Palmer v. Infosys Technologies Limited Incorporated

Filing 138

OPINION. Signed by Honorable Judge Myron H. Thompson on 8/20/2012. (jg, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION

JACK “JAY” PALMER, JR.,
Plaintiff,
v.
INFOSYS TECHNOLOGIES
LIMITED INCORPORATED and
INFOSYS LIMITED,
Defendants.

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CIVIL ACTION NO.
2:11cv217-MHT
(WO)

OPINION
Plaintiff Jack “Jay” Palmer, Jr., brings this lawsuit
against

defendants

Infosys

Technologies

Limited

Incorporated and Infosys Limited (together referred to as
“Infosys”) based on these state-law claims: breach of
contract; outrage; negligence and wantonness; negligent
hiring,

training,

monitoring

fraudulent misrepresentation.1

and

supervising;

and

Jurisdiction is proper

1. Palmer concedes that summary judgment in favor of
Infosys is appropriate on the aspect of his claim
alleging negligent hiring, etc. of the “Whistleblower”
team.
The aspect of his negligent-training claim
involving the “Human Resources” team remains pending.
Palmer Opposition Brief (Doc. No. 87) at 37.

under 28 U.S.C. §§ 1332 (diversity) & 1441 (removal).
Infosys now moves for summary judgment in its favor.

For

the reasons given below, the motion will be granted.

I.

SUMMARY-JUDGMENT STANDARD

Summary judgment is appropriate “if the movant shows
that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of
law.”

Fed. R. Civ. P. 56(a).

The court must view the

evidence in the light most favorable to the non-moving
party and draw all reasonable inferences in favor of that
party.

Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

475 U.S. 574, 587 (1986).

II.

BACKGROUND

Infosys is a software company based in Bangalore,
India.

Like many firms in our global economy, it works

across

borders

countries.

and

employs

citizens

from

numerous

It often needs to obtain visas for its Indian

2

employees to travel to the United States for conferences
or to work on a permanent basis.
Infosys also employs American citizens in the United
States.

Palmer began working for Infosys in August 2008

as a principal consultant.
$

145,008,

company’s

and

he

incentive

is

His starting salary was set at

eligible

plan.

for

bonuses

job

as

His

a

per

the

consultant

requires that he rotate on and off projects.
While

on

a

business

trip

to

Infosys’s

corporate

headquarters in March 2010, Palmer uncovered a massive
visa fraud.2

He believes that the company manipulated the

B-1 visa program, which permits business visits, in order
to send Indian employees to the United States to work on
a permanent basis.
write

“welcome

In May 2010, the company asked him to

letters”

for

prospective

B-1

visa

2.
Palmer’s brief spends an inordinate amount of
time addressing whether Infosys engaged in visa fraud.
To be clear, this litigation does not concern whether
Infosys violated American immigration law.
Rather,
Palmer’s suit rises and falls on a simple inquiry:
whether he has created a genuine dispute of material fact
on his state-law claims.
3

applicants; he thought that these letters were fraudulent
and

refused

to

participate

in

the

scheme.

Shortly

thereafter, he notified Linda Manning in Infosys’s Human
Resources Department about the alleged visa fraud.
response

to

his

complaint,

he

was

supervisors and told to “keep quiet.”

chastised

by

In
his

In October 2010,

after repeated requests that he participate in the visafraud scheme, he met with the company’s in-house counsel
and decided to file an internal whistleblower complaint.
Palmer subsequently reported these allegations to
federal authorities.

As a result, Infosys is currently

under investigation by the Department of Homeland Security
and a federal grand jury.

He has also testified before

the United States Senate Subcommittee on Immigration,
Refugees, and Border Security.
Palmer contends that, since his visa-fraud allegations
he has been the target of a retaliation campaign.
grievances can be grouped into two categories.

His

First, he

contends that his bonuses have been adversely affected.

4

He believes that the bonuses he received in June 2010
($ 16,229), December 2010 ($ 7,251), June 2011 ($ 12,534),
and December 2011 ($ 8,000) were below the rate set in his
contract.

Second, he submits that he has been the target

of harassment.

Regarding work assignments, he was placed

on projects from October 2009 to June 2010, July 2010 to
October 2010, and October 2010 to April 2011; however, he
has not had an assignment since April 3, 2011, and spends
his days sitting at home waiting for work to come in from
the company.

He believes that the company is refusing to

give him work in an attempt to force him out.

Further, he

complains that he has experienced many computer problems
and has been shut out of the company’s network.3
Perhaps most worrisome, Palmer has received numerous
threats related to his visa-fraud allegations.

