07

- 26 58

- cv

G i ordan o v . T h oms on 1 UNITED STATES COURT OF APPEALS 2 3 FOR THE SECOND CIRCUIT 4 5

------------- 6 7 August Term 2008 8 9 Submitted: September 18, 2008 Decided: April 27, 2009 10 11 Docket No. 07-2658-cv, 07-2887-cv 12 13 --------------------------------------------------X 14 15 JOSEPH J. GIORDANO, 16 17 Plaintiff-Appellant-Cross-Appellee, 18 19 - against - 20 21 JOHN B. THOMSON, JR., THOMSON INDUSTRIES, INC., and DANAHER 22 CORPORATION, 23 24 Defendants-Appellees-Cross-Appellants. 25 26 --------------------------------------------------X 27 28 Before: FEINBERG, WALKER, and LIVINGSTON, Circuit 29 Judges. 30 31 WILLIAM DAN BOONE and Ngozi Evelyn Bolin, Bolin & 32 Boone, New York, New York, for plaintiff33 appellant-cross-appellee. 34 35 JOHN T. MORIN and Jennifer L. Marlborough, 36 Wormser, Kiely, Galef & Jacobs LLP, New 37 York, New York, for defend a nts-appellees38 cross-appellants. 39 40 FEINBERG, Circuit Judge: 41 Plaintiff Joseph J. Giordano worked as the Chief Financial 42 Officer (CFO) of T h o m son Industries, Inc. (hereafter “TII” or 43 “the company”) from September 2000 to October 2002. During that-2- 1 period, while TII was in th e p r o cess 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 r o l e i n t h e s a l e . S o me a t T I I p e r c e i v e d h i s b e h a v i o r as 5 counterproductive, and his employment was terminated. A little 6 over a year later, Giordano brought this suit i n t h e United 7 States District Court fo r 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. We affirm. 10 I. BACKGROUND 11 TII manufactured a number of products , i n cluding ball 12 bearings. The company was f o u n d e d by the father of defendant 13 John Thomson, Jr.; at the time of the sale to Danaher, Thomson 14 was TII’s sole shareholder. 15 Giordano started w o rking on TII matters while he was a 16 partner at Coopers & Lybrand. In 1993, Giordano left that firm 17 and began working for TII as a part-time consultant. 18 By 1 9 9 9 , it had become clear that TII was struggling 19 financially. In early 2000, the company began discussions with 20 investment bankers t o 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. T h e o p tions 23 included a sale of the comp a n y, a recapitalization and a-3- 1 restructuring o fits debt. TII eventually selected JPMorgan 2 Chase (“JPMorgan”) to represent it in these matters. 3 In 1999, a s p art of its turnaround efforts, the company 4 hired Dr. Alex Beavers as its new CEO. Be a v ers, in turn, 5 terminated Bartlett Polster, who was then the company’s CFO. 6 Polster had worked full time and was paid rough l y $ 1 70,000 per 7 year. In May 200 0 , G i ordano was given the duties and title of 8 the “acting CFO.” In Augus t 2 0 0 0, Beavers asked Giordano to 9 become the CFO, in part because (as Senior Corp o r a t e Vice 10 President of Human Resources Patrick Mazzeo testified) it would 11 look better to the peop l e involved in the effort to sell or 1 2 re c a p i t a l i z e t h e c o mp a n yt o h a v e a ne mp l o y e e a s C F O( a s 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. On this basis, Giordano became the company’s CFO on 16 September 1. He was paid a yearly salary of $250,000. 17 As indicated above, defendant Thomson eventually decided to 1 8 sell t h e c o mp a n yt oD a n a h e r . G i o r d a n o a s s i s t e di nt he 19 transaction by helping TII negotiate w i t h its lenders. The 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 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-4- 1 con f e r e nce calls; Giordano testified that these took place 2 roughly once a week (sometimes more, sometimes less). Giordano 3 also initially fielded re q u ests 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 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 wa s e ssentially 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 1 5 C umm i n s , a na dv i s o rt od e f e n d a nt J o h n Thomson, testified that 16 Giordano “didn’t function as a CFO” and failed to “straighten out 17 the accounting department.” Garvin stated that Giordano did all 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.” 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. In add i t i o n , about one month before the 24 transaction closed, Giordano was away on vacation.-5- 1 At some point, Giordano bec a m e aware that Danaher was not 2 planning on keeping h i m a s 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. Some transaction participants thought 6 h e w a s 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 October 14, 2002 , shortly before the 10 transact i o n d ocuments were signed. As Cummins remembered it, 11 Giordano asked for $1 million or more , a n dCummins said that 12 Thomson would n e v e r approve a payment in that range. Cummins 13 also testified that Giordano threatened to “torpedo the closing” 14 by refusing to sign necessary documen t s i f h e 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 g o i n g t o have to fire 17 Giordano. Giordano testified that he did not threaten to block 18 the deal, and that Cummins agreed to recomm e n d apayment of 19 $600,000. 20 On October 16, 2 0 0 2, Giordano went to a “pre-closing,” at 21 which various participants were signing papers for the s a le to 22 Danaher. While there, Giordano signed all of the documents put 23 in front of him except a document under which he wo u l dhave 24 r e l e a sed all of his claims against Thomson, TII and Danaher.Giordano’s other c l a ims in the district court are not 1 before us on appeal. With respect to the third claim on appeal, that Giordano was unjustly denied compensation for the “extra” tasks he allegedly performe d b e y ond 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 t h e d i s m i s s a l o fh i s c o n t r a c t

