Opinion
Civil Action No. DKC 2003-3122.
April 6, 2004
MEMORANDUM OPINION
Presently pending and ready for resolution are the separate motions of Defendants Supply Chain Logic, Inc. (SCLogic) and Administaff Co. II, L.P. (Administaff) to dismiss Plaintiff Mary Porter Weston's complaint. The issues have been fully briefed and no hearing is deemed necessary. Local Rule 105.6. For the reasons that follow, Defendants' motions will be denied in part and granted in part.
I. Introduction
The following facts have been alleged by Plaintiff. On September 27, 1999, Plaintiff was hired by SCLogic as a senior account manager at an annual salary of $103,000 plus benefits, expense reimbursements and commissions. The terms of her employment are embodied in an offer letter signed by SCLogic's president, Michael B. Saldi, and by Weston herself in acceptance of the offer.
At the same time, SCLogic had an existing employment agreement with Administaff, in which Administaff assumed the role of co-employer with SCLogic. See id. ¶ 9. Pursuant to the "co-employment" arrangement between the two Defendants, SCLogic would carry out its business operations, including setting the terms and conditions of Weston's employment, and calculating and funding Weston's pay. In turn, Administaff was responsible for administering Weston's compensation and benefits, reserving the right to judge Weston's qualifications, duties, work assignments and job performance along with SCLogic. See id. ¶ 10. The co-employment arrangement also required Weston to enter into a separate employment agreement with Administaff. Plaintiff's employment continued without complaint for over a year; indeed, she often received compliments and encouragement regarding the performance of her sales duties. See id. ¶ 13.
On November 29, 2000, Plaintiff was in an automobile accident in which she suffered physical and mental injuries, including traumatic brain injury. Plaintiff's injuries required extensive medical treatment and time off from work as well as the need for rehabilitative services. Plaintiff alleges that she is permanently disabled as a result of the accident. See id. ¶ 14.
Plaintiff immediately notified SCLogic and Administaff of her accident, injuries and need for time off from work to "recuperate." See id. ¶ 15. According to Plaintiff, however, SCLogic refused to acknowledge Plaintiff's injuries and insisted that she continue to work. At SCLogic's insistence, Plaintiff drove to SCLogic's Maryland headquarters on December 5, 2000 despite her injured condition. See id. Once at the meeting, Plaintiff was informed that SCLogic was considering changing her compensation scheme. SCLogic also commented on the extent of Plaintiff's injuries and gave her specific sales expectations to meet. Plaintiff was told that if she successfully pursued her current accounts with the Red Cross she would more than meet the company's expectations. See id.
On December 7, 2000, Plaintiff received a phone call from Michael Saldi during one of her medical examinations. Plaintiff alleges that Saldi heard the doctor describe her injuries and her likely need for medical and/or disability leave. See id. ¶ 16. The doctor also made it clear to Saldi that Weston should not drive, given the nature and extent of her injuries. See id. The following day, however, Saldi "demanded" that Plaintiff drive to Annapolis, Maryland for a meeting, during which Saldi complained that Weston's efforts had not met the standard objectives of her position. See id. ¶ 17. For the first time, SCLogic proposed eliminating Plaintiff's salary entirely and replacing it with a compensation scheme based solely on earned sales commissions. SCLogic further suggested that Plaintiff's commission earnings would be reduced in order to recapture alleged "overdraws taken up until that point." See id. Plaintiff was given until December 11, 2000 to respond to SCLogic's proposal. Plaintiff claims that, due to her accidentrelated injuries, she was unable to respond before the deadline expired. See id.
Without Plaintiff's consent, SCLogic unilaterally changed Plaintiff's compensation agreement to that of the commissionbased proposal and further demanded repayment of alleged salary overdraws. See id. ¶ 18. On December 23, 2000, SCLogic terminated Plaintiff's salary and, with Administaff, ceased providing health benefits for Plaintiff's children. Administaff then implemented a $210 per month charge to continue Plaintiff's personal benefits. The commencement of Plaintiff's temporary disability payments were also delayed. See id.
Soon after the termination of her salary, Plaintiff was given formal notice by SCLogic and Administaff of her right to take time from work under the Family and Medical Leave Act (FMLA), 29 U.S.C. § 2601, et seq. Accordingly, Plaintiff took 12 weeks off from work, beginning on December 12, 2000, to facilitate her recovery. She did not receive pay or benefits during this time. See id. Although she ultimately received short-term disability benefits, Plaintiff claims that they arrived too late to provide adequate income to pay for needed medical care.
