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BRENNAN v. NATIONAL TEL. DIRECTORY CORP.

April 7, 1995

AMY BRENNAN, Plaintiff,
v.
NATIONAL TELEPHONE DIRECTORY CORPORATION, PENN-DEL DIRECTORY CORPORATION, and BELL ATLANTIC ENTERPRISES INTERNATIONAL, INC., Defendants.



The opinion of the court was delivered by: J. CURTIS JOYNER

 Joyner, J.

 I. BACKGROUND

 A. Summary of Facts

 The defendants in this case are National Telephone Directory Corporation ("NTD"), a New Jersey corporation with its principal offices in Somerset, New Jersey; Penn-Del Directory Corporation ("Penn-Del"), a related corporation with offices in Bensalem and Harrisburg, Pennsylvania; and Bell Atlantic Enterprises International, Inc. ("Bell Atlantic"), which became a general partner in both NTD and Penn-Del after purchasing the two companies from Bell of Canada Enterprises ("BCE") in January of 1993. The plaintiff, Amy Brennan, is a New Jersey resident who was hired on April 7, 1986, and began working as a sales training coach in Penn-Del's office in Bensalem, a Philadelphia suburb.

 By January 1, 1987, Ms. Brennan had been promoted to the position of district sales manager and transferred to Penn-Del's office in Harrisburg. In November of 1988, Ms. Brennan returned to Bensalem and assumed the position of account executive. As an account executive, Ms. Brennan was responsible for the selling and servicing of advertising in the Yellow Pages of the telephone directory. One of the more important aspects of her position was to ensure the accuracy of the paperwork for a given account. A minor lapse in the accuracy of the paperwork could result in a crucial error, such as an incorrect address or phone number, appearing in an advertisement.

 To combat sales errors, the defendants employed a written policy regarding "chargeable errors." Pursuant to that policy, the division manager and customer service manager would, once an error was discovered, investigate the circumstances and make a determination as to whether to charge the error to the sales representative. After the investigation, the account executive was given the opportunity to discuss the matter and offer his or her version of the events. The division manager and customer service manager would then decide whether to charge the account executive with the sales error. A sales representative would be assessed a chargeable error if he or she was either fully or partially responsible for the error. The account executive would then sign an acknowledgement form, which alerted the account executive as to the following company policy: (1) an account executive was to be counseled after each chargeable error; (2) the account executive would be given an in depth interview with the vice president of sales after four chargeable errors; and (3) the company could take "drastic measures," including termination, if the account executive were assessed with four chargeable errors in a given calendar year.

 The record reflects that Ms. Brennan was one of the defendants' more valuable employees. Indeed, she was twice recognized as sales representative of the month and also won trips to Cancun, Mexico and Aruba as rewards for her performance. The record also reflects, however, that Ms. Brennan had some difficulty with the paperwork involved in processing the accounts, and that she was criticized, on more than one occasion, for a lack of attention to detail. During 1990 and 1991, Ms. Brennan was assessed five chargeable errors, but she was not terminated because she collected less than four errors in each year.

 In January of 1992, Ms. Brennan went on disability leave due to the complicated nature of her pregnancy. She was scheduled to return to work in July of 1992. In the spring of 1992, however, six sales errors surfaced involving accounts assigned to Ms. Brennan. Ms. Brennan's division manager, James Schmitt, contacted her in June of 1992 and informed her of the six potential chargeable errors that were pending against her. The evidence presented suggests that Mr. Schmitt had already decided to charge her with three of the errors at the time they informed her of the pending charges. Documentation regarding the errors was forwarded to Ms. Brennan on June 18, 1992. *fn1" On June 28, 1992, Ms. Brennan was again contacted by Mr. Schmitt to discuss the errors. Ms. Brennan admitted that she was at fault with respect to one account, but denied making any mistakes regarding the remaining five chargeable errors. Nonetheless, Mr. Schmitt decided to terminate Ms. Brennan. After consulting with the vice president of sales, who concurred with the decision to terminate, Mr. Schmitt informed Ms. Brennan that she would be fired effective July 9, 1992. Ms. Brennan never received counseling after each chargeable error, never signed an acknowledgement form regarding the errors, and was never interviewed by the vice president of sales.

 B. Procedural Summary

 Ms. Brennan filed a charge with the Equal Opportunity Employment Commission ("EEOC") on October 6, 1992, alleging that Penn-Del and NTD had discriminated against her on the basis of gender and pregnancy. On January 7, 1993, she filed a similar action with the Pennsylvania Human Relations Commission ("PHRC"). The EEOC issued a "no cause" determination on August 6, 1993, in which it concluded that four errors per year is sufficient cause for discharge, and that both men and women had been terminated for violating the chargeable errors policy.

 On November 8, 1993, Ms. Brennan commenced the instant action by filing a complaint in this Court. Ms. Brennan's amended complaint, filed on May 31, 1994 pursuant to this Court's Memorandum and Order of April 28, 1994, *fn2" contains ten counts, four of which arise under federal law. Count I of the amended complaint contains an allegation that the defendants violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., by terminating her employment on account of her gender and pregnancy. In Count II, Ms. Brennan claims that the defendants violated Title VII by discriminating against her in the terms and conditions of her employment on account of her pregnancy. Ms. Brennan further alleges, in Count III, that the defendants undertook a determined effort to rid working mothers from their work force. In Count IV, Ms. Brennan sets forth a claim for punitive damages under Title VII.

