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Klein v. Newly Weds Foods, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 10, 2019

JAMES KLEIN, Plaintiff,
v.
NEWLY WEDS FOODS, INC., Defendant. NEWLY WEDS FOODS, INC., Counter-Plaintiff,
v.
JAMES KLEIN, Counter-Defendant.

          MEMORANDUM OPINION AND ORDER

          HON. MARIA VALDEZ, UNITED STATES MAGISTRATE JUDGE.

         DISCUSSION

         Plaintiff James Klein was terminated from his position as Director of Research & Development by Defendant Newly Weds Foods, Inc. (“Newly Weds”). Klein brought suit, alleging a violation of the Age Discrimination in Employment Act (“ADEA”), arguing that he was terminated and immediately replaced with several younger individuals under the guise of company reorganization. [Doc. No.1]. Newly Weds argues that age played no role in Klein's termination and that there is no evidence that would support such a claim. Newly Weds asserts that Klein's employment ended when it was determined that the position he was deemed most capable of filling in the reorganized department was simply not a viable position for how Newly Weds supported its customers. Newly Weds has moved for summary judgment. [Doc. No. 76].

         Newly Weds has also filed counterclaims against Klein for breach of contract and violation of the Illinois Trade Secret Act. [Doc. No. 43]. Klein has moved for summary judgment [Doc. No. 95] on Newly Wed's counterclaims, arguing that Newly Weds has failed to establish any damages and failed to provide any evidence that Klein used any of its documents or disclosed any of the material in controversy to anyone but his attorney. The parties have consented to the jurisdiction of the United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons that follow, Defendant's Motion for Partial Summary Judgment [Doc. No. 76] is granted and Plaintiff's Motion for Summary Judgment on Defendant's Counterclaims [Doc. No. 95] is dismissed without prejudice.

         BACKGROUND [1]

         Plaintiff Klein was hired by Defendant Newly Weds in 1997 and worked in the Research & Development (“R&D”) department until he was terminated, at the age of 65, in August 2015. [Pl.'s Resp. to Deft.'s SOF at ¶ 2]. At the start of 2015, Newly Weds hired Dirk Beekman to succeed Lynn Theiss, long-time Vice President of R&D. [Deft.'s SOF at ¶ 4]. Although Klein denies that it was “widely understood” that Beekman would reorganize the R&D department, Newly Weds asserts that one of Beekman's responsibilities in 2015 was to make determinations as to how to better manage the R&D department. [Pl.'s Resp. to Deft.'s SOF at ¶¶ 4, 5]. Prior to Newly Weds hiring Beekman, Klein had discussions with Theiss regarding the need to improve headcount through improved workflow between the Regulatory & Technical Information Systems (“RTIS”) Group and the rest of R&D. [Deft.'s SOF at ¶ 6].

         As an initial step in the R&D reorganization, on June 29, 2015, Kendle Gorski transitioned to the newly created position of Raw Material Information Manager in the RTIS area of R&D. [Id. at ¶¶ 7, 10]. The Raw Material Information Group's function was to ensure the acquisition, assimilation, and maintenance of accurate raw material and vendor information. [Id. at ¶ 7]. As a managerial position, Gorski's position was a step below Klein's position as a director, with Gorski's starting salary at $80, 000 and Klein's base salary at the time being $137, 534.99. [Id. at ¶¶ 10, 11].

         Three individuals who previously reported to Klein handling data were shifted to Gorski as part of this move. [Id. at ¶ 7]. This data function had been Klein's responsibility from 2011-2014. [Id. at ¶ 8]. Klein agreed that it would be a “reasonable decision of management” to have the data handled by the Raw Material Information Group and that he did not believe that he would have been better suited to take on those responsibilities than Gorski. [Id. at ¶ 9].

         During this time, as part of the reorganization, Beekman and Klein were discussing having Klein focus on a new long-term innovation. [Id. at ¶ 13]. The discussion included talks of shifting Klein's clerical responsibilities to RTIS to free up Klein to do other things. [Id. at ¶ 13]. Beekman and Klein continued to discuss Klein's expanded job duties and Klein believed that Beekman was “very positive” toward him. [Id. at ¶ 14].

         Early in the reorganization process, Beekman determined that Klein's strength was innovation and coming up with new ideas for the company, and Klein agreed. [Id. at ¶ 15]. Klein and Beekman discussed a position where Klein could do a good job working on basic, long-term research. [Id. at ¶ 19]. The parties disagree as to what role Beekman envisioned for Klein: a singular role in innovation, or a multi-faceted role that encompassed innovation, cost savings, and other duties. [Pl.'s Resp. to Deft.'s SOF at ¶ 20]. Newly Weds believes the position that Beekman envisioned played to Klein's strength in coming up with new ideas, whereas Klein believes that Beekman envisioned a broader role than just simple innovation. [Id. at ¶ 20].

