Giordano v. Thomson, No. 07-2658 (2d Cir. 2009)

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07-2658-cv Giordano v. Thomson 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ------------August Term 2008 Submitted: September 18, 2008 Decided: April 27, 2009 Docket No. 07-2658-cv, 07-2887-cv --------------------------------------------------X JOSEPH J. GIORDANO, Plaintiff-Appellant-Cross-Appellee, - against JOHN B. THOMSON, JR., THOMSON INDUSTRIES, INC., and DANAHER CORPORATION, Defendants-Appellees-Cross-Appellants. --------------------------------------------------X Before: FEINBERG, WALKER, and LIVINGSTON, Circuit Judges. WILLIAM DAN BOONE and Ngozi Evelyn Bolin, Bolin & Boone, New York, New York, for plaintiffappellant-cross-appellee. JOHN T. MORIN and Jennifer L. Marlborough, Wormser, Kiely, Galef & Jacobs LLP, New York, New York, for defendants-appelleescross-appellants. FEINBERG, Circuit Judge: 41 Plaintiff Joseph J. Giordano worked as the Chief Financial 42 Officer (CFO) of Thomson Industries, Inc. (hereafter TII or 43 the company ) from September 2000 to October 2002. During that 1 period, while TII was in the process of selling itself to 2 defendant Danaher Corporation ( Danaher ), Giordano made some 3 inquiries as to whether he would receive some sort of payment for 4 his role in the sale. 5 counterproductive, and his employment was terminated. 6 over a year later, Giordano brought this suit in the United 7 States District Court for the Eastern District of New York. 8 After a bench trial before Judge Joanna Seybert, the judge ruled 9 in favor of TII and the two other defendants. Some at TII perceived his behavior as 10 11 A little We affirm. I. BACKGROUND TII manufactured a number of products, including ball 12 bearings. 13 John Thomson, Jr.; at the time of the sale to Danaher, Thomson 14 was TII s sole shareholder. 15 The company was founded by the father of defendant Giordano started working on TII matters while he was a 16 partner at Coopers & Lybrand. 17 and began working for TII as a part-time consultant. 1999, 18 By 19 financially. 20 investment bankers to consider options for turning the company 21 around, since there were worries that the company would break 22 some of the covenants in its lending agreements. 23 included a it had become In 1993, Giordano left that firm clear that TII was struggling In early 2000, the company began discussions with sale of the company, -2- a The options recapitalization and a 1 restructuring of its debt. 2 Chase ( JPMorgan ) to represent it in these matters. 3 TII eventually selected JPMorgan In 1999, as part of its turnaround efforts, the company 4 hired Dr. Alex Beavers as its new CEO. Beavers, in turn, 5 terminated Bartlett Polster, who was then the company s CFO. 6 Polster had worked full time and was paid roughly $170,000 per 7 year. 8 the acting CFO. 9 become In May 2000, Giordano was given the duties and title of the CFO, In August 2000, Beavers asked Giordano to in part because (as Senior Corporate Vice 10 President of Human Resources Patrick Mazzeo testified) it would 11 look better to the people involved in the effort to sell or 12 recapitalize the company to have an employee as CFO (as acting 13 CFO, Giordano was technically still a consultant). Giordano told 14 Beavers he would accept, but only if the role was part time and 15 temporary. 16 September 1. 17 On this basis, Giordano became the company s CFO on He was paid a yearly salary of $250,000. As indicated above, defendant Thomson eventually decided to 18 sell the company to Danaher. Giordano assisted in the 19 transaction by helping TII negotiate with its lenders. 20 company had defaulted on a loan payment and on a loan covenant. 21 When the company defaulted, the lenders had the right to obtain The 22 a variety of extra payments. Giordano, working with Bruce Treen 23 from JPMorgan, persuaded the lenders to waive their rights to 24 those additional payments. This work was done mainly through -3- 1 conference 2 roughly once a week (sometimes more, sometimes less). 3 also initially fielded requests for due diligence information, 4 but eventually he delegated this duty to a subordinate. Although 5 Giordano claims that his work with the lenders went beyond what 6 a CFO would normally be expected to do, Treen and Anthony Garvin 7 (another JPMorgan banker) disagreed, opining that such work would 8 be within the normal scope of a CFO s duties. 9 calls; Giordano testified that these took place Giordano At trial, the deal participants disagreed regarding whether 10 Giordano was, in general, a competent CFO. Treen testified that 11 Giordano generally fulfilled the role of CFO. By contrast, one 12 Danaher employee testified that Giordano was essentially not 13 doing his job and not proficient in the financial matters of the 14 business other than at the very basic level. Similarly, Richard 15 Cummins, an advisor to defendant John Thomson, testified that 16 Giordano didn t function as a CFO and failed to straighten out 17 the accounting department. 