Last week, a unanimous
Franklin County Court of Appeals affirmed the dismissal on summary judgment of whistleblower
and reverse race discrimination claims, but remanded the highly-compensated plaintiff’s
equitable claims for a six-figure profit bonus on the grounds that the written
bonus plan was unenforceable to bar his equitable claims because there was no
evidence that the plaintiff knew about or had agreed to its terms and because
the employer’s “promises” to award a bonus in its unfettered discretion were illusory.
Pohmer
v. JPMorgan Chase Bank, N.A., 2015-Ohio-1229 (3-31-15). In affirming the dismissal of the race
discrimination claim, the Court agreed that the plaintiff had not shown that
the defendant employer was unusual in discriminating against the majority, that
he was similarly situated to his supervisor, or that the explanation for his
termination (violating the employer’s technology policy by inappropriate and personal
use of his blackberry and email) was pretextual.
He could not prevail on his whistleblower claim because he could not
prove that he had ever made any relevant complaints to his employer in writing
and the trial court did not abuse its discretion in refusing to compel
additional electronic discovery that was unlikely to reveal additional relevant
evidence without exorbitant costs.
According to the Court’s opinion,
the plaintiff had received very favorable performance evaluations for over a
decade, the most recent of which was in December 2011. He had been assured in writing that he would
be receiving a 4.5% profit bonus for 2011.
However, in a random review of his text messages and emails, the
employer discovered that he had been sending inappropriate sexual-themed emails
and messages to his children’s babysitter and co-workers in violation of the
employer’s technology code of conduct.
He was soon terminated in mid-January 2012. A few days later, the employer set the amount
of discretionary incentive compensation and awarded bonuses to remaining
employees a few weeks later. The
plaintiff filed suit and alleged, among other things, that he was subjected to
reverse race discrimination because his supervisor also sent inappropriate
emails and was not fired. Second, he
claimed that he had actually been fired in retaliation for reporting to his
supervisor that one of the employer’s financial product campaigns was an
illegal scam. However, he could not
produce any written evidence that he had ever made such an allegation prior to
his termination despite the employer’s production of thousands of pages of
emails and texts messages. He also
claimed that he was entitled to his profit bonus since he had earned it prior
to his termination.
Incentive Compensation. The
trial court had dismissed his claim for his incentive compensation on the
grounds that the employer’s Performance Based Incentive Compensation Plan
(PBIC) was a binding implied-in-fact contract, thus barring any equitable claim
under the theories of unjust enrichment or quantum meruit. Pursuant to the terms of the PBIC, the
Plaintiff was not entitled to any profit bonus or incentive compensation unless
he was still employed on the date when the profit bonus was actually paid. However, the Court of Appeals found that the
PBIC could not be a contract since there was no evidence that the plaintiff
even knew about the PBIC, let alone agreed to it. All that the employer produced was an
unsigned plan document and not any communications to the Plaintiff about the
PBIC or indication that the Plaintiff’s employment and incentive compensation
were subject to the PBIC. Moreover, to
the extent that the PBIC contained any promises, they were illusory (and thus,
non-binding) since the employer retained “sole and absolute discretion” as to
when, whether, and in what amount to award bonuses. In contrast, the plaintiff produced evidence
of a powerpoint presentation about the incentive compensation he was eligible
to earn for that year and an email from his supervisor about the percentage of
his profit bonus; neither exhibit made any reference to the PBIC or any
requirement that he needed to still be employed on the date that the bonus was
paid.
The doctrine of unjust
enrichment “applies when a benefit is conferred and it would be inequitable to
permit the benefitting party to retain the benefit without compensating the
conferring party.” . . . A claim for quantum meruit shares the same essential
elements as a claim for unjust enrichment, and both doctrines are equitable
doctrines. . . . the two doctrines differ, however, when
calculating damages. The damages for
unjust enrichment are " ' "the amount the defendant benefited,"
' " while the damages for quantum meruit are " ' "the measure of
the value of the plaintiff's services, less any damage suffered by the other
party." ' "
. . .
