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McElroy v. Fidelity Investments Institutional Services Co., Inc.

United States District Court, D. Rhode Island

March 22, 2018

JENNIFER MCELROY, Plaintiff,
v.
FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC., and FIDELITY FINANCIAL ADVISOR SOLUTIONS, Defendants.

          MEMORANDUM AND ORDER

          John J. McConnell, Jr. United States District Judge.

         Jennifer McElroy's former employer Fidelity Investments Institutional Services Company, Inc. ("Fidelity") and Fidelity Financial Advisor Solutions ("FFAS") move for summary judgment of Ms. McElroy's claims for gender discrimination, retaliation, and breach of contract. This motion raises issues of the applicable statute of limitations for breach of a contract that contains compensation provisions and the factual and legal elements required to assert gender and family and medical leave claims in the employment setting.

         Facts[1]

         Ms. McElroy worked for Fidelity for almost seventeen years. In 2004, she began work as an internal wholesaler. Her primary responsibilities were to prospect for new business within the corporate market. She worked in FFAS, a business unit within Fidelity now known as Fidelity InstiUitional Asset Management. FFAS had two channels of distribution, intermediary and direct. Within FFAS is the Fidelity Institutional Liquidity Management Solutions group ("FILMS").

         In 2009, Ms. McElroy became regional vice president, a wholesaler role in which Ms. McElroy's primary responsibility was to manage existing client relationships. She worked in the intermediary channel with banks and broker dealers to provide updates, market information, product information, and to assist intermediaries with opportunities to bring in new business to Fidelity.

         Ms. McElroy had a contract with Fidelity that set forth the plan for the payment of commissions to her.[2] The plan set forth the calculation of commissions, bonuses, and other incentives based on determinations by Fidelity of the plan payout. In January 2012, Fidelity informed Ms. McElroy that it had overpaid her 2011 commissions to the tune of $61, 149.29. Ms. McElroy requested information about the overpayment, but no significant information was ever forthcoming. When asked to sign a repayment letter, Ms. McElroy refused. She objected to any deductions or repayment claiming it would not be legitimate, Despite her protestation, Fidelity unilaterally deducted 75% of the total amount it alleged it overpaid Ms. McElroy from her paychecks.

         At the beginning of the summer in 2012, Ms. McElroy's supervisor, William Pickens, [3] informed her that Fidelity was going to promote her by the end of that year at the next promotional cycle. The promotion was to include a title change and $50, 000 more in compensation. Mr. Pickens had the same discussion with a male employee, Jason Campellone, who was functioning in the same area of responsibility as Ms. McElroy but was based in Atlanta and covered the Southeast territory.[4]

         In the fall of 2012, Ms. McElroy, while serving as regional vice president, informed her supervisor Mr, Perkins and his supervisor Joyce Marsilia that she was pregnant and planned to take a medical leave due to her pregnancy under the Family and Medical Leave Act ("FMLA").[5]

         A few weeks later, at the end of 2012, Mr. Pickens informed Ms. McElroy that the promotion and raise she had been expecting was not going to take place. He told her that there would be no promotions because Fidelity was experiencing challenging market conditions. Despite this representation, Fidelity promoted a male employee, James Scalisi, from a regional vice president in the direct channel of the FILMS group to vice president-the same level promotion that Fidelity had promised to Ms. McElroy. Mr. Scalisi had not asked for parental or other medical leave. Mr. Pickens acknowledged that the same economic factors that affected Ms. McElroy's promotion also affected Mr. Scalisi's position.

         Ms. McElroy began her FMLA leave when her child was born in the spring of 2013. In October 2013, after she returned from her FMLA leave, she initially returned to her position as a regional vice president. Shortly thereafter, Mr. Pickens informed Ms. McElroy that a senior vice president in charge of managing client relationships in New York and New Jersey was vacating her position. This position was two pay grades higher than Ms. McElroy's. He asked Ms. McElroy to cover this position on a temporary basis while they searched for a permanent employee. Fidelity describes this as a reward "for ten years of solid work by giving her the interim opportunity to take over a job two grades above her current role, with the hope that she would win the spot on a permanent basis." ECF No. 20-1 at 1.

         Ms. McElroy agreed, despite the fact that she considered this position less desirable than her existing position, as it entailed extra travel and increased work responsibilities while a new parent. Ms. McElroy served in this position for eight months yet she never received the position's $375, 000 established base salary (which was $200, 000 greater than the base salary of her old position).

         In January 2014, Ms. McElroy informed Mr. Pickens and Ms. Marsilia that she would not apply to fill permanently the position she was temporarily occupying and that she would like to return to her old job as soon as they hired someone permanently. Four months later, Ms. McElroy again inquired about the status of Fidelity filling the position so that she could return to her regular position. She explained that this temporary position was causing her undue hardship. Mr. Pickens told Ms. McElroy that Fidelity had eliminated her old position, despite having assured her for weeks that it was open and that Fidelity was holding it open for her.

