Vogel v. E.D. Bullard Company
Filing
113
MEMORANDUM OPINION & ORDER: (1) Court's 110 Order to show cause is DISCHARGED. (2) Parties shall file a JOINT STATUS REPORT w/in 10 days of the entry of this order. (3) Matter is set for FINAL PRETRIAL CONFERENCE on 9/9/2013 at 11:00 AM in LEXINGTON. Conference shall be conducted TELEPHONICALLY. (4) Matter is set for a JURY TRIAL on 10/1/2013 at 9:00 AM in LEXINGTON. (5) Parties are reminded that this matter remains referred to Magistrate Judge Robert E. Wier for settlement. Signed by Judge Joseph M. Hood on 8/7/2013.(SCD)cc: COR,D,JC
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
JAMES D. VOGEL,
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
E.D. BULLARD COMPANY,
Defendant.
**
**
**
Civil Action No.
5:12-cv-11-JMH
MEMORANDUM
OPINION & ORDER
**
**
On June 7, 2013, the Court ordered [DE 110] Defendant
E.D. Bullard Company to show cause why declaratory judgment
should not be entered in favor of Plaintiff with respect to
the claim for relief in Count VI of the Amended Complaint.
In
Count
VI,
Plaintiff
seeks
a
declaration
that
he
is
entitled to keep the $20,000 signing bonus that he received
from Bullard pursuant to the parties’ Agreement and which
was
his
to
terminated
keep
“for
so
cause”
long
as
within
his
a
employment
certain
was
time
not
period.
Defendant has now filed a Response [DE 112] in which it
maintains
the
request
for
declaratory
relief
should
be
denied because, under the terms of the parties’ Agreement,
Plaintiff
is
obligated
to
repay
the
full
value
of
the
signing bonus because Plaintiff was, in fact, terminated
“for cause”.
Specifically, Bullard takes the position that, while
“for cause” is not defined in the Agreement, it can be
generally
understood
reason.
Bullard
to
mean
further
termination
argues
that
for
the
a
fact
specific
that
it
concluded and told Vogel that he was not a “good fit” at
Bullard falls into this category of termination and that,
ultimately, the evidence shows that he was terminated “for
cause” because the company’s leaders saw that he was not
fit for the position due to “his inability to adequately
perform his job.”
“The
written
construction,
contract
decide.
are
meaning,
matters
and
of
legal
law
for
effect
the
of
court
a
to
Absent ambiguity, a written contract is enforced
according
to
its
ordinary meaning.”
terms,
with
words
being
given
their
Biber v. Duplicator Sales & Serv., Inc.,
155 S.W.3d 732, 735 (Ky. Ct. App. 2004) (citing Morganfield
Nat.
Bank
1992);
v.
Damien
O'Bryan
(Ky. 1966)).
v.
Elder
&
Sons,
Massey–Ferguson,
836
S.W.2d
893
(Ky.
Inc.,
413
S.W.2d
891
“Cause” is not defined in the signing bonus
Agreement, so the Court is left to give the words their
ordinary meaning.
The
Court
wrote
earlier
in
this
action
that,
as
commonly used, “for cause” would mean that “one is let go
for
a
reason,
because
of
2
some
action
or
inaction
unacceptable to the employer because it is illegal or in
direct contravention of company policy or directive from a
superior – not just mere dissatisfaction with performance
and
nothing
writing.”
more,
[DE
at
unless
it
110.]
is
defined
Having
as
considered
such
the
in
a
matter
further, the Court concludes that the definition goes too
far.
Merriam-Webster defines “cause” in the context of “an
employee
discharged
reason:
a
for
cause”
sufficient
as
“a
or
adequate
factor.”
activating
good
See
http://unabridged.merriam-webster.com/unabridged/cause
(last viewed August 6, 2013) (emphasis in original).
This
more limited understanding of the term “for cause”, which
correlates
to
the
first
portion
of
the
Court’s
earlier
statement, strikes the Court as a just interpretation of
the contract, giving its words their ordinary meaning.
This is particularly so in light of Kentucky case law
which
provides
that,
when
a
contract
has
a
termination
provision for cause, an employer cannot be held liable for
breach of contract unless the decision to terminate the
employee’s employment is not justified.
Synthetic
Rubber
Corp.,
655
S.W.2d
489,
See Shah v. Am.
492
(Ky.
1983)
(“Whether [an employee's] employment contract contained a
‘termination for cause only’ covenant or whether he was
3
fired in accordance with company policies and procedures
for
one
or
employer]
more
cannot
of
be
the
many
resolved
causes
against
alleged
him
...
by
[the
[without]
application of the good faith standard established in Crest
Coal Co., Inc. v. Bailey, . . . 602 S.W.2d 425 ([Ky.]
1980).”); cited in Oliver v. J.J.B. Hilliard, W.L. Lyons,
Inc.,
Nos.
2010-CA-001138-MR,
2010-CA-001236-MR,
2010-CA-
001428-MR, and 2010-CA-001479-MR, 2013 WL 762593, at *4-5
(Ky.
Ct.
App.
Mar.
1,
2013)
(unpublished
opinion).
Further, the burden of “show[ing] bad faith [is] on the
[employee].”
Crest Coal Co., Inc. v. Bailey, 602 S.W.2d
425, 426 (Ky. 1980).1
Ultimately, to be “for cause,” an
1
In Crest Coal Co., Inc. v. Bailey, 602 S.W.2d 425 (Ky.
