Tolle v. PocketSonics, Inc.

• Decision Date: 30 October 2018
• Docket Number: Civil Action No. 3:17CV00074
• Citation: 342 F.Supp.3d 695
• Parties: James TOLLE, Plaintiff, v. POCKETSONICS, INC., et al., Defendants.
• Court: U.S. District Court — Western District of Virginia

342 F.Supp.3d 695

James TOLLE, Plaintiff,
v.
POCKETSONICS, INC., et al., Defendants.

Civil Action No. 3:17CV00074

United States District Court, W.D. Virginia, Charlottesville Division.

Signed October 30, 2018

342 F.Supp.3d 696

Kevin James Shehan, Tully Rinckey PLLC, New York, NY, for Plaintiff.

Hayley M. Cotter, Justin Engel, Kenneth M. Bello, Bello Welsh LLP, Boston, MA, Michael Curtis Gartner, Whiteford, Taylor & Preston, LLP, Falls Church, VA, for Defendants.

MEMORANDUM OPINION

Glen E. Conrad, Senior United States District Judge

Plaintiff James Tolle filed this employment discrimination action under the Uniform Services Employment and Reemployment Rights Act of 1994 ("USERRA"), 38 U.S.C. §§ 4301 – 4335, against PocketSonics, Inc. ("PocketSonics"), Analogic Corporation, Analogic Limited (collectively, "Analogic"), Jeff Pompeo, Travis Blalock, Farley Peechatka, and Ronald Rios. The defendants previously moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), arguing that Tolle's claims are barred by a Bonus & General Release Agreement ("Release Agreement") that Tolle signed in consideration for certain bonus and severance payments, and that Tolle had not sufficiently stated a claim against Blalock, Peechatka, or Rios. In response, Tolle conceded that Blalock and Peechatka are not subject to individual liability under USERRA. However, he opposed the defendants' motion in all other respects.

On March 5, 2018, the court issued a memorandum opinion and order granting in part and denying in part the defendants' motion to dismiss. Although the court found the Release Agreement to be clear and unambiguous, the court did not believe that the record had been sufficiently developed to determine whether the Release Agreement provided benefits that were greater than those that Tolle gave up in signing the agreement, rendering it enforceable under § 4302 of USERRA. In particular, the court found that "limited discovery into a comparison of benefits, including whether the other employees received severance agreements, [was] necessary." Mar. 5, 2018 Mem. Op. 6, Dkt. No. 24. Because a ruling on the enforceability of the Release Agreement could be dispositive of Tolle's claims, the court declined to decide whether Tolle stated a plausible claim against Rios.

The parties have completed the limited discovery permitted by the court. The defendants have since filed a renewed motion to dismiss the complaint or, in the alternative,

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for summary judgment. The court held a hearing on the motion via teleconference on August 28, 2018. The motion has been fully briefed and is now ripe for review.

Background

Tolle is a veteran of the United States Navy Reserve. Compl. ¶ 15, Dkt. No. 1. He completed his last active duty assignment in July of 2009. Id. ¶ 17. Tolle was honorably discharged from the Navy Reserve in September of 2011. Id. ¶ 19.

In February of 2011, Tolle began working as a senior engineer for PocketSonics, a technology company that developed a handheld ultrasound device known as the "Sonic Window." Id. ¶ 18; see also Decl. of Jeffrey Pompeo ("Pompeo Decl.") ¶ 10, Dkt. No. 47. Tolle remained with PocketSonics until September 19, 2013, the day before the company merged with Analogic, another technology company. Compl. ¶¶ 77–78. Prior to the merger, PocketSonics employed eight individuals, including Tolle. Defs.' Resp. to Pl.'s 1st Set of Interrogs. 2, Dkt. No. 46-1. The other employees were Chief Executive Officer Jeff Pompeo, Travis Blalock, Drake Guenther, Michael Fuller, Jermaine Headley, Karen Morgan, and Jacob Wegman. Id. Tolle alleges that Pompeo failed to appreciate Tolle's military experience, exhibited bias toward Tolle for that service, and gave preferential treatment to the other employees of PocketSonics, all of whom were non-veterans. Compl. ¶¶ 21–41.

In August of 2013, two of Analogic's executive officers, Ronald Rios and Farley Peechatka, met with all of the PocketSonics employees to discuss Analogic's pending acquisition of PocketSonics. Id. ¶ 51. Tolle alleges that "Rios and Peechatka promised that all PocketSonics employees, including Tolle, would retain their positions and receive permanent positions with Analogic after the merger with PocketSonics." Id. ¶ 52. During the meetings, Tolle advised Rios and Peechatka of his military background and requested that they "consider giving him opportunities to use his extensive leadership and management skills from being a senior Navy Officer." Id. ¶ 53.

