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Book,of.the.Month Club, Inc.
MEMORANDUM
TOt Joe Mona611'o
. , ,
FROM: Bob DeLaney
DATE: Aptil 2, 1991
RE: Promotion
Effective April 1, 1991, youI' salary will be Increased to $60,000 annually. In addition,
you will receive a $15,000 bonus spread over equal payments between Aplil 1 and
December 31, 1991.
Your title will be changed effective April 1, 1991 to Director of Postal Affairs.
In addition, your salary will be reviewed again January 1, 1992 and as a Director you
will participate in a 15% target bonus plan which is based on the company's annual
performance as well as othel' supporting criteria.
An announcement of your title change will be made immediately. A determination of
you I' reporting responsibilities will be made by mid. yea I', but in the interim you will
report to Jim Brow11, Manager of Customer Selvlce Center in Mechanlcsburg, P A.
,~~,
Ive
cc: Beth Lange
14. Pursuant to BOMC's offer, Plaintiff should have received
salary in the following amounts I
1991 $75,000
1992 85,000
1993 88,400 (U cost of livinq
increase)
1994 91,936 (U cost of living
increase)
1995 12,376 (Jan, 1 - Feb, 28)
15. The discrepancies in the salary result in overdue waqes
in the following amounts I
1991 -0-
1992 17,500
1993 18,400
1994 19,274
1995 2,595 (Jan. 1 - Feb. 28)
Total
$57,769
16. The compensation offer made by aOMC included a bonulI
plan, which was, in part, based upon Plaintiff'. salary, The bonus
plan included a profit sharing plan as well as a 15' bonus plan.
4
1991 (15\) $ -0-
1992 (15\) 10,125
1993 (15\) 10,899
1994 (15%) 10,899.
23. Pursuant to BOMC' s agreement, Plaintiff should have
received the following compensation under the bonus planl
1991 (15%) $11,250
1992 (15%) 12,750
1993 (15%) 13,260
1994 (15%) 13,790
24. Plaintiff suffered a total loss under the bonus plan of
$19,127.00.
25. As a result of the breaches of contract set forth abov.,
Plaintiff suffered damages of $81,233.00.
WHEREFORE, Plaintiff requests this Honorable Court to enter
judgment in his favor and against the Defendant under Count I in
the amount of $81,233.00, plus lawful interest, costs and
attorneys' fees.
6
HI~racounT
Exhibit B
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PleQle IIltlhe \\'lIhln 11I01101 for Ihe nexl:
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-----------------------.------...--.-------------------------~~~-------------
CAPTION OF CASE
(enllre clpllon mUll be Illled In full)
JOSEPH A. MONASTRO,
(I'lllntlm I I ~
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BOOK-OF-THE-MONTH CLUB, INC. , ~
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(Offendlnt) , " ..",
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No, ---2l:lll8 Clvll_
Term
19~.
I. Sllle Inlller 10 be argued (I. e" plalnllrrllllollan far lIew !rIal,
defendlnt'l demurrer to complaint, elc,):
Preliminary Objactions of Defenda~t to Plaintiff's Amended Complaint
2. Identify counscl who wllllrgue cOle:
(I) forpl:llntlff: Debra A, Denison, 2331 Market Street, Camp Hill, PA
763-1383
(b) for defendanl: Robert G. Haas, 100 Pine Street, Harrisburg, PA
237-5465
3, I wUI notify all plllles In wrlllng \\'lIhln two da)'s lhal lhls case hal been
lilted for argument,_
~ ~.VL
(~t rney)v-!'l.!J'iibw )
De1rr.- A:-D'enison, Esquire
Dlled: September 14, 1995
2. Plaintiff has not alleged any facts which overcome the
presumption in Pennsylvania that all employment is at-will.
3. With respect to Count I, Plaintiff has not alleged
sufficient facts to show that an express contract of employment
was orally offered by Defendant and accepted by Plaintiff.
4. With reapect to Count I, Plaintiff also has not alleged
that he provided such additional consideration so as to establish
that the parties meant to bind themselves to an employment
relationship for a reasonable period.
