Freeman v. Metlife Group, Inc.
| Decision Date | 17 October 2008 |
| Docket Number | Civil Action No. 08-10864-NMG. |
| Citation | 583 F.Supp.2d 218 |
| Parties | Edward FREEMAN, Plaintiff, v. METLIFE GROUP, INC., Defendant. |
| Court | U.S. District Court — District of Massachusetts |
Victoria Woodin Chavey, Day, Berry & Howard LLP, Jeffrey A. Fritz, Day Pitney LLP, Hartford, CT, for Defendant.
Louis Movitz, Packer and Movitz, P.C., Wellesley Hills, MA, Alan L. Packer, Packer and Movitz, P.C., Boston, MA, for Plaintiff.
The plaintiff in this case, Edward Freeman ("Freeman"), was a management-level employee of the defendant, MetLife Group, Inc. ("MetLife"). After being discharged, Freeman brought suit to recover the severance compensation to which he believed he was entitled. MetLife now moves to dismiss portions of his complaint.
Freeman became employed by MetLife in 2004. He was repeatedly commended for his performance there and, in 2005, received a "4" out of 5 rating. The following year, however, he received only a "2" from a different supervisor, although no explanation was offered regarding any deficiency in his performance. In March, 2008, one week before Freeman was supposed to receive his performance review and commensurate bonus for 2007, and one month before lucrative stock options were set to vest, he was terminated by MetLife purportedly not for cause but because his position in the company had been eliminated.
MetLife offered Freeman a severance package under the MetLife Plan for Transition Assistance for Officers ("the MPTA"). The package included 38 weeks' salary ($116,924) and an additional $78,000 in connection with MetLife's incentive compensation plans. According to Freeman, that package was far less than what he deserved, particularly in light of the fact that 2007 had been a successful year for MetLife. In conjunction with its severance offer, MetLife required Freeman to sign a comprehensive release and/or waiver of his substantive rights, including any right to sue for wrongful termination or for non-payment of earned wages and/or other compensation. Freeman refused to accept the severance offer or sign the release.
The MPTA sets forth the procedure officers must follow when they believe that they have been denied any rights or benefits: 1) submit a written request for reconsideration to the Officer in Charge of Employee Relations, located at MetLife headquarters in New York, 2) within 90 days receive written notification of the decision on the claim (including the specific reason for any denial of the claim) and 3) within 60 days of the denial of the claim submit a written request for review to the same Officer in Charge of Employee Relations. The MPTA clearly states, "You must exhaust the Plan claim and review process as a condition of bringing legal action".
On March 4, 2008, counsel for Freeman, Louis Movitz ("Atty. Movitz"), sent a letter to a MetLife Human Resources Representative in Florida discussing the inadequacies of the proposed severance package for Freeman and seeking to reach a mutually agreeable resolution. A few days later, MetLife's in-house counsel, Susan Flannery ("Atty. Flannery"), briefly responded to Atty. Movitz's letter, stating that she would be handling the matter. Shortly thereafter, Atty. Movitz emailed Atty. Flannery to ask when he could expect a substantive reply from her and she replied that she would be in touch within a week. After Atty. Movitz failed to hear from her as promised, he called and emailed her.
On March 25, 2008, the attorneys finally held a telephone conference during which Atty. Movitz again raised his concerns over the proposed severance package. At that time, Atty. Flannery responded only that the company would be willing to increase MetLife's offer by $30,000 (to $225,000). After receiving a brief letter to that effect, Atty. Movitz again contacted Atty. Flannery seeking substantive responses to his concerns. On April 3, 2008, Atty. Flannery responded that $225,000 was MetLife's last offer and that it would expire on April 7, 2008.
On April 22, 2008, Freeman filed a complaint in Norfolk Superior Court. He alleged counts of 1) breach of contract, 2) breach of implied contract, 3) wrongful termination, 4) failure to honor obligations concerning incentive compensation, stock options and severance, 5) fraud and deceit, 6) negligent misrepresentation, 7) breach of good faith and fair dealing, 8) promissory estoppel and 9) unjust enrichment. Exactly one month later, MetLife removed the case to this Court on the basis of diversity jurisdiction. After some procedural maneuvering, MetLife filed a motion to dismiss part of the complaint pursuant to Fed.R.Civ.P. 12(b)(6). Freeman's opposition to that motion has been replied to by MetLife after it obtained leave of the Court.
