MAUREEN P. KELLY, Magistrate Judge.
Plaintiff Screen Actors Guild — American Federation of Television and Radio Artists, AFL-CIO ("SAG — AFTRA" or the "Union"), brings this action on behalf of regular full-time and part-time newspersons, audio journalists, and producers formerly employed by Sheridan Broadcasting Networks ("SBN"), in an effort to obtain damages deemed owing in arbitration filed against SBN. SAG — AFTRA alleges liability pursuant to the Labor-Management Relations Act of 1947, as amended ("LMRA"), 29 U.S.C. § 185(c), and asserts state law claims against Defendants SBN, Sheridan Broadcasting Corporation ("SBC"), Ronald Davenport, Jr., and Ronald Davenport, Sr. (the individual Davenport Defendants shall be referred to collectively as the "Davenport Defendants"). ECF No. I.
In the instant Complaint, SAG — AFTRA brings claims against SBN, its alter ego SBC, and the Davenport Defendants for (1) breach of contract arising out of Defendants' failure to comply with a collective bargaining agreement requirement to remit payment ordered pursuant to a properly entered arbitration award (Count I), (2) a claim for unpaid wages pursuant to the Pennsylvania Wage Payment and Collection Law ("WPCL"), 43 P.S. § 260 et seq., (Count II), and (3) a claim for conversion of Union dues deducted from employee pay but not remitted to SAG — AFTRA (Count III).
Pending before the Court is the Motion for Judgment on the Pleadings, ECF No. 38, filed by SAG — AFTRA, requesting that this Court enter the judgment in its favor as a matter of law pursuant to Rule 12 (c) of the Federal Rules of Civil Procedure, and against each of the named Defendants. Defendants have filed their brief in opposition to the motion, ECF No. 43, and SAG — AFTRA has filed its reply thereto, ECF No. 44. Upon review of the filings in this matter and for the following reasons, the motion will be granted.
For purposes of resolving the pending Motion for Judgment on the Pleadings, the Court notes that Defendants have filed an Answer to the Complaint and, unless otherwise indicated, Defendants have admitted the following facts set forth in the Complaint.
SAG — AFTRA and SBN entered into a collective bargaining agreement ("CBA") on behalf of SBN employees covering the period of November 8, 2016, through November 7, 2019.
In accordance with the agreed procedures, SAG — AFTRA filed a grievance alleging that on or about August 29, 2017, SBN terminated all represented employees, and in so doing: (1) failed to give proper notice of termination as required by the CBA; (2) failed to pay all terminated employees required severance pay; and, (3) failed to pay all terminated employees for work performed between August 16, 2017 and August 29, 2017. In addition, SAG — AFTRA alleged that SBN failed to implement a 3% wage increase effective November 8, 2016, failed to pay employees for out-of-pocket expenses incurred in the performance of their assigned duties, and failed to remit Union dues previously withheld from the pay checks of SAG — AFTRA member-employees.
Because the grievance was not resolved through the designated grievance procedure, SAG — AFTRA filed a request for arbitration with the Federal Mediation and Conciliation Service ("FMCS"). Defendants admit that in the course of arbitration, the parties submitted a comprehensive list of 51 stipulated facts. ECF No. 1 ¶ 19; and ECF No. 1 at 49-52, ECF No. 7 ¶ 19. Through the stipulated facts, SBN agreed that in addition to the amounts set forth in the grievance, it had also failed to pay one employee her clothing allowance and reimbursement. ECF No. 1 ¶ 19, ECF No. 7 ¶ 17-22. SBN has stipulated to its liability for these amounts, as well as to liability for additional sums as set forth in exhibits SBN and SAG — AFTRA jointly submitted to the arbitrator.
As stipulated to by SBN in arbitration, the following amounts are due and owing:
ECF No. 7 ¶ 23, ECF No. 1 at 49-55.
An arbitration hearing was held on November 20, 2017, with Ronald Davenport, Jr., appearing on behalf of and representing SBN. SBN conceded "there is no contention with the Union's position on either employee back-pay, fringe benefit claims or the Union's claim for non-remitted withheld dues." ECF No. 1 at 46. SBN further stated that, "[t]he Company stipulates to its liability for the amounts referenced above as contained in Joint Exhibit 1 and exhibits thereto."
