Goode v. American Veterans, Inc. et al
Filing
43
MEMORANDUM. Signed by Judge J. Frederick Motz on 6/15/12. (dass, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
MELINDA A. GOODE,
Plaintiff,
v.
AMERICAN VETERANS, INC., et al.,
Defendants.
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Civil No. 8:11-cv-02414
MEMORANDUM
Melinda Goode (―Goode‖) filed a nine-count complaint in this court on August 29, 2011
against defendants American Veterans, Inc. (―AMVETS‖), her former employer, and Velma R.
Hart (―Hart‖) and Linda A. Tucker (―Tucker‖), two former AMVETS employees, alleging
abusive discharge (Count I); breach of express and implied agreement, breach of the employee
policy manual and promissory estoppel (Count II); Employee Retirement Income Security Act
(―ERISA‖) violations (Count III); Fair Labor Standards Act (―FLSA‖) violations (Count IV);
tortious interference with business, economic, and contractual relations (Count V); civil
conspiracy (Count VI); negligent misrepresentation (Count VII), intentional misrepresentation
and fraud (Count VIII); and intentional/negligent infliction of emotional distress (Count IX).1
All counts, except Count V, are directed against defendant AMVETS. Counts V and VI are
asserted against defendants Hart and Tucker.
Now pending before the court are defendants‘ motions to dismiss pursuant to Federal
Rule of Civil Procedure 12(b)(6) or, in the alternative, for summary judgment pursuant to
Federal Rule of Civil Procedure 56(c). (ECF Nos. 16 (Tucker), 17 (AMVETS), 18 (Hart).) In
1
Goode has withdrawn her claim for emotional distress (Count IX). (Goode Opp‘n. ¶ 9, ECF
No. 23.)
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addition, Goode has filed a Rule 56(d) motion to permit discovery and hold defendants‘
summary judgment motions in abeyance. (ECF No. 27.) The issues have been fully briefed, and
no oral argument is necessary. See Local Rule 105.6. For the reasons stated below (1) Goode‘s
Rule 56(d) motion is denied; (2) defendants‘ motions to dismiss are granted as to Counts IV (in
part),V, and VI ; (3) defendants‘ motions for summary judgment are granted as to Counts II, III,
VII, and VIII; and (4) defendants‘ motions are denied with respect to Counts I and IV (in part).
I. BACKGROUND2
Melinda A. Goode (―Goode‖ or ―plaintiff‖) worked as a meeting planner for American
Veterans, Inc. (―AMVETS‖) from September 8, 2008 until her discharge on August 27, 2009.
(Compl. ¶¶ 2–3.) AMVETS is non-profit, 501(c)(19) tax-exempt organization. (Id. ¶ 6.) It is
the fourth-largest veterans organization in the United States and is open to all servicepersons
who have honorably served or presently serve in the U.S. Armed Forces. (Id. ¶ 25.) The day-today functions of the organization are performed by a national staff, which is headed by several
directors. (Id. ¶¶ 28–29.) During Goode‘s tenure as AMVETS‘s meeting planner, James B.
King (―King‖) served as AMVETS‘s National Executive Director, (id. ¶ 30), and Velma R. Hart
(―Hart‖) served as the organization‘s National Finance Director. (Id. ¶ 7.)
Goode first became aware of the meeting planner position in August 2008 after seeing an
advertisement AMVETS placed in a local newspaper. (Id. ¶ 36.) Goode responded to the ad
with a resume and cover letter stressing the importance of the long-term nature of the advertised
position. (Id. ¶ 37.) Her cover letter stated, ―Having recently closed my shop, I am seeking a
2
The facts are taken almost exclusively from the complaint. For those counts dismissed on
summary judgment, I look to supplemental materials when necessary. For the purpose of
addressing defendants‘ motions, I take as true all of plaintiff‘s allegations of material fact and
construe them in the light most favorable to the plaintiff. E.I. du Pont de Nemours & Co. v.
Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011).
2
long-term, permanent position which will utilize my experience and skills as a meeting planner.‖
(Id.) That same month, on August 29, 2008, Goode interviewed for the position with King,
AMVETS‘s Executive Director, and Maria Isaja (―Isaja‖), AMVETS‘s Human Resources
Director. (Compl. ¶ 38.) Goode avers that when she asked why the position was vacant, King
explained that each former meeting planner ―had simply moved on.‖ (Id.) Goode states that
when she pushed for more details as to why there had been three meeting planners in the span of
three years, King responded that it was due to normal attrition and that AMVETS actually had
little turnover, a product of the organization‘s good team environment. (Id. ¶ 40.) According to
Goode, King maintained there were no personality clashes or other issues that in any way
hastened previous meeting planners‘ departures. (Id. ¶ 44.) Goode asserts that throughout the
interview she stressed the importance of job stability and specifically advised King and Isaja that
she was looking for a long-term, permanent position—effectively her ―last job.‖ (Id. ¶ 42.) To
further explain why stability was so important to her, Goode told King and Isaja that she recently
closed her business and for financial reasons anticipated working beyond retirement age. (Id.)
Goode was informed prior to the interview that the position paid ―in the mid-to-high
thirties.‖ (Id. ¶ 38.) During the interview, Goode asked for a starting salary closer to $48,000.
(Id. ¶ 49.) King agreed to increase the position‘s salary to Goode‘s desired $48,000 after a sixmonth probationary period, (id. ¶ 49), and Isaja offered an initial salary review after three
months. (Id. ¶ 50.)
On September 2, 2008, Isaja phoned Goode to offer her the meeting planner position at a
starting salary of $38,000, with an initial salary review after three months. (Id. ¶ 51.) Two days
later, Goode received a signed formal offer letter by e-mail. (Id. ¶ 53.) The offer letter defined
the meeting planner position as a ―full-time exempt position,‖ listed Goode‘s start date and
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salary, and provided for a three-month salary review. (Id. ¶ 54.) In addition, the letter
summarized her benefits package, including her right to life insurance, a 401(k) defined
contribution plan, vacation and sick days, and long-term disability insurance. (Id. ¶ 55.) The
letter also made clear that Goode was to abide by AMVETS‘s employee handbook. (Id. ¶ 57.)
Finally, the letter included the following language:
Maryland is an ―employment at will‖ state. This means that either you or
AMVETS may, at your or our discretion, terminate our employment
relationship at any time. Completion of the designated probationary
period does not change your status as an at-will employee or in any way
restrict AMVETS‘ right to terminate you or change the terms or
conditions of your employment. This letter cannot be construed as a
contract, but as an offer of employment for an indeterminate period of
time.
(Id. ¶ 56.) Goode alleges that she immediately called Isaja to question her about the ―at will‖
language. (Id. ¶ 59.) Isaja‘s response, Goode states, was to downplay the language and dismiss
it as ―legalese‖ included in the letter to ―keep the lawyers happy.‖ (Id. ¶ 59.) After speaking
with Isaja, Goode signed the offer letter. (Id. ¶ 60.)
Goode began work on September 8, 2008. (Id. ¶ 52.) Shortly thereafter she received
AMVETS‘s ―employee handbook,‖ referenced in her offer letter. (Id. ¶ 61.) The handbook
included a thorough discussion of AMVETS policies and procedures, including employee duties
and obligations as well as rights and entitlements. (Id. ¶¶ 62, 65.) The handbook also defined
itself as ―only a general guide‖ and said it was ―not intended to be, and should not be, construed
as a contract.‖ (Id. ¶ 63; Compl. Ex. A. at 48, ECF No. 1-1.) Furthermore, the handbook
reiterated that AMVETS was an at will employer and explained that ―the employment-at-will
doctrine . . . part of the fabric of [Maryland‘s] non-statutory or ‗common law‘ . . . provides that
an employee who does not have a written contract of employment for a specified period of time
can be terminated at any time . . . with or without notice or cause.‖ (Id.)
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Over the course of her employment, Goode planned several events. (Id. ¶ 68.) Goode
states she was significantly under budget for all of these events, received praise from AMVETS
leadership, and was never the subject of any complaints or negative performance evaluations.