In order to survive a motion to dismiss for failure to state a claim under Fed. R.Civ.P. 12(b)(6), a complaint must contain factual allegations sufficient "to raise a right to relief above the speculative level". Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). In considering the merits of a motion to dismiss, the court may look only to the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the complaint and matters of which judicial notice can be taken. Nollet v. Justices of the Trial Court of Mass., 83 F.Supp.2d 204, 208 (D.Mass.2000) aff'd, 248 F.3d 1127 (1st Cir.2000). Furthermore, the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Langadinos v. American Airlines, Inc., 199 F.3d 68, 69 (1st Cir.2000). If the facts in the complaint are sufficient to state a cause of action, a motion to dismiss the complaint must be denied. See Nollet, 83 F.Supp.2d at 208.
In general, an employer in Massachusetts can terminate an at-will employee at any time without cause. St. Arnaud v. Chapdelaine Truck Center, Inc., 836 F.Supp. 41, 43 (D.Mass.1993). Two exceptions to this general rule have been recognized: 1) where there is a violation of public policy and 2) where there is a breach of the implied covenant of good faith and fair dealing. Id.
In his complaint, Freeman alleges that MetLife terminated his employment in violation of a) public policy by trying to avoid having to pay incentive compensation and the vesting of Freeman's stock options, b) the "employment contract" arising out of the parties' conduct and/or employee handbooks, the SDP, and MetLife's compensation plans, c) an implied employment contract and d) the implied covenant of good faith and fair dealing. MetLife moves to dismiss the complaint as to the first three alleged violations.
MetLife first argues that its actions did not constitute a violation of public policy. Under Massachusetts law, public policy violations are recognized where an at-will employee is terminated
for asserting a legally guaranteed right ..., for doing what the law requires ..., or for refusing to do that which the law forbids....
Smith-Pfeffer v. Superintendent of the Walter E. Fernald State Sch., 404 Mass. 145, 533 N.E.2d 1368, 1371 (1989). Courts interpret the public policy exception narrowly so as not to "convert the general rule that `an employment-at-will contract [can] be terminated at any time for any reason or for no reason at all'". Id., citing Gram v. Liberty Mut. Ins. Co., 384 Mass. 659, 429 N.E.2d 21, 27 n. 6 (1981). Freeman cites no case supporting his allegation that a public policy violation has occurred in this case. Moreover, courts recognize attempts to avoid paying earned compensation as being violations of the implied covenant of good faith and fair dealing, not violations of public policy. See Cochran v. Quest Software, Inc., 328 F.3d 1, 8 (1st Cir.2003); Campbell v. BankBoston, 206 F.Supp.2d 70, 81 (D.Mass.2002) (citing cases).
Because Freeman has pled a breach of that implied covenant, he does not also need to proceed on public policy grounds. See Petricca v. City of Gardner, 194 F.Supp.2d 1, 5 (D.Mass.2002) ( duplicative claims); Roche v. Donahue, 985 F.Supp. 14, 17 (D.Mass.1997) (same). Therefore, this Court will dismiss part a) of Count 3 as duplicative of part d) of the same count.
MetLife further, persuasively, contends that Massachusetts does not recognize a cause of action for wrongful termination based on a breach of an express or implied contract. In Presto v. Sequoia Sys., Inc., this Court rejected the idea that, where the plaintiff has claimed contract liability as has Freeman in Counts 1 and 2, the same underlying conduct can be labeled as tortious (under the guise of "wrongful termination") and thus allow for additional recovery under tort liability. 633 F.Supp. 1117, 1121-22 (D.Mass.1986). Therefore, this Court will dismiss parts b) and c) of Count 3 for failure to state a claim upon which relief can be granted.
In Count 1 of his complaint, Freeman alleges a breach of contract arising from MetLife's "failure to properly compensate" him as he should have been compensated under the
contractual terms arising from the parties' conduct, ... employee handbook(s) manual(s), Summary Plan Description(s), Stock and Incentive Plan(s), Long Term Performance Compensation Plan(s), and other employment documents including but not limited to executive compensation, performance shares, stock options and ownership.
Similarly, in Count 4, he alleges that Met-Life failed to honor its obligations in that it
failed to properly compensate [him] or provide a severance package that comports with [his] services and performance, as well as [MetLife's] own internal guidelines [such as employee handbooks and manuals].... By way of example, [MetLife] has failed to provide earned amounts relating to...
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