TEPPER v. TALENT PLUS INC (2021)

MEMORANDUM AND ORDER

The plaintiff, Samuel Tepper, alleged in his complaint, claims concerning breach of contract, promissory estoppel, public policy wrongful discharge, and retaliation pursuant to the Nebraska Fair Employment Practices Act (NFEPA), Neb. Rev. Stat. § 48-1114. Filing 1-1. The defendant, Talent Plus, Inc., moves to dismiss the plaintiff's complaint for the failure to state a claim upon which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons that follow, the Court will grant, in part, and deny, in part, the defendant's motion at this early stage of the proceedings.

I. STANDARD OF REVIEW

To survive a Rule 12(b)(6) motion to dismiss, a complaint must set forth a short and plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2). This standard does not require detailed factual allegations, but it demands more than an unadorned accusation. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). For the purposes of a motion to dismiss a court must take all the factual allegations in the complaint as true, but is not bound to accept as true a legal conclusion couched as a factual allegation. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The facts alleged must raise a reasonable expectation that discovery will reveal evidence to substantiate the necessary elements of the plaintiff's claim. See id. at 545, 127 S.Ct. 1955. The Court must assume the truth of the plaintiff's factual allegations, and a well-pleaded complaint may proceed, even if it strikes a savvy judge that actual proof of those facts is improbable, and that recovery is very remote and unlikely. Id. at 556, 127 S.Ct. 1955.

II. BACKGROUND

According to the allegations in the plaintiff's complaint, in June or July 2019, the defendant's representative contacted the plaintiff concerning an open executive position with the defendant. Filing 1-1 at 2. The plaintiff was living in Chicago, and employed as the Sales Strategy, Growth, and Enablement Leader at Salesforce, Inc. In the discussions that ensued, the plaintiff told the defendant's representative that he would only be interested in a position with the defendant that would allow him the freedom to perform executive functions. According to the plaintiff, he told the defendant's representative that the only way to change and grow is to be uncomfortable, and for him to come to Lincoln, the defendant would have to agree to do what he says as an organization. Id.

In letter dated November 22, 2019, the defendant's Chairman, Doug Rath, wrote, “We have carefully studied your counteroffer and have included your points in what we now know is our final offer. We want you at Talent Plus helping us grow internally and externally impacting the 100 million individuals.” Filing 1-4 at 2.¹ The position that the plaintiff was being offered was Executive Vice President of Growth. He would report directly to the defendant's President, lead the Business Development, Client Engagement, Client Relationship Management, and Global Business Development teams, and would be included in the defendant's Executive Leadership Team. Filing 1-4 at 4. Doug Rath's letter provided detailed information regarding the plaintiff's salary, various bonus and incentive structures, a premium employee benefits package, and profit sharing, as well as stock options and stock purchase opportunities.

The letter advised the plaintiff that his performance would be measured primarily on the outcomes of eight benchmarks, all of which concerned growth and business development. Filing 1-4 at 4-5. Doug Rath closed his letter by telling the plaintiff, “We want you on our team! If you share our enthusiasm, please respond by signing the ‘Acceptance of Offer’ below and returning a copy to my attention at Talent Plus, Inc.” The plaintiff signed Rath's offer letter that same day, November 22. Filing 1-4 at 7.

The plaintiff relocated to Lincoln, and his employment with the defendant began around December 30, 2019. On January 30, 2020, he received a handwritten note from the defendant's President, Makenzie Rath, congratulating him on his one-month anniversary. She wrote that she was excited to have the plaintiff on the team, and looking forward to a great 2020 with him. Filing 1-1 at 4-5. On January 31, the plaintiff met with Doug Rath, who told him that he should continue the work he was doing and “be disruptive.” Filing 1-1 at 5.

In late January, the plaintiff learned that one of the defendant's clients had expressed concerns about the science supporting one of the defendant's instruments. The client reported that the science which supported the use of various metrics was outdated, and the client had been accused of racial discrimination by a minority applicant due to the discriminatory impact of the screening assessment tool. On February 3, the plaintiff met with staff regarding the client's complaint and the discriminatory impact of the screening tool. In the meeting, the defendant's Head of Research, Karl Giuseffi, was asked what was being done to ensure that the science supporting the metrics was up to date. According to the plaintiff, Giuseffi became defensive, tried to avoid the issue, and shifted blame to others. Filing 1-1 at 6. The plaintiff told the team that the client's concerns needed to be addressed, and suggested several ways to go forward. After the meeting, Giuseffi sent an email to the plaintiff, in which he let the plaintiff know that he was not to tell Giuseffi how to run his team.

