Ravi Kotwani v. LLC (2014)

Memorandum of Decision

This action is brought by the plaintiff Ravi Kotwani against his former employer, software developer and licensor ArisGlobal, LLC by a two-count complaint alleging nonpayment of wages and nonpayment of bonuses in violation of the company's Employee Handbook, and claiming double damages and an award of attorneys fees under Conn. Gen.Stat. § 31–72.   Specifically, the plaintiff claims that he is entitled to a pro-rated partial bonus payment in accordance with company policy for the fourth quarter of 2011 and a bonus for the first and second quarters of 2012, and nine days' of basic wages ($4,673) for the period May 22 to June 1, 2012 following his termination on May 21, 2012.   The defendant denies that the plaintiff is entitled to any unpaid wages or bonus payments beyond those which have been paid to him.

The case was tried before the court sitting without a jury, on September 24, 2013.   The parties submitted a binder of jointly agreed full Exhibits 1 through 38 (some, having exhibits attached thereto, designated alphabetically).   Additional Exhibits 39 through 43 were marked into evidence during the trial.   The plaintiff Ravi Kotwani testified and was cross examined by the defendant.   There were no other witnesses.   After the plaintiff rested the defendant made a motion for judgment for failure to establish a prima facie case, which was denied by the court.   The defendant then rested without putting on any evidence.   A briefing schedule was established.   Both parties submitted post-trial memoranda.   The defendant also had submitted a pre-trial brief.   The Plaintiff submitted a reply brief to the defendant's post-trial memorandum.   The reply brief was filed on October 22, 2013.   This is the court's decision on the claims of the plaintiff alleged in his complaint.   The court will discuss the wage claim first, followed by the bonus claim, and finally the claim for double damages and an award of attorneys fees under Conn. Gen.Stat. § 31–72.

COUNT ONE

a. Nonpayment of Wages at Termination of Employment

The court finds as follows.   Mr. Ravi Katwani (“Ravi” or “plaintiff”) applied for employment with ArisGlobal on July 22, 2011.  (Ex. 1.) On August 9, 2011 ArisGlobal offered him employment with the sales position of “Engagement Manager” reporting to Manish Shrivasta (“Manish”), Head–Client Partner Team Americas, starting on or before September 1, 2011 at a starting base salary of $130,000 plus “Service Incentive Compensation” [bonus] up to $45,000 per year, plus fringe benefits.   His base salary was to increase on January 1, 2012, depending on performance, to $135,000 per year.  (Ex. 3)

The offer of employment specifically stated:

Your employment at Aris Global will be “at will” meaning that either you or ArisGlobal will be entitled to terminate your employment at any time and for any reason, with or without cause.   Any contrary representations which may have been made to you are superceded by this offer.   This is the full and complete agreement between you and Aris Global on this term.

Plaintiff accepted the ArisGlobal offer of employment by countersigning the offer of employment letter under the legend “I accept this offer” on August 10, 2011.  Id. On September 1, 2011 upon commencement of employment, Ravi signed an acknowledgment (Ex. 5) of access to the ArisGlobal Intranet Employee Handbook (the “Handbook”).   The acknowledgment said, inter alia:

I understand that it [the Intranet Employee Handbook] contains important information on the general personnel policies of the Company, on the terms and conditions of my employment, and on my privileges and obligations as an employee.   I understand that I am governed by its contents ․

The Handbook (excerpt attached to Ex. 5) states, in part:

Separation from Employment.   All employees of the Company are employed on an at-will basis, which means that both the employee and ArisGlobal, LLC, have the right to terminate employment at any time, for any reason or no reason, with or without cause and with or without notice ․

Notice of Resignation.   It is expected that employees will provide the Company with two weeks written notice of resignation to their supervisor, department manager, or the Human Resources department.   This advance notice will allow the department time to ensure a smooth transition of work, adjust schedules, and begin recruitment for a replacement, if necessary.   Upon notice of resignation, the Human Resources department will arrange an exit interview.

If an employee gives the requested two weeks notice and the Company chooses to conclude employment immediately, or prior to the end of that two week period, the Company will continue to pay salary throughout the notice period ․

Plaintiff's base salary did increase to $135,000 effective January 1, 2012.

