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RE: THOMAS DOWNEY III v. UNITED FOOD AND COMMERCIA

October 2, 1996

Re: Thomas Downey III
v.
United Food and Commercial Workers Union Local 1262, AFL-CIO et al.



The opinion of the court was delivered by: LECHNER

 ORIGINAL FILED WITH THE CLERK OF THE COURT

 Counsel:

 This is a wrongful termination action brought by plaintiff Thomas Downey III ("Downey") against defendants United Food and Commercial Workers Union Local 1262 ("Local 1262"), the United Food and Commercial Worker's Union ("UFCW"), Vitale Enterprises, Inc. - Foodtown Supermarkets, ("Vitale"), Kenneth Heller ("Heller"), John McElroy ("McElroy") and Luis Cordero ("Cordero") (collectively, the "Defendants"). Jurisdiction over the first count of the complaint is alleged pursuant to 29 U.S.C. § 185. Downey alleges supplemental jurisdiction over the remaining counts.

 On 5 March 1996, Downey filed a seven count amended complaint (the "Complaint"). Downey alleges claims of breach of the collective bargaining agreement, wrongful termination, breach of the duty of fair representation, unlawful discrimination pursuant to N.J.S.A. § 10:5-1 et seq., false arrest, false imprisonment, defamation and intentional interference with employment. Downey seeks compensatory and punitive damages, attorney's fees, costs of suit and other such equitable relief as deemed proper.

 On 29 August 1996, the Defendants submitted two separate motions, pursuant to Rule 12N, Appendix N ("Rule 12N") of the General Rules for the District of New Jersey. Defendants Vitale, Heller and McElroy (the "Vitale Defendants") submitted a combined Motion for Summary Judgment Dismissing Plaintiff's Claims Against Them and For Sanctions Pursuant to Rule 11 of the Federal Rules of Civil Procedure ("Rule 11") (the "Vitale Motion for Summary Judgment" and the "Vitale Motion for Sanctions"). Defendant Local 1262 submitted a Motion to Dismiss Amended Complaint and For Summary Judgment (the "Local 1262 Motion for Summary Judgment"). *fn1"

 Facts

 A. The Parties

 Downey is a citizen of the State of New Jersey residing in Hudson County. In April 1993, Vitale hired Downey as a part-time bookkeeper for its Foodtown Supermarket in Kearny, New Jersey (the "Kearny Foodtown"). Complaint, P 11. Downey became a full-time employee in November 1994 and remained a full-time employee until he was terminated on or about 26 May 1995. *fn2" Complaint, P 11-12. When hired, Downey became a member with the UFCW and Local 1262. Complaint, P 13. Downey remained in good standing with UFCW and Local 1262 at all times relevant to the Complaint. Complaint, P 1.

 UFCW and Local 1262 are unincorporated labor associations organized to represent the interests of their members and to negotiate collective bargaining agreements. Complaint, P 2. Local 1262 maintains an office at 1389 Broad Street in Clifton, New Jersey. The UFCW maintains an office at 1775 K Street, N.W., Washington, D.C. Complaint, P 2.

 Vitale is a corporation organized and existing under the laws of the State of New Jersey. Complaint, P 3. Vitale owns the Kearny Foodtown at which Downey was employed. Complaint, P 3. Vitale maintains an office at 9 Bi-Plaza, Old Tappan, New Jersey. Complaint, P 3.

 Heller is an individual who resides in Old Tappan, New Jersey. Heller was employed by Vitale as Director of Loss Prevention. Complaint, P 4. Downey alleges at all times relevant to this action, Heller was working with the knowledge and consent of Vitale. Complaint, P 4. Downey alleges Heller has recently been reassigned to the position of assistant store manager. Deposition of Richard Plishka ("Plishka Dep. Tr."), dated 30 July 1996, attached to Nardone Cert. as Exhibit 3; attached to Arturi Reply Cert. as Exhibit U, 7:15-23.

 McElroy is an individual who resides in Kearny, New Jersey. Complaint, P 5. McElroy was employed in the capacity of a security officer by Vitale. Complaint, P 5. Downey alleges that at all times relevant to this action, McElroy was acting on behalf of and with the consent of Vitale. Complaint, P 5.

 Cordero is an individual who resides in Belleville, New Jersey. Complaint, P 6. Cordero was employed as a cashier at the Kearny Foodtown. Complaint. P 6. The employment of Cordero at Kearny Foodtown commenced in the Fall of 1994 and terminated on or about 24 May 1996. Complaint, P 6.

 B. Discovery and Investigation of the Fraudulent Credit Card Charges

 On or about 31 May 1995, Heller interviewed Cordero at the Kearny Foodtown about the Fraudulent Credit Card Charges. 8 August 1996 Deposition of Kenneth Heller ("Heller Dep. Tr."), attached to Arturi Reply Cert. as Exhibit W, 140:13-14; Deposition of Luis Cordero ("Cordero Dep. Tr."), dated 25 July 1996, attached to Nardone Cert. at Exhibit 4; attached to Arturi Cert. as Exhibit V, 44:5-18. Heller questioned Cordero for approximately one hour. Cordero Dep. Tr. 50:15-17. Cordero admitted to fraudulently processing the credit card transactions and taking the corresponding amount of cash from the register till. Cordero Dep. Tr. 21:17 to 35:25.

