Muller v. Morgan et al
Filing
53
Memorandum Opinion and Order Signed by the Honorable Harry D. Leinenweber on 12/27/2012:Mailed notice(wp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MELISSA MULLER,
Plaintiff,
Case No. 12 C 1815
v.
RICH MORGAN, CHELSEA KLINKE,
RHYTHM MANANI, BELLUS ALC
INVESTMENTS 1, LLC d/b/a
AMERICAN LASER SKINCARE,
Hon. Harry D. Leinenweber
Defendants.
MEMORANDUM OPINION AND ORDER
I.
BACKGROUND
According to her 28-page, 8-count Complaint, the Defendants
sexually harassed Melissa Muller (“Muller”), interfered with her
family
and
medical
leave
rights,
retaliated
against
her
for
cooperating in a company investigation of the sexual harassment and
for filing a claim with the EEOC, intentionally inflicted emotional
distress on her, interfered with her contractual relationship and
prospective economic advantages, and conspired against her.
The
Defendants include Rich Morgan (“Morgan”), the former CEO of American
Laser Skincare (“ALS”) which was Plaintiff’s employer, Chelsea Klinke
(“Klinke”), Vice- President of Sales and Clinic Management for ALS,
Rhythm Manani (“Manani”), General Counsel and Vice-President of Human
Resources of ALS, and Bellus ALC Investments 1, LLC (“Bellus”), the
purchaser of the assets of ALS from the latter’s bankruptcy estate.
ALS, prior to its sale out of bankruptcy, was in the business of
providing laser hair removal and noninvasive aesthetic services in
multiple locations throughout the United States.
Muller commenced
her employment with ALS in 2006 as a laser technician.
She excelled
at her job and was quickly promoted to Clinic Manager in charge of
ALS’s Clinic in Chicago’s Lincoln Park.
In December 2009, Muller
attended a team dinner for the entire Midwest Region, at which Morgan
and Klinke were in attendance.
At this dinner Morgan asked her a
number of questions about her intentions as to future pregnancies,
and whether she was happily married. Muller took this latter inquiry
as an expression of Morgan’s sexual and romantic interest in her.
Shortly after the meeting she was promoted to the position of
Regional Manager of the Midwest. Over the next year she successfully
increased the region’s sales.
In January 2010, Muller attended an executive management team
meeting along with Morgan, Klinke, and several other members of ALS
management.
At this meeting Morgan suggested to the gathering that
they talk about sex.
He then proceeded to ask Muller and another
female regional manager how many sexual partners they had had.
In
September 2010, the company held another dinner for regional managers
and executive staff. Morgan became visibly intoxicated at the dinner
and made leering comments to a number of female attendees.
During
dinner the attendees discussed what sort of plastic surgery they
would consider having done.
Muller and another female attendee said
they would consider plastic surgery on their breasts.
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Morgan then
stated that he was an expert on the subject and he should take a look
at their breasts. Without obtaining approval he proceeded to do so.
After this meeting, another female attendee hired a lawyer and
complained about the way female managers had been treated.
This
prompted the company to initiate an investigation to be conducted by
an outside attorney. In the weeks following, Muller was contacted by
the administrative assistant to the outside attorney, Manani, and
Klinke who informed her that she would have to be interviewed as part
of the investigation.
Klinke contacted Muller multiple times prior
to her interview in an apparent attempt to determine what Muller
would tell the investigators.
She also relayed her opinion as to how
important Morgan was to ALS and that she did not want him to be
removed.
Klinke asked Muller how she felt about Morgan and when she
told Klinke that she thought he might be demoted, Klinke made
sarcastic remarks and then implored Muller to testify that she had
not felt violated when Morgan looked down her shirt.
In September, Muller flew to Michigan to be interviewed by the
outside counsel. Prior to her meeting Klinke again called Muller and
urged her to keep her answers short and not to give out too much
information.
During the interview Muller told the counsel about the
shirt incident as well as Morgan’s comments about sex and his
questions about the state of her marriage, and her family plans.
The
counsel also asked her whether she knew about any inappropriate
relationships Morgan had with the staff.
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Muller informed him of two
relationships she was aware if that he had, one with a Clinic Manager
and another with a former Regional Manager. She further informed him
that at the time of the relationship Muller was the assistant to the
Clinic Manager and that Morgan had flown her to Las Vegas where he
gave her a very expensive watch.
She also told the counsel that she
had been informed that the Regional Manager had obtained money from
Morgan which apparently was paid in return for her silence.
The
counsel asked her if she had been coached as to what to say and she
told him that she had been.
She stated that she was afraid that
others would find out about her testimony.
He informed her that only
the Board of Directors would be informed about the substance of her
testimony
Immediately after the interview, Klinke called Muller and
grilled her about what she had said in the interview.
