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May v. Pilot Travel Centers LLC

December 28, 2006


The opinion of the court was delivered by: Judge Gregory L. Frost

Magistrate Judge Terence P. Kemp


This matter is before the Court for consideration of Plaintiff's October 23, 2006 Motion for Sanctions for Spoliation of Evidence (Doc. # 24), Defendant's combined memorandum in opposition, motion to strike, and motion for attorneys' fees (Doc. # 26), and Plaintiff's reply memorandum (Doc. # 29). For the reasons that follow, the Court GRANTS Plaintiff's motion for sanctions, DENIES Defendant's motion to strike, and DENIES Defendant's motion for attorneys' fees.

I. Background

Defendant, Pilot Travel Centers LLC, is a nationwide retailer that operates gas stations and fast food restaurant franchises. Plaintiff, Scot May, worked for Defendant since 2000. At the time of the events giving rise to this lawsuit, Plaintiff worked as a restaurant general manager for a Wendy's franchise at one of Defendant's Columbus, Ohio locations.

Plaintiff's duties as general manager included the timely entry of vendor invoice information into a computerized system that would enable the corporate office to pay vendors. Plaintiff was also responsible for complying with Defendant's overtime policy, which provided that all employees who worked in excess of forty hours per week received overtime compensation. To enable Plaintiff to correct timekeeping errors, Plaintiff had access to Defendant's computerized records, which meant that Plaintiff could manually adjust employees' hours. As part of his compensation package for fulfilling these and other duties, Plaintiff was eligible for a bonus that depended, in part, on Defendant's measurement of his performance on a weekly, monthly, and quarterly basis. One factor involved in the bonus calculation was the restaurant's financial performance, so that a higher quarterly profit produced a higher bonus. Another factor was whether Plaintiff managed labor costs within budget, which meant that preventing overtime pay from exceeding the budget meant a higher bonus for Plaintiff.

While serving as general manager, Plaintiff met with Regional Manager Richard Fletcher in May 2004. Plaintiff submitted a request for leave under the Family and Medical Leave Act ("FMLA") related to the birth of his son. Fletcher approved the leave, and Plaintiff's leave commenced on June 17, 2004.

In July 8, 2004, while Plaintiff was on leave, one of Defendant's food vendors, Sygma, contacted Defendant's accounting department regarding unpaid invoices. Defendant investigated the issue, and on July 9 Fletcher forwarded an e-mail containing the results of that investigation to Plaintiff and facility General Manager Brad Van Fleet. Thereafter, on July 12, Fletcher visited the Columbus facility that Plaintiff helped manage to investigate the complaints. Defendant asserts that after allegedly reviewing invoices and monthly invoice reports, Fletcher discovered a pattern of "rolling" invoices, or delaying entering the costs of delivered goods into the computer in order to artificially inflate a restaurant's apparent weekly profits, so that, for example, an April invoice was not paid until May. The rolled invoices were not paid until July, which was in the next quarter. Fletcher allegedly learned that despite being on leave, Plaintiff was still processing the invoices during periodic visits to work. Fletcher also spoke with employees who allegedly complained that Plaintiff had altered their time records by deducting time for breaks they never took and by requiring them to work off the clock in order to avoid overtime compensation.

Fletcher met with Plaintiff on July 13, 2004 and informed Plaintiff of his findings. Plaintiff admitted to entering three late invoices, but denied any overtime impropriety. Fletcher informed Plaintiff to continue his leave without reporting for any work while Fletcher continued the investigation. Fletcher then reported his findings to Defendant's Human Resources Manager Al Jecker, who approved Fletcher's recommendation to terminate Plaintiff. Fletcher accordingly terminated Plaintiff on August 2, 2004.

Plaintiff subsequently initiated this lawsuit in the Franklin County Court of Common Pleas on September 19, 2005, asserting claims for FMLA retaliation and interference claims. (Doc. # 1, Ex. A.) Plaintiff claims that, in retaliation for his taking FMLA leave, Defendant falsely accused him of misconduct and terminated his employment. Defendant removed the action to this federal forum on October 5, 2005. (Doc. # 1.) Pursuant to the Preliminary Pretrial Order (Doc. # 9) and the Scheduling Order (Doc. # 10), the discovery period ended on July 14, 2006, and Defendant thereafter filed a pending motion for summary judgment (Doc. # 19).

After the parties had concluded briefing on that motion, Plaintiff then filed his October 23, 2006 motion for sanctions for spoliation of evidence (Doc. # 24), asking that this Court impose any number of sanctions including but not limited to default judgment against Defendant, to an adverse jury instruction concerning destroyed evidence, to the exclusion of testimony, as well as awarding attorneys' fees and costs. Because disposition of the sanctions motion could affect the summary judgment decision, the Court held its summary judgment decision and ordered expedited briefing on the sanctions motion. (Doc. # 25.) The parties have completed briefing on the sanctions motion (Doc. # 24), which has produced two responsive motions by Defendant (Doc. # 26). The motions are now ripe for disposition.

II. Plaintiff's Motion for Sanctions

Citing Federal Rule of Civil Procedure 37 and the Court's inherent authority, Plaintiff moves for sanctions on the grounds that Defendant has engaged in spoliation of evidence by failing to preserve relevant evidence that it relies on in defending this case and that would potentially have been favorable to Plaintiff. Plaintiff also alleges that Defendant has violated its duty to supplement or correct various discovery disclosures.

Defendant first argues that sanctions are not warranted because Rule 37 "simply does not apply" to the situation presented here and can not apply because Plaintiff never filed a motion to compel before moving for sanctions. (Doc. # 26, at 7.) Citing Local Civil Rules 37.1 and 37.2, Defendant in fact concludes that "Plaintiff's failure to file any discovery ...

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