Athenahealth, Inc. v. May

Filing 64

Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDER. For the foregoing reasons, plaintiff's motion to dismiss (Docket No. 59 ) is, with respect to counts I and IV, ALLOWED but, as to counts II and III, DENIED. So Ordered. (Franklin, Yvonne)

United States District Court
District of Massachusetts
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AthenaHealth, Inc.,
Plaintiff,
v.
Lauren May,
Defendant.

Civil Action No.
16-11770-NMG

MEMORANDUM & ORDER
GORTON, J.
This case arises from an employment dispute between
Athenahealth, Inc. (“Athena” or “plaintiff”) and its former
employee, Lauren May (“May” or “defendant”).

Athena alleges

that May failed to return, upon her termination, a laptop
computer provided to her by Athena.

May counterclaims that she

was wrongfully discharged from her employment.
Athena moves to dismiss four of May’s counterclaims for
failure to state a claim for which relief can be granted.

For

the reasons that follow, Athena’s motion will be allowed, in
part, and denied, in part.
I.

Background
A. Factual Background
Athena, a Delaware corporation with its principle

place of business in Watertown, Massachusetts, is a nationwide
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provider of web-based healthcare management services.

May began

working for Athena as a market analyst in or about November,
2011, in the Watertown office.

May and Athena entered into an

at-will employment agreement (“the Agreement”). May later
transferred to Athena’s Princeton, New Jersey, office and
sometime thereafter began working remotely from her home in New
Jersey.
Beginning in 2015, Athena reorganized its Access and
Awareness Division and May’s position changed to “Senior Growth
Analytics and Operations Associate”.

May asserts that in an

effort to convince her to transfer to that position, Athena’s
vice president, Jamie Mallinger (“Mallinger”), promised May that
she would have
absolutely nothing to worry about in making the transition
to a different team and continuing working from home.

May alleges that in March, 2016, her manager prompted her
to misappropriate the technology, intellectual property and
trade secrets of Decidedly, LLC, a company that provided Athena
access to its system.

May expressed her concern to the manager

and her discomfort in fulfilling the request. Nevertheless, May
insists that her manager continued to pressure her to mirror
some of the successful features of the intellectual property of
Decidedly, LLC.

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In March, 2016, and again in May, 2016, defendant contacted
Athena’s senior corporate counsel and expressed her concerns
regarding her manager.

Shortly thereafter, counsel held a

meeting with Athena employees addressing May’s concerns.

Less

than two weeks after that meeting, May’s manager informed her
that she could not effectively fulfill the core requirements of
her position while working remotely and that her continued
employment would depend upon her attendance at her assigned work
station.

May submits that this was the first time Athena had

raised concerns about her remote working arrangement.

May

resigned from her employment on June 17, 2016.
B. Procedural History
Athena filed its complaint against May on August 30, 2016.
The next day, it moved for an emergency temporary restraining
order (“TRO”) requesting that May return the laptop she had
kept.

A TRO was entered by United States District Judge F.

Dennis Saylor IV on September 2, 2016, directing May to return
the subject computer or otherwise to retain custody but refrain
from using it.
The TRO was extended by United States District Judge Indira
Talwani until this session issued a preliminary injunction
directing May to return the computer.

On November 2, 2016,

Athena moved the Court to find May in contempt for failure to
return the computer, in violation of the preliminary injunction.
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That motion was eventually denied as moot because May had
apparently complied with the terms of the injunction.
In January, 2017, May filed a motion to dismiss for lack of
subject matter jurisdiction and failure to state a claim upon
which relief can be granted.

That motion was denied in August,

2017, and in November, 2017, May filed her amended answer and
amended counterclaim.

In her amended counterclaim, May alleges

that Athena’s actions constituted 1) breach of contract (Count
I), 2) breach of the implied covenant of good faith and fair
dealing (Count II), 3) wrongful discharge (Count III), 4) breach
of contract and/or promissory estoppel (Count IV) and 5)
violation of the Conscientious Employee Protection Act (Count
V).
Several months later, Athena filed a motion to dismiss
May’s counterclaims.

That motion is the subject of this

memorandum and order.
II.

Legal Analysis
A.

Legal Standard

To survive a motion to dismiss, a complaint (or
counterclaim) must contain sufficient factual matter, accepted
as true, to “state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
considering the merits of a motion to dismiss, the Court may
look only to the facts alleged in the pleadings, documents
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In

attached as exhibits or incorporated by reference in the
complaint and matters of which judicial notice can be taken.
Nollet v. Justices of Trial Court of Mass., 83 F. Supp. 2d 204,
208 (D. Mass. 2000), aff’d, 248 F.3d 1127 (1st Cir. 2000).
Furthermore, the Court must accept all factual allegations in
the complaint (or counterclaim) as true and draw all reasonable
inferences in the non-movant’s favor. Langadinos v. Am.
Airlines, Inc., 199 F.3d 68, 69 (1st Cir. 2000).

Although a

court must accept as true all of the factual allegations
contained in a complaint, that doctrine is not applicable to
legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662 (2009).
1.

Count I – Breach of Contract

Athena asserts that May has not stated a claim for breach
of contract because the plain language of the “Equitable Relief”
clause (“Section 8”) does not require Athena to mediate before
pursuing equitable relief.