5. Because Plaintiff has not pled sufficient facts to
overcome the presumption of at-will employment, either through
the existence of an express or implied contract for employment,
he has not asserted a cognizable claim for breach of contract in
Count I.
6. With respect to Count III, Plaintiff has not alleged
sufficient facts to show that various alleged employment
"policies" of the Defendant were offered to Plaintiff as part of
an express offer of employment.
7, Plaintiff therefore has not pled a legally suff.i.cient
cause of action for breach of said policies in Count III,
8. In Count II of the Amended Complaint, the Plaintiff
attempts to allege a promissory estoppel claim against the
Defendant.
9, Pennsylvania law does not recognize a cause of action
for promissory estoppel based on an employer's alleged promise to
an at-will employee,
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McNIIG. WALLACI a NURICI<
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truth of the averments in Paragl:'aph 5 of the Amended Complaint and,
therefore, such averments are denied,
6, Admitted in part and denied in part, Admitted only that
the Plaintiff told an officer of the Defendant that he had received
a job offer from another company, It is specifically denied that
the Plaintiff informed Defendant's officers that he intended to
leave the Defendant to "pursue" another position.
7. It is specifically denied that in order to prevent the
Plaintiff from leaving his position with the Defendant, the
Defendant offered the Plaintiff an increase in salary to $75,000 in
1991 and $85,000 in 1992, It is also specifically denied that in
order to prevent the Plaintiff from leaving his position, the
Defendant offered the Plaintiff participation in a 15% target bonus
plan and a promotion to Director of Postal Affairs. At no time did
the Defendant offer the Plaintiff an increase in salary to $85,000.
Moreover, while the Plaintiff received a new job title and an
accompanying raise in 1991, his functions wi thin the Company did
not change,
8. Admitted in part and denied in part, It is admitted that
two memoranda are attached to the Amended Complaint as Exhibits "A"
and "B". It is specifically denied that theEle memoranda confirm an
offer allegedly made by the Defendant to the Plaintiff as described
in Paragraph 7 of the Amended Complaint,
9. Admitted in part and denied in part. It is admitted that
the Plaintiff continued to work for several years for the Defendant
- 2 -
Complaint or that the Plaintiff uhould have received such compensa-
tion, The Defendant fully compl.i(jd with the pl'omise it made to the
Plaintiff in 1991 to increase the Plaintiff's salary to $60,000
annually, and then to review hin salary again in 1992, This
promise was confirmed in a memorandum from Bob Delaney to the
Plaintiff and is attached to the Complaint as Exhibit "A", In
addition, the Defendant denies that it had any obligation to
provide the Plaintiff with a cost of living increase since the,
Defendant did not have a guaranteed cost of living factor as part
of. its compensation package for employees, All wage increases are
merit based and are dF,!termined by performance.
15. It is specifically denied that the Defendant owes the
Plaintiff compensation specified in Paragraph 15 of the Amended
Complaint,
16. Admitted in part and denied in part, It is admitted only
that as part of the raise the Plaintiff received on April 1, 1991,
he was eligible to participate in a 15% target bonus plan based on
the company's annual performance as well as other supporting
criteria. It is denied that the Defendant promised the Plaintiff
that he would receive a 15% bonus annually, Defendant states that
the 15% target bonus plan it maintained was and is based on
individual performance as well as company performance. The target
bonus plan has always been variable and has never guaranteed bonus
eligible employees a specific sum of money.
- 4 -
17. It iij specifically denied that the Defendant failed to
pay the Plaintiff compensation which it promised to pay him during
his employment.,
18. It is specifically denied that the Defendant failed to
increase the Plaintiff's salary after the Defendant informed him of
a raise he would receive, It is also denied that the Plaintiff
received less bonus money than he was promised by the Defendant.
The Defendant compensated the Plaintiff in accordance with the
terms of the memorandum from Bob Delaney to the Plaintiff, dated
April 2, 1991, and which is attac:hed to the Amended Complaint as
Exhibit "A".
