Vasquez v. Whole Foods Mkt., Inc.
Vasquez v. Whole Foods Mkt., Inc.
Opinion of the Court
I. INTRODUCTION
Plaintiffs Victor Vasquez, Nadeem Sheikh, Katia Sadoudi, Svetlana Bautista, Ibrahima Ba, Nicholas Miano, Pa M. Njie, Michael Amegnaglo, and David Berger (collectively, "Plaintiffs") are former Store Team Leaders for various Whole Foods grocery stores in the Washington, D.C., metropolitan area. They bring this action against Defendants Whole Foods Market, Inc. ("WFMI"), Whole Foods Market Group, Inc. ("WFM Group"), Whole Foods Market Services, Inc. ("WF Services"), and Whole Foods spokeswoman Brooke Buchanan (collectively, "Defendants" or "Whole Foods"), alleging that they were terminated in retaliation for blowing the whistle on the improper manner in which Whole Foods conducted its "Gainsharing" program, a bonus program designed to incentivize individual grocery store departments to operate under budget by sharing cost savings with employees. Plaintiffs also assert that, following their terminations, Defendants falsely accused them through published news stories of manipulating the Gainsharing program for their own benefit.
Before the court are the following motions: (1) Defendants' Motion to Dismiss Plaintiffs' Amended Complaint; (2) Plaintiffs' Motion for Leave to File Second Amended Complaint; and (3) Defendants' Motion to Stay. For the reasons herein, the court grants in part and denies in part Defendants' Motion to Dismiss. The court dismisses all claims against all Defendants, except Plaintiffs' claims for defamation and false light invasion of privacy, which may proceed against WFM Group and WF Services only. Additionally, the court grants Plaintiffs' Motion to File a Second Amended Complaint and denies Defendants' Motion to Stay as moot.
II. BACKGROUND
A. Factual Background
Each of the nine Plaintiffs in this action worked as a Store Team Leader-the highest level of leadership at a store location-for a Whole Foods grocery store in the Washington, D.C., metropolitan area before his or her termination in December 2016. Am. Compl., ECF No. 11, ¶ 24. During Plaintiffs' employment, Whole Foods used a profit-sharing program-what Whole Foods referred to as its "Gainsharing" program-in its stores to incentivize department productivity and revenue. Id.
*43¶ 28. Under the program, Whole Foods awarded bonuses to employees whose departments performed under budget by distributing the surplus savings among the employees in that department. Id.
According to Plaintiffs, Whole Foods' corporate leadership undermined the Gainsharing program by imposing a nationwide scheme of "shifting" labor costs. Id. ¶ 29. Under this practice, if a department came in over budget, Whole Foods corporate leadership instructed store leadership-including Store Team Leaders-to "shift" the labor costs of that department to a department that had a budget surplus. Id. Payroll Specialists at each Whole Foods store then effectuated labor cost shifting by manually altering employee time records and submitting the manipulated records to corporate headquarters for payroll processing. Id. ¶ 33. As a result of this practice, the Gainsharing bonuses owed to employees of departments that performed under budget were reduced by the costs unlawfully "shifted" to those departments. Id. ¶ 29. Plaintiffs allege that Whole Foods corporate leadership imposed this practice of "shifting" labor costs in every Whole Foods grocery store to steal bonuses earned by employees and pad company profits. Id. ¶ 30.
In October 2016, a Whole Foods employee from the Mid-Atlantic region submitted an anonymous complaint to Whole Foods' employee tip line, complaining that he or she did not receive the proper Gainsharing bonus because labor costs had been shifted from another department to the employee's department. Id. ¶ 34. Whole Foods thereafter launched an investigation into this complaint. According to Plaintiffs, however, the investigation was a sham. Its true goal was "to concoct support for Whole Foods' pre-determined outcome that the 'shifting of labor costs' was limited to the store complained about" in the anonymous tip. Id. ¶ 35.
In early November 2016, Whole Foods investigators interviewed each Plaintiff about the Gainsharing program implemented in his or her respective store. Each Plaintiff explained that shifting labor costs was a standard practice throughout Whole Foods stores and some Plaintiffs stated they received explicit instructions from corporate officials to do so. Am. Compl. ¶¶ 35-37. After these meetings, Plaintiffs were immediately placed on administrative leave. Am. Compl. ¶ 37.