During the week preceding Sunday, May 13, 2012 Ravi discussed with his supervisor Manish that he was intending to leave ArisGlobal (Exhibits 14, 43).   He testified that there were two reasons that he intended to leave the company:  (1) that management blames the engagement manager team for client problems, and (2) that he wanted to spend time with his father in India who was having health problems.¹  On Sunday May 13, 2012 Ravi emailed Manish (Part of Exhibit 15) saying “Post our initial discussion last week ․ I have firmed up my mind.   Would like us to get together to plan the transition and the exit date.”   But the discussion turned immediately to Ravi's personal concern about his father's ill health in India which he described as the “main reason” for wanting to leave ArisGlobal (Email of May 14 to Manish, part of Exit 15), explaining further, “I may have to make frequent trips to India to take care of my father's health.   I would prefer to have the flexibility of working remotely from India scenario.   Depending on the condition, I may have to even plan to relocate back to India, if required.”   On Wednesday May 16 Manish responded:  “․ ArisGlobal fully empathizes with your situation and is willing to support you while you support your parents.   If you plan to visit India and support your customers from AGI [ArisGlobal] in the immediate future, let us work out the details to ensure that business is not impacted.   If the situation does arrive that you have to relocate to India, ArisGlobal can help you with a position in our PMO Group.   You can work with Debbie and Ram to work out the details of this ․” (Id.) Ravi then sent his resume to Ramachandran Subramaniam (“Ram”) and Debbie Gross (“Debbie”) of the Human Resources (HR) department and Sadnha Dash on May 17, as Ram had requested.   There are several email communications between and among those three and Manish between May 15 and May 18 regarding possible placements of Ravi in India.  “Do we have anything at AGI we can offer Ravi?” “If he can be used in Bangladore and be part of Jaggi's team, then he can be the PMO for certain U.S. accounts and projects.”  “I am sure Vikram too can find him a role in agOD.” “Vikram's agreed to consider Ravi for a position in ag On Demand.”   But an exchange between Manish and Ravi on the afternoon of May 18 effectively put an end to consideration of a position with the company in India.   Ravi to Manish:  “As per our discussion I would like to be relieved from today.   You indicated that it will not be possible.   Please indicate why it is not possible and what is the earliest possible date by which I can exit from the company.”   About an hour later Manish responded “Creating a spot does take some time and we expect to provide you with an offer by next week.   ETA can be confirmed by HR team at our India operations on Monday.   In the event you decide to part ways with ArisGlobal we will expect you to provide effective transition until 01 June which will be your last day at ArisGlobal.”   June 1, 2012 was two weeks (14 days) from May 18, the date of those emails.

Ravi testified that he decided to resign from Aris Global on May 18, when he sent the above email to Manish.

