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Singleton v. Intellisist, Inc.

United States District Court, W.D. Washington, Seattle

May 8, 2018

INTELLISIST, INC., d/b/a Spoken Communications, Defendant.


          Robert S. Lasnik, United States District Judge

         This matter comes before the Court on “Defendant's Partial Pre-Answer Motion to Dismiss Under FRCP 12(b)(6).” Dkt. # 29. Plaintiff has asserted claims of breach of contract, breach of oral agreement, equitable relief under the procuring cause doctrine, and wrongful discharge in violation of public policy arising from his employment by defendant. Defendant argues that plaintiff's allegations regarding his claims of wrongful discharge and failure to pay commissions (whether under contract or in equity) are insufficient to state a claim upon which relief can be granted.

         The question for the Court on a motion to dismiss is whether the facts alleged in the complaint sufficiently state a “plausible” ground for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim is facially plausible when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Somers v. Apple, Inc., 729 F.3d 953, 959-60 (9th Cir. 2013). All well-pleaded factual allegations are presumed to be true, with all reasonable inferences drawn in favor of the non-moving party. In re Fitness Holdings Int'l, Inc., 714 F.3d 1141, 1144-45 (9th Cir. 2013). If the complaint fails to state a cognizable legal theory or fails to provide sufficient facts to support a claim, dismissal is appropriate. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). While the Court's review is generally limited to the contents of the complaint, Campanelli v. Bockrath, 100 F.3d 1476, 1479 (9th Cir. 1996), it may nevertheless consider documents referenced extensively in the complaint, matters of public record, and documents whose contents are alleged in the complaint and whose authenticity is not challenged. Northstar Fin. Advisors Inc. v. Schwab Investments, 779 F.3d 1036, 1042-43 (9th Cir. 2015). The Court has, therefore, considered defendant's 2017 Sales Commission Plan Policy (hereinafter the “Commission Plan”), including the Sales Commission Plan Acknowledgment Form (hereinafter the “Acknowledgment Form”) and the Individual Commission Sales Plan Document (hereinafter the “Individual Document”) (Dkt. #6-1), and the Payment Card Industry Data Security Standards (“PCI Standards”). ( 20542916337).

         I. Wrongful Discharge in Violation of Public Policy

         Plaintiff was employed as the Vice President of Global Business Development for the Sales and Client Services Group of defendant Spoken. Defendant is a call center technology company. The Spoken Labs Initiative (“SLI”) is a research and development arm of defendant.

         Plaintiff was tasked with negotiating service agreements with defendant's clients. A new service agreement was introduced, and plaintiff asked defendant's in-house counsel about a term: he was told that the new language was required to give defendant access to call recording data. Plaintiff spoke to the President of SLI, who informed him that SLI was already listening to call recording data. The recordings defendant was accessing included calls from members of the public to call centers. Plaintiff raised concerns to the President of SLI that defendant's practice of listening to call recording data violated the PCI Standards.

         Plaintiff negotiated three deals with clients where the client objected to the term giving SLI access to the call recording data, and plaintiff modified the agreement to prevent access. Shortly after plaintiff raised his PCI Standards concern and negotiated the first client deal modifying the term, defendant changed his title from vice president to director and reduced his salary.[1] When plaintiff informed defendant for the third time that a client would not accept the term of the service agreement that allowed it to listen to call recording data, defendant terminated his employment. Plaintiff pleads wrongful discharge in violation of the public policy favoring employee reports of employer misconduct (Dkt. #6 at ¶ 37) and the public policy in favor of protecting the personal financial and credit information of the public as set forth in the PCI Standards (Dkt. #6 at ¶ 36).

         “In Washington, the general rule is that an employer can discharge an at-will employee for no cause, good cause or even cause morally wrong without fear of liability.” Ford v. Trendwest Resorts, Inc., 146 Wn.2d 146, 152 (2002) (internal quotation omitted). “The tort for wrongful discharge in violation of public policy is a narrow exception to the at-will doctrine . . . To state a cause of action, the plaintiff must plead and prove that his or her termination was motivated by reasons that contravene an important mandate of public policy.” Becker v. Cmty. Health Sys., Inc., 184 Wn.2d 252, 258 (2015).

