Lelio v. Marsh United States, Inc.

JASON E. LELIO, Plaintiff, v. MARSH USA, INC., Defendant.

Civ. No. 15-10335-MLW

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

August 14, 2017

MEMORANDUM AND ORDER

WOLF, D.J.

Plaintiff Jason Lelio, a former employee of defendant Marsh USA Inc. ("Marsh"), alleges that Marsh owes him $50,000 in compensation. Lelio has asserted claims for violations of the Massachusetts Wage Act, breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, and quantum meruit. Marsh has moved for summary judgment on all of Lelio's claims. See Docket No. 42.

The case was referred to Magistrate Judge Jennifer C. Boal for full pretrial purposes, including a report and recommendation on any dispositive motions. See Docket No. 24. The Magistrate Judge issued her Report and Recommendation on June 19, 2017. See Docket No. 58. In it she recommends that the court allow Marsh's motion for summary judgment.

The Magistrate Judge advised the parties that, pursuant to Rule 72(b) of the Federal Rules of Civil Procedure, they had 14 days to file specific written objections to her recommendation. Accordingly, any such objections were due by July 3, 2017. Neither party, however, filed any objections.

Because the parties have not objected to the Report and Recommendation, the court need not review the issues it addresses de novo. Waiver of de novo review by failing to file proper objections does not entitle a party to "some lesser standard" of review. Thomas v. Arn, 474 U.S. 140, 149-50 (1985); see also Costa v. Hall, No. 00-12213-MLW, 2010 WL 5018159, at *17 (D. Mass. Dec. 2, 2010) ("Absent objections, the court may adopt the report and recommendation of the magistrate judge."). However, review by the court in such circumstances is not prohibited, and some level of oversight, even if not de novo, is encouraged. See Henderson v. Carlson, 812 F.2d 874, 878 (3rd Cir. 1987). The court has reviewed the Report and Recommendation and finds it to be thorough and persuasive. It is, therefore, being adopted.

In view of the foregoing, it is hereby ORDERED that:

1. The attached Report and Recommendation (Docket No. 58) is ADOPTED and INCORPORATED in this Memorandum.

2. For the reasons stated in the Report and Recommendation, Defendant's Motion for Summary Judgment (Docket No. 42) is ALLOWED.

3. Judgment shall enter for defendant Marsh USA Inc. on all counts.

/s/_________

UNITED STATES DISTRICT JUDGECivil Action No. 15-10335-MLW

REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

[Docket No. 42]

June 19, 2017

Boal, M.J.

Plaintiff Jason Lelio, a former employee of defendant Marsh USA, Inc. ("Marsh"), alleges that Marsh owes him $50,000 in compensation. Lelio has asserted claims for violations of the Massachusetts Wage Act, breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, and quantum meruit. Marsh has moved for summary judgment on all of Lelio's claims against it. Docket No. 42.¹ For the following reasons, the Court recommends that the District Judge assigned to this case grant Marsh's motion for summary judgment.

I. PROCEDURAL HISTORY

On October 30, 2014, Lelio filed his complaint in Massachusetts Superior Court. Docket No.5 at 2-11. Marsh removed the case to this Court on February 11, 2015. Docket No. 1.

On February 18, 2015, Marsh filed a motion to dismiss the complaint. Docket No. 7. The District Court denied the motion on September 29, 2015. Docket No. 23.

On September 19, 2016, Marsh filed the instant motion for summary judgment. Docket No. 42. Lelio filed an opposition on October 19, 2016. Docket No. 46. On November 3, 2016, Marsh filed a reply. Docket No. 50.

The Court heard oral argument on June 16, 2017.

II. FACTS²

A. Lelio's Hire

Lelio applied to work at Marsh in or about early 2007.³ After interviewing Lelio by phone and in-person, Financial Accounting Claims Services ("FACS") Northeast Region Leader, Raymond Hutnik, offered Lelio a Senior Consultant position in Marsh Risk Consulting's ("MRC") FACS practice group.⁴

Mr. Hutnik explained the compensation package being offered to Lelio, including a base salary of $175,000, a signing bonus, and eligibility for annual incentive compensation that would be based "on the group's performance and [Lelio's] performance."⁵ Mr. Hutnik did not provideany more detail regarding incentive compensation during this discussion.⁶

In addition to his Senior Consultant title, Lelio was given an officer title upon hire - Vice President.⁷ In or about 2008, Lelio was promoted to Senior Vice President.⁸ By 2013, Lelio had also been promoted to a Managing Consultant position.⁹