The focus then shifted to the last sentence of Manish's email regarding the company's expectation that Ravi continue for two weeks with ArisGlobal until June 1 for an effective transition.   Ravi at first on May 18 resisted any continuation of his employment, referring to the several provisions in his employment letter and the Employee Handbook that his employment was “at will” as to both parties.  (Ex. 20, 43.)   On May 18 at 4:29 PM he emailed Manish stating that he would “get back to you on whether June 1 is acceptable or not” (Ex. 20).   And at 4:46 he said he had “still not confirmed that I will stay till June 1” and “If I was in your place, I would plan for transition right away.”  (Id.) The next morning, Saturday, May 19, Manish informed Ravi by email (Part of Ex. 19) that “If you decide to leave before 01 June, as per the standard operating procedure company will be unable to provide any re-employment, positive reference and relieving letter.”   Ravi then asked Debbie Gross of the HR department to “please show me the evidence that I agreed to provide 2 weeks or more as a notice period while separation” (sic).   On Monday morning May 21 Debbie emailed to Ravi the “Separation from Employment” and “Notice of Resignation” provisions of the Handbook, describing the two week notice expectation as “common business practice.”   She concluded by saying “Our management team is in review of your email requests and will advise you of your employment status with ArisGlobal today.”  (Part of Ex. 20.)   About an hour later at 3:47 PM Ravi responded to Debbie with copies to Manish and Sonia Veluchamy, saying “thanks for sending this information.   This is understood and accepted.   I have consented to the proposed date [June 1] of relieving and informed Sonia.”  (Emphasis added.)   He testified at trial that he agreed by email on May 21 to stay until June 1, which testimony is corroborated not only by his May 21 email to Debbie Gross et al., but also by his email of May 31, 2012 to Charlie Rowan of the ArisGlobal Human Resources department (Part of Ex. 9) where he said:  “Please note that it was company representative—Manish who asked me to continue to June 1. I complied with his request and delayed my joining with the other company.”   Three days after the May 21 email ArisGlobal sent Ravi a letter on May 24, stating that “ArisGlobal accepts your resignation effective May 21, 2012” (Ex. 8).²  In that letter ArisGlobal terminated Ravi's employment as of May 21 and agreed to pay his salary only through that day, May 21, 2012.   The letter then sets forth more than two single-spaced terms of a proposed agreement on payment and other supposed terms of Ravi's separation from the company.   Although there is a signature line for Ravi's attestation to this supposed agreement, he in fact did not and has not ever signed it.   On the company's “Confidential Termination Data Sheet” updated as of May 31, 2012 (Ex. 10) plaintiff's “Termination Date” and “Last Day in the Office” are listed as Monday May 21, 2012.   His “Resignation Date” is listed as Friday May 18, 2012 (the date of his email to Ramish demanding immediate release from the company).   The Data sheet further states (as did the May 24 letter) that he would be entitled to an additional four days of pay at the daily rate of $519.23 per day or a lump sum of $2,076.92 to be paid on May 31, 2012.   The four days' pay is explained in an email of May 26, 2012 from Charlie Rowan to Ravi (part of Exhibit 9) as offered “in good faith and not a requirement ․ to close out the two week notice period beginning on the 13th, the date you expressed your desire to resign.”   Although Ravi protested that he did not decide to resign until May 18, and two weeks later would be June 1 (Exhibit 9), the company's position was that “You will not be paid through June 1st.”  (Id.) Ravi's final ArisGlobal ADP paystub (Part of Exhibit 10) confirms that he was paid the gross amount of 2,076.92 on May 31, 2012, being the extra four days pay accrued after May 21, 2013, his last day on the job.   After deductions for taxes and medical/dental insurance, the net amount came to $1,682.22 and a copy of his paycheck in that amount is included in the exhibit.

The plaintiff claims that he is owed nine days pay for the period May 22, 2012 through June 1, 2012,³ which he calculates to be $4,673 which works out to $519.22 per day which is consistent with the daily rate ($519.23) listed in the company's Termination Sheet (Ex. 10).

Under all the circumstances as described above the court finds that the plaintiff did resign by email on May 18, 2012 when he removed any ambiguity about staying with the company via a relocation to a position in India.   The May 18 resignation date is consistent with ArisGlobal's Termination Sheet which lists May 18 as the date of resignation.   But that resignation left open the issue of the timing of his actual separation from the employ of the company, as he stayed on the job after that date.   When ArisGlobal repeatedly asked for the customary two-week notice for a transition with separation on June 1, the plaintiff initially resisted, maintaining that no such notice was required, but after the defendant emailed the applicable Handbook provisions to the plaintiff, the parties reached a meeting of the minds on May 21 that plaintiff would stay until June 1. The court rejects the defendant's contention in its brief that Plaintiff did not concede to the June 1 separation date until after he had been terminated.   As Ravi said on May 21 in a second email sent to Debbie Gross at the end of the day (6:48 PM):

Please be informed that I revised my date of termination to June 1st based on Manish's email and subsequent correspondence with Sonia today at 10:35 AM ET. Sonia replied to that email with” Thanks.   Ravi. I am having email issues today but will see when I can speak to HR to resolve the questions below.

Subsequently the company chose to terminate my services w.e.f. today (5/21) without any intimation or negotiation.   Please be aware that as per legal records I chose to agree to 2 weeks of notice period TODAY.  (Emphasis in original.)

(Ex. 21.)

