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Welland v. Citicorp, Inc

United States District Court for the Southern District of New York
Dec 17, 2003
2003 WL 22973574 (S.D.N.Y. 2003)


00 Civ. 738 (NRB)

December 17, 2003, Decided . December 17, 2003, Filed

For Plaintiff: Martin D. Edel, Miller & Wrubel, P.C., New York, NY.

For Defendants: Bettina B. Plevan, Proskauer Rose, LLP, New York, NY.




Plaintiff, Stanley Welland, has brought this action against Citigroup, Inc., Citicorp., Inc., Citicorp Global Technology, Inc., and Citicorp International Communications, Inc. (collectively, "defendants" or "Citigroup") alleging age discrimination and breach of contract. Presently before the Court is defendants' motion for summary judgment on all claims. For the reasons stated below, defendants' motion is granted in its entirety.


Defendants have asserted that Mr. Welland's Rule 56.1 Statement should be disregarded because "instead of responding to defendants' statements of facts by admitting or denying them, [Mr.] Welland has given his own 'spin' on them to fit his theory of the case." Def.'s Reply at 1. However, because Mr. Welland's response to defendants' statement of facts adequately admits or denies the allegations therein sufficiently for us to decide this motion, we decline to disregard his Rule 56.1 statement in its entirety.

Plaintiff, who was employed by Citigroup from October 1996 through November 1999, as a senior vice president and division executive of Citicorp Global Technology, was fifty-six years old at the time his employment was terminated. See Defendants' Rule 56.1 Statement ("Defs.' Stmt.") P 1, Plaintiff's Rule 56.1 Statement ("Pl.'s Stmt.") P 3. Plaintiff's position was considered "very senior" at Citicorp. See id. P 13. In October 1998, Citicorp merged with Traveler's Group and the companies together formed Citigroup (the "Company"). See id. P 2. Mr. Welland's job responsibilities at the Company included negotiating with vendors of technology-related services and inviting vendors to bid on contracts to provide particular services to Citigroup. See id. at P 10.

During plaintiff's employment, Citigroup maintained policies regarding the acceptance of gifts or gratuities from vendors, see id. at 14. The January 1992 "Corporate Policy Manual," which was effective when plaintiff began his employment, stated, "avoid any situation in which your personal interests may conflict- or appear to conflict- with the interests of Citicorp or its customers." Defs.' Stmt. P 15. It cited as a "potential conflict" any activity that creates an impression that "business is done with Citicorp only through friendship, family ties, giving and receiving gifts, or to gain favor with a special interest group." Id. Also in effect during plaintiff's employment was the Citigroup "Statement of Business Practices," which stated, amongst other things, "do not accept, or allow a close family member to accept gifts, services, loans, or preferential treatment from anyone- customers, suppliers, or others- in exchange for a current of future business relationship with Citigroup." Affidavit of Bettina B. Plevan ("Plevan Aff.") Ex. J at Welland 864.

There are disputes between the parties as to the precise details of these policies. See Pl.'s Stmt. P 14. However, these disputes do not affect the outcome of defendants' motion and thus, will not be addressed in this memorandum.

a. Plaintiff's Allegedly Improper Behavior and Termination

Throughout his employment at Citigroup, plaintiff attended several events and gatherings where all or part of the expenses associated with the event were paid for by vendors of Citigroup. See Defs.' Stmt. P 23. These trips included special events, such as the 1997 Indianapolis 500, see id. P 29, the 1998 and 1999 Pebble Beach Pro-am Golf Tournaments, see id. PP 34, 42, the 1999 Daytona 500, see id. P 44, and the 1999 Superbowl, see id. P 41, as well as conferences sponsored by vendors in locations such as Hawaii, see id. P 32, Bali, see id. P 30, and Geneva, Switzerland. See id. P 68.

The specific events that Mr. Welland attended are listed in Defendants' Rule 56.1 Statement PP 23-71. Although Mr. Welland disputes certain facts regarding which expenses were paid by vendors in connection with each event, with the exception of one event, see Pl.'s Stmt. P59, there is no dispute that Mr. Welland attended each event and that at least part of the expenses for each event were paid for by Citigroup vendors. See Pl.'s Stmt. PP 23-71.

In October 1999, Citigroup's internal investigative division received an anonymous letter, which was also sent to Mr. Welland's manager, alleging that Mr. Welland had received improper gratuities from vendors. In November 1999, the letter was referred to Thomas Doonan, an investigator for Citigroup Investigative Services ("CIS"). See Defs.' Stmt. PP 73-76. The Company determined that an investigation into the allegations against plaintiff would be commenced, and Mr. Welland was informed of the investigation by his manager, Thomas Trainer. See id. P 78.

Plaintiff asserts that this fact should not be considered because the letter is hearsay and lacks foundation. See Pl.'s Stmt. P 72. However, defendants rely on this letter not merely for the truth of its assertions, but also for its effect on the readers.

Plaintiff disputes these facts on the grounds that the letter is inadmissible hearsay. His objections may be disregarded for the same reason cited above in footnote 4.

On November 15, 1999, Mr. Welland submitted to an audio-taped interview in connection with the investigation. See id. PP 79, 80. During the interview, Mr. Welland admitted both that he attended several vendor-sponsored or similar events and that vendors had paid many of the expenses associated with his attendance at these events. See id. PP 82-86. He also stated that he did not seek company approval to attend the events because he did not believe that he was required to do so. See id. P 88.

While defendants assert that this interview was conducted as part of the investigation into the allegations in the letter, Mr. Welland argues that defendants were already determined to terminate his employment at the time of this interview. See Pl.'s Stmt. P 79.

The day after his interview, Mr. Welland exercised 67,500 vested stock options for a total gain of $ 1,651,347. See id. P 89. That same day, he also sent an email to Thomas Doonan and Thomas Trainer, clarifying several issues that were addressed in the interview and focusing mainly on why he had awarded various Citigroup contracts to AT&T. He also stated toward the end of the lengthy email that all of the vendor events he attended had been "cleared" by his former supervisor, Mary Alice Taylor. See Welland Aff. Ex. 57 at 3.

The tape of Mr. Welland's interview was provided to Citigroup's Senior Vice President for Human Resources, Michael D'Ambrose. See id. P 91. Shortly after the interview, Citigroup's in-house counsel, Mr. Ross, called Ms. Taylor to ascertain what she knew about Mr. Welland's trips. Mr. Ross then relayed the information he learned from Ms. Taylor to Mr. D'Ambrose. The parties are in dispute as to the response that was given to Mr. Russell by Ms. Taylor. While defendants assert that Ms. Taylor denied any knowledge of Mr. Welland's activities, see id. P 95, plaintiff argues that he obtained Ms. Taylor's approval to attend each of the vendor-sponsored events in which he participated. See Pl.'s Stmt. P 94. Ms. Taylor testified at her deposition that she did not know about any of Mr. Welland's trips. See Plevan Aff. Ex. D at 83-84, 171-72, 200. She also testified that she told in-house investigators that she had not approved Mr. Welland's trips. See id.