Soon thereafter, Plaintiffs were fired. On November 30, 2016, Plaintiffs were instructed to meet at Whole Foods' regional office on the following day. Am. Compl. ¶ 38. Each Plaintiff met individually with Regional President Scott Allshouse, Regional Vice-President Nicole Wescoe, and Human Resources Executive Coordinator David Gearhart. Each Plaintiff was terminated, purportedly (according to Whole Foods) for shifting labor costs and falsifying documents in violation of company policy. Id.
The firings made the news. On December 13, 2016, the Associated Press reported in an article titled "Whole Foods Fires 9 Store Managers Over Bonus Manipulation" that nine store managers of Whole Foods stores in Maryland, Virginia, and the District of Columbia were dismissed after a company-wide investigation determined that the managers "engaged in a policy infraction that allowed the managers to benefit from a profit-sharing program at the expense of store employees." Defs.' Mot. to Dismiss, ECF No. 12 [hereinafter Defs.' Mot], Ex. C-2, ECF No. 12-7 [hereinafter AP Article]. The Associated Press article attributed Whole Foods' statements and details about the investigation to Defendant Brooke Buchanan, a spokeswoman for Whole Foods. Two days later, The Washington Post published a news article titled "Whole Foods Fires Managers in *44Md., Va., and D.C. for Manipulating Bonus System." Defs.' Mot., Ex. C-3, ECF No. 12-8 [hereinafter Washington Post Article]. In the article, Whole Foods confirmed that nine managers of Whole Foods stores in Maryland, Virginia, and the District were fired for manipulating a store bonus program. Washington Post Article, at 1. Whole Foods stated that the conduct was still under investigation but was isolated to a relatively small number of its 457 stores. Speaking on behalf of Whole Foods, Brooke Buchanan stated that "[Whole Foods] took swift action, but, relative to the rest of company, this manipulation only happened in nine of our locations." Id.
B. Procedural Background
Plaintiffs filed this action in the Superior Court for the District of Columbia on December 20, 2016, and Defendants removed the case to this court on January 17, 2017. See Notice of Removal, ECF No. 1. Plaintiffs' Amended Complaint asserts the following claims: (1) wrongful termination and retaliation for whistleblowing against all Defendants except Buchanan (Count I); (2) wrongful termination and retaliation for whistleblowing as to Plaintiff Bautista only against all Defendants except Buchanan (Count II); (3) breach of contract and breach of the duty of good faith and fair dealing against all Defendants except Buchanan (Count III); (4) defamation as to all Defendants (Count IV); and (5) false light invasion of privacy as to all Defendants (Count V). Am. Compl. ¶¶ 49-91.
Defendants moved to dismiss the Amended Complaint on April 3, 2017. Defs.' Mot. Defendants WFMI, WF Services, and Buchanan moved to dismiss pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction, and, in the alternative, for failure to state a claim pursuant to Rule 12(b)(6). Defs.' Mot. at 1 n.1. WFM Group moved to dismiss the complaint solely under Rule 12(b)(6). Id. Plaintiffs opposed Defendants' Motion and simultaneously sought leave from the court to amend their Amended Complaint to add a whistleblower retaliation claim under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, 15 U.S.C. § 78u-6, against all Defendants except Buchanan. Pls.' Mem. in Opp'n. to Defs.' Mot., ECF No. 17 [hereinafter Pls.' Opp'n]; Pls.' Mot. for Leave to File a Second Am. Compl., ECF No. 16 [hereinafter Pls.' Mot. to Am.]. Defendants subsequently moved the court to stay consideration of Plaintiffs' Motion to Amend until the court ruled on the pending Motion to Dismiss. Defs.' Mot. to Stay Consideration of Pls.' Mot. to Am., ECF No. 21 [hereinafter Defs.' Mot. to Stay].
The parties' motions are now ripe for consideration.
III. LEGAL STANDARD
Upon a motion to dismiss under Rule 12(b)(2), the plaintiff bears the burden of establishing a factual basis for personal jurisdiction. Crane v. N.Y. Zoological Soc. ,
When evaluating a motion under Rule 12(b)(6), the court "construe[s] the complaint 'in favor of the plaintiff, who must *45be granted the benefit of all inferences that can be derived from the facts alleged.' " Hettinga v. United States ,
IV. DISCUSSION
A. Personal Jurisdiction
Before turning to the legal sufficiency of Plaintiffs' allegations, the court begins, as it must, by determining whether it can exercise personal jurisdiction over Defendants Brooke Buchanan, WFMI, and WF Services.