19, Admitted in part and denied in part, It is admitted that
the Plaintiff received $6,075 in compensation under the profit
sharing plan in 1992, It is denied that he received the amounts
alleged in Paragraph 19 in 1993 and 1994, The Plaintiff received
$5,704 and $6,739 under the Defendant's profit sharing plan in 1993
ahd 1994 respectively,
20. It is specifically denied that the plaintiff should have
received additional monies under the Defendant's prof it sharing
plan. The Defendant paid the plaintiff all monies owed him under
the profit sharing plan in 1992, 1993 and 1994.
21, It is specifically denied that the Plaintiff received
less monies under the profit sharing plan than he was entitled to.
22, Denied as stated, In 1991, the Plaintiff was not
eligible for compensation under the Defendant's 15% tar.get bonus
- 5 -
plan, as per the terms of Bob Delaney's memorandum to the Plaintiff
dated April 7, 1991. In addition, the Plaintiff received $9,983,
$12,000 and $9,800 in 1992, 1993 and 1994 respectively under the
15% target bonus plan.
23. It is specifically denied that the Plaintiff was entitled
to additional compensation under the Defendant's 15% bonus plan,
The Defendant paid the Plaintiff all bonuses to which he was
entitled under the plan, The Defendant's bonus plan does not
guarantee a 15% bonus payment,
24. It is specifically denied that the Plaintiff suffered a
loss under the Defendant's bonus plan of. $19,127. The Plaintiff
received all bonuses to which he was entitled,
25, It is denied that the plaintiff suffered damages of
$81,233 and the Defendant demands strict proof thereof.
WHEREFORE, Defendant respectfully requests that this Court
dismiss the Plaintiff's Amended Complaint and award costs of suit,
attorneys' fees and related expenses in favor of Defendant and
against the Plaintiff.
~
26. Para.graph 26 is an incorporating paragraph to which no
responsive pleading is required,
27. After reasonable investigation, the Defendant is without
knowledge or information sufficient to form a belief as to truth of
- 6 -
the averments, in Paragraph 27 of the Amended Complaint and,
therefore, such averments are denied.
28. The averments of Paragraph 28 of the Plaintiff's Amended
Complaint are conclusions of law to which no responsive pleading is
required,
,
I
If a response is deemed required, then said averments
are specifically denied,
WHEREFORE, Defendant respectfully requests that this Court
dismiss the Plaintiff's Amended Complaint and award costs of suit,
attorneys' fees and related expenses in favor of Defendant and
against the Plaintiff,
COUNT III
29. Paragraph 29 is an incorporating paragraph to which no
responsive pleading is required,
30. The averments of Paragraph 30 of the Plaintiff's Amended
Complaint are conclusions of law to which no responsive pleading is
required. I f a response is deemed required, then said averments
are specifically denied.
31, After reasonable investigation, the Defendant is without
knowledge or information sufficient to form a belief as to the
truth of the averments in Paragraph 31 of the Amended Complaint
and, therefore, such averments are denied,
32, It is admitted only that the Defendant had a severance
pay policy in effect at the time the Plaintiff's employment was
terminated that provided that employees who were terminated IIfor
- 7 -
cause" and not willful misconduct would receive one week's salary
per full year of service,
33, Denied as stated, It is admitted only that, at the time
the Plaintiff's employment was terminated, the Defendant had a
severance pay policy which provided that in cases of termination
due to job elimination, severance pay would be based on a formula
of two weeks per year of service, It is specifically denied that
the Defendant had a severance policy that provided two weeks
severance pay per year of service to employees terminated for
"other reasons".
34. Admitted in part and denied in part. It is admitted only
that the Plaintiff was terminated on February 28, 1995. It is
specifically denied that the Plaintiff was terminated becauee the
Defendant was downsizing, The Plaintiff was terminated by the
Defendant "for cause" within the meaning of Defendant's severance
pay policy and received twelve weeks of severance pay since he had
been employed by the Defendant for twelve years.
