor Law claims and (2) granting its breach of contract counterclaim. Plaintiff opposes Harris Interactive's motion and cross-moves for summary judgment

(1) granting his breach of contract and Labor Law claims and (2) dismissing Harris Interactive's breach of contract counterclaim (Docket Item 22).*fn1

For the reasons set forth below, Harris Interactive's motion for summary judgment is granted in its entirety and plaintiff's cross-motion for summary judgment is denied in its entirety.

II. Facts

A. The Parties' Allegations

Plaintiff's complaint alleges the following facts. On April 27, 2009, Harris Interactive offered plaintiff, in writing, the position of "Senior Vice President, Global Accounts & Business Development" (Complaint, dated June 28, 2010 ("Compl."), (Docket Item 1), ¶ 8). The letter making the offer "set [] forth the terms, conditions, and benefits of [plaintiff's] employment" which included, among other things, the following: (1) a salary of $220,000.00 per year and (2) a provision entitling plaintiff to six-months of severance benefits and continued healthcare benefits (or their cash value equivalent) in the event that he was terminated without cause (see Compl. ¶¶ 9-13). The letter also provided that plaintiff would be an at-will employee of Harris Interactive, stating that "the employment relationship between [plaintiff] and [Harris Interactive] may be terminated at any time, by either [plaintiff] or Harris Interactive, for any reason not expressly prohibited by law" (Ex. B at DEF000002 to Defendant's Statement of Material Facts Not in Dispute, dated Apr. 15, 2011 ("Def.'s St. of Mat. Facts"), (Docket Item 14)). The letter was signed by Kimberly Till, the President and Chief Executive Officer of Harris Interactive (Compl. ¶ 9). Plaintiff accepted the offer by signing the letter on or about May 2, 2009, and he commenced work on or about May 20, 2009 (Compl. ¶ 15).

As Senior Vice-President of Global Accounts and Business Development at Harris Interactive, plaintiff "was responsible for creating and implementing new programs and business models to increase Harris Interactive's domestic and global business" (Compl. ¶ 16). In this position, plaintiff "recruited [and supervised] sales teams for six industry sectors covered by Harris Interactive" and "created a Global Account Management (GAM) Program, designed to coordinate Harris Interactive's larger accounts worldwide" (Compl. ¶¶ 17-18). However, plaintiff alleges that in or about November 2009, Harris Interactive began to unilaterally diminish his duties and "assigned [him] the additional duties of an individual contributor/seller, a position for which [he had] not [been] hired" (Compl. ¶¶ 20-21). Notwithstanding this, plaintiff alleges that he "retained his title, senior leadership responsibilities, global responsibilities, and all compensation terms set forth in his [April 27, 2009 offer letter]" (Compl. ¶ 25).

In approximately mid-January 2010, plaintiff alleges that he discovered Harris Interactive had postponed the formal launch of the six global accounts and sales teams that he had structured (Compl. ¶ 26). Additionally, at around the same time, plaintiff states that he received an e-mail from Frank Forkin, the former President of Client Services in North America at Harris Interactive, "in which Forkin acknowledged that [plain-tiff's] 'role has changed' from what he was hired to do" (Compl. ¶ 27). Then, in late January 2010, plaintiff alleges that he was informed by Till that another Harris Interactive employee would be taking over the launch of the global accounts (Compl. ¶ 28).

On or about February 19, 2010, plaintiff states that he received an e-mail from Till informing him that a time was being scheduled to discuss his changed job responsibilities as well as "appropriate compensation" (Compl. ¶ 29). This conversation took place on or about March 4, 2010; plaintiff alleges that he was informed that he had been "demoted to the title of Senior Vice President [of] Account Management" and that his adjusted salary would be $150,000.00 per year (Compl. ¶¶ 30-32). The reduced salary rate would become effective on March 15, 2010 (Compl. ¶ 35). Plaintiff ceased working for Harris Interactive on March 16, 2010 (see Compl. ¶¶ 37-38).

Plaintiff states that he performed his contractual obligations under the agreement with Harris Interactive and that he did not agree to the company's "unilateral changes" to his employment (Compl. ¶ 34). Plaintiff also states that "Harris Interactive's unilateral removal of [his] job duties, change in his title, and $70,000 reduction in his salary were intolerable changes to [his] working conditions such that Harris Interactive constructively discharged [him] from his employment" effective March 16, 2010 (Compl. ¶¶ 37-38).

