BISS v. GEHRING-MONTGOMERY, INC. et al
MEMORANDUM SIGNED BY HONORABLE JOHN R. PADOVA ON 5/22/17. 5/22/17 ENTERED AND COPIES E-MAILED. (va, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
May 22, 2017
Plaintiff Lawrence Biss has brought this action against Defendants asserting claims
arising from the termination of his employment with Defendant Gehring-Montgomery, Inc.
(“GMI”). Defendants Thomas Sprock and Oliver Zimmerman have moved to be dismissed as
Defendants in this action, asserting that this Court lacks personal jurisdiction over them. For the
reasons that follow, we deny the Motion.
The Complaint alleges the following facts. GMI “is a distributor of specialty chemicals
industries.” (Compl. ¶ 14.) It was founded by Ruth Gehring and managed by her for many
to commercial manufacturers in the automotive, coatings, adhesives, food and personal care
years. (Id. ¶ 15.) Defendant TER Hell & Co., GmbH (“TER Hell”) “is the parent company of a
group [of] companies . . . that distribute, retail, and manufacture raw chemicals.” (Id. ¶ 18.) In
1990, Defendant TER Holding, Inc., a subsidiary of TER Hell, acquired GMI. (Id. ¶ 19.)
Biss was hired by GMI on May 2, 1992 as the Purchasing Manager. (Id. ¶ 16.) He
company and its sales operations. (Id. ¶ 17.) On December 20, 1995, GMI and Biss entered into
became the Managing Director of GMI in January 1996 and was responsible for running the
an employment agreement (the “Employment Agreement”). (Id. ¶ 20.) Under the Employment
Agreement, Biss was entitled to the following compensation: “salary . . . , reimbursement of
business expenses, a new automobile at company expense every three years, profit sharing equal
to 10% of the company’s net profits before taxes and executive compensation, 401(k) plan
days annually.” (Id. ¶ 22(a).) In addition, pursuant to the Employment Agreement, Biss’s
contributions by the company equal to 4% of his [salary], medical insurance, and vacation of 25
with 12 months’ notice. (Id. ¶ 22(b).) Just cause is defined in the Employment Agreement as “a
employment with GMI could only be terminated upon his death, or disability, for just cause, or
repeated and substantial failure to perform his duties after specific written notice of the failure;
felony.’” (Id. ¶ 22(c).) The Employment Agreement also provided that Biss was entitled to
frequent absences without satisfactory explanation; ‘material misconduct;’ or ‘conviction of a
year of his service to the company beginning on January 1, 1996. (Id. ¶ 22(d).)
severance pay upon expiration of the Agreement in the amount of one month of salary for every
Biss was born in 1955 and was 61 years old when he filed the Complaint. (Id. ¶ 23.)
Gehring was born in 1944 and was 72 years old when Biss filed the Complaint. (Id. ¶ 24.)
managers to replace Gehring and Biss. (Id. ¶ 25.) In the summer of 2015, all of the Defendants,
Beginning in 2011, the management of TER Hell made it clear that it wanted to hire younger
would be distributed to Thomas Sprock, 1 Oliver Zimmerman, 2 and his replacement. (Id. ¶ 26.)
except Mark Bitting, informed Biss that his position would be terminated and that his duties
Biss was also notified that he “would be required to interview and train his replacement.” (Id.)
Biss informed Sprock and Zimmerman that his termination violated the federal Age
Defendant Thomas Sprock is the Secretary of GMI and Chief Financial Officer of TER
Hell. (Compl. ¶ 5.)
Defendant Oliver Zimmerman is the President of GMI and the Chief Executive Officer
of TER Hell. (Compl. ¶ 6.)
Discrimination in Employment Act (“ADEA”). (Id. ¶ 27.) At the end of 2015, the company
terminated Gehring because of her age. (Id. ¶ 28.)
On January 1, 2016, Biss’s Employment Agreement was terminated, his position was
eliminated, and his duties were assigned to Bitting, 3 Sprock, and Zimmerman, all of whom are
younger than Biss.
(Id. ¶ 29.)
(Id. ¶ 30.)
