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Biss v. Gehring-Montgomery, Inc.

United States District Court, E.D. Pennsylvania

May 22, 2017



          John R. Padova, J.

         Padova, J.

         Plaintiff Lawrence Biss has brought this action against Defendants asserting claims arising from the termination of his employment with Defendant Gehring-Montgomery, Inc. (“GMI”). Defendants Thomas Sprock and Oliver Zimmerman have moved to be dismissed as Defendants in this action, asserting that this Court lacks personal jurisdiction over them. For the reasons that follow, we deny the Motion.


         The Complaint alleges the following facts. GMI “is a distributor of specialty chemicals to commercial manufacturers in the automotive, coatings, adhesives, food and personal care industries.” (Compl. ¶ 14.) It was founded by Ruth Gehring and managed by her for many years. (Id. ¶ 15.) Defendant TER Hell & Co., GmbH (“TER Hell”) “is the parent company of a group [of] companies . . . that distribute, retail, and manufacture raw chemicals.” (Id. ¶ 18.) In 1990, Defendant TER Holding, Inc., a subsidiary of TER Hell, acquired GMI. (Id. ¶ 19.)

         Biss was hired by GMI on May 2, 1992 as the Purchasing Manager. (Id. ¶ 16.) He became the Managing Director of GMI in January 1996 and was responsible for running the company and its sales operations. (Id. ¶ 17.) On December 20, 1995, GMI and Biss entered into an employment agreement (the “Employment Agreement”). (Id. ¶ 20.) Under the Employment Agreement, Biss was entitled to the following compensation: “salary . . ., reimbursement of business expenses, a new automobile at company expense every three years, profit sharing equal to 10% of the company's net profits before taxes and executive compensation, 401(k) plan contributions by the company equal to 4% of his [salary], medical insurance, and vacation of 25 days annually.” (Id. ¶ 22(a).) In addition, pursuant to the Employment Agreement, Biss's employment with GMI could only be terminated upon his death, or disability, for just cause, or with 12 months' notice. (Id. ¶ 22(b).) Just cause is defined in the Employment Agreement as “a repeated and substantial failure to perform his duties after specific written notice of the failure; frequent absences without satisfactory explanation; ‘material misconduct;' or ‘conviction of a felony.'” (Id. ¶ 22(c).) The Employment Agreement also provided that Biss was entitled to severance pay upon expiration of the Agreement in the amount of one month of salary for every year of his service to the company beginning on January 1, 1996. (Id. ¶ 22(d).)

         Biss was born in 1955 and was 61 years old when he filed the Complaint. (Id. ¶ 23.) Gehring was born in 1944 and was 72 years old when Biss filed the Complaint. (Id. ¶ 24.) Beginning in 2011, the management of TER Hell made it clear that it wanted to hire younger managers to replace Gehring and Biss. (Id. ¶ 25.) In the summer of 2015, all of the Defendants, except Mark Bitting, informed Biss that his position would be terminated and that his duties would be distributed to Thomas Sprock, [1] Oliver Zimmerman, [2] and his replacement. (Id. ¶ 26.) Biss was also notified that he “would be required to interview and train his replacement.” (Id.) Biss informed Sprock and Zimmerman that his termination violated the federal Age Discrimination in Employment Act (“ADEA”). (Id. ¶ 27.) At the end of 2015, the company terminated Gehring because of her age. (Id. ¶ 28.)

         On January 1, 2016, Biss's Employment Agreement was terminated, his position was eliminated, and his duties were assigned to Bitting, [3] Sprock, and Zimmerman, all of whom are younger than Biss. (Id. ¶ 29.) Biss was assigned to a meaningless position with little responsibility “but high visibility to customers and existing employes.” (Id. ¶ 30.) This reassignment “was an affront and an embarrassment” to Biss and was intended to cause Biss to resign and relieve GMI of its obligation to pay him severance in accordance with the Employment Agreement. (Id.) Nevertheless, Biss did not quit. (Id. ¶ 32.)