 Ms. Brennan has also brought six claims under state law. Count V contains the allegation that the defendants violated both the Pennsylvania Human Relations Act ("PHRA"), 43 Pa. Cons. Stat. Ann. § 951 et seq., and the New Jersey Law Against Discrimination ("NJLAD"), N.J.S.A. 10:5-1 et seq., by discriminating against Ms. Brennan on account of her gender and pregnancy. In Count VI, Ms. Brennan alleges that the defendants discriminated against her in the terms and conditions of employment based upon her pregnancy disability in violation of the NJLAD. Count VII sets forth a claim for punitive damages under the PHRA and NJLAD. In Count VIII, Ms. Brennan alleges that the defendants breached an implied covenant to discharge only for just cause in violation of Pennsylvania and New Jersey law. Count IX has been deleted. In Count X, Ms. Brennan alleges that the defendants breached an implied covenant of good faith and fair dealing under Pennsylvania and New Jersey law. Finally, in Count XI, Ms. Brennan asserts that she was discharged in violation of the public policy of New Jersey. On November 23, 1994, the defendants filed the instant motion, in which they seek an award of summary judgment as to the entire amended complaint.

 II. DISCUSSION

 A. The Summary Judgment Standard

 This Court is authorized to award summary judgment "if the pleadings, depositions 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." Fed. R. Civ. P. 56(c). Thus, the Court's responsibility is not to resolve disputed issues of fact, but to determine whether there exist any factual issues to be tried. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-49, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). The non-moving party must raise "more than a mere scintilla of evidence in its favor" in order to overcome a summary judgment motion. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir. 1989) (citing Liberty Lobby, 477 U.S. at 249). Further, the non-moving party cannot rely on unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a summary judgment motion. Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). Boiled to its essence, the summary judgment standard requires the non-moving party to create a "sufficient disagreement to require submission [of the evidence] to a jury." Liberty Lobby, 477 U.S. at 251-52.

 B. Whether NTD and Bell Atlantic are Proper Defendants

 At the outset, we address the defendants' argument that summary judgment should be awarded to NTD and Bell Atlantic on the grounds that they are not proper defendants in the instant case. The defendants assert that Penn-Del, and not NTD or Bell Atlantic, was Ms. Brennan's employer. They further note that Bell Atlantic did not become a general partner of the NTD and Penn-Del until six months after Ms. Brennan had been discharged. For her part, Ms. Brennan asserts that Penn-Del and NTD are interrelated and indistinguishable, and that she considered herself to be an employee of both companies. Further, she argues that Bell Atlantic is liable as either a successor in interest or a general partner of Penn-Del and NTD.

 1. NTD

 We addressed these issues in our Memorandum and Order disposing of the defendants' motion to dismiss. At that time, we declined to dismiss the claims as to NTD because there had not yet been any discovery taken on the issue of whether NTD was Ms. Brennan's employer. We noted, however, that if "defendants want wish to raise this issue after a proper factual determination, they are free to do so." Brennan v. National Tel. Directory Corp., 850 F. Supp. 331, 339 (E.D. Pa. 1994)("Brennan I "). Since that time, Ms. Brennan has offered evidence to suggest that NTD and Penn-Del are interrelated companies. For instance, the record reveals that one man is the president and chief executive officer of both companies. In addition, Ms. Brennan offers Mr. Schmitt's business card, which features the corporate logo of both companies, as further evidence to support her general conclusion.

 But while Ms. Brennan has produced ample evidence to suggest that the two companies are related, she has failed to create a disputed issue of fact regarding whether she was employed by NTD. Indeed, the evidence presented shows that she signed an employment agreement in which she expressly acknowledged that she was employed by Penn-Del. Moreover, the evidence reveals that NTD has offices only in New Jersey, and that Ms. Brennan was never employed in New Jersey. The evidence offered by Ms. Brennan might suggest that NTD and Penn-Del are related companies, but it does not create an issue of fact regarding whether NTD was her employer. Since Ms. Brennan has failed to raise a shred of evidence to suggest that she was employed by NTD, we must grant the defendants' summary judgment motion with respect to NTD on all of the claims in the amended complaint.

 2. Bell Atlantic

 The defendants offer two arguments in support of their request for summary judgment with respect to the claims against Bell Atlantic. First, they contend that since Bell Atlantic was not a named defendant in the EEOC action, they are not a proper defendant in the instant case. Second, they assert that Bell Atlantic had no relationship to any of the other parties in this lawsuit until six months after Ms. Brennan was discharged. Both of these arguments were made by the defendants in their motion to dismiss. In our Memorandum and Order, we rejected the former argument, and noted that the latter argument was premature in that discovery had not yet been taken concerning whether Bell Atlantic could be held liable as a successor corporation. Brennan I, 850 F. Supp. at 339-40. Thus, now that the discovery phase has concluded, we address the issue of successor liability.

 Generally, the successor doctrine arises in the context of discrimination cases in situations where the assets of a defendant employer are transferred to another entity. Thus, the purpose of the doctrine is to ensure that an employee's statutory rights are not "vitiated by the mere fact of a sudden change in the employer's business." Musikiwamba v. ESSI, Inc., 760 F.2d 740, 750 (7th Cir. 1985). The doctrine allows the aggrieved employee to enforce against the successor a claim he could have secured against the predecessor. Id. ; see Kolosky v. Anchor Hocking Corp., 585 F. Supp. 746, 749 (W.D. Pa. 1983)(Title VII ...


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