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Vendetti v. Compass Environmental

November 26, 2007


The opinion of the court was delivered by: Judge Marvin E. Aspen


Presently before us are cross-motions for summary judgment filed by Plaintiff Ronald Vendetti ("Vendetti") and Defendant Compass Environmental, Inc. ("Compass"). Vendetti alleges that Compass breached his Employment Agreement ("Agreement") by requiring him to travel to Chicago two weeks per month. Compass argues that it did not breach the Agreement, and that even if it did, Vendetti may not recover because he breached the Agreement through his insubordination and failure to give Compass an adequate opportunity to cure. For the reasons set forth below, we grant Vendetti's motion and deny Compass's motion.*fn1


Compass is an environmental remediation contractor headquartered in Chicago. (Pl. Facts ¶1). On October 26, 2004, Compass acquired Williams Group International, also an environmental remediation contractor located in Stone Mountain, Georgia. (Pl. Facts ¶7; Def. Facts ¶4). Four Williams executives accepted employment with Compass after the acquisition, including Vendetti, who was hired as a controller. (Pl. Facts ¶9; Def. Facts ¶4, ¶7).

On October 26, 2004, Vendetti entered into an Agreement with Compass. (Compl. Ex. A). The agreement stated in relevant part:

§ 1(b): [Vendetti] shall initially have the duties, responsibilities and authority prescribed from time to time by the Board of Directors of [Compass]. [Vendetti] shall report to the Board of Directors of [Compass] (the "Board") which may, from time to time, further define [Vendetti]'s duties and responsibilities hereunder . . . . [Vendetti] agrees to devote his best efforts and substantially all of his business time, attention, energy, and skill to performing his duties to [Compass] under this Agreement. § 1©: Unless otherwise mutually agreed to, [Vendetti] shall be located in his current company office location (the "Principal Location") during the Term or such other office located within 45 miles of the Principal Location. § 5(f): [Vendetti] may terminate his employment for "Good Reason." "Good Reason" shall mean the occurrence and continuance for thirty days after written notice from [Vendetti] to the [Compass] of any material breach by the [Compass] of any provision of this Agreement after failing to cure such breach. § 6(b): In the event this Agreement is terminated pursuant to Sections 5(b), ©, (d) or (e)(ii), [Vendetti] shall not be entitled to any compensation for any period after the date of termination except for the continuation of medical coverage as required by law; provided, however, that [Vendetti] shall be to any accrued but unpaid obligations; provided, further, in the event [Vendetti] terminates this Agreement following the [Compass's] request to move his place of employment more than 45 miles from the Principal Location, the [Compass] shall pay to [Vendetti] severance pay equal to [Vendetti's] then existing Base Salary payable at such times and in such manner (including subject to all required deductions) for the 12-month period following the date of termination.*fn2 § 6(c): In the event this Agreement is terminated pursuant to [Section (f)], the [Compass] shall pay to [Vendetti] severance pay equal to the [Vendetti's] then existing Base Salary payable at such times and in such manner (including subject to all required deductions) as would otherwise be payable in accordance with the terms of this Agreement as if termination had not occurred, for a period beginning on the date following the date of termination and ending twelve (12) months following the date of termination. (Compl. Ex. A).

From April 2005 to July 2005, Compass installed a new accounting software system to integrate the Williams and Compass systems. Vendetti was in charge of installing and implementing this system and traveled to Chicago on four occasions to do this. (Pl. Facts ¶¶20-21; Def. Facts ¶¶16, 19). After the installation, Vendetti's duties were expanded to include handling accounting for all projects of Compass, not just those of Williams, and completing the monthly statements in connection with those projects. (Pl. Facts ¶22).

In November 2005, Compass hired a new CFO, Thomas Dubnicka (Pl. Facts ¶23; Def. Facts ¶21), who was described as more "hands on" than the previous CFO. (Def. Facts ¶22). During his first few months as CFO, Dubnicka made several requests that Vendetti travel to the Chicago office in order to assist with the month-end closing of the books. (Pl. Facts ¶26; Def. Facts ¶25). Vendetti came to Chicago as requested, but none of these visits lasted longer than three days. (Id.). In mid-March 2006 during a visit to the Chicago office, Dubnicka informed Vendetti that Compass was planning to terminate two of the Stone Mountain accounting personnel and that Vendetti needed to travel to Chicago to cross-train Chicago personnel on those employees' tasks, provide additional training to Vendetti's counterparts in the Chicago office, and help with the year-end audit and monthly closing. (Pl. Facts ¶27; Def. Facts ¶26). Dubnicka said that starting in April, he wanted Vendetti to be working two weeks per month in Chicago, and Vendetti expressed opposition to this amount of travel. (Pl. Facts ¶¶27-28).

As a follow-up, Dubnicka sent Vendetti an email on March 31, 2006 summarizing their meeting in order to "eliminate confusion" regarding what they discussed. (Pl. Facts ¶28; Def. Facts ¶32; Vendetti Depo. Ex. A). The email stated that Vendetti would provide work summaries of the work done by himself and the terminated Stone Mountain accounting personnel and would cross-train individuals in the Chicago office on these functions. (Vendetti Depo. Ex. A). Most significantly, the final paragraph on the email stated:

Finally, beginning with April, you need to plan on being in the Chicago office the last two weeks of each month to assist with the close and other accounting work that needs to be done. At first this will include cross-training others on the work you do. I acknowledge that you expresed [sic] reluctance with this arrangement. However, after managing the finance and accounting function for the past several months, I have decided the most efficient means of completing the close and working on other necessary items and projects is to have you would of the Chicago office two weeks a month. Therefore, you need to plan on being here the last two weeks each month for the indefinite future. (Id.) (emphasis added).

