Asnaashari v. PNY Technologies, Inc

Filing 39

ORDER by Judge Hamilton granting in part and denying in part 33 Motion to Dismiss (pjhlc2, COURT STAFF) (Filed on 8/26/2013)

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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MEHDI ASNAASHARI,
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Plaintiff,

No. C 13-1308 PJH

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v.
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PNY TECHNOLOGIES, INC.,

ORDER GRANTING IN PART AND
DENYING IN PART MOTION TO
DISMISS

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For the Northern District of California

United States District Court

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Defendant.
_______________________________/

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Defendant PNY Technology Inc.’s motion to dismiss plaintiff’s amended complaint

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came on for hearing before this court on August 21, 2013. Plaintiff Mehdi Asnaashari

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(“plaintiff”) appeared through his counsel, Jeannette Vaccaro. Defendant PNY

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Technologies, Inc. (“defendant”) appeared through its counsel, Christopher Mayer. Having

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read the papers filed in conjunction with the motion and carefully considered the arguments

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and the relevant legal authority, and good cause appearing, the court hereby GRANTS in

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part and DENIES in part defendant’s motion as follows.

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Plaintiff’s first cause of action is for breach of contract. Plaintiff concedes that his

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offer letter characterized his employment as “at will,” and specifically stated that his

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employment “may be terminated by PNY at any time, with or without notice,” but argues

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that the letter also stated that his employment was “subject to PNY’s employment policies.”

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Dkt. 34, Ex. B at 2. Plaintiff alleges that defendant violated those policies by terminating his

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employment for performance reasons without following the applicable procedures

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governing performance-related terminations. In dismissing this cause of action as pled in

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the original complaint, the court noted that plaintiff had “not identified the specific policies or

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procedures that were allegedly breached.” Dkt. 25 at 1. However, plaintiff’s amended

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complaint (“AC”) identifies three such policies: (1) “Human Resources must approve any

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involuntary terminations, before they occur,” (2) if “any employee” is involuntarily terminated

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due to “unsatisfactory performance, the employee must be informed of the performance

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problem and given a reasonable opportunity to correct the problem, before any termination

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can occur,” and (3) “any performance problems and related communication must be

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documented and tracked in the employee file.” AC, ¶¶ 36, 37. Thus, plaintiff’s amended

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complaint has cured the deficiencies of his original complaint, and the court DENIES

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defendant’s motion to dismiss plaintiff’s first cause of action.

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Plaintiff’s second cause of action is for breach of the implied duty of good faith and
fair dealing. Plaintiff argues that this claim is based on two separate theories: (1) PNY

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For the Northern District of California

United States District Court

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terminated plaintiff in order to deprive him of the benefits outlined in the offer letter; i.e.,

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PNY terminated plaintiff in bad faith; and (2) PNY terminated plaintiff in violation of its own

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policies and procedures governing involuntary termination for unsatisfactory job

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performance. The court notes that (2) is duplicative of plaintiff’s breach of contract claim,

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and DISMISSES plaintiff’s second cause of action to the extent premised on that theory.

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See also Guz v. Bechtel Nat. Inc., 24 Cal.4th 317, 352 (2000) (“insofar as the employer’s

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acts are directly actionable as a breach of an implied-in-fact contract term, a claim that

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merely realleges that breach as a violation of the covenant is superfluous.”). As to (1), the

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Guz court went on to hold, separately, that “[a]llegations that the breach was wrongful, in

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bad faith, arbitrary, and unfair are unavailing; there is no tort of ‘bad faith breach’ of an

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employment contract.” Id. Thus, plaintiff’s second cause of action is DISMISSED in its

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entirety. Because plaintiff has already had an opportunity to amend this claim, the

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dismissal is with prejudice.

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Plaintiff’s third cause of action is for promissory fraud. The elements of promissory

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fraud are: (1) a promise made regarding a material fact without any intention of performing

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it; (2) the existence of the intent not to perform at the time the promise was made; (3) intent

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to deceive or induce the promisee to enter into a transaction; (4) reasonable reliance by the

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promisee; (5) nonperformance by the party making the promise; and (6) resulting damage
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to the promisee. Behnke v. State Farm General Insurance Co., 196 Cal.App.4th 1443,

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1453 (2011).

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Plaintiff argues that the relevant “promise” here consists of (1) statements from Gadi

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Cohen, PNY’s founder, regarding plaintiff’s bonuses and stock options, and (2) statements

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in PNY’s offer letter, regarding bonuses, stock options, severance pay, and that plaintiff’s

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employment would be “subject to PNY’s employment policies.” AC, ¶¶ 55, 56. However,

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the court finds that any representations regarding bonuses, stock options, or severance

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pay were conditioned on plaintiff reaching one year of employment. Thus, there was no

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actual “nonperformance” of those alleged promises. The only unperformed promise
identified by plaintiff is the promise that plaintiff’s employment would be governed by PNY’s

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For the Northern District of California

United States District Court

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employment policies, which are discussed above in the context of plaintiff’s breach of

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contract claim. Thus, to the extent premised on anything other than PNY’s employment

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policies, plaintiff’s third cause of action is DISMISSED without leave to amend. But to the

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extent that plaintiff’s third cause of action is premised on PNY’s employment policies, the

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motion to dismiss is DENIED.

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Plaintiff’s fourth cause of action is for negligent misrepresentation. The elements of

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negligent misrepresentation are: (1) a misrepresentation of a past or existing material fact;

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(2) without reasonable grounds for believing it to be true; (3) with intent to induce another’s

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reliance on the fact misrepresented; (4) ignorance of the truth and justifiable reliance

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thereon by the party to whom the misrepresentation was directed; and (5) damages. Fox v.

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Pollack, 181 Cal.App.3d 954, 962 (1986). For this cause of action, plaintiff identifies the

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same alleged misrepresentations that were identified with respect to plaintiff’s third cause

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of action (for promissory fraud). And for the same reasons described above, to the extent

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that plaintiff’s claim is premised on anything other than PNY’s employment policies, his

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fourth cause of action is DISMISSED without leave to amend. But even as to the

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employment policies, the court finds that there was no misrepresentation of “past or

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existing material fact.” Instead, any alleged misrepresentation related to PNY’s future

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conduct in terminating plaintiff’s employment without following its own policies. Thus,
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plaintiff’s fourth cause of action is DISMISSED in its entirety. Because plaintiff has already

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had an opportunity to amend this claim, the dismissal is with prejudice.

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Finally, plaintiff asserts a fifth cause of action for wrongful termination in violation of

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public policy. Plaintiff alleges that he was terminated one day before his bonus and stock

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options were set to vest in order to deprive him the benefit of that compensation. While

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plaintiff has not provided extensive support for this allegation, the timing of his termination

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does make plaintiff’s claim plausible enough to survive the pleading stage. Accordingly,

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defendant’s motion to dismiss plaintiff’s sixth cause of action is DENIED.

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As a result of this order, plaintiff has three remaining causes of action: (1) breach of
contract (based on PNY’s alleged failure to follows its employment policies governing

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For the Northern District of California

United States District Court

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performance-related termination); (2) promissory fraud (based on the same conduct); and

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(3) wrongful termination in violation of public policy. Defendant has 21 days from the date

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of this order to file an answer to those remaining claims.

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IT IS SO ORDERED.
Dated: August 26, 2013
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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