07-2658-cv

Giordano v. Thomson

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 defendants-appellees38 cross-appellants.

39

40 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
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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. Some at TII perceived his behavior as

5 counterproductive, and his employment was terminated. A little

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. We affirm. 

10 I. BACKGROUND

11 TII manufactured a number of products, including ball

12 bearings. The company was founded 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 working 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 1999, it had become clear that TII was struggling

19 financially. In early 2000, the company began discussions with

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. The options

23 included a sale of the company, a recapitalization and a
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1 restructuring of its debt. TII eventually selected JPMorgan

2 Chase (“JPMorgan”) to represent it in these matters.

3 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. In May 2000, Giordano was given the duties and title of

8 the “acting CFO.” In August 2000, Beavers asked Giordano to

9 become the CFO, 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. 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

18 sell the company to Danaher. Giordano assisted in the

19 transaction by helping TII negotiate with 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
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1 conference calls; Giordano testified that these took place

2 roughly once a week (sometimes more, sometimes less). Giordano

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 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.” 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 addition, about one month before the

24 transaction closed, Giordano was away on vacation. 
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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. Some transaction participants thought

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 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. Cummins

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. Giordano testified that he did not threaten to block

18 the deal, and that Cummins agreed to recommend a payment of

19 $600,000.

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. While there, Giordano signed all of the documents put

23 in front of him except a document under which he would have

24 released all of his claims against Thomson, TII and Danaher.
Giordano’s other claims 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 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.

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1 Under the release, Giordano would receive a $15,230 severance

2 payment. By the next day, he still had not signed the release.

3 On October 17, Thomson heard that Giordano had not signed

4 the release. Thomson then decided that he had to terminate

5 Giordano because the transaction could not be completed without

6 a release and “in light of [Giordano’s] prior actions and

7 statements . . . he was going to torpedo the transaction.”

8 Thomson terminated Giordano that day via a faxed letter from

9 Mazzeo. 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. In September 2005, after 1
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).

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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. Giordano v. Thomson, 438 F. Supp. 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 dismissed all 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 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 (3) TII had not been unjustly enriched by Giordano’s

15 employment during the Danaher sale. Id. 

16 Giordano then appealed, arguing that 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.

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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. Thus, we need not (and do

8 not) decide whether the district judge was correct 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 Entitled 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
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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 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 ERISA plan gives an administrator discretionary

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. 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 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. 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

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.

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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 id. at *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 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] . . . .” 29 U.S.C. § 1140 (internal

16 citation omitted). To make out a prima facie case of retaliation

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
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1 employment action. See Manoharan v. Columbia Univ. Coll. of

2 Physicians & Surgeons, 842 F.2d 590, 593 (2d Cir. 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 Refusing to Forfeit 

11 Severance Benefits Under the Plan

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. This finding is

19 a reasonable one, particularly given our determination that

20 Giordano was not, in fact, entitled to any severance benefits

21 under the plan. We find no error (clear or otherwise) 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 Workers Benefit

26 Protection Act 

27
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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.” 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

10 21 days to review the waiver (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 him in

13 response to his exercise of his OWBPA right to review the release

14 for 21 days.

15 This argument is mistaken. ERISA § 510 does not create a

16 cause of action for violations of OWBPA. ERISA § 510 prohibits

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. Id. § 1140. Because the OWBPA right to a 21-day review

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 violation of § 626(f). 

24

25
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1 D. Giordano’s Unjust Enrichment Claims Are Without

2 Merit

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.” 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 amount he was

13 paid. Giordano was paid $250,000 per year for part-time work,

14 whereas his predecessor, who worked full time, was paid only

15 $170,000. Moreover, according to some (but not all) deal

16 participants, Giordano’s performance as a CFO was somewhat

17 disappointing. 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. Defendants’ cross-appeal is
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1 DISMISSED as moot; as noted, we express no opinion on whether

2 TII’s severance plan was an ERISA plan.