Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

QL2 Software LCC v. Laveau

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

July 6, 2018

QL2 SOFTWARE, LLC, a Delaware limited liability company, Plaintiff,
THOMAS LAVEAU, an individual, Defendant.




         Plaintiff QL2 Software, LLC (“QL2” or “plaintiff”) seeks a declaration that its former employee, defendant and counter-claimant Thomas Laveau (“Mr. Laveau” or “defendant”) no longer has any right, title or interest in a profit-sharing plan for Incentive Unit Members of QL2 (the “Incentive Units”) or any right to commissions or bonus payments following the termination of his employment on May 15, 2017. Dkt. 1 at 5. Mr. Laveau asserts numerous counterclaims against QL2, which ultimately ask the Court to find that he did not forfeit his Incentive Units when he was involuntarily terminated, and that he is entitled to further commissions based upon payment received by QL2 following his termination. Dkt. 47 at 2. The parties have filed cross-motions for summary judgment. Dkt. 35; Dkt. 44. After careful consideration of the parties' motions, the governing law and the balance of the record, the Court GRANTS QL2's motion for summary judgment, Dkt. 44, DENIES Mr. Laveau's motion for partial summary judgment, Dkt. 35, and DISMISSES this action with prejudice.


         A. Factual History

         1. Mr. Laveau's Employment and Compensation Package at QL2

         In August 2004, Mr. Laveau began working for QL2 and its predecessor, QL2 Software, Inc., as the sales director for its European branch, QL2 Europe Limited (“QL2 Ltd.”), based in the United Kingdom. Dkt. 25 at ¶ 5 (Mr. Laveau's Counterclaims); Dkt. 35-2 (Laveau Decl.) at ¶ 5. QL2 Software, Inc. was a software development company specializing in real-time search technology and analytical tools marketed towards business enterprises. Id. During his thirteen years of employment with the QL2 organization, Mr. Laveau worked in various capacities for the QL2 sales department, including expanding the sales reach of airline and travel-related business. Id. at ¶ 6.

         As part of his compensation, Mr. Laveau received 100, 000 fully-vested shares of QL2 Software, Inc. stock, which QL2 Software, Inc.'s managers represented to be worth approximately 2.5% of the company. Dkt. 25 at ¶ 7; Dkt. 35-2 (Laveau Decl.) at ¶ 6. When QL2 Software, Inc. filed for bankruptcy in January 2010, substantially all of its assets were transferred to Copernicus Holdings, LLC, as part of a plan of reorganization approved by the United States Bankruptcy Court for the Western District of Washington. The company underwent a two-step merger pursuant to the plan, with the surviving entity being the plaintiff, QL2 Software, LLC. Dkt. 45 (Hale Decl.) at ¶ 3.

         Months prior to this merger, during QL2 Software, Inc.'s bankruptcy, Charles Hale (who is now the President of QL2 Software, LLC) offered to purchase all of Mr. Laveau's shares in QL2 Software, Inc. for $20, 000. Dkt. 25, Ex. A at 2. Mr. Laveau agreed, and entered into a written agreement on May 5, 2010 to exchange the shares for $20, 000 cash prior to QL2 Software, Inc.'s merger with QL2 Software, LLC. Id. See also Dkt. 46 (Bugbee Decl.), Ex. A (Laveau Dep.) at 131:1-132:11; Dkt. 35-2 (Laveau Decl.) at ¶ 10.

         Following the bankruptcy and merger, Mr. Laveau continued in his role with the sales department of QL2 Ltd. He also negotiated for, and was granted, 150 Incentive Units in QL2 Software, LLC, which were fully vested on September 1, 2010. Dkt. 25 at ¶ 24.[1] Mr. Laveau did not consult with an attorney regarding the terms of the Incentive Unit Grant Agreement. Dkt. 35-2 (Laveau Decl.) at ¶ 18.

         When Mr. Laveau did engage in an email exchange about the Incentive Units with several members of QL2 management, including Mr. Hale, Mr. Hill, and his immediate supervisor Mr. Campbell, Mr. Laveau asked whether his wife would inherit his Incentive Units if he were to die. Dkt. 35-2 (Laveau Decl.) at ¶ 28. Mr. Hill responded, “The answer to your question is that the interests are fully vested, but they go away if you leave the company for any reason (including death).” Id. at ¶ 29. When Mr. Campbell commented that “I truly agree that if I was to walk away then I walk away from equity, ” but that he believed death was “an extraordinary event that warrants special treatment, ” Mr. Hill responded that “I think we agree that death is a special circumstance that probably warrants special treatment of some kind.” Id. at ¶¶ 30-31. However, QL2 did not ultimately agree to any kind of modification or amendment to the Operating Agreement, or any sort of key man insurance. Id. at ¶ 31. See also Dkt. 35, Ex. 12 (May 26, 2012 email exchange among Mr. Hale, Mr. Hill, Mr. Campbell, and Mr. Laveau).

         Mr. Laveau's receipt and ownership of the Incentive Units was subject to the Incentive Unit Grant Agreement (“Grant Agreement”). Dkt. 25, Ex. B at 4. Pursuant to the Grant Agreement, all the terms and conditions in QL2's Amended and Restated Limited Liability Agreement (the “Operating Agreement”) were “incorporated into [the] Grant Agreement in their entirety.” Id. By entering into the Grant Agreement, Mr. Laveau indicated that he “acknowledges receipt of, and understands and agrees to, [the] Grant Agreement and the Operating Agreement.” Id.

