ZHANG v. CSL BEHRING LLC

District Court, E.D. Pennsylvania·Decided November 21, 2024·No. 2:23-cv-02658·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

ZHENGJIA ZHANG, CIVIL ACTION Plaintiff,

v.

CSL BEHRING, LLC, NO. 23CV2658 Defendant.

MEMORANDUM OPINION Plaintiff Zhengjia ‘Jake’ Zhang is an executive in the biopharmaceutical industry. He is suing CSL Behring, LLC (“CSL Behring”), the parent company of his former employer, seeking to recover unpaid compensation benefits to which he believes he is entitled. CSL Behring now moves for summary judgment, pursuant to Federal Rule of Civil Procedure 56, on Zhang’s three remaining claims for breach of implied-in-fact contract, promissory estoppel, and unjust enrichment.1 For the reasons that follow, CSL Behring’s Motion will be granted. FACTUAL BACKGROUND Unless otherwise noted, the following facts are not in genuine dispute. Plaintiff Jake Zhang is a biopharmaceutical executive with experience operating blood plasma collection centers in China. Defendant CSL Behring is one of over a hundred business entities operating under the corporate umbrella of CSL Limited, a global biotechnology company headquartered in Australia. In 2013, Wuhan Zhong Yuan Rui De Biological Products Co. Ltd. (“Ruide”) hired Zhang as its Vice President of Plasma Center Development. A few years later, in 2017, a sister

1 Zhang initially brought a breach of contract claim as well, but that claim was dismissed after CSL Behring’s Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6). company of CSL Behring’s, CSL Asia Pacific Limited, entered into negotiations to acquire Ruide from its previous owner. Employees from multiple corporations in the CSL family of companies assisted in this acquisition effort, including at least one employee of Defendant CSL Behring—namely, Anthony Hartman, Senior Director of CSL Behring’s Human Resources department.2

As part of the acquisition effort, CSL Behring offered continued employment to several Ruide executives, including Zhang and Zhang’s boss, Jiansheng ‘Jason’ Xu. Xu and Hartman— the former representing the Ruide executives and the latter representing CSL Behring— negotiated the terms of executives’ continued employment. In Zhang’s case, these negotiations culminated in a written employment contract between Ruide and Zhang (the “Labor Contract”). There was no separate written contract between Zhang and CSL Behring, and CSL Behring was not a party to Zhang’s employment contract with Ruide. Zhang’s Labor Contract describes his professional responsibilities and expectations, outlines his base compensation, and, as is relevant to his current claims, contains language

regarding the possibility of an additional long-term incentive (“LTI”) bonus. That language, contained in Article 18 of the Labor Contract, is as follows: [Zhang] is entitled to participate in CSL Behring Group’s cash based long term incentive program, which will be locked for 3 years and paid as a one-off payment after [Zhang’s] 3 years [sic] participation in the program. The CSL Behring Group’s Board will review the long term incentive program on an annual

2 Both parties make much of the intricate corporate structure of CSL Limited and its subsidiary companies. CSL Behring argues that Zhang “improperly conflates corporate entities” in his Complaint—specifically, CSL Behring LLC, CSL Plasma Inc., and CSL Limited—all of which are separate and distinct legal entities. But, because Zhang’s claims fail regardless of whether his “conflat[ions]” of the relevant corporate structure are accepted as accurate, the parties’ disputes over which entities are properly named as defendants do not drive the question of whether summary judgment should be entered. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (“Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.”). For the same reason, Zhang’s request for leave to add CSL Plasma, Inc. is denied as futile. See Am. Corp. Soc’y v. Valley Forge Ins. Co., 424 F. App’x 86, 90 (3d Cir. 2011) (“‘Leave to amend a complaint is futile when the complaint as amended would . . . be immediately subject to summary judgment for the defendant.’” (quoting Cockrell v. Sparks, 510 F.3d 1307, 1310 (11th Cir. 2007))). basis and has the right to change the content of and participants in the plan.

Zhang also conversed with Xu before signing the Labor Contract, who told him that the LTI bonus would amount to “a significant sum,” potentially “amount[ing] to a figure higher than the total sum of wages for three years.” From the language of Article 18 and his discussions with Xu, Zhang believed that we would be entitled to receive the LTI bonus, to be paid by CSL Behring after three years’ employment with Ruide. By the end of 2017, the acquisition was complete, and Ruide continued its operations under new management. Zhang, for his part, continued his work with Ruide, though the terms of his employment were now governed by the Labor Contract. Around this time, he rejected an offer to work for another company, because it could “only promise that the annual wage [would] be higher” than Ruide’s but could not offer an LTI bonus. About two years later, in 2019, Zhang’s job responsibilities expanded, and he began managing the “development of new plasma centers” in China. Along with the change in responsibilities came a change in reporting structure—Zhang began reporting directly to Jeff Schulz, a high-ranking employee at CSL

Plasma, which is wholly-owned subsidiary of CSL Behring. Despite this change, Zhang did not execute a new employment agreement or otherwise discuss the effect the change might have on his compensation package with Schulz or any CSL Behring employee. Zhang did, however, turn down another job offer that he received in December of 2019, due to his belief that he was six months away from receiving the LTI payment. On June 30, 2020, Zhang’s Labor Contract with Ruide was due to expire. Zhang emailed Schulz to request an extension of his employment by one to two months, which he believed would satisfy the three-year tenure requirement for the LTI payment. Schulz denied this request, and Zhang’s employment was terminated the same day. The parties dispute the motivations behind Zhang’s termination. Zhang alleges that he was terminated short of the three-year tenure mark specifically so CSL Behring could avoid triggering any potential LTI payment. CSL Behring denies this allegation, asserting that Zhang’s termination was unrelated to any alleged LTI obligation, but was due instead to a drop in business demand and a lack of work for Zhang.

Following his termination, Zhang filed a lawsuit in China against Ruide, alleging that Ruide was obligated to pay him the LTI benefit under the Labor Contract. The Chinese court denied Zhang’s claim, finding insufficient evidence to support his entitlement to LTI under the terms of the Labor Contract. There is no indication that CSL Behring was a party to this lawsuit or that Zhang raised any claims against CSL Behring in that forum. LEGAL STANDARD A party is entitled to summary judgment if it shows “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “By its very terms, this standard provides that the mere existence of some alleged

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