"A contract is illusory
only when by its terms the promisor retains an unlimited right to determine the
nature or extent of his performance; the unlimited right, in effect, destroys
his promise and thus makes it merely illusory." . . . . In deciding that
the PBIC Plan is an illusory contract with respect to [the plaintiff], we do
not mean to say that the PBIC Plan would be illusory under all circumstances.
This is not a case where [the plaintiff] was made aware of the terms of the
PBIC Plan and thereby assented to the PBIC's terms in exchange for his
continued employment with JPMC.
Reverse Race Discrimination. The Court of
Appeals affirmed the dismissal of this claim because the Plaintiff failed to
meet his prima facie case or show that the employer’s explanation was
pretextual. First, the Court adopted the
heightened burden of proof for a reverse race discrimination claim, which
requires evidence of “background circumstances supporting the inference that [the defendant employer]
was the unusual employer who discriminated against non-minority employees.” The plaintiff could not meet this burden,
although he correctly argued that some courts have questioned the correctness
of using a modified burden of proof in any race discrimination claim.
In any event, the Court found that the Plaintiff did not identify any
similarly situated non-white employees who were treated better. The Plaintiff identified his supervisor for
sending inappropriate personal emails because he only received a disciplinary
warning, but the Court found him not to be similarly situated “in all respects” (i.e., “ 'all of the relevant
aspects of his employment situation were "nearly identical" to
those of the [comparable employee's] employment situation.'").
Thus, to be deemed "similarly situated," "the comparables
'must have dealt with the same supervisor, have been subject to the same standards
and have engaged in the same conduct without such differentiating or mitigating
circumstances that would distinguish their conduct or the employer's treatment
of them for it.'
They obviously did not
report to the same supervisor. “[A] supervisor's
"position of authority within the company create[s] a meaningful distinction"
that "explains [the employer's] different treatment of the two.” More importantly, the employer did not learn of the
supervisor’s alleged misconduct until the plaintiff raised it after his
termination (presumably during his deposition).
“Other
factors may have been at play including a discrepancy in the volume, frequency,
and level of inappropriateness contained in the emails of each of the two men.”
Ultimately, the Court found that the plaintiff could not show that his
termination for admittedly violating the employer’s code of conduct was
pretextual. He could not “demonstrate
that the proffered reason ‘(1) has no basis in fact, (2) did not actually
motivate the employer's challenged conduct, or (3) was insufficient to warrant
the challenged conduct.’" Importantly, he could not show that the
employer knew of any other similar violations of the code of conduct (including
that of his supervisor) at the time of the Plaintiff’s termination in January
2012.
Whistleblowing. The trial and appellate courts both concluded
that the plaintiff could not prevail on his whistleblower claim because he
could not satisfy the statutory requirement that the complaint be made in
writing to the employer after first making a verbal report. The employer had produced several thousand
pages of documents in discovery, including emails and text messages. The plaintiff insisted that he had texted
and/or emailed his supervisor (in addition to personal conversations) about his
objections to the legality of a product campaign. However, his alleged objections were not
reflected in the documents produced in discovery. Therefore, he could not satisfy his statutory
burden of proof under Ohio’s whistleblower statute.
The Plaintiff filed a motion to compel a forensic examination of his
email and text mail boxes to ensure that none of his messages were
inappropriately deleted by the defendant employer. However, the trial court denied that discovery
motion on the grounds that it was “unlikely to lead to admissible evidence and disproportionately
costly.” The appellate court found this
not to be an abuse of discretion in light of the thousands of pages produced in
discovery. Moreover, it noted that the
Plaintiff’s
argument has less to do with the adequacy of the discovery
process and more to do with [his] dissatisfaction that he did not discover
sufficient evidence to support his claims. The trial court noted it had made an
effort throughout the case "to keep discovery proportionate to the issues,
and to sensibly minimize the financial cost and time burden which electronic
discovery might otherwise require."
Indeed, the supervisor denied ever receiving such a written
report and the Plaintiff failed to mention any written objections about the
product campaign in his own deposition.
NOTICE: This summary is designed merely to inform and alert you
of recent legal developments. It does not constitute legal advice and does not
apply to any particular situation because different facts could lead to
different results. Information here can be changed or amended without
notice. Readers should not act upon this information without legal advice. If
you have any questions about anything you have read, you should consult with or
retain an employment attorney.