(Id. ¶ 69.) Goode performed successfully despite working under what she alleged amounted to a
hostile and intolerable work environment. (Id. ¶ 70.) Goode states defendant Hart engaged in
uncivil and harassing behavior, including threats, invasion of privacy, verbal abuse, public
ridicule and belittling, in an attempt to force Goode to quit. (Id. ¶ 84.) Goode reported to King,
pursuant to the employee handbook‘s reporting procedures, not only Hart‘s alleged harassment
but also suspicions of Hart‘s inappropriate use of AMVETS‘s corporate credit card and
attempted manipulation of corporate award accounts for Hart‘s personal benefit. (Id. ¶¶ 75, 76,
78.)
In addition to her grievances related to Hart, Goode questioned King and Isaja about her
status as an exempt employee, arguing that she was, in fact, a non-exempt employee and was
therefore entitled to overtime wages under Maryland and federal law. (Id. ¶¶ 89–92.)
Unsatisfied with King‘s response, Goode reported the alleged violation to the United States
Depart of Labor (―DOL‖) on September 17, 2009. (Id. ¶ 94.)
On August 27, 2009, King and Isaja informed Goode that the meeting planner position
had been eliminated for budgetary reasons. (Id. ¶ 95.) Following Goode‘s discharge, on
September 1, 2009, AMVETS entered into a Memorandum of Understanding (―MOU‖) with
Events at Last, an event planning company owned and operated by defendant Linda Tucker
(―Tucker‖), a former AMVETS employee. (AMVETS Mem. Supp. Mot. Dismiss or Summ. J. at
5–6, ECF No. 17-1.) From January 2000 until May 2006, Tucker held the meeting planner
position Goode later occupied. (Compl. ¶ 33.) Goode alleges Hart discovered the complaints
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lodged against her and retaliated against Goode by conspiring with Tucker to replace Goode after
Hart secured Goode‘s termination under the cover of a ―Reduction in Force.‖ (Id. ¶¶ 80–83, 85–
86.)
After her alleged wrongful discharge, Goode filed this action against defendants
AMVETS, Hart, and Tucker, raising numerous claims under both federal and Maryland state
law.
II. STANDARDS OF REVIEW
A. Motion to Dismiss
―[T]he purpose of Rule 12(b)(6) is to test the sufficiency of a complaint and not to
resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.‖
Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (internal quotation marks
and alterations omitted) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir.
1999)). To survive a motion to dismiss, the factual allegations of a complaint ―must be enough
to raise a right to relief above the speculative level, . . . on the assumption that all the allegations
in the complaint are true (even if doubtful in fact).‖ Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (internal citations and alterations omitted). Thus, the plaintiff‘s obligation is to set
forth sufficiently the ―grounds of his entitlement to relief,‖ offering ―more than labels and
conclusions.‖ Id. (internal quotation marks and alterations omitted). It is not sufficient that the
well-pleaded facts suggest ―the mere possibility of misconduct.‖ Ashcroft v. Iqbal, 556 U.S. 662,
679 (2009). Rather, to withstand a motion to dismiss, ―a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face,‖ meaning
the court could draw ―the reasonable inference that the defendant is liable for the conduct
alleged.‖ Id. at 663 (internal quotation and citation omitted).
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When ruling on such a motion, the court must ―accept the well-pled allegations of the
complaint as true,‖ and ―construe the facts and reasonable inferences derived therefrom in the
light most favorable to the plaintiff.‖ Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997).
The court need not, however, ―accept the legal conclusions drawn from the facts, and [it] need
not accept as true unwarranted inferences, unreasonable conclusions or arguments.‖ Giarratano
v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008).
B. Summary Judgment
A court may properly award summary judgment when ―the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as a matter of law.‖ Fed. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Emmett v. Johnson, 532 F.3d 291, 297
(4th Cir. 2008). A material fact is one that ―might affect the outcome of the suit.‖ Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine dispute about a material fact exists
only ―if the evidence is such that a reasonable jury could return a verdict for the non-moving
party.‖ Id. When reviewing a motion for summary judgment, the court must look at the facts
and inferences drawn therefrom in the light most favorable to the non-moving party. Scott v.
Harris, 550 U.S. 373, 378 (2007).
While the burden is on the moving party to demonstrate the absence of any genuine issue
of material fact, Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970), ―[a] mere scintilla of
proof . . . will not suffice to prevent summary judgment.‖ Peters v. Jenney, 327 F.3d 307, 314
(4th Cir. 2003). The non-moving party may not merely rest upon allegations or denials in her
pleadings but must, by affidavit or other evidentiary showing, set out specific facts showing a
genuine issue remains for trial. Fed. R. Civ. P. 56(e)(2). A court should enter summary
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judgment where a nonparty fails to make a sufficient showing to establish the elements essential
to the party‘s claim and on which the party will bear the burden of proof at trial. See Celotex,
477 U.S. at 322. ―By its very terms, this standard provides that the mere existence of some
alleged factual dispute between the parties will not defeat an otherwise properly supported
motion for summary judgment; the requirement is that there be no genuine issue of material
fact.‖ Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S. Ct. 2505, 2510 (1986). If
there is insufficient evidence for a reasonable jury to render a verdict in favor of the non-moving
party, there is no genuine issue of material fact, and summary judgment may be granted. See
Anderson, 477 U.S. at 248. The District of Maryland has held that ―a party cannot create a
genuine dispute of material fact through mere speculation or compilation of inferences.‖
Summary judgment is inappropriate, however, if there clearly exist factual issues ―that properly
can be resolved only by a finder of fact because they may reasonably be resolved in favor of
either party.‖ Id. at 250; see also JKC Holding Co., LLC v. Washington Sports Ventures, Inc.,
264 F.3d 459, 465 (4th Cir. 2001).
III. ANALYSIS
As a preliminary matter, I decline to stay a ruling on defendants‘ motions in order to
provide Goode an opportunity to conduct discovery. Goode has failed to specify what she is
seeking through discovery and why this information is currently unavailable to her.3 More
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Federal Rule of Civil Procedure 56(d) provides: ―If a nonmovant shows by affidavit or
declaration that, for specified reasons, it cannot present facts essential to justify its opposition,
the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or
declarations or to take discovery; or (3) issue any other appropriate order.‖ Fed. R. Civ. P. 56(d).
Goode fails to identify any facts essential to her opposition that are not already available to her
and that she could only obtain through discovery. In fact, Goode begins her Rule 56(d) motion
by stating ―her affidavit [submitted with her original opposition] asserts admissible evidence
sufficient to overcome Defendants‘ motions.‖ (Goode Mot. Hold Summ. J. Abeyance at 2, ECF
No. 27.) It is only in the alternative, if the court finds otherwise, that Goode requests leave to
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importantly, I find that there remains a sufficient record to permit a summary judgment
determination even if the court disregards the challenged provisions of Goode‘s affidavit.4
The complaint contains eight counts, many of which reference several different statutes
or causes of action. All counts, except Count V, are asserted against defendant AMVETS. Only
Counts V and VI are asserted against defendants Hart and Tucker. I first dismiss several Counts
pursuant to Federal Rule of Civil Procedure 12(b)(6). I then address the surviving Counts on
summary judgment. Fed. R. Civ. P. 12(d) (―If, on a motion under Rule 12(b)(6) . . . matters
outside the pleadings are presented to and not excluded by the court, the motion must be treated
as one for summary judgment.‖).
conduct discovery. Furthermore, Goode at no point details with any specificity materials she is
reasonably likely to obtain through discovery. In her consolidated response, Goode at one point
proffers generally that ―no doubt additional discovery would reveal communications between
Defendants Hart and Tucker.‖ (Goode Opp‘n at 48.) The Fourth Circuit has ruled that ―[a]
nonmovant may not simply rely on vague assertions that additional discovery will produce
needed, but unspecified facts.‖ Finzel v. Mazda Motor of Am., Inc., 172 F.3d 43 (Table), 1999
WL 12934, at *2 (4th Cir. 1999); see also Morrow v. Farell, 187 F. Supp. 2d 548, 551 (D. Md.
2002) (noting a request for discovery will not be granted if the party seeks to conduct a ―fishing
expedition‖ in the hopes of finding helpful evidence). As a final point, Goode‘s motion is
procedurally defective. Goode never filed a formal Rule 56(d) declaration or affidavit.
