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CIPOLLA v. HMS HOST CORPORATION

October 20, 2005.

COSTANTINO CIPOLLA, Plaintiff,
v.
HMS HOST CORPORATION, Defendant.



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

OPINION

This matter comes before the Court upon Defendant's motion for summary judgment. Plaintiff alleges employment discrimination due to his filing for bankruptcy, in violation of (1) § 525(b) of the Bankruptcy Act and (2) New Jersey common law prohibiting employment termination that is contrary to a clear mandate of public policy (in this case, that of § 525). The Court decides the motion on the papers in accordance with Fed.R.Civ.P. 78.

BACKGROUND

  Plaintiff Costantino Cipolla ("Plaintiff") was first hired by defendant HMS Host Corporation ("Defendant" or "Host") in September 1999 as an assistant manager for two restaurants in New Jersey. Defendant is a food and beverage retail concessionaire that operates concessions under brand names. Plaintiff worked for Defendant for nearly three years and received several promotions until becoming manager of Chili's Restaurant in Times Square, New York City. He resigned on or about August 30, 2002.

  On or about September 1, 2003, Plaintiff recommenced working with Defendant for his former supervisor at Chili's, Rick Biglin, who had become the general manager of HMS's Newark Liberty Airport concessions. Mr. Biglin had been partially responsible for Plaintiff's prior promotions. The two occasionally socialized outside of work and remained in touch after Plaintiff's resignation in 2002. Plaintiff wanted to work for Defendant again because of his good working relationship with Mr. Biglin, so Plaintiff quit his job to do so. Plaintiff underwent training at Newark airport and began his duties as a store manager at one of Mr. Biglin's terminals.

  Defendant's Human Resources Manager who oversaw Defendant's Newark Airport facilities was Noelle Voska who was responsible for hiring, maintaining employee files, and handling day to day human resources issues. She was on a leave of absence when Mr. Biglin offered Plaintiff employment in August 2003. When she returned in early September 2003, she learned that Plaintiff had already been working without the completion of formal hiring procedures. She quickly provided Plaintiff with a formal offer letter, backdated to September 1, 2003, and a background check authorization form. The letter and authorization form both stated that employment was contingent upon successful completion of the background check.

  Plaintiff consented to the routine background investigation and was told by Mr. Biglin and Ms. Voska that he did not need to fill out his entire employment application because of his prior experience with Defendant. Plaintiff received his first paycheck from HMS on September 19, 2003, compensating him for services performed through September 11, 2003. Defendant's background investigation policy, instituted in the summer of 2002, prohibits an employee in a supervisory capacity from commencing employment until the results of a credit check are performed. The checks are done post-offer because Defendant needs the applicant's birth date for the check, but under Defendant's policy the offer is expressly contingent upon successful completion of the check and the applicant is not officially hired until the background check is complete. The employee may only attend a one-day welcome orientation and a one-day computer-based training before the check results are reported. The checks are performed by an outside agency called American Background Information Service ("American Background") which emails results to HMS, in this case to Ms. Voska. The criteria and scoring model was established by American Background, following industry standards, with input and final approval from Defendant. The email results only provide a red (Cannot Hire), yellow (Dept. of Loss Prevention/Human Resources will decide after further review), or green (Okay to Hire) flag based on the scoring model analyzing the candidate's debt payment history.*fn1

  On or about September 17, 2003, Ms. Voska received an email from American Background indicating that Plaintiff's credit report generated a red flag. Thomas Stein, the Director of Loss Prevention who worked out of corporate headquarters in Maryland, later reviewed the details of Plaintiff's credit report. It indicated late debt payments and a bankruptcy filing dated August 1, 2003. Mr. Stein does not review the results of every background check. He has the authority and discretion to change a red flag to a green flag, and exercises such authority when extenuating or special circumstances may have caused the bad credit. Ms. Voska does not know the criteria that determine a flag's color, never sees an applicant's underlying credit report, and has no authority to change a flag's color.

  On or about the same day, Mr. Biglin informed Plaintiff that his background check produced a red flag. Plaintiff stated that he was taking care of his debt obligations through bankruptcy and offered to provide his bankruptcy documentation as evidence of taking responsibility. He provided the documentation to Mr. Biglin later that day who turned the materials over to Ms. Voska that night. Ms. Voska represented that she would provide the materials to Mr. Stein.*fn2 Mr. Biglin told Plaintiff not to worry because the matter would be resolved.*fn3

  Mr. Stein first heard from Ms. Voska regarding Plaintiff's red flag soon after Ms. Voska received the red flag by email. Without knowing whom the candidate was, Mr. Stein indicated that a red flag meant the candidate could not be hired. Later that night, Sam Chandler, director of recruiting, called Mr. Stein regarding the red flag. Mr. Stein then reviewed Plaintiff's credit report for the first time. It showed that Plaintiff had four accounts 120 days past due and four accounts that were sent to collection, which exceeds the condition necessary to automatically generate a red flag. It also showed that Plaintiff had filed for bankruptcy. The next day, Ms. Voska's supervisor, Valerie Kane-Curtis, contacted Mr. Stein to see if Plaintiff's flag could be changed to green, but Mr. Stein insisted it remain red. Ms. Kane-Curtis also contacted Senior Vice President Essi Pourhadi to see if he could influence the flag's color, but Mr. Pourhadi said he could not. Mr. Stein testified in deposition that he made the decision to leave Plaintiff's flag red because he saw nothing that warranted changing it. Mr. Stein stated that he considered that Plaintiff had filed for bankruptcy as evidence that he was attempting to deal with his debts, but he did not take the bankruptcy into consideration regarding changing the flag's color because it is not a part of the scoring criteria.

  In 2003, the year Plaintiff was terminated, Defendant had 85 applicants who received red flags and none were hired by Defendant. 23 of the applicants had bankruptcy indicated on their credit report, and 62 did not.*fn4

  Within one week of the return of Plaintiff's red flag, Ms. Voska terminated Plaintiff from his position. Plaintiff later received a letter confirming his termination, citing his credit history as the reason.

  STANDARD OF REVIEW

  Pursuant to Fed.R.Civ.P. 56(c), a motion for summary judgment will be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In other words, "summary judgment may be granted only if there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party." Miller v. Indiana Hosp., 843 F.2d 139, 143 (3d Cir. 1988). All facts and inferences must be construed in the light most favorable to the non-moving party. Peters v. Delaware River Port Auth., 16 F.3d 1346, 1349 (3d Cir. 1994). The judge's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249. "Consequently, the ...


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