Dubnicka later confirmed in his deposition that the monthly closing was a recurring event every month by responding "Yes," when asked if it would be a correct statement to say that even after Vendetti's short-term training assignments were completed, "[Vendetti] would still have to be coming in to do the monthly close and fill out his two weeks per month with other functions as [Dubnicka] would come up with for him to do." (Dubnicka Depo. at 94, 97). On April 17, 2006 Vendetti responded to Dubnicka's March 31, 2001 email, sending a carbon copy to Battistoni, Compass's Chief Operating Officer, and commenting that he was "certain that [Dubnicka] and [Battistoni] have discussed the issue of my physical location in the past." (Pl. Facts ¶32; Compl. Ex. 3). Vendetti's response also stated: "This request for me to work from the Chicago office for 2 weeks each month for 'routine' accounting operations is something that was not discussed when I first joined Compass. I have no problem being in Chicago for 'non-routine' operations or projects such as the work we had to do with system selection, conversions or audit. . . . I do not mind spending 2 to 3 days (maximum) in Chicago each month and how you'd like to use my time would be at our discretion." (Id.). Vendetti also explained that he could do much of the work in the Stone Mountain office anyways, because "[Compass] is built on managing tasks and responsibilities remotely." (Id.).

That same afternoon, Dubnicka emailed Vendetti a response "reserv[ing] comment on the bulk" of the email until a later time and expressing his disappointment that Vendetti was not in the Chicago office that day. (Id.). In addition, Dubnicka felt that Vendetti's absence showed a "total lack of respect for Compass and its needs" and he reiterated that Vendetti needed to be in Chicago both that week and the following week. (Id.). Dubnicka forwarded Vendetti's email to Compass executives, commenting that Vendetti's actions bordered on insubordination and that he was "sure [Vendetti's] employment agreement does not give him the right to refuse to come here two weeks a month." (Id.).

On April 18, Vendetti traveled to the Chicago office and met with Dubnicka and Broderick, Compass's attorney, and Dubnicka's April 19, 2006 email summarized what took place at that meeting. (Compl. Ex. 4). Dubnicka reiterated his disappointment that Vendetti had not come to Chicago the previous day as directed and stated that this amounted to insubordination and grounds for termination for cause. (Id.). He wrote that the cross-training could not be done remotely and confirmed Vendetti's next agreed upon trip to Chicago for the week of April 24th. In addition, he mentioned the need for Vendetti to "be in Chicago for the last two weeks of May and each month thereafter for the foreseeable future." (Id.).

Vendetti tendered his notice of termination for "Good Reason" pursuant to Section 5(f) of the Agreement early in the morning on April 21, 2006, to become effective May 21, 2006. (Compl. Ex. 5; Pl. Facts ¶39-¶40; Def. Facts ¶38). He explained that Compass's instruction that he "work out of the Chicago office two (2) weeks each month for the indefinite future" amounted to a material breach of Section 1(c) of the Agreement. (Compl. Ex. 5). Following a meeting with Broderick and Dubnicka that same day, Vendetti sent an email informing Dubnicka that while he would be willing to travel to Chicago the following week of April 24th, this depended on Compass's response to his notice of termination. (Dubnicka Depo. Ex. 8).

On April 21, 2006 Broderick emailed Vendetti stating that Compass would respond to his notice of termination at a later date. (Pl. Facts ¶42; Def. Facts ¶40). Th email confirmed Vendetti's unwillingness to travel to Chicago until Compass responded to his notice, even though he had agreed that he would come to Chicago to complete the 2005 audit, March closing, and cross-training of Chicago employees. (Broderick Depo. Ex. 7). Broderick reiterated that Compass still expected Vendetti to be in Chicago on Monday, April 24, 2006. (Id.).

Vendetti responded to Broderick's email that same day stating that the demand that he be in Chicago that week was "part and parcel" of the previous demand that he work in Chicago for two weeks per month for the indefinite future, and therefore, his willingness to travel to Chicago "this, or any future week" depended on Compass's response to his notice of termination. (Id. at Ex. 9). Vendetti also believed that the three tasks he was required to perform in Chicago could be performed remotely from his Stone Mountain office. (Id.).

Later that same day, Broderick sent a formal response to Vendetti's notice of termination disagreeing that Vendetti had "Good Reason" to terminate the Agreement. (Compl. Ex. 6; Def. Facts ¶41; Pl. Facts ¶45). Broderick specifically stated that "the Company has not requested, nor is it requesting, you to change your Principal Location. Your supervisor requested that you be in the Chicago office for specific periods of time for specific tasks that had an unknown date of conclusion." (Compl. Ex. 6; Pl. Facts ¶45). Broderick concluded the letter by stating that he would be available during Vendetti's stay in Chicago to discuss the matter. (Compl. Ex. 6). Vendetti did not travel to Chicago and did not respond to ...

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