Thereafter, SBN failed to remit payment in accordance with the Award of Arbitration. As a result, SAG — AFTRA commenced the instant action on April 6, 2018, asserting entitlement to the amounts set forth above, plus liquidated damages of 25% of the wages owed pursuant to the WPCL, in the amount of $65,165.53. In addition, SAG — AFTRA seeks punitive damages in the amount of $250,000.00 for breach of the defendants' fiduciary duties, as well as reasonable attorney's fees and costs. ECF No. 1 at 8-9.
With regard to its assertion of liability as to SBC and the Davenport Defendants, SAG — AFTRA alleges as follows:
ECF No. 1 ¶¶ 8-9.
On July 18, 2018, in the absence of an Answer to the Complaint, SAG — AFTRA moved for the entry of Default Judgment. ECF No. 6. Immediately thereafter, Defendants filed their Answer to the Complaint and therein admit the "Employer" status of SBC and SBN, the alter ego status of Defendants SBC and SBN, and the "Employer" status of the individual Davenport Defendants as officers and agents of SBN and SBC. ECF No. 7 ¶¶ 8-9. Defendants further admit that in the course of arbitration, SBN stipulated to liability for all amounts described. ECF No. 1 ¶ 20, ECF No. 7 ¶¶ 17-22.
Defendants concede that SBN has neither paid the amounts due and owing nor "file[d] a complaint to vacate the terms of the Award." ECF No. 7 ¶ 23. Based upon Defendants' admissions to certain dispositive allegations in the Complaint, SAG — AFTRA indicated its intention to file a Motion for Judgment on the Pleadings as to each of its claims and against all Defendants. ECF No. 26.
On October 25, 2018, Defendants collectively responded indicating interest in resolving all claims and requested additional time to permit the parties to enter into a final written settlement agreement.
On February 25, 2019, this Court learned that Defendants failed to honor their agreement to enter the consent judgment on the docket, and Plaintiff was directed to file the Motion for Judgment on the Pleadings that it had intended to file months earlier. ECF No. 34. Plaintiff has filed the Motion; Defendants have obtained new counsel; and now, for the first time, Defendants challenge liability for the previously admitted sums due to each involved SAG — AFTRA member and to the Union. ECF Nos. 35-37, 38, 42. It is clear to this Court, based upon the conduct displayed and representations made to the Court, that at all times and in all proceedings before this Court up to February 25, 2019, Defendants have conceded individual and joint liability for all amounts owed arising out of the Award of Arbitration (and have consented to the entry of judgment), but through delays and gamesmanship, are now engaging in behavior that dishonors this Court and the impacted employees. While this Court believes that all defenses to liability have been waived, the Court will address each of the arguments and defenses raised in the pending motion. The Court notes that based upon this behavior, Plaintiff was invited to file a Motion for Sanctions, but has thus far refrained from seeking additional relief that would otherwise be available.
Rule 12(c) of the Federal Rules of Civil Procedure provides that "[a]fter the pleadings are closed — but early enough not to delay trial — a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). In reviewing a Rule 12(c) motion, the Court must view the facts presented in the pleadings and the inferences to be drawn therefrom in the light most favorable to the nonmoving party. Judgment will not be granted unless the movant clearly establishes that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law.
Despite Defendants' admissions with regard to all facts establishing liability for amounts owed SAG — AFTRA, Defendants now contend for the first time, that as to the breach of contract claim, liability may lie only as to SBN because neither SBC nor the Davenport Defendants are parties to the CBA. In addition, Defendants contend that SAG — AFTRA's WPCL claim is preempted by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1144, as well as the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185. Finally, as to conversion, Defendants contend that the admitted factual allegations do not establish the degree of willful interference required under Pennsylvania law. ECF No. 43.
