United States District Court, M.D. Tennessee, Nashville Division
CRISPIN S. BLANCHETTE, Plaintiff,
KINDRED HEALTHCARE OPERATING, INC. and KINDRED HEALTHCARE, INC., Defendants.
WAVERLY D. CRENSHAW, JR. CHIEF UNITED STATES DISTRICT JUDGE
a breach of contract action that arises from the ending of
Crispin Scott Blanchette's (“Blanchette”)
employment with Kindred Healthcare Operating, Inc. and
Kindred HealthCare, Inc. (“Kindred”). Kindred has
filed a Motion for Summary Judgment (Doc. No. 44), Blanchette
has filed a Response (Doc. No. 47), and Kindred has filed a
Reply (Doc. No. 49). The parties have submitted numerous
exhibits. (Doc. Nos. 44-2 to 44-16, 46-1 to 46-5, 49-1 to
49-3, 55-1 to 55-4.) Finally, the parties have filed
statements of facts, to which responses have been lodged.
(Doc. Nos. 44-18, 47, 48, 50.) The motion is ready for
decision. For the following reasons, Kindred's motion
will be denied.
corporate headquarters offices are in Louisville, Kentucky.
Effective February 17, 2014, Kindred hired Blanchette as its
Chief Information Officer (“CIO”), reporting to
President and Chief Executive Officer (“CEO”)
Benjamin Breier (“Breier”). (Doc. No. 44-2.)
Blanchette was to receive a salary of $385, 000 per year and
to receive a number of other valuable corporate benefits,
including stock. (Id.) Kindred's Board of
Directors was not involved in the decision to hire
Blanchette. (Doc. No. 44-3.)
The Employment Agreement
and Blanchette executed an Employment Agreement
(“Agreement”). (Doc. No. 44-4.) The term of the
Agreement was for a one-year period commencing on the
Effective Date, February 17, 2014, that was
“automatically extended by one additional day for each
day beyond the Effective Date that the Executive remains
employed by the Company until such time as the Company elects
to cease such extension by giving written notice of such
election to the Executive.” (Id. at 2.) In
such event, the Agreement would “terminate upon the
first anniversary of the effective date of such election
notice.” (Id.) The Agreement provides that it
“shall be construed in accordance with and governed by
the laws of the State of Delaware.” (Id. at
Agreement provides that Kindred may terminate Blanchette
during its term for “Cause.” (Id. at
3.) If Kindred terminates the Agreement for Cause, then
Kindred owes no obligations to Blanchette. (Id. at
6-8.) However, if Kindred terminates the Agreement for other
than Cause, Kindred would owe Blanchette significant salary
and benefits. (Id.)
other hand, the Agreement provides that Blanchette may resign
for “Good Reason.” If that occurs, there is a
“cure period” before the resignation becomes
effective. (Id. at 5.) If Blanchette resigns without
Good Reason, the effective date of the termination of the
Agreement is the date on which Blanchette notified Kindred of
the termination of the Agreement and then Kindred owes no
further obligations to Blanchette. (Id. at 5 and 8.)
However, if Blanchette resigns with Good Reason, Kindred
would owe Blanchette significant salary and benefits.
(Id. at 6-8.)
Agreement specifies that “[a]ny termination by the
Company for Cause, or by [Blanchette] for Good Reason, shall
be communicated by [a] Notice of Termination given in
accordance with this Agreement. For purposes of this
Agreement, a “Notice of Termination” means a
written notice that (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment
under the provision so indicated and (iii) specifies the
intended termination date (which date, in the case of a
termination for Good Reason, shall be not more than thirty
days after the giving of such notice). (Id. at 5.)
The Agreement does not specify any procedural or substantive
requirements for a notice of termination by the Company for
other than Cause or by Blanchette without Good Reason.
(Id. at 6-8.)
the Agreement states that “[a]ny dispute or controversy
arising under, out of, or in connection with this Agreement
shall, at the election and upon written demand of either
party, be finally determined and settled by binding
arbitration in the City of Louisville, Kentucky” using
the Labor Arbitration rules of the American Arbitration
Association (“AAA”). (Id. at 9.)
Moreover, the Agreement provides that Kindred shall be
responsible for all costs of the arbitration and all
reasonable fees incurred therein by Blanchette.
