Baker v. MS Companies, LLC, 3:20-cv-00465

Background

Baker accepted an offer letter (June 2018) from ABC Employment Holdings d/b/a MS Companies providing $135,000 base salary and an ‘‘incentive plan’’ tying semiannual bonuses to EBITDA thresholds (15–17% → 20% salary; 18–20% → 30%; ≥20% → 40%; payouts in February and August).
The Letter did not define whether ‘‘EBITDA’’ meant company-wide EBITDA or the I/C (Quality) Department’s EBITDA; Baker contends it meant I/C Department EBITDA; employer contends it meant company EBITDA.
Employer required employees to be employed for the entire six-month measurement period to be eligible for a Letter bonus; parties dispute Baker’s exact start date but agree he did not work the full July–December 2018 period.
Baker received a $27,000 bonus in March 2019; Baker says it was an insufficient Letter-bonus tied to I/C EBITDA, employer says it was discretionary and not the contract bonus.
Baker sued alleging breach of contract, implied contract, and promissory estoppel seeking $102,600 for the March 2019 shortfall and unpaid 2019 semiannual bonuses; employer moved for summary judgment.
The court granted summary judgment for employer, holding (1) Baker ineligible for the Letter-bonus for the second half of 2018 because he did not work the full period, and (2) Baker produced no admissible evidence creating a genuine dispute that the I/C Department reached the 15% EBITDA threshold (or higher) in either 2019 semiannual period.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Meaning of “EBITDA” in Letter (I/C Dept v. company)	EBITDA refers to the Quality/I‑C Department, so bonuses tied to that division’s results	EBITDA refers to company-wide results; but court treated the issue as unnecessary to decide because other grounds dispose of the case	Court declined to resolve definitively; treated departmental EBITDA argument as assumed for Baker’s benefit and still ruled for defendant
Eligibility for Letter-bonus for Jul–Dec 2018	Baker argues receipt of $27,000 shows he was eligible despite not working whole period	Employer points to an explicit policy and Letter understanding requiring full six-month employment to be eligible; $27,000 was discretionary	Court: Baker was ineligible for the 2nd half 2018 Letter-bonus because he did not work the entire period; testimony shows the $27,000 was discretionary
Nature of the $27,000 paid Mar 2019 (contractual vs discretionary)	Baker says it was the Letter-bonus (albeit underpaid) tied to I/C EBITDA	Employer’s Rule 30(b)(6) testimony: bonus was discretionary, awarded by CEO for a ‘‘good year’’/employee	Court: Record (Vandergrift deposition) shows the $27,000 was discretionary; declarations/presentation relied on by Baker do not permit a reasonable inference it was a contractual Letter-bonus
Whether I/C Department met ≥15% EBITDA in 2019	Baker points to presentation slides and a declarant who said Baker had met ‘‘the EBITDA threshold’’ and an investor deck showing rising divisional revenue/adjusted EBITDA	Employer shows Baker’s only factual basis is speculative: preparatory presentation figures, projections, or adjusted metrics—not final, audited I/C EBITDA	Court: Baker’s evidence is speculative and insufficient; there is no genuine dispute that the I/C Department reached 15% EBITDA in 2019, so no entitlement to Letter-bonuses for 2019

Key Cases Cited

Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard; genuine issue requirement)
Celotex Corp. v. Catrett, 477 U.S. 317 (movant’s initial burden on summary judgment)
Reeves v. Swift Transp. Co., 446 F.3d 637 (materiality and effect on outcome under substantive law)
Cleveland v. Pol’y Mgmt. Sys. Corp., 526 U.S. 795 (plaintiff’s burden to show essential elements at trial in response to summary judgment)
Rodgers v. Banks, 344 F.3d 587 (insufficient ‘‘scintilla’’ of evidence cannot defeat summary judgment)
Hostettler v. College of Wooster, 895 F.3d 844 (credibility and weighing evidence not for summary judgment factfinder)
Tlapanco v. Elges, 969 F.3d 638 (view evidence in light most favorable to nonmoving party)
Pittman v. Experian Info. Sols., Inc., 901 F.3d 619 (movant’s initial burden and nonmovant’s response requirements)
Harris v. Klare, 902 F.3d 630 (reasonable jury standard for genuine dispute)
Young v. United Parcel Serv., 575 U.S. 206 (noting abrogation on other grounds of certain precedent cited)