Around February 5, the plaintiff spoke with Makenzie Rath about Giuseffi. He told Rath that he had caught Giuseffi lying about issues with staff on several occasions. In particular, the plaintiff was concerned that Giuseffi was representing himself to clients and other employees as having a Ph.D., but his online profile reported that he was a Ph.D. candidate rather than a Ph.D. recipient. Filing 1-1 at 7. In fact, Giuseffi had not yet finished his degree. According to the plaintiff, Rath told him Giuseffi's representation of himself as a Ph.D. was a company business decision. The plaintiff responded that Giuseffi's representation was not a good risk for the Company since the staff knew it was untrue, and it could cause confusion or misunderstanding about Giuseffi. The plaintiff also indicated that he was uncomfortable forwarding emails with the misrepresentation about Giuseffi's credentials, believing it to be an unlawful or deceptive act or practice. Filing 1-1 at 8.

Over the next few days, the plaintiff continued to speak to others in the company regarding Giuseffi. On February 8, he spoke with a Board member about his concerns regarding Giuseffi's honesty and integrity. The plaintiff was told that his concerns about Giuseffi were complex issues within a family business, and that he should attempt to manage around them because he would never be able to neutralize family. Filing 1-1 at 8.

Prior to a regularly scheduled meeting on February 10, Makenzie Rath called the plaintiff, and told him that his employment with the defendant was terminated. Filing 1-1 at 9. The plaintiff texted Doug Rath, who immediately called the plaintiff. Doug said he was surprised to hear that the plaintiff's employment had been terminated, and offered to broker a conversation with Makenzie and the plaintiff. The plaintiff told Doug that he believed he was terminated because of the concerns he expressed about Giuseffi regarding his false representation that he was a Ph.D. recipient, and his ambivalence to the client complaint that their screening assessment tool may have had a racially discriminatory bias. According to the plaintiff, Doug's only reply was: “Well, it is what it is.” Filing 1-1 at 10.

III. DISCUSSION

1. Breach of Contract

The defendant argues that even if Doug Rath's offer letter (which requested the plaintiff's signature for acceptance of the offer) was a contract, the offer letter did not offer indefinite employment or contain discharge for cause language. Accordingly, the defendant argues that the plaintiff's employment was at will, and he could be discharged for any lawful reason or no reason at all. Filing 5 at 5-6. Nebraska law provides that when employment is not for a definite term, and there are no contractual, statutory, or constitutional restrictions upon the right of discharge, an employer may lawfully discharge an employee whenever and for whatever reason it so chooses. Goff-Hamel v. Obstetricians & Gyns., P.C., 256 Neb. 19, 588 N.W.2d 798, 801 (1999).

Here, the plaintiff's complaint does not allege that Doug Rath's offer letter expressed a definite term for the plaintiff's employment. Filing 1-1. Instead, the plaintiff argues that the terms in the offer letter, as well as his discussions with Doug Rath prior to accepting the defendant's employment offer, constitute an offer of a unilateral contract.

The language that forms the basis for a unilateral contract of employment, whether written or oral, must constitute a definite offer communicated to the employee, and the offer must be accepted with consideration furnished for enforcement. Blinn v. Beatrice Cmty. Hosp. and Health Ctr., Inc., 270 Neb. 809, 708 N.W.2d 235, 245 (2006). The question to be answered in determining whether a unilateral contract for employment was offered is: Did the employer manifest a clear intent to make a particular promise as an offer of employment that was other than employment at will, and acknowledge or infer an intent to be bound by it so as to justify an employee's understanding that a commitment has been made? Id. at 246. Whether a proposal is meant to be an offer for a unilateral contract is determined by the outward manifestations of the parties, not by their subjective intentions. Id.

The allegations in the plaintiff's complaint (filing 1-1), together with the representations in the offer letter (filing 1-4), when considered in the plaintiff's favor, could be viewed as an offer for a unilateral contract of employment. The plaintiff alleged that when Doug Rath recruited him to join the defendant, he told Rath he would only be interested in joining the defendant if he were allowed the freedom to perform executive functions. The way to grow, according to the plaintiff, was to be uncomfortable, and the only way he would join the defendant was if everyone got out of his way. Filing 1-1 at 2. The plaintiff alleged that the defendant's employment offer indicated that he would have the latitude to perform job functions the way he saw fit. Filing 1-1 at 3.

Doug Rath's offer letter provided that the plaintiff would hold an executive position with the defendant, and he would report only to the defendant's president. Filing 1-4 at 4. The plaintiff would lead several management teams, and was promised good faith consideration for the defendant's board of directors. Filing 1-4 at 6. His performance was to be measured against specific benchmarks, all of which concerned increasing the defendant's business, developing market strategies, and recruitment and development of future company leaders. Filing 1-4 at 4-5. Rath wanted the plaintiff to come in and immediately create a significant impact. Filing 1-4 at 6. After his first month with the defendant, Doug Rath told the plaintiff to continue the work he was doing and be disruptive. Filing 1-1 at 5. Larry Sternberg, a Board member and former company President, told the plaintiff to continue to pound the table and tell people to get out of his way. Filing 1-1 at 4.