Blanchette's May 2015 Resignation and Subsequent
3, 2015, Blanchette sent an email to Breier entitled
“Resignation Notice.” (Doc. No. 44-6.) In the
email, Blanchette stated:
“It is with a heavy heart that I send my resignation
notice. . . . This is most fundamentally a recognition that
time spent with family, and one's physical, social, and
emotional health is paramount. Often times the organizational
communication around someone's departure equivocates
something hollow like ‘he has a strong desire to spend
more time with family' as code for something else. In
this case, the words and the intent are exactly the same. . .
. I want to find a way to make this as least impactful on
Kindred as possible and give the organization the longest
possible runway. At the same time, I would like to not make
this an endless transition as both parties will benefit from
an efficient timeline. . . . This is all the more difficult
acknowledging the profound respect I have for you and the
leadership that you bring to such a wonderful organization.
That element of the future is what I will miss most following
(Id. at 1-2.) Blanchette testified in his deposition
that, at this point, it was his intention to end his
employment with Kindred:
Q: In this e-mail on May 3rd, 2015, it was your intent to end
your employment with Kindred Health Care, is that correct?
Q: And following this e-mail on May 3rd, 2015, did you at any
time specifically revoke or rescind this resignation?
(Doc. No. (44-5 at 13.) Further, Blanchette testified that he
had “no expectation of continued payment under any
agreement for any period after the transition period that
[he] would complete as part of [his] resignation” and
“no expectation of continued benefits or stock.”
(Id. at 145-46.) Finally, Blanchette testified that,
at that time, he did not identify any material breaches of
the Agreement by Kindred, or any Cause under the Agreement.
(Id. at 146.) Blanchette and Breier's testimony
agrees that Blanchette would no longer be serving as
Kindred's CIO from that point and would assist with the
transition of a new person into the CIO position. (Doc. Nos.
44-7 at 10-11; 52-1 at 9-10.)
beyond that, the parties disagree on what happened.
Blanchette maintains that Breier “explicitly stated
that he was not willing to accept my resignation, and there
were going to be other ways to keep me around.”
(Id. at 140.) Blanchette testified that Breier told
him he “was committed to doing whatever he needed to do
to keep me there.” (Id. at 108.) Breier, on
the other hand, testified that he accepted Blanchette's
resignation and had no recollection of saying that he would
not accept it. (Doc. No. 52-2 at 10-11.) Breier further
testified in his deposition as follows:
A: I recall sort of saying, “Okay, ” you know,
“so you're - you're leaving, and I now have to
get on with thinking very quickly about what am I going to do
to replace the chief information officer of this company. And
that is sort of what I remember us talking about.
Q: Okay. Mr. Blanchette testified that when he had this
meeting with you after he submitted his resignation that you
told him that you considered it a personal failure of yours
that he was resigning, that you wouldn't accept his
resignation, and that you would find a position for him at
Kindred. Did you say words to that effect?
A: I have no recollection of saying that.
Q: Okay. Is it possible you did?
A: No. I don't believe so.
Q: It not possible?
A: That I said a “personal failure on my part”?
A: No, not possible.
Q: Okay. Is it possible that you said, “I will not
accept your resignation, and we will find you a position at
A: No. That is not possible. In fact, I recall getting on
with the work of figuring out who Scott's replacement was
going to be.
Q: Okay. Is it possible that you said that, “We will
find you a position at Kindred”?
A: We have had some discussions around performance
improvement opportunities for the enterprise in total. . . .
And Scott had, as I recall, profit [sic] up the idea that
there were efficiencies that could be had, that there were,
you know, lien management techniques, that there were various
things that could be done organizationally to potentially run
our operation more efficiently, not as the chief information
officer, but more broadly as a - as someone who would help us
think about being more efficient, which, you know, we are
always in need of doing. And it is - it is possible that that
conversation at that conversation, that we had a conversation
around saying, “Yeah. That's kind of interesting.
You should have a conversation with Kent Wallace, who's
our chief operating officer. I'll have a conversation, I
guess, potentially with Kent to say you're going to go
have a conversation with him. And why don't the two of
you see if there's something here that might be feasible
for you to - to do along - you know along that path?”
Q: Okay. I appreciate all that. Is it possible, though, that
you said to him, “We will find you a position at
A: I don't believe I said that.