         Beekman created a Continuous Improvement Group, whose function was to find areas of waste where money could be saved by doing things smarter. [Deft.'s SOF at ¶ 22]. The group would focus on savings in procurement, ingredients, and operations, including immediate manufacturing costs and savings. [Id. at ¶ 22]. Beekman selected George Kelecich, who was 52 at the time, to run this group. [Id. at ¶ 23]. Klein alleges that he was performing the role of continuous improvement and cost savings as head of the “Ingredient Technology Group, ” and once he was terminated, the group was renamed the “Waste Group” and, later, the “Continuous Improvement Group.” [Pl.'s Resp. to Deft.'s SOF at ¶ 22]. Klein alleges his job was given to Kelecich, as were his remaining direct reports, John Schranz and Linfeng Wang, who later performed essentially the same work under Kelecich. [Id. at ¶ 22]. Klein further alleges that he was fired and the position was given to Kelecich to create a vacancy for Craig Lawson, a manager under Kelecich who was 40 at the time, who was elevated to R&D Director. [Id. at ¶ 23]. Klein understood that the Continuous Improvement Group would be working with plant operations to reduce waste in plants. [Deft.'s SOF at ¶ 24]

         Kelecich had worked for Newly Weds longer than Klein had. [Id. at ¶ 25] He started in operations and had been a production supervisor. [Id. at ¶ 26]. After Kelecich moved from operations to R&D, he continued to have regular interactions on a weekly or daily basis with Newly Weds' plant managers. [Id. at ¶ 27]. He handled any item that involved R&D and operations that related to product development. [Id. at ¶ 27]. Klein acknowledged that Kelecich had a great relationship with operations, was good with people, and was strong in administration. [Id. at ¶ 28]. Klein had never worked in operations at Newly Weds. [Id. at ¶ 30].

         In August 2015, Carol Bagley, a former Newly Weds employee, had gone to Newly Weds to visit a friend when she bumped into Newly Weds' owner, who asked her if she would be interested in coming back to work for the company. [Id. at ¶ 34]. Bagley previously worked at Newly Weds from 1988 - 1996 in a variety of roles, including food scientist, R&D manager, regulatory compliance manager, and financial analyst. [Id. at ¶ 33].

         Bagley was interested in a position with Newly Weds and subsequently interviewed with an HR manager. [Id. at ¶ 34]. She received a job offer and was pretty confident that her contact with Newly Weds' owner would result in the offer. [Id. at ¶ 34]. As part of the Continuous Improvement Group, Beekman assigned Bagley, who was 50 at the time, to work under Kelecich with respect to the financial aspect of continuous improvement. [Id. at ¶ 32]. Bagley's position was a newly created managerial position with a salary of $80, 000 - a lower position and salary than that of Klein's. [Id. at ¶¶ 35, 36]. While the parties agree it was a new position, Klein alleges that Bagley's job functions had been performed by various individuals, including Klein himself, throughout the company's history. [Pl.'s Resp. to Deft.'s SOF at ¶ 36]. The parties further disagree that Bagley did not pick up any of the projects that Klein had been handling. Klein alleges that Schranz and Wang were immediately reassigned to Bagley following Klein's termination and continued to perform the same work under Bagley that they had performed under Klein. [Id. at ¶ 37].

         Prior to the reorganization, Kelecich had managed some of Newly Weds' remote R&D locations. [Deft.'s SOF at ¶ 38]. Newly Weds asserts that with Kelecich being slotted to head the Continuous Improvement Group, Beekman selected Craig Lawson to take on the functions that Kelecich had managed involving R&D at plants in and outside of Chicago. [Id. at ¶ 39]. Klein disagrees, alleging that Kelecich was reassigned to the position of Continuous Improvement Director so that Lawson could be promoted to Kelecich's old position - asserting that the only difference between Lawson's new position and Kelecich's former position was that Lawson was now responsible for overseeing five plants instead of four. [Pl.'s Resp. to Deft.'s SOF at ¶ 39]. Klein had only managed one remote location for Newly Weds during 2009 - 2010 and admitted that he was not better suited for this position than Lawson. [Deft.'s SOF at ¶ 40].

         Klein believed that Debra Polcyn had picked up some of his responsibilities for budgeting in the reorganization, but he also noted that she had become responsible for talent acquisition and working with universities on interns. [Id. at ¶ 41]. Polcyn, who turned 60 in 2015, moved from a position involving R&D for national chain accounts - a position that was eliminated - to becoming the director of Technical R&D, running the R&D sensory lab and reporting directly to Beekman. [Id. at ¶ 42].

         The parties disagree as to the position that Beekman envisioned for Klein. [Pl.'s Resp. to Deft.'s SOF at ¶ 43]. Newly Weds asserts that it became apparent to Beekman that it would be like “pushing a giant boulder up a hill” because “95%” of everything done at Newly Weds was customer driven. [Id. at ¶ 43]. Klein asserts that, unbeknownst to him, as early as April 2015, Beekman had placed him on a “6 month test” and threatened to replace him; and, by June 2015, had requested severance figures for Klein. [Id. at ¶ 43]. Klein agreed with Beekman's characterization that Newly Weds is a “customer-oriented” company. [Deft.'s SOF at ¶ 44]. The parties disagree that, as the reorganization progressed, the feedback from Vice Presidents in other areas of Newly Weds was that Beekman's vision for Klein's new role was not what Newly Weds was, would not work out, and was simply “not ...


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