Court Opinion

ID: 4254003
Source: CourtListenerOpinion
Date Created: 2018-03-13 16:00:32.703392+00
Date Added: 2024-06-11T14:44:22.742476
License: Public Domain

FILED
                                                                    United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                        Tenth Circuit

                             FOR THE TENTH CIRCUIT                        March 13, 2018
                         _________________________________
                                                                        Elisabeth A. Shumaker
                                                                            Clerk of Court
ROBERT J. BALDING,

      Plaintiff - Appellant,

v.                                                        No. 16-4095
                                                 (D.C. No. 2:14-CV-00090-CW)
SUNBELT STEEL TEXAS, INC.;                                  (D. Utah)
SUNBELT STEEL TEXAS, LLC;
RELIANCE STEEL & ALUMINUM CO.,
DOES 1 through 50, inclusive,

      Defendants - Appellees.
                      _________________________________

                             ORDER AND JUDGMENT*
                         _________________________________

Before BALDOCK, KELLY, and O’BRIEN, Circuit Judges.
                  _________________________________

      After he was fired from his job as a steel salesman, Robert Balding sued his

employer, Sunbelt Steel Texas, Inc., its predecessor, Sunbelt Steel Texas, LLC

(together, Sunbelt), and Sunbelt’s parent company, Reliance Steel & Aluminum Co.

(Reliance). He asserted claims for breach of contract and quantum meruit/unjust

      *
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
enrichment1 under Utah state law, and for violations of the Family and Medical

Leave Act (FMLA) and the Americans with Disabilities Act (ADA). The district

court entered summary judgment in favor of defendants on all claims, and Balding

appeals. Exercising jurisdiction under 28 U.S.C. § 1291, we reverse on the

breach-of-contract claim as to both Sunbelt and Reliance and affirm in all other

respects.

                                  BACKGROUND

      In April 2009, Balding began working as a salesman for Sunbelt, a distributor

of specialty steel bar headquartered in Texas. Balding was the lone Sunbelt

employee based in Utah. The terms of his compensation were originally set out in an

email from Sunbelt’s Vice-President of Sales, Jerry Wasson: $30,000 a year in base

salary plus 1.5% commissions on “total gross sales.” Aplt. App., Vol. I at 56.

Wasson told Balding his base salary was lower than that of a salesman who could not

earn commissions and he could not “have it both ways” (i.e., higher salary and

commissions). Id. Sunbelt never paid Balding any commissions, but it did raise his

base salary to $40,000 in January 2010. Sunbelt’s Executive Vice President, Kathy

Rutledge, who directly supervised Balding at the time, claimed she told Balding the

raise was in lieu of commissions, but Balding denied ever having been told that.

      1
        We will refer to this claim as the “unjust enrichment” claim. See Jones v.
Mackey Price Thompson & Ostler, 355 P.3d 1000, 1012 (Utah 2015) (explaining that
unjust enrichment, also known as “[c]ontracts implied in law” or “quasi-contract[],”
is one of quantum meruit’s “two distinct branches” (the other being “contracts
implied in fact”)). In this claim, Balding sought relief under the “unjust enrichment”
branch of quantum meruit. See Aplt. App., Vol. I at 35.

                                          2
Sunbelt later raised his base salary to $45,000 in April 2011, $52,000 in January

2012, and $60,000 in May 2012. Between December 2010 and October 2012,

Sunbelt also paid Balding seven bonuses totaling $23,250.

      During the course of his employment with Sunbelt, Balding suffered from, and

Sunbelt was aware of, various medical issues, including a panic attack on

November 20, 2013. The next day, Balding informed Sunbelt that his doctor

recommended he take some time off work, and Sunbelt told him he could do so.

      While Balding was out, his supervisor, Mike Kowalski, Jr., was monitoring his

email. On November 26, one of Balding’s customers, Weatherford, emailed Balding

about the status of an order and also emailed him a copy of the associated purchase

order, which was dated November 5, 2013. Kowalski and Sunbelt’s Inside Sales

Manager, Todd Perrin, investigated and determined that although the order had not

been entered into Sunbelt’s system, Balding had promised Weatherford by email on

November 21 that the order was “in process,” he was “rushing [it] through,” the

“dock date” would be “3 days,” and the parts would be “to freight forwarder” by

November 26, 2013. Id., Vol. II at 355–56. According to Kowalski and Perrin, none

of that could have been true without a purchase order in Sunbelt’s system.

