The opinion of the court was delivered by: Wolin, District Judge.
Now before the Court is defendant's motion for summary judgment
in this employment action. Plaintiff, Paul Swider, a former
employee of defendant, HA-LO Industries, Inc. ("HA-LO"), brings
this action for breach of contract, promissory estoppel,
discriminatory discharge in violation of the New Jersey Law
Against Discrimination ("LAD") and fraud. Defendant has moved for
summary judgment on all counts of the Complaint.
The Court has considered the submissions of the parties and
decided this motion on the papers pursuant to Rule 78 of the
Federal Rules of Civil Procedure. For the reasons discussed
below, the Court will grant defendant's motion. Plaintiff's
Complaint will be dismissed in its entirety, with prejudice.
1. Mergers and Acquisitions
In 1997, defendant, a Chicago-based company, acquired NB
Specialties, Inc. ("NB"), a Montville, New Jersey-based company
that distributed promotional products, such as merchandise
bearing a company's name or logo. Defendant was in the same
industry as NB. After the acquisition, defendant maintained the
Montville office, and employed Caryl and Neil Breithaupt, the
former owners of NB. Caryl was hired as the office manager for
New Jersey and Neil was hired as Sales Manager, also in New
Jersey. Both Breithaupts were given written employment contracts
specifying that they would hold those particular positions for
five years and that they could only be dismissed for cause.
During this same period, plaintiff was working for Red Sail
Merchandising ("Red Sail"), a San Francisco-based company.
Plaintiff worked in their Hillside, New Jersey office as regional
sales director. Sometime in 1997, plaintiff learned that Red Sail
was to be sold to defendant. Herb Levy, Vice President —
Northeast for defendant, contacted plaintiff to express
defendant's interest in keeping him on after the acquisition.
Plaintiff was told that defendant needed his experience to help
in developing the New Jersey office. Plaintiff and Levy met
several times to discuss plaintiff's employment with defendant.
Plaintiff also met with Greg Kilrea, defendant's CFO, for the
Defendant offered plaintiff a position as Sales Manager for New
Jersey, but did not inform plaintiff of what his specific duties
would be. Plaintiff was told that it was not defendant's practice
to enter into written contracts with management-level
employees.*fn1 At the time of his hiring, plaintiff did not know
that Neil Breithaupt was also employed as Sales Manager for New
Jersey or that Neil Breithaupt had a written employment contract.
Plaintiff was told that defendant's sales managers were
typically expected to make sales, but that he would not be
responsible for any sales himself. Swider Dep. 32:11-23.*fn2
Plaintiff was further told by defendant's Chief Operating
Officer, Richard Magid, to disregard the comments of a fellow Red
Sail employee, Ann Nepo, suggesting that plaintiff would not be
Sales Manager after the acquisition. Magid told plaintiff not to
worry about Nepo and assured him that defendant did want to hire
him. Magid further told plaintiff that he knew the kind of
individual Nepo was and that she had previously caused trouble at
Red Sail. He suggested that if Nepo became a serious problem, her
termination was a possibility. Swider Dep. 101:18-104:12.
Notwithstanding the offer from defendant, plaintiff did make a
limited inquiry regarding other possible employment. Plaintiff's
efforts in that regard were, however, relatively few and
unfocused. He did not send out his resume or take any action
beyond "networking and talking to people." He had no actual
interviews. Swider Dep. 35:3-36:3. Tom McNulty, a friend of
plaintiff and then-client of Red Sail, invited plaintiff to come
work for him "anytime [he] wanted." Plaintiff and McNulty had a
number of conversations about plaintiff's joining McNulty's
company, one of which occurred before plaintiff had even spoken
to Levy about working for defendant. These conversations occurred
at McNulty's offices when plaintiff was there on Red Sail
business or visiting socially. Swider Dep. 36:7-39:11.
McNulty wanted plaintiff to work as a commissioned salesperson
for Distro-Sales, a company owned by Green, Lind & McNulty,
McNulty's advertising firm. At the time, Distro-Sales had no
employees other than Green, Lind & McNulty employees who ran it
and Distro-Sales had never employed a salesperson before
plaintiff was offered the job. McNulty did not give plaintiff an
offer in writing and they did not discuss the job in specific
terms because plaintiff indicated that he was not interested.
Plaintiff did not want to work strictly on a commission basis
and, therefore, was not interested in working for Distro-Sales.
Plaintiff obviously preferred working for defendant, who promised
him that, notwithstanding his title as Sales Manager, he would
not have to make any sales of his own. In fact, McNulty's
deposition testimony suggests that plaintiff would not have gone
to work for Distro-Sales, even if he had not had an offer from
defendant. See McNulty Dep. 40:1-6 ("[Plaintiff] wanted a
position which was more of a management kind of a position and a
position that had, as he indicated to me, a steadier income.").