Biss was assigned to a meaningless position with little
responsibility “but high visibility to customers and existing employes.”
reassignment “was an affront and an embarrassment” to Biss and was intended to cause Biss to
Employment Agreement. (Id.) Nevertheless, Biss did not quit. (Id. ¶ 32.)
resign and relieve GMI of its obligation to pay him severance in accordance with the
Defendants subsequently engaged BDO Seidman (“BDO”) to perform an audit of GMI.
of his severance pay. (Id. ¶ 33.) During its audit of GMI, representatives of BDO told GMI
(Id.) Defendants engaged BDO to find a reason to fire Biss that would not require the payment
at his trade or profession, and dishonesty.” (Id. ¶ 34.) These representations were false and
employees, ex-employees, and third parties that Biss was guilty of “theft, crimes, incompetence
Defendants knew that they were false. (Id. ¶¶ 35-36.) On July 7, 2016, Biss’s employment was
(Id. ¶ 38.)
Defendants gave numerous false reasons for terminating Biss’s
employment in order to “(a) mask the age discrimination of the Defendants; (b) retaliate against
to pay him the severance pay package required by his contract.” (Id. ¶ 39.) Only Sprock gave a
Mr. Biss for asserting his contractual and statutory rights, and (c) . . . attempt to justify the failure
valid reason for Biss’s termination, when he told Biss: “[w]e tried to settle things with you but
terminate you. You won’t get any severance pay now.” (Id. ¶ 40.) As of the date of his
you made all of these claims for severance and discrimination that we had no other choice but to
Defendant Mark Bitting is the Managing Director for Sales and Purchasing of GMI.
(Compl. ¶ 7.)
26 months of pay as severance under the Employment Agreement. (Id. ¶ 42.) GMI did not give
termination of employment, Biss had worked for GMI for more than 24 years and was entitled to
Biss his severance payments. (Id. ¶ 43.) In addition, pursuant to GMI’s policy of paying unused
vacation pay to employees whom it terminates, Biss was entitled to be paid for four weeks of
total value of $33,000. (Id. ¶¶ 44-45.) Biss was not paid for his unused vacation time. (Id. ¶
vacation pay that he earned in 2015 and 2.8 weeks of vacation pay that he earned in 2016, with a
The Complaint asserts five claims. Count I asserts a claim against all Defendants for age
discrimination pursuant to the ADEA, 29 U.S.C. § 623, and alleges that Biss was first demoted
and then terminated because of his age and because he had asserted that he was being
discriminated against on the basis of his age. Count II asserts a claim against all Defendants for
retaliation for Biss’s assertion of his rights under the ADEA. Count III asserts a claim against all
Defendants under the Pennsylvania Wage Payment and Collection Law, 43 Pa. Stat. § 260.1, et
seq. (the “WPCL”), for Biss’s unpaid severance, notice, and vacation pay provided for under his
Employment Agreement. Count IV asserts a state common law claim for breach of contract
against GMI, TER Hell, and TER Holding for breach of the Employment Agreement. Count V
asserts a state common law claim for defamation against GMI, TER Hell, TER Holding, Sprock,
and Zimmerman arising from the false statements made by Defendants and their agents
regarding Biss. Sprock and Zimmerman have moved to dismiss all of the claims asserted against
them for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2).
“‘[C]ourts reviewing a motion to dismiss a case for lack of in personam jurisdiction must
accept all of the plaintiff’s allegations as true and construe disputed facts in favor of the
plaintiff.’” Bootay v. KBR, Inc., 437 F. App’x 140, 143 (3d Cir. 2011) (alteration in original)
(quoting Carteret Savs. Bank, FA v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir. 1992)). The
plaintiff, however, “bears the burden of proving that the court has personal jurisdiction over the
defendant by a preponderance of the evidence,” Allaham v. Naddaf, 635 F. App’x 32, 37 (3d
Cir. 2015) (citations omitted), and “may not rest solely on the pleadings to satisfy this burden.”
Gutierrez v. N. Am. Cerruti Corp., Civ. A. No. 13-3012, 2014 WL 6969579, at *2 (E.D. Pa. Dec.