- b a s e dc l a i m s a s well. However, unjust enrichment is the only legal b a sis Giordano explicitly articulates when arguing the third point in his brief. -6- 1 Under the release, Giordano would receive a $15,230 s e v e r a nce 2 payment. By the next day, he still had not signed the release. 3 On O c t o b e r1 7 , T h o m s o nh e a r dt h a t G i o r d a n o h a dn o t s i g n ed 4 the release. Thomson then deci d e d t hat he had to terminate 5 Giordano because the transaction could not be completed without 6 a release and “in l i g h t of [Giordano’s] prior actions and 7 statements . . . he was going to torpedo t h e transaction.” 8 Thomson terminated Giordano that day via a f a x ed letter from 9 Mazzeo. The pa r t i e s t o 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 Danah e r , T homson and TII in the Eastern District 15 claiming that (1) h e i s owed money under TII’s severance plan, 16 (2) he was fired in violation of the anti-retaliation provision 17 of the Employee Retirement I n c o m e Security Act (“ERISA”), see 18 ERISA § 510, 29 U.S.C. § 1140, and (3) his work during the deal 19 unjustly enriched Thomson and T I I . In September 2005, after 1Moreover, 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 a r g u m ent for compensation based on unjust enrichm e n t . See Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998). -7- 1 defendants move dfor 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 th a t there existed material issues of dispute 6 for trial. Giordano v. Thomson, 4 3 8 F . S upp. 2d 35 , 40-43 7 (E.D.N.Y. 2005) . Then, in October 2006, the court held a bench 8 trial. In May 2007, it dismis s e d a ll of Giordano’s claims. 9 Giordano v. Thomson, No. 03-cv-5672, 2007 U.S. Dist. LEXIS 39117 10 (E.D.N.Y. May 29, 2007) . Specifically, the district court found 11 that (1) Giordano’s termination was not cau s ually connected to 12 any exercise of h i s rights under ERISA, (2) TII’s denial of 13 severance payments to Giordano was not “arbitrary and capricious” 14 and (3) TII had not b een unjustly enriched by Giordano’s 15 employment during the Danaher sale. Id. 16 Giordano then appealed, arguing th a t Judge Seybert should 17 not have dismissed certain of his claims. Meanwhile, in a cross-Giordano argues that defendants’ cross-appeal is frivolous 2 and that the defendants “arrogated” to themselves a filing extension. These arguments are without merit. -8- 1 appeal, the defendants contend t h at Judge Seybert erred in her 2 conclusion that TII’s severance plan is covered by ERISA. 2 3 II. ANALYSIS 4 We conclude that Giorda n o 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. Thus, we need not (and do 8 not) decide whether the district judge was c o r r e ct in her 9 determination that TII’s severance plan was an ERISA plan. 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. See, e.g., Grace v. Corbis-Sygma, 487 F.3d 113, 118 (2d 14 Cir. 2007). 15 B. Giordano Is Not Entitle d to Benefits Under 16 Thomson’s Severance Plan. 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. To prevail under § 502, a 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) , (2) 22 plaintiff is a participant or beneficiary of the plan, see Rocco-9- 1 v. N.Y. State Teamsters Conference Pension & Ret. Fund, 281 F.3d 2 62, 70-71 (2d Ci r . 2 0 02), and (3) plaintiff was wrongfully 3 denied severance pay owed under the plan, see Feifer v. 4 Prudential Ins. Co. of Am., 306 F.3d 1202, 1208 (2d Cir. 2002). 5 Where an ER I S A p lan gives an administrator discretionary 6 authority to “determine eligibility for benefits or to construe 7 the terms of t h e plan” we review the administrator’s decisions 8 un d e r t he arbitrary and capricious standard. Paneccasio v. 9 Unisource Worldwide, Inc., 532 F.3d 101 , 108 (2d Cir. 2008) 10 (internal quotation marks omitted). Where no such discretion is 11 conferred, we review the administrator’s decision de novo. See 12 id. 13 The p a rties disagree regarding which standard of review 14 should apply here, but we need not re s o l v e the issue because 15 Giordano’s claim would fail under either standard. Judge Seybert 16 con f i r m e d 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. She cited three reasons for this conclusion. First, 19 TII’s deteriorating financial situation made it understandably 20 reluctant to pay severance benefits. See id. at *4-5. Second, 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). See id. at *5.Giordano also argues that TII violated ERISA’s requirement 3 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 viol a tions 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 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. See i d . a t *4, *6. 5 After reviewing the record, we agree with Judge Seybert: Giordano 6 was not entitled to severance payments. 3 7 C. Giordano’s Retaliation Claim 8 9 ERISA § 510 provides that it is illegal to “discharge, fine, 10 suspend, expel, discipline, or discriminate against a participant 11 or benefic i a ry for exercising any right to which he is entitled 12 under the provisions of an employee benefit plan, this subchapter, 1 3 s e c t i o n1 2 0 1 o ft h i s t i t l e , o rt h e W e l f a r e a n dP e n s i o nP lans 14 Disclosure Act, or for the purpose of interferi ng with the 15 attainment of [such rights] . . . .” 29 U.S.C. § 1140 (internal 16 citation omitted). To make out a prima facie case of retaliation 17 under § 510, G i o r d a no must show that (1) he was engaged in a 18 protected a c t ivity, (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-11- 1 employment acti o n . S ee Manoharan v. Columbia Univ. Coll. of 2 Physicians & Surgeons, 842 F.2d 590, 593 ( 2 dCir. 1988). 3 Moreover, Giordano must prove that TII had the specific intent to 4 retaliate against him. See Kouvchinov v. Parametric Tech. Corp., 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. 10 1. Giordano Was Not Fired for Ref u s i n g to Forfeit 11 Severance Benefits Under the Plan 12 13 Giordano’s first argument regarding retaliat i o n 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 w a s determined to be counterproductive. 18 Giordano, 2007 U.S. Dist. LEXIS 39117, at *6-7. This finding is 19 a reasonable one, particula r l y given our determination that 20 Giordano was n o t , in fact, entitled to any severance benefits 21 under the plan. We find no error (clear or o t h e r w i s e ) in the 22 district court’s findings on this issue. 23 24 2. ERISA § 510 Does Not Create a Cause of Action 25 for Enforcing the Older Worker s Benefit 26 Protection Act 27-12- 1 Gio rdano’s second, and less conventional, argument appears 2 to be rela t e d t o t h e am o u n t o f t i me h e w a s g i v e n t o r e v i e wthe 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 m a y n o t waive any 6 right or claim under [the Age Discrimination in Employment Act of 7 1967 (ADEA)] unless the waiver is knowing and voluntary. ” 29 8 U.S.C. § 626(f)(1). It then states that a waiver is not “knowing 9 and voluntary” unless, among other things, the individual is given 1 0 2 1 d a y s t o r e v i e w t h e w a i v e r ( a 45-day period applies in some 11 cases). Id. § 626(f)(1)(F). Giordano appears to argue that TII 12 is liable under ERISA § 510 for retaliating against h im in 13 response to his exercise of his OWBPA right to review the release 14 for 21 days. 15 This argument is m i staken. ERISA § 510 does not create a 16 cause of action for v i o l a t i o n s of OWBPA. ERISA § 510 prohibits 17 only retaliation against a plaintiff who exercises a right derived 18 from: ( 1 ) a n employee benefits plan, (2) “this subchapter,” (3) 19 29 U.S.C. § 1201 or (4) the Welfare and Pension Plans Disclosure 20 Act. Id. § 1140. Because the OWBPA right to a 2 1