      Kowalski and Perrin called Balding and asked why he had told Weatherford

the order was in process. According to Kowalski, Balding denied having told

Weatherford the order was in process until Kowalski revealed that he had reviewed

Balding’s email. But according to Balding, he told Kowalski he did not know why

he had not entered the Weatherford order, and that although Kowalski accused him of

                                          3
lying about his representations to Weatherford, he told Kowalski he had reserved

steel bars for the order while waiting for the hardcopy of the purchase order.

      Kowalski Jr. then informed Rutledge and Sunbelt’s President, Mike Kowalski,

Sr., what had happened. The three of them agreed to terminate Balding’s

employment because he had made misrepresentations about the order to Weatherford

and then lied about it to them, and because Kowalski Jr. previously had received

complaints from two of Balding’s other customers, had issued a written warning in

August 2013 to Balding based one of those complaints, and had issued another

written warning less than two weeks prior to the Weatherford incident because

Balding was consistently late with reports and his voicemail was constantly full.

Rutledge called Balding that day (November 26) and told him he was fired.

      In this action, Balding alleged Sunbelt owed him $173,277.92 in commissions

based on the compensation agreement set out in Wasson’s email or under a theory of

unjust enrichment. In his claims under FMLA (interference and retaliation) and the

ADA (discrimination, retaliation, and failure to accommodate), Balding alleged he

was fired because of his health issues and for trying to take FMLA leave. He further

claimed Reliance was jointly liable with Sunbelt for any alleged wrongful conduct.

      In seeking summary judgment, Sunbelt maintained there was no breach of the

promise to pay commissions because Balding agreed to new compensation terms

when he continued to work while accepting the raises and bonuses without objection

to not being paid any commissions. Sunbelt also argued the contract between Sunbelt

and Balding foreclosed the unjust enrichment claim under Utah law. And Sunbelt

                                           4
asserted there was no evidence Balding had a disability as defined in the ADA, it had

provided all the accommodations Balding had requested, and it had fired Balding for

a legitimate, non-discriminatory and non-retaliatory reason, which foreclosed relief

under the ADA and FMLA. Reliance, which had acquired Sunbelt in October 2012,

argued it was not liable on any claims because it was not Balding’s employer and

also for the same reasons set out in Sunbelt’s motion for summary judgment.

      After a hearing, the district court issued an oral ruling granting defendants’

motions for summary judgment on all claims. Balding sought relief under Fed. R.

Civ. P. 59, which the court granted in part as to the FMLA claims and the ADA

retaliation claim against Sunbelt, concluding there was sufficient evidence of pretext

to get to the jury. The court left unchanged the remainder of its oral rulings, although

it fleshed out its reasoning on most of the other claims, including that Sunbelt was

entitled to summary judgment on the ADA discrimination and accommodation claims

because Balding had not established that he had a qualifying disability and because

Sunbelt had provided every accommodation Balding had requested.

      Sunbelt and Balding then both filed Rule 59 motions seeking reconsideration

of the first post-judgment decision. The court granted Sunbelt’s motion and denied

Balding’s. The court concluded that in its first post-judgment decision, it had

misapprehended the controlling law on pretext, and under the correct analysis,

Balding’s evidence was insufficient to avoid summary judgment. The court therefore

awarded summary judgment to Sunbelt on all the FMLA and ADA claims, including

the ADA discrimination and accommodation claims. Balding appeals.

                                           5
                                    DISCUSSION

      We review an order granting “summary judgment de novo, applying the same

standards that the district court should have applied.” Fields v. City of Tulsa,

753 F.3d 1000, 1008 (10th Cir. 2014) (internal quotation marks omitted). A “court

shall grant summary judgment if the movant shows that there is no genuine dispute as

to any material fact and the movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a). “[W]e examine the record and all reasonable inferences that

might be drawn from it in the light most favorable to the nonmoving party.” Fields,
753 F.3d at 1009 (internal quotation marks omitted).

A.    ADA and FMLA claims

      The district court granted summary judgment to Sunbelt on the FMLA and

ADA claims by applying the McDonnell Douglas2 burden-shifting analysis and

concluding that Balding had not shown a genuine dispute of material fact that

Sunbelt’s proffered reason for terminating his employment was pretextual. See Aplt.

