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TING v. CHICAGO MERCANTILE EXCHANGE

September 21, 2005.

LEWIS TING, Plaintiff,
v.
CHICAGO MERCANTILE EXCHANGE, INC., Defendant.



The opinion of the court was delivered by: JOAN GOTTSCHALL, District Judge

MEMORANDUM OPINION AND ORDER

Lewis Ting has sued his former employer, Chicago Mercantile Exchange, Inc. ("CME"), charging it with race and national origin discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and 42 U.S.C. § 1981. In its answer to Ting's complaint, CME has counterclaimed for breach of fiduciary duty, destruction of personal property, conversion and replevin. Presently before the court is CME's motion for summary judgment, the parties' cross motions for summary judgment on the counterclaim counts, cross motions for sanctions under FED. R. CIV. P. 11(c) and a motion to strike. As set forth below, CME's motion for summary judgment is granted, its cross-motion for summary judgment on the counterclaim is granted in part and denied in part, and the parties' remaining motions are denied.

I. BACKGROUND*fn1 A. Ting's Employment at CME.

  Defendant CME operates a futures exchange, employing approximately 1,100 individuals. In March 2000, CME entered into a two-year employment agreement with Lewis Ting, an Asian-American male. Ting joined CME as a member of the management team, and his duties included oversight of human resources and employee development. As part of Ting's compensation package, the parties' employment agreement called on CME to pay Ting a minimum bonus of $200,000 a year. CME paid Ting $200,000 in bonuses in 2000 and $300,000 in 2001; however, the latter payment represented a reduction from Ting's proposed bonus that year, which had been pegged at $450,000. CME reduced the bonuses of several members of the management team that year, but Ting's reduction was the most significant, allegedly because CME did not view human resources management as requiring the same degree of difficulty as other management positions.

  In early 2002, Jackie Fitzgerald, one of Ting's subordinates, complained to the legal department that Ting had behaved in a manner constituting harassment, retaliation and creation of a hostile work environment. CME hired outside counsel Babbitt and Melton LLP to investigate the allegations. Babbitt and Melton interviewed several individuals, including Ting, in connection with the investigation and issued a report containing its findings (the "Babbitt and Melton Report") to CME's president and CEO James McNulty. Although the Babbitt and Melton Report concluded that no harassment or retaliation had occurred, it faulted Ting's management style.*fn2

  Fitzgerald was not the only individual with whom Ting had a strained relationship during his tenure at CME. Leo Melamed, CME's Chairman Emeritus and a Senior Policy Advisor, was often dismissive of Ting, speaking to him in an "aggressive, speaking down, commanding tone," and, on one occasion, instructed him to get coffee in preparation for a meeting (a task apparently beneath any member of CME's management team). In addition, Melamed claimed that he had trouble understanding Ting on at least one occasion, and denigrated Ting's "note-taking" ability in front of others. According to Ting, Melamed's hostility towards him was motivated both by certain corporate governance changes Ting was attempting to institute as well as by Ting's race. Ting was the only member of the management team whose note-taking ability was criticized or who was asked to get coffee.

  William Miller, a consultant and former director at CME, had similar interactions with Ting, though the record is somewhat shorter on specifics. At one point, Miller and Ting had what the parties characterize as an "abusive conversation," the upshot of which was that Ting called Miller "unprofessional" and questioned his qualifications to provide consulting services to CME. Ting concedes that he was "direct and confrontational" in his dealings with Miller, but maintains that he was motivated to act in this manner to protect a manager in his department whom Miller had criticized. According to a declaration filed by Ting after the close of discovery, McNulty told him that the confrontation with Miller was a "set-up," but CME objects to this statement on hearsay grounds. CME is correct. See FED. R. EVID. 801(c) (defining hearsay as a statement made by an out-of-court declarant offered to prove the truth of the matter asserted); Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 1997) ("Hearsay is inadmissible in summary judgment proceedings to the same extent that it is inadmissible in a trial."). Courts can consider affidavits such as Ting's at the summary judgment stage, but only when "the affiant's . . . testimony would be admissible if he were testifying live." Eisenstadt, 113 F.3d at 742. Ting would not be permitted to testify as to this statement allegedly made by McNulty. Ting's attorney took a lengthy deposition of McNulty after the alleged statement occurred and he had ample opportunity to question him about the putative "set-up" of his client, but has provided the court with no confirming sworn testimony by McNulty. The court cannot consider what Ting now says McNulty said to him about the confrontation.

  B. Ting's Termination and CME's Post-Termination Investigation.

  CME did not renew Ting's employment contract when it expired in March 2002, and Ting remained an at-will employee at CME until some point in August, when CME terminated his employment. CME maintains that it terminated Ting because of morale problems, including the confrontation with Miller, and because of Ting's failure to "advance the interests of CME's Board of Directors." Ting concedes that the Board was dissatisfied with certain corporate governance recommendations he made,*fn3 but maintains that its dissatisfaction was animated by a discrimination against him based on his race. Ting's replacement was Beth Keeve, a Caucasian woman.

  According to Ting, CME initially indicated that it would "do the right thing" and provide him with separation benefits upon his departure, but CME ultimately declined to do so after determining that he had been terminated "for cause." CME also conducted a post-termination investigation into Ting's conduct while an employee, and concluded that Ting had requested excessive work from and authorized excessive payments to Penfield Associates, Inc. ("Penfield") (a consulting firm with whom Ting had close ties), improperly retained outside legal counsel on CME's behalf, deleted information from the hard drive on the laptop issued to him by CME, and retained certain documents and notebooks belonging to CME. Ting denies that his dealings with any outside organizations were improper, but he does not dispute that he deleted information from his laptop hard drive or that he retained certain documents that CME claims are its property.

  After his termination and CME's refusal to pay separation benefits, Ting filed the present action, which maintains that CME's decisions regarding his termination, bonus and severance as well as comments directed toward him while an employee violated Title VII (Count I) and 42 U.S.C. § 1981 (Count II). CME has counterclaimed, alleging claims of breach of fiduciary duty (Count I), destruction of personal property (Count II), conversion (Count III), and replevin (Count IV).

  II. SUMMARY JUDGMENT

  Summary judgment is appropriate "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 a judgment as a matter of law." FED. R. CIV. P. 56(c). The party opposing summary judgment may not rest upon the pleadings, but "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). There is no genuine issue for trial unless there is "sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Id. ...


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