Specific jurisdiction is case specific. "In contrast to general, all-purpose jurisdiction, *46specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction." Goodyear ,
A plaintiff seeking to establish specific jurisdiction over a non-resident defendant must make two showings. She must "establish that specific jurisdiction comports with the forum's long-arm statute,
(1) transacting any business in the District of Columbia;
(2) contracting to supply services in the District of Columbia;
(3) causing tortious injury in the District of Columbia by an act or omission in the District of Columbia;
(4) causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia if the defendant regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia; [or]
(5) having an interest in, using, or possessing real property in the District of Columbia[.]
1. The Impact of Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County
The court starts the personal jurisdiction inquiry with the Supreme Court's recent decision in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County , --- U.S. ----,
*47In Bristol-Myers , "[a] group of plaintiffs-consisting of 86 California residents and 592 residents from 33 other States" brought a mass tort action in California state court arising from injuries allegedly caused by a drug manufactured by Bristol-Myers Squibb.
In this case, Bristol-Myers does not pose a jurisdictional obstacle. All Plaintiffs have alleged some injury in the District of Columbia as a result of Defendants' alleged defamatory statements. Plaintiffs assert that, through Buchanan, Defendants made various defamatory statements that ran in the local press, including in The Washington Post. Am. Compl. ¶¶ 43, 73; see AP Article; Washington Post Article. They further allege that "Store Team Leaders, Assistant Store Team Leaders, and Team Members for Whole Foods in the Mid-Atlantic region knew and understood the defamatory statements published by Whole Foods referred to Plaintiffs." Am. Compl. ¶ 81. Viewing these alleged facts in the light most favorable to Plaintiffs, Plaintiffs have plausibly asserted that Defendants' defamatory statements reached residents of the District of Columbia. Such an allegation is sufficient to establish injury in the District of Columbia, even by a plaintiff who does not reside or work here. See Charlton v. Mond ,
Having concluded that Bristol-Myers does not preclude the exercise of personal jurisdiction over WFMI, WF Services, and Buchanan on constitutional grounds, the court turns to address whether dismissal of the Amended Complaint is warranted for lack of specific jurisdiction as to those Defendants under the D.C. long-arm statute.
2. Specific Jurisdiction over Brooke Buchanan
The court starts its long-arm inquiry with Buchanan. Buchanan is a Texas resident and is the Global Vice President of Communications for WF Services, which is headquartered in Austin, Texas. See Defs.' Mot., Decl. of Brooke Buchanan, ECF No. 12-4 [hereinafter Buchanan Decl.] ¶¶ 3-4. Plaintiffs allege that, shortly after their termination, Buchanan contacted reporters located in the District of Columbia and made false and defamatory statements about them and the circumstances of their termination. Am. Compl. ¶¶ 22, 41-43. Plaintiffs attribute an even more expansive role to Buchanan in their opposition memorandum. See Pls.' Opp'n at 14-15; Pls.' Suppl. Br., ECF No. 27 [hereinafter Pls.' Suppl. Br.], at 3-4. Plaintiffs contend that, because WF Services provided "legal services related to the investigation ... within the District of Columbia," Pls.' Opp'n at 14 (citing Defs.' Mot., Decl. of Patricia Yost, ECF No. 12-3 [hereinafter Yost Decl.] ¶ 12), and because Buchanan was part of WF Services' investigative team, she engaged in a "persistent course of conduct" and received "substantial revenue" from the investigation of Plaintiffs in the District of Columbia, see id. at 14-15; Pls.' Suppl. Br. at 3-4. Plaintiffs maintain that these contacts are sufficient to establish specific jurisdiction over Buchanan under subsection (a)(4) of the long-arm statute. The court disagrees.
Section 13-423(a)(4) allows for the exercise of personal jurisdiction over a defendant that causes "tortious injury in the District of Columbia by an act or omission outside the District of Columbia if the defendant regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia."
