Joan N. Feeney, United States Bankruptcy Judge.
The matter before the Court is the objection to the Claim of Dr. Christine E. Briggs ("Dr. Briggs" or the "Claimant") filed by the Chapter 11 Trustee of the estate of Genesys Research Institute, Inc. (the "Debtor," or "GRI"). Dr. Briggs, a former employee of GRI, who was terminated in September of 2014, approximately one year before the commencement of the Debtor's bankruptcy case, timely filed a proof of claim on October 29, 2015 seeking sick time pay in the amount of $4,262.00 and severance pay in the amount of $2,687.00, for a total claim in the amount of $6,949.00. For reasons set forth below, only Dr. Brigg's entitlement to severance benefits is at issue.
On November 22, 2016, the Trustee filed "Chapter 11 Trustee's First Omnibus Objection to Claims (Employment—Non-Union)" with respect to certain employees' claims in which he distinguished between employees who had been terminated by GRI in September of 2014 and those who were terminated in July of 2015. The Chapter 11 Trustee objected to the totality of Ms. Briggs's claim. In his Objection, the Trustee stated in pertinent part the following:
Steward's [GRI's predecessor] severance policy provided for severance payments to eligible employees based upon job category and years of completed service. That policy stated: "In exchange for signing a release of claim, all eligible employees will be provided severance benefits based on
With respect to severance, the Debtor offered each of the July Claimants a severance package of one week's pay for each year of completed service (up to a maximum of 26 weeks' pay), subject to the execution and return of a release of claims (the "Severance and Release Agreement") within 45 days of termination, but, upon information and belief, none of the July Claimants executed and returned the Severance and Release Agreement to the Debtor within the applicable 45-day period. Accordingly, the Trustee objects to any claim for severance benefits.
Philip J. Hahnfeldt filed a "General Objection to the Chapter 11 Trustee's First Omnibus Objection to Claims (Employment—Non-Union)." Dr. Briggs filed a "Joinder to Hahnfeldt's Objection." On January 4, 2017, this Court deemed the Trustee's Objection to Dr. Briggs's claim to be a contested matter to which Part VII of the Federal Rules of Bankruptcy Procedure applied and subsequently issued a scheduling order.
On September 8, 2017, the Trustee and Dr. Briggs filed a Joint Pre-Trial Statement in which the parties set forth admitted facts requiring no proof. The Court conducted a trial on November 13, 2017 at which Dr. Briggs, appearing pro se, testified and three exhibits were admitted into evidence. At the conclusion of the evidentiary hearing, counsel to the Trustee, without objection from Dr. Briggs, conceded that "[u]nder Massachusetts law ... severance must be a matter of contract ... not a matter of statute."
Between November 2010 and December 31, 2012, the Debtor operated as Steward Research Specialty Projects Corporation ("SRSPC"), an entity related to Steward Health Care ("SHC") and Steward St. Elizabeth's Medical Center LLC ("SSEMC") (collectively "Steward"). At all relevant times, the Debtor operated out of a facility located at St. Elizabeth's Medical Center in Brighton, Massachusetts, at premises owned by SSEMC. As of about December 31, 2012, the Debtor began operating as GRI.
The Claimant is a former "at-will" employee of the Debtor; she had no employment contract with the Debtor at any time. On September 15, 2014, David Horowitz ("Horowitz"), the President and CEO of GRI, sent a letter (hereafter, the "September Letter") to the Claimant and certain other GRI staff and faculty (the "September Claimants") in which he stated, among other things, the following:
Vacation and sick payout- The dollar amount representing your accrued by [sic] unused vacation leave will be included as part of the paycheck issued September 30th. Although GRI has not issued a policy guaranteeing the payout of any sick leave,
The September Letter did not mention severance pay.
Prior to the termination of the Claimant's employment at GRI, the Claimant was compensated on an hourly basis for hours worked at a rate equal to $31.25 per hour. On or about September 30, 2014, the Debtor terminated the Claimant's employment, along with the employment of other so-called September Claimants.
On September 30, 2014, GRI did not have a policy regarding severance benefits.
On September 30, 2014, the Claimant received a payment from GRI which included the following:
a. A "Sick Payout" in the amount of $512.50 for 16.40 hours of the Claimant's unused 136.39 hours of unused sick time at an hourly rate of $31.25.
b. A "Vacation Term Payout" in the amount of $962.81 for 30.81 hours of vacation time at an hourly rate of $31.25.
