Gharavi v. AirWatch, LLC

Filing 56

ORDER signed by the Honorable Edmond E. Chang on 9/28/2014: For the reasons stated in the Order, the motion to dismiss 11 is denied in large part and granted in part. Emailed notice(Chang, Edmond)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
NIMA GHARAVAI,
Plaintiff,
v.
AIRWATCH, LLC,
Defendant.

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No. 13 c 06958
Judge Edmond E. Chang

ORDER
Defendant AirWatch moves to dismiss [R. 11] the First Amended Complaint.
The first argument is that the statements attributed to AirWatch’s CEO, John
Marshall, during the March 2012 employment negotiations with Plaintiff Nima
Gharavi are not actionable as fraud or promissory estoppel. As the Court has noted
during prior status hearings, it is not accurate that any statement made during an
employment negotiation is not actionable. Instead, the dividing line draw by the
case law is between factual representations versus predictions, the latter of which
are not actionable.
In the First Amended Complaint, here are the categories into which the
alleged statements fall:
Paragraphs 11 and 12: the compensation projection of $200,000 and $300,000
are predictions and not actionable as factual representations.
Paragraph 13: the representation that individual quotas, implied to be the
then-current quotas, were $375,000 per quarter or $1.5 million annually is a factual
representation that can form the basis for a fraud claim.
Paragraphs 14(a)-(c): these are all representations as to the then-current
facts, and are actionable. The alleged representations are that sales cycles average
30 to 60 days; deals averaged between $25,000 and $80,000 in total revenue; and
the average deal size involved 500-5,000 device licenses.
Paragraph 16: the statement that if Gharavi stayed at AirWatch for six
months, he would receive an additional equity stake, is not actionable because of
the integration clause in the employment agreement. The integration clause
supersedes any prior “terms of employment,” and this equity-stake promise would

be a term of employment. Accordingly, this statement is not actionable, either as a
fraud or as promissory estoppel. The integration clause also knocks out the
promissory estoppel claim in its entirety, because it was not reasonable to rely on
employment-term promises that were then superseded by the integration clause.
(For the fraud claim, the other factual representations described above are not
superseded by the integration clause, which applies only to Gharavi’s employment
terms, and not to factual representations made during negotiations.) The
promissory estoppel claim is dismissed.
AirWatch’s arguments against the two statutory claims are rejected. First,
discovery is necessary to equip the parties to argue whether AirWatch is subject to
the Illinois Wage Payment Act, 820 ILCS 115/1 et seq. The case cited by AirWatch
involved a placement agency that had placed only four employees in Illinois over
five years. AirWatch is not a placement agency, and the parties need discovery to
determine the comparability of AirWatch’s Illinois presence. For now, the claim
survives.
Second, the Illinois Sales Representative Act, 820 ILCS 120/1 et seq., applies
to distributers of “product[s],” § 1(3), and the software licenses alleged in the First
Amended Complaint readily fit under the plain meaning of the term. AirWatch’s
argument is exceedingly thin, citing only one case that did not involve the Sales
Representative Act and instead concerned a completely different context (whether a
broadcast license was property that could be assigned with government permission).
So this claim too survives.
ENTERED:
s/Edmond E. Chang
Honorable Edmond E. Chang
United States District Judge
DATE: September 28, 2014