The opinion of the court was delivered by: HERBERT HUTTON, District Judge
Presently before the Court are Defendant Acuity Specialty Products
Group, Inc.'s d/b/a Zep Manufacturing Company Motion for Summary Judgment
(Docket No. 40) and Plaintiff Karen Lee Gaul's response thereto (Docket
This suit concerns the alleged discriminatory employment actions
against Karen Lee Gaul ("Gaul") by Acuity Specialty Products Group, Inc.
d/b/a Zep Manufacturing Company ("Zep") and National Service Industries,
A. National Service Industries, Inc.
NSI is a corporation formed in Delaware and maintains its principal
place of business in Georgia. From the start of Gaul's employment with
Zep in August of 1994 until 1996, NSI was qualified to do business in
Pennsylvania and Zep was a wholly-owned subsidiary of NSI.
In 1996 NSI was restructured. As part of its corporate restructuring, NSI withdrew as a corporation qualified to do
business in Pennsylvania. It transferred all of its interest in Zep to a
new subsidiary named National Service Industries, Inc., a company
incorporated in Georgia with is principal place of business in Georgia
("NSI-Georgia"). As a result, Zep became a subsidiary of NSI-Georgia
which in turn was a wholly owned subsidiary of NSI.
In August 2001 NSI underwent another corporate restructuring. NSI spun
off a number of companies, including Zep, into a new corporation known as
Acuity Specialty Products Group, Inc. ("Acuity"). According to NSI, Zep
is a wholly owned subsidiary of Acuity since September 1, 2001.
Additionally, on November 15, 2001, NSI-Georgia ceased to exist and
withdrew is qualification to do business in Pennsylvania.
B. Gaul's Employment with Zep
Zep is a manufacturer and supplier of industrial and institutional
maintenance and sanitation products. On August 22, 1994, Gaul was hired
as a sales representative for Zep's Philadelphia branch under the
supervision of Joseph Rotondi ("Rotondi"). Gaul performed well during
her first year and received the 1995 "Rookie of the Year" award for
having the highest sales of any first-year representative in Zep's
mid-Atlantic region. In April 1995 Gaul was given the additional
responsibility of working as a Field Coach for other sales
representative. In 1996 Gaul was promoted to Accelerated Field Sales
Manager, a position which included both sales and management duties.
Gaul made it to clear to her supervisors that she was interested in
advancing to the position of Branch Sales Manager ("BSM"). According to
Gaul, at the time of her eligibility to become a BSM, Rotondi repeatedly
requested for Gaul to be promoted but those requests were denied by two
of Zep's vice-presidents, Bill Buchman ("Buchman") and Alien Soden
("Soden"). In denying her the promotion, Soden allegedly stated that
"women attract the wrong kind of candidates and will not make good
managers." Joseph Rotondi Aff. ¶ 13 (Docket No. 52, Ex. 3). When Gaul
asked Buchman why she was not being promoted, Buchman allegedly said,
"When are you going to give up this craziness, and just get barefoot and
pregnant?" Karen Gaul Aff. ¶ 58 (Docket No. 52, Ex. 2).
In June 1998 Gaul was finally promoted to BSM of Zep's Philadelphia
branch. As BSM Gaul's responsibilities included (1) hiring, training,
retaining and developing new sales representatives; (2) working with and
developing veteran sales representatives; (3) working with sales
representatives in the field; (4) helping representatives increase their
sales; and (5) developing the members of her team into future managers.
Based on Gaul's performance as a BSM for fiscal year ("FY") 1999, she
received the National Branch Sales Manager of the Year award.*fn2
In the spring of 1999, Zep had an opening for a District Sales Manager ("DSM") for the mid-Atlantic District, which encompasses
the Philadelphia and Washington, D.C. branches. Gaul expressed an
interest in the position to Richard Reisig ("Reisig"), the Division Sales
Manager for the Northeast Division. Reisig allegedly responded by asking
her why she did not stay home and have kids and just be a sales
representative without management responsibilities. Reisig interviewed
male employees for the DSM position in an office setting. In contrast, he
interviewed Gaul in a car while she drove him to New Jersey.
In July 1999, Ethan Powers ("Powers") was promoted to the DSM position
and became Gaul's direct supervisor. According to Powers, Gaul's primary
responsibility was to grow the sales revenues of the Philadelphia branch
by hiring, training, and developing new sales representatives, and
helping veteran representatives grow their business. Gaul was also
responsible for the performance of all the sales representatives in
Philadelphia, including those who did not report directly to her.
In December of 2000, Gaul received her performance review for FY 2000.
