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Bisig v. Time Warner Cable Inc.

United States District Court, W.D. Kentucky, Louisville Division

March 23, 2018

KENNETH BISIG, et al., Plaintiffs,
v.
TIME WARNER CABLE, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          David J. Hale, United States District Court Judge

         Plaintiffs Kenneth Bisig, Daniel Carter, John Doyle, Rebekah Fisher, Jason James, Thomas Kandul, John Kincade, Mark Lopez, Chris Rigsby, and Michael Sheets are former employees of Insight Communications who became employees of Defendant Time Warner Cable, Inc. after Time Warner acquired Insight. Plaintiffs had been employed as sales representatives assigned to apartment complexes in Louisville, Kentucky. Time Warner reduced the number of those representatives from fourteen to seven. Plaintiffs allege constructive discharge, fraud, negligent misrepresentation, promissory estoppel, breach of contract, and breach of the duty of good faith and fair dealing by Time Warner. (Docket No. 40) Plaintiffs have moved for summary judgment on their promissory-estoppel claim (D.N. 111), and Time Warner has moved for summary judgment on all of Plaintiffs' claims (D.N. 142). For the reasons explained below, Plaintiffs' motion will be denied, and Time Warner's motion will be granted.

         I. BACKGROUND

         Plaintiffs worked as multi-dwelling unit (MDU) sales representatives for Insight Communications. (D.N. 116-1, PageID # 2125-26; D.N. 117-1, PageID # 2218; D.N. 118-1, PageID # 2336; D.N. 119-1, PageID # 2472; D.N. 120-1, PageID # 2581-82; D.N. 121-1, PageID # 2685; D.N. 122-1, PageID # 2779; D.N. 123-1, PageID # 2874; D.N. 124-1, PageID # 2974; D.N. 125-1, PageID # 3096-97) Each of the plaintiffs signed and accepted an “MDU Acquisition Compensation Plan” prior to Insight's acquisition by Time Warner. (D.N. 116-1, PageID # 2199; D.N. 117-1, PageID # 2318; D.N. 118-1, PageID # 2449; D.N. 119-1, PageID # 2561; D.N. 120-1, PageID # 2667; D.N. 121-1, PageID # 2765; D.N. 122-1, PageID # 2855; D.N. 123-1, PageID # 2955; D.N. 124-1, PageID # 3079; D.N. 125-1, PageID # 3185) The MDU Plan, under which Plaintiffs were compensated prior to the acquisition, stated that it did not “constitute an express[] or implied contract of employment” and that the company “reserve[d] the right to terminate the sales employment relationship based on lack of performance, negligence, unexcused absenteeism, or inability to perform to sales targets.” (D.N. 142-3, PageID # 4603)

         Time Warner Cable acquired Insight in March 2012. (D.N. 126-1, PageID # 3198) In anticipation of the acquisition, Plaintiffs took part in an electronic onboarding process in January 2012. (Id., PageID # 3232, 3230) As part of the onboarding process, Plaintiffs received and accepted a number of Time Warner documents and policies, including one titled “Important Notice.” (See D.N. 142-2, PageID # 4527-56) The “Important Notice” provided that Plaintiffs would be employed at will “unless [they were] subject to a written employment agreement signed by a company representative authorized to enter into an employment agreement.” (Id., PageID # 4579) Each of the plaintiffs electronically accepted this Notice. (See id., PageID # 4527, 4530, 4533, 4536, 4539, 4542, 4545, 4548, 4551, 4554, 4579-88) The new Time Warner compensation plan did not go into effect until September 2013, so Plaintiffs continued to be compensated under Insight's MDU Plan until that time. (See D.N. 130-1, PageID # 3616)

