and 02-2764 GERALD E. FIELDS v. Thompson Printing Company, Inc.; Gilbert M. Thompson

PRECEDENTIAL
UNITED STATES
COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 02-2763 and 02-2764
GERALD E. FIELDS
v.
THOMPSON PRINTING
COMPANY, INC.;
GILBERT M. THOMPSON,
Appellants No. 02-2763
GERALD E. FIELDS,
Appellant No. 02-2764
v.
THOMPSON PRINTING CO;
GILBERT M. THOMPSON
Appeals from the United States
District Court for the
District of New Jersey
(D.C. Civil No. 99-cv-03743)
District Judge: Honorable
Alfred M. Wolin
Argued November 18, 2003
Before: RENDELL, BARRY and
CHERTOFF, Circuit Judges.
(Filed March 31, 2004)
Anthony F. M alanga, Jr. [ARGUED]
Gaccione, Pomaco & Malanga
524 Union Avenue
P.O. Box 96
Belleville, NJ 07109
Counsel for Appellants/Cross Appellees
Noel E. Schablik [ARGUED]
20 Waterview Boulevard, 3rd Floor
Parsippany, NJ 07054
Counsel for Appellee/Cross Appellant
OPINION OF THE COURT
RENDELL, Circuit Judge.
These appeals come to us from the
District Court’s order enforcing the
language of an employment contract,
rejecting Thompson Printing Company’s
(“TPC”) entreaties that doing so would
violate implied covenants and public
policy. The District Court granted partial
summary judgment in favor of the
employee, Gerald Fields (“Fields”). Both
defendants, TPC and its CEO, Gilbert M.
Thompson (“Thompson”), appeal. For the
reasons that follow, we will affirm in part,
and reverse and remand in part.
I. The Factual Situation
TPC is a closely held corporation.
Thompson owned 80 of the 100
outstanding shares, and Fields owned the
remaining 20. Fields started working for

-- 1 of 18 --

2
TPC in 1955 at age 13. On May 7, 1990,
he entered into a four-page Employment
Contract with TPC. It provided that Fields
was to have the “designated titles” of Vice
President and Chief Operations Officer,
and that he was to “perform the duties
attendant thereto.” The agreement defined
the term of employment as continuing until
June 14, 2000, and detailed compensation
and other benefits to which Fields would
be entitled in exchange for his services.1 It
also provided for annual raises of ten
percent each year during the 10-year term,
and, further, that in the event of
Thompson’s death, Fields’s salary would
be doubled within 30 days. The Contract
gave TPC the right to discontinue the
contractual benefits in the event of Fields’s
voluntary termination:
If during the term of this Contract, Jerry
[Fields] voluntarily terminates his
employment with Thompson [Printing
Company], then it is understood by and
between the parties hereto that the salary
compensation, employment benefits, and
all retirement benefits shall cease as of the
date of the termination.
It also contained a broad non-forfeiture
clause in favor of Fields:
This Contract shall be non-terminable by
Thompson [Printing Company]. In the
event Thompson [Printing Company] shall
terminate the employment of Jerry
[Fields], all of the benefits as contained
herein shall continue in accordance with
the terms and provisions of this
Agreement.
The Contract did not differentiate between
termination with or without cause,
providing for continuation of the benefits
simply if TPC “shall terminate” Fields.
On August 11, 1997, three female
employees made allegations to Thompson,
then CEO, that Fields, by now titled TPC’s
President, had sexually harassed them by
creating a hostile work environment. On
August 13, Thompson telephoned Fields,
who was vacationing with his family, and
fired him. TPC refused to pay Fields any
f u r t h e r c o m pe nsation und er th e
Employment Contract after that date.
1The Contract provided Fields with a
starting annual salary of $131,000,
inclusion in any and all employee benefit
programs and packages, annual vacation
leave, a credit card for his use, a new car -
“a Cadillac or the equivalent at [Fields’s]
choice” - every four years, a second
vehicle (every time TPC provided Fields
with a new car, the old vehicle which was
being replaced would become the second
vehicle), death benefits for Fields’s wife in
the event that he died prior to retirement,
and retirement benefits. Commencing
after the ten-year term, his retirement
benefits included a $2,000/week payment,
the continued use of the credit card, the
continued use of the two cars (with a new
car every sixth year, instead of every
fourth year), and continued medical
benefits with the premiums to be paid by
TPC.

-- 2 of 18 --

3
The three female employees filed a
lawsuit, Zarillo v. Thompson Printing Co.,
L-9076-97, in the Superior Court of New
Jersey against TPC, Fields, Thompson and
another supervisor. No findings were
made since the claims were settled without
any admission of wrongdoing by any of
the defendants.
While the Zarillo lawsuit was still
pending, Fields commenced a civil action
against TPC and Thompson in the United
States District Court for the District of
New Jersey. He asserted a federal claim
under the Employment Retirement Income
Security Act (“ERISA”), 29 U.S.C. § 1001
et seq., contending that the retirement
benefits specified in the Employment
Contract were protected by ERISA, and
that TPC’s failure to pay those benefits
violated the statute. In addition, he sought
reinstatement of his salary and benefits,
including some that had accrued prior to
his termination and had never been paid,
under a variety of state law theories,
including the New Jersey Wage Law, N.J.
Stat. Ann. § 34:11-4.3, breach of contract,
unjust enrichment, conversion, quantum
meruit, and breach of the covenant of good
faith and fair dealing. He also asserted a
minority shareholder oppression claim
under N.J. Stat. Ann. § 14A:12-C-7(1)(c),
arguing that his rights as a minority
shareholder had been violated by
Thompson’s actions.
Thompson and TPC replied,
denying Fields’s allegations and claiming
that Fields’s ERISA claim was barred by
29 U.S.C. § 1003(b), and that his state law
claims were barred by New Jersey’s
“ e n t i r e c o n t r o v e r s y ” d o c t r i n e .
Furthermore, they claimed that Fields had
breached the Employment Contract by
engaging in acts of sexual harassment,
terminating Fields’s rights, as well as their
obligations, under the Contract.
The parties then filed cross motions
for summary judgment. Defendants’
Statement of Uncontested M aterial Facts
d e t a il e d the alleg atio ns of the
Zarillo plaintiffs.2 Defendants argued that
by his actions Fields had breached the
Employment Contract, forfeiting his rights
under the agreement and warranting the
entry of summary judgment in their favor.
However, Fields claimed that not only
were the facts in dispute, but they were not
material to the resolution of his claims
because the Employment Contract
guaranteed that if he was terminated by
2 One employee claimed that Fields had
grabbed her buttocks on one occasion and
attempted to touch her breast on another,
and had repeatedly made lewd and
sexually suggestive comments. Several
incidents were specifically outlined, such
as Fields’s request, during the company’s
search for a part-time receptionist, to let
him know if any of the applicants had big
breasts so that he could come out to look.
Another plaintiff alleged that Fields
repeatedly told her to wear short skirts, one
time going so far as to draw a line on a
wall and say, “I don’t want your skirt to be
below that line.” She also claimed that
Fields attempted to pull up her skirt on at
least two occasions.

