Croteau v. MiTek Inc.
| Decision Date | 12 August 2020 |
| Docket Number | Civil Action No. 19-cv-12171-ADB |
| Parties | ETHAN CROTEAU, Plaintiff, v. MITEK INC., Defendant. |
| Court | U.S. District Court — District of Massachusetts |
BURROUGHS, D.J.
Plaintiff Ethan Croteau ("Plaintiff") filed this action against Defendant MiTek Inc. ("Defendant") alleging five causes of action relating to Defendant's termination of Plaintiff's employment, including breach of contract, breach of the covenant of good faith and fair dealing, intentional inference with a contract, unreasonable restraint of trade, and retaliation in violation of the Massachusetts Civil Rights Act ("MCRA"), Mass. Gen. Laws ch. 12, §§ 11H, 11I. [ECF No. 1-1 ¶¶ 111-42]. Presently before the Court is Plaintiff's combined motion to amend and remand, [ECF No. 14], which seeks to add claims, join parties, and amend existing claims, see [id.]. For the reasons set forth below, Plaintiff's motion, [ECF No. 14], is GRANTED in part and DENIED in part.
A brief overview of Plaintiff's allegations is drawn from Plaintiff's proposed amended complaint ("PAC"). See [ECF No. 14 at 5 ("PAC")]. "For the purposes of [this] motion[], the Court assumes the facts in the proposed amended complaint are true." Brooks v. Citizens Bank of Mass., No. 19-cv-12231, 2020 U.S. Dist. LEXIS 28988, at *1 (D. Mass. Feb. 20, 2020) (citing A.G. ex rel. Maddox v. Elsevier, Inc., 732 F.3d 77, 79 (1st Cir. 2013)).
From September 2006 to January 2017, Plaintiff was employed as a software developer and engineer by Wrightsoft, Inc., a company founded and run by William Wright ("Wright"). [PAC ¶¶ 12-14, 28]. In January 2017, Defendant, through its holding company, MiTek Holdings, Inc., acquired all of Wrightsoft's stock, but continued to run the company under the name Wrightsoft. [Id. ¶¶ 28, 34]. In addition, Plaintiff continued to report to Wright. [Id. ¶ 43]. When Wrightsoft was acquired, Defendant asked Plaintiff to sign a non-compete agreement, which restricted Plaintiff from working for a competitor in any country in which Defendant conducted business for two years after a potential separation from the company. [Id. ¶¶ 31, 36]. Plaintiff was not offered anything in return for entering into the agreement. [Id. ¶ 45]. During his tenure with the company, Plaintiff was promoted and given salary increases, and, though he was not given regular performance reviews, Wright praised Plaintiff's "hard work, dedication, and attention to customer's . . . needs." [Id. ¶¶ 17-19].
In November 2016, Plaintiff was diagnosed with Asperger Syndrome. [PAC ¶ 21]. He informed Wright that same month, [id. ¶ 24], and in September 2017 informed Defendant's human resources ("HR") department that he had Asperger's both by telling an HR contact in person and by entering it into the company's online HR system. [Id. ¶¶ 101-02]. Plaintiff manifests some typical Asperger's symptoms, including "interpreting instructions, suggestions, and commands in literal or hyper-literal ways." [Id. ¶ 26].
In August 2018, Wright asked Plaintiff to begin working on an integration project that would enable Defendant's software tool to function with a third-party registry, RESNET. [PAC¶ 53]. Wright gave Plaintiff the login credentials for someone that Wright said had agreed to help Defendant with the project and told Plaintiff to access RESNET to learn its architecture. [Id. ¶¶ 54-55]. Plaintiff followed these instructions and also wrote a software program to allow him to download information from RESNET to study. [Id. ¶¶ 57-58]. Plaintiff kept Wright apprised of his progress on the integration project. [Id. ¶ 59]. In September 2018, Wright told Plaintiff to delete everything he had downloaded from RESNET. [Id. ¶ 66]. Plaintiff did so, deleting files from desktop and laptop computers that Defendant had issued him, and telling Wright when he was done. [Id. ¶¶ 68, 71-73]. Later, Plaintiff learned that Wright had not simply wanted to integrate Defendant's software with RESNET, but had wanted to design a competing product. [Id. ¶ 69]. When RESNET discovered this, it began investigating Defendant and revoked its software accreditation. [Id. ¶¶ 76-77].
Defendant then initiated its own investigation, asking Plaintiff to turn over his work and personal devices for forensic analysis and to participate in several teleconferences with Wright and others. [PAC ¶¶ 78-79]. Plaintiff complied with these requests and cooperated fully in the investigation. [Id. ¶¶ 80-82, 84]. Throughout the investigation, Wright and Defendant reassigned Plaintiff to other projects and did not allow him to work on a new project that he had been pitched to support as a project manager. [Id. ¶¶ 87-89, 96]. As the investigation progressed, Plaintiff realized that Defendant suspected that he had gained access to RESNET for an improper purpose. [Id. ¶ 83]. Defendant showed Plaintiff an affidavit representing that Plaintiff, not Wright, had initiated the plan to gain access to RESNET's data, which Plaintiff refused to sign. [Id. ¶¶ 85-86].