The plaintiff's allegations, together with the offer letter, would allow a reasonable person to conclude that the plaintiff was hired to achieve certain goals, and that he would be given the space to accomplish those goals the way he saw fit. The allegations allow one to infer that members of the defendant's Board of Directors and the defendant's Chairman encouraged the plaintiff to speak his mind, and be disruptive. According to the complaint, the plaintiff was fired for doing exactly what he was hired to do. A promise of employment on particular terms, but of an unspecified duration, if in the form of a definite offer communicated to the employee, may create a binding unilateral contract. Pine River State Bank v. Mettille, 333 N.W.2d 622, 626 (Minn. 1983).²

Here, at this preliminary stage of the litigation, the allegations in the complaint are sufficient to raise a reasonable expectation that discovery may reveal more to substantiate the elements of the plaintiff's breach of contract claim. Twombly, 550 U.S. at 556, 127 S.Ct. 1955.

2. Promissory Estoppel

Promissory estoppel is predicated on the principle that injustice can be avoided only by the enforcement of a promise. Blinn, 708 N.W.2d at 246. A promise that the promisor should reasonably expect to induce action or forbearance is binding if injustice can be avoided only by enforcement of the promise. Id. Under Nebraska law, promissory estoppel does not require that the promise giving rise to the cause of action meet the requirements of an offer that would result in a contract should it be accepted by the promisee. Id. at 247. Promissory estoppel only requires that the promisee's reliance on the promise be reasonable and foreseeable, even if the promisor did not intend to be bound. Id. at 248.

It is perhaps even more plausible that the representations made by the parties that the Court found could plausibly allege a unilateral contract of employment, would also give rise to a claim of promissory estoppel. Here, it is reasonable and foreseeable that the promises made to the plaintiff—that he would have an executive position with the defendant and be given the latitude to do the job he was hired to do on his own terms—could have induced him to leave his employment in Chicago, join the defendant in Lincoln, Nebraska, and reasonably believe he would not be fired for doing what he was hired to do. The allegations in the plaintiff's complaint plausibly allege that the defendant should be estopped from claiming that the plaintiff's employment was at will.

3. Public Policy Wrongful Discharge

Nebraska recognizes a public policy exception to the at-will employment doctrine. Ambroz v. Cornhusker Square Ltd., 226 Neb. 899, 416 N.W.2d 510, 515 (1987). The public policy exception to at-will employment allows an employee to claim damages for wrongful discharge when the motivation for the employee's firing contravenes public policy. Trosper v. Bag ‘‘N Save, 273 Neb. 855, 734 N.W.2d 704, 707 (2007). The plaintiff alleged that his termination was due, at least in part, to the concerns he raised with Giuseffi's false representation that he was a Ph.D. recipient. According to the plaintiff, Giuseffi's false claim was an unlawful and deceptive act, and an act he refused to engage in by forwarding emails with Giuseffi's false attribution. Filing 1-1 at 12-13. The plaintiff asserts that the public policies his firing contravened were the Nebraska Consumer Protection Act (Neb. Rev. Stat. § 59-1601 et seq.), and the Nebraska Deceptive Trade Practices Act (Neb. Rev. Stat. § 87-301 et seq). The Court is not persuaded.

Nebraska's Consumer Protection Act deems unlawful, unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. Neb. Rev. Stat. § 59-1602. The Nebraska Consumer Protection Act pertains to unfair or deceptive acts or practices that have an impact upon the public interest. Nelson v. Lusterstone Surfacing Co., 258 Neb. 678, 605 N.W.2d 136, 142 (2000). The Nebraska Uniform Deceptive Trade Practices Act prohibits a broad range of deceptive trade practices, most of which concern trademark infringement or misrepresentations regarding the nature of goods or services. See State ex rel. Stenberg v. Consumer's Choice Foods, 276 Neb. 481, 755 N.W.2d 583, 591-92 (2008); Midway Mfg. Co. v. Dirkschneider, 571 F. Supp. 282, 286 (D. Neb. 1983). The particular provision the plaintiff points to specifies that a person engages in a deceptive trade practice when, in the course of business, he causes a likelihood of confusion or of misunderstanding as to affiliation, connection, or association with, or certification by another. Neb. Rev. Stat. § 87-302(a)(3).

