ARGUSH v. LPL FINANCIAL, LLC et al

Filing 147

OPINION. Signed by Judge Anne E. Thompson on 12/23/2016. (km)

NOT FOR PUBLICATION

RECEIVED

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

DEC 23 2016
AT8:30_M
WILLIAM T. WALSH
CLERK

LEEARGUSH,
Plaintiff,

Civ. No. 13-7821

v.
LPL FINANCIAL, LLC, LPL HOLDINGS
INC., ANDREW PUTTERMAN, and
FORTIGENT, LLC,
Defendants.
ALAN GAVORNIK,
Plaintiff,

Civ. No. 14-955
(consolidated for pretrial purposes)

v.
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LPL FINANCIAL, LLC, LPL HOLDINGS
INC., ANDREW PUTTERMAN~ and
fORTIGENT; LLC,--

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Defendants.
NICHOLAS MARINELLO,
· Civ~ No. 14-956-

Plaintiff,

(consolidated for pretrial purposes)

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v.
LPL FINANCIAL, LLC, LPL HOLDINGS
INC., ANDREW PUTTERMAN, and
FORTIGENT, LLC,

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OPINION·

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Defendants.
THOMPSON, U.S.D.J.

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INTRODUCTION
This matter is before the Court upon multiple motions. Two of the three plaintiffs in the
above-captioned cases consolidated for pretrial purposes, Alan Gavornik and Nicholas Marinello
(collectively "Gavomik and Marinello"), have each moved for partial summary judgment on
liability. (Civ. No. 14-955, ECF No. 33; Civ. No. 14-956, ECF No. 33). Defendants LPL
Financial, LLC ("LPL Financial") and LPL Holdings, Inc. ("LPL Holdings") (collectively "LPL"
or ''Defendants") oppose both motions. (Civ. No. 14-955, ECF No. 44; Civ. No. 14-956, ECF
No. 43). Plaintiff Lee Argush ("Argush") has not moved for summary judgment. Defendants
have moved for partial summary judgment on Counts Two and Three ofGavornik and
Marinello's respective complaints. (Civ. No. 13-7821, ECF No. 92). Gavornik and Marinello
oppose Defendants' motions. (Civ. No.13-7821, ECF No. 114). Defendants have also moved
for partial summary judgment on Counts Three and Seven of Argush's Complaint. (Civ. No. 137821, ECF No. 91). Argush opposes Defendants' motion. (Civ. No. 13-7821, ECF No. 112).
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The Court will address all of the parties' motions in this omnibus opinion. The Court has

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decided themotions based on the written submissions of the parties and a hearing held on
October 20, 2016. For the reasons stated herein;:Plaintiffs Gavomik ~clMarinello's motions.
will be denied and Defendants' motions wiU:be denied~ _
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BACKGROUND
This case arises out-of art _employment dispute between the thr~e named Plaintiffs and

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Defendant LPL Financial. Plaintiffs Argush, Gavo~ik and Marinello (collectively "Plaintiffs")
are former employees of LPL Financial. LPL Holdings is the parent company of LPL Financial.
All three Plaintiffs had their employment tenninated by LPL Financial in 2013. The main issue
is whether each of the three Plaintiffs were validly terminated "for cause."

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Prior to June 2011, Plaintiffs were directors and senior officers of Concord Wealth
Management Group ("Concord"). At that time, Concord was jointly owned by American Capital
Acquisition Partners, LLC ("ACAP") and Financial Services Partners Fund I, LLC ("Financial
Services") (collectively "Sellers"). Plaintiffs were the sole members and owners of ACAP. In

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June 2011, Concord, through its parent entity, was acquired by LPL Holdings. The terms of LPL
Holdings' acquisition of Concord were set out in a document called the Stock Purchase
Agreement ("SP A").
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Beginning in June 2011, Plaintiffs became employed by LPL Financial. Both prior to
and following the acquisition of Concord by LPL Holdings, Plaintiffs were physically based in
an office in Matawan, New Jersey. The Plaintiffs individually executed multiple documents
concerning their employment relationship with LPL Financial including Employment
Agreements, Stock Option Agreements, and the SPA. The SPA contained a Delaware choice of
law provision, while the Employment Agreements contained no choice of law provision.
Under the employment agreements, in the event Plaintiffs were terminated; Plaintiffs .. ·
were to receive certain benefits including salary, stock options, and a pro rata bonus for the year-.