The missing term from Ravi's May 18 resignation was therefore filled in by mutual agreement on the evening of May 21 when he acceded to ArisGlobal's request that he stay until June 1 (two weeks from the May 18 resignation).   When defendant then terminated the plaintiff effective on May 21, the third day of the stipulated notice period it had repeatedly requested, and refused to pay him until June 1 it breached its own Handbook provision that, “If an employee gives the requested two weeks notice and the Company chooses to conclude employment immediately, or prior to the end of that two week period, the Company will continue to pay salary throughout the notice period ․” In this case that breach entitles the plaintiff to the nine days of wages he is seeking, less the four days he has already been paid, or five days' wages.   At $519.23 per day, plaintiff's damages are therefore found to be $2,596.15.

b. Claims for Accrued Bonus Payments

During the tenure of plaintiff's employment with ArisGlobal the company had in effect a bonus plan for its sales personnel known as the Sales Incentive Compensation Plan. Plaintiff's accepted offer of employment letter makes reference to the bonus plan (Ex. 3):  “Your total earnings at target shall be $175,000.08 consisting of annual base salary of $130,000.08 ($5,416.67 semi-monthly) along with an annual Services Incentive Compensation of up to $45,000 at plan.   This plan will be based on Services Objectives in accordance the current year calendar year Compensation Incentive Plan for your position.”   Ravi was provided for each calendar year of his employment (2011 and 2012) with an approved CPT Compensation Plan (“Plan”) for his position, accompanied by a CPT Incentive Compensation Plan Guide (“Guide”) for that year.  (Ex. 6—2011 Plan;  Ex. 7—2011 Guide;  Ex 33—Plan and Guide for 2012.)   Each Plan related specifically to Ravi's particular position, setting a goal of $45,000 of incentive compensation for the year ⁴ based on the extent of satisfaction of sales objectives in three categories:  sales bookings, gross margin services (profitability of contracts entered into after attribution of labor and overhead costs for services utilized), and customer satisfaction.   In 2011 the percentages of incentive compensation of the three components were:  sales bookings—70%;  gross margin services—20%;  customer satisfaction—10%.  (Ex. 6.) For 2012 the percentages were changed to 60–20–20, respectively (Ex 32).   The plaintiff claims he has earned but has not received bonus compensation for sales made under contract to a single customer, OptumInsight, Inc., which plaintiff claims as an account assigned to him during the fourth quarter of 2011 and the first and partial second quarters of 2012.   He calculated his claims for bookings commissions from his own records of sales made as applied to ArisGlobal's formulas and parameters in the applicable Compensation Plan. He accepted the company's template for profitability and the company's assessment of customer satisfaction.   Using that methodology, plaintiff claims unpaid bonus compensation of $4,531 for the fourth quarter of 2011;  $9,208 for the first quarter of 2012;  and;  and $5,253 for the partial (April 1–May 21) second quarter of 2012.

Defendant ArisGlobal disputes plaintiff's entitlement to any bonus compensation above and beyond any which may already have been paid, claiming that the plaintiff has failed to meet his burden of proof that any of the bonus compensation he is seeking became due and payable prior to May 21, 2012, his last day of employment, and that company policy bars him from receiving any bonus or employee incentive compensation unless he was in active employ of the company at the time the compensation became due.   Alternatively, as to the claim for the fourth quarter of 2011, defendant claims that OptumInsight, Inc. was not a client assigned to him at any time during the fourth quarter of 2011.   The court finds that defendant's positions are correct.

The “active employment” limitation is found in several provisions of the employment documentation governing the relationship between the parties.

Bonus is payable only if you are employed by the Company and actively working when bonus is paid.  (Handbook, Addendum 7, p. 21.)

The individual is eligible [to participate in the ArisGlobal Incentive Participation Plan] only if he or she has signed the current fiscal year Incentive Compensation Plan. Eligible Participants must be employed by ArisGlobal and in good standing (2011 Incentive Compensation Plan Guide, Ex. 7, p. 3).

The individual is eligible [to participate in the ArisGlobal Incentive Participation Plan] only if he or she has signed the current fiscal year Incentive Compensation Plan (CPT) for their position.   Eligible Participants must be employed by ArisGlobal and in good standing (2012 Incentive Compensation Plan Guide, Ex. 33, p. 4).