Plaintiff never told anyone at defendant-company that he had
turned down a job offer from McNulty, Lind & Green. Plaintiff
accepted defendant's offer of employment and, on October 20,
1997, he began working for defendant in their Hillside office at
a higher salary than he had been earning at Red Sail. As noted
above, Neil Breithaupt had already been hired as Sales Manager as
well, so plaintiff and Breithaupt were co-sales managers for New
Jersey, with plaintiff operating out of the Hillside office and
Breithaupt based in Montville. Apparently, it was understood by
all parties that, notwithstanding their titles, plaintiff was in
fact Neil's superior, and that plaintiff had, in plaintiff's own
words, "direct responsibility, overall responsibility for all
operations and sales and
Neil was — Neil's responsibility was for his own sales." Swider
Approximately three months after defendant acquired Red Sail,
in or about January 1998, defendant merged its Montville and
Hillside offices into a single, new office space in Florham Park,
New Jersey. Plaintiff had primary responsibility for the design
and layout of that space. He worked with the architects and
Sabina Filipovic, from defendant's Chicago office. Plaintiff
states that he involved Neil Breithaupt in "all the decisions,"
but that plaintiff maintained ultimate decision-making authority.
Plaintiff remembers several occasions on which he overrode Neil's
suggestions, but contends that on the whole, they sought to
achieve consensus through compromise. Swider Dep. 53:20-54:18.
Following the merger of the two offices, plaintiff continued to
have overall responsibility for operations and ultimate
decision-making authority. Neil Breithaupt, though still Sales
Manager in name, assisted plaintiff with operations and made
sales of his own. Plaintiff's understanding, gleaned from
conversations with Herb Levy and Greg Kilrea, was that Neil was
"to grow his sales," which was essentially what salespersons at
defendant-company did, rather than what managers did. Swider
57:5-58:7. After the merger of the offices, Caryl Breithaupt was
2. Problems in the New Jersey Office
Shortly after the merger of the Montville and Hillside offices,
problems developed in defendant's New Jersey office. The problems
seem to have derived both from tensions created by the corporate
organization and from the clash of personalities of the
individuals working together in the newly merged office.
Plaintiff acknowledges that the office was not running
smoothly, but he faults the Breithaupts and Anne Nepo for this
situation. According to plaintiff, the problems were caused by
(1) Caryl Breithaupt's "controlling behavior" and constant
"interference" in the operations of the office, and (2) both
Breithaupts' extreme unhappiness resulting from the "bad deal"
they made with defendant. Plaintiff contends that the Breithaupts
felt betrayed by defendant in that they believed that Neil was to
be Sales Manager and Caryl was to be Office Manager, but neither
ultimately was. Moreover, both of their contracts contained
non-compete clauses that prevented them from taking any customers
with them should they decide to leave defendant, and both had
received stock options, which were proving unprofitable.
Plaintiff apparently received complaints from a number of
employees about Caryl Breithaupt. Swider Dep. 65:9-67:8;
Plaintiff also blames personnel problems and low morale on the
"animosity" Anne Nepo felt towards him. Plaintiff knew what Nepo
thought of him from the beginning. Even before he became Sales
Manager, she had been spreading rumors about him. Then, when he
was manager, Nepo complained to Mike Stoll, Manager of
defendant's White Plains office, about plaintiff. Nepo indicated
that she did not respect plaintiff, that he was not helping her
or managing her at all. Stoll told plaintiff about this
conversation with Anne and told him "that he had to give this a
chance . . . working with her and trying to manage and assist her
and show that he could be effective . . ." Stoll Dep. 15:22-25.
Stoll informed others in higher management about the situation
between plaintiff and Nepo.
There were other complaints about plaintiff and concerns on the
part of management about plaintiff's performance as well.
Management felt that plaintiff was being paid an excessively high
salary for a
manager who was not making sales. Moreover, management felt that
plaintiff was not driving profits sufficiently and that the New
Jersey office was not meeting its performance expectations.
According to Rich Magid, on more than one occasion in late 1997
and early 1998, he and plaintiff discussed changing plaintiff's
job description to require him to make sales of his own.
Plaintiff was not interested and refused to accommodate such a
change. Magid Dep. 51:9-53:6. Greg Kilrea also testified that
Neil Breithaupt complained to him more than once about plaintiff.
Apparently, Neil informed Kilrea that "the office [was]
disorganized, that [plaintiff] was not effectively managing
either the sales force or the administrative staff, that he was
negatively affecting morale, that the sales reps from Red Sail,
the old Red Sail, were going around [plaintiff] and going to Neil
as a sales management resource because they weren't comfortable
with [plaintiff's] sales management ability." Kilrea Dep.
37:2-23. Kilrea transmitted complaints made to him to Magid so
that Magid was aware of the situation. Kilrea Dep. 39:21-23.
Therefore, upper management was hearing complaints about
plaintiff from both Stoll and Kilrea.
3. The Bernal/Nepo Letter
On May 5, 1998, Tanja Bernal, a member of the support staff,
sent a letter to Sabina Filipovic, the head of human resources at
corporate headquarters in Illinois, complaining about plaintiff.