         Gary Glauberman, Time Warner's Director of Sales, met with the MDU representatives on August 19, 2013, to present Time Warner's new compensation plan. (D.N. 133-1, PageID # 3780-81; D.N. 134-1, PageID # 3858) Under the new plan, MDU representatives became concierge relationship (CR) representatives. (D.N. 126-1, PageID # 3212, 3206) The signature pages of the Concierge Relationship Representative (CRR) Commission Plan provided that the language used in the document “in no way implie[d] or guarantee[d] continued employment” and that Time Warner was “an ‘at-will' employer, meaning that [the] employment ha[d] no specified term and that the employment relationship [could] be terminated at any time.” (D.N. 143-3, PageID # 4860, 4865) The signatures of each of the plaintiffs appear on these pages, dated August 19 or 20, 2013. (See D.N. 116-1, PageID # 2203, 2205; D.N. 117-1, PageID # 2322, 2324; D.N. 118-1, PageID # 2454-55; D.N. 119-1, PageID # 2565, 2567; D.N. 120-1, PageID # 2671, 2673; D.N. 121-1, PageID # 2768, 2770; D.N. 122-1, PageID # 2860-61; D.N. 123-1, PageID # 2959, 2961; D.N. 124-1, PageID # 3083, 3085; D.N. 125-1, PageID # 3189, 3191)

         According to Plaintiffs, representatives from Time Warner made promises to them, starting before the acquisition and continuing throughout the fall of 2013, that their jobs were safe, that they would make more money, and that they would have a certain number of “A and B units”[1] in their portfolios. (See, e.g., D.N. 122-1, PageID # 2787; D.N. 116-1, PageID # 2153; D.N. 119-1, PageID # 2501; D.N. 123-1, PageID # 2888, 2911; see also D.N. 152-8, PageID # 5348; D.N. 148-1, PageID # 4957-62, 4964, 4969) At an August 30, 2013 meeting, Beth Bennett, Time Warner's Human Resources Director, assured Plaintiffs that their jobs were not being eliminated and that none of them were “at risk.” (See D.N. 152-8, PageID # 5341, 5348; D.N. 148-1, PageID # 4957-60)

         On October 9, 2013, Scott Collins, who was responsible for the CR team, met with Plaintiffs to inform them that Time Warner was reducing the number of CR representatives from fourteen to seven. (D.N. 135-1, PageID # 3883, 3920) In other words, seven of the fourteen CR representatives were going to lose their positions as CR representatives, though not necessarily their employment with Time Warner. (D.N. 138-1, PageID # 4213) Time Warner gave the fourteen CR representatives the opportunity to apply for the remaining seven positions. (See D.N. 126-1, PageID # 3201-02) Those who did not receive one of the seven positions would be offered jobs as direct-sales representatives, selling products to individual homeowners. (Id., PageID # 3202; D.N. 129-1, PageID # 3529, 3478) An internal email suggests that Time Warner considered direct-sales positions to be a step down from MDU positions. (See D.N. 152-9, PageID # 5354-55)

         Plaintiff Sheets resigned on October 3, 2013, before the October 9th meeting during which Plaintiffs were informed of the reduction. (D.N. 125-1, PageID # 3119-20) Plaintiffs Carter, Rigsby, Doyle, Fisher, James, Lopez, and Kincade resigned in the days following the October 9 meeting. (See D.N. 128-1, PageID # 3431) Plaintiff Kandul worked briefly in direct sales before resigning in December 2013. (See D.N. 121-1, PageID # 2713-14) Finally, Plaintiff Bisig took a direct-sales job until his resignation in April 2014. (See D.N. 116-1, PageID # 2145-47)

         Plaintiffs filed this action in state court in late December 2013, and Time Warner removed it to this Court. (See D.N. 1-1; D.N. 1) Plaintiffs' first amended complaint asserts claims of constructive discharge, fraud, negligent misrepresentation, promissory estoppel, breach of contract, and breach of the duty of good faith and fair dealing. (D.N. 40) Plaintiffs seek summary judgment on their promissory-estoppel claim (D.N. 111), and Time Warner seeks summary judgment on all of Plaintiffs' claims (D.N. 142). Following a discovery violation by Time Warner, the Court excluded its employment offer letters from evidence pursuant to Federal Rule of Civil Procedure 37(c). (D.N. 181) Therefore, Time Warner may not rely on the offer letters to support its own motion or to oppose Plaintiffs' motion, and the Court has not considered the letters in ruling on these motions.