After regular withholdings on account of taxes and other federal and state regulations, the Claimant received a total payment of $1,093.32 on account of the above payouts.
Neither the Claimant, nor any other September Claimant, was offered any severance benefit by GRI. Neither the Claimant, nor any other employee of GRI terminated by GRI on September 30, 2014, was offered an opportunity to execute a release of claims against GRI upon their termination. Neither the Claimant, nor any other employee of GRI terminated by GRI on September 30, 2014, was afforded the opportunity to execute a release of claims against GRI upon termination as a precondition to obtaining any severance.
In July 2015, GRI terminated the employment of certain of its other employees, and did offer severance benefits to those employees in exchange for execution and delivery of a release of claims against GRI. No reason was offered to the Claimant by any GRI official as to why no individual whose employment was terminated in September of 2014 was offered severance or the opportunity to execute a release of claims to obtain it, or why only certain claimants whose employment was terminated in July of 2015 were offered severance or the opportunity to execute a release of claims to obtain it.
The Claimant was among the September Claimants who reported certain activity of GRI and its Member [sic], Horowitz, to the Massachusetts Attorney General, due to concern that the reported activity was not in accordance with law.
Dr. Briggs seeks $2,687.00 in severance benefits in connection with the termination of her employment at GRI. She has withdrawn that portion of her Claim seeking $4,262.00 in sick pay benefits due to having settled that part of her Claim in the Small Claims Court matter.
Dr. Briggs was the only witness. The Trustee did not call any witness to testify and did not introduce any documentary evidence. Trustee's counsel did not call the Trustee or any person from GRI's former management to explain its policy or that of its predecessor, Steward.
Dr. Briggs is an accomplished scientist. She earned a Ph.D. in molecular biology and continued her training as a post-doctoral fellow. She testified that she transitioned to human molecular genetics and genomics and computational biology, and, in 2012, was recruited by Dr. Lynn Hlatky to the Center of Cancer Systems Biology (the "CCSB"), located on the campus of St. Elizabeth's Hospital in Brighton, Massachusetts, where she was an assistant investigator and a member of the research faculty investigating genomic factors in cancer. The CCSB faculty, comprised of between 15 and 20 physicists, mathematicians, biologists, and molecular biologists, conducted research funded by the Federal Government through the Department of Energy, the National Aeronautics and Space Administration, and the National Cancer Institute focused on genetic factors for cancer and cancer risk from exposure to radiation.
Dr. Briggs testified that she was an "at-will" employee of the Debtor. On September 15, 2014, she was informed by Horowitz, the President and CEO of GRI, that she was being "laid off" from her position effective September 30, 2014. Indeed, she stated that all the investigators, including Dr. Hlatky and Dr. Hahnfeldt were terminated, with the exception of a few technicians and "a couple of other investigators." In his September 15, 2014 letter, Horowitz informed Dr. Briggs about, among other things, unemployment assistance, continuation of health and dental benefits (through COBRA) and final paychecks. He did not mention severance in the letter and there were no references to severance in attachments to the letter, which included a letter from an employee in Human Resources, and information about benefits such as flexible spending accounts and voluntary life insurance.
Although Dr. Briggs testified that she filed complaints against GRI, discussed below, she admitted that at no time did she make a report to any regulatory authority that GRI made a false statement or submitted false records to the federal government. She testified that her claim for severance was predicated on the disparity in the offer of severance benefits between employees terminated in September of 2014 and those terminated in July of 2015. She also testified that her awareness of the policy was based on communications with Dr. Yun Wang. Dr. Briggs stated:
Dr. Briggs added that "the only criteria that seems to have been applied by GRI leadership was whether or not an employee had filed a complaint with an authority about their misappropriation of restricted funds."
Dr. Briggs also testified about her understanding of the term "whistleblower," indicating that it applied to employees who filed written complaints with the Attorney General's Office or with the Inspector General, adding "I filed complaints with the Inspector General's Office at the Department of Energy and NASA and NIH. And it was at that point that DOE stepped in to get involved in the case as the representative of all the federal agents."