 Cordero testified that, during the interview, Heller threatened him both physically and emotionally. Cordero Dep. Tr. 53:13-18. Cordero contends Heller threatened to arrest him and threatened to call his parents to inform them Cordero was a homosexual and a thief. Cordero Dep. Tr. 53:13-18. Cordero testified Heller used derogatory language when he referred to Downey and Cordero as homosexuals. Cordero Dep. Tr. 57:11 to 59:11. Cordero contends Heller promised he would not press charges or call his parents if Cordero promised to cooperate. Cordero Dep. Tr. 53:20 to 54:54:1. Cordero testified Heller said he wanted a statement from Cordero so that the owner of the Kearny Foodtown could fire Downey. Cordero Dep. Tr. 83:15 to 83:21. Heller denies threatening Cordero during his interview and denies promising Cordero that Foodtown would not press charges if Cordero implicated Downey. Heller Dep. Tr. 265:11-12.

 Cordero wrote a two page statement on 2 June 1995 apologizing for his actions and implicating Downey in the Fraudulent Credit Card Charges. *fn3" Cordero Dep. Tr. 44:22 to 46:25; Handwritten Confession of Luis Cordero ("Cordero Confession"), dated 2 June 1995, attached to Arturi Cert. as Exhibit M.

 C. Downey's Discharge and Arrest

 On or about 2 June 1995, Heller, accompanied by McElroy, interviewed Downey about the Fraudulent Credit Card Charges at the Kearny Foodtown. Opposition Brief at 6; Vitale Moving Brief at 6. Downey testified Heller and McElroy sat on either side of him at a table, blocking his egress from the room. Deposition of Thomas Downey ("Downey Dep. Tr."), dated 16 July 1996, attached to Nardone Cert. as Exhibit 5; attached to Arturi Reply Cert. as Exhibit T, 50:3 to 51:12. Downey testified he requested several times the opportunity to leave but his requests were ignored by Heller and McElroy. Downey Dep. Tr. 58:1 to 59:9. Downey testified Heller verbally threatened him with jail time. Downey Dep. Tr. 59:10-12. Downey indicated he was afraid Heller or McElroy would become physical with him because of incidents he had witnessed previously between Heller or McElroy and other people. Downey Dep. Tr. 59:10-25. Following the interview, Heller and McElroy escorted Downey from the store. Opposition Brief at 7.

 Later in the day on 2 June 1995, Heller went to the Kearny Police Department and reported a theft from Kearny Foodtown in the amount of $ 3,049.81. Heller implicated Downey and Cordero in the theft. Investigation Report by Kearny Police, dated 2 June 1995, attached to Nardone Cert. as Exhibit 6.

 Detective Michael Cinardo ("Cinardo") met with Cordero at the Kearny Police Department on 3 June 1993. 3 June 1995 Police Report, attached to Nardone Cert. as Exhibit 6. Cordero contends Heller was also at the Kearny Police Department and spoke with Cordero prior to his meeting with Cinardo. Cordero Dep. Tr. 48:11 to 49:5. Cordero testified Heller told him to "answer [the questions] the way that I'm supposed to answer [the questions]." Cordero Dep. Tr. 48:11 to 49:5. Heller allegedly indicated to Cordero that no charges would be pressed against Cordero and that he would not go to jail. Cordero Dep. Tr. 48:11 to 49:5. Thereafter, Cordero provided a statement to Cinardo implicating Downey in the Fraudulent Credit Card Charges. 3 June 1995 Police Report.

 Downey contends Heller falsely represented to Cinardo that Downey had worked on all occasions when the Fraudulent Credit Card Charges occurred. Cinardo Police Report Notes, attached to Nardone Cert. as Exhibit 9. *fn4" Downey contends Cinardo testified Heller referred to Downey and Cordero as "lovers" and "queers." Opposition Brief at 9. *fn5"

 On 7 June 1995, Downey voluntarily appeared at the Kearny Police Department and was charged with forgery and theft by deception. 7 June 1995 Arrest Report, attached to Nardone Cert. as Exhibit 10.

