Andrea Soddu v. Procter & Gamble Company ( 2013 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0750n.06
No. 12-4271
FILED
UNITED STATES COURT OF APPEALS Aug 13, 2013
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
ANDREA SODDU, )
)
Plaintiff-Appellant, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE SOUTHERN
) DISTRICT OF OHIO
PROCTER & GAMBLE COMPANY, )
)
Defendant-Appellee. )
)
BEFORE: ROGERS and COOK, Circuit Judges, and VAN TATENHOVE, District Judge.*
ROGERS, Circuit Judge. Andrea Soddu acquired stock options while working as a senior
executive for Procter & Gamble (P&G), and now claims the right to exercise those options after
terminating his employment with P&G. In September 2002, Soddu’s supervisor asked him to resign
from the joint venture Soddu had been leading, citing poor performance and allegations of sexual
harassment against Soddu. Soddu complied, but later contested his resignation. After a mediation
of this dispute, Soddu signed two negotiated separation agreements providing him with a severance
package in exchange for a broad waiver of past and future claims. Shortly after signing those
agreements, but prior to the official termination of Soddu’s employment, Soddu exercised his vested
stock options that had positive value, for which he was paid $1.5 million. When Soddu sought to
*
The Honorable Gregory F. Van Tatenhove, United States District Judge for the Eastern
District of Kentucky, sitting by designation.
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Soddu v. Procter & Gamble
exercise his remaining stock options in 2007, P&G denied his request and informed him that those
options had been cancelled. Soddu then filed this suit seeking declaratory relief in federal district
court. The district court granted P&G’s motion for summary judgment, concluding that the waivers
in the separation agreements precluded Soddu’s claims. Soddu then filed a motion to unseal portions
of the sealed transcripts of hearings before the court, which the district court denied.
The district court properly granted summary judgment for P&G because Soddu has not raised
a genuine issue of material fact to show that his claim to the stock options in question was preserved.
Soddu also has not shown that the denial of his motion to unseal was an abuse of the district court’s
discretion.
Soddu was employed by Procter & Gamble Europe NV (P&G Europe), a European division
of P&G, from 1979 until December 2002. Over the course of his employment, Soddu received stock
options as part of his compensation and benefits. These options were at all times governed by the
P&G stock-option plan (the Plan), administered by P&G at its headquarters in Cincinnati, Ohio.
Each grant of stock options was a contract between Soddu and P&G. Under the Plan, stock options
remained valid until their expiration as long as the employee remained employed. After termination,
the options remained valid and exercisable only in the event of a “special separation,” defined as any
termination of employment, other than a termination for cause or a voluntary resignation, that occurs
prior to the time the participant is eligible to retire. Without a special separation, options generally
had to be exercised on or before the end of employment.
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Soddu was sent to Italy in June 2000 to lead a joint venture known as Fater. He was the
highest-ranking executive for P&G Europe in the Fater joint venture. In September 2002, Soddu met
with his supervisor, Paul Polman, President of P&G Europe. Polman informed Soddu that Polman
was not happy with Fater’s performance under Soddu’s leadership. Polman also informed Soddu
that claims of sexual harassment had been raised against Soddu. Polman asked Soddu to resign from
Fater. Soddu complied with Polman’s request, although he remained employed by P&G Europe.
Soddu then initiated an internal challenge to his “forced” resignation from Fater. He
contested the manner in which Polman solicited his resignation, arguing that he had been coerced
into resigning through the use of baseless sexual-harassment claims. Soddu wanted to remain
employed by P&G Europe in another capacity, but was told that there was no position available for
someone with his qualifications. Soddu and P&G Europe agreed to mediate their dispute, and
following negotiations at which both sides were advised by counsel, they agreed to two separation
documents.