Among other
things Klinke asked Muller if she had been asked about any rumors
involving Klinke and Morgan.
Muller responded in the affirmative
which caused Klinke to “freak out.”
Apparently as a result of the
investigation Morgan was removed as CEO but was not fired.
Shortly
after this the newly appointed CEO, Steve Strauss (“Strauss”),
visited Muller and asked her how she felt about Morgan’s removal as
CEO. She responded generally favorably but later learned from Klinke
that Morgan was still employed with the company in a part-time role.
In the fall of 2010 Muller became pregnant.
who
was
unenthusiastic,
and
responded
that
everyone getting pregnant at the same time.
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She told Klinke,
they
couldn’t
have
In January 2011, Muller
was contacted by the newly appointed Director of Sales for the West
Coast along with Klinke to tell Muller that she was being placed on
a Performance Improvement Plan (the “PIP”), even though her work for
the company had never before been criticized.
She was assured that
the PIP was for guidance rather than discipline.
Subsequently she was asked to name the individual who would take
her place while she was on maternity leave.
selection, it was criticized.
After she told them her
A short time later she was told by
Klinke that she needed to step down as Regional Manager and assume
the position of Clinic Manager because “she didn’t have what it takes
to be a leader in her region.”
have contractions.
Muller began to cry and started to
She saw her obstetrician who diagnosed her has
having “situational stress induced contractions.”
Later that month
prior to her leave she was actually demoted to Clinic Manager of
another Chicago clinic at greatly reduced pay.
Muller began her maternity leave in May 2011 and returned to
work as Clinic Manager in July.
Her clinic flourished.
In August
2011 she filed a charge of discrimination with the Equal Employment
Opportunity Commission (the “EEOC”).
Klinke began a road show in
October giving out awards for outstanding service.
Even though
Muller was the number one salesperson in the region she was not given
an award.
The following day Muller was given a “final warning” by
her supervisor which stated that she had ninety (90) days to improve
her performance despite her excellent sales numbers. She was told by
her supervisor that she had been told by “corporate” to give the
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warning even though she thought that Muller was an excellent clinic
manager.
During this period Klinke fired Muller’s assistant and
refused to allow her to hire a replacement which greatly increased
the amount of time Muller had to put in.
Klinke then visited
Muller’s clinic apparently in order to criticize her performance.
Muller disputed this criticism.
In December 2011, ALS filed for bankruptcy, which was just prior
to Klinke’s last visit.
Although Muller had received her Right-to-
Sue letter in November, she was unable to file suit against ALS
because of the automatic stay that had been entered.
During the
pendency of the bankruptcy the ninety (90) day time period for
Muller’s final warning came to an end.
Klinke gave Muller “a strong
talking to” about her poor performance but did not fire her.
January
2012,
ALS
received
bankruptcy
court
approval
to
In
sell
substantially all of its assets free and clear of any liabilities.
ALS announced that a private equity firm, Versa, was financing the
asset sale and the assets were to be purchased through an affiliate,
the
Defendant
Bellus.
The
day
before
the
closing
an
unnamed
individual, who identified himself as being an employee of Versa,
called Muller at work and told her that she was fired effective
immediately.
II.
DISCUSSION
Muller bases her 8-count Complaint on the foregoing.
Defendants save Morgan, have moved to dismiss.
All
Klinke, Manani, and
Bellus contend that this Court has no personal jurisdiction over
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them, and thus they are entitled to dismissal under Rule 12(b)(2).
They also contend that the statutory counts should be dismissed under
Rule 12(b)(6) because none of these counts contain “enough facts to
state a claim to relief that is plausible on its face.”
They also contend that similarly none of the other counts state
a claim and therefore they should also be dismissed under Rule
12(b)(6).
The Defendant supports their Rule 12(b)(2) Motions with the
Affidavits of Klinke, Manani, and Paul Halpern (“Halpern”), who was
authorized to act on behalf of Bellus.
Based on the affidavits,
neither Klinke nor Manani have ever lived in Illinois, owned property
in Illinois, been liable for taxes in Illinois, voted in Illinois, or
been involved in litigation in Illinois.
Neither visited Illinois
more that four times in a year and all visits were limited to two or
fewer days.
Klinke visited Illinois twice each in 2010 and 2011 and
all were business related and she met with Muller on only two of the
occasions.
Manani visited Illinois four times in 2010, three of
which were board meetings and one occasion was personal.
She did not
meet with Muller on any of these occasions.
Halpern’s affidavit states that Bellus is a Delaware corporation
with its principal place of business in Philadelphia and does not
conduct business in Illinois.
does not pay salaries.