After Plaintiff's 12 weeks of FMLA leave expired, she returned to work but was not sufficiently recovered to perform her job as she had before. Plaintiff alleges that she informed SCLogic and Administaff that she needed accommodations, including the need for help with writing, in order to perform her duties, see id. ¶ 25. She did not, however, receive any assistance from either employer. See id. ¶ 21. Rather, SCLogic attempted to divert Plaintiff's accounts and potential customers to other employees, and deprived her of commissions to which she was entitled. Plaintiff also failed to receive proper credit for accounts she brought in or sales she helped the company achieve — a problem Plaintiff claims to have begun long before she was injured. See id. ¶ 22.
As Plaintiff continued working, she repeatedly advised SCLogic and Administaff of her accident-related disabilities, but her requests for accommodations were ignored; instead, she received numerous complaints about her job performance. According to Plaintiff, SCLogic and Administaff's poor treatment of her, along with inadequate compensation and the lack of accommodations, created "an intolerable and hostile work environment" and interfered with Plaintiff's ability to perform her job. See id. ¶ 24. As an example, Plaintiff claims that SCLogic ridiculed her and berated her for taking time off and seeking protection under the FMLA. See id. ¶ 25. Additionally, at an alleged "performance evaluation" on May 5, 2001, attended by SCLogic and Administaff, SCLogic complained about Plaintiff's performance, demanded that she agree with the new compensation scheme and warned her of the repercussions of retaining counsel and asserting her FMLA rights. See id. Despite the stated purpose for the meeting, there was no review of Plaintiff's performance or a statement of the company's objective goals. Plaintiff further alleges that she was reprimanded for low levels of productivity during the first half of 2001, a period of time encompassing almost all of her FMLA leave. See id.
On June 1, 2001, Plaintiff presented a final proposal to both Defendants that would allow amicable working relationships between all parties. Neither SCLogic nor Administaff responded. Thus, on June 8, 2001, Plaintiff resigned and secured other employment but at a reduced salary and with decreased benefits. See id. ¶ 26. Finally, Plaintiff also alleges that SCLogic made false statements to past and potential employers and business contacts with the intent of undermining Plaintiff's ability to work in the industry, to steal her customers and to retaliate against her for challenging its conduct towards her. See id. ¶ 27. Without indicating the content or identity of the speakers or receivers of this communication, Plaintiff claims to have suffered damage from SCLogic's allegedly defamatory statements.
Plaintiff filed, on October 31, 2003, an eight count complaint alleging: (1) accounting (against SCLogic); (2) breach of contract (against both Defendants); (3) violation of the FMLA (against both Defendants); (4) interference with business expectancy (against SCLogic); (5) defamation (against SCLogic); (6) injunctive relief (against SCLogic); (7) violation of Maryland Wage Payment and Collection Law (against both Defendants); and (8) discrimination under the Americans with Disabilities Act (ADA), 42 U.S.C. § 12101, et seq. (against both Defendants).
Both Defendants filed separate answers and subsequent motions to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), with SCLogic seeking a dismissal of the claims of breach of contract (count two), defamation (count five) and discrimination (count eight), and Administaff seeking dismissal of the breach of contract (count two), interference with business expectancy (count four), defamation (count five), injunction (count six) and discrimination (count eight) claims. Plaintiff concedes that the claims of defamation or interference with business expectancy have been brought against SCLogic only, and not Administaff, and therefore Administaff's motion to dismiss these counts is moot and will not be addressed further. As both motions to dismiss, prepared by the same counsel, contain identical or similar arguments, the court will resolve these motions in one memorandum opinion, addressing the arguments set forth therein concurrently or independently as appropriate.
II. Standard of Review
A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) ought not be granted unless "it appears beyond doubt that the Plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). All that the Federal Rules of Civil Procedure require of a complaint is that it contain "'a short and plain statement of the claim' that will give the Defendant fair notice of what the Plaintiff's claim is and the grounds upon which it rests." Id. at 47; Comet Enters. Ltd. v. Air-A-Plane Corp., 128 F.3d 855, 860 (4th Cir. 1997). "Given the Federal Rules' simplified standard for pleading, '[a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'" Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514, 122 S.Ct. 992, 998 (2002), quoting Hishon v. King Spalding, 467 U.S. 69, 73 (1984).