18 the work normally expected from a CFO but that he was somewhat 19 less involved than we would have liked to have seen for a company 20 in its circumstances. Garvin stated that Giordano did all 21 Defendants also note that, according to their calculations, 22 Giordano worked roughly 6.2 days per month between December 2000 23 and October 2002. 24 transaction closed, Giordano was away on vacation. In addition, about one month before the -4- 1 At some point, Giordano became aware that Danaher was not 2 planning on keeping him as an employee after the purchase. 3 Thereafter, he made several inquiries regarding whether he would 4 receive an additional payment, beyond his salary, for his role in 5 the sale of the company. 6 he was threatening to block the sale if he was not paid the 7 additional money; at trial Giordano denied making such threats. 8 This process culminated in a dinner between Cummins and Giordano 9 that took place on Some transaction participants thought October 14, 2002, shortly before the 10 transaction documents were signed. As Cummins remembered it, 11 Giordano asked for $1 million or more, and Cummins said that 12 Thomson would never approve a payment in that range. 13 also testified that Giordano threatened to torpedo the closing 14 by refusing to sign necessary documents if he was not paid. 15 Cummins also testified that he then called the law firm working 16 on TII s behalf to tell it that TII was going to have to fire 17 Giordano. 18 the deal, and that Cummins agreed to recommend a payment of 19 $600,000. Cummins Giordano testified that he did not threaten to block 20 On October 16, 2002, Giordano went to a pre-closing, at 21 which various participants were signing papers for the sale to 22 Danaher. 23 in front of him except a document under which he would have 24 released all of his claims against Thomson, TII and Danaher. While there, Giordano signed all of the documents put -5- 1 Under the release, Giordano would receive a $15,230 severance 2 payment. 3 By the next day, he still had not signed the release. On October 17, Thomson heard that Giordano had not signed 4 the release. 5 Giordano because the transaction could not be completed without 6 a 7 statements . . . he was going to torpedo the transaction. 8 Thomson terminated Giordano that day via a faxed letter from 9 Mazzeo. release and Thomson then decided that he had to terminate in light of [Giordano s] prior actions and The parties to the sale then re-executed all of the 10 documents previously signed by Giordano, negotiated a provision 11 under which Thomson would indemnify Danaher for any claims made 12 against it by Giordano and completed the sale. 13 In November 2003, Giordano brought this suit against 14 defendants Danaher, Thomson and TII in the Eastern District 15 claiming that (1) he is owed money under TII s severance plan, 16 (2) he was fired in violation of the anti-retaliation provision 17 of the Employee Retirement Income Security Act ( ERISA ), see 18 ERISA § 510, 29 U.S.C. § 1140, and (3) his work during the deal 19 unjustly enriched Thomson and TII.1 1 In September 2005, after Giordano s other claims in the district court are not before us on appeal. With respect to the third claim on appeal, that Giordano was unjustly denied compensation for the extra tasks he allegedly performed beyond his normal CFO duties, we note that Giordano left ambiguous in his brief whether he was appealing the dismissal of his unjust enrichment claim alone or the dismissal of his contract-based claims as well. However, unjust enrichment is the only legal basis Giordano explicitly articulates when arguing the third point in his brief. -6- 1 defendants moved for summary judgment and Giordano moved for 2 partial summary judgment on his ERISA claim, the district court 3 held that TII s severance plan constituted an employee welfare 4 benefit plan subject to ERISA but denied the remainder of both 5 motions, finding that there existed material issues of dispute 6 for trial. 7 (E.D.N.Y. 2005). 8 trial. 9 Giordano v. Thomson, No. 03-cv-5672, 2007 U.S. Dist. LEXIS 39117 Giordano v. Thomson, 438 F. Supp. 2d 35, 40-43 Then, in October 2006, the court held a bench In May 2007, it dismissed all of Giordano s claims. 10 (E.D.N.Y. May 29, 2007). 