The first document—the so-called Belgian agreement—was an agreement between Soddu
and P&G Europe, under which Soddu’s employment contract with P&G Europe was terminated as
of December 31, 2002. The agreement provided Soddu with separation pay and benefits similar to
what Soddu would have been granted by a Belgian court. Soddu received the equivalent of three
years’ pay, a prorated bonus, health insurance for one year, and other fringe benefits. Stock options
were not specifically mentioned in this agreement. Article 9 of the Belgian agreement contains a
waiver provision:
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As long as all above payments are made and conditions adhered to, both parties fully
and explicitly waive any further claim based on rights which could arise or have
arisen from or concerning the relationship that existed between the employer and
employee.
Parties further waive any claim related to any error in law or in fact, or omission with
respect to the nature and scope of their respective rights and agreement.
These waiver of rights are done, as concerns [Andrea Soddu], toward the employer
but also all companies of or associated to the Procter & Gamble group, including but
not limited to P&G Italia, P&G and P&G International Operations in Geneva and
The Procter & Gamble Company in the US to which [Andrea Soddu] previously
wrote. These previous claims, as they fall under the present waiver of rights and
claims, are now closed and no further claims will be made by [Andrea Soddu].
R.17 at 106-07 (emphasis added).
The second document—the so-called Italian agreement—was an agreement between Soddu
and Procter & Gamble S.R.L. (P&G Italy) which addressed the dispute over Soddu’s resignation
from Fater. The agreement indicates, in clause 3, that Soddu agreed to “waive all rights, claims and
actions resulting from, or otherwise connected with, the employment relationship that occurred in
Italy.” Id. at 110. In clause 7, Soddu agreed:
[T]o waive . . . any right or claim resulting from, or for any reason connected with,
the employment relationship, with this waiver also holding for the period in which
he was assigned to work for PROCTER & GAMBLE S.R.L. in Italy, as well as for
any right or claim resulting from, or for any reason connected with, the working
relationship or the holding of corporate positions or resignation from the same, and
with an express declaration that these waivers are to be valid with regard to: (I)
PROCTER & GAMBLE EUROPE NV; (II) PROCTER & GAMBLE S.R.L.; (III)
The PROCTER & Gamble Company, as well as the bodies contemplated under the
“PROCTER & Gamble Stock Plan”; (IV) Fater S.p.A., . . . .
Id. at 110-11 (emphasis added). Moreover, clause 7 provides a non-exhaustive list of rights and
claims that Soddu agreed to waive, including “all rights, reasons and actions, regarding: differences
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in remuneration, compensation or indemnities of any type, fringe benefits.” Id. at 111 (emphasis
added). Finally, clause 10 includes language indicating that both
parties expressly acknowledge that their intention, in executing the present report,
has been not only to settle any possible reasons of dispute regarding the employment
relationship, . . . but also to prevent any possible reason of future dispute, even if not
expressly identified or inferable in the present agreement, but nevertheless resulting
from or connected with the employment relationship being terminated.
Id. at 112 (emphasis added).
After signing the agreements, Soddu was given a letter from Richard Pease, Vice President
of Human Resources for P&G. The Pease letter stated:
Your stock Options will be handled according to the Company Plan of the Procter &
Gamble Company in Cincinnati. Specifically, this means you have the right to
exercise your vested options until December 31st, 2002, with the exception of the
stock options received in 1997, 1998 and as per the February 1999 grant, for which
you have the right to exercise until January 31st, 2003.
The agreements were signed by all parties on December 19, 2002. Shortly afterward, Soddu
exercised all of his vested options that had positive value, for which he was paid $1.5 million. He
held on to other options that had, at that time, negative return value. In September 2003, Soddu was
informed that he would receive nearly two million euros when he turned sixty under the “Free
Pension Promise” program, which reflected bonuses Soddu had earned and deferred during his
tenure at P&G Europe. Like the stock options, the Free Pension Promise benefits were not
specifically mentioned in the Belgian agreement between Soddu and P&G Europe.
In 2007, Soddu tried to exercise his remaining options—which by that time had gained
value—but was denied by P&G. Soddu was told that those options had been cancelled. Soddu
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attempted to exercise those options again in July 2008, and received no response. In October 2008,
Soddu filed this suit in federal district court, seeking a declaratory judgment that he was entitled to
all stock options that were granted and vested at the time of the separation agreements.
