Lynch v. New Deal Delivery Service Inc.

974 F.Supp. 441

Fran J. LYNCH, Plaintiff, v. NEW DEAL DELIVERY SERVICE INC., Steven Sacharoff and Bernard Geik, individually and in their capacities as principals of New Deal Delivery Service Inc., Defendants.

Civil No. 95-6269 (WHW).

United States District Court, D. New Jersey.

August 12, 1997.

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Jane B. Jacobs, Klein, Zelman, Rothermel & Dichter, L.L.P., New York City, for Plaintiff.

Pamela A. Phillips, Fischbein, Badillo, Wagner, Harding, Jersey City, NJ, for Defendants.

OPINION

WALLS, District Judge.

Plaintiff Fran J. Lynch brings this suit against defendants New Deal Delivery Service, Inc., Steven Sacharoff and Bernard Geik, alleging that they discriminated against her and terminated her employment on the basis of her sex, created a hostile work environment, subjected her to quid pro quo sexual harassment, and fired her in retaliation for resisting the alleged sexual harassment and hostile environment. She also charges defendants with intentional infliction of emotional distress, violation of the public policy of the State of New Jersey, breach of contract, and breach of the implied covenant of good faith and fair dealing.

Defendants now move for summary judgment on all counts of the Complaint. Pursuant to Rule 78 of the Federal Rules of Civil Procedure, the Court decides this matter on the basis of the written submissions of the parties. For the reasons stated below, the motion is granted in part and denied in part.

I. FACTUAL BACKGROUND

Plaintiff Fran J. Lynch ("Lynch") was employed by defendant New Deal Delivery Service, Inc. ("New Deal") as its chief financial officer from November 8, 1993 until she was fired on July 18, 1994. Defendants Steven Sacharoff ("Steven Sacharoff") and Bernard Geik ("Geik") respectively serve as chief operating officer and president, and are also part owners of New Deal. For most of Lynch's time at New Deal, and until his death in May 1994, the organization was run by Bernard Sacharoff ("Bernard Sacharoff"), the principal owner of New Deal and the father of Steven Sacharoff.

Defendants assert that at the time that Lynch was hired, New Deal was in a precarious financial position. It was hoped that Lynch, with her experience and financial expertise, would "turn the company around." Certification of Steven Sacharoff ("Sacharoff Certif.") at ¶ 4. When she was hired, Lynch sent a letter to Steven Sacharoff outlining the terms of the employment agreement they had reached over the telephone. The relevant portions of the letter, dated November 1, 1993, read as follows:

This letter will serve the purpose of outlining the terms of my employment with New Deal Delivery Service, Inc. It is not to be construed as a contract of employment, obligating either the employer, New Deal Delivery Service, Inc. or the employee, Fran J. Lynch, to a specified contract period.... Commencing November 8, 1993, the following compensation agreement will be in effect:

a) A base annual salary of $135,000

b) A bonus incentive plan payable at the end of 12 months of employment, or upon an earlier termination of our relationship as follows:

Employee will utilize a "best efforts" approach to reduce both fixed and variable expenses of New Deal Delivery Service, Inc. Employee will quantify savings to Employer in an agreed upon fashion. The first $750,000 of savings will flow to Employer, with an incentive to be paid to Employee of 10% of all savings in excess of the initial $750,000. This incentive bonus shall be payable at the end of the twelve months of employment or upon an earlier termination of our relationship, and shall be subject to the respective employment taxes in effect at the time.

* * * * * *

This document represents the complete agreement between the parties, and there are no written or oral understandings, promises or agreements that are not incorporated herein in full.

Sacharoff Certif., Exh. B. The letter is signed by Lynch and Steven Sacharoff, on behalf of New Deal, and there was no other writing between the parties. Defendants and Lynch agree that Lynch was hired as an "at-will" employee.

On December 15, 1993, Lynch's birthday, Stephen Pirrone ("Pirrone"), New Deal's executive vice president, told Lynch that there was a vendor in the office who needed to see her.¹ Lynch asked if she could set an appointment with the vendor for a later date, but Pirrone insisted that she come with him. Lynch walked with Pirrone into an area where a male stripper began to perform. She later testified that there were sixty to seventy employees in the room; however, Pirrone recalls only about fifteen people present. Lynch protested when the stripper lifted her into the air and she requested that he put her down, after which she returned to her office. Pirrone came to see Lynch after the performance and she told him that she thought what had happened was inappropriate. Pirrone apologized, but also explained, "You have to learn to lighten up a bit. We are all family here. Women need this to blow off steam. We do it all the time." Deposition Testimony of Fran J. Lynch ("Lynch Dep.") at 184:21-24, 185:5. Lynch saw Steven Sacharoff later in the day and when she asked if he knew what had happened, he smiled in response. Pirrone testified that female employees in the office sought his permission to bring in the stripper and asked him to pay for the performance, which he did out of his own pocket. He did not arrange for the stripper. Lynch never discussed the incident with anyone else until she filed this lawsuit.