Based on the above facts, plaintiff presently seeks:

(1) six months of severance benefits, (2) six months of continued healthcare benefits, or their cash value equivalent, (3) the unpaid portion of his salary for his final two days of work at the "proper contractual rate" (i.e., at $220,000.00 instead of $150,000.00) and (4) liquidated damages, attorneys' fees, costs, disbursements and prejudgment interest (Memorandum of Law in Support of Plaintiff's Cross-Motion for Summary Judgment and in Opposition to Defendant's Motion for Summary Judgment, dated May 10, 2011 ("Pl.'s Mem."), (Docket Item 24), 2; see also Compl. ¶¶ 54, 64).*fn2

In its Answer to the Complaint (Answer, dated July 27, 2010 ("Answer"), (Docket Item 5)), Harris Interactive has asserted a counterclaim for breach of contract. In connection with Harris Interactive's offer letter dated April 27, 2009, plaintiff received a $15,000.00 signing bonus (Answer ¶¶ 43-44). The letter provided, however, that in the event plaintiff either voluntarily terminated his employment or was terminated for cause prior to the first anniversary date of his employment, the signing bonus would have to be repaid to Harris Interactive (Answer ¶ 43). Based on the facts set forth above, Harris Interactive alleges that plaintiff voluntarily terminated his employment prior to the first anniversary date of his employment, and, thus, is obliged to reply his $15,000.00 signing bonus (Answer ¶¶ 45-49).

B. Facts the Parties' Claim Are Established by Discovery

Both parties have submitted Local Civil Rule 56.1 statements. I set forth here the material facts that the parties contend have been established either through discovery or by affidavits submitted in connection with the pending motions, noting the particular disputes that exist between the parties.

By letter dated April 27, 2009, Harris Interactive offered plaintiff employment with the company subject to the express provision that plaintiff would be an "at-will" employee*fn3 (Def.'s St. of Mat. Facts ¶¶ 7, 10, citing Exs. A and B to Def.'s St. of Mat. Facts and Affidavit of Kimberly Till in Support of Motion for Summary Judgment, sworn to on Apr. 15, 2011 ("Till Aff."), (Docket Item 15), ¶¶ 9-11). Plaintiff's job duties and responsibilities were not set forth in this letter (Def.'s St. of Mat. Facts ¶ 8, citing Ex. B to Def.'s St. of Mat. Facts). However, there is no dispute that:

[P]laintiff was initially tasked with, inter alia, all of the following: (1) recruit a business development team from across a number of different sales sectors that would aggressively grow North American client lists and sales; (2) form a series of teams to create and execute global strategies for driving increased business from up to six of Harris' clients with global presence and needs (typically, client accounts were managed locally by geographic region); and (3) carry out individual "contributions" or sales (i.e., personally book sales for Harris with his own set of clients).

(Def.'s St. of Mat. Facts ¶ 12, citing Till Aff. ¶¶ 13-15, Affidavit of Marc H. Levin in Support of Motion for Summary Judgment, sworn to on Apr. 15, 2011 ("Levin Aff."), (Docket Item 16), ¶¶ 2-4 and Affidavit of Frank Forkin, sworn to on Mar. 24, 2011 ("Forkin Aff."), (Docket Item 18), ¶¶ 3-5). Plaintiff reported to Forkin, although Till and other individuals at Harris Interactive also tracked plaintiff's progress (Def.'s St. of Mat. Facts ¶ 13, citing Till Aff. ¶¶ 16-23 and Forkin Aff. ¶ 3).

Harris Interactive contends, however, that plaintiff's performance in his leadership and managerial roles at Harris Interactive "lagged from early on in his tenure . . . . " (Def.'s St. of Mat. Facts ¶ 14, citing Till Aff. ¶¶ 16-21 and Forkin Aff. ¶¶ 6-7, 13). For example, Harris Interactive states that "[p]laintiff did not lay the administrative groundwork for the Business Development Team in a timely manner, failing to assign accounts to individuals and groups or develop sales targets until well after he had started with Harris"*fn4 (Def.'s St. of Mat. Facts ¶ 15, citing Forkin Aff. ¶¶ 6-7). Additionally, several team members complained that plaintiff "did not appear to be very active in the Business Development Team's organization and direction"*fn5 (Def.'s St. of Mat. Facts ¶ 18, citing Forkin Aff. ¶ 6).
With respect to "the formation of the six Global Account teams," Harris Interactive states that one of plaintiff's superiors "was unable to recall any actions at all taken by [p]laintiff with respect to this aspect of his duties"*fn6 (Def.'s St. of Mat. Facts ¶ 20, citing Till Aff. ¶¶ 21-22, Forkin Aff. ¶ 6 and Affidavit of George Terhanian, sworn to on Mar. 28, 2011 ("Terhanian Aff."), (Docket Item 19), ¶¶ 10-11). Further, Harris Interactive states that any effort plaintiff made in this regard occurred approximately six months into his employment and that the actual launch of the Global Account Management Program did not take place until responsibility for the program had been given to another Harris Interactive employee*fn7 (Def.'s St. of Mat. Facts ¶¶ 21-23, citing Ex. E to Def.'s St. of Mat. Facts and Till Aff. ¶ 22).

Finally, with respect to plaintiff's initial job performance, Harris Interactive states that "[p]laintiff's inability to handle his leadership abilities was confirmed [by] the performance results of his Business Development Team"*fn8 (Def.'s St. of Mat. Facts ¶ 26, citing Till Aff. ¶¶ 23-26 and Forkin Aff. ¶ 9). Specifically, in approximately mid-January 2010, Till and others reviewed whether the Business Development Team's performance met established sales goals and discovered that plaintiff's "method of computing his team's performance was wildly erroneous" and that the stated sales goals had not been met*fn9 (Def.'s St. of Mat. Facts ¶¶ 27-29, citing Ex. F to Def.'s St. of Mat. Facts and Till Aff. ¶¶ 24-27).