-- 3 of 18 --

4
TPC, his benefits were to continue.
The District Court granted Fields’s
summary judgment motion with regards to
his ERISA, New Jersey Wage Law, breach
of contract, unjust enrichment and
quantum meruit claims, but denied the
motion with respect to the oppression
claim. The Court held that the entire
controversy doctrine was inapplicable as
“the validity of the sexual harassment
claims [was] entirely immaterial to the
adjudication of the parties’ rights and
obligations under the Employment
Agreement.” It then determined that,
under the plain language of the Contract’s
non-forfeiture clause, Fields was entitled
to both retirement and pre-retirement
benefits, rejecting defendants’ arguments
that enforcing the agreement would violate
public policy or that Fields had breached
the agreement. It also held Thompson
jointly and severally liable based on its
view that Thompson had not drawn any
distinction between himself and TPC, so
both were liable. Subsequently, Fields
dismissed the oppression claim, and the
parties agreed upon the amount of
compensation due under the Contract, but
reserved the right to appeal the District
Court’s ruling.
The District Court had jurisdiction
over Fields’s ERISA claim pursuant to 29
U.S.C. § 1132, and over the state law
claims pursuant to 28 U.S.C. § 1367. We
have appellate jurisdiction under 28 U.S.C.
§ 1291.
II. Discussion
TPC and Thompson now appeal the
District Court’s order granting partial
summary judgment. They essentially raise
three issues, namely, whether the Court
erred in determining 1) that Fields’s suit
was not barred by the entire controversy
doctrine; 2) that TPC was obligated to pay
Fields the compensation; and, 3) that
Thompson should be held personally
liable. Fields cross-appeals the District
Court’s determination that he was not
entitled to attorneys’ fees under ERISA,
contending that its analysis was flawed,
based on existing case precedent.
Our review of an order granting
summary judgment is plenary. Morton
Int’l, Inc. v. A.E. Staley Mfg. Co., 343
F.3d 669, 679 (3d Cir. 2003). Under
Federal Rule of Civil Procedure 56(c),
summary judgment is proper where no
genuine issue of material fact exists, and
the moving party is entitled to judgment as
a matter of law. Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986). In
determining whether a dispute regarding a
material fact exists, we draw all reasonable
inferences in favor of the non-moving
party. Morton, 343 F.3d at 680.
A. The Entire Controversy Doctrine
We first address defendants’
argument that the New Jersey entire
controversy doctrine required Fields to
bring his claims against TPC and
Thompson as cross-claims in the Zarillo
sexual harassment action, and that because
he did not do so, application of the
doctrine results in the preclusion of those
claims.

-- 4 of 18 --

5
The entire controversy doctrine is
currently codified in Rule 4:30A of the
New Jersey Rules of Civil Procedure,
which provides that “[n]on-joinder of
claims or parties required to be joined by
the entire controversy doctrine shall result
in the preclusion of the omitted claims to
the extent required by the entire
controversy doctrine.” The doctrine
“seeks to assure that all aspects of a legal
dispute occur in a single lawsuit.” Olds v.
Donnelly, 696 A.2d 633, 637 (N.J. 1997).
Its purposes “are threefold: (1) to
encourage the comprehensive and
conclusive determination of a legal
controversy; (2) to achieve party fairness,
including both parties before the court as
well as prospective parties; and (3) to
promote judicial economy and efficiency
by avoiding fragmented, multiple and
duplicative litigation.” Mystic Isle Dev.
Corp. v. Perskie & Nehmad, 662 A.2d 523
(N.J. 1995). The doctrine is essentially a
rule of mandatory joinder of claims and
parties, which precludes non-joined claims
from being brought at a later date. We
have characterized it as “New Jersey’s
specific, and idiosyncratic, application of
traditional res judicata principles.”
Rycoline Prods., Inc. v. C & W Unlimited,
109 F.3d 883, 886 (3d Cir. 1997). Over
the years, New Jersey courts have
extended the doctrine to related claims,
defenses, counterclaims and cross-claims.
See Massari v. Einsiedler, 78 A.2d 572
(N.J. 1951) (defenses); Ajamian v.
Schlanger, 103 A.2d 9 (N.J.), cert. denied,
348 U.S. 835 (1954) (related claims);
Vacca v. Stika, 122 A.2d 619 (N.J. 1956)
(counterclaims). Thus, the doctrine
applies to “virtually all causes, claims, and
defenses relating to a controversy between
the parties engaged in litigation.” Cogdell
v. Hospital Center, 560 A.2d 1169, 1173
(N.J. 1989).
The New Jersey Supreme Court has
stated that “[i]n determining whether
successive claims constitute one
controversy for purposes of the doctrine,
the central consideration is whether the
claims . . . arise from related facts or the
same transaction or series of transactions.”
DiTrolio v. Antiles, 662 A.2d 494, 502
(N.J. 1995). Thus, we must determine
whether the facts giving rise to Fields’s
claims against TPC and Thompson also
gave rise to the Zarillo plaintiffs’ claims
against TPC, Thompson and Fields in the
earlier action. TPC urges that absent the
alleged behavior at the center of the sexual
harassment claims, Fields would not have
been terminated and he would not have
brought suit against TPC and Thompson.
While this is no doubt true, the causal
relationship between the two sets of claims
is not conclusive under New Jersey law.
Rather, “[t]he issue is, basically, whether
a sufficient commonality of facts
undergirds each set of claims to constitute
essentially a single controversy that should
be the subject of only one litigation.”
DiTrolio, 662 A.2d at 497.
Here, no such “commonality of
facts” exists, as the facts requiring
determination in Fields’s ERISA and
breach of contract action are quite separate
from the facts that would have been
determined in the Zarillo action. There,
the plaintiffs blamed TPC for the

