Slinger v. PendaForm Company, The

CourtDistrict Court, M.D. Tennessee
DecidedMay 22, 2023
Docket3:17-cv-00723
StatusUnknown

This text of Slinger v. PendaForm Company, The (Slinger v. PendaForm Company, The) is published on Counsel Stack Legal Research, covering District Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Slinger v. PendaForm Company, The, (M.D. Tenn. 2023).

Opinion

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

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

MEMORANDUM OPINION AND ORDER The instant case, which is now on its seventh year and its third assigned district judge, is in the district court for its third stint here, after a second remand from the United State Court of Appeals for the Sixth Circuit. As the Sixth Circuit suggested at the end of its opinion directing the second remand (Doc. No. 175), it is time to “conclude this story.” (Id. at 9).1 BACKGROUND The above-referenced second appeal to the Sixth Circuit was taken by Defendant after the undersigned entered judgment for Plaintiff against Defendant, The PendaForm Company (“PendaForm), in the amount of $757,712.08 on March 3, 2021. (Doc. No. 132 at 4).2

1 When citing to a page in the Sixth Circuit’s opinion or a document filed by one of the parties, the Court endeavors to cite to the page number (“Page __ of __”) added by the Clerk’s Office at the bottom of the page as part of the pagination process associated with Electronic Case Filing in this case, if such page number differs from the page number originally provided by the author/filer of the document.

2 This case was reassigned to the undersigned from Judge Campbell (to whom the case previously had been reassigned from Judge Trauger) after the below-referenced bench trial but prior to the Court’s issuance of findings of facts and conclusions of law. PendaForm Company, a plastic-manufacturing business, hired Jack Slinger to be its president and CEO. But when new owners bought PendaForm a few years later, they scaled back Slinger’s role at the company. While they waited for Slinger’s contract to run out, he was told to work from home.

Not long after he started working from home, Slinger visited his old office to clear out his things. During his visit, Slinger allegedly warned several employees they should not “be the last man standing.” When the company caught wind of the statement, it fired Slinger within a week.

PendaForm’s termination letter said it fired Slinger “for cause” under his contract. But Slinger didn’t think the company had cause to fire him. And if it didn’t have cause, Slinger is eligible for twelve-months’ severance—worth hundreds of thousands of dollars. So Slinger sued, claiming he was fired without cause and should receive his severance.

The district court granted PendaForm’s motion for summary judgment, concluding that Slinger’s statement violated the contract’s non-solicitation clause. We reversed and remanded for trial. See Slinger v. PendaForm Co. (Slinger I), 779 F. App’x 378, 383 (6th Cir. 2019).

And at the trial stage, the district court let Slinger raise another argument: Even if he did violate the non-solicitation agreement, it was void under Wisconsin law. But the court refused to let PendaForm introduce a further justification for firing Slinger: evidence it had acquired during discovery that revealed Slinger had an affair with a subordinate.

The district court issued a series of orders after the bench trial. In the first, the court ruled that the non-solicitation agreement was void, so PendaForm couldn’t fire Slinger for violating it even if his statement was “solicitation.” The court also ruled that PendaForm waived all other arguments that might support a for-cause firing and concluded that PendaForm thus breached the contract by withholding Slinger’s severance.

(Doc. No. 175 at 2-4) (footnotes omitted).3

3 The (two) footnotes omitted from the block quote respectively stated, helpfully, as follows:

1 Though the letter didn’t specify a cause, for-cause firing under the contract may be for various reasons, including gross misconduct or violating the contract’s non-solicitation clause.

2 The district court framed this question as one of enforceability. But PendaForm never tried to enforce the non-solicitation agreement against Slinger; it merely relied on it as a reason for firing him. So the more precise question is whether the non-solicitation clause is unlawful and thus void under Wisconsin law, rather than whether it’s enforceable. See

The Sixth Circuit noted that PendaForm raised three issues in challenging the judgment and that each issue would be resolved sequentially:4 [PendaForm] contends the district court erred in (1) holding that the contract’s non- solicitation clause is void; (2) finding that PendaForm waived or forfeited its argument that Slinger’s statement constituted gross misconduct that warranted firing; and (3) barring PendaForm from admitting evidence of Slinger’s relationship with a subordinate. We take each in turn, reviewing the district court’s legal conclusions de novo and its waiver and forfeiture determinations for an abuse of discretion.

(Id. at 4). The Sixth Circuit rejected each of PendaForm’s first two arguments. On the third argument, however, PendaForm fared better. After finding that PendaForm had neither waived nor forfeited the argument, the Sixth Circuit found that the Court erred in excluding the referenced evidence (hereinafter, “after-acquired relationship evidence”) for the particular reason that the Court excluded it, namely, that under Wisconsin law, so-called “after-acquired evidence”5 cannot be used to as an independent basis to justify a firing for cause. Specifically, based primarily on a 1911 case from the Wisconsin Supreme Court, Loos v. George Walter Brewing Co., 129 N.W. 645 (Wis. 1911), the Sixth Circuit found that “[t]he after-acquired-evidence defense applies to breach- of-contract claims in Wisconsin,” so that by “using this affirmative defense, an employer can fire

Wis. Stat. § 103.465. Though the two are analogous under the Wisconsin statute, we reframe the inquiry as voidness for accuracy.

(Doc. No. 175 at 3 n. 1-2).

4 As is not atypical for an appellee, PendaForm made clear in its notice of appeal that it was challenging not just the judgment as such, but also various underlying decisions that underlay the judgment, including but not limited to the Court’s findings of fact and conclusions of law. (Doc. No. 134).

5 As the Sixth Circuit noted, this phrase refers to evidence acquired during litigation, after the termination for cause that the evidence is invoked to justify. (Doc. No. 175 at 7). an employee based on misconduct that constitutes cause, regardless of whether the employer knew about the misconduct at the time of termination.” (Doc. No. 175 at 8).6 But the Sixth Circuit did not preclude the possibility that the after-acquired relationship evidence could be excluded on other grounds. To the contrary, the Sixth Circuit noted that “a single issue remains: Whether PendaForm’s after-acquired [relationship] evidence is otherwise

admissible.” ((Id. at 9). In other words, it remained possible that such evidence could still be appropriately excluded for some other reason. And the Sixth Circuit clearly had in mind a particular other reason potentially could be: that the after-acquired evidence defense was barred because it was not raised in PendaForm’s answer, and had not been added via a court-authorized amendment to the answer. So the Sixth Circuit noted that this Court on remand should consider the after-acquired relationship evidence “if”—by which the Sixth Circuit clearly meant “if but only if”—"it determines that PendaForm may amend its answer to add the after-acquired-evidence defense.” (Id. at 9 n. 5). Spelling things out clearly, the Sixth Circuit instructed as follows:

So on remand, the district court should first consider whether PendaForm may amend its answer to add this affirmative defense.

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Slinger v. PendaForm Company, The, Counsel Stack Legal Research, https://law.counselstack.com/opinion/slinger-v-pendaform-company-the-tnmd-2023.