Plaintiffs have failed to meet their burden of making a prima facie case of personal jurisdiction under subsection (a)(4)
*49as to Buchanan. For starters, Plaintiffs offer no "specific facts" to support their contention that Buchanan was part of the WF Services' team that investigated Plaintiffs in the District of Columbia. Lans v. Adduci Mastriani & Schaumberg, LLP ,
3. Specific Jurisdiction over WFMI and WF Services
a. WFMI
Turning next to WFMI, WFMI is a Texas corporation with its principal place of business in Austin, Texas. Am. Compl. ¶ 18. According to a declaration submitted by Patricia Yost, an officer with WF Services, "WFMI is ... a holding company that owns shares of other operating companies, which in turn own and operate the individual Whole Foods market stores." Yost Decl. ¶ 5. Yost further attests that WFMI does not own or operate any stores in the District of Columbia; has no employees, office space, or telephones in the District; and has no bank accounts or other tangible personal or real property in the District. See id. ¶¶ 5, 9. WFMI also does not, according to Yost, set policies for Whole Foods stores and does not regulate or assure uniformity of policies in the stores. See id. ¶ 10.
To counter these assertions, Plaintiffs point to two pieces of evidence and one set of allegations. First, Plaintiffs offer WFMI's Form 10-K filing with the Securities and Exchange Commission for the fiscal year ending September 2016, which states that, "As of September 25, 2016, we operated 456 stores: 436 stores in 42 U.S. states and the District of Columbia ," and identifies four such stores in the District. Pls.' Opp'n., Ex. 1, ECF No. 17-4 [hereinafter 10-K filing], at 14 (emphasis added). Second, Plaintiffs cite to the Complaint *50and Answer filed in FTC v. Whole Foods Market, Inc. , 07-cv-1021-PLF (D.D.C.), an antitrust enforcement action brought by the Federal Trade Commission ("FTC") to enjoin the merger of Whole Foods and another grocery chain. In the Complaint, the FTC defined "Whole Foods" to mean "Whole Foods Market, Inc." and alleged that "Whole Foods transacts business in the District of Columbia," an allegation WFMI admitted in its Answer. See Pls.' Opp'n. at 9-10. Plaintiffs also cite to another response in the Answer, in which WFMI admitted that it "operates approximately 190 stores in more than 30 states and the District of Columbia." Pls.' Opp'n, Ex. 3, ECF No. 17-6, at 2 ¶ 2. Third, Plaintiffs point to their allegations that the shifting of labor costs to undermine the Gainsharing program was a "nation-wide corporate practice" and Plaintiffs were instructed by "Whole Foods corporate leadership ... to shift labor costs." Am. Compl. ¶¶ 29, 31. Plaintiffs argue this "nation-wide" practice only could have come from the "corporate parent," thereby creating relevant contacts between WFMI and the District of Columbia. Based on the foregoing, Plaintiffs maintain that this court may exercise specific jurisdiction over WFMI because their claims in this case arise from WFMI's "transacting [ ] business in the District,"
The court disposes of two of the asserted bases quickly. Neither subsection (a)(2) nor subsection (a)(5) supports the exercise of long-arm jurisdiction. None of Plaintiffs' claims "aris[e] from,"
Subsection (a)(1) does not, however, provide a basis to exercise jurisdiction over WFMI. Save an argument buried in a footnote, Plaintiffs do not argue that WFMI's subsidiaries' contacts with the District of Columbia should be imputed to WFMI.
Next, subsection (a)(3) provides no refuge. The only alleged tortious conduct occurring in the District of Columbia, as required under subsection (a)(3), is Vasquez's firing.
Finally, subsection (a)(4) does not, as Plaintiffs maintain, confer jurisdiction over WFMI through Plaintiffs' defamation claim. That contention suffers from two defects. First, Buchanan, who uttered the alleged defamatory statement, is not alleged to be an officer, employee, or agent of WFMI. Cf. Livnat ,
In the end, Plaintiffs have not offered a sufficient factual basis upon which this court can exercise personal jurisdiction over WFMI. Accordingly, all claims against WFMI are dismissed without prejudice.