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of termination~ :}f Plai~tiffs wer~-~ennin~~e<(fo~:.~aµ~e, Plaintiffs would p.o_t re<?eive some of these
.,,_ bertefits.-:~-The_definitionoftermirtatioh "for cause'' that governed the empio)rmenttelationship

between the individual Plaintiffs and LPL Financial was contained in the SPA~- Under the SPA,
termination for ,'~caus~" is defined-as follows: .· ~

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(l)failure·t~lsubstantiallyperfoim such Person's duties as an employee of LPL

(other than. a8 a resulfof a permanent disability) for a period of ninety (90) days
following notice to LPL to such Person ofsuch failure; (2) fraud, embezzlement,
dishonesty or theft in connection with such Person's duties; (3) an act or acts
--constituting a felony, a violation of anyfederal or state securities or banking law
or a misdemeanor involving moral turpitude; (4) willful misfeasance, willful

misconduct; or gross negligence in connection with such Person 's duties or an act
or omission which is injurious to the financial condition or business reputation of
LPL; or (5) breach of this Section 6.09.

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(Civ. No. 14-955, ECF No, 33-3, Levy Deel. Ex. A.) (emphasis added).

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Plaintiffs Gavomik and Marinello
LPL Financial terminated Plaintiffs Gavornik and Marinello on December 27, 2013. LPL

Financial claims that it validly tenninated Gavomik and Marinello "for cause" because they
"obstructed LPL in obtaining indemnification payments to which LPL was contractually entitled
from an entity they controlled." (Civ. No. 14-956, ECF No. 43, Defs.' Opp'n. Br. at 1).
During May 2013, Defendants allege that LPL Holdings started to make written demands
for indemnification on Gavornik and Marinello. (Civ. No. 14-956, ECF No. 43-1, Defs.' Resp.
to Pis.' Statement of Undisputed Material Facts ("Defs.' Resp.") at, 15). Defendants claim that
the indemnification demands related to money paid by LPL for legal services that ACAP was
contractually obligated to pay under an indemnification provision in the SPA. (Civ. No. 14-956,
ECF No. 43, Defs.' Opp'n. Br. at 1-2). The parties agree that Gavornik and Marinello, together
with Argush, owned ACAP. (Civ. No.

14_~955,_EC~J--.ro. 48~1,

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Pis.' Resp. to Defs.' Resp.

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Statement of Additional Undisputed Material Facts at, 1). Defendants allege that ACAP was
required to inde1ruiify_ LPL and that Gayornik anc.\Jv.tarinello obstructed LPL in obtaining the
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indemnificatio-n paym-ents (Civ. No. 14-9S6, ECF N~. 43, Defs.' Opp'n. Br. at 1). Gavornik and
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Marinello argue_ t~1at while ACAP may have -~8:~ indemnity obligations under the SPA, Gavomik
and Marinello were not individually obligated to indemnify LPL. (Civ. No. 14-956, ECF No.
33-2, Pis.-'

Mot. at_2~3):-.