Although Mr. Welland now argues that he received permission from Ms. Taylor to attend each of the vendor-sponsored events at issue, there is no dispute that when she was questioned by Mr. Ross, she denied having provided pre-approval for Mr. Welland's attendance at any of these events. Similarly, although Mr. Welland points to his email of November 16, 1999 as evidence that he had informed the Company, prior to his termination, that contrary to his own statements during the taped interview, he actually had received permission with respect to each vendor-sponsored event. This email was sent only to Thomas Doonan, Thomas Trainer, and another Citigroup employee by the name of Harold Levy, however. There is no evidence in the record, nor does Mr. Welland allege that Mr. D'Ambrose, the individual who ultimately decided to terminate him, ever became aware of the email.

Following the taped interview and the subsequent statements from Ms. Taylor, Mr. D'Ambrose recommended to Mr. Trainer, Mr. Welland's then-current manager, that plaintiff be terminated for cause. See id. P 98. Mr. Trainer followed this recommendation, and plaintiff was told of his termination at a meeting on November 23, 1999. See id. P 100.

b. Benefits Withheld

As a result of his termination, as well as its being "for cause," Mr. Welland was denied several significant financial benefits that he otherwise might have received. Mr. Welland had been granted shares of restricted stock under Citicorp's 1997 and 1988 Stock Incentive Plans. See Plevan Aff. Exs. M, N, O. Under an Agreement of October 21, 1996, Mr. Welland had been awarded 45,000 shares of Citicorp restricted stock. See id. Ex. M. The Agreement provided that in the event of termination of employment for any cause other than death, permanent disability or retirement, any restricted shares that had not yet vested would be forfeited. See id. at D1766.

Mr. Welland had also been awarded shares of restricted stock under a December 1997 Restricted Stock Agreement. See Defs.'s Stmt. P 111; Plevan Aff. Ex. O at Welland 86. This Agreement also provided for forfeiture of the shares upon termination of employment for any reason other than death or permanent disability. See id. As a result of his termination, Welland forfeited 22,500 unvested shares of restricted stock that had been granted to him under the October 1996 Agreement and all unvested shares that had been granted to him under the December 1997 Agreement. See Defs.' Mem. PP 114, 115.

In addition to the restricted stock, Mr. Welland had also been awarded stock options pursuant to the Citicorp 1988 Stock Incentive Plan and the 1997 Citicorp Stock Incentive Plan. See Plevan Aff. Exs. Q, R. These Plans provided that any unvested stock options would be forfeited upon termination of employment for any reason other than retirement. Termination of employment after age fifty-five for any reason was deemed "retirement" for purposes of the Plans, unless it was "for cause." See id. Ex. Q at P 4(a)(ii), D1781; Ex. R at P 4(a)(ii) D1805.

Defendants assert that shortly after Mr. Welland was terminated, Mr. D'Ambrose obtained approval from two members of Citigroup's Personnel, Compensation and Directors' Committee (the "Committee") to cancel plaintiff's unexercised stock options based on the fact that he had been terminated for cause. See id. P 123. Defendants assert that at a December 14, 1999 meeting, Mr. D'Ambrose obtained ratification from the entire Committee of the earlier decision to cancel the unexercised stock options. See Defs.' Stmt. P 125. Mr. Welland disputes this fact, arguing that Mr. D'Ambrose obtained the ratification only by presenting false information to the Committee and that Mr. D'Ambrose obtained the Committee's prior approval to discharge plaintiff even before the CIS interview was conducted. See Pl.'s Stmt. P 123, 126. There is no evidence in the record to support these contentions, however. As a result of his termination and the Committee's subsequent decision, plaintiff forfeited 127,500 unvested and unexercised stock options under the 1997 Plan and 84,375 unvested and unexercised stock options under the 1998 Plan. See Defs.' Stmt. PP 127-28.

Plaintiff was also denied benefits obtainable under Citigroup's Performance Management Severance Pay Plan for Officers, its Supplemental Executive Retirement Plan ("SERP") and its Deferred Compensation Plan. The Performance Management Severance Pay Plan for Officers provides that severance benefits under the plan are not available where an employee has violated the Company's internal policies. See Balaschak Decl. Ex. C. Art. I, IV. Thus, when Mr. Welland's employment was terminated, Citigroup withheld severance benefits from him on the grounds that he had violated the Company's internal policies. See Defs.' Stmt. P 131. Additionally, shortly after plaintiff's employment was terminated, Mr. D'Ambrose sought and obtained internal Citigroup approval to forfeit Mr. Welland's SERP benefits because of his termination for cause. See id. P 136. This decision was also ratified by the Committee at the December 14, 1999 meeting. See id. Because Citigroup was basing its termination of Mr. Welland's employment on alleged misconduct, Mr. Welland was also ineligible to receive any additional compensation under the Deferred Compensation Plan.

As a result of plaintiff's termination, he also did not receive a bonus for 1999. See id. P 143. Citigroup policy provides that bonuses are discretionary and that an employee cannot receive any bonus unless he is still employed by Citigroup on December 31 of the year at issue.

Plaintiff contests that Citigroup had any legitimate basis for characterizing his termination as "for cause" and withholding from him the above described benefits upon his discharge. Plaintiff claims that his employment was terminated because of his age and that at the time of his termination, he was one of the few Senior Citigroup executives over fifty-five years old with significant holdings in the Company's age-based compensation plans. He asserts that Citigroup focused on his age when terminating him for cause and purposefully forced him to forfeit those holdings. See Pl.'s Oppn. at 13.

Plaintiff grounds the theoretical underpinnings of his claim in the corporate merger history of Citigroup. After Citicorp Inc. merged with Traveler's to form Citigroup, the existing Citicorp Stock Incentive Plans were replaced. Whereas the old Plans had been based on age, meaning restricted stock and stock options vested based on an employee's age, the new plans operated based on employees' length of service. See id. at 9. Although this change did not affect any of the vesting provisions of stock options or restricted stock that had been awarded before the merger, such as those awarded to plaintiff, Mr. Welland asserts that he was one of the only employees covered under the older agreements and was thus conspicuous within the Company. See id. When defendants also eliminated the age-based pension plan, Mr. Welland sent a letter to Ron Russell, a Citigroup human resources executive, complaining that elimination of the age-based plan prejudiced older workers at the Company, including himself. See id. Mr. Welland charges defendants with firing him in order to avoid the obligation of paying him the benefits that he claims were his due. Additionally, plaintiff alleges that by fabricating a ground on which to rest the "for cause" characterization of his termination, defendants breached each of the benefits contracts plaintiff had entered with Citigroup.


