Cognizant Tech. Sols. Corp. v. Franchitti

• Docket Number: Civil Action 21-cv-16937
• Decision Date: 02 November 2023
• Parties: COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION and COGNIZANT TECHNOLOGY SOLUTIONS U.S. CORPORATION Plaintiffs, v. JEAN-CLAUDE FRANCHITTI, and VARTAN PIROUMIAN Defendants.
• Court: U.S. District Court — District of New Jersey

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION and COGNIZANT TECHNOLOGY SOLUTIONS U.S. CORPORATION Plaintiffs, v. JEAN-CLAUDE FRANCHITTI, and VARTAN PIROUMIAN Defendants.

Civil Action No. 21-cv-16937

United States District Court, D. New Jersey

November 2, 2023

MEMORANDUM AND ORDER

PETER G. SHERIDAN, U.S.D.J.

This case is before the Court on Plaintiffs Cognizant Technology Solutions Corporation's and Cognizant Technology Solutions U.S. Corporation's (collectively "Plaintiffs" or the "Company") motion to dismiss Defendants Jean-Claude Franchitti's (“Franchitti”) and Vartan Piroumian's ("Piroumian" and collectively "Defendants" or "Employees") counterclaims to the Complaint under Title VII of the Civil Rights Act of 1964 and the New Jersey Law Against Discrimination ("NJLAD"). (ECF No. 61). Oral argument was heard on October 5, 2023.

For the reasons stated below, this motion is DENIED.

I.

The Court has jurisdiction under 28 U.S.C. § 1332(a) because this action is between citizens of different states and the amount in controversy exceeds the sum or value of $75,000. Venue is proper as the matter was previously removed from New Jersey State Court. 28 U.S.C. § 1441(b).

II.

a. Background

Defendant Jean-Claude Franchitti was employed by the Company from April 16, 2007 until July 20, 2016. (ECF No. 1 at 16). Defendant Vartan Piroumian was employed by the Company from April 2, 2012 until August 2, 2017. (Id. at ¶ 16). Franchitti was employed first as Chief Architect and then later as Assistant Vice President. (ECF No 1-2 ¶ 16). Piroumian was employed in several Associate Director level roles such as a Principal Architect and an Enterprise Architect. (Id. at ¶ 18).

Due to the nature of their positions, Defendants were privy to "proprietary and competitively sensitive information, including, but not limited to, employee information, pricing discussions and negotiations, client negotiations and sales processes." (Id. at ¶¶ 16, 18). Additionally, each of the Defendants signed nondisclosure agreements (the "NDAs") and agreed to maintain the confidentiality of the Company's business information pursuant to the Company's Employee Handbook and Code of Conduct. (Id. at ¶¶ 33-38).

Defendants in this matter have filed numerous lawsuits and Equal Employment Opportunity Commission ("EEOC") complaints against the Company. The Court summarizes them chronologically below:

• On October 7, 2016, Franchitti filed a charge of discrimination against the Company with the EEOC; this complaint was filed after Franchitti had ceased working with the Company. (Id. at ¶ 35). There, Franchitti alleged retaliation and age and national origin discrimination in that he was "discharged due to age, national origin and in retaliation" and that "[d]uring the last several years of [his] employment, hundreds of employees at Cognizant have been fired due to their age and/or non-Indian born national origin." (ECF No. 55 at ¶ 30). His claim before the EEOC similarly alleges his claim of Cognizant's commission of visa fraud. (Id.). The EEOC ultimately issued a Letter of Determination finding Cognizant had violated Title VII and sought to resolve the claims. (ECF No. 55 at 31). A settlement between Franchitti and the Company as to the Title VII claim was discussed in 2020, but it was not finalized because Franchitti refused to waive his right to other pending complaints or charges because Franchitti had already filed suit in 2017 against the Company under the FCA. (ECF No. 55 at ¶ 32).

• On October 14, 2016, Piroumian-before his employment with the Company had ended-filed a charge of discrimination against the Company with the EEOC at which time he was issued a preservation notice. (ECF No. 55 at ¶ 16).

• On August 22, 2017, Franchitti filed a qui tarn lawsuit asserting False Claims Act ("FCA") claims against the Company in the District of New Jersey captioned Franchitti v. Cognizant Tech. Sols. Corp., et al., No. 17-06317 (hereinafter the "Qui Tarn Action"). (Id. at ¶ 36).

• On September 18, 2017-following his separation from the Company-Piroumian and two other named plaintiffs filed an action in the United States District Court for the Central District of California, captioned Palmer, et al. v. Cognizant Technology Solutions Corporation and Cognizant Technology Solutions U.S. Corporation, No. 17-06848 (CD. Cal.) (hereinafter "the California Action"). (ECF No. 55 at ¶ 21).