-- 5 of 18 --

6
d i s criminatory and hostile work
conditions, and the Superior Court was
interested in the nature of the work
environment and what TPC did to address
the female employees’ complaints, while,
in the instant case, we are interested in the
language of the Employment Contract and
the parties’ rights and obligations under
that Contract and ERISA.3 Cases in which
the New Jersey courts have applied the
entire controversy doctrine to bar a second
suit have been characterized by some
duplication of proof. For instance, in
DiTrolio, the second action was found to
“require[] the production of substantially
the same evidence that would be adduced
in the first action.” Id. at 507. And, in
Mystic Isle, forcing the two claims to be
brought at the same time “would have
resulted in a more comprehensive
determination of the underlying legal
controversy.” 662 A.2d at 531. New
Jersey’s application of the entire
controversy doctrine “emphasize[s] the
essential unfairness of forcing parties and
courts to rerun a course previously run.”
Joel v. Morrocco, 688 A.2d 1036, 1040
(N.J. 1997). Here, given that two different
sets of facts are relevant to the two
different types of claims, there is no reason
to believe that the New Jersey courts
would bar the suit to enforce the
Employment Contract on the theory that a
“comprehensive determination” should
have been sought in the Zarillo litigation.
Our decision in Fornarotto v.
American Waterworks Co., 144 F.3d 276
(3d Cir. 1998) is also instructive. There,
Fornarotto, an employee of a subsidiary of
A m e r i c a n W a te rw o r k s C o m p a n y
(“AWC”), was struck by an automobile
driven by Chiapetta, also an employee of
the AW C subsidiary. Id. at 277. In 1990,
Fornarotto filed a personal injury suit
against the AWC subsidiary and Chiapetta,
who he claimed had been acting in the
course of his employment. Id. Fornarotto
attempted to return to work, but
complications from his injuries eventually
forced him from the job. In 1995, he filed
a complaint against AWC under the civil
enforcement provisions of ERISA, seeking
disability benefits. Id. at 278. In 1996,
Fornarotto settled the personal injury suit.
Id. Shortly thereafter, the defendants in
the ERISA suit moved for, and the district
court granted, summary judgment on the
ground that the ERISA claim arose from
the same set of facts as the personal injury
claim and was therefore barred by the New
Jersey entire controversy doctrine. Id.
We reversed, holding that the
personal injury suit and the disability suit
did not turn on the same transactional
facts. Id. at 280. While the injuries
suffered were relevant to both suits, the
issue of Chiapetta’s negligence and the
issue of the employer’s obligation to pay
disability benefits under a pension plan
“[did] not rise to the level of ‘commonality
3The specific claims in the Zarillo suit
include: discrimination under federal and
state law, constructive discharge, assault
and battery, intentional infliction of
emotional distress, breach of contract
based on a handbook and policy, breach of
implied covenants, and loss of consortium.

-- 6 of 18 --

7
of facts’ necessary to trigger the entire
controversy doctrine.” Id. (citing Joel,
688 A.2d 1036). Thus, we held that, “[t]he
two claims are separate and distinct, and
failure to join them does not require a
‘rerun’ of the preceding litigation nor does
this allow Fornarotto to ‘seek two bites at
the apple.’” Id.
Similarly, the Zarillo plaintiffs’
sexual harassment claims against TPC,
Thompson and Fields, and Fields’s
contract claims against TPC and
Thompson do not constitute one
controversy under the doctrine. There is
no “rerun” here, as the question of TPC’s
obligation to Fields under the Employment
Contract is a matter of contract law and
turns on contractual language and
principles, while the Zarillo litigation
involved claims of harassment and hostile
work environment that implicated certain
duties and potential liability on the part of
the defendants. Because the two sets of
claims involve vastly different legal issues,
and the resolution of those legal issues
turns upon different sets of facts, the
relationship between the two suits is “too
attenuated to hold that both actions arise
from a ‘commonality of facts.’” Id.
Furthermore, even in the event that
Fields’s claims against TPC and
Thompson could be said to be part of the
same controversy giving rise to the Zarillo
claims, basic notions of fairness would
prevent us from applying the doctrine here.
“Despite the doctrine’s apparent rigidity,
New Jersey courts have clearly stated that
it is not to be applied in a rigid manner
divorced from concepts of equity and
fairness.” Fornarotto, 144 F.3d at 282; see
also DiTrolio, 662 A.2d at 505 (“The
polestar of the application of the rule is
judicial fairness.”); Cogdell, 560 A.2d at
1177 (“Party fairness is critical in the
application of the doctrine.”).
Specifically, in applying the entire
controversy doctrine, “[f]airness is . . . a
protective concept that focuses primarily
on whether defendants would be in a better
position to defend themselves if the claims
had been raised and asserted in the first
litigation.” DiTrolio, 662 A.2d at 505. “A
key determination is whether ‘the
defendants are now disadvantaged because
they were not parties to the first
litigation.’” Fornarotto, 144 F.3d at 282
(quoting DiTrolio, 662 A.2d at 505).
Here, TPC was a party to the first
litigation, and is not disadvantaged now on
that basis. Furthermore, nothing occurred
during the Zarillo lawsuit or since its
settlement that would affect TPC’s or
Thompson’s ability to defend themselves
in the instant case. The main elements
upon which the instant controversy turns -
the contractual language and TPC’s
actions - remain constant and unexplored.
As a result, we can fathom no reason why
TPC and Thompson would have been
better able to defend themselves from
Fields’s ERISA and breach of contract
claims had he raised them in the earlier
action.
In addition to examining the effect
upon the defendants, “[f]airness to the
plaintiff must also be considered.” Joel,
688 A.2d at 1038. The New Jersey courts
have stated that “[c]hief among the