A. Summary Judgment Standard

HN1 [] Summary judgment is properly granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The Federal Rules of Civil Procedure mandate the entry of summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). HN2 [] In reviewing the record, we must assess "the evidence in the light most favorable to the party opposing the motion, and resolve ambiguities and draw reasonable inferences against the moving party." Frito-Lay, Inc. v. LTV Steel Co. (In re Chateaugay Corp.), 10 F.3d 944, 957 (2d Cir. 1993). In order to defeat such a motion, the non-moving party must affirmatively set forth facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). An issue is "genuine … if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248 (internal quotation marks omitted).

We are mindful that HN3 [] "trial courts must be especially chary in handing out summary judgment in discrimination cases, because in such cases the employer's intent is ordinarily at issue." Chertkova v. Conn. Gen. Life Ins. Co., 92 F.3d 81, 87 (2d Cir. 1996); see also Bickerstaff v. Vassar College, 196 F.3d 435, 448 (2d Cir. 1999) (quoting Ramseur v. Chase Manhattan Bank, 865 F.2d 460, 464-65 (2d Cir. 1989)) ("Employers are rarely so cooperative as to include a notation in the personnel file that the firing is for a reason expressly forbidden by law.").

However, this caution does not absolve the plaintiff from the responsibility of producing sufficient evidence from which a reasonable jury could return a verdict in his favor. See Anderson, 477 U.S. at 249-50 (1986); see also Abdu-Brisson v. Delta Air Lines, Inc., 239 F.3d 456, 461 (2d Cir. 2001) cert. denied, 534 U.S. 993, 151 L. Ed. 2d 378, 122 S. Ct. 460 (2001) (affirming summary judgment where "plaintiffs adduced no evidence that [the employer's] legitimate non-discriminatory explanations for each of the challenged employment terms was false").

B. Age Discrimination Claim

Although HN4 [] plaintiff has brought his age discrimination claims under the New York State and New York City Human Right Laws, the same three-step analysis used for cases brought under federal statutes, such as the ADEA, applies. See id. at 466. HN5 [] The ADEA provides that it is "unlawful for an employer … to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. § 623(a)(1). The critical issue in an ADEA case, as in any discrimination case, is one of proof of discriminatory intent on the part of the defendant. "Liability depends on whether the protected trait (under the ADEA, age) actually motivated the employer's decision." Hazen Paper Co. v. Biggins, 507 U.S. 604, 610, 123 L. Ed. 2d 338, 113 S. Ct. 1701 (1993).

Thus, HN6 [] because allegations of age discrimination are, as here, so often based on circumstantial evidence, they have often been analyzed using the three-step burden-shifting analysis established in McDonnell-Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973). Under the McDonnell-Douglas framework, our first inquiry is whether plaintiff has established a prima facie case of discrimination. St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 506, 125 L. Ed. 2d 407, 113 S. Ct. 2742 (1993). If the plaintiff has so pled, then a presumption of discriminatory animus is established and the burden shifts to defendant to produce evidence of a legitimate, non-discriminatory reason for its actions. See Tex. Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 254, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981). Assuming that the defendant can produce such a justification, then the presumptions and burdens of the McDonnell-Douglas framework drop away, and only the ultimate question of "discrimination vel non" remains. Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 142-43, 147 L. Ed. 2d 105, 120 S. Ct. 2097 (2000) (quoting U.S. Postal Serv. Bd. of Govs. v. Aikens, 460 U.S. 711, 714, 75 L. Ed. 2d 403, 103 S. Ct. 1478 (1983)).

We need not tarry long over the first stage of the McDonnell-Douglas framework. Mr. Welland was in the protected class by virtue of his age, fifty-six, and he was discharged. Moreover, on defendants' pre-discovery motion to dismiss, Judge Martin found that "as a matter of pleading plaintiff had established the 'minimal' prima facie case" necessary to survive defendants' motion. Welland v. Trainer, Citigroup Inc., et al., 2000 U.S. Dist. LEXIS 18108, No. 00 Civ. 738, 2000 WL 1848501 at *1 (S.D.N.Y. Dec. 18, 2000) (Martin, J.) (citing James v. New York Racing Assoc., 233 F.3d 149, No. 00-7040, 2000 WL 1752908 at *3 (2d Cir. Nov. 29 2000). Since HN7 [] plaintiff has established a prima facie case, a presumption of discriminatory animus is established and the burden shifts to the defendants to proffer a legitimate non-discriminatory reason for the termination. See Burdine, 450 U.S. at 254.

Judge Martin also stated, however, that "the Court had little doubt that it would grant summary judgment, even at this early stage of the litigation, if defendants had offered proof of this claim [that plaintiff accepted lavish entertainment from vendors]." Id.

1. Legitimacy of Proffered Reason for Termination

In the instant case, defendants argue that they discharged Mr. Welland for a legitimate non-discriminatory reason, "specifically a pattern of routinely making excursions to resort locations and attending prominent sporting events paid for by vendors with whom he was negotiating millions of dollars worth of contracts." Defs.' Mem. at 13. Defendants assert that Mr. Welland's alleged behavior provided a legitimate basis for dismissal because it directly violated Company policies. See id. As stated above, the parties do not dispute that defendants maintained corporate policies which mandated that employees avoid creating either actual conflicts on interest or situations which might appear to others to be conflicts of interest. See Defs.' Stmt. P 15.

HN8 [] Discharging an employee for violating company policies constitutes a legitimate and nondiscriminatory reason for terminating employment. See Shunway v. United Parcel Serv., Inc., 118 F.3d 60, 65 (2d Cir. 1997) (holding that discharging employee for violating company's no-fraternization policy was legitimate and nondiscriminatory); Swanston v. Pataki, 2001 U.S. Dist. LEXIS 4857, No. 97 Civ. 9406, 2001 WL 406187 at *4 (S.D.N.Y. Apr. 20, 2001) (stating that even where a company's conflict policy is open to multiple interpretations, if the company puts forth a reasonable reading of the policy as the basis for termination, that will "serve to meet defendants' burden of proffering a legitimate non-discriminatory reason.").

2. Evidence of Pretext of Discriminatory Motive

Because HN9 [] defendants have offered a valid nondiscriminatory reason for Mr. Welland's discharge, the presumption of discrimination drops out of the case, and plaintiff must present evidence that defendants' reason is but a pretext for intentional discrimination. See St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 515-516, 125 L. Ed. 2d 407, 113 S. Ct. 2742 (1993).