These

threats include:
! On October 27, 2010, at 12:37 a.m.,
Palmer’s wife answered their home phone
3. Palmer, however, refuses to hand over his company
computer for examination out of fear that someone will
copy his hard drive.
5

and a man with an Indian accent asked to
speak with him.
His wife said he was
unavailable, and the caller mumbled
something and hung up.
A similar
incident occurred that same night at
2:27 a.m.
! Palmer has received other threatening
calls along the lines of “Why are you
doing this, you stupid American, we have
been good to you.”
! On February 28, 2011, Palmer reported
to work to find a note on his keyboard
stating that, “Jack: Just leave your not
wanted here hope your journey brings you
death stupid American.” Palmer Exhibit
13 (Doc. No. 47-5) at 6 (typographical
errors in original). When Palmer turned
on his computer, a word document
displayed the same message.
! On April 21, 2011, Palmer received an
email stating that, “if you make cause
for us to sent back to india we will
destroy you and yuor family.” Palmer
Exhibit 14 (Doc. No. 46-5) at 7
(typographical errors in original).
! On May 25, 2011, Palmer received a
threat through his LinkedIn account from
Vinodbhai Mankar, an Indian national and
self-professed “advocate” of Infosys:
“you still working at infy? they should
have fired you long back ... after you
stabbed
their
back
by
falsely
implicating them on the misuse of visa.
unfortunately infy is an indian company
6

and indian’s don’t stab ... even in the
front. that’s what hypocrites like you
take advantage of. Hope they learn the
rule of Tit for Tat.
I just wish you
were here in India. we would have taken
*good* care of you.” Palmer Exhibit 11
(Doc. No. 47-4) (typographical errors in
original).
As a result of these threats, Palmer is emotionally
distraught, takes antidepressants, and sometimes carries
a concealed gun.

III.

DISCUSSION

Infosys moves for summary judgment on all five of
Palmer’s state-law claims.

Because the basis of the

court’s jurisdiction is diversity and because the claims
at issue are state claims, it is Alabama substantive law,
not federal substantive law, that governs this case.
R.R. v. Tompkins, 304 U.S. 64, 78 (1938).
therefore

make

an

educated

guess

of

Erie

This court must
how

the

Alabama

courts, and, in particular, the Alabama Supreme Court,
would resolve these claims.

Blue Cross & Blue Shield of

Ala., Inc. v. Nielsen, 116 F.3d 1406, 1413 (11th Cir.
7

1997) ("The final arbiter of state law is the state
supreme court, which is another way of saying that Alabama
law is what the Alabama Supreme Court says it is.").
Because Palmer’s claims arise out of his employment,
it is important to keep in mind that Alabama is an ‘atwill’ employment state.
explained

that:

"The

The Alabama Supreme Court has
bedrock

principle

of

Alabama

employment law is that, in the absence of a contract
providing otherwise, employment in this state is at-will,
terminable at the will of either party.

Under this

doctrine, an employee may be discharged for any reason,
good or bad, or even for no reason at all.”

Ex parte

Amoco Fabrics and Fiber Co., 729 So. 2d 336, 339 (Ala.
1998).

And an extension of this principle and logic would

be that, absent a contract providing otherwise, employee
may be demoted, denied a promotion, or otherwise adversely
treated for any reason, good or bad, or even for no reason
at

all.

wrongly,

The

Alabama

jealously

Supreme

guarded

8

Court

this

has,

at-will

rightly
status

or
and

recognized

only

statutory

exceptions

(for

example,

worker’s compensation restrictions) and a few narrow nonstatutory

exceptions.

See

id.

(“Among

those

[non-

statutory] limitations is an exception, recognized by [the
Alabama Supreme] Court, for implied contracts arising out
of the use of an employee handbook. ... [T]he provisions
of an employee handbook can become a binding unilateral
contract, thereby altering an employment relationship’s
at-will status. ... [But] not all employer communications
would justify such treatment. Rather, only those employer
communications meeting the traditional requirements for
the

formation

of

a

unilateral

contract--an

offer,

communication, acceptance, and consideration--will bind
the parties.").

It is against this backdrop of Alabama

law, like it or not, that the court considers Palmer’s
claims arising out of his employment.

9

A.

Breach of Contract

Palmer contends that he and Infosys had a contract
that

the

company

breach-of-contract

breached.
claim,

he

To

must

make

show

(1)

out
a

a

valid

contract binding the parties, (2) his own performance
under the contract, (3) Infosys’s nonperformance, and (4)
damages.