35. Admitted,
36. It is specifically denied that the Plaintiff was entitled
to an additional 12 weeks of severance pay beyond that which he
received. The Defendant paid the plaintiff all the severance pay
to which he was entitled,
37. Admitted in part and denied in part, It is only admitted
that the plaintiff was reimbursed for vacation days based on an
annual salary of $72,662. It is denied that his vacation time
- 8 -
should have been calculated based on an annual salary of $91,936 or
that he is entitled to additional vacation pay,
38, It is deni~d that the plaintiff was not reimbursed for
two travel days in the amount of $707.20 or that he is entitled to
that amount, The Plaintiff was scheduled to attend a Time Warner
Freight Committee Meeting in California, the week of February 20,
1995, He was expected to be at the Pennsylvania facility but left
two (2) days prior to the start of the meeting without notice to
his immediate supervisor, Therefore, he was docked for these two
(2) days as per.sonal which represent unaccounted time outside the
meeting,
WHEREFORE, Defendant respectfully requests that this Court
dismiss the Plaintiff's Amended Complaint and award costs of suit,
attorneys' fees and related expenses in favor of Defendant and
against the Plaintiff.
COUNT IV
39, Paragraph 39 is an incorporating paragraph to which no
responsive pleading is required,
40, It is specifically denied that the Defendant failed to
increase the Plaintiff's compensation as allegedly promised. The
Plaintiff received all monies due him from the Defendant.
41. It is specifically denied that the Plaintiff failed to
receive all compensation due him under tile Defendant's bonus and
vacation pay plans.
- 9 -
42, Admitted in part and denied in part, It io only admitted
that the Plaintiff requested additional wages from the Defendant on
one or more occaoion. It is specifically denied that the Defendant
had any obligiltion to pay the Plaintiff additional monies as
requested by the Plaintiff.
43. The averments of Paragraph 43 of the Plaintif f' s Amended
Complaint are conclusions of law to which no reoponsive pleading is
requirf.ld, If a response is deemed required, then said averments
are specifically denied.
44, It is specifically denied that the Plaintiff is entitled
to the relief set forth in Paragraph 44 of the Amended Complaint
and strict proof thereof is demanded,
WHEREFORE, Defendant respectfully requests that this Court
dismiss the Plaintiff's Amended Complaint and award costs of suit,
attorneys' fees and related expenses in favor of Defendant and
against the Plaintiff.
NEW MATTER
45, Upon information and belief, some or all of the
Plaintiff's claims are barred by failure of consideration. The
Plaintiff cannot show that the Defendant's alleged promise to pay
him additional compensation was supported by sufficient
consideration as he was already in the Defendant's employ at the
time the alleged promise was made. While the Plaintiff received a
raise from the Defendant in 1991, he assumed no new additional
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responsibilities, In addition, at no time did the Plaintiff confer
- 10 -
any additional benefits upon the Defendant or undergo a significant
hardship that would furnish consideration sufficient to support
Plaintiff's breach of contract claims.
46, Upon information and belief, some or all of the
Plaintiff's claims are barred by fa~lure of detrimental reliance or
promissory estoppel. The Plaintiff does not and cannot allege that
he suffered a "manifest injustice" that would support a promissory
estoppel or detrimental reliance claim, The Plaintiff's allegation
that he declined one job oppurtunity as a result of the Defendant's
promise does not alone rise to the level of "manifest injustice"
necessary to support a detrimental reliance claim, In addition,
the Plaintiff's detrimental reliance claims are also barred in
whole or in part because the Plaintiff cannot prove reasonable
reliance on the Defendant's promises. Once the Plaintiff ~llegedly
learned that the Defendant would not compensate him as allegedly
promised, the Plaintiff could not continue to reasonably rely on
the Defendant's conduct in the future,
47. Upon information and
Plaintiff's claims are barred
belief,
by the
Rome or all of the
applicable statute of
limitations. The statute of limitations for Plaintiff's breach of
contract and Wage Payment and Collection Law claims began running
in 1991 when the Plaintiff first complained that he should have
been compensated at a higher rate. As the Plaintiff did not file
his Complaint until on or around June 16, 1995, some or all of the
- 11 -
Plaintiff's claims are barred by the applicable statutes of
limitations.