See Kiernan Certif., Exh. Q. The letter discussed problems that
Bernal perceived in the New Jersey office, particularly regarding
plaintiff's management. Specifically, it noted that morale was
low and attributed that to plaintiff, whom Bernal indicated was
"a very ineffective manager." Kiernan Certif., Exh. Q, at 1. The
letter suggested that plaintiff was not working hard at his job
and was not responsive to the concerns or needs of his staff.
Id. at 2. It further blamed plaintiff for problems that the
staff was having with Barbara King, the Operations Manager whom
plaintiff had hired. Id.
When Filipovic received this letter, she spoke immediately to
Rich Magid and Gene Ehrenfeldt. She shared the letter's contents
and asked how they wanted her to handle it. It was agreed that
Magid and Ehrenfeldt would deal with it because they interacted
more with plaintiff. Filipovic Dep. 26:10-27:6. Filipovic also
spoke to Neil Breithaupt because she wanted to ascertain his
perspective on the situation, given that he and plaintiff were
co-managers at that time. Filipovic Dep. 28:18-29:5; 31:7-24.
Therefore, the letter's existence and contents were widely known
among upper management.
Filipovic also spoke to Anne Nepo, whom she knew was involved
in the drafting of the letter in some way. She informed Nepo that
her behavior — discussing her problems with a particular manager
with another employee — was unprofessional and inappropriate and
could lead to her termination. Filipovic Dep. 34:2-22.
Plaintiff learned of the letter from Sabina Filipovic, but did
not learn who had written it or exactly what it said. She
informed him only that they had received a letter complaining
about him and, as a result, she was overseeing his decisions more
carefully. Swider Dep. 89:2-90:2. Plaintiff approached Neil
Breithaupt about the letter. Neil acknowledged his awareness of
the letter's existence and provided plaintiff with a copy of the
letter that he had received several weeks before. Swider Dep.
90:7-18. Plaintiff subsequently learned from another employee
that many employees had known of the letter before it was signed
by Bernal and delivered to management. According to plaintiff,
this other employee indicated that pressure
had been put on others in the office to sign a letter complaining
about plaintiff. Swider Dep. 93:20-94:8.
Within only a few weeks of the letter's transmission to
Filipovic, plaintiff received a phone call from Bernal, the
letter's author. She called to apologize about the letter and to
inform plaintiff that she had not in fact written it, but rather
that Anne Nepo had. Anne Nepo had apparently pressured Bernal
into signing and sending the letter. Bernal later sent a
retraction letter to plaintiff. See Kiernan Certif., Exh. S. In
the retraction, Bernal again apologized for the letter's contents
and explained that she sent it to put an end to Nepo's harassing
behavior towards her, which included phone calls to Bernal's
4. Restructuring and Termination
In late May or early June 1998, it became apparent that the
co-manager structure was failing and had to be eliminated. Magid
solicited thoughts of others in upper management on restructuring
and on the possibility of elevating plaintiff to the status of
sole manager. Kilrea agreed with Magid that some corporate
reorganization was necessary. Kilrea Dep. 40:17-41:16. Filipovic,
for her part, believed that the co-manager arrangement was not
working, but she was not sure that plaintiff was capable of
managing the sales department on his own. She felt that "Paul
wasn't going to be strong enough for that location in a sales
manager role due to the fact that he didn't necessarily have
sales experience." Filipovic Dep. 44:3-9. She shared these
thoughts with Rich Magid and Gene Ehrenfeldt. Filipovic Dep.
44:10-15. Ultimately, the decision was made to dispense with the
co-manager structure and to make plaintiff Sales Manager and
change Neil Breithaupt to salesperson.
According to plaintiff, at approximately that time, he received
a phone call from Lou Weisbach, defendant's CEO and President,
telling him how pleased the company was with him and that he was
getting "very good reports" about plaintiff. Swider Dep.
Notwithstanding this alleged positive feedback, not long after
the restructuring, Magid decided to fire plaintiff. Magid did not
make this decision alone. About one month before plaintiff's
termination, Mike Stoll had spoken to different members of upper
management about the tension between plaintiff and Nepo. He
indicated that the situation "had gotten to a point where [he]
didn't feel it could be resolved . . ., unless [the company] made
a significant change, and . . . that [the] best solution at this
point [was] to let Paul go." Stoll Dep. 20:17-23. Stoll
recommended this because he believed that they would "be able to
move the office ahead faster and more effectively by replacing
Paul." Stoll Dep. 23:7-11.
Gene Ehrenfeldt, Sabina Filipovic and Greg Kilrea also
participated in Magid's decision to terminate plaintiff.
Ehrenfeldt Dep. 43:3-10. They met to discuss the continuing
problems in the New Jersey office and how to handle them. They
discussed the feedback that had been coming from different
individuals in the New Jersey office regarding its functioning
and morale. They agreed that the office was not running
efficiently and that sales were not meeting the expectations of
management. Kilrea Dep. 48:10-24. The ultimate decision was to
terminate plaintiff. Ehrenfeldt Dep. 43:3-10.
At the time of plaintiff's discharge, the position that McNulty
had offered to plaintiff may have remained open, but plaintiff
contends that he was not made another offer to accept the