PARKER et al v. SEALED AIR CORPORATION

Filing 19

OPINION/ORDER denying 10 Motion for Judgment on the Pleadings. Signed by Judge Kevin McNulty on 3/9/16. (DD, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

CATHY PARKER, et al.,

No. 15-cv-1354 (KM)(MAH)

Plaintiffs,
OPINION AND ORDER

V.

SEALED AIR CORPORATION,
Defendant.

KEVIN MCNULTY, U.S.D.J.:
This matter comes before the Court on the motion of the defendant,
Sealed Air Corporation (“Employer”), for judgment on the pleadings under Fed.
R. Civ. P. 12(c). Plaintiffs (“Employees”), who work at Sealed Air’s South
Carolina facility, bring this action seeking incentive pay that they say was
wrongfully withheld. For the reasons stated herein, the Employer’s motion is
DENIED.

Standard
Federal Rule of Civil Procedure 12(h)(2) “provides that a defense of failure
to state a claim upon which relief can be granted may also be made by a
motion for judgment on the pleadings.” Turbe v. Gov’t of Virgin Islands, 938
F.2d 427, 428 (3d Cir. 1991). Accordingly, when a Rule 12(c) motion asserts
that the complaint fails to state a claim, the familiar Rule 12(b)(6) standard
applies. Id. To withstand dismissal, the complaint must contain (1) a short and
plain statement of the grounds for the court’s jurisdiction; (2) a short and plain
statement of the claim showing that the pleader is entitled to relief; and (3) a
demand for the relief sought. Fed R. Civ. P. 8(a).
For the purposes of a motion to dismiss, the facts alleged in the
complaint are accepted as true and all reasonable inferences are drawn in favor
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of the plaintiff. N.J. Carpenters & the Trs. Thereof v. Tishman Const. Corp. of
N.J., 760 F.3d 297, 302 (3d Cir. 2014). Fed. R. Civ. P. 8(a) does not require that
a complaint contain detailed factual allegations. Nevertheless, “a plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more
than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127
S. Ct. 1955, 1964—65 (2007). Thus, the complaint’s factual allegations must be
sufficient to raise a plaintiff’s right to relief above a speculative level, so that a
claim is “plausible on its face.” Id. at 555, 570; see also W. Run Student Hous.
Assocs., LLC v. Huntington Nat. Bank, 712 F.3d 165, 169 (3d Cir. 2013).
The Complaint
The motion focuses on the complaint’s claim of breach of contract, which
hinges on the Employer’s Annual Incentive Plan (“AlP”). Essentially Employees
claim that that Employer retroactively manipulated their job performance
rankings to bring them below the rating of 2.8 that would have entitled them to
a bonus.
The terms of the AlP were circulated to employees in a document, the
“2012 Annual Incentive Plan Formal Communication,” that summarized the
incentive structure in relation to the performance rankings. Employees allege
that they were assigned a ranking of 3.0 (out of 5) at the end of 2012. On
February 27, 2013, however, their ratings were changed to 2.7. That, they say,
was not a bona fide ranking, but a result of the Employer’s decision to exclude
15% of the AlP participants from the incentive pool. Management allegedly
explained that this change reflected a change of policy from “goal ranking” to
“forced ranking.”
Analysis
In support of its motion, Employer contends that the disclosure
document does not set forth any promise specific enough to give rise to an
entitlement to a rating of 3.0. The disclosure document states that in the event

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of a conflict, the AlP itself will control. Employer quotes the AlP itself, which
contains a disclaimer vesting final authority in the Employer, with authority to
modify terms, and a statement that it does not constitute a contract of
employment. Employer suggests facts that tend to disprove that bonuses
vested at the end of the year. And it says the 2012 year-end ratings were
“tentative.” The Employer cites case law to the effect that a contract cannot be
formed under such vague circumstances, without clear agreement as to terms.
See ECF no. 10-1 at 14—15 (citing, e.g., Shebar v. Sanyo Bus. Sys. Corp., 111
N.J. 276, 290 (1988)).
Were this strictly a forward-looking exchange of promises, I would be
more inclined to accept Employer’s argument. Here, however, Employees have
alleged, not only that they should have received a ranking of 3.0 under the AlP
standards, but that they did receive such a ranking. That fact might be
interpreted to eliminate the vagueness problem. Or it might not, but this is a
motin to dismiss. Employees set forth an established course of dealing with
the mployer. They point to language in the AlP and disclosure document that
indicate bonuses will be paid based on the attainment of goals during the year.
And they raise questions about the prominence of any disclaimers, their
timing, and the employees’ knowledge of the terms of the AlP, as opposed to the
disclosure document.
Employees cite black letter contract law to the effect that a “unilateral
contract” may result, not from an exchange of promises, but from an offer that
contemplates performance, which may be accepted by rendering performance.
In particular, an employer’s undertaking to pay a bonus or pension to an
empioyee who remains on the job for a certain period may result in contract
formation if the employee in fact remains on the job for that period. See ECF
no. 16 (citing, e.g., Restatement (Second) of Contract
(19’1); 2 Corbin, Contracts

§ 25, 45 & cmt. d

§ 6.2 (rev. ed. 1995); Woolley v. Hoffman-La Roche,

99 P.J. 284 (1985)). Where a contract exists, the implied covenant of good faith

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and ‘air dealing, too, may bear on the permissibility of the alleged “rug-pulling”
in February 2013.
Employer, to be sure, raises cogent factual contentions and arguments in
response to the Employees’ claims. These must await summary judgment. This
complaint cannot be disposed of on the pleadings, because it raises factual
contentions which, if credited, support a cause of action.

ORDER
The plaintiffs having filed a complaint (ECF no. 1), and the defendants
having answered (ECF no. 7); and the defendants having thereafter moved for
judgment on the pleadings, pursuant to Fed. R. Civ. p. 12(c) (ECF no. 10); and
the plaintiffs having filed a response (ECF no. 16); and the defendants having
filed a reply (ECF nc. 17); and the court having considered the matter without
oral irgument and rendered the foregoing Opinion; and good cause appearing
therefor:
IT IS this

9th

day of March, 2016

ORDERED that defendant’s motion for judgment. on the pleadings (ECF
no. 10) is DENIED.

/z
Hon. Kevin McNult
United States District Judge

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