48. Upon information and belief, some or all of the
Plaintiff's claims are barred by laches or waiver. Upon informa-
tion and belief, the Plaintiff complained to the Defendant about
the level of his compensation in 1991, He said nothing to the
Defendant about his compensation after 1991, The Plaintiff
continued to work for the Defendant from April 1991 to February
1995 and accept the compensation provided to him by the Defendant
without raising any claims regarding such compensat ion, Because of
the Plaintiff's continued acceptance of salary and benefits from
the Defendant without protest or act ion, some or all of the
Plaintiff's claims are barred by laches and/or waiver.
49, Upon information and belief, some or all of the
Plaintiff's claims are barred by his failure to mitigate damages,
After learning that he was not being compensated as allegedly
promised in 1991, the Plaintiff could have mitigated his damages by
seeking and accepting outside employment that compensated him at a
higher rate than he was being paid by the Defendant. However, by
choosing to continue to work for the Defendant from 1991 to 1995 at
a rate which he allegedly believed was below that to which he was
entitled, and without seeking additional employment, the Plaintiff
failed to mitigate his damages,
50, The Defendant has a bona fide and good faith dispute with
the Plaintiff regarding sums to which the Plaintiff claims entitle-
1- 12 -
ment and, therefot'e, the Defendant Is not liable for 1 iquidat'ild
damages under the Pennsylvania Wage Payment and CollectIon Law,
51, Upon information and beilief, some or all of the
PlaintIff's claims are barred by the PlaintIff's consent to accept
compensation from the Defendant,
52, Plaintiff's Amended Complaint fails to state a cause of
action upon which relief can be granted since the Plaintiff cannot
possibly ~rove that the Defendant violated the Pennsylvania Wage
Payment and Collection Law,
53, Some or all of the Plaintiff's claims are barred by the
statute of frauds since the Plaintiff's allegations run counter to
the express terms of the April 2, 1991 memorandum from Bob Delaney
to the Plaintiff regarding his promotion and compensation package,
54. The Defendant affirmatively states that it has complied
with the terms of any and all agreements that were applicable to
the Plaintiff's employment,
55. Some or all of the Plaint iff's claims for severance,
vacation and travel pay are barred by the Plaintiff's failure to
allege that one or more of these benefits were offered as bindlng
terms of employment.
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.'
CBRTIrICATB or SIRVICI
I hereby certify that I have this date served a copy of the
foregoing document, ANSWER OF DEFENDANT BOOK-OF-THE-MONTH CLUB,
INC. TO THE PLAINTIFF'S AMENDED COMPLAINT, upon the following, by
first-class United States Mail, postage prepaidl
Debra A. Denison, Esq,
REAGER & ADLER, P.C.
2331 Market Street
Camp Hill, PA 17011
"L-?---
Esq.
& NURICK
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Ro ert G. Haa ,
McNEES, WALLA E
100 Pine Street
P. 0, Box 1166
Harrisburg, Pa
(717) 237-5465
1 710a ,,1166
Datedl December 8, 1995
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46. Denie4 as a legal conclusion. In further response, it is
averred that in reliance on Dlllfendant' f.I promise to increase
Plaintiff's salary, Plaintiff turned down an opportunity to take a
new position with another employer which would have increased his
salary and transferred him outside of the area. In further
reliance on Defendant's promise, Plaintiff assumed additional
responsibilities and provided Defendant significant servic~s.
Plaintiff was assured payment would be forthcoming and continued
his work in reliance thereof.
47. Denied as a legal conclusion. In further response, it is
averred that the statutl of limitations on Plaintiff's Wage Payment
and Collection Act claim did not begin to run until January 1, 1993
when Defendant breached its promise to increase Plaintiff's salary
in 1992.