In reviewing the complaint, the court accepts all well-pled allegations of the complaint as true and construes the facts and reasonable inferences derived therefrom in the light most favorable to the Plaintiff. Ibarra v. United States, 120 F.3d 472, 473 (4th Cir. 1997). The court must disregard the contrary allegations of the opposing party. A.S. Abell Co. v. Chell, 412 F.2d 712, 715 (4th Cir. 1969). The court need not, however, accept unsupported legal conclusions, Revene v. Charles County Comm'rs, 882 F.2d 870, 873 (4th Cir. 1989), legal conclusions couched as factual allegations, Papasan v. Allain, 478 U.S. 265, 286 (1986), or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979).
III. Analysis
A. Breach of Contract (against both Defendants)
To survive a motion to dismiss, a complaint for breach of contract must "allege with certainty and definiteness facts showing a contractual obligation owed by the defendant to the plaintiff and a breach of that obligation by the defendant." Continental Masonry v. Verdel Construction Co., 279 Md. 476, 480, 369 A.2d 566 (1977). "At this stage, [Plaintiff] does not have to forecast evidentiary support for her allegations." Swedish Civil Aviation Admin. v. Project Management Enterprises, Inc., 190 F. Supp.2d 785, 792 (D. MD. 2002).
Plaintiff alleges that she entered into an employment agreement with SCLogic, which set forth the terms and conditions of her employment, including her salary, commission and benefits. She further alleges that she was required to, and in fact did, enter into a second employment agreement with Administaff as co-employer with SCLogic. Under the co-employer arrangement, SCLogic was responsible for setting forth the terms of employment, and calculating and funding Plaintiff's pay, while Administaff was responsible for paying Plaintiff's wages, salary, or commissions for services performed under her agreement with Administaff and SCLogic. See paper no. 13, at 3. The parties do not dispute the existence of the co-employment relationship or the delegation of duties in furtherance of this relationship.
The complaint further alleges that after Plaintiff's accident, Administaff and SCLogic breached the employment agreement by "failing to pay her the salary, benefits and expense reimbursements to which she was entitled." Paper no. 1, at 32. Defendants' failure to compensate Plaintiff "caused [her] to lose compensation (both salary and commissions), benefits and incidental losses caused by lack of benefits, such as out of pocket payments for health care and injuries for which adequate heath care was not available." Id. ¶ 33.
1. Defendant Administaff
Administaff contends that Plaintiff's claim of breach of contract is insufficient because Plaintiff's employment contract with Administaff is silent as to the specific terms of salary, compensation and benefits. Administaff further argues that, because the agreement contained a terminable-at-will clause, Administaff had the right to change or terminate Plaintiff's compensation scheme at any time, with or without cause. Finally, Defendant contends that the employment agreement was the sole and exclusive agreement between the parties and that no other agreement exists setting forth the contractual terms Plaintiff now alleges were breach. Whether the provisions of the agreement provide as Defendant contends has yet to be determined, but Plaintiff's allegations as to what constitutes the contract and its breach are sufficient to state a claim.
While Administaff argues that Plaintiff has not alleged the breach of a specific provision setting forth the terms of compensation, "a breach of contract does occur if it 'affects the purpose of a contract in an important or vital way.'" Swedish Civil Aviation Admin., 190 F. Supp.2d at 791 (rejecting defendant's argument that plaintiff must allege the breach of a particular contractual provision when the alleged breach affects the purpose of the contract in an important way). Administaff's alleged failure to compensate Plaintiff for services rendered certainly affects the purpose of her employment with her co-employers, Administaff and SCLogic.
Additionally, Administaff's argument that the terminable-at-will clause permitted Administaff to modify or terminate Plaintiff's compensation is not only unsupported by law, but also unsupported by logic. While a termination-at-will clause may permit termination of employment with or without cause, such a clause cannot be read to grant the employer the unilateral power to terminate an employee's compensation during ongoing and continued employment.
Any factual issues raised by Administaff need not be resolved at this stage; rather, they are more appropriately flushed out during discovery or through summary judgment. At this stage, Plaintiff has complied with the "simplified notice pleading standard [which] relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." See Swierkiewicz, 534 U.S. at 512 (citing Conley, 355 U.S. at 47). Accordingly, Administaff's motion to dismiss count two will be denied.