-- 7 of 18 --

8
equitable considerations determining the
doctrine’s applicability ‘is the full and fair
opportunity of the party sought to be
precluded in the second action to have
raised the claim there asserted in the
original action.’” Illiano v. Seaview
Orthopedics, 690 A.2d 662, 666 (N.J.
Super. Ct. App. Div. 1997) (citation
omitted). The issue is whether,
considering what was at stake in the
Zarillo action, it is “reasonable as a matter
of practical jurisprudence” to require
Fields to have sued his co-defendants in
the same case. Id. We do not think such a
requirement would be reasonable here.
Forcing Fields to bring his claim as a
cross-claim against TPC in the Zarillo
action would not have aided the Zarillo
plaintiffs’ case in any way. In fact, it
would have complicated the matter, and
perhaps even jeopardized settlement. This
not a situation where Fields withheld his
claims relevant to the Zarillo action “for
strategic reasons,” seeking “two bites at
the apple.” Id. at 1041. Thus, the entire
controversy doctrine does not apply, and
Fields’s claims are not precluded by his
failure to bring them in the earlier action.4
B. TPC’s Obligation to Fields
Second, we examine defendants’
contention that the District Court erred in
determining that TPC violated its
obligations under ERISA5 and the terms of
the Employment Contract when it refused
to pay Fields compensation or benefits
after August 13, 1997. They argue that, in
light of Fields’s alleged acts of sexual
harassment, it would violate public policy
to enforce the agreement. In the
alternative, they argue that Fields’s alleged
acts breached the agreement, terminating
4This might be a closer question if TPC
intended to offer proof of the alleged
incidents of sexual harassment. However,
it has maintained that its right to terminate
Fields is clear based on the allegations
made against him.
5Fields’s retirement benefits, as
specified in the Employment Contract,
constitute a so-called “Top Hat” plan.
“Top Hat plans are clearly subject to
ERISA.” Kemmerer v. ICI Americas, Inc.,
70 F.3d 281, 286 (3d Cir. 1995). A
participant in a “Top Hat” plan may bring
a civil action “to recover benefits due to
him under the terms if his plan, to enforce
his rights under the terms of the plan, or to
clarify his rights to future benefits under
the terms of the plan.” 29 U.S.C. §
1132(a)(1)(B). In such situations, “breach
of contract principles, applied as a matter
of federal common law, govern disputes
arising out of the plan documents.”
Kemmerer, 70 F.3d at 287. Thus, we
apply federal common law to determine
TPC’s obligation to Fields with respect to
his retirement benefits. However, we
apply New Jersey law to determine TPC’s
obligation to Fields with respect to his pre-
retirement compensation and benefits. As
both bodies of law compel the same result
(and since the parties did not distinguish
between the two sets of benefits), we
combine the discussion of the two claims.

-- 8 of 18 --

9
TPC’s obligation to continue to pay him.6
Both of these arguments essentially urge
us to look past the plain language of a
relatively straightforward contract. Given
the fact pattern before us, we will decline
to do so.
It is axiomatic that a court may
refuse to enforce a contract that violates
public policy. See W.R. Grace & Co. v.
Local 759, 461 U.S. 757, 766 (1983)
(citing Hurd v. Hodge, 334 U.S. 24, 34-35
(1948)). “A promise is unenforceable if
the interest in its enforcement is
outweighed in the circumstances by a
public policy harmed by enforcement of
the agreement.” Town of Newton v.
Rumery, 480 U.S. 386, 392 (1987). “Such
a public policy, however, must be well-
defined and dominant, and is to be
ascertained ‘by reference to the laws and
legal precedents and not from general
considerations of supposed public
interests.’” Grace, 461 U.S. at 766. In
New Jersey, for example, courts have
declined to enforce contracts that violate
statutes, promote crime, interfere with the
administration of justice, encourage
divorce, violate public morality or restrain
trade. Saxon Constr. & Mgmt. Corp v.
Masterclean of North Carolina, Inc., 641
A.2d 1056, 1058 (N.J. Super. Ct. App.
Div. 1994).
Here, the defendants argue that
enforcement of the Employment Contract
a n d c o m p e n s a t i o n o f F i e l d s
notwithstanding his alleged behavior
violates the clear public policy against
sexual harassment of both the United
States, as embodied in Title VII of the
Civil Rights Act of 1964, 42 U.S.C. §
2000e-2(a)(1), and the state of New Jersey,
as embodied in the New Jersey Law
Against Discrimination, N.J. Stat. Ann. §
10:5-12. The defendants cite Stroehmann
Bakeries, Inc. v. Local 776, 969 F.2d 1436
(3d Cir. 1992), in which this Court held
that an arbitrator’s order to reinstate an
employee accused of sexual harassment,
without a determina tion that the
harassment did not occur, violated public
policy. “There is a well-defined and
dominant public policy concerning sexual
harassment in the workplace which can be
ascertained by reference to law and legal
precedent.” Id. at 1441.
However, Stroehmann is clearly
distinguishable from the case at hand.
Unlike the arbitrator’s order there, the
E m p l o ym e n t C o n t r a c t d o e s n o t
“undermine[] the employer’s ability to
6Fields has requested that the sections of
defendants’ brief arguing these points be
stricken because they misrepresent facts
contained in the record. Specifically,
Fields argues that in these sections
defendants, rather than acknowledging that
Fields faced allegations of sexual
harassment, instead use language that
assumes Fields did, in fact, commit acts of
sexual harassment. He contends that this
is a deliberate attempt to mislead the court.
However, defendants’ statement of facts
clearly states that acts of sexual
harassment were merely alleged. Anyone
reading the brief as a whole would
understand that the acts were alleged and
not proven. We see no reason to strike.