48. Denied as a legal conclusion. In further response,
paragraph 48 of the New Matter pleads two affirmative defenses in
one paragraph in violation of Pa.R.C.P. 1022. said defenses are,
nonetheless, denied as legal conclusions. In further response, it
is denied that Plaintiff had knowledge of any breach of contract by
BOMC until the end of calendar year 1992. In 1993, Plaintiff did,
in fact, question his level of compensation.
2
5260 .1, ~ ~., alii well as breach of contract, for monies
,allegedly owed to him and damages resulting from Defendant' s
alleged failure to pay him severance benefits in accordance with
the Defendant's severance pay policy. (Amended Compl., " 29-39,
39-44).
3, Plaintiff alleges, in pertinent. part, that Defendant
maintained a severance pay policy which provided that employees
would receive two weeks of severance pay per year of service if
they lost their employment as a result of corporate down-sizing.
(Amended Compl, , 33) ,
4. Plaintiff alleges that his job was terminated due to
corporate down-sizing, (Amended Compl. , 34),
5. The Employee Retirement Income Security Act ("ERISA"), 29
U,S.C. 51001, ~ ~" governs the administration of employee
benefit plans such as Defendant's severance pay policy, and
contains a comprehensive remedial scheme that is excl.usive in
nearly every respect.
6. Section 514 of ERISA, 29 U,S,C, 51144(a), provides in
pertinent part that ERISA "shall supersede any and all state laws
insofar as they now or hereafter relate to any employee benefit
plan"
7. ERISA has been consistently interpreted to preclude state
statutory and common law claims that relate to e~ployee benefit
plans, including severance pay plans,
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5260.1, Sit. .llJW., as well as breach of contract, for monies
allegedly owed to him and damages resulting from Defendant' s
alleged failure to pay him severance benefits in accordance with
the Defendant's severance pay policy, (Amended Compl., ~~ 29-39,
39-44) .
3. Plaintiff alleges, in pertinent part, that Defendant
maintained a severance pay policy which provided that employees
would receive two weeks of severance pay per year of service if
they lost their employment as a result of corporate down-sizing.
(Amended Compl. ~ 33),
4. Plaintiff alleges that his job was terminated due to
corporate down-sizing. (Amended Comp!. ~ 34).
5. The Employee Retirement Income security Act ("ERISA"), 29
U.S,C. 51001, II ~" governs the administration of employee
benefit plans such as Defendant's severance pay policy, and
contains a comprehensive remedial scheme that is exclusive in
nearly every respect,
6. Section 514 of ERISA, 29 U.S.C, 51144(a), provides in
pertinent part that ERISA "shall supersede any and all state laws
insofar as they now or hereafter relate to any employee benefit
plan"
7. ERISA has been consistently interpreted to preclude state
statutory and common law claims that relate to employee benefit
plans, including severance pay plans,
- 2 -
,
5260,1, ~ ~., as well as breach of contract, for monies
allegedly owed to him and damages resul t ing from Defendant' s
alleged failure to pay him severance benefits in accordance with
the Defendant's severance pay policy. (Amended Compl., ,. 29-39,
39-44) .
3. Plaintiff alleges, in pertinent part, that Defendant
maintained a severance pay policy which provided that employees
would receive two weeks of severance pay per year of service if
they lost their employment as a result of corporate down-si.zing.
(Amended Compl. , 33).
4. Plaintiff alleges that his jQb was terminated due to
corporate down-sizing, (Amended Comp!. , 34) .
5. The Employee Retirement Income Security Act ("ERISA"), 29
U.S,C, !l1001, ~ ~., governs the administratJ,on of employee
benefit plans such as Defendant's severance pay policy, and
contains a comprehensive remedial scheme that is exclusive in
nearly every respect,
6. Section 514 of ERISA, 29 U,S,C, !l1l44(a), provides in
pertinent part that ERISA "shall supersede any and all state laws
insofar as they now or hereafter relate to any employee benefit
plan"
7. ERISA has been consistently interpreted to preclude state
statutory and common law claims that relate to employee benefit
plans, inclUding severance pay plans.