Termination. A Sales employee who has terminated their employment either voluntarily or involuntarily will be eligible to earn commissions on all arrangements that are invoiced on or before the date of termination less any amounts owed to the company in accordance with local laws and the provisions of this Guide.   Commissions cannot be earned on any deals invoiced after the day of termination.

To receive Sales Incentive Plan earnings, Commissions, Bonuses, or SPIFFS, an employee is eligible to receive payments under this plan only if they are employed by ArisGlobal at such time incentive earnings are due to be paid.   (2011 Incentive Compensation Plan Guide, Ex. 7, p. 14–15) (2012 Incentive Compensation Plan Guide, Ex. 33, p. 23).

The court finds, as the plaintiff admitted in his testimony, that the plaintiff signed the 2011 Compensation Plan for his position on December 5, 2011 (Ex. 6, p. 2) and signed the 2012 Compensation Plan for his position on February 28, 2012 (Ex 32, p. 3).   The provisions of the 2011 and 2012 Incentive Compensation Plan Guides are therefore binding upon him.⁵  The plaintiff argues that his signatures are not binding during the year 2011 before December 5, 2011 or during the year 2012 before February 28 (the dates of his signatures on the Plans) because, he claims, there is no retroactivity provision in the Plan or Plan Guide.   But both the 2011 and the 2012 Plan Guide under the heading “Acceptance” provide that “Effective with the start of the fiscal year or as otherwise noted, the participant will earn incentive compensation in accordance with that Fiscal Year's MBO Incentive Compensation Guide and Position Specific Plan for their designated Position.”  (Ex. 7, p. 17;  Ex. 33, p. 25.)   Both Guides further provide specifically at page 3 that “Previous incentive compensation arrangements for participants will terminate and the current Incentive Plan and Guide will go into effect on the first day of the fiscal year unless otherwise noted in the Guide Document.   The Guide will remain in effect until further notice ․ The fiscal year is the 12–month period beginning January 1 and ending December 31.”   There is no effective date other than January 1 noted in either the 2011 or the 2012 Guide document.   The 2011 and 2012 Incentive Compensation Guides therefore cover the full fiscal years which is also the full calendar years 2011 and 2012.

Since it is undisputed that plaintiff's final day of employment (active or otherwise) with ArisGlobal was May 21, 2012, and he was paid his full salary accrued through that date, the issue becomes whether or not Arisglobal has failed to pay him any bonus or installment of incentive compensation that was due to be paid on or before May 21, 2012.   The plaintiff has failed to prove that there was any such failure to pay.

Payment terms for Incentive compensation payments (bonuses) for the year 2011 are set forth in the 2011 Guide (Ex. 7) at page 13:

Achievement bonuses will be paid by the end of March following the close of the fiscal year provided all approvals have been obtained.

Achievement bonuses that are based on the company's financial results, i.e. Company Revenues and Product License Revenue targets will be paid once the audited financials are completed for the current fiscal year (approximately by May 31).

Arms Global reserves the right to change the Incentive Compensation Plan Method as the business needs of the company change.

Ex. 7, p. 13.

The “approvals” required before bonus payments were to be paid are spelled out in detail:

All Department heads will submit the employee yearly achievement results to Human Resources for review and approval.   Upon approval, HR will send an achievement e-mail notification to the employee.   It will be the manager's responsibility to review the achievement results with their employees on an individual basis.

Id.

The plaintiff had the burden of proof as to all elements of his claim, including the nonpayment of a bonus payment by the deadline established under binding company policy.   Although the March 31, 2012 calendar had passed without any bonus payment made to the plaintiff, he failed to present any evidence that the required “approvals” had been completed before his separation on May 21, 2012.   There was no evidence of receipt of an achievement e-mail notification from Human Resources.   There was no evidence of an achievement review on an individual basis with his manager.   Also, to the extent that his bonus would have been based on the company's financial results, such as the calculation of the “gross profits” component of his bonus, he failed to prove the date of completion of the company's audited financial statements.   He testified that he did not know when the audited financial statements of ArisGlobal for 2012 were completed, but claims that since there is no date specified for completion of the annual audit, the company was bound to complete the audit within a reasonable time, citing Keefe v. Norwalk Cove Marina, Inc., 57 Conn.App. 601, cert. denied 254 Conn. 903 (2000) (“When no time for performance of a contract is contained within its terms, the law presumes that it is to be performed within a reasonable time.”   Plaintiff's position is that non-completion of the audit by May 21, 2012 was not within a reasonable time.   The argument fails for lack of any evidence, expert or otherwise, as to what would be a reasonable time for completion of audited financial statements for a global company operating on a December 31 fiscal year-end.   The 2011 Guide had estimated the audit completion date as May 31.   There is nothing in the evidence to indicate that 2012 would be any different.   Plaintiff's employment was terminated ten days prior to May 31, 2012.