Because of the foregoing, Harris Interactive began to reduce plaintiff's job responsibilities in late 2009, and by mid-January 2010, plaintiff was not performing the job responsibilities for which he had originally been hired (Def.'s St. of Mat. Facts ¶¶ 32-33, citing Exs. G, H, I to Def.'s St. of Mat. Facts, Forkin Aff. ¶¶ 12, 15 and Till Aff. ¶ 22). Harris Interactive states that comments made by Forkin to plaintiff concerning the changes in his job responsibilities "seemed to [Forkin] to be well-received"*fn10 and that plaintiff did not object to the changes in his responsibilities*fn11 (Def.'s St. of Mat. Facts ¶¶ 31-33, citing Exs. G, H, I to Def.'s St. of Mat. Facts, Forkin Aff. ¶¶ 12, 15 and Till Aff. ¶ 22).

As a result of the changes to plaintiff's job responsibilities, Harris Interactive states that it determined plain-tiff's salary "needed to be reduced and his other compensation restructured" because plaintiff was performing an individual contributor/seller role as opposed to a management-level leadership role (see Def.'s St. of Mat. Facts ¶¶ 34-35, citing Till Aff. ¶¶ 33-36, Levin. Aff. ¶ 4, Forkin Aff. ¶ 16 and Terhanian Aff. ¶¶ 16-17). Plaintiff, Forkin, Till and Marc Levin (Harris Interactive's Executive Vice-President, General Counsel and Corporate Secretary) discussed these changes with plaintiff on or about March 4, 2010 during a conference call (Def.'s St. of Mat. Facts ¶ 42, citing Ex. A to Def.'s St. of Mat. Facts and Levin Aff. ¶ 4). In pertinent part, plaintiff was informed during this call that (1) his title would be changed to reflect his new role at the company and (2) his salary would be reduced to $150,000.00 per year effective March 15, 2010 (Def.'s St. of Mat. Facts ¶ 43, citing Exs. L and M to Def.'s St. of Mat. Facts and Till Aff. ¶¶ 37-38). Plaintiff was told to consider the changes and "to let the conference call participants know if he was uncomfortable with [them], and another one could be discussed"*fn12 (Def.'s St. of Mat. Facts ¶ 47, citing Ex. L to Def.'s St. of Mat. Facts and Till Aff. ¶ 39). Shortly after the conference call, Levin sent plaintiff an email summarizing the changes being made to his compensation (Def.'s St. of Mat. Facts ¶ 48, citing Ex. M at 8-9 to Def.'s St. of Mat. Facts and Levin Aff. ¶ 6).

On March 8, 2010, plaintiff sent Levin an e-mail, stating that he was "'not able to accept'" the revised terms and conditions of his employment with Harris Interactive and that he was requesting his severance pay (Def.'s St. of Mat. Facts ¶ 50, citing Ex. M at 7-8 to Def.'s St. of Mat. Facts and Levin Aff. ¶ 7). Levin responded to plaintiff that the severance provision in his employment agreement did not apply because he was not being terminated by Harris Interactive*fn13 (Def.'s St. of Mat. Facts ¶ 50, citing Ex. M at 6-7 to Def.'s St. of Mat. Facts and Levin Aff. ¶ 7).

Plaintiff e-mailed Levin again on March 10, 2010 and stated that he believed Harris Interactive owed him severance pay and that the company was in breach of contract, though he also asked for "'clarity'" about his responsibilities and reporting going forward*fn14 (Def.'s St. of Mat. Facts ¶ 51, citing Ex. M at 5-6 to Def.'s St. of Material Facts and Levin Aff. ¶ 8). In response, Levin e-mailed plaintiff with a description of his job responsibilities as an individual contributor/seller and again explained to plaintiff that he was not entitled to severance payments because Harris Interactive had not terminated him*fn15 (Def.'s St. of Mat. Facts ¶ 52, citing Ex. A at 84-85, 212-13 and Ex. M at 3-4 to Def.'s St. of Mat. Facts and Levin Aff. ¶ 9). Levin also asked plaintiff to confirm whether he wanted to continue working at Harris Interactive by March 12, 2010 (Def.'s St. of Mat. Facts ¶ 52, citing Ex. A at 84-85, 212-13 and Ex. M at 3-4 to Def.'s St. of Mat. Facts and Levin Aff. ¶ 9).

On March 12, 2010, plaintiff e-mailed Levin and again "demand[ed] . . . severance [pay] and [asserted] a complaint that he was being subjected to conditions that no other Harris [Interactive] employee was subjected to" (Def.'s St. of Mat. Facts ¶ 55, citing Ex. M at 2-3 to Def.'s St. of Mat. Facts). Levin responded to plaintiff's e-mail shortly thereafter, again asking plaintiff to confirm whether he wanted to continue working at Harris Interactive by March 15, 2010*fn16 ...


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