Defendants allege that multiple written communications were sent to Gavornik and
Marinello requesting that the outstanding monies be reimbursed, yet no payment was made. (Id.
at 2). Shortly thereafter, LPL Financial terminated Plaintiffs Gavomik and Marinello on
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Plaintiff Argush
Plaintiff Argush was terminated roughly four months earlier, and on a different basis,

than Gavomik and Marinello. Argush was terminated on August 6, 2013. (Civ. No. 13-7821,
ECF No. 121-1, Defs.' Resp. to Pl.'s SUMP at~ 116). LPL Financial claims that it validly
terminated Argush for cause because Argush ''willfully and repeatedly violated LPL's written
directive to him to work remotely." (Civ. No. 13-7821, ECF No. 91-1, Defs.' Mot. at 1).
On July 30, 2013, Argush had a meeting with Andrew Putterman, his direct supervisor
("Putterman"), Anna Orsenigo, a Vice President of Human Resources of LPL Financial
("Orsenigo") and Gavomik ("July 30th Meeting"). (Civ. No. 13-7821, ECF No. 112-1, Pl.'s
Resp. to Defs.' SUMP at, 44). At that meeting, Argush alleges that Putterman orally
communicated to him that he was permitted to continue to come into the office to work until
LPL Financial could set up Argush with the capability to work remotely. (Civ. No. 13-7821,
ECF No. 112, Pl. 's Opp'n. Br. at 2).
LPLFinancial maintains that notwithstanding any alleged oral communication at the July
30th meeting, LPL-Financial sent Argush four clear written directives after the July_ 30th meeting
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. _jnstructing Argush-that h~ was not to report to the office to work without first receiving advance
permission.

LPt:_'.fipancial further alleges that Argush disregarded its written directives and

continued to. report to the office on August 1st, 2nd, 5th, 6th, and 7th. (Civ. No. 13-7821, ECF
No. 121-l, Defs.' Reply SUMP at,, 52, SS, 58, 61). LPL Financial claims that it terminated
Argush's employmenton August 6th via email. (Id. at,, 62, 64; Civ. No. 13-7821, ECF No. 913, DiSomma Deel. Ex. 19). In essence, LPL Financial claims that, as a result of Argush's failing
to abide by its· clear directives, it validly terminated Argush "for cause'-' pursuant to Section 6.09
of the SPA due to Argush' s ''willful misfeasance, willful misconduct, or gross negligence in

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connection with such Person's duties or an act or omission which is injurious to the financial
condition or business reputation of LPL." (Id.

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at~~ 62,

63).

Procedural History
Argush v. LPL Financial, et al. is the lead case, which was removed from Superior Court

of New Jersey, Law Division, Monmouth County, to this Court in December 2013. (Civ. No.
13-7821, ECF No. 1). Gavornik v. LPL Financial, et. al. and Marinello v. LPL Financial, et. al.
(Civ. No. 14-956) were both filed in this Court in February 2014. (Civ. No. 14-955, ECFNo. 1;
Civ. No, 14-956, ECF No. 1). The three cases have been consolidated for pretrial purposes. (See
Civ. No. 13-7821, ECF No. 27). On August 5, 2014, this Court granted in part Defendants'
motion to dismiss in each of the three cases.1 (Civ. No. 13-7821, ECF No. 22; Civ. No. 14-955,
ECF No. 20; Civ. No. 14..,956, ECF No. 20). Additionally, on August 24, 2016, this Court
granted Defendants' Motion to Dismiss Count Four of Plaintiffs' Respective Complaints, which
sought a declaratory judgment that Plaintiffs' restrictive covenants were null and void. (Civ. No.
13-7821, ECF No. 110). As a result, in each case, Plaintiff has two remaining claims against
Defendants:.~reach

of Employment Agreement and Breach of Contract.

Currently before the Court are five motions for summary judgment in these consolidated
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cases: (1) PlaintiffGavornik'sMotion for Partial Summary JudgnientonLiability(Civ~·No.14..~· ·
955, ECF No. 33); (2) Plaintiff Marinello's Motion for Partial Summary Judgment on Liability
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(Civ. No. 14-956, ECFNo; 33); (3) Defendants' Motion for Summary Judgment on Counts Two
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and Three of PlafutiffGavomik and PlaintiffMarinello's Respective Complaints (Civ. No. 137821, ECF No. 92); (4)Defendants' Motion for Summary Judgment on Count Four of All

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The Court dismissed each of the Plaintiffs' claims for: (1) violation of the Conscientious Employee Protection Act
("CEPA"); and (2) tortious interference. The Court also dismissed Plaintiff Argush's claims for breach of the
covenant of good faith and fair dealing and conversion.