Plaintiff claims that he was told verbally by a representative of ArisGlobal at the time he started his employment that all bonus payments would be made not later than 45 days after the end of each quarter, but admitted that he had no writing to that effect.   Even though that testimony came in without objection, it would be contrary to the parol evidence rule for the court to consider that testimony.   The Guides for both 2011 and 2012 establish specific definite timetables for payment of bonuses, neither of which is 45 days after the end of each quarter.   Plaintiff's claimed verbal deadline of 45 days after quarter endings would vary, alter and contradict the written provisions of each Guide.

The parol evidence rule is not a rule of evidence but a rule of substantive evidence law.  Damora v. Christ–Janer, 184 Conn. 109, 441 A.2d 61 (1981).   Subject to a few exceptions, the parol evidence rule forbids the use of oral testimony to vary or contradict the written words of a contract.   Because such testimony is legally irrelevant when offered for that purpose, it is inadmissible.  TIE Communications, Inc. v. Kopp, 218 Conn. 281, 288–89, 589 A.2d 329 (1991).   In consequence, even if parol evidence is improperly admitted, it is ineffective to vary the written contract because it cannot legally affect the rights of the parties.  Ruscito v. F–Dyne Electronics, 177 Conn.App. 149, 259, 411 A.2d 2371 (1979);  Nagel v. Modern Investment Corp., 132 Conn. 698, 700, 46 A.2d 605 (1946).   See also Conn. Accoustics, Inc. v. Xhema Construction, Inc., 88 Conn.App. 741, 745, 870 A.2d 1178.

Colin C. Tait & Eliot D. Prescott, Tait's Handbook of Connecticut Evidence, § 10.4.1 (4th Ed.2008).

As an alternative ground of decision as to the fourth quarter of 2011, the court finds that the sole client or customer on whose transactions plaintiff bases his bonus claim was not assigned to the plaintiff during the fourth quarter of 2011.   OptumInsight, Inc. was assigned to the plaintiff by an email of February 9, 2012 from Manish, assigning to Ravi the OptumInsight account for all transactions “going forward.”  (Ex 27A.) Although Ravi claimed he had evidence that he was “involved” with OptumInsight during the fourth quarter of 2011, he testified that it was “not in the book” [of exhibits] and he could not find it.

For the year 2012, the Incentive Compensation schedule of bonus payments was:

Commissions are paid quarterly according to the terms and conditions of the approved Position specific plan.   Quarterly payments will be made no later than the last day of February, May, August, and November with the exception of the payment of the fourth quarter results.   Commissions for the fourth quarter will be paid in two installments.   The first installment of the fourth quarter payment will be calculated using the commission rate in effect for the third quarter.   The second installment of the final fourth quarter commission payment will be made once the annual audit is complete and final revenue recognition is determined.   2012 Guide, Ex 33, p. 12.

This very clear schedule bars plaintiff's claim for bonus compensation for the second quarter of 2012, which would have been payable not later than August 31, 2012, long after Ravi's employment was terminated on May 21, 2012.   And it also bars the claim for bonus compensation for the first quarter of 2012, due not later than the last day of May—May 31, 2012.   Ravi's employment terminated on May 21.   He was no longer an active employee of ArisGlobal on the day the second quarter bonus was due to be paid.

