Copley v. Medpace, Inc.
| Decision Date | 14 February 2013 |
| Docket Number | Case No. 1:12-cv-426 |
| Parties | ASHLEY COPLEY, Plaintiff, v. MEDPACE, INC., Defendant. |
| Court | U.S. District Court — Southern District of Ohio |
Litkovitz, M.J.
Plaintiff, Ashley Copley, brings this action under the Employment Retirement Income Security Act (ERISA), 29 U.S.C. § 1001, et seq., and Ohio state law alleging breach of contract, unjust enrichment, and equitable estoppel against defendant Medpace, Inc. (Medpace) for allegedly terminating her employment in order to deny her certain benefits. (Doc. 1). This matter is before the Court on Medpace's motion to dismiss plaintiff's ERISA claim (Doc. 7), plaintiff's response in opposition (Doc. 13), and Medpace's reply memorandum. (Doc. 14).
Plaintiff was an employee of Medpace from August 28, 2007 through May 31, 2011. (Doc. 1 at ¶¶ 9, 22). During her employment with Medpace, plaintiff was provided stock options on two occasions. Id. at ¶¶ 10-11. Plaintiff was first given the option to purchase 1000 shares of Medpace on May 9, 2008 and on January 1, 2009, was given the option to purchase 2000 shares. Id. at ¶ 10. These stock options vested on January 1, 2011 and May 8, 2011, respectively. Id. at ¶ 11. In order to be able to exercise her right to convert her options, plaintiff had to be a Medpace employee at the time of conversion. Id. at ¶ 12.
In the Spring of 2011, plaintiff requested that she be able to work remotely part time as her husband was being transferred to Tennessee. Id. at ¶ 13. Plaintiff and Medpace entered into an agreement whereby plaintiff would continue her employment with Medpace through June 30,2011. Id. at ¶ 14. After June 30, 2011, plaintiff and Medpace agreed that plaintiff would continue her employment as an independent contractor and/or consultant at least through July 31, 2011. Id. at ¶ 15.
On June 17, 2011, Medpace closed on a private equity investment with another company. Id. at ¶ 18. Pursuant to the terms of the investment, stock options held by Medpace employees had to be terminated and/or surrendered. Id. at ¶ 19. As of June 17, 2011, employees with outstanding stock options were offered consideration for agreeing to surrender their options. Id. at ¶ 20. Plaintiff's stock options could have been converted at the time of the private equity investment or, alternatively, plaintiff would have been offered consideration in excess of $75,000.00 for agreeing to terminate her option rights. Id. at ¶ 21.
Plaintiff was terminated by Medpace on May 31, 2011, before the expiration date of her employment contract. Id. at ¶ 22. Medpace refused to allow plaintiff to execute her stock options and terminated her rights to do so as of May 31, 2012. Id. at ¶ 23.
Plaintiff bears the burden of proving jurisdiction in order to survive a motion to dismiss on grounds of lack of subject matter jurisdiction. Nichols v. Muskingum College, 318 F.3d 674, 677 (6th Cir. 2003); Michigan Southern R.R. Co. v. Branch & St. Joseph Counties Rail Users Ass'n, Inc., 287 F.3d 568, 573 (6th Cir. 2002); Moir v. Greater Cleveland Regional Transit Authority, 895 F.2d 266, 269 (6th Cir. 1990). "In reviewing a 12(b)(1) motion, the court may consider evidence outside the pleadings to resolve factual disputes concerning jurisdiction, and both parties are free to supplement the record by affidavits." Nichols, 318 F.3d at 677 (citing Rogers v. Stratton Industries, 798 F.2d 913, 916 (6th Cir. 1986)). "[W]here a defendant argues that the plaintiff has not alleged sufficient facts in [his] complaint to create subject matterjurisdiction, the trial court takes the allegations in the complaint as true." Nichols, 318 F.3d at 677 (citing Jones v. City of Lakeland, 175 F.3d 410, 413 (6th Cir. 1999)).
Furthermore, to survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), plaintiff's complaint "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 566 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). The Court must accept all well-pleaded factual allegations as true but need not "accept as true a legal conclusion couched as a factual allegation." Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). While a complaint need not contain "detailed factual allegations," it must provide "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 566 U.S. at 678 (citing Twombly, 550 U.S. at 555). A pleading that offers "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Nor does a complaint suffice if it tenders "naked assertion[s]" devoid of "further factual enhancement." Id. at 557.
Additionally, a court may consider exhibits attached to the complaint or motion to dismiss under certain circumstances. Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001) (citing Nieman v. NLO, Inc., 108 F.3d 1546 (6th Cir. 1997)). Though, generally, a court may not consider matters outside of the pleadings when ruling on a Rule 12(b)(6) motion without converting it into a Rule 56 motion for summary judgment, "[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim." Weiner v. Klais & Co., 108 F.3d 86, 89 (6thCir. 1997) (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993)).
With these principles in mind, the Court reviews plaintiff's complaint.
Medpace moves for dismissal of plaintiff's ERISA claim, asserting that the stock option plan upon which the ERISA claim is based is not an "employee welfare benefit plan" or "employee welfare pension plan," but is instead an incentive plan that is not governed by ERISA. In support, Medpace has submitted a copy of the 2008 Non-qualified Stock Option Plan (the Plan). See Doc. 8, Ex. A. Medpace contends that the plain language of the Plan demonstrates that it is not subject to ERISA and, consequently, plaintiff's ERISA claim must be dismissed for lack of subject matter jurisdiction and for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6).
In response, plaintiff asserts that whether or not the Plan is governed by ERISA is a question of fact which should be determined by looking at extrinsic evidence not currently before the Court. Plaintiff accordingly requests that Medpace's motion to dismiss be denied as premature as discovery is necessary to determine whether the Plan is an ERISA plan. For the following reasons, the undersigned recommends that Medpace's motion to dismiss plaintiff's ERISA claim be granted.
ERISA allows civil litigants to recover damages incurred where employers interfere with their protected rights. Specifically, 29 U.S.C. § 1140 makes it "unlawful for any person to discharge . . . a participant or beneficiary for . . . the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan." See 29 U.S.C. § 1140. ERISA applies only where an "employee benefit plan" exists. ERISA defines "employee benefitplan" as "an employee welfare benefit plan or an employee pension benefit plan or a plan which is both an employee benefit plan and an employee pension benefit plan." 29 U.S.C. § 1002(3). An "employee welfare benefit plan" is defined as:
any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 186(c) of this title (other than pensions on retirement or death, and insurance to provide such pensions).
29 U.S.C. § 1002(1). Section 186 of ERISA includes plans that govern employee benefits such as vacation and holiday time and severance pay. See 29 C.F.R. § 2510.3-1(a)(3). An "employee pension benefit plan" is defined as:
any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that by its express terms or as a result of surrounding circumstances such plan, fund, or program— (i) provides retirement income to employees, or (ii) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond, regardless of the method of calculating the contributions made to the plan, the method of calculating the benefits under the plan or the method of distributing benefits from the plan. A distribution from a plan, fund, or program shall not be treated as made in a form other than retirement income or as a distribution prior to termination of covered employment solely because such distribution is made to an employee who has attained age 62 and who is not separated from employment at the time of such distribution.
29 U.S.C. § 1002(2). ERISA specifically excludes "payments made by an employer to some or all of its employees as bonuses for work performed, unless such payments are systematically deferred to the termination of covered employment or beyond, or so as to provide retirement...
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