Plaintiff argues that pretext is evident because: (a) he complied with Citigroup policy and there was thus no basis for termination; (b) defendants selectively enforced the Company policies; (c) his pension and other benefits would have become fully vested had he not been terminated as he was; (d) Citigroup required employees who left the Company to sign separation agreements releasing Citigroup with respect to any age-based claims. See Pl.'s Opp. at 32-34. However, each of Mr. Welland's arguments fails.

a. Compliance with Citigroup Policy

Mr. Welland argues that there are material facts in dispute showing that he did not violate Citigroup policy and that defendants merely proffered the violations as an explanation in order to hide their true motive of discharging him because of his age. See Pl.'s Oppn. at 18-22. Plaintiff claims he acted within the limits of Citigroup's conflicts policy because the policy allows for exceptions to be made where employees receive managerial approval. See id. at 18. Plaintiff asserts that summary judgment on his age discrimination claims must be denied because the facts concerning whether he received managerial approval are "sharply disputed." See id.

It is insufficient to defeat defendants' motion for Mr. Welland to assert that he did not violate the policies. Rather, HN10 [] the material issue is whether defendants decision to terminate him was made on a reasonable basis. See DeLeonardis v. Credit Agricole Indosuez, 2000 U.S. Dist. LEXIS 16506, No. 00 Civ. 0138, 2000 WL 1718543 at *12 (S.D.N.Y. Nov. 15, 2000) (stating that the relevant inquiry is not whether the violative acts occurred, but whether the decision to discharge the employee was reached honestly and after an appropriate investigation). Thus, our inquiry should be focused not on factual disputes that have arise since the time of Mr. Welland's termination, but on the information that was available to and relied on by defendants prior to the termination.

The record establishes that defendants did indeed conduct an appropriate investigation into plaintiff's activities and that the decision to terminate him was reasonable in light of the facts collected and the Company's internal policies. Defendants assert that the decision to terminate plaintiff for cause was based primarily on his own admissions in the tape-recorded interview with internal investigators and his former manager's confirmation that she did not pre-approve his acceptance of vendor payments for special events and excursions. See Defs.'Reply at 10. Defendants' argument is confirmed by the record. See Plevan Aff. Ex. X, D'Ambrose Tr. at 128, 130 (stating that Mr. Ross told Mr. D'Ambrose that Ms. Taylor had "no knowledge of the trips and did not give him approval to attend"); Plevan Aff. Ex. D, Taylor Tr. at 83 (stating that she did not grant Mr. Welland prior approval for any of the vendor-sponsored events he attended). While plaintiff argues that he did obtain approval to attend the subject events from Ms. Taylor, he has not submitted any evidence of such pre-approval. Moreover, and more importantly, the record establishes that Mr. D'Ambrose's decision to terminate plaintiff was based on his reasonable belief that no such approval had ever been obtained. Plaintiff does not dispute that in reaching his decision, Mr. D'Ambrose relied on information that plaintiff supplied in his interview admitting that he had accepted lavish gratuities and the subsequent information provided by Ms. Taylor. Taken together, this evidence provided a reasonable basis on which Mr. D'Ambrose could conclude that Mr. Welland had violated Company policy.

Mr. Welland also asserts that Mr. D'Ambrose called the two Committee members with whom he claims to have first discussed plaintiff's termination prior to the CIS interview, alleging that Mr. D'Ambrose decided with these two Committee members to fire him and only then decided to stage a sham investigation. This assertion is equally unsupported by the evidence. Mr. D'Ambrose stated in his deposition that his conversation with the two Committee members who first agreed to Mr. Welland's termination occurred "a month or a month and a half" before the more formal full Committee meeting in December 14 1999. See Plevan Reply Aff. Ex. X, D'Ambrose Tr. 68. Mr. Welland was interviewed only one month earlier on November 15, 1999. Therefore, contrary to Mr. Welland's assertions, Mr. D'Ambrose's testimony fails to demonstrate that the conversation with the Committee members occurred before the interview of Plaintiff. Additionally, we note that plaintiff could have conducted depositions of the two Committee members to clarify the supposed or constructed inconsistency, but he failed to do so.

Despite this evidence that the investigation and subsequent decision were bona fide, plaintiff also avers that the sham nature of the investigation is evident from the fact that his manager, Mr. Trainer, did not agree with the decision to terminate him. See Pl.'s Oppn. at 25. Plaintiff has mischaracterized Mr. Trainer's deposition testimony. Mr. Trainor stated that he would not have discharged Mr. Welland had he not been asked to do so by Mr. D'Ambrose, but also that he could not disagree with Mr. D'Ambrose's decision because Mr. Trainer had not been involved in the investigation. See Plevan Aff. Ex. Z, Trainer Tr. 40. Moreover, plaintiff does not offer any basis on which the fact that Mr. Trainer did not agree with the ultimate decision should lead to an inference that the investigation was a sham. Mr. Trainer testified that he did understand that Mr. Welland had violated the policies at issue. See id. 252-54. Accordingly, Mr. Trainer's statement that he would not have fired plaintiff had he not been asked to do so does not undermine the validity of the investigation nor defeat defendants' motion.

Plaintiff also agues that the sham nature of the investigation may be distilled from the fact that defendants' in-house investigator, Thomas Doonan, testified that Citigroup did not permit him to conduct the investigation he wanted. See Pl.'s Oppn. at 25. Defendants have asserted that the decision to terminate Mr. Welland was based on Mr. Welland's own comments in his interview and the subsequent comments from Ms. Taylor. See Def.'s Reply at 12. Because the elements cited by defendants provide sufficient reasonable basis on their own for the termination of Mr. Welland, Mr. Doonan's desires with respect to the investigation are irrelevant for summary judgment purposes.

b. Selective Enforcement

Plaintiff's claim that defendants selectively enforced Company policies also fails to establish that the stated reasons for his termination were but a pretext for purposeful discrimination. The seminal Second Circuit case on selective enforcement is La Trieste Restaurant & Cabaret, Inc. v. Village of Portchester, 40 F.3d 587 (2d Cir. 1994). That case held that HN11 [] a claim for selective enforcement would arise if plaintiff, compared with others similarly situated was selectively treated and such selective treatment was based on impermissible considerations. Trieste was called into doubt by the Supreme Court in Village of Willowbrook v. Olech, 528 U.S. 562, 145 L. Ed. 2d 1060, 120 S. Ct. 1073 (2000), where the Court held that HN12 [] rather than demonstrating that selective enforcement was based on impermissible considerations, a party claiming selective enforcement need only allege that the enforcement was "irrational and wholly arbitrary." The Second Circuit has since ruled in Giordano v. City of New York, 274 F.3d 740 (2d Cir. 2001) that HN13 [] a plaintiff alleging selective enforcement is still required to show "not only irrational and wholly arbitrary acts but also intentional disparate treatment." Id. at 751. Furthermore, such a plaintiff must show that those responsible for terminating him knew that they were treating him differently from anyone else. See id.