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Plaintiffs' Respective Complaints (Civ. No. 13-7821, ECF No. 94); 2 (5) Defendants' Motion for
Summary Judgment on Counts Three and Seven of Plaintiff Argush's Complaint (Civ. No. 137821, ECF No. 91). The third Plaintiff in these consolidated cases, Argush, did not move for
summary judgment.

LEGAL STANDARD
Summary judgment is appropriate if the record shows "that there is no genuine issue as to
any material fact and that the movant is entitled to judgment as a matter oflaw." Fed. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In deciding a motion for summary
judgment, a district court considers the facts drawn from "the pleadings, the discovery and
disclosure materials, and any affidavits" and must ''view the inferences to be drawn from the
underlying facts in the light most favorable to the party opposing the motion." Fed. R. Civ. P.
56(c); Curley v. Klem, 298 F.3d 271, 276-77 (3d Cir. 2002) (internal quotations omitted). In
resolving a motion for summary judgment, the Court must determine ''whether the evidence
presents a sufficient disagreement to require submission to ajury or whetheHt is'--scf one-sided
that one party_must prevail as-a matter of-law." Andersonv. LibertyLobby, 477 U.S; 242, 25152 ( 1986). More precisely, summary judgment s~ould be: granted_ if the evidence available
would not support a jury verdict infavorofthe nonmoving. party:> Id.: at 248-49. The Court must- ·

grant summary judgment against any party ''who fails to make· a showing sufficient to establish
the existence of an element essential to that .party's case, and_ on which that party will bear the
burden of proof at trial." Celotex, 477 U.S.-at322;,.>-'

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As a result of this Court's dismissal of Count Four of Plaintiffs'- respective complaints (See Civ. No. 13-7821, ECF
No. 110), this motion is now moot.

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ANALYSIS

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Plaintiff Gavornik and Plaintiff Marinello's Summary Judgment Motions
Initially, the Court notes that Gavomik and Marinello submitted virtually identical

motions for summary judgment on liability. Therefore, the Court will address both Plaintiffs'
motions in this section. Gavornik and Marinello each have two remaining claims in this case:
Breach of Employment Agreement and Breach of Contract. (See Civ. No. 14-955, ECF Nos. 2021; Civ. No. 14-956, ECF Nos. 20-21). Both Plaintiffs move for partial summary judgment on
liability on these claims. There are two main issues that the Court must address: (1) what law
applies to this dispute and (2) whether LPL Financial' s termination of the Plaintiffs constitutes a
Breach of Contract or Breach of Employment Agreement.

a. Choice of Law Analysis
The first issue that the Court must address is what law applies to the present dispute.
Defendants argue that Delaware law should apply, while Gavomik and Marinello appear to argue
that New Jersey law applies->(c1v. :N6(-14~95-6\EeF.N()~::4l, Defs.'-Opp'n. Br. at 16 n. 9 citing
Civ. NoA3-7821, ECF ~o. 92-1, Defs/ Opp'n.

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at-l 7'-:-18; Civ. No.J4-955,

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No. 33-1). _

A federal court sitting-iD. divetsity applies the forum: state's .choice of law rules to determine what
substantive-law applies~: :SeeKlaxon Co.· v.: Sten.torBlec':' Mfg~~:3 l3 U.S. 487, 496-98-(1941); see

alsoLebegern v.