App., Vol. IV at 1156–65. It was proper to do so for the FMLA retaliation and ADA

claims. See DeWitt v. Sw. Bell Tel. Co., 845 F.3d 1299, 1306–07 (10th Cir. 2017)

(describing three-step burden-shifting analysis applicable to FMLA retaliation and

ADA discrimination and accommodation claims); Foster v. Mountain Coal Co.,

830 F.3d 1178, 1186 (10th Cir. 2016) (same with respect to ADA retaliation claim).

But because the burden-shifting analysis does not apply to a FMLA interference

      2
          McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973).

                                           6
claim, “no pretext analysis is necessary”; instead, “summary judgment for [an]

employer is warranted when there is no genuine dispute as to any material fact

regarding alternative reasons for termination.” DePaula v. Easter Seals El Mirador,

859 F.3d 957, 978 (10th Cir. 2017) (internal quotation marks omitted). The district

court recognized this distinction in its first post-judgment decision, see Aplt. App.,

Vol. IV at 1028, but in its second post-judgment decision, the court engaged in only a

pretext analysis for all the FMLA and ADA claims, including the FMLA interference

claim.

         That was incorrect. But regardless, the two standards are similar enough that

we are confident in the court’s final analysis. In examining pretext, the relevant

inquiry, as the district court correctly noted, is not whether Sunbelt’s “‘proffered

reasons were wise, fair, or correct, but whether it honestly believed those reasons and

acted in good faith upon those beliefs.’” Aplt. App., Vol. IV at 1160 (quoting Lobato

v. N.M. Env’t Dep’t, 733 F.3d 1283, 1289 (10th Cir. 2013)). Similarly, in

considering an employer’s proffered rationale for an adverse employment action that

allegedly interfered with an employee’s FMLA leave, “[w]hat is important is . . .

whether the [employer] terminated [the employee] because it sincerely, even if

mistakenly, believed [in the proffered rationale].” Dalpiaz v. Carbon Cty., 760 F.3d
1126, 1134 (10th Cir. 2014).3

         3
        As to his FMLA claims, Balding argues, as he did before the district court,
that where wrongful conduct is carried out by the employer’s “corporate proxy,” the
employer is subject to strict liability under Harris v. Forklift Systems, Inc., 510 U.S.
                                                                               (continued)
                                            7
      In reaching the conclusion that summary judgment in favor of Sunbelt was

warranted on all the FMLA and ADA claims, the district court examined four facts

bearing on Sunbelt’s claimed reason for firing Balding: (1) Sunbelt knew about a

number of Balding’s health issues before terminating him; (2) Sunbelt decided to fire

Balding the same day it learned about the Weatherford issue and while Balding was

on leave and without a meaningful investigation; (3) Sunbelt’s senior management

(including Kowalski Sr. and Rutledge) had agreed on November 22 that Sunbelt

might have to fire Balding after January 1, 2014;4 and (4) management was on notice

that Weatherford might have backdated to November 5 the purchase order it sent on

November 26.

17, 21 (1993). Aplt. Opening Br. at 57. Like the district court, we reject this
argument. Although Balding is correct that the burden-shifting analysis does not
apply to FMLA interference claims, that is not because of anything in Harris. Harris
was not a FMLA case and makes no mention of strict liability for conduct by a
“corporate proxy.” Hence, Harris is wholly irrelevant to Balding’s argument, and we
are at a loss why his counsel has repeated this argument on appeal.
      4
        This fact was set out in Exhibit O to Balding’s declaration filed with his
opposition to summary judgment. The district court considered this fact despite
finding defendants’ evidentiary objection to it “well taken.” Aplt. App., Vol. IV
at 1033 n.9. The court also considered “well taken” defendants’ evidentiary
objections to a large number of paragraphs of Balding’s declaration and other
exhibits attached to it. Id. In his opening appellate brief, Balding did not take issue
with the court’s ruling on the evidentiary objections, so defendants argued he
therefore waived any challenge to that ruling. In his reply brief, Balding finally
challenged the ruling. We need not sort out the evidentiary ruling because the district
court considered Exhibit O, and none of our rulings in this decision are dependent
solely on any of the other stricken provisions or exhibits. We express no view on the
propriety of the district court’s ruling on the evidentiary objections.