-- 9 of 18 --

10
fulfill its obligation to prevent and
sanction sexual harassment in the
workplace.” Id. at 1442. Enforcement of
the Contract does not require TPC to hire
or reinstate someone who may have
engaged in acts of sexual harassment,
which may violate the policy against
“perpetuating a hostile and offensive work
environment.” Id. at 1443. Nor does the
Contract impinge on TPC’s ability to
police the work environment and to
prevent sexual discrimination. Rather, it
requires TPC to pay certain sums if they
terminated Fields, ostensibly for any
reason, including improper and offensive
conduct. Had TPC intended to avoid this
result, they could have bargained for a
limiting provision in the contract. But the
absence of such a provision, owing to
TPC’s failure, does not “perpetuate a
hostile and offensive work environment.”
Id. The principles of public policy simply
do not reach that far.7
Fields relies on Aramony v. United
Way Replacement Benefit Plan, 191 F.3d
140 (3d Cir. 1999), and we find it to be
more persuasive considering the fact
pattern before us. United Way terminated
Aramony, its CEO, after discovering that
he had engaged in fraud. Id. at 143. After
his conviction, United Way chose to deny
him the pension benefits he was due under
the organization’s retirement plan. Id.
Aramony filed suit to regain them. Id. On
appeal, we affirmed the trial court’s ruling
that Aramony was entitled to the benefits
because the retirement benefit plan
contained no felony forfeiture provision.
Id. at 149-150. “The signed plan simply
does not include a felony forfeiture
exception to its otherwise sweeping non-
forfeiture clause. There is no basis upon
which to read one into the contract.” Id.
Here, Fields’s Employment
Contract, like the documentation in
Aramony, does not include any conduct-
related exception to its non-forfeiture
clause. TPC asks us to save it from its
own failure to include such a forfeiture
clause. Doing so would essentially force
us to read clauses thought desirable from a
policy standpoint into every employment
contract. This we cannot do. Employers
may legitimately offer compensation and
benefits that can be taken away only for
specific reasons, or that cannot be taken
away at all, in order to lure or reward
employees. The absence of a forfeiture
clause here suggests that this may well
have been what was intended. As long as
7Our decision in Stroehmann is
distinguishable for two additional reasons.
First, Stroehmann involved the review of
an arbitrator’s exercise of discretion, rather
than the application of a straightforward
contract clause. Second, the Stroehmann
court, while holding that reinstatement was
violative of public policy, specifically
noted that the arbitrator could have
concluded that a lesser punishment than
termination was appropriate. Similarly,
here, TPC could have retained the benefits
it was due under the Employment Contract
by continuing Fields’s employment and
taking less drastic steps to remedy whatever problem was found to exist.

-- 10 of 18 --

11
the enforcement of the promise itself is not
violative of public policy, we will not deny
the parties the bargained-for relief. The
fact that it could be said to have public
policy implications is not enough. We find
the payment of the bargained-for
compensation does not violate public
policy.
It should also be noted at this
juncture that even were we inclined to look
with disfavor on the rights of a harassing
executive to continue to rece ive
compensation in this situation, there has
been no finding that Fields was in fact
guilty of harassment. Clearly, any
consideration of TPC’s claim that it was
entitled not to compensate Fields because
of his conduct would have to be based on
a finding that his behavior did rise to a
level that had policy and contract
implications. And, defendants have made
no claim that they need an opportunity to
prove that Fields did behave in such a
manner, apparently resting on the principle
that the allegations to that effect supported
a denial of compensation.
Defendants’ other argument is that,
based on the allegations, Fields breached
the Employment Contract, giving TPC the
right to discontinue payment of the
contractual benefits. The District Court
dismissed this line of reasoning out of
hand, concluding that TPC “was not
deprived of the fruits of the Employment
Agreement,” and that “the implied duty
defendants posit is trumped by the
language of the parties’ agreement.”
However, while we agree with the District
Court’s ultimate conclusion, a more
careful look at defendants’ argument is
necessary.
Every contract in New Jersey does
contain an implied covenant of good faith
and fair dealing. See R.J. Gaydos Ins.
Agency, Inc. v. Nat’l Consumer Ins. Co.,
773 A.2d 1132, 1145 (N.J. 2001); Wilson
v. Amerada Hess Corp., 773 A.2d 1121,
1126 (N.J. 2001); Sons of Thunder, Inc. v.
Borden, Inc., 690 A.2d 575, 587 (N.J.
1997); Pickett v. Lloyd’s, 621 A.2d 445,
450 (N.J. 199 3); Onderdonk v.
Presbyterian Homes, 425 A.2d 1057, 1063
(N.J. 1981); Bak-A-Lum Corp. v. Alcoa
Bldg. Prods., Inc., 351 A.2d 349, 352 (N.J.
1976); Association Group Life, Inc. v.
Catholic War Veterans, 293 A.2d 382, 384
(N.J. 1972); Palisades Properties, Inc. v.
Brunetti, 207 A.2d 522 (N.J. 1965). We
have previously noted the New Jersey
courts’ adherence to this view. See
Emerson Radio Corp. v. Orion Sales Inc,
253 F.3d 159, 170 (3d Cir. 2001) (stating
that New Jersey courts recognize an
implied covenant of good faith and fair
dealing). Under the implied covenant of
good faith and fair dealing, neither party
shall do anything which will have the
effect of destroying or injuring the right of
the other party to receive the fruits of the
contract. R.J. Gaydos Ins. Agency, 773
A.2d at 1146; 13 Williston on Contracts §
38:15 (4th ed. 2000).
In addition, every employee owes a
duty of loyalty to their employer. Cameco,
Inc. v. Gedicke, 724 A.2d 783, 789 (N.J.
1999). The duty of loyalty “consists of
certain very basic and common sense
obligations.” Lamorte Burns & Co. v.