Although Goode has filed two affidavits in response to defendants‘ motions, she never filed a
specific affidavit pursuant to Rule 56(d) that specifies a legitimate need for further discovery and
outlines with some particularity what she hopes to obtain through discovery should the motion be
granted. See Jarvis v. Astrue, No. CCB-05-2950, 2007 WL 2332694, at *9 (D. Md. 2007)
(noting the importance of an affidavit laying out ―specific and detailed information about the
proposed discovery clearly linking it to the elements necessary for an effective opposition.‖),
aff’d, 282 F. App‘x 259 (4th Cir. 2008). The failure to submit a formal Rule 56(d) affidavit or
declaration is, on its own, sufficient grounds for denying Goode‘s motion to hold summary
judgment in abeyance. Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 244, 246
n.19 (4th Cir. 2002); Nguyen v. CAN Corp., 44 F.3d 234, 242 (4th Cir. 1995).
4
Express notice of the conversion (from motion to dismiss to summary judgment) is not needed
when defendants‘ motions to dismiss are alternately framed as motions for summary judgment,
providing plaintiff with the opportunity to submit additional materials outside the pleadings.
Jackson v. Mayor of Baltimore City, No. JFM 08-3103, 2009 WL 2060073, at * 1 (D. Md. July
14, 2009).
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A. Motion to Dismiss
i. Abusive Discharge—Violation of Public Policy (Count I)
―The common law rule, applicable in Maryland, is that an employment contract of
indefinite duration, that is, at will, can be legally terminated at the pleasure of either party at any
time.‖ Adler v. Am. Standard Corp., 432 A.2d 464, 467 (Md. 1981) (citing, among other cases,
State Comm’n on Human Relations v. Amecom Div., 360 A.2d 1 (Md. 1976)). However, in
Adler, on a certified question from the District of Maryland, the Maryland Court of Appeals
recognized a narrow exception to the common law terminable at-will doctrine; a cause of action
is allowed for abusive discharge of an at-will employee if the motivation for the discharge
―contravened some clear mandate of public policy.‖ 432 A.2d at 471.
The tort of abusive discharge is one of limited scope. A tort action for abusive discharge
lies in only two situations: (1) discharge for refusing to engage in an illegal activity and (2)
discharge for exercising a specific legal right or duty. Adler v. Am. Standard Corp., 830 F.2d
1303, 1307 (4th Cir. 1987); see also Milton v. IIT Research Inst., 138 F.3d 519, 522 (4th Cir.
1998) (affirming dismissal of an abusive discharge claim that did not fit into either category).
Furthermore, ―[a]busive discharge is inherently limited to remedying only those discharged in
violation of a clear mandate of public policy which otherwise would not be vindicated by a civil
remedy.‖ Makovi v. Sherwin-Williams Co., 561 A.2d 179, 180 (Md. 1989) (emphasis added).
Thus, a statute that carries its own remedy cannot satisfy the public policy exception because
―the generally accepted reason for recognizing the tort [of abusive discharge], that of vindicating
an otherwise civilly unremedied public policy violation, does not apply.‖ Id. at 190. Under the
facts of this case, Goode must assert with particularity and specificity a clear mandate of public
policy, the source of which is not a statute providing its own remedy, and which bestows on her a
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particular legal duty. Goode fails to do so, and therefore her claim for abusive discharge must be
dismissed.
Goode‘s complaint includes a laundry list5 of public policy sources and, as one District of
Maryland judge aptly phrased, asks this court to ―‗pluck out‘ a public policy from a potential
pool of mandates.‖ Thompson v. Mem’l Hosp. at Easton, Md., 925 F. Supp. 400, 407 (D. Md.
1996) (Harvey, J.). However, there are significant problems with each proffered public policy
source. First, the litany of statutes to which Goode points as potential public policy sources all
include their own enforcement provisions and therefore cannot serve as the basis of a separate
tort cause of action for abusive discharge under the principle established in Makovi.6 561 A.2d at
180. Second, Goode seems to suggest that even if her discharge was not specifically prohibited
by statute, this court should recognize a more general public policy exception to the terminable at
5
Goode fails to discuss or explain the relevance of the majority of the public policy sources she
lists. For example, she includes the Equal Pay Act and Maryland‘s Occupational Safety and
Health laws in her list of statutes without alleging a single occurrence of gender-based
discrimination or violations of workplace health and safety laws. The exhaustive list of public
policy sources, many of which seem completely disconnected to the facts of the case, raises
suspicions about the validity of her abusive discharge claim. Thompson, 925 F. Supp. at 407
(―The claims asserted by plaintiff in this case are particularly suspect because he has advanced
the existence of so many different public policies allegedly violated by defendant in terminating
his employment.‖).
6
For example, Goode points to the Maryland Code‘s prohibition on discriminatory employment
practices based on an employee‘s race, color, religion, sex, age, national origin, marital status,
sexual orientation, genetic information, or disability, Md. Code Ann., State Gov‘t § 20-602, and
to the Code‘s prohibition on discharging an employee in retaliation for exercising a right under
Maryland‘s occupational safety and health laws, Md. Code Ann., Lab. & Empl. § 5-604, or in
retaliation for trying to enforce equal pay laws. Md. Code Ann., Lab & Empl. § 3-308. Each of
these statutes provides administrative or judicial remedies, and therefore the policies underlying
these statutes cannot form the basis of an abusive discharge claim. See Md. Code. Ann., State
Gov‘t § 20-1213; Md. Code Ann., Lab. & Empl. § 5-604(b); Md. Code Ann., Lab. & Empl. § 3427(a). Even if these statutes could form the basis of a ―clear mandate of public policy‖ required
for an abusive discharge cause of action, Goode fails to provide sufficient factual support to
overcome dismissal. In fact, Goode‘s listing of these statutes is the only place in the more than
fifty-page complaint where she mentions status-based discrimination, occupational safety and
health violations, and the other protections afforded by the statutes she proffers as public policy
sources.
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will doctrine. However, the general public policies she proffers, such as encouraging reporting
of potential illegal conduct, (Compl. ¶ 104), and protecting against retaliation for
whistleblowing, (Compl. ¶ 115), are too general and unspecified to establish a public policy
mandate for the purposes of an abusive discharge claim. It is not that I am unwilling to go
outside of state legislative enactments to determine Maryland public policy. However, I am
circumspect about such action since it is normally and preferably the function of the legislative
branch. In my view, Goode suggested state public policies that are too expansive and vague to
provide her with a basis for relief.
Finally, Goode proffers a somewhat unique public policy source—the interrelationship
between a provision of the United States Internal Revenue Code and AMVETS‘s employee
handbook. Goode asserts she was terminated for reporting instances of private inurement of
AMVETS money and property—prohibited for tax-exempt entities under 26 U.S.C. §
501(c)(19(C)—even though the employee handbook required such reporting7 and guaranteed
whistleblower protection.8 (Compl. ¶¶ 113, 116.) Goode argues that because she was required
to report these alleged violations pursuant to AMVETS‘s employee handbook, her discharge for
fulfilling her duty to report constitutes a violation of public policy. (Goode Opp‘n at 9–10.) In
essence, Goode avers her alleged retaliatory discharge for reporting improper private inurement
of nonprofit assets amounts to a public policy mandate of sufficient clarity to warrant an
7
Article 7.15 of the handbook states: ―It is the duty of all employees to properly maintain and
report deficiencies of, and abuses to, AMVETS‘ property.‖ (Compl. Ex. A at 5.)
8
AMVETS‘s Whistleblower Policy states: ―It is the responsibility of all directors, officers and
employees to comply with these standards and to report violations or suspected violations.‖ (Id.
at 43–44.) The policy also has a no retaliation provision which provides that ―no director, officer
or employee who in good faith reports a violation of the standards shall suffer harassment,
retaliation or adverse employment consequence.‖ (Id.) The purpose of the policy is ―to
encourage and enable employees and others to raise serious concerns within the Organization
prior to seeking resolution outside the Organization.‖ (Id.)