         Ms. McElroy resigned in May 2014. She claims that Fidelity constructively discharged her. She did not receive any severance.

         Procedure

         Ms. McElroy filed suit against Fidelity and FFAS. She alleges in her suit that Fidelity: l) discriminated against her for being pregnant and for notifying her boss that she planned to become pregnant again at some point in the future; 2) retaliated against her because she previously took and would likely again take FMLA leave; and 3) breached its contract with her by recouping tens of thousands of dollars of an alleged commission overpayment.[6]

         Fidelity and FFAS have moved for summary judgment (ECF No. 20), to which Ms. McElroy objects (ECF No. 34), and the Defendants reply (ECF No. 39).

         Legal Standard

         "Summary judgment is a drastic remedy because it deprives the parties of the opportunity to have a jury determine the outcome as enshrined in the Seventh Amendment to the United States Constitution." Colman v. Faucher, 128 F.Supp.3d 487, 490 (D.R.I. 2015) (footnote omitted). Per Federal Rule of Civil Procedure 56(a), the Court shall grant summary judgment when there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." To determine whether there is a genuine dispute as to a material fact, the Court must assess whether "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court must construe the facts in the light most favorable to the nonmoving party, Audette v. Town of Plymouth, Mass., 858 F.3d 13, 20 (1st Cir. 2017). Furthermore, "[t]he Court does not 'weigh the credibility of the testimony/ but presumes 'that a rational factfinder would accept it as stated by the witness."' Delgado v. Pawtucket Police Dep't, 747 F.Supp.2d 341, 349 (D.R.I. 2010) (quoting Gonzalez v. El Dia, Inc., 304 F.3d 63, 68 (1st Cir. 2002)). The moving party bears the burden of identifying the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Then, the burden shifts to the nonmoving party to identify at least one genuine issue of material fact. Mendes v. Medtronic, Inc., 18 F.3d 13, 15 (1st Cir. 1994).

         I. Defendant FFAS

         Defendants assert that FFAS is not a properly named Defendant because it is not a separately incorporated entity, but rather is merely a division within Fidelity. Ms. McElroy does not present any factual evidence or legal support for a separate claim against this division of Fidelity. In fact, Ms. McElroy does not dispute the fact that "FFAS is not and never was[] a distinct corporate entity." ECF No. 21 ¶ 5; see ECF No. 36 at 1 (not disputing this fact).[7] Therefore, the Court GRANTS the Motion for Summary Judgment as to Defendant FFAS.

         II. Breach of Contract Claim

         Ms. McElroy asserts that Fidelity breached the Employee Compensation Plan with her by its "unilateral assertion, .. to seek reimbursement of what it claims were excess commissions/incentives paid to Ms. McElroy ... as a result of what [Fidelity] claims was a manual administrative error." ECF No. 34-1 at 12; see ECF No. 1-1 ¶¶ 49-54 (Count VI). Fidelity avers that Ms. McElroy did not bring this claim for wages within the applicable statute of limitations. Ms. McElroy counters that this "is not a claim for unpaid wages, " but rather a breach of a contractual obligation to Ms. McElroy "under the terms of the variable compensation plan, by denying her the contractual benefits to which she was due." ECF No. 34-1 at 12.

         Fidelity's argument turns on whether this is actually a breach of contract claim or a Rhode Island Payment of Wages Act claim. The Payment of Wages Act allows "[a]ny employee or former employee . . . aggrieved by the failure to pay wages and/or benefits or misclassification in violation of chapter 28-12 and/or 28-14" to bring suit to obtain relief. R.I. Gen. Laws § 28-14-19.2(a). However, the statute of limitations for such a claim is only three years. Id. § 28-14-19.2(g). Fidelity claims that this three-year limitations period-not the ten-year period applicable to breach of contract claims-controls.

         The Rhode Island Supreme Court instructs that, in analyzing a claim for purposes of determining the appropriate statute of limitation, the Court is to "look to the substance of a claim, rather than the pleading's nomenclature." Bisbano v. Strine Printing Co,, Inc., 135 A.3d 1202, 1209 (R.I. 2016) (citing Martin v. Howard, 784 A.2d 291, 301 (R.I. 2001)).

         Ms. McElroy alleges the following in her Complaint:

24. Commencing in 2012, Plaintiff was subject to a number of unilateral reductions in her commissions, predicated on the employer's assertion that she had been overpaid.
51. Plaintiff was entitled to certain compensation pursuant to the Employers' Compensation Plan.
52. Plaintiff fulfilled her obligations under the Employers' Compensation Plan, making her eligible for certain variable incentive compensation.
53. The Defendants unilaterally reduced Plaintiffs commissions in the year 2012 on its position that payments made to the Plaintiff ...

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