There is no evidence in the record to support plaintiff's assertions of selective enforcement because the conduct that plaintiff attributes to employees who were treated differently than he was does not rise to the level of misfeasance with which plaintiff was charged by Citigroup. While plaintiff contends that many other employees attended vendor-sponsored events without consequence, the most egregious example he cites is an employee who attended six such events. See Pl.'s Oppn. at 20-21. Although he points to at least seven other Citigroup employees who attended special events at vendor expense, he alleges that each of those employees participated in one to two vendor-sponsored events. See id. at 23-24. Conversely, Mr. Welland admitted to attending nineteen such events, twelve of which occurred during the last year of his employment. See Plevan Aff. Ex. L, Interview Tr. at 25 passim. Mr. Welland has thus failed to demonstrate that other employees were treated differently than he was because he has not shown that any employee acted in a comparable manner.

Moreover, even if the behavior of other employees had been comparable to plaintiff's, there is no evidence in the record that Mr. D'Ambrose was aware of the activities of the employees to whom Mr. Welland refers before making the decision to discharge him. In fact, Mr. D'Ambrose specifically denies any such knowledge. See D'Ambrose Dec. P 9. Under the standard applied in Giordano, Mr. Welland has thus failed to offer sufficient evidence that the policy was selectively enforced to sustain his claim. Plaintiff has made no showing of intentional disparate treatment, nor has he shown that Mr. D'Ambrose or any members of the Committee were aware of any similar misconduct by other employees. Mr. Welland's claim of selective enforcement is thus insufficient to demonstrate that defendants' proffered motive for terminating him was mere pretext.

c. Cost Concerns

Mr. Welland's argument that Citigroup terminated his employment so that it could cut costs and replace him with someone who would be less expensive for the Company is also inadequate to sustain his burden of proving discriminatory motive. Mr. Welland's replacement, William Bellew, was fifty-two years old at the time of plaintiff's termination. See Defs.' Stmt. P 6. Mr. Welland argues that by replacing him with someone under age fifty-five, Citigroup escaped many of the financial obligations it owed plaintiff. See Pl.'s Oppn. at 31. Plaintiff's allegations are simply insufficient to establish a claim of age discrimination.

The Supreme Court has held that HN14 [] an employer may make a decision based on a factor correlated with age without being held to have engaged in age discrimination. Hazan Paper Co., 507 U.S. at 609. Pension status without more is not automatically a proxy for age and does not suffice as the basis for a claim of age discrimination. See id. at 611. In other words, "employment actions based upon economic considerations do not violate" age discrimination laws. Devlin v. Transp. Communications Int'l Union, 2002 U.S. Dist. LEXIS 4339, No. 95 Civ. 0742, 2002 WL 413919 at *7 (S.D.N.Y. Mar. 14, 2002); Criley v. Delta Air Lines, Inc., 119 F.3d 102, 105 (2d Cir.), cert.denied, 522 U.S. 1028, 139 L. Ed. 2d 607, 118 S. Ct. 626 (1997) (holding that decisions based on economic considerations do not create violations of anti-discrimination laws even where those decisions only impact employees of the protected age group).

The record does not establish that Mr. Welland's termination was effected by defendants as a cost-saving measure. Even if plaintiff's termination was intended as a way for the Company to save money, plaintiff's claim on this ground would still fail because defendants' alleged decision to that effect would constitute precisely the type of non-actionable economic decision described above.

Similarly, although plaintiff avers that his March 1999 memorandum to Ms. Taylor complaining about the effects of post-merger changes in benefits contributed to defendants' decision to terminate him, the record establishes that Mr. D'Ambrose, who made the decision to discharge plaintiff, was not aware that plaintiff had written such a letter. See D'Ambrose Decl. P 10.

Additionally, HN15 [] courts have repeatedly rejected age discrimination claims where the age of the replacement has not been significantly less than that of the former employee. See Ellis v. Provident Life & Accident Insurance Co., 926 F. Supp. 417 (S.D.N.Y. 1996), aff'd without op., 107 F.3d 2 (2d Cir.), reported in full, No. 96-7755, 1997 U.S. App. LEXIS 3410 (2d Cir. Feb 24, 1997) (granting summary judgment where plaintiff was fifty-two and his replacement was forty-seven and stating that as a matter of law, a five year age difference did not create an inference of age discrimination); Mania v. Alper Holdings USA, Inc., 1996 U.S. Dist. LEXIS 11076, No. 95 Civ. 1846, 1996 WL 438162 at *4-*5 (S.D.N.Y. Aug. 5, 1996) (granting summary judgment where there was a nine year age difference between former and replacement employee). Plaintiff's evidence that he was replaced by a younger employee is not enough to establish that defendants' proffered reason was but a pretext for age discrimination. See Browne v. CNN Am., Inc., 1999 U.S. Dist. LEXIS 17699, No. 98 Civ. 1768, 1999 WL 1084236 at *3 (S.D.N.Y. Dec. 1, 1999), aff'd, 229 F.3d 1135 (2d. Cir. 2000) (stating that "evidence that an employee is replaced by a younger individual … is not enough, standing alone, to establish that the employer's proffered reason for firing the employee was pretextual").

d. Release from Claims

Finally, plaintiff's argues that Citigroup's practice of requiring employees who leave the Company to sign separation agreements releasing Citigroup with respect to any age-based claims provides additional evidence of defendants' age-based animus against him is also without merit. HN16 [] Asking a departing employee to sign a waiver releasing the employer from possible claims can hardly be considered probative of discrimination when the ADEA specifically provides for the signing of such waivers. See 29 U.S.C. § 626(f) (explaining the requirements for valid waiver of rights upon termination of employment). Plaintiff does not argue that the waiver sought by defendants was in any way insufficient under the ADEA.

Plaintiff has cited cases from the 9th and 10th Circuits in support of his argument, but it appears he has misread those cases. See Pl.'s Oppn. at 34. Because agreements to waive age-based claims are specifically provided for in the ADEA, plaintiff's argument that such a waiver should permit the trier of fact to draw an inference of discrimination is without merit.

Cassino v. Reichhold Chem., 817 F.2d 1338 (9th Cir. 1987) involved the admissibility of a separation agreement, rather than the inferences that should be drawn from such agreements. Greene v. Safeway Stores, Inc., 98 F.3d 554, 562 (10th Cir. 1996) refers to separation agreements in a footnote, stating only that the jury "could infer [some] sensitivity" of the employer to age discrimination claims. Finally, the Eighth Circuit has recently held that such waivers of claims are inadmissible in age discrimination cases under Federal Rule of Evidence 408. See Swan v. Interstate Brands Corp., 333 F.3d 863, 864 (8th Cir. 2003).