1980),
the
Kentucky
Supreme
Court
considered
the
termination of an employee’s employment under a contract
which provided for employment so long as employer was
“satisfied” with the employee’s work. The Kentucky Supreme
Court remanded the matter to the trial court with
directions to enter a judgment for the employer, holding
that the trial court erred when it denied the employer’s
motion for a directed verdict.
Specifically, the Supreme
Court determined that a reasonable person could not find
that the employer acted in bad faith where there was
sufficient
evidence
of
the
employer’s
justified
dissatisfaction
with
the
employee’s
work
where
the
employee’s work attendance record showed a long and
consistent pattern of unexcused and unexplained absences;
his immediate supervisor and foreman testified that, in
addition
to
his
unsatisfactory
attendance
record,
respondent's work product was inferior; an office employee
of the company stated that respondent had come into the
company office on several occasions with alcohol on his
breath; and another witness testified that he had seen
employee out drinking when he was supposed to be working.
4
employee’s dismissal must be for a good or adequate reason
and not made in bad faith.
By extension, in this matter, the Court concludes that
Vogel has a right under the parties’ Agreement to keep the
bonus paid to him so long as (1) his employment was not
terminated for cause or (2) his employment was terminated
for cause but the employer’s decision was taken in bad
faith,
i.e.,
was
not
justified.
The
Court
is
not
immediately persuaded that Vogel was terminated “for cause”
because
Defendant’s
stated
reason
for
terminating
Plaintiff’s employment at the time his employment ended was
that he was “not a good fit” – not because Vogel was not
performing
his
job.
There
is,
however,
evidence
that
Bullard – at least so far as Pasch was concerned – was not
pleased with Plaintiff’s efforts on the job and that those
feelings or concerns may have factored into the decision
that Vogel was not a “good fit.” This could lead a trier of
fact to determine that the termination was “for cause.”
That
said,
there
is
no
evidence
in
the
record
of
Bullard’s investigation into or method of reviewing Vogel’s
performance and little detail with respect to any actions
or inactions on Vogel’s part with which his supervisors
were dissatisfied.
concedes
that
he
At best, the Court knows that Vogel
failed
to
5
collate
information
about
competitors from their 10-K forms and that Pasch repeatedly
told him that he felt Vogel was not leading and needed to
grow sales, learn distribution channels, and provide input
and
strategy
for
the
company’s
endeavors.
While
it
is
scanty, there is evidence of pre-termination meetings in
which this criticism of Vogel’s performance was shared with
Vogel.
Of
course,
having
stated
that
his
employment
ended
because he was not a “good fit,” Bullard’s reliance on what
was
said
before
(of
this
which
little
is
revealed
Court)
during
Pasch’s
in
the
meetings
evidence
with
Vogel
sounds a bit like post hoc reasoning with respect to the
decision
to
terminate
Vogel’s
employment.
Even
if
the
reliance on those criticisms was not post hoc, it could
also be understood from the evidence that Pasch was busy
constructing an opportunity to fire Vogel after Pasch had
already
decided
that
he
no
longer
remain employed with the company.
wished
for
Vogel
to
If his criticisms were
then levied in bad faith, relief would be due to Vogel on
his claim.
Ultimately, there is “evidence on which a jury could
reasonably
find
for”
either
party,
version of the story is believed.
depending
which
Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 256 (1986).
6
on
It may be just
barely beyond the mere scintilla of evidence discussed in
Anderson,
but
it
demands
a
trial
of
this
matter.
Considering the presentation of evidence to date, the Court
again concludes that summary judgment in favor of Defendant
on this issue is not appropriate.
The Court concludes,
however, that there remains a question as to what motivated
the decision to terminate Vogel’s employment and whether or
not the decision to terminate his employment was taken in
bad faith.
Thus, summary judgment in favor of Vogel is not
appropriate either.
Accordingly, IT IS ORDERED:
(1)
That
the
Court’s
June
7,
2013,
Order
to
show
cause is DISCHARGED;
(2)
That the parties shall file a JOINT STATUS REPORT
within ten (10) days of the entry of this order
in which they shall address:
(a)
their readiness for trial;
(b)
which, if any, of the pending Motions
in
Limine
[DE
79
through
86]
are
relevant with respect to the remaining
claim; and
(c)
the anticipated length of the trial on
the remaining claim.
(3)
That
this
matter
is
7
set
for
a
final
pretrial
conference
on
11:00.
Monday,
This
September
conference
telephonically.
The
shall
parties
9,
2013,
be
conducted
shall
at
make
arrangements for the call and, once all parties
are
on
the
line,
they
shall
contact
the
undersigned in his chambers by calling (859) 2332415.
(4)
That
this
Tuesday,
matter
is
October
1,
set
for
2013,
a
jury
trial
on
at
9:00
a.m.
in
LEXINGTON, KENTUCKY.
(5)
The parties are reminded that this matter remains
referred to Magistrate Judge Robert E. Wier for
such expedited settlement processes as he shall
direct
consult
by
and
subsequent
contact
order.
Magistrate
Counsel
shall
Judge
Wier’s
office directly should they wish to schedule a
settlement conference, in keeping with his Order
of June 21, 2013 [DE 111].
This the 7th day of August, 2013.
8
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