- 2 -
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14. Pursuant to BaMC's otter, plaintitf should have received
salary in the following amounts I
1991 $75,000
1992 85,000
1993 88,400 (n cost of living
increase)
1994 91,936 (n cost ot living
increase)
1995 12,376 (Jan. 1 - Feb. 28)
15. The discrepancies in the salary result in overdue wag..
in the following amountsl
1991
1992
1993
1994
1995
-0-
17,500
18,400
19,274
2.595
(Jan. 1 - Feb. 28)
Total
$57,769
16. The compensatiOI\ offer made by BOMC included a bonus
plan, which was, in part, based upon Plaintiff's salary. The bonus
plan included a profit sharing plan as well as a 15\ bonus plan.
4
.
~
DATE:
TO:
FROM:
RE:
June 13, 1994
Marty Mehring
Policy Changes
From tlma to time, aOMC Customer Service Inc; reviews existing policies to Insure that they
continue to address the company's strategy of having-policies that meke both good.
business sense and enhance our employee's ability to meet the company's business goals.
Improvements In the Company's retirement plans, eddlng the PIP plan and the recent adding
of medical benefits to same sex domestic partners are exemples of recent changes which
support these ob/ectlves,
Effective June 13, 1994, we are making further changes to a numuer of our present
policies. With the exception of the Overtime policy, these changes pertain only to full-time
employees.
~RANCE
Effective 6/13/94, aOMe CSI's policy for severance payments will be modified In the
following ways:
In casas of terminations for cause, (I,e.. performance) the severance entitlement will be
based on a formula of one week per full year of service; and the payment will be l=oid in a
lump sum. Those terminations for gross misconduct and/or willful misconduct will not
receive severance.
In cases of terminations due to Job elimination, the severance entitlements will continue to
be besed on a formula of two weeks per year of service, prorated at 1 week per every six
months at service, Employees will now have the option of staying on payroll up to 26
weeks In order to extend their benefits coverage, The balance of severance due after 26
weeks will be paid In a lump sum,
In all cases, severance payments will be capped at 39 weeks,
OVERTIME HOURS
Effective with the next biweekly payroll, I,e.. 6/25/94, all paid time off, e,g" vacation.
holiday, sick days, etc, will .ruu be considered working time for the purposes of triggering
time and one-half overtime pay. Our present polley pays straight-time overtime for the first
two & one-half hours after 37.5 and time and one-half for all hours over 40, This policy
afflicts both full-time and part-time staff.
TUITION REIMBURSEMENT
Reimbursement for Job related courses will be increased from 75 % to 100%. All classes
beginning after 6/13/94, which are approved for reimbursement, will be reimbursed at
100%.
.
EXIIIDlT '\c,"
continued
, ~ I .
.
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.
.
(
(
, , MEMORANDUM
DATE: June 13, 1994
TO: LEADERSffiP COMMITTEE
FROM: Marty Mehring
RE: June 13th. Policy Change Announcement
DISTRIBUTION: ALL Full-time and Part-time employees.
WHEN: Immediately or no later than Tuesday, June 14th
Q. Who Is Impacted by these changes?
A. The calculation of overtime pay pertains to all non-exempt, fuU-time employees and
regular and temporary part-time employees. This does not impact exempt employees
since they are not eligible for overtime pay.
Severance, Tuition and Adoption Reimbursement pertains ~ to full-time staff.
Q. Why change the severance policy?
A. There are a number of reasons for changing the severance policy:
Providing the same severance to both the job eliminated and er.lployees terminated for
performance reasons did not make &ood business sense. We felt there should be a
difference since the reason for tenmnations are substantially different. Most companies
provide different severance for job elimination vs, cause termination,
The policy continues to be competitive with other blue chip companies, The cap of 39
weeks (9, months) we feel is an appropriate payment while still allowing us to be
compeutive.
Q. Is the change related to anticipated staff reduction?
A. As you can tell by our job postings, we continue to replace staff who leave the
comp~i' and, in fact, we have recently added a number of positions to staff.