                                          8
      The district court concluded that despite these facts, there was no genuine

dispute that Sunbelt honestly believed Balding had misled Weatherford about the

status of the order and then lied about it when confronted. The court provided a

thorough explanation that we need not repeat here; we have reviewed it, along with

the record, the controlling law, and the parties’ arguments, and we agree with the

court’s analysis. We therefore affirm summary judgment on the FMLA and ADA

claims for substantially the same reasons stated in the district court’s second

post-judgment decision. In addition, to the extent the ADA accommodation claim

concerns pre-termination conduct, we also affirm summary judgment in favor of

Sunbelt because Balding failed to show he did not receive any pre-termination

accommodation he requested. See Aplt. App., Vol. IV at 1043 (concluding, in first

post-judgment decision, that Balding’s failure to make this showing “independently

defeats [his] ADA failure to accommodate claim”). We do not see how the failure to

show pretext warrants summary judgment on any pre-termination accommodation

claim Balding may have asserted.

B.    Breach-of-contract claim

      On the breach-of-contract claim, the district court ruled that Balding was

precluded from claiming entitlement to the 1.5% commission on his total gross sales

set out in his original compensation agreement because he accepted raises and

bonuses for several years and did not object to Sunbelt’s failure to pay him any

commissions. The court determined “a jury could find only that from January 2010

through the end of his employment in November 2013, Balding accepted salary

                                           9
increases, accepted bonuses, never complained to his direct supervisors about not

receiving commissions, and never asked Sunbelt for an accounting or in any way

made a demand for commission payments.” Id. at 1026.

      The court reached this conclusion by testing the facts against several principles

of Utah law concerning modification of unilateral contracts with implied-in-fact

terms. In doing so, however, the court seems to have overlooked an important

component of such a modification—whether Balding could only have reasonably

believed Sunbelt was extending a new offer based on the new terms.

      In Johnson v. Morton Thiokol, Inc., 818 P.2d 997 (Utah 1991), the Utah

Supreme Court set out the general principle that in unilateral employment contracts,

an employee’s conduct can result in a new or changed contractual obligation:

      In the case of unilateral contract[s] for employment, where an at-will
      employee retains employment with knowledge of new or changed
      conditions, the new or changed conditions may become a contractual
      obligation. In this manner, an original employment contract may be
      modified or replaced by a subsequent unilateral contract. The employee’s
      retention of employment constitutes acceptance of the offer of a unilateral
      contract; by continuing to stay on the job, although free to leave, the
      employment supplies the necessary consideration for the offer.
Id. at 1002 (internal quotation marks omitted).5 The district court relied on this

passage from Johnson. But Johnson went on to state that although it was unclear

“what type of evidence is sufficient to raise a triable issue concerning the intentions

      5
         The issue in Johnson was whether an implied-in-fact contract between an
employer and employee included a provision that the employee, who otherwise was
an at-will employee, could be fired only for good cause. Notwithstanding this factual
distinction, Johnson’s analysis can be applied here.

                                           10
of the parties and therefore the existence of an implied-in-fact contract term,” it was

“clear that the evidence must be sufficient to fulfill the requirements of a unilateral

offer.” Id. And to find an implied-in-fact provision in a unilateral contract

enforceable, Johnson requires the employer to communicate to the employee its

intent that it is offering a new term in a manner sufficiently definite for the employee

to reasonably believe the employer is offering that term:

      [F]or an implied-in-fact contract term to exist, it must meet the
      requirements for an offer of a unilateral contract. There must be a
      manifestation of the employer’s intent that is communicated to the
      employee and sufficiently definite to operate as a contract provision.
      Furthermore, the manifestation of the employer’s intent must be of such a
      nature that the employee can reasonably believe that the employer is
      making an offer of employment [on new terms].
Id. (emphasis added) (footnotes omitted).
      The chief manifestation of Sunbelt’s intent concerning base-salary raises is