Forman,~471F.3d424,:.428

(3d Cir~'2006) (noting "[a]s this was a diversity

case filed in New Jersey, New-Jersey choice oflaw rules govern"); New Jersey choice oflaw
principles require aCourttofirst determine ifthere is an·actual conflict between two potentially
applicable laws. Ifthere is no conflict, then because a New Jersey court would apply its ownlaw
in such a case, a federal court sitting in diversity must also apply New Jersey law. Lebegern, 471
F .3d at. 428 .. Her~, ~hile Defendants argue that Delaware law should apply, Defendants concede
that there is no relevant conflict between Delaware law and New Jersey law. (Civ. No. 14-956,

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ECF No. 43, Defs.' Opp'n. Br. at 16 n. 9). Therefore, the choice oflaw inquiry ends there, and
New Jersey law applies to the dispute.

b. Counts Two and Three: Breach of Employment Agreement and Breach of
Contract
In order to state a claim for breach of contract in New Jersey, a plaintiff must allege "(1)
a contract between the parties; (2) a breach of that contract; (3) damages flowing therefrom; and
(4) that the party stating the claim performed its own contractual obligations." Frederico v.

Home Depot, Inc., 507 F.3d 188, 204 (3d Cir. 2007). The main issue that the Court must address
with respect to the alleged breach of contract here is whether LPL Financial validly terminated
each Plaintiff"for cause." Under New Jersey law, a termination is considered "for cause" if the
termination is "based on facts that are (1) supported by substantial evidence and (2) are
reasonably believed by the employer to be true and also (3) is not for an arbitrary, capricious, or
illegal reason.''- Spano v. JP Morgan Chase Bank, 2011WL6934837, at *6 (D.N.J. Dec. 30,

· -io1If{quotiri~-·Maieti~·. i.

·Unit~dParcel Serv., 749 F. Supp. 1344, 1363 (D.N.J. 1990).
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. Here, the_ pa.rties agree that the definition of termination for "cause" was contained in the
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In rele~ant parl,-·Sectl~n 6.09 of the SPA define~"''cause" as "willful misfeasance, willful

misconduct, or gross:negligencejn connectionwith.sucltPers011's duties or an act or omission.
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· -, >which is injurious to the financial condition or.busiJ?.es~.r~~tation of LPL." (Civ. No. 14-955,
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No. 33-3; -LeyyDecL Ex;.A). ·Defendants allegethatGavomik and Marinello were
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· terniinated as·· a 'result of:theii'performing an"actor QniissiolJ ~hich is injurious to the financial
condition or busi.ness reputation of LPL." (Civ. No.--14-956,:ECF No~ 43-1, Defendants' Resp. at
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Specifically; Defendants claim that Gavomik and Marinello were terminated "for cause"

for failing to abide by th~ir indemnification obligations in. the SPA which required Plaintiffs to

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indemnify LPL for certain legal fees paid by LPL. (Civ. No. 14-956, ECF No. 43, Defs.' Opp'n
Br. at 1-2).
The relevant indemnification provision in the SPA3 specifically refers to the
indemnification obligations of the "Sellers" for the purposes of that agreement. Under the SPA,
the "Sellers" were ACAP and Financial Services. (Civ. No. 14-956, ECF No. 43-1, "Defs.'
Resp." at~ 17). Gavomik and Marinello were two of the three owners and members of ACAP.
(Id.

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Gavomik and Marinello argue that they had no obligation to personally indemnify LPL
and that their "reasonable refusal to pay an obligation not owed cannot be an 'act or omission
which is injurious to the financial condition or business reputation of LPL."' (Civ. No. 14-955,
ECF No. 48, Pl.'s Reply Br. at 8). Gavomik and Marinello also argue that LPL's financial
condition was not injured by any act or omission of Gavornik and Marinello because $500,000 of
the purchase price paid by LPL to acquire Concord was set aside in an escrow account to secure