2. Defendant SCLogic
SCLogic, also moving to dismiss count two, argues that Plaintiff has failed to state a claim for breach of contract because Administaff, and not SCLogic, was responsible for making compensation payments. Plaintiff does, however, allege that Plaintiff entered into a contractual agreement with SCLogic for a senior account manager position. The terms of Plaintiff's employment, and SCLogic's promise of compensation, are detailed in an offer letter, dated September 27, 1999, which both SCLogic and Plaintiff signed. See paper no. 1, ¶ 8. In addition to setting forth the terms of employment and compensation, SCLogic was responsible for calculating and funding Plaintiff's pay. See paper no. 12, at 3. Plaintiff further alleges that her salary was "terminated" by SCLogic and she received no pay or benefits during her leave of absence. See paper no. 1, ¶¶ 18-19, 32. Thus, Plaintiff has sufficiently alleged both a contractual obligation of SCLogic with respect to Plaintiff's employment and promised compensation as well as a breach of that obligation by SCLogic. Administaff's responsibility for the administration of SCLogic's payroll neither absolves SCLogic's contractual obligations nor affects the sufficiency of the complaint's allegations. Accordingly, Plaintiff's allegations are sufficient to state a claim for breach of contract and, therefore, SCLogic's motions to dismiss count two will be denied.
B. Discrimination Under the ADA (against both Defendants)
Both Defendants move to dismiss Plaintiff's claim of discrimination, arguing that Plaintiff has failed sufficiently to plead a claim under the ADA. In order to state a claim under the ADA, Plaintiff must allege that (1) she has a "disability"; (2) she is otherwise qualified for the job; and (3) her termination was an unlawful discrimination based solely on her disability. See Tyndall v. Nat'l Educ. Centers, Inc., 31 F.3d 209, 211 (4th Cir. 1944). While Plaintiff need not, at this stage, state a prima facie case under the ADA, she must, at the very least, show that she was "disabled" within the meaning of the ADA. See 42 U.S.C. § 12112(a)(1995); Gottesman v. J.H. Batten, Inc. 286 F. Supp.2d 604, 612 (M.D.N.C. 2003).
The ADA defines "disability" as meeting one of three prongs: 1) having an actual mental or physical impairment that substantially limits one or more of the major life activities of an individual; 2) having a record of such an impairment; or 3) being regarded as having such an impairment. See 42 U.S.C. § 12102(2)(1995). Plaintiff's claim, as alleged, would fall within the first prong — that is, that she claims to have an actual impairment that substantially limits a major life activity.
According to Equal Employment Opportunity Commission ("EEOC") regulations, "substantially limit[ed]" has been interpreted by the EEOC to mean "[u]nable to perform a major life activity that the average person in the general population can perform"; or "[s]ignificantly restricted as to the condition, manner or duration under which an individual can perform a particular major life activity as compared to the condition, manner, or duration under which the average person in the general population can perform that same major life activity." 29 C.F.R. § 1630.2(j). The EEOC regulations also define the phrase "major life activities" as meaning "functions such as caring for oneself, performing manual tasks, seeing, hearing, speaking, breathing, learning and working." 29 C.F.R. § 1630.2(i)(2003).
Plaintiff alleges that "[a]t all relevant times, [she] was disabled within the meaning of the ADA." See paper no. 1, ¶ 74. However, she fails to identify the physical or mental impairment that she claims has rendered her "permanently disabled." See id. ¶ 14. At best, she claims that she suffered "massive physical trauma as well as traumatic brain injury," but her allegations go no further to specify the trauma suffered or the effect it had on her ability to function. Although she states that she is disabled, Plaintiff repeatedly states that these were injuries from which she could "recuperate" or "recover" if given medical treatment and time off from work. See paper no. 1, ¶¶ 14 15.
Plaintiff's complaint is also silent as to the major life activity that has been substantially limited as a result of her alleged disability. See Sutton v. United Airlines, Inc., 527 U.S. 471, 482-83 (1999). While she claims to have needed and requested accommodations, Plaintiff refers only briefly to a need for help with writing. She says nothing of how, or if, her injuries substantially limited her ability to work as a sales person or complete any other major life activity. Indeed, Plaintiff stresses the fact that she was able to work despite her injuries and that she performed her job competently, with or without accommodation. Thus, Plaintiff's discrimination claim is insufficient to state a claim under the ADA. See Rohan v. Networks Presentation, LLC, 175 F. Supp.2d 806, 811-13 (D.Md. 2001).