-- 11 of 18 --

12
Walters, 770 A.2d 1158, 1168 (N.J. 2001).
This duty usually arises in situations where
an employee has assisted a competitor of
the employer or engaged in self-dealing.
See Cameco, 724 A.2d at 789. However,
it is also phrased more generally. “An
employee must not while employed act
contrary to the employer’s interest.”
Lamorte Burns & Co., 770 A.2d at 1168.
Defendants argue that Fields
breached the implied covenant of good
faith and fair dealing inherent in the
Employment Contract and the duty of
loyalty inherent in his relationship with
TPC, based on the employees’ allegations
of sexual harassment. These allegations,
they contend, destroyed TPC’s ability to
reap to the benefits to which it was entitled
under the Employment Contract - namely,
Fields’s services for ten years - by making
it impossible for them to continue to
employ him. In light of his breach and
failure of performance, they maintain that
they have the right to not perform their
part.8
Fields argues that the only
affirmative obligation that he had under
the agreement was to perform the duties of
the Vice President of TPC, and that he did
so until the day that he was terminated, by
which time he had been named President
of the company. He cites authority for the
proposition that courts are obligated to
enforce contracts as they are made by the
parties and not to create additional terms
out of thin air. See, e.g., Marchak v.
Claridge Commons, Inc., 633 A.2d 531
(N.J. 1993). However, “[i]mplied
covenants are as effective components of
an agreement as those covenants that are
express,” and “a party’s performance
under a contract may breach [an] implied
covenant even though that performance
does not violate a pertinent express term.”
Wilson, 773 A.2d at 1126. See also
Emerson, 253 F.3d at 170 (stating that
New Jersey law holds that a party to a
contract can breach the implied duty of
good faith even if that party abides by the
express and unambiguous terms of that
contract); Sons of Thunder, 690 A.2d at
588 (noting favorably that other courts
have stated that a party can violate the
implied covenant of good faith and fair
dealing without violating an express term
of the contract).
Further, an employee may violate
the implied covenant of good faith and fair
dealing even while performing his or her
listed job duties to perfection. And we can
imagine circumstances in which an
employee who has committed acts of
sexual harassment could be deemed to
have breached this implied covenant.
However, while the “principle of fair
dealing pervades all of [New Jersey]
contract law . . . [t]hat principle will not
8 TPC has also framed this argument as
Fields having, by his conduct, “voluntarily
terminated” his position, relieving TPC of
the responsibility to compensate him under
the specific term of the Contract that so
provides. However, the pleadings did not
rely on this theory and we find it
unnecessary to engage in this analysis.

-- 12 of 18 --

13
alter the terms of a written agreement.”
Rudbart v. North Jersey District Water
Supply Comm’n, 605 A.2d 681, 692 (N.J.
1992). “The implied duty of good faith
and fair dealing does not operate to alter
the clear terms of an agreement and may
not be invoked to preclude a party from
exercising its express rights under such an
agreement.” Fleming Cos., Inc. v.
Thriftway Medford Lakes, Inc., 913 F.
Supp. 837, 846 (D.N.J. 1995) (citing
Glenfed Fin. Corp. v. Penick Corp., 647
A.2d 852, 858 (N.J. Super. Ct. App. Div.
1994)). So, where the terms of a contract
are not specific, the implied covenant of
good faith and fair dealing may fill in the
gaps where necessary to give efficacy to
the contract as written. But where the
terms of the parties’ contract are clear, the
implied covenant of good faith and fair
dealing will not override the contract’s
express language.
Here, the Employment Contract
specifically provides:
This Contract shall be non-terminable by
Thompson [Printing Company]. In the
event Thompson [Printing Company] shall
terminate the employment of Jerry
[Fields], all of the benefits as contained
herein shall continue in accordance with
the terms and provisions of this
Agreement.
This provision not only prohibits TPC
from terminating the Contract but it
provides further that if it should
“terminate” Fields’s “em ployment,”
Fields’s benefits will continue. In other
words, if TPC should fire him, it must still
pay him. There is no differentiation
between termination with cause and
termination without cause; Fields’s
benefits are to continue in any event.
Thus, under the express terms of the
agreement, Fields has a right to benefits
even in the event that he is terminated for
cause.
Defendants’ argument urges us to
treat Fields’s alleged behavior - behavior
that could give rise to termination for
cause - as a breach of the implied covenant
of good faith and fair dealing. However,
whether he breached this covenant, giving
rise to a clear right to terminate him, is not
the issue. The fact remains that even if he
committed the alleged acts and the
termination was justified, the express
terms state that if he is terminated, benefits
will continue. We cannot read the implied
covenant of good faith and fair dealing to
essentially alter the terms of the Contract,
enabling TPC to discontinue Fields’s
benefits in the event that he was
terminated for cause. Because TPC did
not include a proviso that it would not
have to continue Fields’s benefits in the
event he was terminated even for cause,
we will not read that language into the
Contract.
Defendants argue that the New
Jersey courts have relieved an employer of
the duty of strict performance of an
employment contract when the employee
has engaged in misconduct, relying on
McGarry v. St. Anthony of Padua Roman
Catholic Church, 704 A.2d 1353 (N.J.
Super. Ct. App. Div. 1997). There,