disputed—whether Rutledge told Balding the initial $10,000 raise was in lieu of

commissions. The district court considered this factual dispute immaterial under

Johnson and other Utah law and instead focused on Balding’s conduct in accepting

raises without complaining about the lack of commission payment.6 The district

      6
        In addition to the one quote from Johnson, the district court also relied on
Restatement (Second) of Contracts § 202(4) (Am. Law Inst. 1981), which provides:
“Where an agreement involves repeated occasions for performance by either party
with knowledge of the nature of the performance and opportunity for objection to it
by the other, any course of performance accepted or acquiesced in without objection
is given great weight in the interpretation of the agreement.” And the district court
cited B.R. Woodward Marketing, Inc. v. Collins Food Service, Inc., 754 P.2d 99, 103
(Utah Ct. App. 1988), for the principle that “one cannot prevent a waiver by a private
mental reservation contrary to an intent to waive, where his or her actions clearly
indicate such an intent.” As we proceed to explain, there is a genuine dispute of
                                                                            (continued)
                                            11
court concluded it would be unreasonable for Balding to believe he was still on a

commission structure when his first raise ($10,000) far exceeded the commissions he

alleged he was owed at that point ($3,725),7 and Wasson’s initial email offer of

employment told Balding he could not have both commissions and a base salary as

high as a non-commissioned salesman.

      The court also relied on the fact that after the initial raise in January 2010, the

only conversation Balding had with a supervisor occurred in April 2012, when

Balding sent an email to Kowalski Sr. after having had an oral discussion with him

about commissions. Balding wrote:

      I could tell that you were surprised to hear of a commission which was
      written up for me. I would like you to know that I am grateful for profit
      sharing and other incentives Sunbelt Steel gives. I am here to help grow
      [the company] and become [a] huge part of Sunbelt Steel. If there could be
      some consideration that [sic] would be grateful.
Aplt. App., Vol. II at 536. Kowalski Sr. replied: “Thanks, Rob. I plan to have

follow-up conversations with Kathy [Rutledge] & Jerry [Wasson] this week and will

get back to you. Hang in there!” Id. Kowalski Sr. never got back to Balding. In his

material fact whether Balding had “knowledge” of the claimed nature of the raises
and bonuses such that he had to have reasonably believed commissions were no
longer part of his compensation package. And tied to that disputed material fact is
whether Balding “clearly indicate[d],” id., (or could have indicated) an intent to
waive the base-salary+commission structure.
      7
        As time went on, Balding’s sales grew to the point where the total in
commission he alleges he is owed far exceeds what he earned in raises and bonuses.
The district court did not take that into consideration, but it bears on the
reasonableness of Balding’s belief that the raises and bonuses were not in lieu of
commissions.

                                           12
affidavit, Kowalski Sr. explained that he “let the matter drop” and “no one at Sunbelt

was earning commissions at [that] time.” Id. at 373. The court declined to accept

Balding’s speculation that Kowalski Sr.’s failure to get back to him was evidence of

deceit and guilt. The court also pointed out that when asked, Balding said he did not

know why he did not raise the commission issue with either Rutledge or his other

direct supervisor, Kowalski Jr., other than he thought Wasson was the one to go to.8

      The district court’s focus on Balding’s conduct overlooked whether the offer

of a raise in lieu of commissions was adequately communicated to Balding (setting

aside what Rutledge allegedly told Balding) such that the only reasonable inference

to be drawn from the facts is that Balding must have reasonably believed that Sunbelt

had made that offer. And the only other record evidence of a manifestation of

Sunbelt’s intent regarding the raises is a “Personnel Change Notice” Sunbelt entered

on January 6, 2012, reflecting a “merit increase effective 1/2/2012” for Balding. Id.,

Vol. III at 622 (emphasis added). The notice states that his “Old Title/Salary” was

“$45,000,” and his “Job and Salary Change” was to “$52,000 yearly.” Id. (some

      8
         The district court also noted Balding twice asked Wasson when he might get
paid commissions he was owed. Wasson first told Balding the “keystone group” of
investors would not authorize a commission payment, Aplt. App., Vol. I at 258, and
later said Sunbelt was just getting profitable and Balding should start seeing his
commissions “shortly,” id. at 259–60. But as the court observed, Balding testified he
had contacted Wasson about commissions before the first raise in January 2010, so
those contacts do not support Balding’s argument that he believed he was entitled to
commissions despite the parties’ course of conduct after the January 2010 raise.
Balding testified he spoke with Wasson about commissions again some time later,
but he could not recall when or the content of the discussion.

                                          13
capitalization omitted). By referring only to base salary and not commissions, the

notice could be viewed as a manifestation of Sunbelt’s intent to supplant

commissions with raises. But the space for Balding’s signature is empty; hence, it is

unclear whether Balding saw the notice prior to his termination (neither he nor

Sunbelt asserts that he did). Even if he did, a factfinder could view the notice as

evidence that Sunbelt simply gave Balding a merit-based raise to his base salary.

