Graham v. Honeywell International Inc.

Background

Honeywell hired Maxwell A. Graham as a sales manager in 2019. In 2021, during a reorganization, Honeywell required him to reapply for his position or lose his job. Graham negotiated compensation tied to Honeywell’s Sales Incentive Plans, then signed a July 30, 2021 employment agreement. Honeywell later ended his employment in September 2022 as part of a large reduction in force. Graham sued, alleging improper termination and failure to pay earned wages and incentive compensation.

The parties filed cross-motions for summary judgment. Honeywell moved on all of Graham’s claims, while Graham moved only on the waiting-time-penalties claim. Summary judgment may be entered when the undisputed record shows that a party is entitled to judgment as a matter of law. The court concluded that some issues could be decided, but that genuine disputes of material fact required other issues to remain unresolved.

Breach of Contract

The court granted summary judgment in favor of Honeywell on the portion of Graham’s contract claim concerning his allegedly premature termination. The July 2021 employment agreement expressly stated that his employment was at will. The court held that Honeywell did not breach that agreement by terminating Graham in September 2022, even though Graham contended that he had an earlier oral understanding allowing him to choose a 2023 retirement date. The written agreement superseded earlier terms, and Graham’s alleged December 2021 oral agreement could not support the claim because he had not pleaded that agreement in the operative complaint.

The court denied summary judgment on the portion of the contract claim concerning incentive payments under the Sales Incentive Plans. The plans described how incentive payments would be calculated, required changes to apply prospectively, and described themselves as agreements. Graham’s employment agreement incorporated the plans, and the court found a triable issue—meaning an issue for a fact-finder—about whether Graham accepted the plans by performing work and relying on Honeywell’s compensation representations.

The court also found factual disputes about the Hamilton, Starbucks-China, and OnTrac matters. For Hamilton, the record did not resolve whether Honeywell’s Large Order Bonus Plan applied because its details were announced after the deal closed, and the parties disputed the payment calculations. For Starbucks-China, the parties disputed whether Honeywell used the plan’s required dispute-resolution procedure and whether the person who resolved the dispute was the responsible sales leader. For OnTrac, Honeywell conceded that it did not use the plan’s procedure, while the parties disputed who was required to begin that process.

Unpaid Wages

The court granted summary judgment in favor of Honeywell to the extent Graham’s unpaid-wages claim concerned payments allegedly owed after his employment ended based on his planned retirement date. The court denied summary judgment to the extent the claim concerned incentive payments required under the Sales Incentive Plans. That part remained unresolved because of the factual disputes about whether Graham received all payments due under the plans.

Quantum Meruit

Quantum meruit is a claim seeking payment for services when no enforceable contract governs the compensation. The court denied summary judgment on this claim. If the Sales Incentive Plans are not enforceable contracts, Graham may pursue quantum meruit; until that issue is decided, he may pursue the claim as an alternative to his contract claim. The court also rejected Honeywell’s statute-of-limitations argument because the amended claim related back to Graham’s original complaint under Federal Rule of Civil Procedure 15(c)(1)(B).

Waiting-Time Penalties

Both parties sought summary judgment on Graham’s claim for penalties under California Labor Code section 203, based on Honeywell’s alleged failure to pay earned incentive compensation when his employment ended. The court denied summary judgment to both Honeywell and Graham.

The court rejected Honeywell’s arguments that the claim necessarily failed with the unpaid-wages claim, that Honeywell could offset alleged Hamilton overpayments against the penalties, and that payment under the plans’ schedule avoided liability. California law required payment when employment ended, and the plans recognized that applicable law could accelerate their payment schedule. The court also found factual disputes about whether Graham had earned payments, whether Honeywell had an objectively reasonable defense, and whether Honeywell acted in bad faith by delaying payment until September 23, 2022.

Age Discrimination

The court denied summary judgment on Graham’s age-discrimination claims under the California Fair Employment and Housing Act and the federal Age Discrimination in Employment Act. Applying the burden-shifting framework used for these claims, the court held that Graham presented enough evidence to establish a preliminary case and create factual disputes about Honeywell’s explanation and whether that explanation was a pretext for discrimination.

The evidence included the transfer of some accounts to an employee more than 20 years younger than Graham, statements about Graham’s expected retirement, evidence concerning his salary, and testimony describing the reduction in force as a means of selecting people Honeywell wanted to eliminate. The court concluded that Honeywell’s arguments about the significance of the transferred accounts and the alleged “stray remarks” were matters for the fact-finder.

Fraudulent Concealment

The court denied summary judgment on Graham’s fraudulent-concealment claim. The claim concerns Honeywell’s alleged failure to disclose the details and effect of the Large Order Bonus Plan before applying it to the Hamilton deal. The court found factual disputes about when Honeywell disclosed the plan, whether Honeywell had a duty to disclose it, and whether Graham was harmed because the parties disputed whether the plan paid more than the governing Sales Incentive Plan.

Unfair Competition Law Claim

The court denied summary judgment on Graham’s claim under California’s Unfair Competition Law. The law provides equitable relief, such as an order requiring action, only when the plaintiff lacks an adequate legal remedy. The court agreed that if the Sales Incentive Plans are not enforceable contracts, Graham might lack a legal remedy for the alleged failure to pay incentive compensation. Because other claims also survived Honeywell’s motion, the court allowed this claim to proceed.

Punitive Damages

The court denied summary judgment on Graham’s request for punitive damages. It held that Graham could pursue punitive damages in connection with the fraudulent-concealment claim, which survived Honeywell’s motion.

Evidentiary Objections and Disposition

The court denied the parties’ evidentiary objections. It found that the evidence relied on in the order met the more flexible evidentiary requirements used at the summary-judgment stage.

The final dispositions were:

- Breach of contract: Granted in favor of Honeywell concerning the allegedly premature termination; denied concerning alleged unpaid incentive payments under the Sales Incentive Plans. - Unpaid wages: Granted in favor of Honeywell concerning payments allegedly owed after termination; denied concerning incentive payments required under the Sales Incentive Plans. - Quantum meruit: Denied. - Waiting-time penalties: Denied. - Age discrimination: Denied. - Fraudulent concealment: Denied. - Unfair Competition Law claim: Denied. - Punitive damages: Denied.

Thus, the motions were granted in part and denied in part, with the specified portion of the contract claim and the specified portion of the unpaid-wages claim resolved for Honeywell, while the remaining identified claims or portions remained unresolved.