Q. What are the key chaol:es to the Severnoce Polley?
A.
The maximum amount of severance an employee can receive for any reason is
39 weeks. Under the previous policy it was 52 weeks.
2) Provides a severance benefit strUcture which is related to the reason for the
separation, i.e., an employee whose job is eliminated will receive a larger
benefit than an employee terminated for cause.
1)
, . ,
",
. 'June 13th. Policy Change(,1II10uncement
Page 2
(
"
3)
An employee whose Job is eliminated may elect to lake spread payments for up
to 26 weeks (6 months), Any balance over 26 weeks will be piiid lump-sum.
o The advantage of laking spread payments is that it extends benefits as
these people go through a transition period,
Payment is calculated at the rate of one week for each 6 months of full-
time service.
o
Terminations for cause will be paid at one week for each full year of service.
The employee will not have the option to take this as a spread payment because
their actions influenced this deciSion.
Q. WlU present staff be grandfathered for their present severance eligibility'?
4)
A. No. If we were changing vacation policy we might have grand fathered vacation
entitlement, but the administration of grandfalhering the whole stllrf for a policy that is
very rarely used does not make sense.
Q. Why the change In the way we will calculate overtime payments'?
A. The former policy allowed us to calculate overtime on time not worked (i.e., holidays,
vacation, jury duty, funeral leave, etc,) in each pay week which was in essence
pyramiding costs, The change is in compliance with the Wage and Hour Laws and will
allow us to pay our employees fairly and avoid incremental costs,
While a new pay policy for BOMC, this is consistent with pay practices in place in
most business organizations.
We have had a number of cases where people have been on jury duly or a sickday on a
Monday and a Tuesday, who then work the rest of the week and trigger time and a half
pay after actually workin~ only 2S hours. It didn't make sense to us, so we decided to
address it. Employees Will continue to be paid for holidays, jury duty, sick days, etc.,
it just won't be used to trigger time and olle half pay.
Q. Why are you chanKlng the Tuition Reimbursement Polley'?
A. We thought it made sense to bring it in line with other blue chip companies. 100% (or
job-related collrses is fairly common with most major companies.
Q. Beca~e the reimbursement rate is wcreaswK, wlU there be less courses approved'?
A. The Educational Assistance Program will be administered under the same guidelines as
in the past. The only change is the rate (%) o{ reimbursement.
Q. How will you define "job related" KomK forward'?
A. We are not, at present, changing what we have determined to bejob related - we are
only changing the reimbursement %.
Q. It I started a course prior to June 13 but It ends after June 13 do I let 100~1
A. No, the class must begin after 6/13/94.
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5260.1 ~ ~., arising out of Plaintiff Joseph Monastro's
(hereinafter "Plaintiff") former employment with Defendant.
3. On or about February 27, 1996, Defendant filed a Motion
for Partial Judgment on the Pleadings with respect to portions of
Plaintiff's original Complaint which attempted to set forth state
law claims based on Defendant's alleged failure to properly pay
severance benefits to Plaintiff upon his termination. Said
Motion was based on federal law pre-emption of the above
described claims by the Employee Retirement Income Security Act
of 1974 ("ERISA"). 29 U.S.C. !!i1001 II ~.
4. Plaintiff then filed an Amended Complaint on or after
April 17, 1996 which raised a claim for the first time under the
Employee Retirement Income Security Act of 1974, 29 U.S.C. 51001
~ ~., based on Defendant's alleged failure to properly pay
severance benefits to Plaintiff upon his termination.
5. The United States District Court has jurisdiction over
ERISA claims. 29 U.S.C. 51132 (f).
6. The United States District Court has jurisdiction over
all claims arising under the constitution, laws or treaties of
the United States. 28 U.S.C. !!i1331.
7. The United States District Court has supplemental
jurisdiction over the state law breach of contract, promissory
estoppel and wage payment claims which are part of the same case
and controversy as the ERISA claim pursuant to 28 U.S.C. 51367.
- 2 -