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exception to the at will doctrine and allow her claim for abusive discharge to proceed. Neither of
these two sources, taken separately or together, bestows a specific legal duty such that
termination for exercising the duty contravenes a clear mandate of public policy.9
In Thompson, the plaintiff asserted an abusive discharge claim, alleging the defendant
improperly fired him because the plaintiff intended to report discovered ―operational illegalities.‖
925 F. Supp. at 407. The District Court of Maryland dismissed the plaintiff‘s claim because
even though ―[p]laintiff might have felt morally obligated to report the misadministrations, and
indeed his suspicions . . . were later confirmed by a state inspection . . . [the] plaintiff was under
no legal duty to act as he did, and therefore any public policy embodied in [the Maryland law
defining such ―operational illegalities‖] [did] not protect plaintiff from discharge.‖ Id.; see also
Milton, 138 F.3d at 523 (4th Cir. 1998) (holding that no statute or other legal source imposed on
plaintiff a duty to report defendant‘s alleged tax fraud to form the basis for an abusive discharge
claim).
Similarly, Goode was under no legally prescribed duty to report Hart‘s alleged financial
improprieties. The provision of the United States Internal Revenue Code Goode cites provides
as a condition for tax-exempt status, that no portion of the net earnings inure to the benefit of any
private shareholder or individual. 26 U.S.C. 501(c)(19)(C). Nowhere in the language of the
statute is there an affirmative duty placed on employees of tax-exempt organizations to report
suspected violations. And even if there were such a duty, reporting to a superior, rather than an
9
The fact that the prohibition on private inurement is a matter of federal policy does not on its
own preclude it from serving as a public policy source for a state tort cause of action. Federal
public policy is incorporated into Maryland public policy because Maryland has an interest in its
citizens obeying the law. Adler, 538 F. Supp. at 580 (finding public policy underlying federal
tax laws a proper basis for an abusive discharge claim because ―federal policy . . . is incorporated
as public policy by the State of Maryland‖).
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external law enforcement officer or agency, would not be an exercise of that duty. Thus, the
Code provision is an insufficient public policy source to support an abusive discharge claim
because it confers no duty upon Goode.
The employee handbook likewise seems to be an insufficient public policy source. Even
though it might confer a duty, it is not a legally cognizable duty; the employee handbook is not a
legal source bestowing legal obligations. A general provision in a policy handbook does not rise
to the level of a statutory duty, and Goode does not point to any binding authority to persuade
this court otherwise. As the Adler court recognized, ―[courts] have always been aware . . . that
recognition of an otherwise undeclared public policy as a basis for a judicial decision involves
the application of a very nebulous concept to the facts of a given case, and that declaration of
public policy is normally the function of the legislative branch.‖ Adler, 432 A.2d at 472. While
at first glance it seems that provisions of an employee handbook, especially of the general policy
sort at issue in this case, cannot serve as the ―clear mandate of public policy‖ required for an
abusive discharge claim, upon further consideration Goode‘s argument gives me pause. In the
event that Goode did not report the private inurnment of AMVETS‘ funds, AMVETS would be
within its rights to discharge Goode based on Article 7.15 of the handbook, which bestows a duty
to report misuse of AMVETS‘ property. It seems wrong, then, that Article 7.15 can serve as a
proper basis for termination yet cannot serve as a sufficient public policy basis on which to assert
an abusive discharge claim in the event an employee is discharged after fulfilling his obligations
under Article 7.15. I will allow this claim to go forward for limited discovery on this point.
Defendant AMVETS retains the right to renew its summary judgment motion upon discovery.
14
ii. FLSA and Analogous State Law Violations (Count IV)10
The Fair Labor Standards Act (―FLSA‖) requires employers to pay overtime to
employees who work in excess of forty hours per week. 29 U.S.C. § 207(a)(1). However,
employees who work in a ―bona fide executive, administrative, or professional capacity‖ are
exempt from overtime pay. 29 U.S.C. § 213(a)(1). Only the administrative exemption is at issue
in this case. Federal regulations adopted by the Secretary of Labor have further defined the
scope of an exempted employee working in an administrative capacity. See C.F.R. § 541.200.
The regulations provide that the term ―employee employed in a bona fide administrative
capacity‖ means any employee:
(1) Compensated on a salary or fee basis at a rate of not less than
$455 per week (or $380 per week, if employed in American Samoa
by employers other than the Federal Government), exclusive of
board, lodging or other facilities;
(2) Whose primary duty is the performance of office or nonmanual work directly related to the management or general
business operations of the employer or the employer's customers;
and
(3) Whose primary duty includes the exercise of discretion and
independent judgment with respect to matters of significance.
29 C.F.R. § 541.200(a). Application of the overtime exemption is an affirmative defense for
which the employer bears the burden of proof, Corning Glass Works v. Brennan, 417 U.S. 188,
196–97 (1974), and exemptions ―are to be narrowly construed against the employers seeking to
assert them.‖ Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960).
It is undisputed that AMVETS treated Goode as an exempt employee. Goode was
offered a ―full-time exempt position,‖ as stated in AMVETS‘s offer letter. (Compl. Ex. B.) In
10
The FLSA analysis applies equally to Maryland‘s analogous Wage and Hour Law. Md. Code
Ann., Lab. & Empl. § 3-415. In her opposition to defendants‘ motions, Goode focuses solely on
Count IV‘s retaliation claim. I, however, will address both the retaliation and overtime pay
claims raised in her complaint.
15
addition, Section 2.4 of the employee handbook, entitled ―Employee Status Definitions,‖ defined
―exempt employee‖ as follows:
―Exempt Employees‖ – Unless otherwise specified will mean
exempt from the daily and weekly overtime requirements of: (1)
the Fair Labor Standards Act as amended (Federal Wage and Hour
law); and (2) the Walsh-Healey Public Contracts Act. Exempt
employees are eligible for all AMVETS benefits.
(Compl. Ex. A. 9.) What is disputed, however, is whether Goode was, in fact, a non-exempt
employee.
Goode states that she often worked upwards of sixteen-hour days and on such occasions
she was not paid overtime, while other support staff with similar supervisory responsibilities
were paid overtime. (Compl. ¶ 155.) During one of the events she worked on, Goode avers she
was the only administrative employee who was not paid overtime. (Goode Aff. ¶ 24, ECF No.
23, Ex. A). After discovering this, Goode raised the issue with King, but it was never resolved.
(Id. at ¶ 24.) Then, in late March 2009, Goode alleges she requested ―comp time‖ from King for
over 100 hours of overtime work performed between December 2008 and March 2009. (Id. at ¶
27.) King purportedly responded by refusing to reevaluate whether Goode was an
administrative employee. (Compl. ¶ 157.)
In asserting entitlement to back overtime pay, Goode sets forth more than empty
assertions and presents a genuine issue of material fact as to whether AMVETS improperly
classified her as an exempt employee. Dismissal is therefore inappropriate, as is summary
judgment. AMVETS completely ignores the overtime payment portion of Count IV; AMVETS
does not address Goode‘s claim for overtime in its motion or subsequent reply memorandum.
Whether Goode‘s position involved the exercise of discretion and independent judgment
required for the administrative exemption is a contested factual issue, and one that is dispositive
16
of Goode‘s cause of action. Thus, AMVETS‘s motion for summary judgment is denied on this
claim.11
Goode also raises a FLSA retaliation claim in addition to her overtime claim. The FLSA
contains a retaliation provision making it unlawful ―to discharge or in any other manner
discriminate against any employee because such employee has filed any complaint or instituted
or caused to be instituted any proceeding [seeking overtime payments], or has testified or is
about to testify in any such proceeding.‖ 29 U.S.C. § 215(a)(3). A plaintiff asserting a claim of
retaliation under the FLSA must show that ―(1) he engaged in an activity protected by the FLSA;
(2) he suffered adverse action by the employer subsequent to or contemporaneous with such
protected activity; and (3) a causal connection exists between the employee‘s activity and the
employer‘s adverse action.‖ Jackson v. Mayor & City Council of Baltimore City, No. JFM 083103, 2009 WL 2060073, at *2 (D. Md. July 14, 2009) (citing Darveau v. Detecon, Inc., 515
F.3d 334, 340 (4th Cir. 2008)). Once the plaintiff makes out a prima facie case of retaliation, the
burden shifts to the defendant to provide a legitimate, non-discriminatory purpose for the adverse
employment action. Id. (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973)).