It does not employ individuals and
Its sole asset is the equity of ALS which it
obtained on February 3, 2012.
ALS is a limited liability company
under the laws of Delaware with its principal place of business in
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Michigan.
ALS has its own board of managers and is separate from
Bellus’s board of managers.
ALS keeps and maintains books, records,
and accounts separate from the books, records and accounts of Bellus.
ALS is fully capitalized.
Muller’s response does not take issue with the conclusion that
the court does not have general jurisdiction over Klinke, Manani, or
Bellus.
Her position is that the court has specific jurisdiction
over Klinke, Manani, and Bellus because of their tortious conduct
which caused injury to Muller in Illinois, citing Janmark, Inc. v.
Reidy, 132 F.3d 1200, 1202 (7th Cir. 1997).
Manani respond
by
claiming that
none
of
To which Klinke and
Muller’s
tort
claims,
statutory or common law, rise above pure speculative level and thus
do not state claims upon which relief could be granted.
As a fall
back position Klinke and Manani claim entitlement to the benefits of
the fiduciary shield doctrine, citing Rollins v. Ellwood, 565 N.E.2d
1302,
1317
(Ill.
1990).
“A
court
should
decline
to
exercise
jurisdiction over a nonresident defendant whose conduct in Illinois
had been performed solely as a corporate representative, and not for
his personal benefit.”
As stated in Janmark, Inc. V. Reidy, 132 F.3d 1200 (7th Cir.
1997), whether a court can obtain personal jurisdiction over a nonresident defendant depends on where the injury to the plaintiff
occurs.
This is because there is no tort without an injury.
The
state in which the injury occurs may require the wrongdoer to answer
for her deeds.
Since Illinois extended its long-arm power to the
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limit allowed by the Constitution of the United States under Calder
v. Jones, 465 U.S. 783 (1984), the state in which the victim of a
tort suffers the injury may entertain a suit against the accursed
tortfeasor.
Therefore, in order to determine whether any of the
Defendants must answer to Muller here in Illinois, it will be
necessary
to
constituted
Illinois.
determine
tortious
whether,
contact
the
that
actions
caused
of
the
injury
to
Defendants
Muller
in
If so, then the Court would have jurisdiction to hear the
claims against them unless they are entitled to the benefits of the
fiduciary shield doctrine.
The Court has parsed the Complaint for all allegations of
wrongdoing against Klinke and Manani.
Klinke, who was Muller’s
supervisor, is alleged to have been present when Muller was sexually
harassed by Morgan.
She appeared to have attempted to interfere in
the investigation of Morgan by strongly suggesting that Muller temper
her testimony.
She “freaked out” when Muller told her about some of
her testimony. Klinke was “unenthusiastic” when informed that Muller
was pregnant and would have to take family leave.
After Klinke was
informed of some of Muller’s testimony and after she learned of her
pregnancy she placed her on a Performance Improvement Plan, even
though Muller’s performance was exemplary. Klinke told her she would
need to step down as regional manager prior to her taking family
leave because Muller did not have anyone ready to take her place.
She demoted her to clinic manager at lower pay prior to taking her
leave.
Klinke fired Muller’s assistant after Muller returned from
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leave and would not allow her to hire a replacement which caused
Muller to have to work longer hours.
Klinke was instrumental in
seeing that Muller was placed on a ninety (90) day improvement plan
even though her work was exemplary.
With regard to Manani the Complaint only alleges that Manani
instructed her to give a statement concerning the complaints against
Morgan and that she was a recipient of a rebuttal that Muller sent to
management when her work was criticized after the PIP.
It is clear
from the lack of allegations against Manani that she is guilty of no
tortious conduct toward Muller and consequently the Court finds that
it does not have personal jurisdiction over Manani.
It is clear that neither Klinke nor Manani was responsible for
the alleged sexual harassment, which according to the Complaint was
solely
the
responsibility
of
Morgan,
therefore
the
harassment under the IHRA would not support jurisdiction.
count
for
However,
the allegations regarding the attempts on the part of Klinke to
interfere with Muller’s testimony and her concerns about her taking
leave for her pregnancy, coupled with the allegations of apparent
retaliation, which include the PIP placement, the demotion from
Regional Manager to Clinic Manager, the firing of Muller’s assistant,
and
the
unjustified
criticism
which
followed
shortly
after
by
Muller’s termination, can give rise to an inference what some or all
of these allegations were in retaliation of Muller’s testimony, her
leave taking, or both.
It is a violation of the Illinois Human
Rights Act (the “IHRA”), for a person to retaliate against another
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because that person opposed what she believed to be unlawful sex
harassment.
