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CHAFFEE v. KRAFT GEN. FOODS

May 11, 1995

HAROLD CHAFFEE, Plaintiff,
v.
KRAFT GENERAL FOODS, INC., Defendant.



The opinion of the court was delivered by: WILLIAM H. WALLS

 Walls, District Judge,

 The plaintiff, Harold Chaffee ("Chaffee") and defendant Kraft General Foods, Inc. ("Kraft") have submitted cross-motions for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure, in this case brought by a former employee to recover severance pay allegedly, wrongfully withheld from him by his employer. For reasons stated below, summary judgment is granted in favor of the defendant, Kraft.

 The origins of this imbroglio are found in Hoboken, New Jersey--the home of baseball, Frank Sinatra and the Maxwell House Coffee plant. While the present vitality of the first two institutions may be open to debate, the Maxwell House factory undeniably has ceased operations. This controversy relates to events pertaining to the effect of that factory's close-down upon Chaffee, a long-time employee. *fn1"

 In 1968, Chaffee began his employment at Maxwell House's plant. Over time, his various positions included adjuster mechanic, maintenance foreman and packaging specialist.

 In 1990, Maxwell House decided to phase out its operations at the Hoboken Plant by 1992. Naturally, this news could be expected to send the Hoboken Plant's laborers in search of new employment. To entice the Plant's employees to remain loyal and productive until activities actually ceased, Maxwell House developed the "Hoboken Closing Program - Salaried Employees" ("the Plan") The Plan comprised a severance program and a stay-on bonus program.

 The severance program required that,

 
In order to qualify for severance benefits under this program, the employee must be actively employed on the Final Date of Employment identified by the Company for his or her job. (emphasis added).

 An employee who satisfied this requirement would receive one month's pay for each year of service to Maxwell House, up to a maximum of 24 months, which could be paid either in a lump sum or installments. The stay-on bonus part gave selected employees a bonus for continuing their employment at the Plant, if requested by Maxwell House, after its official cessation of operations in early 1992, to wind up operations and close the Plant. The bonus would be four months of the employee's base pay. The Final Date of active employment was subject to change; Maxwell House, when writing to advise an employee of his or her Final Date, stated that the designated day could "change depending on business needs. We will notify you of any change at least 90 days in advance."

 Chaffee remained a loyal worker from the time the announcement was made in 1990 to some time in 1992. He had also been asked to "stay-on" and participate in the close-down, and was notified by letter dated September 21, 1990 that his "Final Date" of employment would be April 1, 1992. Chaffee was charged with the duty of coordinating the intake and processing of outside contracts for environmental clean-up at the Plant. Maxwell House exercised its right to extend Chaffee's termination date more than once. In the company's letter of June 2, 1992, he was informed that his termination date would be October 1, 1992. Later, in an August 25, 1992 letter, his termination date was extended by Maxwell House to December 1, 1992.

 In addition to his normal duties during his "stay-on" to close-down the Plant, Chaffee also engaged in extra-legal activities. Specifically, he became involved in a scheme to accept payments from contractors seeking to do jobs at the Plant, but who were ineligible because they employed non-union laborers. In a letter dated September 25, 1992 from Maxwell House Chaffee was informed that the company had learned that the FBI was investigating allegations of illegal acts done by Chaffee in his supervision of the Plant shut-down, and he, therefore, was being suspended from employment without pay. The letter further advised that if the investigation revealed Chaffee to be innocent of any wrongdoing, he would be reinstated with full back pay through October 1, 1992, and although his employment would be terminated on that date, he would receive benefits due under the Plan.

 On October 29, 1993, Chaffee plead guilty before District Judge Jerome B. Simandle to an information charging him with conspiracy to commit mail fraud in violation of 42 U.S.C. § 371. At that proceeding, Chaffee admitted to the Judge that in early 1992, while overseeing contractors engaged in the removal of asbestos from the Hoboken Plant, he had arranged to receive $ 150,000.00 in exchange for hiring a contractor who employed non-union laborers, in contravention of Maxwell House's policies.

 In its December 1, 1993 letter, Maxwell House had notified Chaffee that his employment was retroactively terminated as of September 25, 1992--the date on which he had been given notice of his suspension pending the FBI's investigation.

 On February 4, 1994, pursuant to his guilty plea, the defendant Chaffee was sentenced by Judge Simandle. The transcript of those proceedings reveals that Judge Simandle stated that Chaffee had "played an important role in a very serious crime," and inquired of Chaffee's then counsel, in the presence of the defendant, "shouldn't there be some recognition of how serious that situation was and shouldn't that militate toward a short-term imprisonment for Mr. Chaffee?" Chaffee's counsel answered that his client's crime was an aberration in Chaffee's life, that he had treated his family well and had cooperated with the government in prosecuting others involved in the Maxwell House Plant close-down affair. Significantly, Chaffee's lawyer also represented that "he's also been, as a result of this, for his 25 years of service with Maxwell House, he's lost two years of severance pay which is $ 90,000.00. " (emphasis added).

 The Judge did not sentence Chaffee to a custodial sentence. Instead, he imposed upon him three years probation, 750 hours of community service and a $ 2,500.00 fine. The Judge stated, among other things, that "I also know that you've suffered much already separate and apart from anything this Court would do in imposing a sentence."

 On September 30, 1994, Chaffee's counsel, who earlier had represented him before Judge Simandle, filed the instant suit seeking a recovery of Chaffee's severance and stay-on bonuses he claims Kraft wrongfully has withheld from Chaffee. The complaint has three counts: Count One sounds in breach of contract; Count Two pursues punitive damages; and Count Three seeks attorneys' fees.

 Standard for Summary Judgment

 Summary judgment is appropriate where the moving party establishes that "there is no genuine issue of material fact and that [it] is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party must show that if the evidentiary material of record were reduced to admissible evidence in court, it would be insufficient to permit the non-moving party to carry its burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The opposing party must set forth specific facts showing a genuine issue for trial and may not rest upon the mere allegations or denials of its pleadings. Sound Ship Building Co. v. Bethlehem Steel Co., 533 F.2d 96, 99 (3d Cir. 1976), cert. denied, 429 U.S. 860, 50 L. Ed. 2d 137, 97 S. Ct. 161 (1976).

 Discussion/Analysis

 Kraft seeks summary judgment on two grounds: (1) the earlier representations of Chaffee's attorney before the sentencing Judge in the criminal proceedings bar the present civil lawsuit; and (2) if the suit is not barred, Chaffee nevertheless is not entitled to the benefits of the Plan.

 Kraft asks the Court to apply the doctrine of judicial estoppel to bar Chaffee's breach of contract claim. The Court agrees, and also suggests this case presents an example of "legal chutzpah" not often seen. As Leo ...


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