State Farm Fire & Cas. Co. v. Slade, 747 So. 2d

293, 303 (Ala. 1999).
Palmer contends that Infosys breached its contract
with him by not paying him a 30 % bonus.
his

semiannual

undervalued.
bench”

bonuses

since

June

He believes that
2010

have

been

Additionally, he submits that his “on the

status–-that

is,

that

he

has

not

received

an

assignment since April 2011–-contributes to his reduced
bonuses.
First, there is no formal document, signed by Palmer
and an appropriate Infosys officer or supervisor, bearing
the heading “employment contract” or something comparable.
Rather, to support the notion that he has an employment

10

contract, Palmer relies on an annual letter or document
the

company

sends

possible bonus.

him

setting

forth

his

salary

and

While the court doubts that this document

constitutes an employment contract, the court will assume
that it does, for Palmer cannot recover on his breach-ofcontract claim even it does.
First of all, Palmer misconstrues the document. As an
initial matter, the document does not state that he is
entitled to a 30 % bonus in any year.

Rather, it states:

“For this year [2008], the maximum bonus you can earn will
be 30 % of your paid our Base Salary.”
(Doc. No. 47-1) at 133.

Infosys Contract

Thus, Palmer was not even

entitled to 30 % bonus for his first year at the company.4
Moreover, Palmer’s bonuses are governed by Infosys’s
incentive plan, which awards bonuses on a sliding scale
from 0 % to 100 % of base salary.

Bonuses are set

according to a multi-factor analysis, which looks to

4. Palmer does not challenge his bonuses from 2008
and 2009.
11

individual,

unit,

and

company-wide

performance.

Additionally, the incentive plan provides that:
“The company reserves the right to
administer, construe and interpret the
Plan to make all determinations related
to the Plan to approve all bonus
payments prior to payment, and to
resolve all issues and disputes related
to the Plan, all in the Company’s
discretion. The Company’s decisions on
these
subjects
shall
be
final,
conclusive and binding on all concerns.”

Incentive Plan (Doc. No. 47-6) at 3.

Palmer, therefore,

is not entitled to any specific bonus amount in any year.
As such, he cannot establish his breach-of-contract claim
under Alabama law.5

B.

Outrage

Palmer contends that, despite the at-will status of
employees in this state, Infosys’s overall treatment of

5. Palmer initially argued that Infosys had failed
to reimburse him for certain expenses. Because Infosys
has rectified that situation, Palmer has dropped that
allegation. Response to First Interrogatories (Doc. No.
47-7) at 4.
12

him in his employment supports a claim based on the tort
of outrage.

Alabama’s tort of outrage “is essentially

equivalent to what many states refer to as ‘intentional
infliction

of

emotion

distress.’”

K.M.

v.

Alabama

Department of Youth Services, 360 F. Supp. 2d 1253, 1259
n.4 (M.D. Ala. 2005) (Thompson, J.).

In order to prove a

claim of outrage, a plaintiff must establish that, “(1)
the defendant ... intended to inflict emotional distress,
or should have known that his or her acts would result in
emotional

distress;

(2)

the

act

[was]

extreme

and

outrageous; (3) the act ... caused plaintiff['s] distress;
and (4) plaintiff['s] emotional distress [was] so severe
that no reasonable person could be expected to endure it.”
Id. at 1259 (citing Harrelson v. R.J., 882 So. 2d 317, 322
(Ala. 2003)).

The Supreme Court of Alabama has emphasized

“that this tort does not recognize recovery for ‘mere
insults,

indignities,

threats,

oppressions, or other trivialities.’”

annoyances,

petty

American Rd. Serv.

Co. v. Inmon, 394 So. 2d 361, 364-65 (Ala. 1980) (citation

13

omitted).

Rather,

recovery

is

appropriate

for

only

“conduct so outrageous in character and so extreme in
degree as to go beyond all possible bounds of decency, and
to be regarded as atrocious and utterly intolerable in a
civilized society.” Id. at 365.

The tort is, therefore,

“an extremely limited cause of action.”

Potts v. Hayes,

771 So.2d 462, 465 (Ala.2000).
In the at-will employment context, Alabama courts have
especially cabined the tort of outrage.

A plaintiff

alleging outrage based upon a termination must establish
that the firing was contrary to public policy and was
accompanied with the “sound of fury.”

Wal-Mart Stores,

Inc. v. Smitherman, 872 So. 2d 833, 840 (Ala. 2003)
(quoting Harrell v. Reynolds Metals Co., 495 So. 2d 1381
(Ala. 1986)).