Accordingly, plaintiff's assertion that his dismissal for cause was a mere pretext for age discrimination is not supported by the record. Plaintiff has not carried his burden under the McDonnell-Douglas framework of showing that the evidence in the case, evaluated in its entirety, supports a reasonable inference of age discrimination. Since plaintiff cannot point to evidence that reasonably supports a finding of age discrimination, defendants are entitled to summary judgment in their favor on this claim. See Devlin v. Transp. Communications Int'l Union, No. 95 Civ. 0742, 2002 WL 413919 at *8 (S.D.N.Y. Mar. 14, 2002) (citing James v. New York Racing Ass'n, 233 F.3d 149, 154 (2d Cir. 2000)) (stating that, HN17 [] "if the employer provides a nondiscriminatory reason for its actions and the plaintiff cannot 'point to evidence that reasonably supports a finding of prohibited discrimination,' the employer is entitled to summary judgment.").

C. Breach of Contract Claims

Mr. Welland claims that Citigroup breached its agreements with him when it canceled his unvested and unexercised stock options and other benefits in connection with his termination. There are six different benefit plans or policies which plaintiff claims entitled him to additional compensation despite his termination. See Pl.'s Oppn. at 15-16.

1. Stock Option Agreements

Both the 1997 and 1988 Stock Incentive Plans under which Mr. Welland was granted stock options provided for forfeiture of unexercised options upon termination for cause. See Plevan Aff. Exs. Q, R. Citicorp's 1988 Stock Incentive Plan and 1997 Stock Incentive Plan, which governed plaintiff's stock options, provided that any unexercised stock options would be forfeited upon termination of employment for any reason other than retirement. Termination of employment after age fifty-five for any reason was deemed "retirement" for purposes of the Plans, unless it was "for cause." See id. Plaintiff argues that whether cause existed is a fact intensive inquiry that cannot be determined on a motion for summary judgment. See Pl.'s Oppn. at 2.

HN18 [] Under New York law, an employer's decision regarding non-ERISA benefits may be set aside only where it is made in bad faith, was arbitrary or was the result of fraud. See Gehrhardt v. Gen. Motors Corp., 581 F.2d 7, 11 (2d Cir. 1978) "If the decision is supported by a reasonable basis, 'the court may not substitute its judgment for that of [the employer] on the disputed factual issues.'" See id. at 12 (citing Pasternack v. Diamond, 3 A.D.2d 422, 161 N.Y.S.2d 277, 278 (1st Dep't), appeal dismissed, 3 N.Y.2d 938, 146 N.E.2d 189, 168 N.Y.S.2d 8 (1957), aff'd 5 N.Y.2d 770, 154 N.E.2d 141, 179 N.Y.S.2d 864 (1958)). The interpretation of such contracts are "matters properly treated as questions of law and are reviewable by this court." See Gitelson v. DuPont, 17 N.Y.2d 46, 48, 215 N.E.2d 336, 268 N.Y.S.2d 11, 12-13 (1966).

Plaintiff asserts that the arbitrary and capricious standard should not apply in the present case, but his rationale with respect to this argument is unclear. See Pl.'s Opn. at 16. He seems to claim that the Committee did not pass on the issue of cause, and thus, the arbitrary and capricious standard should not apply. See id.

HN19 [] The decision of an employer to terminate an employee for cause where that employee has violated company policy by accepting gifts from vendors or customers is not arbitrary or capricious. See In re Kapelewski, 275 A.D.2d 855, 713 N.Y.S.2d 233 (3d Dep't 2000) (holding that an employee committed misconduct sufficient to warrant termination where he accepted gifts from vendors in violation of company policy); Olan v. Ross, 60 A.D.2d 113, 400 N.Y.S.2d 379 (3d Dep't 1977) (employer was justified in discharging employee who accepted gifts from vendor in violation of her employer's instruction). The Committee's decision is reviewed on the basis of information that was available to the decision-maker when the decision was made. See DeLeonardis v. Credit Agricole Indosuez, 2000 U.S. Dist. LEXIS 16506, No. 00 Civ. 138, 2000 WL 1718543 at *12 (S.D.N.Y. Nov. 15, 2000) (stating that the relevant inquiry is what management relied on in making the decision to terminate the employee).

Plaintiff cannot sustain his burden with respect to the unexercised stock options. Under Citicorp's Stock Incentive Plans, the Committee functioned as the plan administrator and was vested with the sole authority to interpret its terms in deciding whether to effect a forfeiture in relation to a "for cause" termination. See Defs.' Reply at 5; Welland Aff. Exs. 2,3. Plaintiff does not dispute that the Committee members were aware: (1) that Mr. D'Ambrose believed that plaintiff had violated Company policy by accepting gifts from vendors; (2) that Mr. Welland had admitted to accepting multiple vendor-paid trips"; (3) that Citigroup policy prohibited employees from accepting any gifts that would create the lappearance that decisions could be influenced by vendor gratuities; and that (4) Ms. Taylor, when approached by in-house counsel, denied approving Mr. Welland's activities. This information provided a reasonable basis on which the Committee could conclude that there was cause to forfeit plaintiff's unexercised stock options under the Stock Incentive Plans. Because the Committe's decision with respect to the stock options has not been shown to be arbitrary or capricious, it should not be set aside. See Gehrhardt, 581 F.2d at 11.

Mr. Welland argues that the Committee's decision should be evaluated based on the standard of good faith and fair dealing, which prevents an employer from depriving an employee of benefits due at the time of termination. See Pl.'s Oppn. at 16. This standard is inapplicable in the instant case because (1) Mr. Welland's argument is based on an alleged breach of actual contract provisions, not on breach of the implied standard of good faith; and because (2) there is no evidence to contradict defendants' assertion that Mr. Welland did receive all benefits to which he was entitled upon his termination.

Although Mr. Welland argues that there is a factual dispute with respect to his receipt of managerial approval to attend the vendor-related events, there is no dispute regarding whether, when questioned by Citigroup's in-house counsel, Ms. Taylor denied granting plaintiff prior approval for his trips. Since the relevant inquiry is what the decision-makers knew when they decided to discharge plaintiff, not what actually transpired, this factual dispute does not prevent the granting of summary judgment.

2. Restricted Stock

Plaintiff's argument that defendants also breached the terms of the 1997 and 1988 Stock Incentive Plans when they forfeited from him the unvested restricted stock he had been conditionally granted is also incorrect. The Restricted Stock Agreements under which plaintiff had been granted shares of stock which had yet to vest provided for forfeiture of unvested shares upon an employee's termination from the Company for any reason. See Plevan Aff., Ex. n at D1763, Ex. O at Welland 86 (stating that in theevent of termination "for any reason … all shares subject to the Restriction Period shall be forfeited"). Under this Agreement, the only way to avoid forfeiture was for the Committee to affirmatively act to void the forfeiture provision based on the circumstances. See id.

