Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

McGough v. Broadwing Communications

December 21, 2001

GERALD N. MCGOUGH AND MATTHEW J. HAVILAND, PLAINTIFFS,
v.
BROADWING COMMUNICATIONS, INC., DEFENDANTS.



The opinion of the court was delivered by: Irenas, District Judge

OPINION

Plaintiffs Gerald McGough ("McGough") and Matthew Haviland ("Haviland") filed the instant suit against their former employer, Broadwing Communications, Inc. ("Broadwing"), seeking recovery of allegedly unpaid commissions and bonuses. The Complaint asserts claims for breach of contract, promissory estoppel, unjust enrichment, as well as for violations of the Pennsylvania Wage Payment and Collection Law, 43 P.S. §260.1 et. seq. ("WPCL"), and the Pennsylvania Commissioned Sales Representatives Act, 43 P.S. § 1471 et. seq ("CSRA"). Finally, Plaintiffs also bring a cause of action for an accounting of those commissions which they allege remain due and owing. Presently before the Court is Defendant Broadwing Communications, Inc.'s Motion to Dismiss Counts IV (WPCL), V (CSRA), and VI (Accounting) of Plaintiffs' Complaint pursuant to Fed. R. Civ. P. 12(b)(6). This Court has jurisdiction over this matter pursuant to 28 U.S.C. §1332. For the reasons set forth below, Defendant's motion to dismiss will be granted in part and denied in part.

I.

Plaintiffs Gerald N. McGough and Mathew J. Haviland are former employees of Defendant Broadwing Communications, Inc., a provider of telecommunications services doing business throughout the United States. Plaintiffs were originally hired by Broadwing's predecessor, IXC Communications, on or about August 30, 1998, and employed in the company's retail sales division, Eclipse Telecommunications ("Eclipse"). (Compl. at ¶¶ 9-11). Plaintiff McGough assumed a position as a regional sales director and Plaintiff Haviland was employed as a branch manager. Id. According to the complaint, as compensation for their work, Plaintiffs were paid a base salary plus commissions. (Compl. at ¶ 12). As a branch manager, Haviland was allegedly entitled to commissions on each sale by a sales person in his branch (referred to as "override commissions"). (Compl. at ¶ 16). In his position as sales director, McGough was similarly entitled to override commissions on all sales within all branches in his region. (Compl. at ¶ 17).

On or around November 15, 1999, Defendant Broadwing acquired IXC Communications. (Compl. at ¶ 8). Following the acquisition, Broadwing began implementation of a variety of changes with respect to the compensation of sales managers. Broadwing initially published and distributed a document entitled "Broadwing Communications, Inc. Sales Compensation Plan for Branch Sales Manager" ("Compensation Plan") which was to become effective beginning April 1, 2000. (Compl. at ¶ 20). Under the original Compensation Plan, commissions were to be calculated based on a customer's third month of billing following the implementation of telecommunications services. However, according to the complaint, while attending a Branch Sales Managers' Summit in Dallas, Texas, hosted by Broadwing, Plaintiffs were allegedly "informed that the Compensation Plans Company-Wide, were not being followed. They were further informed that several changes had already been implemented and others might yet be introduced." (Compl. at ¶21). Plaintiff McGough was informed, for instance, that the formula for calculating override commissions had been modified so that managers' commissions from sales were being determined on the basis of a customer's first rather than the third month of billing. (Comp. at ¶22). According to Plaintiffs, Broadwing did not publish or distribute a new Compensation Plan detailing the changes which had apparently been made. (Compl. at ¶24). Sums earned on commission were simply deposited in Plaintiffs' accounts and no detailed statement of sales commissions was ever provided. (Compl. at ¶25).