One federal district court has commented

that “unlawful conduct falling short of discharge[] may be
inadequate to sustain a claim for outrage under Alabama
law,

even

if

the

employer’s

acts

otherwise

irreconcilable with sound public policy.”

14

are

Lees v. Sea

Breeze Health Care Center, Inc., 391 F. Supp. 2d 1103,
1107 n.3 (S.D. Ala. 2005) (Steele, J.).

This limiting

principle accords with the Supreme Court of Alabama’s
admonition that outrage “should not be the basis for
vicarious or respondeat superior liability except in the
most compelling circumstances.”

Busby v. Truswal Systems

Corp., 551 So. 2d 322, 327 (Ala. 1989).6
Palmer asserts that the campaign of harassment and, in
particular, the numerous threats he has received are
sufficient to state a claim of outrage under Alabama law.7

6.
Egregious sexual harassment appears to be the
sole example of an outrage claim from the employment
context that does not involve a termination. Carraway
Methodist Health Systems v. Wise, 986 So. 2d 387, 401
(Ala. 2007).
7.
Palmer points to Holmes v. Oxford Chemicals,
Inc., 672 F.2d 854 (11th Cir. 1982), as an additional
basis for his outrage claim. In Holmes, the plaintiff
suffered a heart attack that rendered him permanently
disabled. His employer reduced his disability benefits
from $ 500 a month to $ 49.10 in an attempt to force him
to apply for Social Security disability.
Id. at 856.
Here, by contrast, Palmer’s base salary has increased
from $ 145,008 in 2008 to $ 165,000 today. While Palmer
believes his bonuses are inadequate, he cannot base a
claim of outrage on salary diminution given the
undisputed facts about his base salary.
15

Courts have frequently rejected outrage claims based on
similar accusations of threats and disparate treatment at
work.
Inc.,

See, e.g., Thrasher v. Ivan Leonard Chevrolet,
195

F.

Supp.

2d

1314,

1319

(N.D.

Ala.

2002)

(Buttram, J.) (finding that “discrimination with regard to
overtime hours, scrutiny, and termination-–which lasted a
period of eight days–-is not sufficiently egregious” to
support an outrage claim).

The court finds Little v.

Robinson,

1168

(Ala.

plaintiff,

a

72

instructive.

So.
The

3d

2011),
city

particularly

council

member,

alleged that the mayor of Anniston issued a death threat
during a public meeting and that the two men almost came
to blows.

The mayor also stated that Little was part of

the “black corruption” problem in the city.

Id. at 1170.

The Supreme Court of Alabama disagreed that the mayor’s
comment–-that if “it had gotten ugly, ‘[w]e’d be having
[Little’s] funeral today,’” id. at 1169-–was a death
threat but nonetheless recognized that the two men were
engaged in a heated confrontation that quickly escalated.

16

Id.

at

1173.

Despite

a

near-physical

encounter

and

racially explosive language, the Supreme Court of Alabama
concluded that the mayor’s behavior did not constitute
outrage as a matter of law.

Id.

Similarly, while the electronic and telephonic threats
and anti-American statements are deeply disturbing, it is
clear that the Alabama Supreme Court would not view them
as “beyond all possible bounds of decency,” so that it
must “be regarded as atrocious and utterly intolerable in
a civilized society.” Inmon, 394 So. 2d at 365.

Moreover,

under Alabama law, because Palmer has not been terminated,
a claim of outrage may only proceed to trial under the
most egregious fact pattern.

Alabama law is, therefore,

clear that the record here is insufficient to support the
“extremely limited

cause of action” known as the tort of

outrage.8 Potts, 771 So.2d at 465.

8.
Because this court concludes that the Alabama
Supreme Court would find that the alleged conduct was
not extreme or outrageous, this court need not decide
Infosys’s alternative contention that there is no
evidence that the threats were made by its employees.
17

C.

Negligence and Wantonness

Palmer brings a claim of negligence and wantonness.