9, 2014) (citing Simeone ex re. Estate of Albert Francis Simeone, Jr. v. Bombardier-Rotax
GmbH, 360 F. Supp. 2d 665, 669 (E.D. Pa. 2005); and Carteret Savs. Bank, 954 F.2d at 146).
Rather, “[o]nce the defense has been raised, . . . ‘the plaintiff must sustain [his] burden of proof
in establishing jurisdictional facts through sworn affidavits or other competent evidence . . . .’”
Int’l Bhd. of Elec. Workers Local Union No. 126 Ret. Plan Tr. Fund v. Cablelinks, Inc., Civ. A.
No. 15-1925, 2015 WL 8482831, at *1 (E.D. Pa. Dec. 10, 2015) (quoting Time Share Vacation
Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984)).
Sprock and Zimmerman argue that we should dismiss them as Defendants to this action
because they are German, do not reside in Pennsylvania, and “have never purposefully availed
themselves to [sic] the jurisdiction of this Court.” (Defs.’ Mem. at 3.) “Under Federal Rule of
Civil Procedure 4(k), a District Court typically exercises personal jurisdiction according to the
law of the state where it sits.” O’Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d
Cir. 2007) (citing Fed. R. Civ. P. 4(k)(1)(A)); see also Fed. R. Civ. P. 4(k)(1) (“Serving a
summons . . . establishes personal jurisdiction over a defendant: (A) who is subject to the
jurisdiction of a court of general jurisdiction in the state where the district court is located . . . .”).
“Pennsylvania’s long-arm statute permits courts to exercise personal jurisdiction over
nonresident defendants ‘to the fullest extent allowed under the Constitution of the United States’
and ‘based on the most minimum contact with this Commonwealth allowed under the
Constitution.’” Ackourey v. Sonellas Custom Tailors, 573 F. App’x 208, 211 (3d Cir. 2014)
(quoting 42 Pa. Cons. Stat. Ann. § 5322(b)). “Accordingly, in determining whether personal
jurisdiction exists, we ask whether, under the Due Process Clause, the defendant has ‘certain
minimum contacts with . . . [Pennsylvania] such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.’” O’Connor, 496 F.3d at 316-17
(alterations in original) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
There are two types of personal jurisdiction, general and specific. Id. at 317 (citing
Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414-15 & n.9 (1984)).
“General jurisdiction exists when the plaintiff’s claim arises out of the defendant’s ‘continuous
and systematic’ contacts with the forum state. General jurisdiction exists even if the cause of
action is unrelated to the defendant’s activities in the forum state.” Rocke v. Pebble Beach Co.,
541 F. App’x 208, 210 (3d Cir. 2013). “Specific jurisdiction exists when the plaintiff’s claim
arises out of the defendant’s activities within the forum such that the defendant could reasonably
anticipate being haled into the state’s courts.” Id. (citing Vetrotex Certainteed Corp. v. Consl.
Fiber Glass Prods. Co., 75 F.3d 147 (3d Cir. 1995)).
Plaintiff maintains that we have specific personal jurisdiction over Sprock and
Zimmerman in this case. 4 “In determining whether there is specific jurisdiction, we undertake a
three-part inquiry.” D’Jamoos ex rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94,
102 (3d Cir. 2009). “First, the defendant must have ‘purposefully directed [its] activities’ at the
Plaintiff also argues that we have general jurisdiction over Sprock and Zimmerman as a
result of their continuous and substantial contacts with Pennsylvania. However, since we have
specific jurisdiction over Sprock and Zimmerman, see infra at 11, we need not address this
forum.” Id. (alteration in original) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472
(1985)). “Second, the litigation must ‘arise out of or relate to’ at least one of those activities.”
Id. (quoting Helicopteros Nacionales, 466 U.S. at 414; and O’Connor, 496 F.3d at 317). “And
third, if the first two requirements have been met, a court may consider whether the exercise of
jurisdiction otherwise ‘comport[s] with fair play and substantial justice.’” Id. (alteration in
original) (quoting Burger King, 471 U.S. at 476).
