Interpublic Group of Companies v. Lesser

775 F. Supp. 697, 1991 U.S. Dist. LEXIS 14955, 1991 WL 219121
CourtDistrict Court, S.D. New York
DecidedOctober 18, 1991
DocketNo. 89-CIV-6660 (LJF)
StatusPublished
Cited by1 cases

This text of 775 F. Supp. 697 (Interpublic Group of Companies v. Lesser) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Interpublic Group of Companies v. Lesser, 775 F. Supp. 697, 1991 U.S. Dist. LEXIS 14955, 1991 WL 219121 (S.D.N.Y. 1991).

Opinion

OPINION

FREEH, District Judge:

Plaintiff, Interpublic Group of Companies, (“Interpublic”), has filed a motion for summary judgment pursuant to Fed. R.Civ.P. 56. Defendant, Michael S. Lesser, (“Lesser”), opposes the motion and cross-moves for partial summary judgment. For the reasons stated by the Court at the conclusion of oral argument and herein, Interpublic’s motion is granted.

FACTS

Construing the record in the light most favorable to Lesser the relevant facts of this case are as follows:

Lesser was employed by Interpublic as Chairman and Chief Executive Officer of Lowe Marschalk, Inc., (“Lowe Marschalk”) a subsidiary of Interpublic, from July 16, 1980 to March 29, 1989. On May 17th 1988 Lesser signed an agreement with Inter-public in which Lesser promised to repay to Interpublic upon its demand the full $349,-300 value of the removal of his 1986 stock award restrictions and his tax assistance payment if he were to cease to be in Inter-public’s employ before May 17, 1990 for any reason other than: (1) termination by Interpublic; (2) death; (3) resignation on account of disability; (4) resignation for good reason as defined in Lesser’s Executive Severance Agreement with Interpublic; or (5) retirement.

From 1985 to 1989, Lowe Marschalk was owned 70% by Interpublic and 30% by Lowe PLC, another subsidiary of [698]*698Interpublic. The Chairman of Lowe PLC is Frank Lowe. Lesser and Lowe do not like each other. Beginning in mid-1988, Lowe sought to buy Lowe Marschalk but would not do so as long as Lesser was chairman. In or about January 1989, negotiations intensified between Grier and Lowe for the sale of the remaining 70% of Lowe Marschalk to Lowe PLC. In memos between Grier and Lowe the termination of Lesser as head of Lowe Marschalk was discussed.

On March 24, 1989, Lesser informed Interpublic that he would be leaving Lowe Marschalk to take a position as President of Ogilvy & Mather. Concerned about the possible effect Lesser’s departure might have on Lowe Marschalk’s Coca-cola and other accounts, Interpublic offered Lesser a higher paying position in the corporate offices of Interpublic. Lesser rejected Interpublic’s offer and on March 29, 1989 Lesser resigned from Interpublic.

On April 25, 1989 Interpublic wrote Lesser, demanding the $349,300.00. payable no later than May 10, 1989. The money has not been paid.

DISCUSSION

Summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories and admissions on file, together with 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). The parties must base their affidavits on “personal knowledge” and set forth facts as would be “admissible in evidence.” Fed.R.Civ.P. 56(e). The moving party has the initial burden of demonstrating the absence of a genuine issue of material fact. Adickes v. S.H. Kress and Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). The movant may satisfy this burden by demonstrating to the Court that there is an absence of evidence to support the non-moving party’s case on which that party would have the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). The non-moving party then has the burden of coming forward with “specific facts showing that there is a genuine issue for trial.” Fed. R.Civ.P. 56(e). The non-movant must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). To avoid summary judgment, enough evidence must favor the non-moving party’s case such that a jury could return a verdict in its favor. See Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). In the present case, the record before this Court, including affidavits and depositions, does not demonstrate any genuine issues of material fact for trial.

Lesser has failed to demonstrate that any genuine issue of material fact exists regarding his constructive discharge claim. The Repayment Agreement, under which Interpublic has sued, expressly provides that Lesser’s repayment obligation would arise if he voluntarily ceased to be employed by Interpublic. Lesser does not dispute that Interpublic did offer him another genuine executive position in Inter-public’s corporate offices for more money and that it was not a demotion. Lesser Tr. at 77. Therefore Lesser’s obligation to repay his stock award was caused by his voluntary decision to leave Interpublic for Ogilvy & Mather instead of accepting the new position offered him by Interpublic.

In the context of an employee transfer, a claim for constructive discharge requires more than a subjective opinion that the new position is so intolerable that it forces a resignation. Even if Lesser had been confronted with a demotion in position or title, courts are very reluctant to find a constructive discharge bases solely upon the employee’s opinion. Neale v. Dillon, 534 F.Supp. 1381, 1390 (E.D.N.Y.1982). Lesser offers no material facts to show that the new, higher paying executive position at Interpublic was so intolerable that it forced him to resign.1

[699]*699Moreover, New York law is particularly hard pressed to find a constructive discharge when there is no evidence of reduction in salary or benefits, and the employee is asked to remain with his employer. See Pena v. Brattleboro Retreat, 702 F.2d 322 (2d Cir.1983); Ioele v. Alden Press, Inc. 145 A.D.2d 29, 536 N.Y.S.2d 1000, 1004 (1989); Neale v. Dillon, 534 F.Supp. 1381 (E.D.N.Y.1982). It is undisputed by Lesser that Interpublic’s offer to Lesser was for increased compensation.

Finally, as the Second Circuit emphasized in Pena v. Brattleboro Retreat, 702 F.2d. 322, 326 (1983), the law does not provide a remedy for an overreaction to a reasonable business decision of an employer. Clearly Interpublic had a right to sell Lowe Marschalk to Lowe PLC. Even assuming that the chief obstacle to that sale was the animosity between the buyer Frank Lowe and Lesser, Interpublic nevertheless had a right, not only under their employment agreement with Lesser but also as a matter of sound business judgment, to move Lesser to another position in Interpublic.

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Bluebook (online)
775 F. Supp. 697, 1991 U.S. Dist. LEXIS 14955, 1991 WL 219121, Counsel Stack Legal Research, https://law.counselstack.com/opinion/interpublic-group-of-companies-v-lesser-nysd-1991.