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RBS Citizens Financial Group Inc. v. Hewitt Associates, LLC

United States District Court, D. Connecticut

June 22, 2016




         Plaintiffs RBS Citizens Financial Group, Inc. and RBS Securities, Inc. (collectively "RBS") filed this suit against Defendant Hewitt Associates, LLC ("Hewitt") on November 14, 2013, alleging breach of contract (Count One) and negligence (Count Two), arising out of Hewitt's performance under the Master Consulting Agreement signed by the parties. The parties now bring cross motions for summary judgment. Oral argument was held on June 14, 2016. For the following reasons, Plaintiffs' Motion [Doc. # 32] for Summary Judgment is granted in part and denied in part, and Defendant's Motion [Doc. # 35] for Summary Judgment is granted in part and denied in part.

         I. Background

         A. Master Consulting Agreement

         In 2007, RBS and Hewitt entered into a Master Consulting Agreement ("MCA"), under which, effective January 2008, Hewitt agreed to perform Leave Administration services for RBS, pursuant to a Delivery Model incorporated by reference into the MCA. (See MCA, Ex. A to Stip. Facts [Doc. # 32-3] ¶ 7(d); id., Attachment B, Delivery Model.) Under the Delivery Model, Hewitt agreed to provide the following services related to the Family and Medical Leave Act ("FMLA") and analogous state statutes:

[1] [RBS] [e]mployee contacts [Hewitt] via phone to initiate FMLA leave[;]
[2] [Hewitt] verifies employee's eligibility, any applicable state laws, and if the request is for a qualifying reason. [Hewitt] then sends FMLA confirmation letters with [Certification of Health Provider ("CHP")] form to employee [;]
[3] [Hewitt] notifies [RBS] via email of employee's intent to take leave. Employee returns completed CHP to [Hewitt] for approval/denial[;] ...
[4] [Hewitt] sends FMLA approval or denial letter to employee, notifies [RBS] via email[;]
[5] [Hewitt] sends updated employment status to [Human Resources Service Center] system to reflect leave status.

(Delivery Model at 4.)

         The MCA obligated Hewitt to perform these services "in a professional manner ... with the training, skills, and professional credentials as may be necessary to perform such Services in accordance with customary industry standards and practices." (MCA ¶ 7(c).) Additionally, Hewitt agreed to "indemnify and hold [RBS] . . . harmless from and against any and all claims, demands, actions, damages, losses, liabilities, and expenses of any nature (including reasonable attorneys' fees and expenses) arising from Hewitt's performance of the Services resulting from: Hewitt's or its Consultants' negligence . . . ." (Id. ¶ 8(a).) However, the MCA provided that "[i]n no event will either party be liable to the other party for incidental, consequential, special, or punitive damages (including loss of profits, data, business or goodwill, or government fines, penalties, taxes, or filing fees), regardless of whether such liability is based on breach of contract, tort, strict liability, breach of warranties, failure of essential purpose or otherwise, and even if advised of the likelihood of such damages." (Id. ¶ 8(c).)

         B. FMLA/Connecticut FMLA Leave Calculations

         The FMLA provides that eligible employees may take up to twelve weeks of job-protected unpaid leave for qualifying reasons in a twelve month period. 29 U.S.C. § 2612. The Connecticut analog to the FMLA ("CT FMLA") provides employees with up to sixteen weeks of job-protected unpaid leave in a twenty-four month period. Conn. Gen. Stat. § 31-5111. The twelve and twenty-four month periods can be calculated several different ways. See Dep't of Labor, Fact Sheet #28H: 12-Month Period under the Family and Medical Leave Act (FMLA), Under the "rolling year" method, leave availability is measured backward from the date an employee uses any FMLA/CT FMLA leave. Id. Thus, each time an employee takes leave, the remaining leave entitlement is the balance of the 12 (or 16, in the case of the CT FMLA) weeks which has not been used in the immediately preceding 12 (or 24, for the CT FMLA) months. Id. Under the calendar year method, the 12 and 24-month periods run from January 1 through December 31. Id.

         Although prior to January 1, 2010, some RBS divisions utilized a calendar year method, at all times relevant to this case, the Global Banking and Markets ("GBM") division utilized a rolling year method. (Stip. Facts ¶¶ 8-9; see Ex. B to Stip. Facts.)

         C. Events at Issue

         The seeds of this dispute were sown on October 5, 2009, when RBS (GBM) Senior Operations Analyst (Reconciliation and Control department) Louis Ridgeway fell off an office chair and injured himself. (Stip. Facts ¶ 15.) Mr. Ridgeway requested, and was granted, FMLA leave. (Id. ¶ 15; see Oct. 2009 Ltr., Ex. D to Stip. Facts.) Because Mr. Ridgeway had previously taken FMLA/CT FMLA leave in May and June 2009, "under a rolling method of calculating leave[, ] his available federal FMLA leave ... extend[ed] until December 3, 2009, and his available CT FMLA . . . extend[ed] until December 31, 2009." (Stip. Facts ¶ 16; see May 2009 Ltr., Ex. C to Stip. Facts.)