May maintains that the “Mediation;

Jurisdiction; and Waiver of Jury Trial” clause (“Section 10”)
applies because Athena sought damages along with equitable
remedies.
Relevant to Count I, Sections 8 and 10 of the Agreement
relate to dispute resolution.

Specifically, in Section 8 of the

Agreement, Athena reserved the right to pursue equitable relief,
“in addition to any other rights and remedies it may have” in
court.

Section 10, meanwhile, provides that:
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[except under] Section 8, any dispute . . . concerning
Employee’s employment with or separation from Athena will
be referred to mediation . . . . [before being] brought in
a court of competent jurisdiction in the state in which the
office to which Employee reports is located.
Because plaintiff seeks the equitable remedy of return of
the computer, Section 8 of the Agreement applies.

Indeed, May

used the same argument in her motion to dismiss which was
earlier denied. See Athenahealth v. May, 272 F. Supp. 3d 281,
285 (D. Mass. 2017).

Accordingly, count I of defendant’s

counterclaim will be dismissed.
2.

Counts II and III – Breach of the Implied
Covenant of Good Faith and Fair Dealing and
Wrongful Discharge

Athena contends that May does not allege facts sufficient
to articulate a public policy at issue in her termination and
therefore has not stated claims for breach of the implied
covenant of good faith and fair dealing or wrongful discharge.
May was an at-will employee who can only pursue such claims
if her termination implicates a clearly established public
policy. See Wright v. Shriners Hosp. for Crippled Children, 412
Mass. 469, 472 (1992)(explaining that an at-will employee has a
cause of action for breach of the implied covenant of good faith
and fair dealing if the termination violates a clearly
established public policy); see also King v. Driscoll, 418 Mass.
576, 582 (1994)( “an at-will employee has a cause of action for

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wrongful termination only if the termination violates a clearly
established public policy”).
Contrary to Athena’s contention, however, May has pled a
clearly established public policy issue in her termination.

She

submits that she refused to participate in her manager’s alleged
unlawful conduct of appropriating Decidedly’s intellectual
property.

It is against public policy for an employer to

terminate an at-will employee for refusing to engage in unlawful
conduct. Mello v. Stop & Shop Companies, Inc., 402 Mass. 555,
557-58 (1988); see also Upton v. JWP Businessland, 425 Mass.
756, 757 (1997)( noting that the implied covenant of good faith
and fair dealing public policy exception allows redress to
employees who are terminated for refusing to break the law).
May submits that she was terminated because she refused to
misappropriate the technology, intellectual property and trade
secrets of Decidedly, LLC.

Requiring an employee to engage in

such conduct is a violation state law, federal law and public
policy. See 18 U.S.C. § 1836 et seq.; M.G.L. ch. 93, § 42.
Accepting May’s allegations as true, as the Court must do at
this stage of the litigation, May has raised a well-established
public policy issue in her counterclaim and has stated claims
for breach of the implied covenant of good faith and fair
dealing and for wrongful discharge.

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For this reason, Athena’s

motion to dismiss Counts II and III

of the amended counterclaim

will be denied.
3.

Count IV – Promissory Estoppel

Athena moves to dismiss May’s counterclaim for promissory
estoppel, stating that the promise May alleges Mallinger made to
her about future employment was vague and that May could not
have relied on such a promise.

In her opposition memorandum,

May suggests that the promise was not vague and that a specific,
limited condition of employment is at issue.
To establish a claim for promissory estoppel, a plaintiff
must prove that defendant made a representation that was
intended to induce action or specific inaction from her, that
she reasonably relied on the representation when taking action
and that injustice can only be avoided by enforcement of the
promise. Loranger Const. Corp. v. E. F. Hauserman Co., 6 Mass.
App. Ct. 152, 154 (1978), aff’d, 376 Mass. 757 (1978).

The

representation must be an “unambiguous promise” on which she
could reasonably rely. Upton, 425 Mass. at 760.
Mallinger allegedly promised May that she

would have absolutely nothing to worry about in the
transition and continuing to work from home.
The written agreement between May and Athena, however,
provided that May was an at-will employee, terminable at any
time for no reason.

Given May’s at-will status, the promise is
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too ambiguous to be enforceable under the doctrine of promissory
estoppel. See Treadwell v. John Hancock Mut. Life Ins. Co., 666
F. Supp. 278, 287 (D. Mass 1987)(citing McCone v. New England
Tel. and Tel. Co., 393 Mass. 231, 233 n. 6 (1984)).
Despite May’s contention that the reference to the
transition in the promise indicates that a specific and limited
condition of employment is at issue, the promise itself is not a
representation for employment for a specific period of time.
Therefore, some amount of speculation is required to determine
what Mallinger meant by “in the transition” and consequently,
May remains an employee at-will. Cf. Id. at 286 (promise of
“secure and continued employment” too vague to change employee’s
at-will status).

Accordingly, Count IV will be dismissed.
ORDER

For the foregoing reasons, plaintiff’s motion to
dismiss (Docket No. 59) is, with respect to counts I and IV,
ALLOWED but, as to counts II and III, DENIED.
So ordered.

/s/ Nathaniel M. Gorton
d
Nathaniel M. Gorton
United States District Judge
Dated February 13, 2018

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