- d ay review 21 period under 29 U.S.C. § 626(f) does not fall within any of these 22 four categori e s , t h ere is no ERISA § 510 cause of action for a 23 violation of § 626(f). 24 25-13- 1 D. Giordano’s Unjust Enrichment Cla ims Are Without 2 Merit 3 “Under New York law, a plaintiff asserting a claim of unjust 4 enrichment must show that the defendant wa s e nriched at the 5 pl a i ntiff’s expense and that equity and good conscience require 6 the plaintiff to r e c o v e rthe enrichment from the defendant.” 7 Golden Pac. Bancorp v. FDIC, 375 F.3d 196, 203 n.8 (2d Cir. 2004). 8 Recovery on su c h a c l a i m is “limited to the reasonable value of 9 the services rendered by the plaintiff.” Collins Tuttle & Co. v. 10 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 a m o u n t h e was 13 paid. Giord a n o was paid $250,000 per year for part-time work, 14 whereas his predecessor, who worked full time, was p a i donly 15 $170,000. M o r e over, according to some (but not all) deal 16 participants, Giordano’s performance as a CFO was somewhat 17 d i sappointing. And while Giordano claims the work he did with 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 III. CONCLUSION 23 For the reasons stated above, we AFFIRM the district court’s 24 dismissal of Giordano’s claims . D e fendants’ cross-appeal is-14- 1 DISMISSED as moot; as noted, we express no opinion onw hether 2 TII’s severance plan was an ERISA plan.