         On December 1, 2009, Mr. Ridgeway called Hewitt's Florida office to find out how much federal and state leave he had left because his doctor had informed him that his condition could be improved through an elective surgery (for which he would require additional leave). (Stip. Facts ¶ 18.) He spoke to a Hewitt representative named Eddie Nieto. (Id; see Ridgeway Dep., Ex. Z to Passarella Decl. [Doc. # 32-4] at 114.) Hewitt's records indicate that Mr. Nieto (erroneously) advised Mr. Ridgeway that he was eligible for "state leave . . . through [the] end of [the] year, and advised [him] that his state leave renew[ed] in 2010." (Hewitt Records, Ex. E to Stip. Facts at 3.) In other words, Mr. Nieto told Mr. Ridgeway that as of January 2010, his "CT FMLA would refresh ... and he would have the full 16 weeks of entitlement and therefore would have job protection" through April 2010. (Id. at 6; see also Ridgeway Dep. at 114.)

         In fact, utilizing a rolling year method, as of January 1, 2010, Mr. Ridgeway's state leave was exhausted, and he no longer had job protection. (Stip. Facts ¶ 16.) Hewitt, however, did not inform RBS of Mr. Nieto's conversation with Mr. Ridgeway on December 1, 2009. (Id. ¶ 21.)

         As a result, on December 3, 2009, RBS approved the recruitment of an analyst from the Principal and Interest ("P & I") division to replace Mr. Ridgeway, who RBS apparently believed, had overstayed his leave. (Id. ¶ 22; see Ex. F to id.) On December 7, 2009, Mr. Ridgeway's manager, Koren Horsey, emailed her RBS Human Resources Partner, Dawn Hughes, about Mr. Ridgeway's leave status, noting that the last she had heard from Hewitt was that Mr. Ridgeway was only approved for leave until December 3, 2009. (Stip. Facts ¶¶ 23-24; see Ex. G to id. at 2-3.) Ms. Hughes forwarded the email to Erika House, a Hewitt representative, who responded that Mr. Ridgeway's "short-term disability was extended through 01/27/2010. [His] Family Medical Leave Act exhausted on 12/3/09, so as of 12/4/09 [he] remain[s] on Connecticut FMLA until 12/31/2009. Connecticut FMLA will run up to 16 weeks. As of 01/01/2010 [he] will no longer be eligible for job protection but will remain on short-term disability." (Ex. G to Stip. Facts at 2.)

         Mr. Ridgeway, in reliance on the information he had received from Hewitt, failed to return from his leave on December 31, 2009. (Stip. Facts ¶ 27.) As a result, on January 6, 2010, Mr. Horsey declared, by email to several RBS employees, "We are going to officially replace Louis Ridgeway. I would like to transfer Scott Fabbri from P & I to [Reconciliation and Control ('Rec & Control')] to replace Louis. This will open a role in P & I." (Horsey Email re Fabbri, Ex. H to Stip. Facts.) "No one from RBS-including Ms. Horsey-made any attempt to telephone, email or otherwise contact [Mr.] Ridgeway, directly or indirectly, when he did not return to work in January 2010 until January 25, 2010." (Stip. Facts ¶ 32.) On January 25, 2010, Ms. Hughes sent Mr. Ridgeway a letter notifying him that his "Family Medical Leave allowance has exhausted as of January 1, 2010 and [his] position as a Senior Operations Analyst has been put into the posting process/is no longer available." (Ex. I to id.) By email dated February 9, 2010, Hewitt informed Ms. Hughes that Mr. Ridgeway's short-term disability leave had been extended to February 7, 2010, but his job protection remained exhausted. (Ex. J to Stip. Facts.)

         Mr. Ridgeway, after receiving the January 25, 2010 letter from Ms. Hughes, called Hewitt on February 17, 2010 to clarify whether he did in fact have job protection through April, as Hewitt had previously told him. (See Hewitt Records at 3-4.) The Hewitt representative confirmed that "he was eligible for job protection to 4/22/10 and after that date RBS was no longer required to hold his position." (Id. at 4.) RBS did not learn that Hewitt had told Mr. Ridgeway that he was on job-protected leave until April 9, 2010, when Mr. Ridgeway contacted Ms. Hughes.[1] (Stip. Facts ¶ 39.)