 On 10 June 1995, Heller interviewed another Kearny Foodtown cashier, Joy SanFilippo ("SanFilippo") *fn6" , regarding a Fraudulent Credit Card Charge that was processed on 12 May 1995. *fn7" Opposition Brief at 10. Downey contends Heller extracted a statement from SanFilippo that implicated Downey in that incident. Opposition Brief at 9. During her interview with Heller, SanFilippo indicated Downey was the bookkeeper on duty when Cordero used the cashier number of SanFilippo to manually enter a credit card charge of $ 312.14. Opposition Brief at 9-10. At a later date, SanFilippo reviewed the appropriate time records and realized she was mistaken and Downey was not the bookkeeper on duty. Opposition Brief at 10. SanFilippo testified she believed her statements to be true at the time she made them on 10 June 1995. Opposition Brief at 10-11. *fn8"

 On 21 June 1995, Heller provided the Kearny Police Department with additional information regarding Fraudulent Credit Card Charges on 5 May 1995 and 12 May 1995. 23 June 1995 Police Report, attached to Nardone Cert. as Exhibit 16. Detective Vincent Thomas ("Thomas") informed Heller that not enough evidence existed to charge Cordero in those incidents. Nardone Cert. at Exhibit 16. Heller then signed a complaint against Cordero for the original incident. Nardone Cert. at Exhibit 16. Ramon de la Cruz, the Hudson County prosecutor who handled the criminal action against Downey and Cordero, testified Heller objected to the disposition of the case through administrative remand and Heller wanted the case to go to the Grand Jury. 25 July 1995 Deposition of Ramon de la Cruz ("Cruz Dep. Tr."), attached to Nardone Cert. as Exhibit 19, 37:12 to 38:16.

 On 14 December 1995, Heller testified before the Grand Jury about the incidents surrounding the Fraudulent Credit Card Charges. Grand Jury Tr. 3:7 to 8:5. Downey alleges Heller perjured himself when he testified that a manager number was required to override the manual entry of a credit card. Opposition Brief at 13. The procedure of using a manager number to override a manual entry of a credit card was instituted three days after the last Fraudulent Credit Card Charge was made. 15 May 1995 Vitale Memorandum, attached to Nardone Cert. as Exhibit 21.

 D. The Filing of the Downey Grievance

 On 7 June 1995, Downey met with Peter Smith ("Smith"), the business representative for Local 1262, to prepare a grievance report (the "Grievance Report"). 7 June 1995 Local 1262 Grievance Report, attached to Nardone Cert. as Exhibit 22. The Grievance Report was filed with Joseph Emerson, store manager at Kearny Foodtown. 28 March 1996 Affidavit of Peter M. Smith ("Smith Aff."), attached to Gaudioso Cert. as Exhibit B; attached to Nardone Cert. as Exhibit 23, P 5. *fn9"

 On 29 June 1995, Smith met with George DuBose ("DuBose"), a Assistant Field Director of Local 1262, Richard Plishka, Director of Human Resources at Vitale and Heller (the "29 June Meeting"). Smith Aff., P 8. Although Downey was invited to the 29 June Meeting, he did not attend. Smith Aff., PP 7-8.

 At the 29 June Meeting, Heller and Plishka showed Smith and DuBose the documentation which traced the Fraudulent Credit Card Charges back to Cordero. Smith Aff., P 9. Heller and Plishka told Smith and DuBose that Downey, as a bookkeeper, had to have knowledge of fraud, otherwise he was not properly following company procedures on balancing out the credit card vouchers at the registers. Smith Aff., P 9. Smith and DuBose also received a copy of the Cordero statement implicating Downey, which was taken by the Kearny Police. Smith Aff., P 9.

 On 6 July 1995, Smith and DuBose again met with Plishka and Heller. Smith Aff., P 13. Downey was also present. Smith Aff., P 13. Plishka told Smith and DuBose that there had been 14 Fraudulent Credit Card Charges and Downey and Cordero were working on each of the days they occurred. Smith Aff., P 13. The Vitale representatives did not have any documentation at the meeting to demonstrate Downey was personally involved, but indicated they would provide it. Smith Aff., P 13.

 Another meeting was held on 14 July 1995. Smith Aff., P 16. Downey was invited but did not attend. Smith Aff., P 16. Plishka and Heller could not provide documentation implicating Downey because, pursuant to company policy, the sheets recording the reconciliation of each register close out were destroyed the following day. Smith Aff., P 16.

 Smith met with Martin Vitale ("Martin Vitale"), the President and Chief Executive Officer of Vitale, on 17 July 1996. Smith Aff., P 17. Smith told Martin Vitale that it could not be established Downey participated in the Fraudulent Credit Card Charges. Smith Aff., P 17. At best, Vitale would only be able to prove Downey violated company accounting procedures by not informing the company of the volume of credit card transactions. Smith Aff., P 17. Smith told Martin Vitale the violation of company accounting procedures did not warrant termination of employment under the "proper cause" provisions of the collective bargaining agreement (the "Vitale CBA"). Smith Aff., P 17. Smith negotiated a settlement with Vitale whereby Downey received two-thirds of his back pay and reinstatement to his position at the Hoboken Foodtown (the "Settlement Agreement"). Smith Aff., P 17. Downey did not receive full back pay because Vitale believed the failure of Downey to follow the company accounting procedures warranted some discipline. *fn10" Smith Aff., P 17.

 At the conclusion of the meeting, Smith called Downey and informed him of the Settlement Agreement. Smith Aff., P 18. Smith and Downey arranged to meet on 21 July 1995 (the "21 July Meeting") at the office of Local 1262 so that Downey could sign the grievance release (the "Grievance Release"). Smith Aff., P 18. Downey was placed on the work schedule at the Hoboken ...


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