Because the notice is subject to interpretation by a factfinder, it is, along with

whether Rutledge told Balding the initial raise was in lieu of commission, material to

the definiteness of an offer to substitute raises for commissions.9

      As for the bonuses, the only evidence bearing on Sunbelt’s intent comes in the

form of a memo Kowalski Sr. sent to all employees in September 2011 explaining the

bonus plan Sunbelt had put in place for 2011: “[A]ll employees are eligible to

receive quarterly and annual bonuses that are based on the company’s performance

once a brief employment period has been satisfied. The bonus amounts are

discretionary and are primarily based on the achievement of certain goals such as

sales volume and profitability.” Id., Vol. II at 377. By the time of this memo,

Balding had already received three bonuses (in December 2010, April 2011, and July

2011). But the memo says the bonuses are tied to company performance, not

      9
        In addition to the Personnel Change Notice, the record contains two emails
from Kowalski Sr. to Sunbelt’s controller informing the controller of increases in
Balding’s base pay (from $30,000 to $40,000 in January 2010, and from $40,000 to
$45,000 in April 2011). See Aplt. App., Vol. III at 616, 618. Like the notice, neither
of the emails mentions commissions, but unlike the notice, there is no indication
Balding may have seen them during his employment.

                                            14
individual performance, as were Balding’s commissions. The memo, therefore, sheds

little light on whether Balding had to have reasonably believed the bonuses were in

lieu of the 1.5% commission on his total gross sales he was originally promised.

      In sum, there are genuinely disputed issues of material fact on the contract

claim. We therefore reverse the grant of summary judgment to Sunbelt on that claim.

C.    Unjust enrichment

      We affirm the grant of summary judgment to Sunbelt and Reliance on the

unjust enrichment claim. Although the parties dispute the terms of Balding’s

compensation, the existence of a valid, enforceable compensation contract between

Sunbelt and Balding is undisputed. As the district court ruled, under Utah law, the

existence of a valid, enforceable contract forecloses relief under a theory of unjust

enrichment because the two theories of recovery are inconsistent. See Helf v.

Chevron U.S.A., Inc., 361 P.3d 63, 78 (Utah 2015) (“Because a breach of contract

remedy requires a valid, enforceable contract, while a quantum meruit remedy

presupposes that no contract governs the services provided, a plaintiff may recover

only one of these two inconsistent remedies.”); Concrete Prods. Co. v. Salt Lake

Cty., 734 P.2d 910, 911 (Utah 1987) (“Unjust enrichment is a doctrine under which

the law will imply a promise to pay for goods or services when there is neither an

actual nor an implied contract between the parties.”). Balding contests only an

“additional reason” the district court gave for granting summary judgment on the

unjust enrichment claim—that even if there was no contract, unjust enrichment is

                                           15
unavailable because his compensation was reasonable. Aplt. App., Vol. IV at 1027.

We need not decide the correctness of the court’s “additional reason.”

D.    FMLA, ADA, and contract claims against Reliance

      Balding brought the same FMLA, ADA, and breach-of-contract claims against

both Sunbelt and Reliance, contending that Reliance and Sunbelt were a joint

enterprise and that Reliance was as much his employer as Sunbelt. We affirm the

grant of summary judgment to Reliance on the FMLA and ADA claims. But we

reverse with respect to the contract claim because the district court never decided

whether Reliance was also Balding’s employer or a party to Balding’s compensation

agreement, and we decline to do so in the first instance.

      At the oral hearing on defendants’ motions for summary judgment, the district

court granted summary judgment to Reliance because the evidence was insufficient

“for a jury to conclude that the elements for the FMLA interference and other claims

that [the court] discussed would be sufficient to hold Reliance liable all for the same

reasons that [the court] explained as to Sunbelt.” Id. at 944.10 This ruling

encompassed all of Balding’s claims because the court had already “discussed” them

all. In its first post-judgment decision, the court summarily denied Balding’s Rule 59

motion “as to Reliance on all claims,” id. at 1019, because Balding had “simply

reargue[d] the same facts that the court previously considered and found to be

      10
        The court also considered whether the claims against Reliance were moot
because of the rulings in favor of Sunbelt on all claims. See Aplt. App., Vol. IV
at 939. But the court did not base the grant of summary judgment to Reliance on
mootness.