On May 25, 2007, Marsh sent Lelio an offer letter that outlined his $175,000 base salary and a signing bonus.¹⁰ The offer letter did not reference incentive compensation and Lelio does not recall receiving any documents relating to incentive compensation upon hire.¹¹ The letter did, however, direct Lelio to Marsh's intranet site for information about benefits available to him.¹² The letter also stated: "This offer letter supersedes all prior agreements and understandings oral or written between you and the Company."¹³ On June 4, 2007, Lelio signed the offer letter and returned it to Marsh.¹⁴

Upon hire, Lelio executed a document stating: "I acknowledge that no supervisor, manager or other representative of MMC or Marsh has the authority to make any verbal promises, commitments or statements of any kind regarding MMC's and Marsh's policies,procedures or any other issues that are legally binding on MMC and/or Marsh."¹⁵

Lelio accessed Marsh's intranet site numerous times throughout his employment, including when he signed up for benefits, completed his self-evaluations and reviewed Mr. Hutnik's evaluations of his performance.¹⁶ Included among such information on Marsh's intranet site is a document entitled, Compensation At Marsh, A Guide For Colleagues ("Compensation Guide"), which details the compensation available to Marsh employees.¹⁷ While the Compensation Guide is updated regularly, its description of incentive compensation remained materially the same throughout Lelio's employment.¹⁸

The 2013-2014 Compensation Guide's section on "Components of Total Compensation" states that Marsh employees are eligible for various types of incentive compensation, including Discretionary Bonuses, Sales Compensation, and Long-Term Incentive.¹⁹ With respect to Discretionary Bonus (referred to as "ICP"), the Compensation Guide states:

Given that the ICP is directly related to the performance of Marsh, bonuses will increase or decrease from year to year and are, therefore, a true example of variable pay. . . . [R]eceiving a bonus one year doesn't necessarily mean you will receive one in the following year. In other words, bonuses are trulydiscretionary.²⁰

With respect to Long Term Incentive (referred to as "LTI"), the Compensation Guide states:

Long-term incentive plans are designed to reward a colleague's potential success as well as assure the company's longer-term business goals are achieved. The Long Term Incentive Plan (LTIP) provides awards to key colleagues whose contributions today can impact Marsh's future success. . . . LTIP awards are 'vested' or earned over a period of time, usually over 3 to 4 years from the date of the grant.²¹

Marsh's Compensation Guide stated that incentive compensation, including both ICP and LTI, was entirely discretionary.²²

Marsh also produced a guide entitled "2013 - 2014 Compensation at Marsh: A Guide for Managers."²³ Lelio maintains that he did not receive a copy of this guide.²⁴ The Guide for Managers stated that "[o]ver the next few years in order to meet our challenging growth initiatives there will be a shift in the pay mix from short-term to more long-term incentives for many of our highest performing senior leaders."²⁵ The corresponding section in the Compensation Guide did not contain this language.²⁶

B. The MRC 2008 Compensation Plan Presentation

In February 2008, Lelio attended a presentation at which MRC's goals relating to ICP forperformance year 2008 were discussed ("2008 Presentation").²⁷ The PowerPoint slides detailing the presentation, which Lelio received and reviewed during his employment, included a chart that provided for a guaranteed minimum ICP for several positions, including senior consultants.²⁸ Managing consultants were not among those guaranteed a minimum bonus in the 2008 Presentation.²⁹ During 2008, Lelio was a Senior Consultant; by 2013, Lelio had been promoted to Managing Consultant.³⁰

The 2008 Presentation materials stated that they set forth "general guidelines only, and management [had] complete discretion to allocate Discretionary Bonuses [ICP] in a way that depart[ed] from these guidelines."³¹ The materials also directed employees to Marsh's intranet site for addition information about incentive compensation.³² The presentation materials also stated that the 2008 Presentation was "[e]ffective for calendar year 2008."³³

The PowerPoint was entitled "MRC 2008 Bonus Program Overview," and at the top of several slides in large bold text were the words "MRC 2008 Bonus Plan."³⁴ The materials stated that bonus eligibility would depend on MRC achieving performance goals set for 2008 and thatincentive compensation relating to performance year 2008 would be paid by March 15, 2009.³⁵

Lelio testified at deposition that the 2008 Presentation was not a contract and that he did not know if the guidelines detailed therein had ever been applied.³⁶

C. Marsh's Incentive Compensation Practices

During Lelio's employment, then-FACS Global Leader Kevin McCarthy was responsible for allocating and distributing year-end compensation awards for the FACS group across the United States.³⁷ Toward the end of each calendar year, Mr. McCarthy created a spreadsheet listing all FACS employees and their performance data, including billed hours, revenue generated, annual performance ratings, and prior year compensation awards.³⁸ Mr....