11 that (1) Giordano s termination was not causually connected to 12 any exercise of his rights under ERISA, (2) TII s denial of 13 severance payments to Giordano was not arbitrary and capricious 14 and 15 employment during the Danaher sale. 16 17 (3) TII had not Specifically, the district court found been unjustly enriched by Giordano s Id. Giordano then appealed, arguing that Judge Seybert should not have dismissed certain of his claims. Meanwhile, in a cross- Moreover, TII expressly alleges in its brief that Giordano appeals only the unjust enrichment issue, and Giordano does not contest this characterization in his reply brief. Because Giordano fails to fully argue for reinstating his contract-based claims, we treat his third point on appeal as an argument for compensation based on unjust enrichment. See Norton v. Sam s Club, 145 F.3d 114, 117 (2d Cir. 1998). -7- 1 appeal, the defendants contend that Judge Seybert erred in her 2 conclusion that TII s severance plan is covered by ERISA.2 3 II. ANALYSIS 4 We conclude that Giordano was not entitled to receive 5 payments under TII s severance plan, that he was not terminated 6 in violation of ERISA s anti-retaliation provision and that his 7 unjust enrichment claim has no merit. 8 not) 9 determination that TII s severance plan was an ERISA plan. decide whether the district Thus, we need not (and do judge was correct in her 10 A. Standard of Review 11 After a bench trial, this Court reviews a district court s 12 factual findings for clear error and its legal conclusions de 13 novo. 14 Cir. 2007). 15 16 B. 17 ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), provides 18 that a person to whom benefits are owed under an ERISA plan may 19 bring a civil action to recover them. 20 plaintiff must show that (1) the plan is covered by ERISA, see 21 Guilbert v. Gardner, 480 F.3d 140, 145-46 (2d Cir. 2007), 22 plaintiff is a participant or beneficiary of the plan, see Rocco See, e.g., Grace v. Corbis-Sygma, 487 F.3d 113, 118 (2d Giordano Is Not Entitled Thomson s Severance Plan. 2 to Benefits Under To prevail under § 502, a (2) Giordano argues that defendants cross-appeal is frivolous and that the defendants arrogated to themselves a filing extension. These arguments are without merit. -8- 1 v. N.Y. State Teamsters Conference Pension & Ret. Fund, 281 F.3d 2 62, 70-71 (2d Cir. 2002), and (3) plaintiff was wrongfully 3 denied under 4 Prudential Ins. Co. of Am., 306 F.3d 1202, 1208 (2d Cir. 2002). 5 Where 6 authority to determine eligibility for benefits or to construe 7 the terms of the plan we review the administrator s decisions 8 under the arbitrary and capricious standard. 9 Unisource Worldwide, Inc., 532 F.3d 101, 108 (2d Cir. 2008) severance an ERISA pay plan owed gives an the plan, administrator see Feifer v. discretionary Paneccasio v. 10 (internal quotation marks omitted). Where no such discretion is 11 conferred, we review the administrator s decision de novo. 12 id. See 13 The parties disagree regarding which standard of review 14 should apply here, but we need not resolve the issue because 15 Giordano s claim would fail under either standard. Judge Seybert 16 confirmed the propriety of TII s decision to deny severance 17 benefits to Giordano. See Giordano, 2007 U.S. Dist. LEXIS 39117, 18 at *3-5. 19 TII s deteriorating financial situation made it understandably 20 reluctant to pay severance benefits. 21 Giordano s predecessor received only eight weeks of severance 22 payments even though he was a full-time employee (Giordano worked 23 part time) and had worked at the company for 20 years (Giordano 24 had been an employee for less than three years). She cited three reasons for this conclusion. -9- See id. at *4-5. First, Second, See id. at *5. 1 Finally, the judge determined that the company offered severance 2 benefits only to employees who were not terminated for cause; 3 Giordano, she found, was terminated for cause--specifically, his 4 attempt to torpedo the Danaher sale. 5 After reviewing the record, we agree with Judge Seybert: Giordano 6 was not entitled to severance payments.3 7 8 9 C. See id. at *4, *6. Giordano s Retaliation Claim ERISA § 510 provides that it is illegal to discharge, fine, 10 suspend, expel, discipline, or discriminate against a participant 11 or beneficiary for exercising any right to which he is entitled 12 under the provisions of an employee benefit plan, this subchapter, 13 section 1201 of this title, or the Welfare and Pension Plans 14 Disclosure Act, or for the purpose of interfering with the 15 attainment of [such rights] . . . . 16 citation omitted). 17 under § 510, Giordano must show that (1) he was engaged in a 18 protected activity, (2) TII was aware of that activity, (3) he 19 suffered from an adverse employment decision and (4) there was a 20 causal connection between the protected activity and the adverse 29 U.S.C. § 1140 (internal To make out a prima facie case of retaliation 3 Giordano also argues that TII violated ERISA s requirement that an ERISA plan participant whose claim has been denied be afforded a full and fair review. 