         The Operating Agreement provides that Incentive Units are “equity interests” or “profit interests” in QL2, which are “subject to . . . forfeiture.” Dkt. 25, Ex. C at ¶ 3.3(a)-(b). Most significantly in this case, the Operating Agreement provides that “[u]pon an Incentive Unit Member ceasing to provide services as an employee, consultant or advisor to the Company and its Subsidiaries for any reason, including death or disability, any Incentive Units held by such person immediately shall be forfeited to the Company and neither such Person nor such Person's estate or executor shall have any further rights with respect to such Incentive Units.” Id. at ¶ 3.3(d). However, Mr. Laveau asserts that he “had no reason to believe that QL2 believed that they had the ability to cause forfeiture of my Incentive Units by terminating my employment with QL2.” Dkt. 35-2 (Laveau Decl.) at ¶ 22. Mr. Laveau asserts that if he had understood that QL2 believed it had the power to erase his equity, he would have objected to such an equity plan, because it would have provided no sense of financial security. Id.

         2. Mr. Laveau's Move to California

         In his first counterclaim, Mr. Laveau asserts that “in late 2014, QL2 management asked Laveau to transfer to the United States to work as the vice president of international sales. To induce him to accept this transfer, QL2 represented to Laveau that his Incentive Units would remain intact and that he would retain the same compensation of a base salary with quarterly commissions upon transfer.” Dkt. 25 at ¶ 9. Mr. Laveau further represents that he “reasonably took QL2 at its word and accepted the transfer offer, leaving the United Kingdom for employment in California in January 2015.” Id.

         At oral argument on June 27, 2018, however, Mr. Laveau retreated from this version of the facts, and acknowledged that it was actually Mr. Laveau who approached QL2 to request the transfer to California. See also Dkt. 46 (Bugbee Decl.), Ex. A (Laveau Dep.) at 15:6-25. Emails exchanged between Mr. Laveau and his wife, as well as Mr. Laveau and his supervisor QL2 Chief Strategy Officer Paul Campbell, reflect that Mr. Laveau's decision to relocate to California was personal, based largely upon his family's desire to be close to his wife's family. Dkt. 45, Exs. A-C.[2] In fact, prior to approaching QL2 about the move, Mr. Laveau and his family had already applied for and received green cards from the United States. Dkt. 46, Ex. A (Laveau Dep.) at 63:13-19. Mr. Laveau's green card was issued in January 2014, and he testified that he and his family needed to move by mid-2015 before his green card expired. Id. at 66:10-25.

         Similarly, Mr. Laveau's email correspondence with his supervisor, Mr. Campbell, does not reflect a request or suggestion by QL2 that Mr. Laveau should relocate in 2014 for the benefit of the company. Mr. Laveau stated, “As we have discussed over the past year, my goal was to move with QL2 to the U.S. . . . this seemed to be a proposition attractive to the company and to me.” Dkt. 45, Ex. B at 6. However, Mr. Laveau noted that he had recently sensed resistance by the company to his request, noting that “such a move now seems unpalatable to QL2 and, based upon my understanding of your position on some of the remuneration points thus far, less attractive to me.” Id.

         Mr. Campbell responded, “Yes, having your talent applied on this side of the globe is an attractive proposition but this means we then create a challenge for us in EMEA.” Id. He further explained, “I would not say it's unpalatable for us but you have to agree that it creates a challenge for us in EMEA. Mind you, it's not a challenge that we cannot deal with if you decide to move to the US.” Id. He later reemphasized QL2's willingness to accommodate Mr. Laveau's desire to move: “You have been building EMEA for over 8 years so moving to the U.S. will create a challenge for us to solve once you move. As I said above, it's a challenge that we are happy to undertake in support of your move.” Id. He later noted, “I'm sure we can work out some arrangement that supports, first and foremost, your family needs and secondarily QL2's needs.” Id. at 7. Mr. Laveau left the United Kingdom to continue his employment for QL2 from a home office in California in January 2015. Dkt. 25 at ¶ 9.

         3. Mr. Laveau's Involuntary Termination on May 15, 2017

         Mr. Laveau entered into two consecutive one-year written compensation agreements in 2015 and 2016. These agreements provided that in addition to his base salary and Incentive Units, Mr. Laveau was entitled to commissions which were calculated and paid out at the end of each financial quarter. Dkt. 25 at ¶ 10. When it came time to negotiate a 2017 compensation plan, QL2 declined to formalize the agreement in writing, but orally represented that the 2016 compensation plan would be renewed with the same terms. Id. at ¶¶ 36-37. Thus, it is undisputed that the 2016 written compensation plan was extended, and still in effect when Mr. Laveau's employment was terminated.

         In May 2017, QL2 sold off the entirety of the airline portion of its business, in which Mr. Laveau primarily worked, to a competitor, Infare. Id. at ¶ 11.[3] Just prior to the company-wide announcement, Mr. Laveau was informed that his employment with QL2 would cease as of May 15, 2017, but he would begin employment with Infare in the same sales capacity he had previously occupied with QL2. Id. at ¶ 39. QL2 then terminated Mr. Laveau as an employee on May 15, 2017. Id. at ¶¶ 11, 38-39. On May 22, 2017, Mr. Laveau learned that as a result of his termination, QL2 had extinguished his Incentive Units - which he believed to have been worth at least $1 million - pursuant to the Operating Agreement. Id. at ¶¶ 11, 38-39.[4] At ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.