The public policy exception to at-will employment is a narrow exception, limited to cases where a clear mandate of public policy has been violated, and it should be limited to manageable and clear standards. In determining whether a clear mandate of public policy has been violated, a court should consider whether the employer's conduct contravenes the letter or purpose of a constitutional, statutory, or regulatory provision or scheme. Trosper, 734 N.W.2d at 707.

Here, the allegations in the plaintiff's complaint regarding Giuseffi's false Ph.D. recipient claim fail to contravene the letter or purpose of either the Consumer Protection Act or Deceptive Trade Practices Act. There are no allegations indicating, or giving rise to an inference that Giuseffi's false claim had any impact on consumers or the public interest. Neither are there allegations indicating, or giving rise to an inference that Giuseffi's misrepresentation could be considered a deceptive trade practice connected to the course of the defendant's business. There are no allegations that the defendant deceived anyone by falsely accrediting Giuseffi with a Ph.D. Giuseffi's misrepresentation is a form of puffery—an exaggerated statement of bluster or boast upon which no reasonable consumer would rely. American Italian Pasta Co. v. New World Pasta Co., 371 F.3d 387, 390-91 (8th Cir. 2004). While the Court does not condone the alleged misrepresentation, there is no inference from the allegations that any client, or a reasonable person, would have relied on Giuseffi actually having a Ph.D. in doing business with the defendant. Giuseffi's misrepresentation, for all practical business purposes, is immaterial, even though it might have seemed important to him. See Bernstein v. Extendicare Health Services, Inc., 607 F.Supp.2d 1027, 1031 (D. Minn. 2009).

4. Retaliation

The Nebraska Fair Employment Practices Act protects an employee from retaliation for opposing an employer's action, but only when the employee reasonably and in good faith believes the employer's action to be unlawful. Wolfe v. Becton Dickinson and Co., 266 Neb. 53, 662 N.W.2d 599, 605 (2003). Here, the plaintiff alleged that his discharge came on the heels of his confrontation with Giuseffi regarding an assessment instrument which a client reported was alleged to be racially discriminatory.

It is an unlawful employment practice for an employer to discriminate against any of its employees because the employee has opposed any practice made an unlawful employment practice by the Nebraska Fair Employment Practices Act. Neb. Rev. Stat. § 48-1114(1)(a). An employment practice made unlawful pursuant to the Nebraska Fair Employment Practices Act is for an employer to fail or refuse to hire or otherwise discriminate against any individual because of such individual's race. Neb. Rev. Stat. § 48-1104(1).

The plaintiff could reasonably believe, in good faith, that his discharge, occurring close-in-time to his confrontation with Giuseffi, as well as his subsequent report to Makenzie Rath about Giuseffi, was in retaliation for speaking out about the claim that the defendant's assessment instrument may be racially discriminatory.

IV. CONCLUSION

On the facts alleged at this very preliminary stage, there is enough for this matter to proceed to discovery with respect to the plaintiff's breach of contract, promissory estoppel, and retaliation claims. The Court must assume the truth of the plaintiff's factual allegations, and the reasonable inferences that arise therefrom. See Twombly, 550 U.S. at 556, 127 S.Ct. 1955. For these reasons, the defendant's motion to dismiss the plaintiff's breach of contract, promissory estoppel, and retaliation claims shall be denied. The defendant's motion to dismiss the plaintiff's public policy wrongful discharge claim shall be granted for the reasons stated above.

IT IS ORDERED:

1. Defendant's motion to dismiss (filing 4) is granted in part and denied in part as set forth above.

2. The plaintiff's public policy wrongful discharge claim is dismissed.

3. This matter is referred to the Magistrate Judge for case progression.

FOOTNOTES

1.   This matter is before the Court on defendant's removal from state court. Included in the removal filings is a copy of Rath's letter offering the plaintiff employment with the defendant. Filing 1-4 at 1. This letter is referenced in, but not attached to, the plaintiff's complaint. On a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the Court may consider materials that are part of the public record or do not contradict the complaint, and materials that are necessarily embraced by the pleadings. Nelson Auto Ctr., Inc. v. Multimedia Holdings Corp., 951 F.3d 952, 955 (8th Cir. 2020). Here, Rath's letter to the plaintiff is embraced by the plaintiff's complaint, and does not contradict the plaintiff's complaint. Further, the plaintiff has not objected to its consideration in resolving the defendant's motion.

2.   The Nebraska Supreme Court relied on Pine River State Bank in analyzing issues regarding the creation of a unilateral contract of employment in Johnston v. Panhandle Co-op. Ass'n, 225 Neb. 732, 408 N.W.2d 261, 266-69 (1987).

John M. Gerrard, Chief United States District Judge