Through its claim for breach of contract, SAG — AFTRA seeks to recover the full amount of the Award of Arbitration entered against SBN in accordance with the terms and obligations imposed by the CBA. ECF No. 1 at 6-7. Defendants object to the imposition of liability as to SBC on the basis that Pennsylvania common law limits liability for breach of contract to the parties to the contract. ECF No. 43 at 4 (citing
Pennsylvania, however, has long recognized that even in contract, "[w]here a corporation has been formed in order to enable an individual or other entity to escape an existing legal obligation, the independence of the separate corporate entity will be ignored and `disregarded whenever it is necessary to avoid injustice.'"
The factors weighed to determine when it is appropriate or necessary to ignore the separate status of a corporation are flexible, and a finding or fraud or illegality is not required.
SAG — AFTRA similarly seeks to require SBC to comply with the terms of the CBA and render payment for a duly entered Award of Arbitration against SBN, citing the admitted failure by and between all Defendants to adhere to corporate formalities. In opposing the pending motion, Defendants do not challenge the factual basis for SBC's liability, given the collective and binding admission that "[a]t all times relevant hereto, SBN and SBC functioned in a manner as if they were a single employer in that their financial affairs and managerial structures are so intermingled that every act or omission on the part of SBN can be attributed to SBC and every act or omission on the part of SBC can be attributed to SBN and that the Defendants are thus each liable for each other's obligations." ECF No. 1 ¶ 9, ECF No. 7 ¶ 9. Under these unique circumstances, Defendants' reliance on the general legal principle of contract privity is insufficient. The Court finds that in the absence of a factual challenge to liability, and based on the clear admissions of SBN and SBC, it is in the interest of justice to find SBC equally liable to SAG — AFTRA and its represented employees for the obligations assumed by SBN under the CBA. Accordingly, the Motion for Judgment on the Pleadings is granted in favor SAG — AFTRA and against SBC and SBN with regard to its breach of contract claim.
In Count II of the Complaint, SAG — AFTRA claims entitlement to wages due and payable pursuant to the Pennsylvania WPCL, 43 P.S. § 260.1 et. seq. ECF 1 ¶¶ 28-32. The WPCL provides a civil remedy for employees to "recover unpaid wages" from their employers. 43 P.S. § 260.9a(b), and includes within the definition of wages "all earnings of an employe," as well as "fringe benefits or wage supplements whether payable by the employer from his funds or from amounts withheld from the employe's pay by the employer." 43 P.S. § 260.2a.
Of particular relevance to the Davenport Defendants, the WPCL defines "Employer" to include "every person, firm, partnership, association, corporation, receiver . . . and any agent or officer of any of the above-mentioned classes employing any person in this Commonwealth."
Despite repeated acceptance of liability for sums owed, Defendants now assert that SAG — AFTRA's WPCL claim is preempted by ERISA and LMRA, and subject to dismissal solely because of the presence of a collective bargaining agreement. ECF No. 43 at 4-8. Preemption under either statute is not as broad as Defendants contend.
Section 301 of the LMRA, 29 U.S.C. § 185(a) grants federal courts jurisdiction over actions for breach of contract based on a collective bargaining agreement between a union and an employer. The United States Supreme Court has held that this provision preempts state law claims and confers federal subject matter jurisdiction over disputes concerning the interpretation of collective bargaining agreements: "[Section] 301 pre-empts state law . . . insofar as resolution of the state law claims require[s] interpretation of a collective bargaining agreement."
In this instance, SAG — AFTRA correctly indicates that interpretation of the CBA is not needed to resolve its WPCL claim. Through the underlying arbitration proceedings, SBN (and SBC as its alter-ego), stipulated to all relevant facts concerning its obligations under the CBA and the amounts owed each employee and the Union. Further, Defendants (including the Davenport Defendants), in their Answer to the Complaint and in representations to this Court, have conceded liability and agreed to the entry of judgment against each of them. Under these unique circumstances (including Defendants' waiver of preemption), SAG — AFTRA's state law claim stands independent of rights under the CBA, and is comparable to that at issue in
In
Defendants cite
Such concerns, however, are not present in the instant case. First, Defendants have voluntarily and repeatedly conceded individual and collective liability to Plaintiff's WPCL claim before this Court, and so have waived any defense to this claim. Second, the amounts due and owing are fixed, based upon the parties' participation in the grievance procedures, stipulated facts in the arbitration, and the arbitration of employee and Union claims. Thus, the arbitrator's award, voluntarily stipulated to by SBN (and SBC as its alter ego) renders unnecessary reference to or interpretation of the terms of the CBA to resolve this dispute, and eliminates any potential for inconsistent results. Finally, the parties need only look to the Award of Arbitration, the Answer to the Complaint, and the parties' representations before this Court, wherein each Davenport Defendant conceded his status as an officer and/or agent of SBC and SBN for liability for amounts due. Under these unique circumstances, Plaintiff's WPCL claim is not preempted by the LMRA.