Then, the burden shifts back to the plaintiff, who must prove defendant‘s stated purpose is
merely pretextual. Id.
Goode‘s retaliation claim fails because she does not allege that she was engaged in a
protected activity prior to or contemporaneous with her discharge. Goode avers she reported the
alleged FLSA overtime pay violation to the DOL on September 17, 2009, several weeks after her
11
Goode avers she was in contact with a DOL investigator who, after reviewing documentation
Goode provided, determined Goode was a ―non-exempt‖ employee and advised Goode that she
would be contacting AMVETS to request back pay for the overtime hours. (Goode Aff. ¶ 51.)
Before proceeding any further, this court requests an update on this process. If AMVETS is
already in the process of paying Goode back pay, there is no role for the court to play in this
matter.
17
discharge. (Compl. ¶ 94.) Thus, this cannot be the predicate for her FLSA retaliation claim
because her discharge, the alleged adverse employment action, was not subsequent to or
contemporaneous with, but, in fact, prior to, the protected activity. The only other potential
predicate activity is Goode‘s complaint to King. This is insufficient, however, because the
Fourth Circuit has expressly held that ―the FLSA‘s anti-retaliation provision does not extend to
internal complaints.‖ Whitten v. City of Easley, 62 Fed. Appx. 477, 480 (4th Cir. 2003); see also
Jackson, 2009 WL 2060073, at *8 (D. Md. July 14, 2009) (―The Fourth Circuit has interpreted
the FLSA retaliation provision to require the institution of a formal proceeding, as opposed to an
internal complaint to a supervisor . . . .‖). Thus, Goode fails to plead a legally sufficient cause of
action for retaliation, and her claim is therefore dismissed.
iii. Tortious Interference with Business, Economic, and Contractual Relations (Count V)
The Maryland Court of Appeals has outlined the scope of the tort of interference with
contractual or business relationships:
[T]he two general types of tort actions for interference with
business relationships are inducing the breach of an existing
contract and, more broadly, maliciously or wrongfully interfering
with economic relationships in the absence of a breach of contract.
The principle underlying both forms of the tort is the same: under
certain circumstances, a party is liable if he interferes with and
damages another in his business or occupation.
Kaser v. Fin. Prot. Mktg., Inc., 831 A.2d 49, 53 (Md. 2003) (quoting Natural Design, Inc. v.
Rouse Co., 485 A.2d 663, 674 (Md. 1984)). A cause of action for tortious interference with
economic relations extends to terminable at will relationships. See Kramer v. Mayor of
Baltimore, 723 A.2d 529, 539 (Md. Ct. Spec. App. 1999). Because the alleged interference
pertains to what this court has determined to be an at will relationship, the court will construe
this count as a claim for intentional interference with economic relations.
18
An action for tortious interference with economic relations differs from interference with
contractual relations in that ―the right of an individual to interfere, which is narrowly restricted in
an interference with contract action, is treated more broadly in an action claiming interference
with economic relations.‖ Kramer, 723 A.2d at 539–40; see also Natural Design, 485 A.2d at
674 (―A broader right to interfere with economic relations exists where no contract or a contract
terminable at will is involved.‖) By its very nature, a contract terminable at will holds no legal
assurance of future performance, ―thus a competitor who intentionally causes a third person not
to continue an existing contract terminable at will does not improperly interfere with the
contractual relation if no wrongful means are employed.‖ Macklin v. Robert Logan Assocs., 639
A.2d 112, 121 (Md. 1994).
To make out a claim of tortious interference with economic relations, a plaintiff must
demonstrate (1) an intentional and willful act on the part of the defendant; (2) calculated to cause
damage to the plaintiff in plaintiff‘s economic relations; (3) done with an unlawful purpose,
without right or justification (which constitutes malice); and (4) resulting in actual damage and
loss to the plaintiff. Blondell v. Littlepage, 991 A.2d 80, 97 (Md. 2010). The essential element
is that the interference be ―by conduct that is independently wrongful or unlawful, quite apart
from its effect on the plaintiff‘s business relationships. Wrongful or unlawful acts include
common law torts and violence or intimidation, defamation, injurious falsehood or other fraud,
violations of criminal law, and the institution or threat of groundless civil suits or criminal
prosecutions in bad faith.‖ Kramer, 723 A.2d 529 at 540 (1999) (internal quotation marks
omitted) (citing Alexander & Alexander, Inc. v. B. Dixon Evander Assocs., Inc., 650 A.2d 260
(1994)). As the Maryland Court of Appeals has emphasized, ―[s]imply because a person induces
another to exercise an existing right to terminate a contract, even if that person‘s intention with
19
regard to one of the parties to the contract is tortious, does not make it actionable. That is, his or
her conduct is not thereby rendered improper or wrongful as a matter of law.‖ Macklin, 639 A.2d
112, 119 (Md. 1994).
Goode avers defendants Hart and Tucker conspired to improperly interfere with, and
ultimately did, in fact, interfere with, Goode‘s relationship with AMVETS by persuading King to
discharge Goode under the pretext of a ―Reduction in Force.‖ (Compl. ¶ 163.) Goode maintains
Hart was acting outside the scope of her duties in furtherance of her own interests and not those
of her employer, AMVETS. (Compl. ¶ 165.)12
Of all the counts in Goode‘s complaint, this count is the most factually anemic. The
complaint merely states, in a conclusory fashion, that defendants tortiously interfered with
Goode‘s employment by improper motive or through improper means. (Compl. ¶¶ 162–68.)
However, Goode does not allege facts from which this court could infer that defendants‘ conduct
was wrongful or unlawful. She does not allege any specific tortious conduct done by defendants
Hart and Tucker together or separately. Macklin, 639 A.2d at 119. Thus, the basis of her
tortious interference claim amounts to nothing more than insufficient labels and conclusions.
Twombly, 550 U.S. at 555. As a result, Count V is dismissed.
iv. Civil Conspiracy (Count VI)
12
As a matter of law, a party to a contract cannot tortiously ―interfere‖ with his or her own
contract. Bagwell, 665 A.2d 297, at 313 (citing, among other cases, Natural Design, 485 A.2d at
663). An agent of a party to a contract, acting within the scope of the agency relationship,
similarly cannot interfere with the contract. Id.; see also Cont'l Cas. Co. v. Mirabile, 449 A.2d
1176, 1185 (Md. Ct. Spec. App. 1982). Cognizant of this, Goode simply alleges Hart was acting
outside the scope of her employment. Goode provides no factual basis to support this bald
assertion. I need not reach this issue, however, because Count V is nothing but a list of
conclusory statements and fails to overcome defendants‘ 12(b)(6) motions.
20
Civil conspiracy has been defined in Maryland as the following:
[A] combination of two or more persons 13 by an agreement or
understanding to accomplish an unlawful act or to use unlawful
means to accomplish an act not in itself illegal with the further
requirement that the act or the means employed must result in
damages to the plaintiff. . . . No action in tort lies for conspiracy to
do something unless the acts actually done, if done by one person,
would constitute a tort.
Robb v. Wancowicz, 705 A.2d 125, 132 (Md. Ct. Spec. App. 1998) (internal quotation marks and
citations omitted).
Civil conspiracy is a ―parasite tort,‖ Kramer, 723 A.2d at 542; it ―is not a separate tort
capable of independently sustaining an award of damages in the absence of other tortious injury
to the plaintiff.‖ Alleco Inc. v. Harry & Jeanette Weinberg Found., Inc., 665 A.2d 1038, 1045
(1995) (quoting Alexander, 650 A.2d at 265 n.8). Here, Goode cannot recover for civil
conspiracy because her claims for the alleged underlying torts are dismissed. Count VI is
therefore dismissed.
B. Summary Judgment
v. Breach of Express and Implied Agreement, Breach of the Employee Policy Manual,
and Promissory Estoppel (Count II)
a. Breach of Express and Implied Agreement14
As discussed above, in Maryland, ―an employment contract of indefinite duration is
considered employment ‗at will‘ which, with few exceptions, may be terminated without cause
The ―two or more persons‖ requirement must take into account that a conspiracy cannot take
place between a corporation and its agent acting within the scope of his or her employment. Id.
Columbia Real Estate, 384 A.2d at 472. See related discussion supra note 12.