-- 13 of 18 --

14
McGarry had entered into an employment
contract with St. Anthony’s. Id. at 1354.
The contract required the church to give
McGarry notice of termination at least 30
days in advance of termination and to
continue to pay him during the 30-day
period if it did not wish him to work
during that period. Id. at 1355. Three
months after starting work, McGarry was
arrested in the parking lot of the church for
receiving shipments of illegal steroids and
he admitted that he had been using the
church property to receive other
shipments. Id. Upon learning of the
arrest, the church terminated McGarry,
instructed him to stay off church grounds
and refused to pay him, even under the 30-
day notice requirement. Id. McGarry filed
suit, contending that he had been
wrongfully terminated and argued that he
was entitled to 30 days’ pay because the
church had failed to follow the 30-day
notice requirement. Id. at 1356.
The New Jersey Superior Court
found that “even where . . . the employee
performs the duties contracted for
satisfactorily, criminal activity by the
employee can justify his discharge for
breach of an employment contract.” Id. at
1357. As a result, St. Anthony’s “had
good cause to terminate the employment
contract by virtue of [McGarry’s] breach
of the implied covenant of good faith and
fair dealing.” Id. Furthermore, McGarry
was “not . . . allowed to recover
termination pay under the termination
clause of the breached contract.” Id. at
1 3 5 8 . H o w e v e r , M c G a r r y i s
distinguishable from the instant situation.
For one thing, the court clearly viewed the
criminal nature of McGarry’s acts to be
critical to its analysis. Furthermore, the
issue in McGarry was whether the
termination was justified based on breach
of an implied covenant. Id. The court
held that is was. Id. Here, the issue is not
whether termination was appropriate or
called for, but rather, if termination occurs,
what happens to Fields’s benefits. Unlike
McGarry, here the Contract speaks
specifically to that issue. Thus, we will
affirm the District Court’s conclusion that
TPC’s failure to pay the required
compensation constituted a breach of the
employment agreement and its obligations
under ERISA, and that Fields is entitled to
all of the compensation and benefits that
he was due under the plain meaning of the
Contract.9
9TPC argues that it has no obligation to
pay Fields’s “Top Hat” retirement benefits
because it has no unencumbered assets,
and that, in the event that Fields contests
its claim that it has no unencumbered
assets, the case must be remanded to make
such a determination. We find this
position to be meritless. “Top Hat” plans
are treated like unilateral contracts.
Goldstein v. Johnson & Johnson, 251 F.3d
433, 442 (3d Cir. 2001). According to
“unilateral contract principles, once the
employee performs, the offer becomes
irrevocable, the contract is completed, and
the employer is required to comply with its
side of the bargain.” Kemmerer, 70 F.3d
at 287. Thus, TPC became obligated to
pay Fields retirement benefits on his first

-- 14 of 18 --

15
C. Thompson’s Personal Liability
Finally, we consider defendants’
argument that the District Court erred
when it imposed personal joint and several
liability on Thompson. The Court’s order
stated:
Finally, because defendants have not
argued what if any distinction should be
drawn between defendant Thompson
Printing and defendant Gilbert M.
Thompson with respect to their liability to
Fields, the Order shall not differentiate
between them and they shall be jointly and
severally liable for the relief granted by
this Court’s Order of Partial Summary
Judgment.
As a preliminary matter, Fields
contends that Thompson has waived this
issue through his failure to raise it at the
trial level. However, while Thompson
clearly could have raised a genuine issue
of material fact to avoid personal liability,
the threshold burden was on Fields, who
brought the claim against Thompson, to
plead and prove undisputed facts that
warranted an imposition of liability against
Thompson personally as a matter of law.
“A party seeking summary judgment
always bears the initial responsibility of
informing the district court of the basis for
its motion, and identifying those portions
of ‘the pleadings, depositions, answers to
interrogatories, and admissions on file,
together with the affidavits, if any,’ which
it believes demonstrate the absence of a
genuine issue of material fact.” Celotex,
477 U.S. at 323. In order to be entitled to
judgment against Thompson, Fields had to
aver, and demonstrate he could prove,
sufficient facts to support liability against
Thompson under ERISA and under state
law.
So, while the District Court placed
the onus on the defendants to distinguish
the liability of TPC from Thompson, it was
really Fields’s burden to not only plead,
but also to prove, that he was entitled to
judgment as a matter of law against
Thompson. Thompson was the CEO of
TPC, and the corporate officer responsible
for terminating Fields and discontinuing
his benefits. The pleadings allege
generally that he violated fiduciary duties
owed to Fields under ERISA, and that he
and TPC breached the Contract by refusing
to pay Fields salary and benefits after
Fields’s termination. But, these pleadings
fall short of alleging, let alone
establishing, a basis for personal liability
against a corporate officer, on any of the
claims at issue.
With regards to the ERISA claim,
the parties have stipulated that Fields’s
post-employment benefits plan is a “Top
Hat” plan. “Top Hat” plans are “unique
animal[s] under ERISA’s provisions.”
Goldstein v. Johnson & Johnson, 251 F.3d
433, 442 (3d Cir. 2001). Because “these
plans are intended to compensate only
day of work under the Contract. Only
Fields’s voluntary termination could end
that obligation. Whether or not TPC has
unencumbered assets has no bearing on the
question of its duty to pay.