Defendants next contend that ERISA preempts SAG — AFTRA's WPCL claims. As noted supra, Defendants have conceded liability and have waived all substantive defenses based upon representations made in their Answer, the stipulation submitted in the arbitration proceeding, and to the Court as set forth on the docket of this matter. Further, while SAG — AFTRA seeks severance pay and other limited benefits, the claims "do not implicate ERISA unless they require the establishment and maintenance of a separate and ongoing administrative scheme."
Here, SAG — AFTRA seeks to recover unpaid wages, severance payments, and expense reimbursements. The sums were rendered payable through the Award of Arbitration and consent to entry of judgment as to all Defendants. No further administrative tasks are imposed upon any Defendant-Employer and as such, an ERISA benefit plan is not implicated. Accordingly, for each of the reasons set forth above, the Motion for Judgment on the Pleadings as to SAG — AFTRA's WPCL claim is granted.
Plaintiff brings a claim for conversion with regard to Defendants' "failure to transmit Union dues withheld from the paychecks of the employees represented by the Union." ECF No. 1 ¶ 19. In arbitration and in this Court, Defendants have conceded liability for the dues they withheld from employee salaries but failed to remit to the Union.
With regard to the substance of Defendants' argument, "[c]onversion is the deprivation of another's right of property in, or use or possession of, a chattel, without the owner's consent and without lawful justification."
Here, it is undisputed that the Davenport Defendants, as sole officers of SBC and SBN, were personally responsible for directing the payment of corporate expenses. Defendants likewise do not dispute that the applicable CBA required SBN to submit to SAG — AFTRA wages withheld from employees for union dues, and that Defendants failed to do so. In failing to remit the withheld dues to the Union, Defendants clearly deprived the Union of their right of property and, therefore, each is personally liable for conversion of the withheld dues under Pennsylvania law.
SAG — AFTRA claims damages awarded in arbitration for unpaid wages, unpaid severance pay, pay due in lieu of written notice of termination, failure to implement a wage increase, failure to reimburse expenses, and failure to remit union dues withheld from employee paychecks. SBN/SBC has conceded liability for all sums in awarded in arbitration and the Davenport Defendants have conceded their personal responsibility for sums due and owing in the course of this litigation. Under these extraordinary circumstances, the Court finds that SAG — AFTRA is entitled to the damages claimed as follows:
SAG — AFTRA also seeks punitive damages as well as attorney's fees and costs, which shall be considered separately upon motion filed in support thereof. Any motion related thereto shall be filed no later than ten days from the entry of this Opinion and Order. In the absence of a motion, or upon the filing of a notice withdrawing these claims, Judgment shall be entered in the amount of $325,827.64.
For the foregoing reasons, Plaintiff's Motion for Judgment on the Pleadings, ECF No. 38, is properly granted. Accordingly, the following Order is entered:
AND NOW, this 5
IT IS HEREBY ORDERED that Plaintiff's Motion for Judgment on the Pleadings is GRANTED and, as to the claims at issue therein, the Court finds in favor of Plaintiff and against Defendants Sheridan Broadcasting Networks, Sheridan Broadcasting Corporation, Ronald Davenport, Jr., and Ronald Davenport, Sr., in the amount of $325,827.64.
IT IS FURTHER ORDERED that within ten days, Plaintiff shall file a motion for attorney's fees and costs and a motion for an award of punitive damages, unless otherwise withdrawn, and if withdrawn, Plaintiff shall file a Notice of Voluntary Dismissal of its claims for either or both attorneys' fees and cost and punitive damages.