HN20 [] New York courts have held that the failure to take discretionary action provided for under an agreement does not constitute a breach of the agreement. See De Simone v. Siena College, 243 A.D.2d 1037, 1038, 663 N.Y.S.2d 701, 702 (3d Dep't 1997) (dismissing breach of contract claim where university exercised discretion, deciding not to take affirmative action to renew a teaching contract). Moreover, it is well-settled that "an employee has no enforceable right to compensation under a discretionary compensation or bonus plan." Grieve v. Barclays Capital Sec., Ltd., No. 602820/98, 1999 WL 1680654 at *4 (Sup. Ct. N.Y. Co. Sept. 10, 1999). Because the Restricted Stock Agreements vested the Committee with discretion to decide whether to act to prevent automatic forfeiture, plaintiff's efforts to characterize the failure to exercise that discretion as a breach of contract fail. Mr. Welland has no enforceable right in the restricted stock options that were automatically forfeited and summary judgment is granted in favor of defendants on this claim. See Microtel Franchise & Dev. Corp. v. Country Inn Hotel, 923 F. Supp. 415, 418-19 (W.D.N.Y. 1996) (rejecting breach of contract claim where alleged breach was based on obligations that were discretionary).

3. SERP and Deferred Compensation

Mr. Welland claims that Citigroup also breached its contracts with him by wrongly depriving him of benefits under the Company's Supplemental Executive Retirement Plan of Citicorp and Affiliates ("SERP") and its Deferred Compensation Plan. He asserts that because the phrase "for cause" was not defined in the contracts at issue, it is up to the trier of fact to determine whether cause in fact existed, and that summary judgment is thus inappropriate at this stage. See Pl.'s Oppn. at 15. In addition, plaintiff disputes the alleged grounds for his termination, and thus argues that the attendant withholding of benefits from him was unjustified. See id. .

The SERP agreement provides that a15-26ll benefits granted under the plan will be forfeited where an employee's discharge is based on "gross misconduct." See Balaschak Decl. Ex. D, Supplemental Executive Retirement Plan, at P 5(b). "Gross misconduct" is defined by the plan as including any act that the Committee determines in good faith is a basis for terminating an employee for cause. See id. at P 2(a). Shortly after Mr. Welland's employment was terminated, Mr. D'Ambrose sought and obtained internal Citigroup approval to forfeit Mr. Welland's SERP benefits because of his termination for cause. See Defs.' Stmt. P 136. This decision was also ratified by the Committee at the December 14, 1999 meeting. See id.

The Deferred Compensation Plan provides that if an employee is involuntarily terminated for any reason other than job discontinuance, redundancy or poor performance, no additional compensation could be credited to that employee's account after the date of termination. See Balaschak Decl. Ex. E, Art. 6 § 6.3. Because Citigroup based its termination of Mr. Welland's employment on alleged misconduct, it withheld any additional compensation under the Plan on the alleged grounds that plaintiff was ineligible to receive it.

HN21 [] Under New York law, courts apply a very narrow scope of review to an employer's decision to terminate an employee "for cause" under an agreement where that term is not defined, reviewing the employer's decision only to determine if it was arbitrary and capricious. See TWA v. Beaty, 402 F. Supp. 652, 658 (S.D.N.Y. 1975) aff'd without op., 542 F.2d 1165 (2d Cir. 1995). Termination based on misconduct has been held not to be arbitrary or capricious. See Sines v. Opportunities for Broome, Inc., 156 A.D.2d 878, 880, 550 N.Y.S.2d 99, 101 (3d Dep't 1989) (stating that where the record supported allegations of misconduct on the day petitioner was terminated, respondent's finding of just cause for dismissal was neither arbitrary nor capricious).

Both of these plans provided the plan administrator with broad discretion to interpret its terms. The SERP provides that the Committee "shall have the authority to construe and interpret the terms of the Plan … [and] to investigate and make factual determinations necessary or advisable to administer or manage the plan." see Balaschak Decl. Ex. D at P 6(a). The Deferred Compensation Plan provides the Committee with similar discretion. See id. Ex. E, Art. 9.

Mr. Welland has offered no evidence that the Committee acted in a manner that was arbitrary and capricious in exercising its discretion to withhold benefits after he was terminated for cause. On the contrary, and as discussed supra pages 17-18, in light of the tape-recorded interview and of his former manager's statements, the Committee had a reasonable basis to terminate him for cause. Once he had been terminated for cause, the Committee was within its rights under the benefits plans to withhold any additional payment form plaintiff. Accordingly, defendants' motion for summary judgment is granted with respect to plaintiff's SERP and Deferred Compensation claims.

4. Severance

Defendants argue that Mr. Welland's claim for severance pay must be dismissed because it is preempted by ERISA and plaintiff has failed to exhaust his administrative remedies. See Defs.' Mem. at 33. This Court has already dismissed plaintiff's claims for benefits under ERISA because he failed to exhaust his administrative remedies as required by 29 U.S.C. § 1140. However, plaintiff argues that his claim is not governed by ERISA. He asserts that his challenge to defendants' actions regarding his severance pay involves material issues of disputed fact and cannot be disposed of on a motion for summary judgment. See Pl.'s Oppn. at 28. Specifically, he argues that there is no proof that Citigroup's policy involved an ongoing administrative obligation such that it should fall under the province of ERISA. See id. He asserts that Citigroup's policy requires only one lump-sum payment, and thus is not governed by ERISA. See id.

See Welland v. Trainer, Citigroup Inc., et al., 2000 U.S. Dist. LEXIS 18108, No. 00 Civ. 738, 2000 WL 1848501 at *1 (S.D.N.Y. Dec. 18, 2000) (Martin, J.) (dismissing plaintiff's claim under ERISA for severance benefits for failure to exhaust administrative remedies). Judge Martin also granted plaintiff leave to replead his ERISA claim if he could allege in good faith a violation of Section 510. Plaintiff has failed to proffer any such amendment.

HN22 [] Federal statutory law provides that ERISA "shall supercede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan. " See 29 U.S.C. § 1144(a) (1974). Accordingly, ERISA preempts state law contract claims respecting the denial of benefits under covered employee benefit plans. See Smith v. Dunham-Bush, Inc., 959 F.2d 6, 11 (2d Cir. 1992). Moreover, "the mere fact that a plan calls for a 'one time' payment, like severance" does not prevent a finding that such payment was made pursuant to ERISA. Ebenstein v. Ericsson Internet Applications, Inc., 263 F. Supp.2d 636, 641 (E.D.N.Y. 2003).