b. WF Services
The final jurisdictional inquiry concerns WF Services. WF Services is a Delaware corporation with its principal place of business in Texas. Yost Decl. ¶ 3. Yost describes WF Services "as the administrative arm of the Whole Foods Market family of companies, providing accounting, legal, and other administrative services to the Whole Foods Market [regional] operating entities," such as WFM Group. Id. ¶ 6; see also id. ¶ 11. WF Services charges WFM Group and other operating companies the cost of the services provided, "plus a nominal upcharge." Id. ¶ 11. The amounts charged by WF Services for its services "are not connected to any goods or services sold by WFM Group, including goods or services sold in the District of Columbia." Id. Moreover, WF Services has no permanent presence in the District of Columbia. It has no employees, office space, or telephones in the District; nor does it have any bank accounts or other tangible or real property in the District. Id. ¶ 13. It also does not render services directly to persons or entities operating within the District. Id. With regard to the events at issue in this case, according to Yost, WF Services provided "legal services related to the investigation and preparation for this and related pending legal matters." Id. ¶ 12. Additionally, it provided "non-legal services ... in relation to the Gainsharing issues generally ... at WFM Group's office in Rockville, Maryland." Id. Finally, Yost attests that WF Services does not derive revenue from any goods sold or services rendered in the District of Columbia. Id. ¶ 13.
*53Plaintiffs offer no facts of their own in opposition to Yost's affidavit. Instead, they assert that Yost makes their case for them. They contend that WF Services does not provide its services "in a vacuum," but instead provides administrative services "directly" to the four stores located in the District of Columbia. Pls.' Opp'n at 12. They also point to Yost's admission that WF Services provided legal services in connection with the investigation of Plaintiffs and other related pending matters. Id. at 13. And, finally, they rely on Buchanan's defamatory utterances, attributing those to her employer, WF Services. Id. Based on these specific facts, Plaintiffs assert that long-arm jurisdiction over WF Services is warranted under subsections (a)(1), (2), and (4).
The court views it as a close call, but ultimately concludes that Plaintiffs have satisfied their burden of making a prima facie showing of personal jurisdiction under subsection (a)(4). As previously discussed in connection with Buchanan, Plaintiffs have alleged tortious conduct outside the District of Columbia-Buchanan's alleged defamatory statements-as well as injury in the District of Columbia, because Buchanan's statements were received in the District. But, unlike with Buchanan, Plaintiffs have satisfied one of the "plus" factors required by subsection (a)(4) with regard to WF Services. Plaintiffs have pointed to facts connecting WF Services to the District of Columbia that render it plausible that WF Services either "regularly does ... business" or "engages in any other persistent course of conduct" in the District. Yost's concession that WF Services provided legal services in connection with the investigation of Plaintiffs in the District of Columbia makes it "plausible" that WF Services has provided similar services in the past in this forum. Cf. Forras ,
* * *
Before moving on, the court recaps the results of the personal jurisdiction inquiry. Plaintiffs did not meet their burden of showing pertinent facts to make out a prima facie case of personal jurisdiction against WFMI and Buchanan; thus, the claims against them are dismissed without prejudice. Plaintiffs did meet their burden as to WF Services, and WFM Group did not contest jurisdiction. The court now turns to address the merits of Defendants' 12(b)(6) motion as to WF Services and WFM Group.
B. Merits
1. Wrongful Termination in Violation of Public Policy (Count I)
All Plaintiffs concede that they were at-will employees. Nevertheless, in Count I of the Amended Complaint, they bring a claim for wrongful termination, asserting that the public policy exception to the at-will employment doctrine applies. Plaintiffs assert that, because Whole Foods terminated them for blowing the whistle on the nationwide practice of shifting labor costs to undermine the Gainsharing program and steal bonuses from employees, they can maintain a claim for wrongful termination as a matter of public policy. As Plaintiffs were terminated from employment in different jurisdictions, the law applicable to Count I varies. District of Columbia law applies to Vasquez; Maryland law applies to Bautista and Njie; and Virginia law applies to Sheikh, Sadoudi, Ba, *54Miano, and Amegnaglo. Regardless of the differences in law, none of Plaintiffs' wrongful termination claims survive, albeit for different reasons.
a. Public-Policy Exception in District of Columbia
The District of Columbia recognizes a common law tort of wrongful discharge "as an exception to the traditional at-will doctrine governing termination of employment, where the discharge violates 'a clear mandate of public policy.' " District of Columbia v. Beretta, USA Corp. ,
A court should consider seriously only those arguments that reflect a clear mandate of public policy-i.e., those that make a clear showing, based on some identifiable policy that has been officially declared in a statute or municipal regulation, or in the Constitution, that a new exception is needed. Furthermore, there must be a close fit between the policy thus declared and the conduct at issue in the allegedly wrongful termination.
