Hobbs v. Ketera Techs., Inc., Civil Action No. 3:10–CV–169–L.

• Decision Date: 30 March 2012
• Docket Number: Civil Action No. 3:10–CV–169–L.
• Parties: Rachel B. HOBBS, Plaintiff, v. KETERA TECHNOLOGIES, INC., Defendant.
• Court: U.S. District Court — Northern District of Texas

865 F.Supp.2d 719

Rachel B. HOBBS, Plaintiff,

v.KETERA TECHNOLOGIES, INC., Defendant.

Civil Action No. 3:10–CV–169–L.

United States District Court,

N.D. Texas,

Dallas Division.

March 30, 2012.

Yona Rozen, Edith Koke Thomas, Gillespie Rozen & Watsky PC, Dallas, TX, for Plaintiff.

Alicia Sienne Voltmer, Eva W. Turner, Ogletree Deakins Nash Smoak & Stewart, Dallas, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

SAM A. LINDSAY, District Judge.

Before the court is Defendant's Motion for Summary Judgment (Doc. 26), filed March 18, 2011; and Defendant's Objections and Motion to Strike Portions of Declaration of Rachel B. Hobbs (Doc. 40), filed May 26, 2011. After carefully reviewing the motions, briefing, appendices, evidence, record, and applicable law, the court grants Defendant's Motion for Summary Judgment and dismisses with prejudice Plaintiff's claims for breach of contract, quantum meruit, promissory estoppel, and violations of Title VII, the Texas Commission on Human Rights Act (“TCHRA”), and the Family Medical Leave Act (“FMLA”). Defendant's Objections and Motion to Strike Portions of Declaration of Rachel B. Hobbs are overruled and denied as moot.

I. Factual and Procedural Background

Plaintiff Rachel B. Hobbs (“Hobbs” or “Plaintiff”) filed this action on January 28, 2010, against her former employer Ketera Technologies, Inc. (“Ketera” or “Defendant”) for sex and pregnancy discrimination under Title VII, 42 U.S.C. § 2000e et seq. and the TCHRA; interference and retaliation under the FMLA; breach of contract; quantum meruit; and promissory estoppel. ¹ Hobbs seeks damages for lost wages, unpaid commissions, punitive damages, attorney's fees, and other costs.

Ketera is a small software company located in Silicon Valley, California. According to Hobbs's First Amended Complaint (the “Complaint”), she was employed by Ketera or its predecessor from approximately April 2, 2007, to March 3, 2009, and worked remotely from her home in Texas. Hobbs started in an “enterprise” or “direct sales” position as a director of enterprise sales at a base salary of $120,000 annually. Compl. 2, ¶ 9. In addition to a base salary, Hobbs was eligible for commissions and incentive compensation, otherwise referred to as quota achievement bonuses for each quarter in which quotas were met. Payment of commissions and incentive compensation was contingent on Ketera being able to collect from its customers for sales made. To be eligible for commissions, Hobbs also had to be employed by Ketera when payments were received from customers. These and other terms, including Ketera's reservation of the right to adjust or withhold compensation if circumstances in Hobbs's conduct or territory warranted it, were included in a 2007 compensation plan signed by Hobbs.

Hobbs's 2007 compensation plan set her quarterly sales quotas in 2007 for the second, third, and fourth quarters at $300,000, $540,000, and $610,000, respectively, making Hobbs's total 2007 annual quota $1,450,000. Hobbs's quotas for 2007 were prorated to account for her March 2007, start date with Ketera.

Hobbs's direct sales compensation plan for 2008 was substantially the same as that for 2007 except that Hobbs was required to meet a quarterly quota of $450,000 in sales. It is undisputed that Hobbs did not meet any of her quotas from April 2007 to the second quarter of 2008 while working as an enterprise or direct salesperson. According to a record produced by Ketera and relied on by Hobbs, the following percentages of sales quotas were achieved by Hobbs from 2007 to 2008 while she was employed as an enterprise or direct salesperson:

+---------------------------------+
                ¦Quarter¦% Quota Achieved         ¦
                +-------+-------------------------¦
                ¦Q2 2007¦39%                      ¦
                +-------+-------------------------¦
                ¦Q3 2007¦21%                      ¦
                +-------+-------------------------¦
                ¦Q4 2007¦16%                      ¦
                +-------+-------------------------¦
                ¦Q1 2008¦27%                      ¦
                +-------+-------------------------¦
                ¦Q2 2008¦0%                       ¦
                +---------------------------------+
                

Pl.'s Resp.App. 15. This and another record reflect that only sales for new accounts were considered in calculating quarterly percentages of quotas achieved by Hobbs while she was in direct sales. See id.; Pl.'s Resp.App. 12. Credit was not given for “renewal” or “up sell” sales. Id.