Dr. Briggs personally drafted a complaint, using a Charitable Organization Complaint Form, with the Non-Profit Organizations/Public Charities Division of the Office of the Attorney General for the Commonwealth. She testified that it was her belief that GRI's management was aware of the complaint, but she indicated that she could not be positive.
Dr. Briggs also testified that, when she was terminated, she and other employees were assured that management was going to continue Steward's policies. She further stated that she was aware that the employees that were terminated after she was terminated were required to sign a release in exchange for receiving severance, although, because she was not offered severance, she had no idea what the release would have entailed.
Dr. Briggs testified that she may have received documents or manuals from Steward regarding benefits, including severance, but she could not recall any details regarding severance. She reiterated that the only difference between the September 2014 and July 2015 employees was severance, stating "[t]hat's the only criteria that was consistently applied for September claimants and July claimants." In other words, the earlier terminated employees who took part in whistleblower actions were denied the opportunity to receive severance, while the employees who were terminated later, whom Dr. Briggs stated were predominantly Chinese nationals, were not.
Dr. Briggs introduced a letter from Robert Stemple, GRI's Director of Finance, to Ms. Yun Wang who was terminated effective July 24, 2015 and who was not offered severance and a letter to another employee whose name was redacted. That letter to the unidentified employee was dated June 20, 2015 and included a statement that "[i]n exchange for signing a release of claims you will be eligible to receive severance benefits as follows: 1 week of severance benefits per 1 year of completed service, up to a maximum of 26 weeks." According to Dr. Briggs, Ms. Wang had engaged in so-called whistleblower
This court set forth the law applicable to proofs of claim objections in
Pursuant to Fed. R. Bankr. P. 3001(f), "[a] proof of claim executed and filed in accordance with the Federal Rules of Bankruptcy Procedure constitutes prima facie evidence of the validity and amount of the claim." See
The Trustee maintains that GRI did not have any severance policy in place at the time Dr. Briggs was terminated, and it was not legally obligated to make an offer of severance to her. Alternatively, he asserts that an offer of severance was discretionary and conditioned upon the execution of a release.
Dr. Briggs indicated that her claim is based, at least in part, on the Federal False Claim Act, 31 U.S.C. § 3730(h), which she maintains provides for relief from retaliatory actions and, in her particular case, retaliation was for her lawful acts in furtherance of whistleblower allegations set forth in a complaint filed with the Office of the Massachusetts Attorney General Charitable Organization on January 13, 2014 and a complaint filed in the Massachusetts Superior Court, Department of the Trial Court on July 28, 2014.
Dr. Briggs relies, at least in part, on 31 U.S.C. § 3730(h), which provides in pertinent part:
Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter.
31 U.S.C. 3730(h)(1). The statute also provides that
The Court concludes that Dr. Briggs failed to establish that GRI committed any of the acts set forth in § 3729. Nevertheless, she produced evidence that GRI applied Steward's severance policy in a fashion that demonstrated that it was retaliating against employees who participated in the filing of complaints against it.
Dr. Briggs's claim has prima facie validity in the amount of $2,687.00. The Trustee, through cross-examination of Dr. Briggs, established that Dr. Briggs did not have in her possession any employee manuals or documents that would have demonstrated her entitlement to severance. Nevertheless, Dr. Briggs established with reference to the Trustee's First Omnibus Objection to Claims (Employment—Non-Union), that "Steward's severance policy provided for severance payments to eligible employees based upon job category and years of completed service." That policy, according to the Trustee, stated:
Because GRI offered the July 2015 employees, who had not filed complaints against it, severance, the Court concludes: 1) that GRI retained Steward's severance policies, and 2) that it had neither modified nor eliminated the policy. Although the
The well-recognized rule is that "`[e]mployment at will is terminable by either the employee or the employer without notice, for almost any reason or for no reason at all.'"
We have recognized exceptions to that general rule, however, when employment is terminated contrary to a well-defined public policy. Thus, "[r]edress is available for employees who are terminated for asserting a legally guaranteed right (e.g., filing workers' compensation claim), for doing what the law requires (e.g., serving on a jury), or for refusing to do that which the law forbids (e.g., committing perjury)."
In
In summary, the Trustee, through his Omnibus Objection to Dr. Briggs's proof of claim provided arguments in an attempt to
In view of the foregoing, the Court shall enter an order overruling the Chapter 11 Trustee's Objection to the claim of Dr. Christine Briggs.