         In September 2015, the Washington Supreme Court issued three companion cases, Rose, Becker, and Rickman, intending to clarify the formulation of this tort. See generally Rose v. Anderson Hay & Grain Co., 184 Wn.2d 268 (2015); Becker, 184 Wn.2d 252; Rickman v. Premera Blue Cross, 184 Wn.2d 300 (2015). The court explained that there are four scenarios giving rise to wrongful discharge in violation of public policy claims that can be “easily resolved” under the framework initially articulated in Thompson v. St. Regis Paper Co., 102 Wn.2d 219 (1984). See Rose, 184 Wn.2d at 286-87; Becker, 184 Wn.2d at 258-59. These scenarios do not require much analysis because they implicate clear public policies. Id.; Karstetter v. King Cty. Corr. Guild, 1 Wn.2d 822, 832 (2017). The four scenarios are:

(1) when employees are fired for refusing to commit an illegal act, (2) when employees are fired for performing a public duty or obligation, such as serving jury duty, (3) when employees are fired for exercising a legal right or privilege, such as filing workers' compensation claims, and (4) when employees are fired in retaliation for reporting employer misconduct, i.e., whistle-blowing.

Rose, 184 Wn.2d at 286-87 (internal citation omitted). If one of these four situations is at issue, the burden shifts to the defendant to show plaintiff's dismissal was for other reasons. See Id. at 287.

         Plaintiff's theory is that he reported employer misconduct when he raised data security issues with the President of SLI. Whether plaintiff is entitled to protection as a whistle-blower depends, to some extent, on “the degree of alleged employer wrongdoing, together with the reasonableness of the manner in which the employee reported, or attempted to remedy, the alleged misconduct.” Farnam v. CRISTA Ministries, 116 Wn.2d 659, 668-69 (1991) (internal citations omitted). Whistle-blowing requires that the employee “sought to further the public good, and not merely private or proprietary interests.” Dicomes v. State, 113 Wn.2d 612, 620 (1989). While whistle-blowing does not require a violation of an explicit statutory requirement, it does require that the public benefit be more than remote and that the conduct be more than “merely praiseworthy from a subjective standpoint.” Id. at 624 (1989). For purposes of this motion to dismiss, the Court finds that plaintiff has adequately alleged that he was concerned that defendant was violating the PCI Standards and that the concern touched on the public's privacy interests. As plaintiff was not required to confirm the validity of his concerns before taking action, see Rickman, 184 Wn.2d at 312, it is sufficient that plaintiff reasonably believed that his employer was wrongfully accessing and using the call recording data. Regardless of whether the PCI Standards actually apply to defendant, plaintiff has alleged a plausible claim of wrongful conduct. Cf. Farnam, 116 Wn.2d at 672 (finding the employee did not seek to further the public good because she knew the employer's conduct did not violate the law). Additionally, the method plaintiff employed to raise his concern -- internal reporting -- was sufficiently reasonable to state a claim at this stage. Plaintiff states a claim on which relief can be granted to the extent his public policy claim is based on whistle-blower status.[2]

         Plaintiff's other theory, that his discharge violated a public policy set forth in the PCI Standards, is not one of the four “easily resolved” scenarios discussed in Thompson. Plaintiff must therefore allege facts from which the Court could draw the plausible inference that the Perritt framework is satisfied. Rose, 184 Wn.2d at 287.[3] Under that analysis, courts consider:

(1) the existence of a “clear public policy” (clarity element), (2) whether “discouraging the conduct in which [the employee] engaged would jeopardize the public policy” (jeopardy element), (3) whether the “public-policy-linked conduct caused the dismissal” (causation element), and (4) whether the employer is “able to ...

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