In April 2008, Hobbs informed her then-supervisor Tom Webb (“Webb”) that she was pregnant. During this conversation, Webb indicated that he was going to wait to tell the other executive staff team members about Hobbs's pregnancy. In the summer of 2008, Hobbs met with Webb and Leslie Cedar (“Cedar”), Hobbs's former supervisor. Hobbs acknowledges that no one at Ketera made negative comments to her about being pregnant but contends that during this meeting she was advised by Webb and Cedar for the first time that her attitude had changed for the worse.

It was during this meeting that Webb and Cedar also first talked to Hobbs about moving her from direct sales to channel sales. Hobbs does not recall whether Webb and Cedar explained to her at that time their reasons for wanting to move her into the channel sales department. Hobbs did not state at the time whether she would be open to considering a move to channel sales.

Sometime later that summer but before the third quarter of 2008, Hobbs had another conversation with Webb that she secretly recorded. In that telephone conversation, Webb again raised the issue of moving Hobbs to channel sales. Hobbs asked how the decision was being made as to whom at Ketera would be moved and how pay cuts were being determined. Hobbs was particularly interested and pressed Webb to explain why Ketera had decided to move Hobbs to a channel sales position, which paid a lower base salary, while permitting her male counterpart, Eric Blando (“Blando”), to continue working in direct sales.

Blando joined Ketera on December 17, 2007, several months after Hobbs. Four other male enterprise salespersons were hired by Ketera around the same time Hobbs was hired. At the time of the recorded conversation, however, Blando was the only male enterprise salesperson still employed by Ketera. One of the other four male enterprise salespersons, Charlie Coltman was fired on July 9, 2007, for “performance” reasons. Pl.'s Resp.App. 14. It is unclear why the other two male enterprise salespersons left the company, but it appears that they left of their own accord.

Ketera's records reflect that Coltman only had sales of $12,672 and met 0% percent of his sales quotas in 2007, but there is no evidence in the record regardinghis required quotas for the first three quarters of 2007. Blando's sales record at this time were similarly low. Blando's quota for 2008 was $1.6 million, but he only achieved 6% percent of his quota in the first quarter of 2008, and 0% the second quarter.

Webb avoided Hobbs's question about Blando during the recorded conversation and instead focused on the company's need to reduce costs in the form of salaries because the company's overall performance, including Hobbs's performance, with regard to new account sales was dismal, and as a result, the company was “upside down” financially. According to Webb, Ketera sales were not keeping pace with the salaries paid to the company's sales employees. Webb also told Hobbs that over the past twelve months, management at Ketera had become increasingly frustrated with Hobbs's attitude. Webb stated that Ketera chief executive officer Steven Savignano (“Savignano”) was particularly unhappy with Hobbs as a result of what Webb referred to as miscommunications between Savignano and Hobbs. Hobbs acknowledged this fact.

Savignano was opposed to the idea of transferring Hobbs to another position and instead preferred to fire her but ultimately left the decision to Webb. In response to Hobbs's question “So why haven't I been let go”?, Webb explained that although “performance is not great pretty much across the board,” he and some others believed Hobbs had skills and value to contribute to the company in some fashion. Webb acknowledged that there had only been a couple of people in the history of the small company who had been successful in sales. One of those persons was Cedar and, like it or not, the bar was set fairly high for other sales employees based on Cedar's performance.

Hobbs ultimately agreed to move to channel sales but did not believe that she had any real choice in the matter. She was allowed to grandfather some of her accounts, including an account with Service Master, and she continued to receive commissions. Her annual salary, however, was reduced from $120,000 to $75,000. Hobbs started her new position in channel sales in the third quarter of 2008, during which her quarterly quota was reduced to $400,000. Hobbs achieved 7% of her sales quota the third quarter of 2008. In the fourth quarter, however, she achieved 101% of her quota due in large part to a sale made in conjunction with the Service Master account. Ketera's records reflect that this sale was a renewal. In her prior enterprise sales position, Hobbs was not credited for renewal sales for purposes of determining whether she met her sales quotas. As a channel salesperson, she was given credit for renewals that accounted for her achieving 101% of her quota in the fourth quarter of 2008 before taking maternity leave. See Pl.'s App. 12.

Hobbs went on maternity leave in mid December 2008. Before taking leave, Hobbs contends that she “conferred with and submitted information requested by Ketera Human Resources related to [her] request for FMLA protected leave.” Compl. 4, ¶ 22. While Hobbs was out on maternity leave, Ketera fired Blando who had only met 5% of his sales quota in the third quarter of 2008 and 0% the final quarter. Around the same time Blando was let go in January 2009, Ketera rehired Coltman and another male employee, Mike Schwabrow, to work in the direct sales...