14
In her opposition to defendants‘ motions, Goode seems to focus solely on the ―breach of the
employee manual‖ cause of action and ignores the other causes of action included in Count II of
her complaint. I address all causes of action asserted in the complaint but will discuss the
―breach of AMVETS‘ employee manual‖ in greater detail.
13
21
by either party at any time.‖ Elliott v. Bd. of Trustees of Montgomery Cnty. Cmty. Coll., 655
A.2d 46, 49 (Md. Ct. Spec. App. 1995) (quoting Castiglione v. Johns Hopkins Hosp., 517 A.2d
786 (Md. Ct. Spec. App. 1986)); see also Lubore v. RPM Assocs., Inc., 674 A.2d 547, 554 (Md.
Ct. Spec. App. 1996) (―It is a longstanding principle in Maryland that an indefinite hiring is
prima facie a hiring at-will.‖). In the at will employment context, absent a contravening public
policy as the court has found to be the case here, an employer may ―terminate an employee for
any reason, even a reason that is arbitrary, capricious, or fundamentally unfair,‖ and it is not the
role of the court to ―review either the employer‘s (1) motivation or (2) factual bases for
termination.‖ Towson Univ. v. Conte, 862 A.2d 941, 949 (Md. 2004) (citing, among other cases,
Porterfield v. Mascari II, Inc., 823 A.2d 590, 602 (Md. 2003)).
Goode contends that AMVETS‘s assertions during her interview, in her offer letter, and
in the employee handbook established an express or implied-in-fact employment contract.
(Compl. ¶ 118.) Goode avers her discharge constitutes a material breach of this contract.
(Compl. ¶¶ 133–34.) However, Goode puts forth no evidence supporting a breach of contract
claim. Goode was unquestionably an at-will employee and there was no employment contract
that limited AMVETS‘s right to terminate her employment. Goode‘s signed offer letter included
the following provision:
Finally, please understand that Maryland is an ―employment at
will‖ state. This means that either you or AMVETS may, at your
or our discretion, terminate our employment relationship at any
time. Completion of the designated probationary period does not
change your status as an at-will employee or in any way restrict
AMVETS‘s right to terminate you or change the terms or
conditions of your employment. This letter cannot be construed as
a contract, but as an offer of employment for an indeterminate
period of time.
22
(Compl. Ex. B.) Thus, the at-will nature of her employment was made explicitly clear from the
outset. It was further reinforced in the introduction to the employee handbook Goode received:
This personnel policy manual is not a contract between any
employee and AMVETS and it should not be considered as such
under any conditions. AMVETS, in accordance with applicable
state law, is an employment at will employer, at will employees
may be terminated with or without notice or cause.
(Compl. Ex. A. at 7.) Upon receiving the manual, Goode signed Addendum 8 (titled ―Receipt of
Personnel Policies Manual‖), thereby acknowledging her understanding and acceptance of the
terms of the handbook. Addendum 8 included the following language:
I understand and acknowledge that this handbook is only a general
guide. It is not intended to be, and should not be, construed as a
contract. . . . I further understand the employment-at-will doctrine,
a doctrine that is part of the fabric of my state‘s non-statutory or
―common‖ law, which provides that an employee who does not
have a written contract of employment for a specified period of
time can be terminated at any time. An at-will employee can be
terminated with or without notice or cause.
(Compl. Ex. A. at 48).
In short, on three separate occasions AMVETS made it explicit that Goode‘s employment
was at will. On one of these occasions Goode included her signature below the at-will language,
acknowledging the at-will nature of her employment. No reasonable jury could find that
Goode‘s employment was anything other than at will.
Moreover, Goode‘s allegations that AMVETS officials discounted the importance of the
at-will language, (Goode Aff. ¶¶ 5, 7, ECF No. 23 Ex. A.), are insufficient and unpersuasive.
Goode asserts King and Isaja told her that she could work ―as long as [she] wished.‖ (Goode
Aff. ¶ 3.) Accepting this as true, such a period is too indefinite and non-specific to rebut the atwill presumption. See Lubore, 674 A.2d at 554 (citing Mazaroff, Maryland Employment Law §
3.2 at 166 (1990)) (The presumption of at-will employment ―can be overcome by express or
23
implied terms which show that the parties clearly intended to create a binding relationship for a
specific period of time or until certain conditions occur.‖) (emphasis added)). An employer
usually expects its employees, particularly new hires, to work for the foreseeable future. Stating
such an expectation, or expressing hope for a long-term relationship, does not transform an at
will employment relationship into one for a specific duration or prohibit dismissal except for
cause. Id. (citing Winand v. Case, 154 F. Supp. 529, 545 (D. Md. 1957) (finding that, even
where a contract stated, ―it is also our desire to have [the employee] remain active in the business
indefinitely,‖ the employee was an at-will employee for an indefinite period)).
Looking at all facts and inferences drawn therefrom in the light most favorable to Goode,
there is no genuine issue of material fact that supports denying summary judgment. Anderson,
477 U.S. at 247–48. Given that Goode‘s employment was at will, there is no support for a
breach of contract claim because AMVETS has unfettered discretion in its decisions to terminate
at-will employees. That is the very nature of at-will employment. Therefore, AMVETS‘s
motion for summary judgment is granted on this claim.
b. Breach of the Employee Policy Manual
In addition to her breach of contract claim, Goode also presents a cause of action for a
―breach of the employee policy manual.‖ The court reads this claim as alleging a breach of an
implied contractual obligation. Although Maryland courts have recognized implied contracts
based on employee manuals, see Dahl v. Brunswick Corp., 356 A.2d 221 (Md. 1976); Staggs v.
Blue Cross of Md., Inc., 486 A.2d 798 (Md. Ct. Spec. App. 1985), they have also held that an
effective disclaimer precludes such a finding. Fournier v. United States Fid. & Guar. Co., 569
A.2d 1299 (Md. Ct. Spec. App. 1990); Castiglione v. Johns Hopkins Hosp., 517 A.2d 786 (Md.
24
Ct. Spec. App. 1986). AMVETS‘s employee handbook contained a clear and unambiguous
disclaimer; therefore, the handbook in no way created enforceable contract rights.
In Staggs, the Maryland Court of Special Appeals recognized the potential for a ―properly
expressed and communicated‖ provision of an employee handbook that ―limi[ts] the employer‘s
discretion to terminate an indefinite employment‖ to constitute contractual undertakings
enforceable by the employee. Staggs, 486 A.2d at 803. The holding was a narrow one. The
court cautioned ―that not every statement made in a personnel handbook or other publication will
rise to the level of an enforceable covenant . . . general statements of policy are no more than that
and do not meet the contractual requirements for an offer.‖ Id. (internal quotation and citation
omitted); see also Haselrig v. Pub. Storage, 585 A.2d 294 (Md. Ct. Spec. App. 1991). The next
year, in Castiglione, the Maryland Court of Special Appeals emphasized Staggs’ limited
recognition of implied contractual rights from an employee manual:
[U]nlike the situation in Staggs, in this case the appellee expressly negated, in a
clear and conspicuous manner, any contract based upon the handbook for a
definite term and reserved the right to discharge its employees at any time. . . .
The purpose of the Staggs exception to the at will doctrine is to protect the
legitimate expectations of employees who have justifiably relied on manual
provisions precluding job termination except for cause. . . . Justifiable reliance is
precluded where, as in the case at hand, contractual intent has been expressly
disclaimed.
517 A.2d at 793–94 (internal citations omitted); cf. Bagwell v. Peninsula Reg’l Med. Ctr., 665
A.2d 297, 309 (Md. Ct. Spec. App. 1995) (relying on Castiglione and holding that the handbook
at issue validly disclaimed the creation of contractual rights).