         II. STANDARD

         Summary judgment is required when the moving party shows, using evidence in the record, “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see 56(c)(1). For purposes of summary judgment, the Court must view the evidence in the light most favorable to the nonmoving party. Loyd v. Saint Joseph Mercy Oakland, 766 F.3d 580, 588 (6th Cir. 2014) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). However, the Court “need consider only the cited materials.” Fed.R.Civ.P. 56(c)(3); see Shreve v. Franklin Cty., Ohio, 743 F.3d 126, 136 (6th Cir. 2014). If the nonmoving party “fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c), ” the fact may be treated as undisputed. Fed.R.Civ.P. 56(e)(2)-(3). To survive a motion for summary judgment, the nonmoving party must establish a genuine issue of material fact with respect to each element of each of his claims. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986) (noting that “a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial”).

         III. DISCUSSION

         A. Breach of Contract

         Count V of the complaint asserts a breach-of-contract claim against Time Warner. (D.N. 40, PageID # 492-93) Specifically, Plaintiffs assert that they had implied-in-fact and oral contracts with Time Warner under which their jobs were secure, their jobs would not materially change, and their compensation would increase.[2] (Id.) Time Warner argues that the parties did not have an implied contract and that any claim based upon an oral contract is barred by the statute of frauds. (D.N. 142-1, PageID # 4425-28)

         1. Implied Contract

         “To establish a breach of contract claim in Kentucky, Plaintiff[s] must demonstrate three things: 1) existence of a contract; 2) breach of that contract; and 3) damages flowing from the breach of contract.” Delamar v. Mogan, No. 4:13-CV-00047-JHM, 2015 WL 225404, at *5 (W.D. Ky. Jan. 15, 2015) (citing Metro Louisville/Jefferson Cty. Gov't v. Abma, 326 S.W.3d 1, 8 (Ky. Ct. App. 2009)). “Under Kentucky law, ‘[a]n implied contract is one neither oral nor written-but rather, implied in fact, based on the parties' actions.'” Id. at *5 n.3 (quoting Furtula v. Univ. of Ky., 438 S.W.3d 303, 308 n.6 (Ky. 2014)). An implied contract requires the agreement of the promisor to be bound.

[A] contract may be inferred wholly or partly from such conduct as justifies the promisee in understanding that the promisor intended to make a promise. To constitute such a contract there must, of course, be a mutual assent by the parties-a meeting of minds-and also an intentional manifestation of such assent. Such manifestation may consist wholly or partly of acts, other than written or spoken words.

Furtula, 438 S.W.3d at 308 (quoting Kellum v. Browning's Adm'r, 21 S.W.2d 459, 463 (Ky. 1929)). “The conduct of a party is not effective as a manifestation of his assent unless he intends to engage in the conduct and knows or has reason to know that the other party may infer from his conduct that he assents.” Id. at 309 (quoting Restatement (Second) of Contracts § 19(2) (Am. Law Inst. 1981)). “[A] manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.” Id. (quoting Restatement (Second) of Contracts § 26). “In other words, when the recipient of a statement is informed that the maker of the statement does not intend to enter into a contract . . . the formation of a contract will not be implied.” Id.