Gaul received a rating of "Exceeds Expectations" for achieving the sales
representatives headcount goal, "Meets Expectations" for increasing
revenue by 6% for the second six months of the fiscal year, and "Below
Expectations" for not meeting the Branch sales revenue goals. Overall,
Gaul was rated as "Meets Expectations." As a result, Powers gave Gaul a
3% raise. According to Zep, Gaul's performance weakened in the following months.
Specifically, sales revenues for the Branch were below target every month
and Gaul was not hiring additional sales representatives nor spending
enough time in the field with the representatives. Powers contends that
he met with Gaul several times during the spring of 2001 to discuss the
Philadelphia branch's lagging revenues and the lack of new sales
representative hired. Gaul then allegedly inquired about returning to a
sales representative position because she felt it would allow her to
spend more time with her terminally ill husband.
According to Gaul, in the spring of 2001, Powers told her to hold off
on hiring new sales representatives until July because of budget
concerns. Gaul also disputes that she received any verbal warning about
her performance and maintains that Powers in fact assured Gaul that she
was doing well. Moreover, Gaul contends that she merely inquired about
the possibility of taking on a different job in the event she needed to
work fewer hours. Gaul denies that she told Powers she wanted to return
to the sales representative position. At the same time, Gaul spoke with
James Logan ("Logan"), Direction of Human Resources and Labor Relations,
to relate her concerns that Reisig may be treating her differently
because she was a woman.
Gaul was demoted on August 29, 2001 to the position of Field Sales
Manager ("FSM"). William Aimis ("Aimis") replaced Gaul in the BSM position. According to Zep, Powers decided to demote Gaul
based on (1) her failure to meet the Philadelphia Branch's sales revenue
and profitability targets for two consecutive fiscal years and (2) Gaul's
failure to fulfill expectations with respect to hiring, retaining, and
developing new sales representatives. On August 30, 2001, Gaul received a
memorandum from Powers in which he stated that the reason for her
demotion was because of the sales results for fiscal year 2001. No other
factors were mentioned.
Gaul believes that the decision to demote her was made jointly by
Powers, Reisig, Logan, James Piva, Northeast Division Operations Manager,
and Sam Daniels, the most senior sales executive at the time. Gaul notes
that while Zep had a policy of warning employees about their poor
performance prior to taking an adverse action, Gaul was demoted without
warning and without a chance to improve.
On September 6, 2001, Gaul turned down the FSM position and asked to be
reclassified as a sales representative. On September 12, 2001, Gaul
received a memorandum from Powers regarding her compensation for the
sales representative position. Unlike the initial offer of employment for
the FSM position, the memorandum specifically required Gaul to sign a
release waiving any claims arising out of her employment with Zep. Gaul
refused to sign the release after consulting with her attorney. On
September 27, 2001, Gaul received a letter from Logan. The letter stated
that if Gaul failed to report to work on October 1, 2001, Zep will take
the position that Gaul no longer wished to work for the company. Gaul
reported to work on that day but was told to return home after she
refused to sign the September 12, 2001 employment agreement.
From September 2001 to November 2001, Gaul believed she was no longer
employed by Zep and was therefore entitled to three months of severance
pay according to her 1998 BSM Employment Agreement. She also filed for
unemployment compensation. Zep initially maintained that Gaul was not
entitled to the severance pay because she was demoted, and not
terminated. Zep later revised its position and paid Gaul the three
months' severance pay. Additionally, after learning that Gaul filed for
unemployment compensation, Logan wrote to the Unemployment Bureau
accusing Gaul of fraud. He later stated that he had been "overzealous. "
Gaul in turn withdrew her claim for unemployment once she was paid.
On November 26, 2001, Gaul filed a charge of gender discrimination with
the Pennsylvania Human Rights Commission ("PHRC").
On December 1, 2001, Gaul signed a Sales Representative's Exclusive
Account Agreement with Zep and returned to work as a sales representative
in the Philadelphia branch on December 10. The Agreement required Gaul to
sell $50,000 after six months, $75,000 after nine months, and $100,000
after one year in exchange for receiving a minimum monthly compensation
of $6400 for one year. In comparison, other new representatives at Zep
were required to sell $28,000 in their first six months. During the next few months,
Gaul failed to meet her established sales goals. Gaul alleges that she
did not receive any business leads or book of business, even though
substantial business was given to male employees who had been demoted.
Gaul also alleges that she did not receive any sales support from Aimis,
her supervisor. On August 26, 2002, Powers decided to stop paying Gaul
her minimum monthly ...