The AMVETS employee handbook is much closer to that in Castiglione than that in
Staggs. Far from including contractual undertakings, the introduction to the AMVETS handbook
includes the following clear and unambiguous disclaimer: ―This personnel policy manual is not
a contract between any employee and AMVETS and it should not be considered as such under
25
any conditions.‖ (Compl. Ex. A at 7.) The introduction explains that the handbook ―describes
current personnel policies‖ as ―an informational service to the employees.‖ (Id.) These policies
are, as the introduction states, ―subject to modification, suspension or termination with or
without notice.‖ (Id.) The introduction also states that ―AMVETS reserves the right to change
corporate policies and employee benefits, and to amend the personnel policy manual and the
information contained therein as it sees fit in its sole and unfettered discretion.‖ (Id.) Not only
has contractual intent been expressly disclaimed, but the policies themselves are flexible and
open to unilateral modification. Thus, the handbook holds no legal significance on which to base
a cause of action in contract. AMVETS‘s motion for summary judgment is granted with respect
to this claim.
c. Promissory Estoppel
Lastly, Count II seeks relief based on promissory estoppel. ―[I]n Maryland, promissory
estoppel is an alternative means of obtaining contractual relief.‖ Maryland Transp. Auth. Police
Lodge # 34 of the Fraternal Order of Police, Inc. v. Maryland Transp. Auth., 5 A.3d 1174, 1227
(Md. Ct. Spec. App. 2010), rev’d on other grounds, 21 A.3d 1098 (Md. 2011). Under Maryland
law, the elements of a claim for promissory estoppel are: (1) a clear and definite promise by the
promisor; (2) where the promisor has a reasonable expectation that the offer will induce action or
forbearance on the part of the promisee; (3) which does induce actual and reasonable action or
forbearance by the promisee; and (4) causes a detriment which can only be avoided by the
enforcement of the promise. Horlick v. Capital Women’s Care, LLC, -- F. Supp. 2d --, 2011 WL
7144125 (D. Md. 2011) (citing Pavel Enters., Inc. v. A.S. Johnson Co., 674 A.2d 521, 532 (Md.
1996). The Maryland Court of Appeals has instructed that a ―court, and not a jury, must
determine that binding the [promisor] is necessary to prevent injustice.‖ Huffman v. Town of La
26
Plata, No. Civ. A. DKC 2004-2833, 2005 WL 1038854 (D. Md. May 4, 2005) (quoting Pavel
Enters., 674 A.2d at 533).
Goode avers her discharge contradicted AMVETS‘s representations and commitments.
(Compl. ¶ 10.) Goode further asserts King made express promises of job stability to encourage
Goode to accept AMVETS‘s employment offer. (Compl. ¶ 119.) Specifically, Goode alleges
King ―assured‖ her that as long as she performed her job responsibilities, she could work at
AMVETS for as long as she wanted, subject to dismissal only for cause. (Compl. ¶¶ 45, 119.)
Despite the at-will language in the offer letter, Goode states King and Isaja dismissed the
language as ―legalese‖ to ―keep the lawyers happy.‖ (Compl. ¶ 122.).
Even construing all factual allegations in the light most favorable to Goode, there is
insufficient evidence to find that justice requires AMVETS be bound to their alleged promises.
There is nothing in the record that supports an inference of reasonable reliance, that it was
reasonable for Goode to rely on oral statements so blatantly contradicted by three separate
writings. The terms of her at-will employment were formalized in her offer letter and reinforced
again by both the introduction to the employee handbook and her signed receipt of the handbook.
All of these clearly stated the employment was ―at will,‖ putting Goode on actual notice that her
employment was at will and vitiating any reasonable reliance. Goode has therefore failed to
make a sufficient showing to establish an essential element for the claim of promissory estoppel.
Summary judgment for AMVETS is granted on this claim.
vi. ERISA Violations (Count III)
Section 510 of ERISA provides:
It shall be unlawful for any person to discharge . . . a participant or
beneficiary . . . for the purpose of interfering with the attainment of
27
any right to which such participant may become entitled under [an
employee benefit plan], this sub chapter, or the Welfare and
Pension Plans Disclosure Act . . . . The provisions of section 1132
of this title [which provides for civil enforcement] shall be
applicable in the enforcement of this section.
29 U.S.C. § 1140. The Fourth Circuit has interpreted the language ―attainment of any right . . .
to which such participant may become entitled‖ to provide an employee a cause of action when
the employee is discharged to prevent vesting in a qualified pension plan or o prevent accrual of
additional benefits. Conkwright v. Westinghouse Elec. Corp., 933 F.2d 231, 236, 237–38 (4th
Cir. 1991).
A § 510 claim requires proof of the employer‘s specific intent, i.e., that the employer
discharged the employee with the purpose of interfering with the employee‘s pension rights. Id.
at 238 (―[I]t is necessary to separate the firings which have an incidental, albeit important effect
on employee‘s pension rights from the actionable firings, in which the effect of the firing on the
employer‘s pension obligation was a motivating factor in the firing decision.‖). The Fourth
Circuit recognizes, however, that the specific intent requirement results in proof problems similar
to those in the Title VII context—employers do not often articulate the motivation for their
actions, particularly if those actions are unlawful. Id. at 239. Thus, allocating the burdens of
proof, the court imports the three-step McDonnell Douglas scheme of presumptions and shifting
burdens utilized in the Title VII context. Id. (adopting the McDonnell Douglas analysis in the
ERISA context as laid out in Gavalik v. Cont’l Can Co., 812 F.2d 834, 851 (3d Cir. 1987)).
As in the Title VII context, employees alleging discrimination under ERISA bear the
initial burden of making out a prima facie case. Gavalik, 812 F.2d at 852 (citing McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 802 (1973)). To establish a prima facie case under
ERISA § 510, an employee must demonstrate that (1) the employer performed a prohibited
28
action (2) for the purpose of interfering (3) with the attainment of a right to which the employee
is currently, or in the future may become, entitled. Id. If the plaintiff establishes a prima facie
case by a preponderance of the evidence, the burden shifts to the employer to state a legitimate,
nondiscriminatory explanation for the challenged conduct. Id. If the employer carries its burden
and successfully demonstrates a legitimate, nondiscriminatory explanation, the burden then shifts
back to the plaintiff, who is given the opportunity to establish by a preponderance of the
evidence that the defendant‘s explanation is pretextual. Id.
A plaintiff‘s unsubstantiated allegations and bald assertions are insufficient to defeat a
motion for summary judgment, Jacobsen v. Towers Perrin Forster & Crosby, Inc., No. RDB-052983, 2008 WL 782477, at *10 (D. Md. March 20, 2008) (citing Evans v. Tech. Applications &
Serv. Co., 80 F.3d 954, 960 (4th Cir. 1996)), because a ―party cannot create a genuine dispute of
material fact through mere speculation or compilation of inferences.‖ Shin v. Shalala, 166 F.
Supp. 2d 373, 375 (D. Md. 2001) (internal citations omitted). If the plaintiff fails to present facts
that permit a reasonable inference of pretext, summary judgment should be granted in
defendant‘s favor. Jacobsen, 2008 WL 782477, at *10 (citing Rowe v. Marley Co., 233 F.3d
825, 830 (4th Cir. 2000)). Ultimately, then, on summary judgment a § 510 claim comes down to
plaintiff‘s evidence supporting pretext. Dister v. Cont’l.. Grp., Inc., 859 F.2d 1108 (2d Cir.
1988) (citing Texas Dept. of Cmty. Affairs v. Burdine, 450 U.S. 248, 256 (1981)).
Goode avers her discharge was a willful attempt to deprive her of rights protected by
ERISA. More precisely, she contends that preventing the impending vesting of her rights under
AMVETS‘s ERISA plan was a motivating factor in her discharge. Under the McDonnell
Douglas scheme, Goode‘s § 510 claim ultimately fails because she does not demonstrate a
genuine issue on the matter of pretext. Similar to the facts in Conkwright—which, like here,
29
involved insufficient facts to support a § 510 claim—the only evidence Goode puts forth15 to
support her claim of pretext is the e-mail discussion among AMVETS officials regarding the
cost-saving potential of Goode‘s termination. Conkwright, 933 F.2d at 239 (―It is obvious that
benefit costs make up a large amount of the costs of an employee to a company, and that pension
rights are a substantial component of benefit costs, but these undeniable propositions are not
sufficient standing alone to prove the requisite intent by the path of pretext.‖).