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In relevant -part, the provisfort readS:
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Section 10.01. Indemnificati9Ii by t~e Sellers.
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(a) Indemnification. SubJect to the limitations and other provisions set forth in this ARTICLE X, from and after the
Clqsing, each S_eller shall jq~tlkaitd severally indegmify and J1old harmless Buyer [LPL] and its Affiliates
(inCludilig, foiloWing-thtf Clo~ihg, each Acquired Conipany), and the Rq)resentatives, Affiliates, successors and
assigns of each of the foregoing Persons (each, a "Buyer Indemnified Person"), from, against and in respect of any
and all Actions; Liabilities~- Governmental Orders, Encumbrances, losses, damages, bonds, dues, assessments, fmes,
_penalties, Taxes, fees, qosts-(mc_I~ditig costs of investigation, defense and enforcement of this Agreement), expenses
-_or amounts paid in settl~nienf{uieach case, including reasonable,attomeys' and experts' fees and expenses),
whether or not involving a Third P;nty Claim (collectively, "Losses"), incurred or suffered by Buyer Indemnified
P.~~~o~ or any ~(them_ as a result_c)f;:arjsing_out of or relating to, dir~ctly or indirectly:

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(v) the facts related to the SEC ReView;
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(vi) the Third Party Clai1nide~tifi~d ori Schedule 10.0l(a)(vi) (which Third Party Claim will be subject to the
ptovisio~ of SecJi9n _
lQ.04); prnvid¢d, J:ic>wever, tha~ Buyer agrees to reimburse Sellers for 50% of any Losses
arishig outo{the Tlilicf Party Claim identified on Schedule 10.0I(a)(vi) up to a maximum reimbursement of one
hundred thousand dollars_($100,000), such amount to be payable upon fmal resolution or settlement of the Third
Party Claim;
,_ -- - (Civ.- No. 14-955, ECF No. 48-1, Pis.' Resp. to Deis;' Resp. Statement of Additional Undisputed Material Facts at~
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the debt supposedly in issue. (Id. at 2-3). As a result, Gavornik and Marinello claim that they
did not commit an act or omission injurious to the financial condition or business reputation of
LPL, and therefore, LPL Financial lacked cause to terminate their employment. Defendants
argue that ACAP could only act through the Plaintiffs, and as a result, Gavomik and Marinello
had an obligation to indemnify or cause ACAP to indemnify LPL. (Civ. No. 14-956, ECF No.
43, Defs.' Opp'n. Br. at 2). Defendants claim that this failure to cause LPL Holdings to be
indemnified was a valid ground for terminating Plaintiffs for cause.
The Court is persuaded that there is a genuine factual dispute as to whether Gavomik and
Marinello had an obligation to indemnify LPL, or cause LPL to be indemnified, under the SPA.
The Court is similarly persuaded that a genuine factual dispute exists as to whether Gavornik and
Marinello had the ability to cause ACAP to fulfill its indemnification obligation under the SPA,
or whether unanimous consent of all three members of ACAP would be required. Therefore,
material questions of fact still remain as to whether Gavomik and Marinello committed acts or
omissions which were injurious to the financial condition or business reputation of LPL and
whether Gavomik and Marinello were validly terminated for cause. Gavomik and Marinello
· · ·-~have not sufficiently demonstrated that LPL Financial is liable for breach of contract and
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-_. ,':-_Gavoniik and MarineUo's'tA9tion~ for partial sununary judgment on liability must be denied.
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II.

Defendants' Summary Judgment Motions on Counts Two and Three of Plaintiff
Gavornik and Mar~ello's Respective Complaints
Defendants -move for summary judgment on Counts Two and Three of Gavornik and

Marinello' s respective complaints, the same counts just discussed in the previous section
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.<~-;·:>'·afial'Yzing davornikand . Marinellci's sumrriary judgment motions. (Civ. No. 13-7821, ECF No.

92). On Defendants' Motion for Summary Judgment, the parties make very similar arguments to
those which were made ori Gavornik and Marinello' s motions for partial summary judgment on

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liability. The Court is persuaded that the same factual issues that precluded Gavomik and
Marinello from prevailing on their motions also preclude Defendants from prevailing on their
motion for summary judgment. Therefore, for the reasons discussed in the preceding section,
Defendants' motions for summary judgment on counts two and three of Gavomik and
Marinello' s respective complaints are denied.

III.