On August 15, 2019, Plaintiff told HR personnel that he and his wife were close to closing on a real estate purchase. [PAC ¶ 105]. Four days later, on August 19, 2019, BonnieDaniels ("Daniels"), MiTek Industries Inc.'s Senior Vice President of Culture and People Services, called Plaintiff into a meeting where she informed him that he was being terminated for violating company policy and exposing the company to potential criminal liability. [Id. ¶¶ 4, 106-09]. Plaintiff asked Daniels to delay the effective date of his termination, given his pending real estate closing, but Daniels and/or Defendant refused his request. [Id. ¶¶ 111-13]. As a result of his unemployment, Plaintiff's real estate purchase fell through. [Id. ¶ 114].
On September 19, 2019, Plaintiff initiated this action in Middlesex Superior Court, [ECF No. 1-1 at 5], and on October 21, 2019, Defendant removed the action to this Court, [ECF No. 1]. Thereafter, Defendant asked for and obtained extensions of time within which to respond to the complaint, [ECF No. 8, 13]. Before Defendant's response was due, Plaintiff filed his combined motion to amend and remand on November 22, 2019. [ECF No. 14]. Defendant opposed, [ECF No. 18], and Plaintiff replied, [ECF No. 21].
Federal Rule of Civil Procedure 15(a)(2) provides that leave to amend generally should be "freely give[n] . . . when justice so requires." See Fed. R. Civ. P. 15(a)(2); see also Foman v. Davis, 371 U.S. 178, 182 (1962) (). "[E]ven so, [a] district court enjoys significant latitude in deciding whether to grant leave to amend." ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46, 55 (1st Cir. 2008). "Reasons for denying leave include undue delay in filing the motion, bad faith or dilatory motive, repeated failure to cure deficiencies, undue prejudice to the opposing party, and futility of amendment." United States ex rel. Gagne v. City of Worcester, 565 F.3d 40, 48 (1st Cir. 2009) (citing Foman, 371 U.S. at 182); see also UnitedStates ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 734-35 (1st Cir. 2007)). "In determining whether to grant a motion to amend, the Court must examine the totality of the circumstances and 'exercise its informed discretion in constructing a balance of pertinent considerations.'" United States ex rel. Hagerty v. Cyberonics, Inc., 146 F. Supp. 3d 337, 342 (D. Mass. 2015) (quoting Palmer v. Champion Mortg., 465 F.3d 24, 30-31 (1st Cir. 2006)).
Plaintiff asserts that amending his complaint to add new claims and to join additional defendants is appropriate as the added claims are sufficiently pled and joinder is proper. [ECF No. 21 at 1]. Defendant argues that joinder is improper and that the proposed new claims are futile. [ECF No. 18 at 8].
Plaintiff's PAC would add four new defendants: MiTek Holdings Inc. ("MiTek Holdings," parent company of existing Defendant); MiTek Industries, Inc. ("MiTek Industries," parent company of MiTek Holdings); Daniels; and Wright. [ECF No. 15 at 2]. Because Wright is a Massachusetts resident, his addition as a defendant in this matter would defeat diversity and the case would need to be remanded to state court. See [id.; id. at 25]; see also 28 U.S.C. § 1332.
Plaintiff also seeks leave to add four new claims: Count IV, international interference with a contract (employment), against Wright; Count V, wrongful termination, against Defendant; Count VIII, negligent infliction of emotional distress, against Wright and Daniels; and Count IX, negligent supervision and retention, against Defendant and MiTek Industries. [ECF No. 15 at 7]. In addition to adding these new claims, Plaintiff also seeks to amend existing claims to add other parties: Count III, intentional interference with a contract (residential purchase), adding Daniels; Count VI, unreasonable restraint of trade, adding MiTek Holdings;and Count VII, retaliation in violation of the MCRA, adding MiTek Holdings, MiTek Industries, Wright, and Daniels. [Id.].1
Defendant's primary challenge to the motion to amend is that Plaintiff's proposed amendments are futile because they fail to state a claim for relief. [ECF No. 18 at 10]. "[W]hile motions to amend are liberally granted, a court has the discretion to deny them if it believes that, as a matter of law, amendment would be futile." Carlo v. Reed Rolled Thread Die Co., 49 F.3d 790, 792 (1st Cir. 1995) (internal citation omitted). "The standard for assessing the futility of the amendment is the motion to dismiss standard." Turnley v. Banc of Am. Inv. Servs., 576 F. Supp. 2d 204, 211 (D. Mass. 2008).
In reviewing a motion to dismiss under Rule 12(b)(6), the Court must accept as true all well-pleaded facts, analyze those facts in the light most favorable to the plaintiff,...
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