In addition to override sales commissions, the Complaint further alleges that "after the acquisition of Broadwing, certain key employees, including Plaintiffs, were promised management bonuses." (Compl. at ¶27). Correspondence dated September 22, 1999 and addressed to Plaintiff Haviland is attached to Plaintiffs' complaint as an exhibit and is purported to set forth the basis for these management bonuses. The letter reads in relevant part:

Mathew [Haviland], you are an essential member of the "NewCo" team. As such, you are eligible for special compensation for your role in establishing the new company. If you are an active employee on May 19, 2000, you will receive $6,468.80. If you are an active employee on November 17, 2000 you will receive $6,468.80. (Compl. at Exhibit Exhibit D).

The complaint suggests that Plaintiff McGough received a similar letter promising two separate bonuses of $10,143.00 should he remain an active employee of the company on each of same two respective dates. (Compl. at ¶¶ 27-29). Both McGough and Haviland were each paid the "first half" of this management bonus on or about May 19, 2000. (Compl. at ¶ 28).

Following Broadwing's acquisition of IXC Communications, Plaintiffs were retained in their original positions as employees of the retail sales division until October 30, 2000. On that date, both McGough and Haviland were informed that their employment with the company was being terminated. (Compl. at ¶¶ 13-15). Plaintiffs were allegedly reassured that they would each receive the salary and commissions owed to them for services rendered through October 31, 2000. Id. However, they were also informed that the "second half" of their management bonuses due on November 17, 2000, would not be paid. (Compl. at ¶ 29)..

Following their termination, Plaintiffs filed the instant suit seeking to recover unpaid commissions and a variety of bonuses for services provided prior to their termination. *fn1 Plaintiffs' complaint asserts several causes of action. Counts I through III assert claims for breach of contract, promissory estoppel, and unjust enrichment. Counts IV and V seek recovery based on alleged violations of Pennsylvania Wage Payment and Collection Law ("WPCL") and the Pennsylvania Commissioned Sales Representatives Act ("CSRA"), respectively. Finally, under Count VI of the complaint, Plaintiffs seek an itemized accounting of the commission payments which remain outstanding. Defendant's motion to dismiss under F. R. Civ. P. 12(b)(6) is limited to Counts IV through VI of Plaintiffs' complaint.

II.

Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In resolving a Rule 12(b)(6) motion, the court primarily considers allegations in the complaint, although matters of public record, orders, items appearing in the record of the case and exhibits attached to the complaint may also be taken into account. See Chester County Intermediate Unit v. Pennsylvania Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990). In doing so, the court must accept as true all of the factual allegations contained in the complaint and any reasonable inferences that can be drawn therefrom. See Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996). Dismissal of claims under Rule 12(b)(6) should be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Although the court must assume as true all facts alleged, "[i]t is not . . . proper to assume that the [plaintiff] can prove any facts that is has not alleged." Associated General Contractors of Calif., Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). Finally, when "confronted with such a motion, the court must review the allegations of fact contained in the complaint; for this purpose the court does not consider conclusory recitations of law." Pennsylvania ex rel. Zimmerman v. Pepsico, Inc., 836 F.2d 173, 179 (3d Cir. 1988) (emphasis added).

A.

In Count IV of the complaint, Plaintiffs seek to recover unpaid commissions and bonuses under the Pennsylvania Wage Payment and Collection Law, 43 Pa. Stat. Ann. § 260.1, et seq. (West 1992) ("WPCL"). *fn2 The WPCL does not create any substantive statutory right to wages or other forms of compensation; rather, it merely provides a statutory vehicle for employees to recover earned wages from an employer who has breached an underlying contractual obligation to provide such compensation. See Weldon v. Kraft, Inc., 896 F.2d 793, 801 (3d Cir. 1990). The basic purpose of the WPCL is "to remove some of the obstacles employees face in litigation by providing them with a statutory remedy when an employer breaches its contractual obligation to pay wages." Hartman v. Baker, 766 A.2d 347, 352 (Pa. Super. 2000) (quoting Oberneder v. Link Computer Corp., 449 Pa.Super. 528, 528 (1996), affirmed, 548 Pa. 201 (1997)). In addition to providing for the recovery of earned but unremitted compensation, the statute permits an employee whose earned wages ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.