Plaintiff makes a passing one-sentence claim that “The company fired Mr. Katwani in bad faith, to avoid paying commissions due, when they promised payment within 45 days after the quarter end.”  (Plaintiff's Memorandum, October 14, 2012 (No. 107) p. 4.) The argument is not sufficiently developed factually or legally.   The claimed 45–day promise, as explained above, cannot be considered by the court because of the parol evidence rule, and the two-week notice provision of the Handbook specifically provides for the event of a termination by the employer during the two-week notice period and stipulates the damages for that happening—payment of wages for the remainder of the notice period.   The plaintiff's arguments that the “active employment” requirement renders the Handbook illegal and void for vagueness are likewise undeveloped and are rejected by the court.   See Treglia v. Santa Fuel, Inc., 148 Conn.App. 39 (2014).  (Analysis, rather than mere abstract assertion, is required in order to avoid abandoning an issue by failure to brief the issue properly.)

The court therefore finds for the defendant on all of the bonus claims.

COUNT TWO

Claim for Double Damages and an Award of Attorneys Fees under Conn Gen.Stat. § 31–72

As mentioned, plaintiff is also seeking double damages and an award of attorneys fees pursuant Conn Gen Stat. § 31–72.⁶  Although the nine days' or the five days' pay have been described herein generically as “wages,” that term has its own specialized meaning when claiming relief under Section 31–72.   The statutory definition of “wages” in § 31–71a(3), which governs claims for collection of unpaid wages under § 31–72, is:  “ ‘Wages' means compensation for labor or services rendered by an employee whether the amount is determined on a time, task, piece, commission or other basis of calculation.”   It is undisputed that plaintiff's wages were paid in full through May 21, 2012, Ravi's final day on the job.   Those payments were in consideration of his services as an ArisGlobal employee and were “compensation for labor or services rendered by an employee” and, therefore, had they not been paid, would have qualified as statutory wages for purposes of a claim under § 31–72.   But the additional nine days' pay the plaintiff seeks in this action (reduced by the court to five days' pay) would be payments to a former employee and would not be “for labor or services rendered by an employee,” which labor or services had already been fully compensated.   One superior court has characterized payments to a former employee above and beyond compensation for his or her labor or services rendered as “separation pay” or “severance pay” and defined its status with respect to § 31–72 as neither allowable “wages” nor an allowable “fringe benefit,” saying:

Although § 31–76k now includes accumulated paid vacation Fulco's ⁷ reasoning that the legislature intended that § 31–76k and the statutory definition of wages in § 31–71a(3) concern different types of remuneration is still valid as it relates to plaintiff's concern for severance pay.   Section 31–76k addresses payment for accrued fringe benefits upon termination of employment, including certain fringe benefits, whereas § 31–72 relates to “wages” as defined in § 31–71a(3).   The definition of wages is limited to remuneration for labor or services rendered ․ The statutory definition of “wages” as used in § 31–72 is limited on its face and makes no mention of severance pay.   If the legislature in enacting § 31–72 or amending § 31–72 did not intend to include such benefits as severance pay within the meaning of wages as used in the statute, then it would be illogical to conclude that the legislature intended that § 31–76k would include severance pay when § 31–76k does not specify severance pay on its list of fringe benefits.  (Citation and internal quotation marks omitted.)

Stoddard v. WBM Plaza, LLC, Superior Court, Judicial District of Fairfield at Bridgeport, Docket No. CV05–4007856 (March 20, 2006, Arnold, J.), 2006 Conn.Super Lexis, 895, *12–*13 [41 Conn. L. Rptr. 91] (motion to strike count claiming severance pay under Conn. Gen.Stat. § 31–73 granted).

See, also, Weurth v. Schott Electronics, Inc. Superior Court, Judicial District of Ansonia–Milford at Milford, Docket No. CV91–036406 (March 13, 1992, Flynn, J.), 6 Conn. L. Rptr. 167, 1992 Conn.Super. Lexis 846 (Severance pay does not constitute wages for purposes of General Statutes § 31–72);  Mangiofico v. McKelvey, Superior Court, Judicial District of New Britain, Docket No. CV04–4000609S (April 18, 2005, Burke, J.) (Motion to strike claim for unpaid severance pay under § 31–72 granted.  (“Since the severance pay is not ‘compensation for labor or services rendered by an employee ․” the severance pay does not constitute wages for the purposes of General Statutes § 31–72.)