775 ILCS 5/2-101(A).
It is similarly a violation of
FEMA to retaliate against an employee for exercising right under the
Act. 29 U.S.C. $ 2615(A)(1). Thus, these allegations are sufficient
at this early stage of litigation to survive a motion to dismiss.
Austin v. Cook County, No. 07-3184, 2009 U.S.Dist, LEXIS 23536 AT
**8-9.
Thus, the Complaint supports personal jurisdiction unless
Klinke is entitled to the benefits of the fiduciary shield doctrine.
According to the Illinois Supreme Court in Rollins v. Ellwood,
565 N.E.2d 1302 (1990), the rationale for the fiduciary shield
doctrine is the belief that it is unreasonable and unfair to assert
personal
jurisdiction
over
an
employee,
whose
tortious
conduct
causing injury in Illinois was solely a result of his employment and
not the result of any personal interest or motivation.
Here Klinke
was Muller’s supervisor and she was at least partly responsible for
demoting her and in firing her assistant.
Further the Complaint
alleges that these acts were taken against Muller because of Klinke’s
personal dislike for Muller and because Muller testified in the
investigation
of
Morgan
contrary
to
her
wishes.
The
doctrine
according to Brujis v. Shaw, 876 F.Supp. 975, 979-80 (N.D.Ill. 1995)
is built on the concept of fairness and whether the defendant’s
conduct affecting Illinois interests would make it fair to require
him to defend an action in Illinois.
If the Complaint is correct
that Klinke acted in her self interest because of her anger at Muller
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for testifying against Morgan then it is fair for her to defend her
actions here in this state.
With regard to the count for intentional infliction of emotional
distress, the Complaint is woefully short of allegations of any
conduct on the part of either Klinke or Manani that were “truly
extreme and outrageous.”
First there are no allegations involving
Manani in any way that could be wrongful let alone extreme and
outrageous.
Second, with regard to Klinke, the worst that could be
said is that she “unenthusiastic” when informed of her pregnancy.
Thus, this count does not state a claim.
See, McGrath v. Fahey, 533
N.E.2d 806, 809 (Ill. 1988).
Next
Muller
asserts
that
the
actions
of
the
Defendants
constituted tortious interference with a contractual relationship
and/or prospective economic advantage.
Neither of these theories of
recovery apply to Manani because the Complaint is devoid of any
allegations that she had anything to do with the firing of Muller or
the failure on the part of Bellus to hire her.
This case is closer
as to Klinke but the Complaint does not say that Klinke specifically
caused Muller to be fired.
While Klinke criticized Muller’s work,
the Complaint intimates that the firing was carried out by an unnamed
employee of Versa.
have
committed
So neither of these two Defendants can be held to
either
tortious
interference
with
contractual
relationship nor prospective economic advantage.
Finally, the Complaint charges Klinke and Manani with civil
conspiracy.
In order to establish a civil conspiracy the complaint
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must contain allegations that the parties “knowingly and voluntarily
participated in a common scheme to commit an unlawful act or a lawful
act in an unlawful manner.
LEXIS 9431.
McCoy v. Games Tech Corp., 2012 U.S.Dist.
The Complaint must allege an agreement and a tortious
act in furtherance of that agreement.
Fiberglass
Corp.
720
N.E.2d
242
McClure v. Owens Corning
(1999).
There
are
no
such
allegations in the Amended Complaint.
Finally moving on to Bellus. The Defendants’ Motion is based on
the fact that Bellus bought the assets of ALS free and clear of any
claims.
Since the closing occurred a day after Muller was fired,
Defendant argues that it cannot be held
liable.
Muller’s counsel
acknowledged this before the bankruptcy judge.
However, Muller
alleges
that
she
was
fired
the
day
before
the
closing
by
an
individual who claimed to be employed by Versa, the private equity
firm that financed
the
sale.
Bellus counters
with
affidavits
alleging that deal was not closed until February 3, 2012.
That it
was Dennis Roberts, the COO of American Laser Centers, who fired
Muller and that he did so while in the employ of American Laser
Centers, the debtor in bankruptcy.
Since the affidavits have not
been countered by Muller, her bare assertion, not under oath, that
she was fired prior to the closing by someone who claimed to be
employed by Versa cannot provide the evidence necessary to establish
jurisdiction over Bellus.
Since the Complaint does provide sufficient facts to establish
the liability of Klinke for the tort of retaliation, there is
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personal jurisdiction for Muller to proceed against her.
However,
the case is dismissed for want of jurisdiction against Manani and
Bellus.
III.
CONCLUSION
For the reasons stated herein, Defendant Chelsea Klinke’s Motion
to Dismiss is denied.
The Motions to Dismiss of Defendants Rhythm
Manani and Bellus ALC Investments 1, LLC are granted.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
DATE: 12/27/2012
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