Because Soddu disputed the circumstances surrounding his termination from P&G, the
district court held an evidentiary hearing in November 2010. At that hearing, Luisa Delgado, former
Human Resources Director for P&G Europe, detailed her investigation into the allegations of sexual
harassment against Soddu. Delgado testified that several female employees had alleged that Soddu
engaged in inappropriate behavior towards them, and that this was a major reason why P&G Europe
sought to end Soddu’s employment. See R. 59 at 148-73. The transcript of this hearing was later
sealed due to privacy concerns, by mutual agreement of the parties.
Soddu and P&G filed cross-motions for summary judgment. The district court granted
summary judgment for P&G on Soddu’s request for declaratory relief, but granted summary
judgment for Soddu on P&G’s counterclaim for attorney’s fees. R. 111. The district court held that
the broad, express, and unambiguous waivers in the agreements precluded Soddu’s claim for relief.
Id. at 11. The district court rejected Soddu’s argument that the waivers did not apply against P&G
because they were part of an agreement with P&G Europe, id., and rejected the notion that the stock
options were not included in the waivers because the agreements made no specific mention of stock
options, id. at 12. The district court also noted that Soddu’s reliance on the Pease letter was
misplaced because the waivers were unambiguous, barring the court from considering such extrinsic
evidence. Id. at 14.
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Soddu moved to alter or amend the judgment under Federal Rule of Civil Procedure 59(e),
and moved to unseal the transcript of Delgado’s testimony. The district court denied both motions
in a written order. R. 136. On the motion to unseal, the district court found that Soddu’s “vague
assertion” that he needed access to the transcripts to enforce his rights under European privacy law
was unpersuasive in light of the countervailing privacy concerns of the parties. Id. at 3-4. On the
Rule 59(e) motion, the district court held that Soddu failed to show any clear error of law, newly
discovered evidence, or manifest injustice requiring the court to grant the motion. Id. at 4. The
district court noted that Soddu was improperly using the motion to “rehash[] prior arguments” in a
way that Rule 59 does not allow. Id. at 5.
Soddu now appeals the district court’s grant of summary judgment for P&G and the district
court’s denial of his motion to unseal the hearing transcripts.
Because Soddu agreed to a broad and unambiguous contractual waiver of his rights, in
exchange for generous compensation, he waived his right to seek a declaration that he is entitled to
the stock options in question. This court reviews the district court’s judgment de novo, construing
all evidence in the record, and all reasonable inferences, in the light most favorable to Soddu as the
nonmovant. King v. Taylor, 694 F.3d 650, 661 (6th Cir. 2012). Although Soddu claims that his
right to exercise the stock options was preserved, the district court properly held that the Belgian
agreement, by its clear and express terms, waived Soddu’s rights against P&G. Employee
agreements to settle and waive claims for relief are enforceable when supported by valid
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consideration. See generally Nicklin v. Henderson, 352 F.3d 1077, 1081-82 (6th Cir. 2003); Adams
v. Philip Morris, Inc., 67 F.3d 580, 583 (6th Cir. 1995).
While Soddu was employed by P&G Europe, and the Belgian agreement was a contract
between Soddu and P&G Europe, the agreement contained language that clearly extended the waiver
of rights to all related P&G entities. Article 9 of the agreement states: “These waiver of rights are
done, as concerns [Soddu], towards the employer [P&G Europe] but also all companies of or
associated to the Procter & Gamble group.” R. 17 at 107 (emphasis added). This language
unambiguously extends the waiver of rights to all related P&G entities, including the Ohio-based
parent company that administers the Plan. When interpreting a contract, this court must “examine
the contract as a whole and presume that the intent of the parties is reflected in the language of the
contract,” and must follow the plain and unambiguous language that the parties used to express their
intent. See Sunoco, Inc. (R&M) v. Toledo Edison Co., 953 N.E.2d 285, 292 (Ohio 2011). The clear
intent of the parties here was to waive Soddu’s rights against P&G.