While Plaintiff is correct that at this stage she is only required, under Fed.R.Civ.P. 8(a)(2), to provide a "plain and short statement of the claim," she must allege some factual basis to support a claim under the ADA. Even the cases cited by Plaintiff, while recognizing the liberal pleading standards of Rule 8(a)(2), required some allegation of a mental or physical impairment. See Gottesman, 286 F. Supp.2d at 609, 613 (alleging "physical limitations involving the loss of his larynx" after "medical doctors performed a full laryngectomy on Plaintiff and surgically removed all of [his] larynx"). Even under a liberal pleading standard, Plaintiff fails to provide SCLogic with sufficient notice of her alleged disability. As such, Plaintiff has failed to state a claim of discrimination under the ADA. Accordingly, count eight of Plaintiff's complaint will therefore be dismissed, although Plaintiff will have 15 days to file a motion for leave to amend with a proposed amended complaint.
Pursuant to Fed.R.Civ.P. 15(a), once a party serves a responsive pleading, "a party may amend a pleading only by leave of court." As both Defendants have filed an answer to Plaintiff's complaint, Plaintiff must seek, by motion, leave to amend her complaint. While Plaintiff has alluded to the desire to obtain a grant of leave to amend, she has not moved the court for such relief at this time. See paper no. 12, at 14.
C. Defamation (against SCLogic)
SCLogic contends that dismissal of count five is proper because Plaintiff has failed sufficiently to state a claim of defamation. In response, Plaintiff argues that a claim of defamation is not subject to a heightened pleading standard, but only subject to the "short and plain statement" standard of Rule 8(a)(2). Applying this standard, Plaintiff asserts that her claim of defamation is sufficiently pled so as to survive SCLogic's motion to dismiss.
Under Maryland law, a defamatory statement is one "which tends to expose a person to public scorn, hatred, contempt or ridicule, thereby discouraging others in the community from having a good opinion of, or associating with, that person." Rosenberg v. Helinski, 328 Md. 664, 675, 616 A.2d 866, 871 (Md. 1992) (citing Batson v. Shiflett, 325 Md. 684, 722-23, 602 A.2d 1191 (1992)). To state a claim for defamation of a non-public figure, a plaintiff must allege (1) that the defendant made a defamatory statement to a third person; (2) that the statement was false; (3) that the defendant was legally at fault in making the statement; and (4) that the plaintiff thereby suffered harm. See Metromedia, Inc. v. Hillman, 285 Md. 161, 171-72, 400 A.2d 1117, 1123 (Md. 1979) (discussing effect of Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) and Jacron Sales Co. v. Sindorf, 276 Md. 580, 350 A.2d 688 (1976)).
Plaintiff alleges that "SCLogic also made false statements about Weston to her past and potential employers and to her past and potential business contacts, all with the intent of undermining Weston's ability to work in SCLogic's industry, to steal her customers and to retaliate against her for challenging its actions toward her." Paper no. 1, ¶ 27. Other than this bare bones contention, Plaintiff alleges neither the content of the alleged statement nor the identity of the speaker or audience. Once again, Plaintiff fails to understand that, even under a liberal pleading requirements, she must allege more then an unsupported, conclusory factual allegation that SCLogic made false statements about her to past and potential employers, without providing any allegation concerning of what was said and to whom. See Schoonfield v. Baltimore, 399 F. Supp. 1068, 1090 n. 29 (D.Md. 1975). Given that Plaintiff has failed to provide, even in the most basic of terms, any allegations or factual support concerning the time, place or content of the allegedly defamatory comments, she has failed, even under liberal pleading requirements, to state a claim for defamation. Therefore, Administaff and SCLogic's motions to dismiss count five will be granted, again subject to possible amendment.
Plaintiff relies on an unpublished Fourth Circuit opinion, Henderson v. Food Lion, Inc., 1991 WL 644 (4th Cir. 1991), to support the proposition that defamation actions in federal court are subject to the liberal notice pleading requirements of the federal rules. While the case does in fact look to federal, and not state, pleading requirements, it in no way suggests that a complaint may state a claim of defamation without referencing either the time or place of the alleged communication or the content of the alleged statement, the speaker, or the listener.
IV. Conclusion
Plaintiff's complaint fails to state a claim of defamation or discrimination under the ADA. It does, however, sufficiently plead a cause of action upon which relief may be granted for breach of contract. Thus, count five (defamation) and count eight (discrimination) will be dismissed as to both Administaff and SCLogic. The motions of Administaff and SCLogic to dismiss count two (breach of contract), however, will be denied.