Rosell v. Long Rap, Inc. ,
Identifying a public policy and satisfying the "close fit" requirement does not, however, necessarily get a plaintiff across the finish line to stating a wrongful termination claim. Other public policies can foreclose the claim. "Even where there is a showing of a clearly identifiable policy, the D.C. Court of Appeals has refused to find new exceptions to the doctrine of at-will employment where the legislature has already 'creat[ed] a specific, statutory cause of action to enforce' the public policy at issue." LeFande v. District of Columbia ,
The same fate befalls Vasquez here. Vasquez invokes the District of Columbia's Wage Payment and Collection Law ("DCWPCL"),
b. Public Policy Exception in Maryland
Turning next to Plaintiffs Bautista and Njie, Maryland law also recognizes that "there is a public policy exception to the at-will employment rule for wrongful termination 'when the motivation for the discharge contravenes some clear mandate of public policy[.]' " Yuan v. Johns Hopkins Univ. ,
Here, much like Vasquez, Bautista and Njie premise their claim on Maryland's Wage Payment and Collection Law, Md. Code Lab. & Empl. § 3-501 et seq. ("Maryland Wage Law"). Am. Compl. ¶ 49d-f. That statute, however, provides injured employees a remedy. If an employer fails to pay employee "wages"-a term that includes bonuses, Md. Code Lab. & Empl. § 3-501(c)(2)(i)-the employee may "bring an action against the employer to recover the unpaid wages."
c. Public Policy Exception in Virginia
Plaintiffs Sheikh, Sadoudi, Ba, Miano, Amegnaglo, and Berger's claim for wrongful discharge arises under Virginia law. Like the District of Columbia and Maryland, Virginia recognizes a narrow exception to the at-will employment doctrine, "known as the 'Bowman ' exception,' " which allows an employee to bring a common-law wrongful discharge claim "if the 'termination violates Virginia's public policy.' " Lester v. TMG, Inc. ,
(1) When an employer violated a policy enabling the exercise of an employee's statutorily created right ...;
(2) When the public policy violated by the employer was explicitly expressed in the statute and the employee was clearly a member of that class of persons directly entitled to the protection enunciated by the public policy ...; [or]
(3) When the discharge was based on the employee's refusal to engage in a criminal act....
Francis v. Nat'l Accrediting Comm'n of Career Arts & Sciences, Inc. ,
The narrowness of Virginia's public policy exception is demonstrated by the Virginia Supreme Court's recent decision in Francis . There, an employee who was threatened and harassed at her workplace sought and obtained a preliminary protective order against her colleague.
In light of the Supreme Court of Virginia's decision in Francis , the court concludes that Plaintiffs here do not have a viable claim for wrongful termination under Virginia law. "To analyze such a claim, it is important to discern what right was conferred on an employee by statute, and then whether the employer's termination of employment violated the public policy underlying that right." Id. at 191. As to the first inquiry, the Virginia Wage Payment Act does not itself confer a right on employees to receive pay. Rather, the sole state appellate court in Virginia to have interpreted the Wage Payment Act describes its purpose as "establish[ing] the public policy of the Commonwealth as to the manner in which employers pay wages to employees." Mar v. Malveaux ,
From that conclusion it naturally follows that each Plaintiff's termination itself did not violate public policy. At most, the Wage Payment Act establishes an employee's *58right regarding when and how to get paid. There is no correlative public policy in the Act that protects an employee's "exercise" of her right to receive wages. Indeed, if the statutory right to seek a protective order to safeguard one's health and safety does not reflect a public policy to protect the exercise of such a right, then surely the more passive right of receiving earned wage payments on a regular basis, to the extent it exists statutorily, cannot as a matter of public policy receive greater protection. The court therefore finds that Plaintiffs have failed to state a claim of wrongful discharge under Virginia law.
In so ruling, the court recognizes that numerous state and federal courts in Virginia have gone the other way. Those courts have concluded that the Wage Payment Act confers "an individual's right to compensation" and, as such, "implicates a property right that falls within the Bowman exception." Clark v. BayDocs, Inc. , No. 3:12-cv-896,
* * *
In summary, because Plaintiffs have not succeeded in meeting the narrow public policy exception to the at-will employment doctrine under any applicable law, the court dismisses Count I with prejudice.