                                           16
inadequate to sustain his burden of going forward, particularly as to his ‘joint’

employer/enterprise theory claims against defendant Reliance, Sunbelt’s parent

‘umbrella’ corporation,” id. at 1022. In its second post-judgment decision, “the court

decline[d] to revisit its prior ruling dismissing Balding’s joint employer/enterprise

theory claims against Reliance” and also ruled that Balding’s claims against Reliance

were moot because the court had dismissed “Balding’s FMLA and ADA claims

against Sunbelt on the grounds that their reasons for terminating him were not a

pretext.” Id. at 1149 n.3.

       We agree with the district court’s ruling that Reliance cannot be liable on the

FMLA and ADA claims if Sunbelt is not. The same facts concerning the legitimacy

of the proffered reason for terminating Balding’s employment are the same as to both

Sunbelt and Reliance; the only role Balding claimed Reliance played in the decision

to fire him was approving Sunbelt’s decision. But the sole reason the district court

gave for granting summary judgment to Reliance on the contract claim was its grant

of summary judgment to Sunbelt on that claim. Because we are reversing on the

contract claim as to Sunbelt, the basis for the district court’s ruling as to Reliance is

wholly undermined. Despite claiming in its first post-judgment decision that it had

already considered and found Balding’s joint employer/enterprise theory inadequate,

the court had not done so in its oral ruling; it simply granted summary judgment to

                                            17
Reliance for the same reasons it had granted summary judgment to Sunbelt.11 We

therefore must reverse on the contract claim as to Reliance. We decline to resolve in

the first instance Balding’s joint employer/enterprise theory.

                                   CONCLUSION

      The district court’s grant of summary judgment to all defendants on the breach

of contract claim is reversed. The grant of summary judgment to all defendants is

otherwise affirmed.

                                            Entered for the Court

                                            Paul J. Kelly, Jr.
                                            Circuit Judge

      11
          Balding pointed this out in his second Rule 59 motion, arguing the court
failed to provide “any analysis let alone a sound conclusion for ruling that . . .
Reliance is somehow not also Balding’s employer and a contracting party with
Balding given the agreements and contractual duties by Reliance to Balding.” Aplt.
App., Vol. IV at 1049 n.1.

                                          18
16-4095, Balding v. Sunbelt Steel Tex., Inc.
O’BRIEN, J., concurring

       The majority reverses the summary judgment entered in favor of defendants on

Balding’s breach of contract claim. While a reversal is necessary, I would limit the scope

of reconsideration. In all other respects, I join the Order and Judgment.

       At-will employment permits either of the parties to modify or end the relationship

at any time for any reason—motive or purpose matter not. Of course, any change is

prospective only (both parties are bound by their agreement until it is changed or

terminated) and the employer’s right to unilaterally terminate employment is limited by

state and federal laws forbidding myriad discriminatory practices. Those exceptions

aside, an employee may demand a raise (or other changes) and may walk away without

consequence if the demand is not met. Conversely, an employer may, for whatever not

improperly discriminatory reason, decide an employee is overpaid and require him to

work for less pay or under different, but not legally prohibited, circumstances. The

employee must then decide whether to accept the new terms or forego continued

employment; it is a binary choice—unpleasant perhaps, but a choice nonetheless. There

is no requirement that demanded or imposed changes be agreeable to the other party, or

negotiable, or fair or even reasonable. If they are not accepted (or modified),

employment ends. However, to be effective the changes must be clearly communicated

to the affected party, either expressly or tacitly, and the affected party’s response must be

clearly communicated, either expressly or tacitly. “Clearly communicated” is an

objective test. With those principles in mind, I turn to the matter at hand.
      Balding signed on with Sunbelt in April 2009 as an at-will employee at a salary of

$30,000 per year plus a 1.5% commission on sales. Wasson (the hiring authority for

Sunbelt) explained that a commission was included because Balding’s salary was lower

than salesmen who did not receive commissions; Balding was pointedly told he could not

have it both ways (higher salary and commissions).