• On February 16, 2021, Franchitti filed an individual action against the Company in the United States District Court for the Southern District of New York (hereinafter the "New York Action"). (Id. at ¶ 39).

• On February 20, 2021, Franchitti filed a second charge of discrimination against the Company on the basis that the proposed Settlement Agreement was in furtherance of the Company's discriminatory scheme and retaliation for Franchitti's speaking out. (ECF No. 55 at 35). In support of this theory, he pled that former employees Mohan Ramachandran, Vipul Khanna, Nandagiri Narasimha Srinivas, and Venugopal Lambu failed to return their Cognizant laptop(s) upon their departure from the company, but the Company had not sued these individuals. (ECF No. 55 at ¶ 44).

According to Plaintiffs, the claims at the heart of this lawsuit arose when sometime in 2020, Plaintiffs claim they learned that Defendants had breached their NDAs when Defendants each produced a .pst file containing thousands of Plaintiffs documents during discovery in the California Action. (ECF No. 55 at ¶ 40). This .pst file allegedly contained "every email [Plaintiffs] ever sent or received while they were employed by the Company" after they no longer worked for the Company. (T5:6-9). Plaintiffs claim that such retention is in breach of (1) the NDAs; (2) the requirements set forth in the Company's Employee Handbook and Code of Ethics; and (3) the duty of loyalty the Employees owed to the Company. (ECF No. 61-1 at 5).

b. Procedural History

On July 23, 2021, Plaintiffs filed their initial Complaint alleging breach of contract and breach of fiduciary duty. (ECF Nos. 1-2). On September 14, 2021, Defendants moved to remove the matter from New Jersey State Court to the District Court of New Jersey. (ECF No. 1). On March 1, 2023, Defendants filed their Amended Answer to the Complaint containing the Counterclaims presently before the Court. (ECF No. 55).

Defendants plead two counts in their Counterclaim against the Company. First, Defendants allege retaliation in violation of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-3 ("Title VII"). (ECF No. 55 at 19). Second, Defendants allege retaliation in violation of New Jersey Law Against Discrimination, N.J.S.A. 10:5-12(d) ("NJLAD"). (Id.).

The Counterclaims contend the Company retaliated against Defendants for engaging in protected activities. (ECF No. 55 at 19). Specifically, Defendants allege that they engaged in the following protected activities: (7) they filed charges of discrimination against the Company with the EEOC; (2) they commenced the California Action alleging claims of race and national origin discrimination; and (3) Franchitti filed (a) the Qui Tarn Action against the Company under the FCA alleging the Company participated in pervasive and ongoing visa fraud and (b) the New York Action for claims of retaliation based termination. (ECF No. 55 at 19).

As a consequence of these activities, Defendants allege that the Company filed this lawsuit to (1) divest Defendants of "all financial compensation paid to [them] during their employment with Cognizant" (this compensation totals "in the millions of dollars for Counterclaim Plaintiffs' collective fourteen years of employment with [the Company]") and (2) to "intimidate and coerce [the Defendants] to settle or withdraw from participation in the aforementioned lawsuits and charges." (ECF No. 55 at 19-20). Defendants further allege that the Company "has not taken similar action against other former employees who retained their [Company] assets and/or confidential [Company] documents following their departure . . . ." (Id.).

Plaintiffs present two arguments on which they argue that Defendants' Counterclaims should be dismissed for failure to state a claim for retaliation under Title VII and NJLAD: (1) Defendants failed to sufficiently plead they suffered an adverse employment action and (2) the Complaint is protected by the Noerr-Pennington Doctrine.

III.

Under Federal Rule of Civil Procedure 8(a)(2), a complaint "requires only a short and plain statement of the claim showing that the pleader is entitled to relief." To survive a motion to dismiss, the complaint must allege "'enough facts to state a claim to relief that is plausible on its face.'" Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220 (3d Cir. 2011) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The plausibility standard is not akin to a probability requirement; it asks for more than a sheer possibility that the defendant acted unlawfully. Id.

In reviewing a motion to dismiss, the Court “accept[s] as true all allegations in the plaintiffs complaint as well as all reasonable inferences that can be drawn from them, and . . construe[s] them in a light most favorable to the non-movant." Monroe v. Beard, 536 F.3d 198, 205 (3d Cir. 2008). The Court should disregard legal conclusions and "recitals of the elements of a cause of action, supported by mere conclusory statements." Santiago v. Warminster Township, 629 F.3d 121, 128 (3d Cir. 2010) (quoting Iqbal 556 U.S. at 678). The Third...