-- 15 of 18 --

16
highly-paid executives, and . . . such
employees are in a strong bargaining
position relative to their employers,” they
are free from some of the requirements
that are imposed upon most ERISA plans
in order to protect those employees
covered by such plans. Id. Specifically,
“Top Hat” plans are not subject to
ERISA’s requirements for vesting and
funding, see 29 U.S.C. §§ 1051(2);
1081(a), and the administrators of these
plans are not subject to ERISA’s fiduciary
requirements. See 29 U.S.C. §§ 1051(2),
1081(a), 1101(a). Thus, Thompson did not
have a fiduciary duty with respect to
Fields’s “Top Hat” plan, and may not be
held personally liable for any violations of
ERISA with respect to that plan.
With respect to the breach of
contract claim, New Jersey law provides
that “an officer who causes his corporation
to breach a contract for what he conceives
to be in the best interest of the corporation
does not thereby incur personal liability.”
Zeiger v. Wilf, 755 A.2d 608, 622 (N.J.
Super. Ct. App. Div. 2000). In Zeiger, the
New Jersey Superior Court cited with
approval Oregon’s test for determining
whether an officer has acted in the best
interest of the corporation. Id. at 623. The
test asks
whether the agent acts within the scope of
his authority, and with the intent to benefit
the principal. When this test is met an
agent is not liable to a third party for
intentional interference with contract even
if the agent acts with ‘mixed motives’ to
benefit himself or another principal as
well.
Id. (citing Welch v. Bancorp Mgmt.
Advisor, Inc., 675 P.2d 172, 178 (Or.
1983)).
Thus, Thompson can be held personally
liable only if Fields alleges and proves that
Thompson was not acting with the intent
to benefit TPC when he refused to pay
Fields the benefits and compensation that
were due u nder the em ployment
agreement. See also Law of Corp.
Officers and Dir., § 3:30 (2004) (“[A]
corporate officer or director is not
personally liable for . . . inducing the
breach of a corporate contract, provided
the officer or director acts in good faith
and for the benefit of the corporation.”);
3A W. Fletcher, Cyclopedia of the Law of
Private Corporations § 1158.10 (2002).
Fields has failed to make such an
allegation, let alone present proof of facts
necessary to impose officer liability.
Fields’s motion for summary judgment is
not accompanied by any evidence that
could provide a basis for a finding that
Thompson acted in bad faith. The
Statement of Facts that Fields filed in
support of his motion for summary
judgment contains facts about Fields’s
employment history with TPC, the
company’s termination of Fields, and its
failure to pay him salary and benefits after
that termination. However, nowhere does
it state any facts that would support
Thompson’s being held personally liable.
In fact, the only specific allegations
relating to Thompson were in connection
with the ERISA claim, dealt with above,
and the minority oppression claim, which
was withdrawn before this appeal. As a

-- 16 of 18 --

17
result, the imposition of personal liability
and judgment against Thompson was
improper, and that portion of the District
Court’s opinion will be reversed.
D. Cross-Appeal of Attorneys’ Fees
On cross-appeal, Fields challenges
the District Court’s decision not to grant
him attorneys’ fees. ERISA provides that
“the court in its discretion may allow
reasonable attorney’s fees and costs of
action to either party.” 29 U.S.C. §
1132(g)(1). We have set forth five policy
factors for a district court to consider in
determining whether to award fees: (1) the
offending parties’ culpability or bad faith;
(2) the ability of the offending parties to
satisfy an award of attorney’ fees; (3) the
deterrent effect of an award of attorneys’
fees; (4) the benefit conferred upon
members of the pension plan as a whole;
and (5) the relative merits of the parties’
positions. Ursic v. Bethlehem Mines, 719
F.2d 670, 673 (3d Cir. 1983). In Anthuis
v. Colt Indus. Operating Corp., 971 F.2d
999, 1011 (3d Cir. 1992), we reiterated
that “we regard our requirement that
district courts consider and analyze these
factors as a mandatory requirement.” See
also McPherson v. Employees’ Pension
Plan of Am. Re-Insurance Co., 33 F.3d
253, 254 (3d Cir. 1994). We require such
an analysis “in order that we may
intelligently review the judgments reached
by those courts.” Anthuis, 971 F.2d at
1011.
In Anthuis, the district court had
denied a party’s request for attorney’s fees
with the following statement:
Plaintiff has requested attorney’s fees
which are available pursuant to our
discretion under 29 U.S.C. § 1132(g)(1).
We will deny that request. Colt has
neither acted in bad faith, nor pressed a
clearly meritless position.
Id. We noted there that “the district court
considered factors one and five of the
Ursic catechism, but did so without
analysis or articulation of its reasons.
Moreover, the district court’s opinion
[was] silent with respect to the other Ursic
factors.” Id. at 1012. Thus, we were
hampered in our review function because
the district court failed to enunciate the
reasons for the conclusions it reached in
denying . . . attorneys’ fees, and
additionally [had] utterly failed to
recognize, analyze, explain or enunciate
conclusions concerning the other Ursic
factors which it was required to consider.
Id. As a result, we remanded the issue to
the district court for further consideration.
Here, the District Court denied
Fields’s request for attorneys’ fees by
stating:
The statute provides that fees may be
awarded to a prevailing litigant upon a
showing, inter alia, of culpability or bad
faith of the party in violation of the statute.
29 U.S.C. § 1132(g)(1). Plaintiff’s
showing on this motion falls well short of
establishing this peculiarly fact-sensitive

-- 17 of 18 --

18
element beyond any reasonable dispute.
Fields contends that this statement
provides insufficient reasoning for the
court to have ruled on the issue of fees.
Inasmuch as it is nearly identical to the
statement deemed insufficient in Anthuis,
we agree. The District Court did not
mention four of the Ursic factors, much
less analyze them in a rigorous fashion. A
conclusory statement that one of the
factors has not been fulfilled is not enough
to discharge the District Court’s
responsibility to explain its reasoning. In
addition, the Ursic factors are not
requirements in the sense that a party must
demonstrate all of them in order to warrant
an award of attorney’s fees, but rather they
are elements a court must consider in
exercising its discretion. Even if the
District Court’s analysis of the first factor
was sufficient - which it was not - it was
obliged to examine the remaining factors
as well.
Although we find the District
Court’s explanation wanting, we cannot, as
Fields asks, conclude that the court abused
its discretion in denying the fees. While
he urges that we should examine the
record ourselves and draw our own
conclusions regarding the propriety of
awarding attorneys’ fees, “the function of
analyzing and balancing [the Ursic]
considerations is not ours to undertake.”
Anthuis, 971 F.3d at 1012. We may
review a district court’s decision regarding
fees and costs “only when we know the
reasons for, and the basis of, those factors
on which the district court relied when it
exercised its discretion.” Id. Here, the
District Court did err in not providing an
adequate basis for its reasoning under
Ursic. Accordingly, we will vacate its
ruling in this regard and remand this issue
for further consideration.
III.
For all of the reasons above, we
will affirm the order of the District Court
insofar as it authorizes judgment against
TPC, reverse the order of the District
Court insofar as it authorizes judgment
against Thompson, and vacate and remand
to District Court for further proceedings
with respect to the issue of the award of
attorneys’ fees.

-- 18 of 18 --