         Shortly thereafter, Heidi Lane, a representative of the Connecticut Department of Labor ("CT DOL") contacted Amy Gare, RBS's in-house employment attorney, and told her that she believed RBS was required by law to reinstate Mr. Ridgeway. (Id. ¶ 40; see 2012 Gare Dep., Ex. K to id. at 59.) Ms. Gare testified that based on her conversation with Ms. Lane, she "understood that there may be an obligation to reinstate Mr. Ridgeway if it was possible." (2012 Gare Dep. at 59.)

         Nonetheless, RBS did not reinstate Mr. Ridgeway. Rather, "[f]ollowing its policy for employees returning from additional leave after the expiration of FMLA leave, RBS gave [Mr.] Ridgeway 45 days to find a new position within the company and sent him a link to all available jobs." (Stip. Facts ¶ 42; see Ex. BB to Passarella Decl.) Mr. Ridgeway did not seek other employment with RBS, and RBS and Mr. Ridgeway failed to reach a separation agreement. (Stip. Facts ¶ 43.) Mr. Ridgeway's employment with RBS ended on July 1, 2010. (Id. ¶ 44.)

         D. Underlying Litigation

         On October 10, 2010, Mr. Ridgeway filed a complaint with the CT DOL, claiming that RBS had interfered with his rights under the CT FMLA. (Id. ¶ 46.) Eight months later, on June 16, 2011, Mr. Ridgeway filed a complaint against RBS in federal court, alleging interference and retaliation under the FMLA, wrongful termination in violation of public policy, termination in violation of Conn. Gen. Stat. § 31-51q, promissory estoppel, and negligent misrepresentation. See Ridgeway v. RBS, 3:11cv976 (D. Conn.), Compl. [Doc. #1].

         By decision dated March 27, 2012, Judge Vanessa Bryant dismissed Mr. Ridgeway's claims of wrongful termination and termination in violation of § 31-51q, but permitted his remaining claims to go forward. See id., Mem. Decision Def.'s Mot. Dismiss [Doc. # 40]. The parties proceeded to discovery, during the course of which RBS made two admissions relevant here: (1) "[i]n the conversation with Hewitt Associates on or about December 1, 2009, Hewitt granted Ridgeway's FMLA leave to begin on January 1, 2010" and (2) "[i]n December of 2009, Hewitt granted Ridgeway an FMLA leave to begin on January 1, 2010 and to run for twelve weeks." Id., Mem. Decision Mot. Withdraw Judicial Admissions and Mot. Summ. J. [Doc. # 135] at 11.

         RBS subsequently sought to withdraw these admissions, arguing that the summaries provided by Hewitt of its phone calls with Mr. Ridgeway revealed that Hewitt had only advised Mr. Ridgeway that his CT FMLA would refresh in January 2010 and not his FMLA. Id. Judge Bryant, however, denied RBS's motion, reasoning:

In view of the fact that the recording of the December 1, 2009 call has been destroyed, Ridgeway would clearly suffer prejudice as a consequence of the withdrawal because he would now need to obtain evidence of the recording that was destroyed. This is particularly prejudicial where RBS was aware of the need to preserve the recording as early as February 2010 when Ridgeway responded to Hughes's letter placing Hewitt on notice that there was a dispute regarding FMLA entitlement and at the latest by April 2010 when Hughes learned that Ridgeway had been provided with incorrect information by Hewitt and when Hewitt emailed an account of the recorded call to RBS regarding Ridgeway's dispute. Lastly the need to preserve the recording had clearly arisen when on April 22, 2010, [Ronni] Greenberg, an RBS Human Resource Representative, acknowledged that Hewitt provided Ridgeway with incorrect information and told him that it was "unfortunate" but that "we were correct to send you a letter stating [that your leave was exhausted][T]he people that we outsource to would have been incorrect to tell you that it was not exhausted." Further, the Court is not persuaded that withdrawal would promote the presentation of the merits as there is evidence in the record that lends credence to [the] truthfulness of the admissions such as the May 20, 2009 and October 13, 2009 letters Hewitt sent on RBS letterhead, which expressly indicated that FMLA leave was calculated on a calendar year basis. Further, the principal piece of evidence RBS relies on to support its position that withdrawal is warranted is Ebonie's email account of the December 1 call to Hughes which is arguably inadmissible and self-serving hearsay....[T]here is no indication that the admission is no longer true as a result of Ebonie's email which contained her third party account of the recorded call. Moreover, because the recording has been destroyed there is no assurance that either party can point to which would definitely establish what was actually said during that call.

Id. at 29-30.

         The court granted summary judgment in RBS's favor on Mr. Ridgeway's FMLA retaliation claim, finding that "no reasonable trier of fact could conclude that RBS's decision to terminate him was influenced by [Mr.] Ridgeway contacting the CTDOL." Id. at 46. However, the court denied summary judgment on Mr. Ridgeway's FMLA interference, promissory estoppel, and negligent misrepresentation claims. Id. at 60. On August 12, 2013, Mr. Ridgeway and RBS settled the case for $400, 000, ...

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