29 U.S.C. § 1133(2). We need not reach this claim since the typical remedy for violations of this provision is remand for further administrative review, but remand is unnecessary where it would be futile. Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 630 (2d Cir. 2008). Remand would be fuitle here. -10- 1 employment action. 2 Physicians 3 Moreover, Giordano must prove that TII had the specific intent to 4 retaliate against him. 5 537 F.3d 62, 66-67 (1st Cir. 2008); Dister v. Cont l Group, Inc., 6 859 F.2d 1108, 1111 (2d Cir. 1988). Specific intent is determined 7 under the burden-shifting framework outlined in McDonnell Douglas 8 Corp. v. Green, 411 U.S. 792, 802-05 (1973). See Dister, 859 F.2d 9 at 1111-13. & Surgeons, 842 F.2d 590, 593 (2d Cir. 1988). See Kouvchinov v. Parametric Tech. Corp., 10 11 12 13 Giordano s first argument regarding retaliation is that he 14 was terminated for failing to waive his claim for ERISA benefits 15 when he declined to sign the release. Judge Seybert rejected this 16 claim, finding that Giordano was terminated because his behavior 17 during the Danaher deal was determined to be counterproductive. 18 Giordano, 2007 U.S. Dist. LEXIS 39117, at *6-7. 19 a 20 Giordano was not, in fact, entitled to any severance benefits 21 under the plan. 22 district court s findings on this issue. 23 24 25 26 27 1. See Manoharan v. Columbia Univ. Coll. of reasonable 2. Giordano Was Not Fired for Refusing to Forfeit Severance Benefits Under the Plan one, particularly given our This finding is determination that We find no error (clear or otherwise) in the ERISA § 510 Does Not Create a Cause of Action for Enforcing the Older Workers Benefit Protection Act -11- 1 Giordano s second, and less conventional, argument appears 2 to be related to the amount of time he was given to review the 3 waiver of his claims against defendants and to 29 U.S.C. § 626(f), 4 a provision of the Older Workers Benefit Protection Act (OWBPA). 5 That provision provides that [a]n individual may not waive any 6 right or claim under [the Age Discrimination in Employment Act of 7 1967 (ADEA)] unless the waiver is knowing and voluntary. 8 U.S.C. § 626(f)(1). 9 and voluntary unless, among other things, the individual is given 10 21 days to review the waiver (a 45-day period applies in some 11 cases). 12 is liable under ERISA § 510 for retaliating against him in 13 response to his exercise of his OWBPA right to review the release 14 for 21 days. 15 29 It then states that a waiver is not knowing Id. § 626(f)(1)(F). Giordano appears to argue that TII This argument is mistaken. ERISA § 510 does not create a 16 cause of action for violations of OWBPA. 17 only retaliation against a plaintiff who exercises a right derived 18 from: (1) an employee benefits plan, (2) this subchapter, (3) 19 29 U.S.C. § 1201 or (4) the Welfare and Pension Plans Disclosure 20 Act. 21 period under 29 U.S.C. § 626(f) does not fall within any of these 22 four categories, there is no ERISA § 510 cause of action for a 23 24 25 violation of § 626(f). Id. § 1140. ERISA § 510 prohibits Because the OWBPA right to a 21-day review -12- 1 2 D. 3 Under New York law, a plaintiff asserting a claim of unjust 4 enrichment must show that the defendant was enriched at the 5 plaintiff s expense and that equity and good conscience require 6 the plaintiff to recover the enrichment from the defendant. 7 Golden Pac. Bancorp v. FDIC, 375 F.3d 196, 203 n.8 (2d Cir. 2004). 8 Recovery on such a claim is limited to the reasonable value of 9 the services rendered by the plaintiff. 10 Giordano s Unjust Enrichment Claims Are Without Merit Collins Tuttle & Co. v. Leucadia, Inc., 544 N.Y.S.2d 604, 605 (App. Div. 1989). 11 Here, it is clear that the reasonable value of the services 12 provided by Giordano was not more than the actual amount he was 13 paid. 14 whereas his predecessor, who worked full time, was paid only 15 $170,000. 16 participants, 17 disappointing. 18 TII s lenders was beyond the normal scope of a CFO s duties, none 19 of the other deal participants who testified on the matter agreed. 20 We cannot say that the judge erred in believing the latter group. 21 Thus, Giordano s unjust enrichment claim is without merit. 22 23 24 Giordano was paid $250,000 per year for part-time work, Moreover, according Giordano s to performance some as (but a CFO not was all) deal somewhat And while Giordano claims the work he did with III. CONCLUSION For the reasons stated above, we AFFIRM the district court s dismissal of Giordano s claims. -13- Defendants cross-appeal is 1 DISMISSED as moot; as noted, we express no opinion on whether 2 TII s severance plan was an ERISA plan. -14-

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