A defendant who opposes the exercise of personal jurisdiction on the ground that it would
not “comport with fair play and substantial justice,” id. (quotation omitted), “must present a
‘compelling case that the presence of some other considerations would render the jurisdiction
unreasonable’ because once minimum contacts have been established jurisdiction is
presumptively constitutional.” Isaacs v.Trustees of Dartmouth Coll., Civ. A. No. 13-5708, 2014
WL 4186536, at *8 (E.D. Pa. Aug. 25, 2014) (quoting O’Connor, 496 F.3d at 324; and citing
Pennzoil Prods. Co. v. Colelli & Assocs., Inc., 149 F.3d 197, 207 (3d Cir. 1998)), aff’d sub nom.
Isaacs v. Arizona Bd. of Regents, 608 F. App’x 70 (3d Cir. 2015). “The Supreme Court has
looked to several factors to determine whether fairness enables or strips jurisdiction.”
“These factors include: ‘the burden on the defendant, the forum State’s interest in adjudicating
the dispute, the plaintiff’s interest in obtaining convenient and effective relief, the interstate [and
international] judicial system’s interest in obtaining the most efficient resolution of controversies
. . . and the procedural and substantive interests of other nations.’” Id. (alterations in original)
(quoting O’Connor, 496 F.3d at 324).
Biss has submitted a Declaration in which he lists Sprock’s and Zimmerman’s activities
in this Commonwealth that gave rise to the claims asserted in the Complaint. Biss states in his
Declaration that, in early April 2015, “Zimmerman visited GMI’s offices in Warminster,
[Pennsylvania] for at least two days.”
(Biss Decl. ¶ 10.)
While Zimmerman was in
Pennsylvania, he informed Biss that “as of January 1, 2015, he was in charge of Ter Hell’s
subsidiaries, including GMI, and [Biss] was to report directly to Zimmerman and Sprock
met with Biss. (Id. ¶ 12.) During this visit, Zimmerman spoke to Biss about Mark Bitting, who
concerning GMI.” (Id.) In February of 2016, Zimmerman again visited GMI in Warminster and
responsibilities, and [his] employment agreement.” (Id. ¶¶ 11-12.) “In March 2016, Ter Hell
had been hired as GMI’s Director of Sales the previous month, and about Biss’s “role and
Secretary.” (Id. ¶ 14.) The following month, Sprock visited GMI’s offices in Warminster,
announced that Zimmerman was now President of GMI and that Sprock was now the company’s
Pennsylvania for two or three days, “accompanied by a BDO Seidman employee.” (Id. ¶ 15.)
Sprock “explained that BDO had been engaged to perform a ‘compliance audit’ of GMI.” (Id.)
On July 7, 2016, while Sprock was visiting GMI’s offices in Warminster, Pennsylvania, he
(Id. ¶ 16.) Sprock and Zimmerman were involved in “the decision not to pay [Biss’s] wages in
called Biss “into a meeting with Mr. Bitting and terminated [Biss’s] employment with GMI.”
breach of [his] employment agreement.” (Id. ¶ 18.) We conclude, accordingly, that the Biss
Declaration establishes that Sprock and Zimmerman purposely directed their activities at
Pennsylvania by visiting this Commonwealth on multiple occasions and that Biss’s claims arise
out of their activities in the Commonwealth during those visits.
Sprock and Zimmerman argue, however, that we may not subject them to specific
personal jurisdiction in Pennsylvania because all of the actions they took in Pennsylvania in
connection with Biss’s claims were taken in their official capacities on behalf of their employers
GMI, TER Hell, and TER Holding, which are also Defendants in this case.
Zimmerman maintain that they are not subject to specific personal jurisdiction in Pennsylvania
under these circumstances because they are protected by the corporate shield doctrine.
Under the corporate shield doctrine, “‘[i]ndividuals performing acts in a state in their
corporate capacity are not subject to personal jurisdiction of the courts of that state for those
acts.’” Kappe Assocs., Inc. v. Chesapeake Envtl. Equip., LLC, Civ. A. No. 15-2211, 2016 WL
4538806, at *6 n.12 (E.D. Pa. Aug. 31, 2016) (quoting Bowers v. NETI Techs,, Inc., 690 F.