Soddu’s attempt to minimize the extent of the waiver language in the Belgian agreement is
unavailing. Soddu argues that the language refers to the other P&G entities only with respect to
Soddu’s prior claims, and that future claims were therefore not covered by this language. That
position, however, is at odds with the contractual language, which clearly states that “no further
claims will be made by [Soddu].” R. 17 at 107 (emphasis added). No rational juror could read this
language as limiting the waiver against P&G to previous claims; the parties’ clear intent was to
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foreclose previous and future claims against P&G Europe and any other P&G entity. Soddu cannot
now rewrite the contractual language to allow further claims against P&G.
Because the waivers in the agreements were clear and unambiguous, this court cannot look
to extrinsic evidence in construing the contracts. See Sunoco, 953 N.E.2d at 292. “A court will
resort to extrinsic evidence in its effort to give effect to the parties’ intentions only where the
language is unclear or ambiguous.” Kelly v. Medical Life Ins. Co., 509 N.E.2d 411, 413 (Ohio
1987). The Pease letter, therefore, cannot be considered in interpreting the separation agreements.
The Pease letter was not part of the agreement that the parties reached, and Soddu has failed to show
that the agreements were ambiguous in waiving his rights against P&G. Soddu cannot, therefore,
now rely on the letter to raise a triable fact issue.
Soddu’s argument based on the Free Pension Promise (FPP) program is likewise
unpersuasive. Like the stock options, the FPP was not expressly mentioned in the separation
agreements. Unlike the stock options, however, P&G has indicated to Soddu that it will pay him the
benefits he earned under the FPP program, which reflect bonuses Soddu earned and deferred during
his employment. Soddu argues that since he retained his entitlement to FPP benefits even though
the FPP program was not expressly carved out of the separation agreements, he likewise retained his
entitlement to the stock options. Soddu’s argument fails to appreciate, however, the important
differences between the two benefits and P&G’s ability to treat different benefits differently.
Although Soddu waived his right to claim benefits not carved out of the separation
agreements, P&G retained its discretionary ability to provide Soddu some benefits while denying
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him others. The separation agreements’ clear contractual language establishes that the agreements
were intended to address every aspect of the employment relationship and broadly waive Soddu’s
rights against P&G. Nevertheless, even if Soddu waived his rights, P&G retained the discretionary
ability to pay out benefits, particularly when those benefits reflect money an employee has already
earned. The pension included money Soddu had earned but deferred, while the stock options were
vested but unexercised—and therefore unearned—at the time they were cancelled. In short, P&G’s
decision to allow Soddu to recover post-termination FPP benefits has no bearing on the independent
decision by P&G to deny Soddu the exercise of stock options that have been cancelled. In light of
the broad, express waiver in the Belgian agreement, Soddu has waived his right to claim entitlement
to the stock options.
In addition, the district court properly denied Soddu’s motion to unseal the evidentiary
hearing transcripts because Soddu failed to provide a sufficiently compelling reason to do so. The
decision whether to lift or modify an order sealing documents is left to the sound discretion of the
district court. Meyer Goldberg, Inc. v. Fisher Foods Inc., 823 F.2d 159, 161 (6th Cir. 1987). Soddu
claims that he requires access to the testimony of Luisa Delgado, who testified at the hearing about
her investigation into sexual harassment allegations against Soddu, to substantiate possible violations
of Soddu’s privacy rights under European law. Soddu’s reason for needing access to the transcripts
does not necessarily override the countervailing privacy concerns of the parties in this case. The
parties mutually agreed that the matters concerned were confidential, and the confidential matters
are intertwined with those aspects of the transcripts to which Soddu demands access. The district
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court did not abuse its discretion in weighing these competing interests and determining that the
transcripts should remain sealed.
The district court’s judgment is affirmed.
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