HN23 [] The Second Circuit has held that in determining whether an employer's severance package is a plan governed by ERISA, the court should consider: "(1) whether the employer's undertaking or obligation requires managerial discretion in its administration; (2) whether a reasonable employee would perceive an ongoing commitment by the employer to provide employee benefits; and (3) whether the employer was required to analyze the circumstances of each employee's termination separately in light of certain criteria." Tischmann v. ITT/Sheraton Corp., 145 F.3d 561, 566 (2d Cir. 1998) (citing Schonholz v. Long Island Jewish Med. Ctr., 87 F.3d 72, 76 (2d Cir. 1996)) (internal quotation marks omitted).

Under the test articulated by the Second Circuit, Citigroup's severance plan is governed by ERISA. First, the plan does require Citigroup's discretion, as it confers on the plan administrator the authority to interpret and construe the plan, to establish and enforce rules and regulations for the efficient administration of the plan, to amend or terminate the plan in whole, and to "review denial [of benefits] [and] decide whether or not to uphold the denial." See Balaschak Decl. Ex. C at D2449, D2451, D2452.

Secondly, a reasonable employee would have perceived an ongoing commitment by the employer to provide benefits because the Company's severance policy, providing for such payments, was described in the handbook of employee benefits provided to all employees. See id. P 2, Ex. F; Davis v. Commercial Bank of N.Y., 275 F. Supp. 2d 418, No. 02 Civ. 1913, 2003 WL 21415333 at *3 (S.D.N.Y. 2003) (finding HN24 [] the publication of severance plan in employee handbook sufficient to provide reasonable basis on which an employee would perceive an ongoing commitment by the employer).

Thirdly, Citigroup's plan also requires that the employer analyze the circumstances of each employee's termination separately. Citigroup's policy specifically provides that no severance pay will be provided where an employee is terminated for improper behavior, by a voluntary resignation or by a decision of the Corporate Audit Committee. See id. Ex. C. HN25 [] The plan's requirement of individualized eligibility determinations "is precisely the 'ongoing administrative program' that is the hallmark of an ERISA plan." Davis, 275 F. Supp. 2d 418, 2003 WL 21415333 at *3.

Additionally, it is also worth noting that this same severance plan has already been considered by Judge Mukasey in Tardi v. Citicorp Sec., Inc., No. 96 Civ. 5419, 1996 U.S. Dist. LEXIS 18648 (S.D.N.Y. Dec. 16, 1996). Although the issue in that case was a former employee's rights under the plan, rather than the applicability of ERISA, the court reached its conclusion by treating the plan as one governed by ERISA.

Based on the above analysis, plaintiff's state law claim for breach of the severance plan and the implied covenant of good faith and fair dealing relating to the subject plan and are accordingly, preempted by ERISA. See Totton v. N.Y. Life Ins. Co., 685 F. Supp. 27, 31 (D.Conn. 1988) (stating that HN26 [] a claim asserting that the denial of benefits under a severance plan is a breach of the plan is governed by ERISA's preemptive provision). Since plaintiff has failed to exhaust his administrative remedies in connection with his severance benefits, defendants' motion for summary judgment as to this claim thus granted.

5. Bonus

Defendants seek summary judgment on plaintiff's claim that he was wrongfully denied a financial bonus to which he was entitled. Plaintiff's claim with respect to a bonus fails as matter of law. The applicable bonus policy provides Citigroup with complete discretion as to whether to award bonuses. See Plevan Aff., Ex. P at D4187. Additionally, it requires that employees be employed on December 31 of the year at issue in order to receive a bonus. The policy specifically states that bonuses "aren't automatically awarded year to year and are determined at management's sole and exclusive discretion." See id.

HN27 [] Where a bonus policy expressly reserves the right to the employer to pay or not pay bonuses, employees cannot claim a vested right or entitlement to payment of a bonus under that policy. See O'Shea v. Bidcom, Inc., No. 01 Civ. 3855, 2002 U.S. Dist. LEXIS 13225 at *8 (S.D.N.Y. July 19, 2002) (stating that "a promise to pay incentive compensation is unenforceable if the written terms of the compensation plan make clear that the employer has absolute discretion in deciding whether to pay the incentive"); Namad v. Salomon Inc., 74 N.Y.2d 751, 753, 543 N.E.2d 722, 545 N.Y.S.2d 79, 80 (1989) (stating that employee was not entitled to bonus when clause in contract provided discretion concerning amount of bonus compensation rested with management). Similarly, where the relevant bonus policy requires employment through a certain date and the employee was discharged before that date, the employee does not have a valid claim to the bonus. See Zolotar v. N.Y. Life Ins. Co., 172 A.D.2d 27, 32, 576 N.Y.S.2d 850, 853-54 (1st Dept 1991) (holding that employee's involuntary termination prior to date required by bonus policy prevented the employee from receiving bonus); Bayer v. Oxford Univ. Press, Inc., 270 A.D. 586, 588, 61 N.Y.S.2d 209, 210-11 (1st Dep't 1946), aff'd, 296 N.Y. 780, 71 N.E.2d 215 (1947) (stating that employee had no rights in a bonus where he was not in the defendants' employ on the required date).

Because Citigroup's bonus policy (1) clearly provides that bonuses awarded pursuant to the policy are discretionary and (2) precludes payment of a bonus for any year during which an employee is not actively employed on December 31 of the year at issue, plaintiff has no enforceable right in a bonus, and defendants' motion for summary judgment on this claim is accordingly granted.

Plaintiff also argues that terminating him prior to December 31 and thus precluding him from receipt of a bonus was a breach of Citigroup's implied covenant of good faith and fair dealing. This claim also fails. The precipitating event for plaintiff's termination was the anonymous letter disclosing plaintiff's violations of company policy, not the advancement of the yearly calendar. Moreover, where a party's employment is at-will, the existence of a bonus policy does not create restriction on an employer's discretion to fire the employee at any time. See Plantier v. Cordiant, 1998 U.S. Dist. LEXIS 15037, No. 97 Civ. 8696, 1998 WL 661474 (S.D.N.Y. Sept. 24, 1998).

For the reasons stated above, defendants' motion for summary judgment is granted with respect to each of plaintiff's claims. The Clerk of the Court is respectfully requested to close this case.


DATED: December 17, 2003



Summaries of

Welland v. Citicorp, Inc

United States District Court for the Southern District of New York
Dec 17, 2003
2003 WL 22973574 (S.D.N.Y. 2003)
Case details for

Welland v. Citicorp, Inc

Case Details

Full title:STANLEY M. WELLAND, Plaintiff, - against - CITICORP, INC.,CITICORP, INC.…

Court:United States District Court for the Southern District of New York

Date published: Dec 17, 2003


2003 WL 22973574 (S.D.N.Y. 2003)
2003 U.S. Dist. LEXIS 22721

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