Although there is no appellate authority directly on point with regard to severance pay claims under § 31–72, the Supreme Court has determined in a closely analogous area that for the purposes of Conn. Gen.Stat. § 31–222 (unemployment compensation), since “wages cease when employment does, severance pay cannot be considered wages,” McGowan v. Administrator, 153 Conn. 691, 693 (1966).

On the basis of the foregoing analysis and authorities the court holds that the plaintiff is not entitled to double damages or an award of attorneys fees under Conn. Gen.Stat. § 31–72 with regard to the five days' pay awarded under Count One.

Order

For the foregoing reasons the court enters judgment for the plaintiff in the amount of $2,596.15 plus costs as taxed by the Clerk.

Alfred J. Jennings, Jr.

Judge Trial Referee

FOOTNOTES

FN1. No trial transcripts have been prepared.   Statements from the evidence are taken from the court's handwritten notes and from listening to the digital audio recording of the trial..  FN1. No trial transcripts have been prepared.   Statements from the evidence are taken from the court's handwritten notes and from listening to the digital audio recording of the trial.

FN2. Ravi testified as to receipt of a letter on May 21, 2012, terminating his employment, but no such letter has been placed in evidence..  FN2. Ravi testified as to receipt of a letter on May 21, 2012, terminating his employment, but no such letter has been placed in evidence.

FN3. May 22 through June 1 would usually be counted as a ten-day period, but plaintiff testified precisely that he was claiming nine days' pay at his calculated amount of $4,673 and the court will treat the claim as being in that amount..  FN3. May 22 through June 1 would usually be counted as a ten-day period, but plaintiff testified precisely that he was claiming nine days' pay at his calculated amount of $4,673 and the court will treat the claim as being in that amount.

FN4. The 2011 plan covered the full year 2011.   Since the plaintiff was not hired until September 1, 2011, his 2011 goal was pro-rated down to one-third of the $45,000 goal or $15,000..  FN4. The 2011 plan covered the full year 2011.   Since the plaintiff was not hired until September 1, 2011, his 2011 goal was pro-rated down to one-third of the $45,000 goal or $15,000.

FN5. As the plaintiff testified he did not sign either the 2011 or the 2012 Compensation Plan Guide document because there are no signature lines on the Guides and they are not meant to be signed separately from the signature on the Incentive Compensation Plan for that year.   Each Guide provides that “By signing the acceptance portion of the position specific MBO Incentive Compensation Plan the participant acknowledges and accepts responsibility for reviewing the contents of both the Guide and their Position Specific Compensation Plan, he or she agrees to the terms stated therein ․” (Ex. 7. P. 17;  Ex. 33 p. 25.).  FN5. As the plaintiff testified he did not sign either the 2011 or the 2012 Compensation Plan Guide document because there are no signature lines on the Guides and they are not meant to be signed separately from the signature on the Incentive Compensation Plan for that year.   Each Guide provides that “By signing the acceptance portion of the position specific MBO Incentive Compensation Plan the participant acknowledges and accepts responsibility for reviewing the contents of both the Guide and their Position Specific Compensation Plan, he or she agrees to the terms stated therein ․” (Ex. 7. P. 17;  Ex. 33 p. 25.)

FN6. Conn. Gen.Stat. § 31–72 provides in relevant part that “whenever any employer fails to pay an employee wages in accordance with the provisions of sections 31–71a to 31–71i, inclusive, or fails to compensate an employee in accordance with section 31–71k [accrued fringe benefits upon termination] ․ such employee ․ may recover, in a civil action, twice the full amount of unpaid wages, with costs and such reasonable attorneys fees as may be allowed by the court ․”.  FN6. Conn. Gen.Stat. § 31–72 provides in relevant part that “whenever any employer fails to pay an employee wages in accordance with the provisions of sections 31–71a to 31–71i, inclusive, or fails to compensate an employee in accordance with section 31–71k [accrued fringe benefits upon termination] ․ such employee ․ may recover, in a civil action, twice the full amount of unpaid wages, with costs and such reasonable attorneys fees as may be allowed by the court ․”

FN7. Fulco v. Norwich Roman Catholic Diocese Corp., 27 Conn.App. 800 (1992)..  FN7. Fulco v. Norwich Roman Catholic Diocese Corp., 27 Conn.App. 800 (1992).

Jennings, Alfred J., J.T.R.