         According to Time Warner, two documents prevent Plaintiffs from demonstrating mutual assent by the parties to enter into an employment contract. (See D.N. 142-1, PageID # 4426-27) First, the “Important Notice” stated: “You will be employed on an at-will basis unless you are subject to a written employment agreement signed by a company representative authorized to enter into an employment agreement.” (D.N. 142-2, PageID # 4450-51, 4579) The Important Notice further stated: “Use of this website or its content does not constitute a contract of employment or imply employment for a particular term.” (Id., PageID # 4579) Second, an “Employment At-Will Policy” stated:

Time Warner Cable (TWC) employees are hired for an indefinite period of time and are considered “at-will” employees. “At-will” employees are free to terminate their employment with the Company at any time. Similarly, the Company retains the legal right to terminate the employment of an “at-will” employee, at any time, for any reason, with or without cause, and with or without notice. This policy does not apply to employees with written contracts with the Company.

(Id., PageID # 4451, 4590) Each plaintiff electronically accepted the “Important Notice” (id., PageID # 4527, 4530, 4533, 4536, 4539, 4542, 4545, 4548, 4551, 4554, 4579-88), but the proffered evidence does not clearly show that each plaintiff accepted, or even received, the “Employment At-Will Policy.” (See id., PageID # 4527-56) In her affidavit, however, Bennett states that each plaintiff electronically acknowledged the policy. (Id., PageID # 4451)

         Plaintiffs have declared that the onboarding process was “unfocused and unsupervised”; that Time Warner told them that the online process was mandatory; that no one explained the meaning or significance of the documents that were submitted to them during the online process; that they do not recall getting to take any information home to read more thoroughly; that the process was presented as a formality; and that they were not required to read, but only to click and accept, the various documents. (D.N. 148-19, PageID # 5198-99, 5201-02, 5204-05, 5207-08, 5210-11, 5213-14, 5216-19, 5222-23, 5225-26) However, “[u]nder Kentucky law, one who signs a document after having an opportunity to read it is ‘bound to the contract terms unless there was some fraud in the process of obtaining his signature.'” Holifield v. Beverly Health & Rehab. Servs., Inc., No. 3:08-CV-147-H, 2008 WL 2548104, at *3 (W.D. Ky. June 20, 2008) (quoting Cline v. Allis-Chalmers Corp., 690 S.W.2d 764, 766 (Ky. Ct. App. 1985)). Plaintiffs have not shown that they were denied an opportunity to read the Notice or that Time Warner obtained their signatures fraudulently. Therefore, the fact that they were not required to read the documents is immaterial. It is undisputed that Plaintiffs electronically accepted the Important Notice, which expressly provided that they were employed at will unless subject to a written employment agreement signed by an authorized company representative and that their use of the website did not constitute a contract of employment or imply employment for a particular term. (D.N. 142-2, PageID # 4450-51, 4527, 4530, 4533, 4536, 4539, 4542, 4545, 4548, 4551, 4554, 4579-88) Thus, no contract for secure or unchanged employment was implied. See Furtula, 438 S.W.3d at 309; Nork v. Fetter Printing Co., 738 S.W.2d 824, 825 (Ky. Ct. App. 1987) (finding at-will employment and rejecting the plaintiff's implied-contract argument where the plaintiff signed forms stating that employment could be terminated at will by the employer).

         Plaintiffs rely on the MDU Acquisition Compensation Plan in support of their contract argument, as the MDU Plan remained in place for some time after Time Warner acquired Insight. (D.N. 152, PageID # 5256-57; see D.N. 130-1, PageID # 3616) The MDU Plan stated: “Insight reserves the right to terminate the sales employment relationship based on lack of performance, negligence, unexcused absenteeism, or inability to perform to sales targets.” (D.N. 142-3, PageID # 4603) According to Plaintiffs, this language created a contract not to terminate them except for cause. (D.N. 152, PageID # 5257) Plaintiffs avoid, however, the preceding sentence in the MDU Plan: “This Pay Plan Detail does not constitute an express[] or implied contract of employment.” (D.N. 142-3, PageID # 4603) Each plaintiff signed and accepted this disclaimer (D.N. 116-1, PageID # 2199; D.N. 117-1, PageID # 2318; D.N. 118-1, PageID # 2449; D.N. 119-1, PageID # 2561; D.N. 120-1, PageID ...


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