Defendants' Summary Judgment Motion on Counts Three and Seven of Plaintiff
Argush's Complaint
a. Choice of Law Analysis
As noted the Background section of this Opinion, the facts relating to Plaintiff Argush's

claims are distinct. To reiterate, the Court must first address what law applies here. Argush
argues that New Jersey law should apply, while Defendants argue that Delaware law should
apply. (ECF No. 91-1, Pl.'s Br. at 11-12; ECF No. 112, Defs.' Opp. Br, at 24-28). As discussed

supra in Section I(a) of the Analysis Section of this Opinion, if there is no conflict between two
potentially applicable laws, and a New Jersey court _would apply its own law, a federal court
sitting in diversity must also apply New Jersey law. Lebegern, 471 F.3d at 428. Here, the
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parti~s agree that there is no relevant conflict between De_laware law and New J ers~y law. -_
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· No. 91-1, Pl. 's Br. at 11 n.5; ECF No. 112, Defs/Opp~~Br;:at24)..::::'f:\lerefore, the choictto_flaw:::,,
inquiry ends there, and New Jersey law applies to the dispute... :. --

b. Counts Three and Seven: Breach of Contract and Breach of Employment
.Agreement
Argush's Corrected Amended Complaint contains two separate breach of contractclaims. ·
Defendants arguethat no breach.occurred because Argush was terminated for cause, and thus,
Argush cannot prevail on his breach of contract claims. Argush argues that genuine issues of ·
material fact remain as to whether or not Argush was validly terminated for cause, and
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Defendants' summary judgment motion must be denied. In order to state a claim for breach of
contract in New Jersey, a plaintiff must allege "(l) a contract between the parties; (2) a breach of
that contract; (3) damages flowing therefrom; and (4) that the party stating the claim performed
its own contractual obligations." Frederico v. Home Depot, Inc., 507 F .3d 188, 204 (3d Cir.
2007).
When the alleged contractual breach consists of termination without cause, a Court must
determine whether just cause existed at the time of termination. In New Jersey, "[a] discharge
for just cause is defined as one that is 'based on facts that are (1) supported by substantial
evidence and (2) are reasonably believed by the employer to be true and also (3) is not for any
arbitrary, capricious, or illegal reason." Spano v. JP Morgan Chase Bank, N.A., 2011 WL
6934837 at *6 (D.N.J. Dec. 30, 2011) (quoting Maietta v. United Parcel Serv., Inc., 749 F. Supp.
1344, 1363 (D.N.J. 1990)).
Here, the parties agree that the definition of termination for "cause" was contained in the
SPA~ In relevant part,- Section 6.09 of the SPA defines "cause" as ''willful misfeasance, willful
-misconduct, or gross negligence in connection with such Person's duties." (Civ. No. 13-7821,
ECF No. 112-1, Pl.'csResp.to-:0Defs~'

SUMF~at~Vl3}::':

Additionally, it is undisputed that the Offer

Letter signed bybothpartiesin~lµped aproyision that de~necJ:Argush~s. employment as "at-will"'_- . .
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and permitted LPL Financial to modify Argush's work responsibilities. 4 (Id. at 4ff 19). It is also
-undisputed that onJuly-30, 2013-;Argush had~a meeting with Andrew Puttetman, his direct

4

The relevant text of this provision reads: "Ifyou accept QUI' offer, your.employment with LPL Financial will be
"at-will." This means your employment is not for any specific period of time -and can be terminated by you at any
time for any reason. Likewise, LPL Financial 1Day tenajnat_e._ the ~mploymtmt relationship at any time, with or
without "Cause" or advance notice. !ti addiifori, .LPL Firilin.cfaffoser\res the nght to modify your position, duties or
reporting relationship to meet business needs and to use discretion in deciding on appropriate discipline. ·No such
modification or exercise- of discretion shall be-treated as termination-Without "Cause." Any change to the at-Will ·~
employment relationship must be by a specific, written agreement signed by you and the LPL Financial President
Any obligation to pay severance, if any, on account of a termination by .the Company without "Cause" hereunder
shall not change the nature of your employment as "at-will." (Id. at~ -19).