Although not mentioned by the parties, the court
notes that the United States Supreme Court’s recent
decision in Snyder v. Phelps, 131 S. Ct. 1207 (2011), may
be applicable in this case. The Snyder Court held that an
intentional infliction of emotion distress claim is
barred if the challenged speech was on a matter of public
concern. “Speech deals with matters of public concern
when it can be fairly considered as relating to any
matter of political, social, or other concern to the
community.”
Id. at 1216 (internal quotation marks
omitted).
It can hardly be disputed that immigration
policy is a matter of public concern.
Additionally,
Palmer received the email threats after he went public
with his story; as Palmer’s brief explains, the complaint
filed in this action prompted considerable discussion in
the information-technology industry. Palmer Opposition
Brief (Doc. No. 87) at 17.
The threats directed at
Palmer, while objectionable, are part and parcel of
injecting oneself into the political arena. Cf. Doe v.
Reed, 130 S. Ct. 2811, 2837 (2010) (Scalia, J.,
concurring in the judgment) (remarking that “harsh
criticism, short of unlawful action, is a price our
people have traditionally been willing to pay for
self-governance. Requiring people to stand up in public
for their political acts fosters civic courage, without
which democracy is doomed”).
As such, the First
Amendment may present a bar to Palmer’s outrage claim
because “‘in public debate [we] must tolerate insulting,
and even outrageous, speech in order to provide adequate
“breathing space” to the freedoms protected by the First
Amendment.’” Snyder, 131 S. Ct. at 1219 (quoting Boos v.
Barry, 485 U.S. 312, 322 (1988)) (alteration in
original).
18

More specifically, he believes that Infosys has failed to
protect

him

from

retaliation

in

violation

of

its

whistleblower policy.
To prove a negligence claim under Alabama law, a
plaintiff must establish duty, breach, causation, and
damages.
Bank,
claim

Armstrong Business Services, Inc. v. AmSouth

817 So. 2d 665, 679 (Ala. 2001).
requires

defendant

acted

a

plaintiff
or

failed

to

A wantonness

demonstrate

to

act

with

that

the

reckless

indifference to the consequences of its acts or omissions.
Id. at 679-80.
Infosys argues, and this court agrees, that Palmer is
attempting to bootstrap a whistleblower retaliation claim
into a negligence or wantonness tort.

But there is no

evidence that Alabama tort law recognizes (arguably as an
exception to the State’s at-will status) an independent
cause of action for negligently or wantonly failing to
prevent whistleblower retaliation.

19

As such, Palmer’s

negligence-and-wantonness claim must fail under Alabama
law.

D. Negligent Hiring, Training, Monitoring, and
Supervising
Palmer

also

brings

a

claim

of

training, monitoring, and supervising.

negligent

hiring,

“A party alleging

negligent or wanton supervision and hiring must ... prove
the underlying wrongful conduct of employees.” Voyager
Ins. Companies v. Whitson, 867 So. 2d 1065, 1073 (Ala.
2003).
Palmer has conceded that his negligent hiring, etc.
claim

is

claim.
see

contingent

on

his

negligence-and-wantonness

See Palmer Opposition Brief (Doc. No. 87) at 37;

also

supra

Section

III.C.

Because

Palmer’s

negligence-and-wantonness claim fails under Alabama law,
so, too, does his negligent hiring, etc. claim.

20

E.

Fraudulent Misrepresentation

Palmer submits that Infosys’s failure to enforce its
whistleblower

policy

misrepresentation.
promise

of

constitutes

fraudulent

Because his claim is predicated on a

future

behavior-–namely,

to

enforce

the

whistleblower policy--Palmer must establish the elements
of promissory fraud.

Wade v. Chase Manhattan Mortgage

Corp.,

1369,

994

F.

(Hancock, S.J.).

Supp.

1378-79

(N.D.

Ala.

1997)

To make out a promissory-fraud claim,

Palmer must show that "(1) a false representation (2) of
a material existing fact (3) reasonably relied upon by
[him] (4) who suffered damage as a proximate consequence
S.B. v. St. James Sch., 959

of the misrepresentation."
So.2d

72,

omitted).

101

(Ala.

2006)

(quotations

and

citations

In addition, he must show that "(5) .. at the

time of the misrepresentation, the [company] had the
intention not to perform the act promised, and (6) ... the
[company] had an intent to deceive."

21

Id.

Here, Palmer has failed to establish the fifth and
sixth elements of his claim.

He has presented no evidence

that, when Infosys issued its whistleblower policy in
2003, it intended to deceive and not enforce the policy.
As such, Palmer’s fraud claim must fail under Alabama law.

* * *

Without
telephonic
argument

question,
threats

could

are

be

the

alleged

deeply

made

that

electronic

troubling.
such

Indeed,

threats

and
an

against

whistleblowers, in particular, should be illegal.

The

issue before the court, however, is not whether Alabama
should make these alleged wrongs actionable, but whether
they are, in fact, illegal under state law.
cannot rewrite state law.

This court

Therefore, for the reasons

given throughout this opinion, this court must conclude
that, under current Alabama law, Palmer has no right to
recover from Infosys.

22

An appropriate summary judgment in favor of Infosys
and against Palmer will be entered.
DONE, this the 20th day of August, 2012.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE