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Mary Trapani v. Greatwide Logistics Services

August 29, 2011

MARY TRAPANI
v.
GREATWIDE LOGISTICS SERVICES, LLC., ET AL.



The opinion of the court was delivered by: McLaughlin, J.

MEMORANDUM

The plaintiff was hired by Joseph Chandler ("Chandler") in January 2008 as a vice president of Organizational Development for a Pennsylvania based trucking company. She was terminated by Chandler in 2009 along with other employees as a result of cost containment measures taken by the company. The plaintiff has brought gender discrimination and retaliation claims against Chandler, two other co-workers, her employer and related companies. The defendants have moved for summary judgment and the Court will grant the motion.

I. The Summary Judgment Record

A. Background

Defendant GWTM, LLC ("GWTM") is a Langhorne, Pennsylvania, based trucking company specializing in the hauling of heavy equipment, building materials, and other specialty freight. GWTM is a subsidiary of Greatwide Logistics Services, Inc. ("GWLS"), an integrated logistics company headquartered in Dallas, Texas. Plaintiff Mary Trapani ("plaintiff") was hired by GWTM's predecessor, Greatwide Truckload Management, LLC ("Truckload Management").

In 2007, ("Chandler") became president of Truckload Management. Chandler took over a company which had been assembled through the acquisition of three separate motor carriers. His challenge was to convert these separate operating entities into a single integrated business unit designed to handle the rapidly expanding growth in freight and revenue. During 2007, Truckload Management grew from a $240 million run rate to one approaching $300 million, with a proposed budget for 2008 of $310 million. The run rate is equal to the company's adjusted gross revenue excluding its fuel surcharge revenue. Dep. of Joseph Chandler, Ex. B to Defs.' Mot ("Chandler Dep."), at 5-6, 66, 115-17, 140-41.

In order to assist in the consolidation of the human resource functions and the various administrative operations at the corporate level, and to prepare the company for further anticipated growth, Chandler created two new staff vice president positions, each with an annual base salary of $150,000: (1) the Vice President of Administration position; and (2) the Vice President of Organizational Development position. Chandler hired John Rosch ("Rosch") for the VP of Administration position. Chandler Dep. at 34, 115-16, 141-42.

The VP of Organizational Development position was designed to provide supervision over the corporate human resource functions and to serve as a liaison with the company's independent sales agents and truck operators. The company's employee headcount was not large enough to justify a VP of Human Resources position, but an executive position could be justified if the duties were expanded to include the liaison role with the company's independent sales agents and truck operators. Chandler Dep. at 37, 45; Dep. of Mary Trapani, Ex. C. to Defs.' Mot ("Pl.'s Dep."), at 76-77; December 24, 2007, Email and Offer Letter from Chandler to Plaintiff, Ex. D to Defs.' Mot ("12/24/07 Offer Letter").

Truckload Management's CFO, Pam Prior, whom Chandler had hired in August 2007, suggested to Chandler that he consider the plaintiff for the newly created VP of Organizational Development position. Prior and Trapani were friends and had worked together at a previous employer. Chandler Dep. at 36-37; Dep. of Pamela Prior, Ex. E to Defs.' Mot ("Prior Dep."), at 6-9, 11.

Chandler interviewed the plaintiff in late 2007 and made the decision to offer her the position. In January 2008, the plaintiff began working as the VP of Organizational Development, and she reported to Chandler. Chandler Dep. at 43, 139; Pl.'s Dep. at 47-50; 12/27/04 Offer Letter.

B. Company's Financial Difficulties and Downsizing During the summer and fall of 2008, Truckload

Management's parent company, GWLS, defaulted on its banking covenants in two consecutive fiscal quarters. The defaults caused customer and agent concerns about the long-term future of Truckload Management. Chandler Dep. at 10-11, 142-44.

In the late summer and early fall of 2008, the subprime mortgage crisis devastated the credit markets, resulting in a worldwide recession. Truckload Management was hard hit in every segment of its freight business. Chandler began to look for ways to bring the Company's expenses in line with decreasing revenues. Chandler Dep. at 19, 143-44.

In October 2008, Greatwide Logistics and its affiliated companies, including Truckload Management, filed for Chapter 11 bankruptcy relief in the United States Bankruptcy Court for the District of Delaware. The filing accelerated the Company's decline in that certain shippers refused to continue to do business with a motor carrier under Bankruptcy Court protection. Chandler Dep. at 14, 18-19, 144-45; Bankruptcy Order, Ex. A to Defs.' Mot.

The company's actual total revenue for 2008 equaled $287 million and fell short of the proposed budget of $310 million. Revenues continued to plummet in 2009, ending the year with $134 million in revenues, more than a 40% decline from 2008. Chandler Dep. at 145-46.

There was also an across-the-board reduction in independent sales agents and truck operators. The number of drivers declined from more than 2,000 to between 1,000 and 1,100 and sales agents dropped from about 400 to below 250. Chandler Dep. at 146-47.