Goode points to Exhibit 3 of defendant Tucker‘s motion, (ECF No. 16-2), in which Hart
informs King via e-mail that terminating Goode‘s employment in favor of contracting out the
meeting planner duties would save around $20,000. (Goode Opp‘n at 40.) Goode argues that
this is ―evidence that AMVETS discharged [her] because of the savings that would result from
the termination of ERISA benefits.‖ (Id.) This number reflects the potential reduction in the
overall expenditure for meeting planner services, taking into account both salary and benefits
costs, but there is no special attention paid, or discussion focusing on, the benefits portion. As in
Conkwright, this supports an argument that cost-saving was a factor in Goode‘s termination (as
AMVETS readily admits), but it does not support an assertion that benefits in particular were
targeted. Conkwright, 933 F.2d at 239 (―As a number of courts have recognized, it is not
sufficient for an employee to allege lost opportunity to accrue additional benefits as evidence of
the employer‘s specific intent to violate ERISA; rather, a plaintiff must adduce facts, which if
taken as true, could enable a jury to identify unlawful intent from the other various reasons why
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Goode also points to the increase in AMVETS‘s gross revenue in 2009, demonstrated by
AMVETS‘s 2010 Federal Form 990 tax return, as evidence that the budgetary ―Reduction in
Force‖ explanation for her termination in 2009 was pretextual. (Goode Opp‘n, Ex. D.) However,
the exhibit does not include total expenditures, net profit, or other information. Without the
ability to properly evaluate gross revenue, the exhibit is not probative.
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an employer might have terminated plaintiff, and to conclude that the employer harbored the
requisite unlawful intent.‖).
In sum, Goode has not produced sufficient evidence to support a reasonable inference of
pretext. In fact, Goode fails to supply any connection, either through direct or circumstantial
evidence, between her discharge and AMVETS‘s attempt to prevent her from attaining ERISAprotected benefits. No reasonable jury could find unlawful intent, even after taking as true
Goode assertions. Therefore, summary judgment is appropriate.
vii. Fraudulent (Intentional), or in the Alternative, Negligent Misrepresentation (Counts
VII and VIII)
In Maryland, a claim for fraud requires that ―(1) the defendant made a false
representation to the plaintiff; (2) its falsity was either known to the defendant or that the
representation was made with reckless indifference as to its truth; (3) the misrepresentation was
made for the purpose of defrauding the plaintiff; (4) the plaintiff relied on the misrepresentation
and had the right to rely on it; and (5) the plaintiff suffered compensable injury resulting from
the misrepresentation.‖ McKenzie v. Comcast Cable Commc’n, Inc., 393 F. Supp. 2d 362, 373
(D. Md. 2005) (quoting Alleco, 665 A.2d at 1047)). A plaintiff asserting a fraud claim is subject
to Federal Rule of Civil Procedure 9(b), which requires that fraud counts be plead with
particularity. Fed. R. Civ. P. 9 (b). The Fourth Circuit has held ―particularity‖ to mean ―the
time, place, and contents of the false representations, as well as the identity of the person making
the misrepresentation and what he obtained thereby.‖ Harrison v. Westinghouse Savannah River
Co., 176 F.3d 776, 784 (4th Cir. 1999) (quoting 5 Charles Alan Wright and Arthur R. Miller,
Federal Practice and Procedure: Civil § 1297, at 590 (2d ed. 1990)). At the summary judgment
phase, a plaintiff must produce clear and convincing evidence to support a claim of fraud.
DeGirolamo v. Sanus Corp. Health Sys., 1991 WL 103383 at *4 (4th Cir. June 17, 1991).
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The elements of a claim for negligent misrepresentation are similar. The plaintiff must
prove ―(1) the defendant, owing a duty of care to the plaintiff, negligently assert[ed] a false
statement; (2) the defendant intend[ed] that his statement [would] be acted upon by the plaintiff;
(3) the defendant ha[d] knowledge that the plaintiff [would] probably rely on the statement,
which, if erroneous, [would] cause loss or injury; (4) the plaintiff, justifiably, [took] action in
reliance on the statement; and (5) the plaintiff suffer[ed] damage proximately caused by the
defendant‘s negligence.‖ Goldstein v. Miles, 859 A.2d 313, 332 (Md. Ct. Spec. App. 2004)
(citing Martens Chevrolet, Inc. v. Seney, 439 A.2d 534 (Md. 1982)). Because the action sounds
in negligence, the plaintiff must show that the defendant owed the plaintiff a duty. Cooper v.
Berkshire Life Ins. Co., 810 A.2d 1045, 1054 (Md. Ct. Spec. App. 2002). Such a duty exists in a
prospective employer-employee relationship; the employer owes a duty to speak with reasonable
care. Giant Food, Inc. v. Ice King, Inc., 536 A.2d 1182, 1185 (Md. Ct. Spec. App. 1988) (―[T]he
most common example of the duty to speak with reasonable care is based on a business or
professional relationship, or one in which there is a pecuniary interest.‖); see also Griesi v. Atl.
Gen. Hosp. Corp., 756 A.2d 548, 553 (Md. 2000) (holding that the duty exists in preemployment negotiations).
In support of her contention that King and Isaja‘s misrepresentations constituted fraud or,
at the very least, negligent misrepresentation, Goode alleges King provided false statements
regarding the nature of AMVETS‘s work environment, the reasons behind the departure of
several previous meeting planners, and the job stability Goode could expect. (Goode Opp‘n at
51–53.) Goode avers that none of these statements were truthful. (Id.) Goode argues that when
making these representations King and/or Isaja knew them to be false, or at least failed to
exercise reasonable care as to their truth. (Id.) It was King‘s goal, Goode asserts, to use these
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false statements to encourage Goode to accept the job offer. (Id.) Goode contends that, as King
had hoped, she relied upon King‘s statements and assurances to her detriment. (Id.) Goode
alleges she suffered damages as a result of forsaking other employment offers. (Id.)
Goode meets the respective pleading standards for both fraudulent (intentional)
misrepresentation and negligent misrepresentation. As such, Counts VII and VIII overcome
AMVETS‘s motion to dismiss. These Counts do not, however, pass muster under the summary
judgment standard. Goode‘s failure to adequately address the issue of reasonable reliance—an
important element for both intentional (fraudulent) and negligent misrepresentation—is fatal to
her claims. A fraud claim requires the plaintiff had ―the right to rely‖ on the alleged statements,
meaning the reliance is reasonable in light of the surrounding circumstances. Goldstein, 859
A.2d at 332 (Md. Ct. Spec. App. 2004) (citing Sass v. Andrew, 832 A.2d 247, 267 (Md. Ct. Spec.
App. 2003)). Similarly, an action for negligent misrepresentation requires that the plaintiff could
―justifiably take action in reliance‖ on the alleged statements. Id. (citing Martens Chevrolet,
Inc., 439 A.2d at 534).
Taking King and Isaja‘s alleged statements as true, and looking at all surrounding facts
most in favor of Goode, no jury could find Goode‘s reliance to be reasonable. First, in terms of
the alleged misrepresentations regarding job stability, it is patently unreasonable to rely on oral
statements directly contradicting several explicit, written statements defining the employment as
at will. Second, in terms of the alleged misrepresentation of AMVETS‘s positive ―team
environment,‖ it is unreasonable to rely on a prospective employer‘s general assertions about
company culture. One wouldn‘t expect an employer to denigrate fellow co-workers or speak
negatively of the relationships among employees. Beyond its inherent subjectiveness, it is
absurd to think that an employer‘s statements about collegiality could form the basis of a
33
misrepresentation claim. If that were the case, the courts would be flooded with suits from
disillusioned employees.
In conclusion, viewing the evidence in the light most favorable to Goode, a reasonable
jury could not find by clear and convincing evidence that AMVETS, through King and Isaja,
made intentionally or negligently false representations on which Goode rightfully relied.
Therefore, AMVETS‘s summary judgment motion is granted.
CONCLUSION
For the aforementioned reasons, (1) Goode‘s Rule 56(d) motion is denied; (2)
defendants‘ motions to dismiss are granted as to Counts IV (in part), V, and VI ; (3) defendants‘
motions for summary judgment are granted as to Counts II, III, VII, and VIII; and (4)
defendants‘ motions are denied with respect to Counts I and IV (in part).
June 15, 2012______________ ___
Date
/s/
J. Frederick Motz
United States District Judge
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