On September 4, 2013, PocketSonics' Board of Directors ("Board") held a meeting to discuss matters related to the pending merger with Analogic. Board Meeting Minutes 1, Dkt. No. 51-1. The Board also discussed the proposed payment of bonuses to certain employees. The minutes from the meeting indicate that the Board approved the payment of "Transaction Bonuses" to four employees, including Tolle, which would be contingent upon the successful completion of the merger with Analogic and the execution of a release agreement by the recipient. Id. 7. The Board also approved the payment of "FDA Bonuses" to the same four employees, which would be contingent upon the submission of the Sonic Window to the Food and Drug Administration ("FDA"). Id. The Board proposed to pay Tolle a Transaction Bonus in the amount of $13,500 and an FDA Bonus in the same amount. Id. The bonuses proposed for the other three employees ranged from $19,125 to $54,000 each. Id.

The Board also approved the payment of "Special Pre-Closing Bonuses" to all eight PocketSonics employees. Id. 8. The Board proposed to pay Tolle and four other employees a Special Pre-Closing Bonus of $2,000. The remaining bonuses ranged from $15,000 to $30,000. Id. The Board agreed that the Special Pre-Closing Bonuses would be paid immediately prior to the effectiveness of the proposed merger. Id.

Analogic ultimately declined to offer Tolle a permanent position with the company following the merger. According to the complaint, this decision was made by Rios, upon the recommendation of Pompeo

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and Blalock. See, e.g., Comp. ¶ 87 (describing a written statement from Rios in which he noted that "both Pompeo and Blalock affected his decision not to hire or retain Tolle as a regular employee after Analogic's acquisition of PocketSonics was final"). Instead, Analogic offered Tolle a three-month consulting arrangement, which Tolle rejected. Decl. of Patricia Dumas ("Dumas Decl.") ¶ 3, Dkt. No. 46. The proposed consulting agreement was contingent upon the company's acquisition of PocketSonics by September 13, 2013. Consulting Agreement ¶ 1, Dkt. No. 46-2. Under the terms of the proposed consulting agreement, Tolle would have been paid a maximum amount of $6,000 per week during the three-month period specified in the agreement. Id. ¶ 6.

All of the other PocketSonics employees were offered and accepted regular employment with Analogic, either before or immediately after the merger was finalized on September 20, 2013. Dumas Decl. ¶¶ 4–10. The documents delineating the terms and conditions of their employment with Analogic, including their respective compensation packages, have been filed under seal with the court. See Sealed Exs. to Dumas Decl., Dkt. No. 50. Four of the individuals who accepted full-time engineering positions with Analogic were offered annual base salaries that exceeded $100,000. Id. They were also given the opportunity to participate in Analogic's annual bonus program and its standard benefit program that included medical, dental, and life insurance, disability protection, and the company's 401(k) plan. Id. Two of the individuals who accepted full-time engineering positions also received Analogic stock units as a sign-on equity award, as well as the opportunity to receive an additional equity award as part of Analogic's long-term incentive program. Id.

On September 13, 2013, Tolle executed a Bonus & General Release Agreement ("Release Agreement"), under which Tolle agreed that his employment would terminate on the business day prior to the closing of PocketSonics' merger with Analogic, and that he desired to "resolve certain matters including those related to the provision of certain bonus opportunities to [Tolle] from PocketSonics, the release of claims by [Tolle] against PocketSonics, and the termination of [his] employment." Release Agreement 1, Dkt. No. 47-3. By signing the Release Agreement, Tolle acknowledged that he had been given at least 21 days to consider the agreement, and that he had been advised to consult with an attorney about the agreement's terms. Id. ¶ 8. Under the terms of the Release Agreement, Tolle received a "Transaction Bonus Payment" of $13,500, a "Severance Payment" of $13,500, and a "Special Bonus Payment" of $2,000, all in "valuable consideration" for his general release of claims against PocketSonics. Id. ¶¶ 1, 3. The release provision of the agreement states as follows:

I hereby fully and forever generally release and discharge PocketSonics, its current, former and future parents, subsidiaries, affiliated companies, related entities, employee benefit plans, and their fiduciaries, predecessors, successors, officers, directors, stockholders, agents, employees and assigns (collectively, the "Company") from any and all claims,

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