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Kelly Sarbacher, An Individual v. Americold Realty Trust

November 14, 2011


The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge



The Court has before it two summary judgment motions. Plaintiff Kelly Sarbacher seeks a determination that severance pay qualifies as a wage under Idaho's Wage Act (Dkt. 44). Defendants AmeriCold Realty Trust and AmeriCold Logistics, LLC (collectively, "AmeriCold") has also moved for partial summary judgment on the same issue. AmeriCold also moves for summary judgment of Sarbacher's entire claim, arguing that Sarbacher was terminated for cause and is thus not entitled to severance pay in any event. (Dkt. 48).

The Court heard argument on November 2, 2011 and now issues its decision. For the reasons explained below, the Court will grant Sarbacher's motion for partial summary judgment and deny in part and grant in part AmeriCold's motion.


1. Sarbacher's Termination

AmeriCold describes itself as "the world's largest full-service temperature controlled warehouse and logistics provider." Mot. Memo. (Dkt. 49), at 1. In simpler terms, the company stores and keeps track of products for other businesses. One of AmeriCold's critical functions is to keep accurate records of the precise location of these products. This litigation concerns practices at AmeriCold's Ontario, Oregon facility. Sarbacher was the general manager of the Ontario facility for roughly 14 years, beginning in 1992.*fn1

Warehouse employees at the Ontario facility keep track of a product's location manually. When products come into the facility, they are put in a designated location within the warehouse. Once that location is filled, remaining product is sent to a second location. If warehouse employees fail to document that some product was sent to a second location, the inventory shows up as missing once the product is removed from the first location.

During Sarbacher's tenure as general manager, the number of "missing" cases at the Ontario facility was typically greater than 10,000. Sarbacher testified that the number of missing cases did not affect the facility's overall operations. He also testified that from the time he began working in the Ontario facility in 1992, if the physical inventory at a particular warehouse location did not match up with electronic records, warehouse staff would "roll" product while "they worked out the details." Sarbacher Dep. at 35:11-20.

Rolling does not involve physically moving product; instead, employees would electronically move one product from its original, designated location in the warehouse to its next designated location or to a "phantom" location. Sometimes, electronically moving the product to its next location would simply correct a warehouse error. In other words, the location of physical product would eventually line up with the location listed in the electronic records. Moving product into a "phantom" location resulted in the product no longer showing up as missing on electronic reports.

In 2007, AmeriCold instituted "Flash Reports." These reports tracked various items, including the number of missing cases at each AmeriCold facility. The goal was for each facility to have fewer than 1000 missing cases. Nonetheless, the Ontario facility continued to roll product so that it consistently (and inaccurately) showed fewer than 1000 missing or "invalid" cases.

2. Sarbacher's Employment Agreement

The parties entered into the employment agreement at issue in June 1998. Id. The agreement provides for a one-year term of employment, which would automatically extend for successive one-year periods, unless either party gave notice of non-renewal. Id. ¶ 1(b).

The agreement mentions severance several times. The preamble states: WHEREAS, as a condition to and in consideration of Employee's continued employment as an employee "at will," the participation in the long term incentive compensation plan of Americold Logistics, severance payments provided, and other good and valuable consideration, the Company and Employee are entering into this Agreement.

Id. at 1 (emphasis added).

Later, a chart sets out the following "type or types of compensation" payable to Sarbacher upon termination, indicating that the "Severance Benefit" is payable only if Sarbacher is terminated "without cause." Id. ¶ 5(c) (emphasis added). The agreement defines a "Termination for Cause" to include "misconduct involving fraud or dishonesty in the performance" of the employees' duties. Id. ¶ 5(d).

The agreement initially provided that severance payments (which were to paid in accordance with then-current payroll procedures) would cease if the employee "obtain[ed] substantially similar compensation . . . under a plan or program of any other employer . . . ." Id. ¶ 5(c). Under an addendum executed just a few weeks later, however, the parties agreed that "the Company shall pay the Severance Benefit as set forth above to Employee whether or not Employee obtains compensation from another employer." First Addendum (Dkt. 47-1) ¶ 2.


One of the principal purposes of summary judgment "is to isolate and dispose of factually unsupported claims . . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is "not a disfavored procedural shortcut," but is instead the "principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources." Id. at 327. "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 The evidence must be viewed in the light most favorable to the non-moving party, id. at 255, and the Court must not make credibility findings. Id. Direct testimony of the non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d 1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th Cir. 1988). And a court is not obligated to take the non-movant's version of events as true when the account is blatantly contradicted by video evidence. Scott v. Harris, 550 U.S. 372, 378-81 (2007).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001)(en banc). To carry this burden, the moving party need not introduce any affirmative evidence (such as affidavits or deposition excerpts) but may simply point out the absence of evidence to support the nonmoving party's case. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir.2000). This shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in her favor. Id. at 256-57. The non-moving party must go beyond the pleadings and show "by her affidavits, or by the depositions, answers to interrogatories, or admissions on file" that a genuine issue of material fact exists. Celotex, 477 U.S. at 324. However, the Court is "not required to comb through the record to find some reason to deny a motion ...

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