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supervisor ("Puttennan"}, Anna Orsenigo, a Vice President of Human Resources of LPL
Financial ("Orsenigo"}, and Plaintiff Gavornik ("July 30th Meeting"). (Civ. No. 13-7821, ECF
No. 112-1, Pl.'s Resp. to Defs.' SUMF at~ 44).
Defendants argue that Argush was validly terminated with cause as a result of his
engaging in willful malfeasance and misconduct. Specifically, Defendants argue that Argush
violated four separate written directives 5 instructing Argush to work remotely and also that he
should not report to the office to work without first receiving advance permission, including one
directive sent on August 5th by his direct supervisor, Puttennan. (Civ. No. 13-7821, Defs.' Br.,
ECF No. 91-1 at 16). Defendants claim that these written directives were an exercise of the right
afforded to LPL Financial in the Employment Agreement to modify Argush's work
responsibilities. (Id.

at~

13). Essentially, Defendants argue that Argush was validly terminated

for cause on August 6th for engaging in willful malfeasance and misconduct by violating these
directives and reporting to the office on August 1st, 2nd, 5th and 6th.
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Argush argues that, at the July 30th meeting; he received oral permission to continue to ·•
report to the office from his direct supervisor, Putterman, and that the aforementioned written
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directives·- ~ontradicted .tJiis oral~penlli~sion. Argush claims that· Pu~ctman granted him
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::;-.·;';".

·-· p~rmi~sI~!l-to continue to teporfto the office until LPL Financi~fcotiid-.adequately set up
capabilities forA.rgush to work remotely. (Civ. No. 13-7821, PL Opp'n. Br., ECF No. 112 at 2).
Argtishsupports this claim with his own-deposition testimony (Civ. No.13-7821, ECF No. 91-3,
DiSomma !)~cl. EX. 6 (Argush Dep. Tr.) at 277: 17-277 :21)) and with deposition testimony of
PlaintiffGavomik (Civ. No.13-782_1, ECFNo. 91-3, DiSomma Deel. Ex. 8 (Gavomik Dep. Tr.

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Tlle Written directives c'otisisted offcfor;"documents: (l} a· JulyJOthMeriiorandmn from Oi'senigo; (2) aJuly 3 lst
email from Orsenigo; (3) an August 2nd email from another Vice President ofHwnan Resources of LPL Financial,
Ron McGuire ("McGuire''); and 4) an August 5th email from Putterman. (Civ. No. 13-7821, Defs.' Mot., ECF No.
91-1at12-16).
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at 209:12-209:21)). Considering these two distinct narratives, the Court is persuaded that there
exist genuine issues of material fact as to whether Argush had permission to report to the office
on August 1st, 2nd, and 5th and whether his reporting to the office on those days constituted
willful misconduct or malfeasance sufficient to terminate him for cause.
Argush also argues that he did not receive the August 5th email from Putterman until
after he arrived at the office on the morning of August 6th. (Civ. No. 13-7821, Pl. Opp'n. Br.,
ECF No. 112 at 2). Whether or not Argush received and was aware of the only written directive
issued by his direct supervisor instructing him not to report to the office similarly is a factual
dispute that is not appropriate for resolution on this record.
Viewing the evidence in the light most favorable to the non-moving party, the Court is
persuaded that genuine issues of material fact remain as to whether Argush' s conduct constituted
willful misconduct or malfeasance and whether Argush was validly terminated for cause. These
types of factual disputes can be only be resolved at trial. As a result, Defendants' Motion for
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Summary Judgment on Counts:]'bfee·arid~Sevemof Argush' s Complaint will be denied.

CONCLUSION
· Eor the foregoing reasons, Plaintiff Gavomik and Marinello' s motions for summary
"~·~·~,.>:. .· judgment

will. be denied and Defend~ts'.: motions for summary judgment will be denied. An

appropriate order will follow~

~&.~
TROMP~
ANNE E.

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Date:~£!d · ~·~ ,0116
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