         Defendants subsequently engaged BDO Seidman (“BDO”) to perform an audit of GMI. (Id.) Defendants engaged BDO to find a reason to fire Biss that would not require the payment of his severance pay. (Id. ¶ 33.) During its audit of GMI, representatives of BDO told GMI employees, ex-employees, and third parties that Biss was guilty of “theft, crimes, incompetence at his trade or profession, and dishonesty.” (Id. ¶ 34.) These representations were false and Defendants knew that they were false. (Id. ¶¶ 35-36.) On July 7, 2016, Biss's employment was terminated. (Id. ¶ 38.) Defendants gave numerous false reasons for terminating Biss's employment in order to “(a) mask the age discrimination of the Defendants; (b) retaliate against Mr. Biss for asserting his contractual and statutory rights, and (c) . . . attempt to justify the failure to pay him the severance pay package required by his contract.” (Id. ¶ 39.) Only Sprock gave a valid reason for Biss's termination, when he told Biss: “[w]e tried to settle things with you but you made all of these claims for severance and discrimination that we had no other choice but to terminate you. You won't get any severance pay now.” (Id. ¶ 40.) As of the date of his termination of employment, Biss had worked for GMI for more than 24 years and was entitled to 26 months of pay as severance under the Employment Agreement. (Id. ¶ 42.) GMI did not give Biss his severance payments. (Id. ¶ 43.) In addition, pursuant to GMI's policy of paying unused vacation pay to employees whom it terminates, Biss was entitled to be paid for four weeks of vacation pay that he earned in 2015 and 2.8 weeks of vacation pay that he earned in 2016, with a total value of $33, 000. (Id. ¶¶ 44-45.) Biss was not paid for his unused vacation time. (Id. ¶ 46.)

         The Complaint asserts five claims. Count I asserts a claim against all Defendants for age discrimination pursuant to the ADEA, 29 U.S.C. § 623, and alleges that Biss was first demoted and then terminated because of his age and because he had asserted that he was being discriminated against on the basis of his age. Count II asserts a claim against all Defendants for retaliation for Biss's assertion of his rights under the ADEA. Count III asserts a claim against all Defendants under the Pennsylvania Wage Payment and Collection Law, 43 Pa. Stat. § 260.1, et seq. (the “WPCL”), for Biss's unpaid severance, notice, and vacation pay provided for under his Employment Agreement. Count IV asserts a state common law claim for breach of contract against GMI, TER Hell, and TER Holding for breach of the Employment Agreement. Count V asserts a state common law claim for defamation against GMI, TER Hell, TER Holding, Sprock, and Zimmerman arising from the false statements made by Defendants and their agents regarding Biss. Sprock and Zimmerman have moved to dismiss all of the claims asserted against them for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2).


         “‘[C]ourts reviewing a motion to dismiss a case for lack of in personam jurisdiction must accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff.'” Bootay v. KBR, Inc., 437 F. App'x 140, 143 (3d Cir. 2011) (alteration in original) (quoting Carteret Savs. Bank, FA v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir. 1992)). The plaintiff, however, “bears the burden of proving that the court has personal jurisdiction over the defendant by a preponderance of the evidence, ” Allaham v. Naddaf, 635 F. App'x 32, 37 (3d Cir. 2015) (citations omitted), and “may not rest solely on the pleadings to satisfy this burden.” Gutierrez v. N. Am. Cerruti Corp., Civ. A. No. 13-3012, 2014 WL 6969579, at *2 (E.D. Pa. Dec. 9, 2014) (citing Simeone ex re. Estate of Albert Francis Simeone, Jr. v. Bombardier-Rotax GmbH, 360 F.Supp.2d 665, 669 (E.D. Pa. 2005); and Carteret Savs. Bank, 954 F.2d at 146). Rather, “[o]nce the defense has been raised, . . . ‘the plaintiff must sustain [his] burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence . . . .'” Int'l Bhd. of Elec. Workers Local Union No. 126 Ret. Plan Tr. Fund v. Cablelinks, Inc., Civ. A. No. 15-1925, 2015 WL 8482831, at *1 (E.D. Pa. Dec. 10, 2015) (quoting Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984)).


         Sprock and Zimmerman argue that we should dismiss them as Defendants to this action because they are German, do not reside in Pennsylvania, and “have never purposefully availed themselves to [sic] the jurisdiction of this Court.” (Defs.' Mem. at 3.) “Under Federal Rule of Civil Procedure 4(k), a District Court typically exercises personal jurisdiction according to the law of the state where it sits.” O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007) (citing Fed.R.Civ.P. 4(k)(1)(A)); see also Fed.R.Civ.P. 4(k)(1) (“Serving a summons . . . establishes personal jurisdiction over a defendant: (A) who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located . . . .”). “Pennsylvania's long-arm statute permits courts to exercise personal jurisdiction over nonresident defendants ‘to the fullest extent allowed under the Constitution of the United States' and ‘based on the most minimum contact with this Commonwealth allowed under the Constitution.'” Ackourey v. Sonellas Custom Tailors, 573 F. App'x 208, 211 (3d Cir. 2014) (quoting 42 Pa. Cons. Stat. Ann. § 5322(b)). “Accordingly, in determining whether personal jurisdiction exists, we ask whether, under the Due ...

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