After the bankruptcy filing, Ray Greer ("Greer"), President and CEO of GWLS, instructed Chandler and the other heads of Greatwide's affiliated companies to take drastic and immediate steps to reduce expenses. Chandler Dep. at 10, 149-50.

Chandler created a downsizing task force consisting of himself, Pamela Prior, Timothy Hooper, Director of Financial Planning and Analysis, and Shawn Bauder, VP and Controller. The task force met for the first time around November 14, 2008. Chandler Dep. at 29-30, 150; Dep. of Timothy Hooper, Ex. G to Defs.' Mot ("Hooper Dep."), at 4-7.

Hooper prepared four cost proposals for the downsizing task force's consideration, dated November 20, 2008: Proposal 1 (Hiring Freeze); Proposal 2 (Region Consolidation); Proposal 3 (Executive Consolidation); and Proposal 4 (Staff Reorganization). All four proposals were ultimately implemented for a total savings of approximately $4.5 million. Hooper Dep. at 7-12; Greatwide Truckload Mgmt 2009 Operating Plan - Cost Reduction Proposals, dated November 20, 2008 ("Greatwide Truckload Mgmt 2009 Operating Plan"), Ex. H to Defs.' Mot.

Plaintiff's position was listed on Proposal 3 ---Executive Consolidation --- as one of six senior staff positions that should be considered for elimination. Prior and Chandler independently came to the conclusion that plaintiff's position should be one of the positions eliminated as part of the Executive Consolidation. Prior never considered that plaintiff's position would not be eliminated. Prior Dep. at 16-17, 21, 29; Greatwide Truckload Mgmt 2009 Operating Plan.

Prior offered to Chandler that her CFO position be eliminated. Chandler refused her suggestion. Chandler considered Prior a key or "A" player in Truckload's Management's operations, along with Bauder and Hooper (males). Chandler Dep. at 119; January 25, 2009, Memo from Chandler to Greer, Ex. I to Defs.' Mot., at 102.

Just before Thanksgiving 2008, Chandler told his boss, Greer, that three of the six positions listed on Proposal 3 would be eliminated. The three positions were VP of IT (held by Robert Hall ("Hall"), VP of Organizational Development (held by the plaintiff), and VP of Administration (held by Rosch). They also discussed the closing of Truckload Management's Regional Office in Kenosha, Wisconsin. Chandler Dep. at 22-25. Chandler made the decision to eliminate plaintiff's position and terminate her employment. Chandler did not consult with Hove or anyone at GWLS about his decision to eliminate plaintiff's position. Chandler Dep. at 150.

On January 22, 2009, the task force met for the last time and formalized the company's reduction plans. On January 22, 2009, Hooper knew that the positions of the plaintiff, Rosch and Hall would be eliminated. On January 23, 2009, Hooper prepared a draft memo documenting the task force's decisions and presented it to Chandler the following day on January 24, 2009. Hooper Dep. at 13-16.

Chandler incorporated Hooper's draft into a memo to Greer, dated January 25, 2009, explaining the various cost reduction steps to be undertaken. Among these steps was the elimination of the positions held by the plaintiff and Rosch. The memo further explained that these terminations would not be carried out until the closing of the company's regional office in Kenosha, Wisconsin, had been accomplished and the work of that office had been successfully transferred to the corporate headquarters. Chandler Dep. at 93-94; January 25, 2009, Memo from Chandler to Greer, Ex. I to Defs.' Mot.

The closing of the Kenosha, Wisconsin, regional office was scheduled to take place in February 2009, resulting in the elimination of more than 60 positions. Pl.'s Dep at 92; December 16, 2008, WARN Act Letter from Truckload Management to Mayor Keith Bosman, Ex. J to Defs.' Mot.

In February 2009, the assets of Truckload Management and the related entities were sold at an auction sale approved by the Bankruptcy Court. The plaintiff and most of the then current management personnel became employees of the new entity, GWTM. Bankruptcy Order, Ex. A to Defs.' Mot; Pl.'s Dep at 71; Am. Compl. ¶ 8.

As of April 7, 2009, the plaintiff's and Rosch's work in the closing of the Kenosha, Wisconsin, office and the consolidation of various functions at the corporate headquarters, as well as work on various transition issues relating to the asset sale of Truckload Management to GWTM, was complete. At this time, the plaintiff and Rosch were informed of the elimination of their positions and the termination of their employment. Chandler Dep. at 129; Pl.'s Dep at 236-37, 256.

At the time of plaintiff's termination, the company was much reduced in size and revenue. In December 2008, the month plaintiff was offered the VP of Organizational Development position, the employee headcount was 193. In April 2009, the month her position was eliminated, the employee headcount had decreased to 134, more than a 30% decline. The number of independent sales agents and truck operators had also shrunk significantly. This decline continued to worsen during 2009.

Chandler Dep. at 144-47; Pl.'s Dep. at 97-98; GWTM, LLC, 2008 & 2009 Revenue Analysis and 2007-2010 Headcount ...


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