During Lynch's time at New Deal, defendant Geik called her at her apartment several times at night. He would begin the conversations by asking Lynch, "Hi, babe, what are you doing?" Id. at 210:12-13. Geik would then ask her a business question that she had already answered during the day and would always end the conversation by asking Lynch not to tell anyone that he had called her. Lynch admits that Geik never proposed anything improper, and she never let him know that she found the phone calls to her home offensive.

In late April or early May 1994, Geik told Lynch, "You look really great. I can't help noticing since you have been working out, you must have lost a lot of weight. It's not that I stare at your body all the time, but you can't help noticing." Id. at 213:19-23. On several other occasions, Geik suggested that he and Lynch work out together at his gym and that they have dinner afterwards. Lynch declined the invitations, and states that Geik did not appear hostile or try to force or pressure her to change her mind.

During a meeting with Steven Sacharoff and Pirrone, Geik asked Lynch for the key to the apartment that New Deal was renting for her. Lynch refused to give it to him. Geik then asked her, "What do you do on week nights? You got something on the side? Are you playing around?" Id. at 215:15-18. He had made similar comments on other occasions in the presence of Lynch's co-workers. In the spring of 1994, Geik discussed his marital problems with Lynch during a car ride to a meeting. He explained to Lynch that he was trying to decide whether or not he should stay married. Lynch never complained to anyone regarding Geik's conduct.

While Lynch was employed at New Deal, several incidents occurred involving other female employees. One involved a receptionist named Annie who Pirrone told Lynch to fire. When Lynch asked why, Pirrone replied, "Sachs [defendant Steven Sacharoff] is on the loose again. He found a new toy. We are going to have a problem. She is too pretty." Id. at 193:10-12. Pirrone said that Steven Sacharoff had a habit of "hanging around the attractive girls" and "putting his hands on them." Id. at 194:13-18. Lynch observed Steven Sacharoff hanging around Annie and once saw him sitting next to her with his hand on her knee. According to Lynch, Annie was replaced with another "pretty" receptionist with whom Steven Sacharoff also spent a lot of time. Id. at 198:19-25.

Another episode involved Linda Lefebre ("Lefebre"), who was a collections manager at New Deal. Lefebre approached Lynch and asked her to "do something" about Steven Sacharoff because he was "hanging around [her] desk" and "putting his hands on [her]." Id. at 200:18-201:2. When Lynch related this incident to Pirrone, he explained that this type of behavior had occurred before and that Bernard Sacharoff, Steven's father, knew of his son's problem. Pirrone told her that Steven Sacharoff had also bothered a secretary named Heather to the point where she intended to quit.

During the second quarter of 1994, Lynch was asked to comfort Lori Gancarz ("Gancarz"), one of the secretaries at New Deal. Gancarz was upset after Steven Sacharoff lifted her into the air, causing her dress to go over her head. After Pirrone and Gancarz spoke to Bernard Sacharoff about this incident, Bernard Sacharoff warned his son in front of Pirrone that if this ever occurred again, he would be thrown out of the business. Lynch never spoke to anyone at New Deal regarding these events.

The final occurrence before Lynch's termination involved Scott Roberts ("Roberts"), personnel director for Unimark and S & R, two affiliated companies with which New Deal shares common ownership. Roberts had apparently been arrested at Unimark for exposing himself to a female job applicant. Lynch learned of the incident during a meeting when Steven Sacharoff, Geik, and another man were laughing and joking about it. Concerned by their cavalier attitude, she advised them to "sober up," call counsel to determine a corporate response, and find out whether they had employment practices liability insurance. Id. at 224:2-15.

Pirrone terminated Lynch's employment on July 18, 1994. Lynch twice asked for an opportunity to speak to Steven Sacharoff regarding her performance bonus, but was never given that opportunity. Defendants claim that they informed Lynch that she was let go...