      No commissions were ever paid and no explicit change to the employment

agreement was ever formally negotiated or even formally proposed. However, Balding’s

compensation changed significantly. Starting in January 2010 he received substantial

raises and some bonus payments, summarized as follows:

Employment start           April 2009 - $30,000 + 1.5% commission
Raise 1                    January 2010 – to $40,000
Bonus 1                    December 2010
Bonus 2                    April 2011
Raise 2                    April 2011 – to $45,000
Bonus 3                    July 2011
Bonus 4                    October 2011
Raise 3                    January 2012 – to $52,000
Bonus 5                    January. 2012
Bonus 6                    April 2012
  Ambiguous email          April 2012 – for email text see majority opinion at 12
Raise 4                    May 2012 – to $60.000
Bonus 7                    October 2012 (the 7 bonuses total $23,200)
Employment end             November 26, 2013

      According to Sunbelt, contemporaneously with his first raise, Ms. Rutledge,

Balding’s supervisor, told him the raise was in lieu of commissions. Her testimony is the

only proof. Balding says he was told no such thing by Rutledge or anyone else.

Moreover, he claims to have repeatedly complained to Sunbelt’s management team about

its failure to pay his commissions. Indeed, two of those complaints appear in the record,

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but they occurred before his first raise. Beyond that, no admissible evidence clearly

supports his claim of repeated complaints. There is, however, an email he sent to

Kowalski, Sr. in April 2012. It is, at best, equivocal and the parties offer conflicting

interpretations.

       The district judge dutifully acknowledged the dissonance in the Rutledge and the

Balding positions and resolved the matter in Balding’s favor. But that did not end the

debate. The judge went on to properly conclude that Balding’s employment was at-will

and to announce the substance of his reasoning on the breach of contract claim, writing:

       On the evidence presented by Balding, a jury could find only that from
       January 2010 through the end of his employment in November 2013,
       Balding accepted salary increases, accepted bonuses, never complained to
       his direct supervisors about not receiving commissions, and never asked
       Sunbelt for an accounting or in any way made a demand for commission
       payments. The one conversation with Kowalski, Sr. in April 2012 in which
       Balding said he would be grateful if some consideration could be given to a
       commission, even drawing all inferences in favor of Balding, is not
       sufficient for a jury to find, in the face of Balding accepting raises and
       bonuses for four-and-one-half years without complaint, that the original
       agreement for compensation including a commission had not been
       superseded by the parties’ course of dealing.

Aplt. App., Vol. IV at 1026.

       Significantly, Balding knew from the start of his employment with Sunbelt that

“he could not have it both ways” (a higher salary and commissions). Somewhere along

the time continuum detailed above, but no later than May 2012, when Balding accepted a

raise to $60,000 without comment or complaint about commissions, no person could

reasonably fail to recognize that the employment terms had changed – no commissions

were paid, but raises and bonuses magically appeared and were accepted. Balding might

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not have liked or agreed with the new reality, but he was undeniably aware of it.

Knowing the probable result of demanding payment for commissions—termination of his

employment—he chose not to rock the boat. At that point his silence and decision to

soldier on, coupled with an understanding of his binary option (accept the new

compensation scheme or quit), was an assent to the changes (implied acceptance). No

jury could reasonably conclude otherwise. In summary, there is a tipping point where

minute factual distinctions cease to matter. Where it falls, exactly, on the timeline is a

matter of fact, but the figurative “edge of the universe” is a matter of law and common

sense, not fact.

       The district judge looked at roughly four years of experience and concluded things

had changed, but then he made his conclusion retroactive to the earliest possible date,

January 2010. I don’t see how that can be said without factual findings. Balding may

have smelled something in the wind, but at that early date he cannot be charged with

knowledge sufficient for summary judgment against him. For that reason I concur in the

reversal and remand on the breach of contract issue. However, I would limit the remand

to establishing a date prior to the May 2012 raise when Balding was sufficiently aware of

the new employment terms to trigger his obligation to fish or cut bait. Damages for

breach of contract, if any, should be accordingly limited. Balding is entitled to

commissions at least through January 2010. The parties’ dispute the amount; it will

require resolution.

       Balding argues that the defendants interfered with his ADA and FMLA rights and

retaliated against him for attempting to exercise them. The district court entered

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summary judgment against Balding on those claims and we have affirmed. That said, on

remand, any argument about the propriety of Balding’s termination should have no place;

he was an at-will employee—the only issues are, 1) the date of Balding’s implied

acceptance of the newly imposed compensation regime and 2) damages, if any.

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