Slinger v. PendaForm Company, The

District Court, M.D. Tennessee·Decided January 13, 2021·No. 3:17-cv-00723·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

JACK L. SLINGER, ) ) Plaintiff, ) ) v. ) NO. 3:17-cv-00723 ) THE PENDAFORM COMPANY, ) JUDGE RICHARDSON ) MAGISTRATE JUDGE NEWBERN Defendant. )

MEMORANDUM AND FINDINGS OF FACT AND CONCLUSIONS OF LAW PURSUANT TO FED. R. CIV. P. 52

I. Introduction1

Plaintiff initially filed this action in Davidson County Chancery Court. On April 19, 2017, Defendant removed the action to this Court. The Court granted summary judgment to Defendant, but the Sixth Circuit reversed on July 11, 2019. The Court held a one-day bench trial in this case on November 25, 2019 before District Judge William L. Campbell, Jr. On February 3, 2020, as directed by Judge Campbell, each party filed proposed findings of fact and conclusions of law (Doc. Nos. 95, 96). On February 14, 2020, Judge Campbell recused himself, and this case was reassigned to the undersigned district judge. (Doc. No. 101). Thereafter, in a series of orders issued after receipt of input from the parties, the undersigned endeavored to determine how to proceed, given that: (1) findings of fact and conclusions of law remained to be issued by the Court; (2) the undersigned had not been present for the testimony that was presented live (i.e., in-person at trial, as opposed to by read-back of depositions) at the bench trial before

1 For purposes of this Introduction, the Court assumes the reader’s general familiarity with the names and items referred to in the Introduction and notes that such are clearly identified below. Judge Campbell;2 (3) live testimony potentially could assist the undersigned in making findings of fact with respect to any facts truly in dispute, especially to the extent that such findings would turn on credibility determinations as to the witnesses who had testified live (i.e., Plaintiff and Mr. Kruger); (4) the issue of the enforceability of the Non-Solicitation Clause in the parties’ Employment Agreement had been raised but not yet decided.

Ultimately, the undersigned issued two rulings that dictated what should (and should not) happen next in this case. First, the Court ruled that the Non-Solicitation Clause was unenforceable. (Doc. No. 113). Second, the Court ruled that Defendant had waived (or forfeited) the right to assert that: (a) Plaintiff’s termination was for any “cause” other than breach of the Non-Solicitation Clause (Doc. No. 120); (b) failure to pay Plaintiff the severance alleged owed him was justified by Plaintiff’s (alleged) non-compliance with the obligations imposed upon him by subparagraph 6(b) and paragraph 7 of the Employment Agreement. Together, these rulings had the effect of eliminating the need to address herein some of the issues the Court otherwise perhaps would need to address herein. Likewise, the Court’s detailed explanation for these rulings eliminated the need

for the Court to explain (beyond merely referring to the Court’s prior orders) herein the reasons for those rulings. The content set forth below shall constitute the findings of fact and conclusions of law required by Fed. Rule Civ. P. 52. The Court notes that the findings of fact cover some (though not all) events and circumstances that—because of the Court’s above-referenced rulings—are not

2 The only witnesses to testify live at the bench trial were Plaintiff and Defendant’s president, David Kruger. material to the Court’s conclusions of law (and resulting resolution of Plaintiff’s claim) but are part of the overall context of Plaintiff’s claim and thus worth recounting.3 II. Findings of Fact4 At material times, Defendant was a company engaged in the business of extruding and thermoforming black plastic components for use primarily in the automotive industry. (Plaintiff,

at 29).5 After its below-referenced acquisition by another company in December 2016, Defendant was headquartered in New Concord, Ohio, having previously been headquartered in Portage, Wisconsin. (Id. at 29-30). On July 11, 2011, Plaintiff Jack Slinger entered into an Employment Agreement with the Defendant establishing his position as President and Chief Executive Officer (“CEO”) with Defendant. (Employment Agreement, at 1 (Plaintiff’s Trial Exhibit 1); Plaintiff, at 59).6 Defendant understood that the contract remained binding and in effect even after the December 2016 acquisition of Defendant. (Kruger, at 169-70). The contract defined the “Employment Period” as expiring on July 11, 2014, but that period was later extended to July 11, 2017. (Employment Agreement, at ¶ 5 (Plaintiff’s Trial Exhibit 1);

3 They also are worth recounting because, as the Court fully realizes, Defendant contends that the Court’s rulings are incorrect, and to the extent such contention is valid, some of these events and circumstances would be relevant.

4 As indicated below, the Court makes some of the below-referenced findings based on the testimony of Plaintiff, or Mr. Kruger, or both. None of these findings, in the Court’s view, are contested in any substantial way, and to the extent they may be contested to a degree, none are material to the Court’s conclusions of law herein. For these reasons, the Court saw no need to take live testimony from Plaintiff or Mr. Kruger in order to assist with credibility determinations.

5 Citations herein to trial testimony will be in the form of ([last name of witness or counsel speaking], at [page number of the trial transcript (Doc. No. 94)]. As indicated above, live testimony was presented of only two witnesses, i.e., Plaintiff and Mr. Kruger; the testimony presented of all other witnesses was presented by reading portions of their deposition testimony.

6 All (trial) exhibits cited herein are all joint exhibits and are marked as such on their first page. But on the Court’s exhibit sticker, affixed to the back page of each exhibit, every such exhibit is labeled as a Plaintiff’s exhibit and will be referred to as such in the citations herein. Amendment No. | (p. 16 of 20)). The Employment Period was subject to early termination upon the occurrence of certain events, however, including “Termination For Cause” and “Termination Without Cause.” (/d., 75). If the company terminated Plaintiff early “without cause,” it was conditionally obligated to continue to pay him his base salary and other benefits:

(6) Subject to Executive’s compliance with subparagraph 6(d) and paragraph 7, if the Employment Period ends early pursuant to paragraph 5 on account of a Termination Without Cause that occurs during the Employment Period, the Company shall continue to pay Executive his Base Salary at the time of such termination, in accordance with the Company’s normal payroll practices, for a period of twelve (12) months following such Termination Without Cause; provided, however if such Termination, Without Cause is required in connection with a Change in Control then such period will be extended by an additional twelve (12) months for a total of twenty-four (24) months. In addition, Executive shall be entitled to continue to participate in the Company’s medical plan (with a monthly premium cost to Executive equal to the amount Executive was required to pay as a monthly premium for participation in such plan immediately prior to the Termination Without Cause, which amount shall be withheld by the Company from the payments made to Executive described in the preceding sentence) until the earlier of (i) Executive’s eligibility for any such coverage under another employer’s or any other medical plan or (ii) twelve (12) months following the termination of Executive's employment, Executive agrees that the petiod of coverage under such plan shall count against such plan’s obligation to provide continuation coverage pursuant to COBRA.

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