Supp. 349, 357 (E.D. Pa. 1988)). “[T]he purpose of the ‘corporate shield’ doctrine is to protect
corporate officers and directors from being haled into court and exposed to personal liability in
each state that the corporation does business based solely upon their status as corporate officers
and directors.” Maleski by Taylor v. DP Realty Trust, 653 A.2d 54, 63 (Pa. Commw. Ct. 1994)
(quoting Central Pa. Teamsters Pension Fund v. Burten, 634 F. Supp. 128 (E.D. Pa. 1986)).
However, the corporate shield doctrine “may be overcome in two ways: 1) a corporate agent
may be held personally liable for torts done in a corporate capacity within the forum; and 2) by
violating a statutory scheme that provides for personal, as well as corporate, liability.”
Universal Steel Bldgs. Corp. v. Shore Corp. One, Civ. A. No. 09-0656, 2010 WL 1142039, at *5
(W.D. Pa. Mar. 24, 2010) (citing Nat’l Precast Crypt Co. v. Dy-Core of Pa., Inc., 785 F. Supp.
1186, 1191 (W.D. Pa. 1992)).
Biss does not dispute Sprock and Zimmerman acted in in their corporate capacities in
Pennsylvania. However, he contends that the corporate shield doctrine does not apply in this
case because Count III of the Complaint asserts a claim against Sprock and Zimmerman under
the WPCL, which provides for personal as well as corporate liability for certain corporate
officers. The WPCL provides that “[a]ny employee . . . to whom any type of wages is payable
may institute actions provided under this act.” 43 Pa. Stat. Ann. § 260.9a(a). The WPCL defines
the term “wages” to “[i]nclude all earnings of an employee . . . includ[ing] fringe benefits or
wage supplements . . . .” 43 Pa. Stat. Ann. § 260.2a. The term “Fringe benefits or wage
supplements” is defined to encompass “separation, vacation, holiday, or guaranteed pay . . . and
any other amount to be paid pursuant to an agreement to the employe [sic] . . . .” Id. We
conclude that the WPCL thus encompasses Biss’s claim for unpaid severance, notice and
The WPCL also defines the term “[e]mployer” to include agents and officers of
corporations employing persons in Pennsylvania. Id. However, an officer of a corporation
cannot be sued under the WPCL solely by virtue of his or her position. “Rather, to hold an
‘agent or officer’ personally liable for unpaid wages under the WPCL, ‘evidence of an active role
in decision making is required.’” Mancini v. Concorde Grp., No. 2233 EDA 2013, 2234 EDA
2013, 2014 WL 10575398, at *10 (Pa. Super. Ct. Sept. 25, 2014) (quoting Hirsh v. EPL Techs.,
Inc., 910 A.2d 84, 88 (Pa. Super. Ct. 2006)). “Specifically, an employee must establish that the
‘agent or officer’ was ‘actively involved in corporate policy-making, such as corporate decisionmaking or corporate advisement on matters of pay or compensation.’” Id. (quoting Hirsh, 910
A.2d at 88). Biss states in his Declaration that both Sprock and Zimmerman were actively
involved in the corporate decision making that resulted in his termination as an employee of
prevent his obtaining the severance pay he was owed. (See Biss Decl. ¶ 18; Compl. ¶ 40.)
GMI and alleges in the Complaint that the decision to terminate him was made, in part, to
Therefore, the record before us contains evidence that would support holding both Sprock and
Zimmerman liable for Biss’s unpaid wages under the WPCL. We conclude, accordingly, that the
corporate shield doctrine has been overcome in this case because the Complaint alleges a claim
against Sprock and Zimmerman for violation of a statute “that provides for personal, as well as
corporate, liability.” Universal Steel Bldgs. Corp., 2010 WL 1142039, at *5 (citation omitted).
We further conclude that we have specific jurisdiction over both Sprock and Zimmerman in this
case based on their alleged activities in this Commonwealth that gave rise to Biss’s claims.
For the reasons stated above, we deny Sprock and Zimmerman’s Motion to Dismiss
Plaintiff’s Complaint for Lack of Personal Jurisdiction. An appropriate Order follows.
BY THE COURT:
/s/ John R. Padova
John R. Padova, J.
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