2. Wrongful Termination of Plaintiff Bautista (Count II)
In Count II, Plaintiff Svetlana Bautista asserts a separate claim of retaliatory wrongful termination in violation of the public policy exception to the at-will employment doctrine in Maryland. Bautista alleges that, on two separate occasions, she reported to Whole Foods corporate leadership that for eight months, compost collected in Whole Foods stores from customers had been illegally dumped into landfills rather than a compost facility. Am. Compl. ¶¶ 56-57. Bautista asserts that corporate leadership never followed up on her reports and instead terminated her in retaliation for blowing the whistle on Whole Foods' violation of the Maryland Consumer Protection Act, Md. Com. Law Code Ann. § 13-301 et seq. Am. Compl. ¶¶ 55, 58-59.
The court agrees with Defendants that Bautista's common law wrongful termination claim is foreclosed by Parks v. Alpharma, Inc. ,
3. Breach of Contract and Breach of the Duty of Good Faith and Fair Dealing (Count III)
The court turns now to Plaintiffs' breach of contract and breach of the implied duty of good faith and fair dealing claims contained in Count III of the Amended Complaint. In support of these claims, Plaintiffs assert that their employment with Whole Foods was governed by the Whole Foods General Information Guide ("GIG"), which applies to all Whole Foods stores within the District of Columbia, Virginia, and Maryland. See Defs.' Mot., Ex. C-4, ECF No. 24 [hereinafter 2016 GIG].
As already discussed, in the District of Columbia, Maryland, and Virginia, employment is presumed to be terminable at-will, that is, at any time and without cause. See Turner v. Fed. Express Corp. ,
Plaintiffs' allegations fail to rebut the presumption of at-will employment under the law of all three jurisdictions for two reasons. First, Plaintiffs have not identified any language in the GIG to support their assertion that Whole Foods intended to limit its ability to terminate plaintiffs without cause. Second, the GIG expressly disclaims that it is a contract and affirms *60the at-will nature of the employment relationship.
With respect to the first reason, Plaintiffs maintain that Whole Foods limited its ability to terminate employees at-will by committing to a "corrective action process," as set forth in the GIG. Plaintiffs characterize that process as a promise by Whole Foods to its employees that it would terminate an employee for misconduct only after subjecting her to a series of incremental disciplinary actions over a 12-month period, except in the case of a severe offense. See Pls.' Opp'n at 33-35. By agreeing to adhere to such a process, Plaintiffs assert, Whole Foods "voluntarily and explicitly mandated dismissal only for cause." Id. at 35. Plaintiffs' argument is unpersuasive, however, because it relies on a selective reading of the GIG. It is true that the GIG generally prescribes a corrective action process for behavioral or performance deficiencies that moves from counseling statements to written warnings to a final written warning, instituted over a "rolling 12-month period," before Whole Foods discharges an employee. See 2016 GIG at 46-49. It also, however, vests substantial discretion in Whole Foods to carry out that process. For instance, when describing the policy, the GIG states at the outset that, "[w ]hen practical , Team Members will be warned and counseled for unsatisfactory performance prior to discharge." Id. at 46 (emphasis added). The very next sentence states that, "[d]epending on the nature and severity of the offense ..., the company reserves the right to discharge any Team Member without warning." Id. ; see id. ("The process may vary based on the severity of the situation."). The GIG also contrasts "[e]xamples of conduct that may lead to corrective action" and "major infractions," suggesting that the latter category of offenses is more likely to lead to immediate discharge. See id. at 47-48. The GIG's use of permissive language makes clear that Whole Foods did not intend to precondition termination of its employees on participation in the corrective action process, or to create a "just cause" requirement for termination. Cf. Strass v. Kaiser Found. Health Plan of Mid-Atl. ,
This reading is confirmed by the series of disclaimers contained in the GIG warning employees that the manual does not create any contractual rights. It is well-established that employers may "effectively disclaim any implied contractual obligations arising from" provisions in employment manuals. Boulton v. Inst. of Int'l Educ. ,
YOUR EMPLOYMENT IS AT-WILL. THIS MEANS THAT YOUR EMPLOYMENT IS FOR NO DEFINITE PERIOD OF TIME, AND EITHER YOU OR WHOLE FOODS MAY TERMINATE YOUR EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE OR NOTICE.
*612016 GIG at 3. The GIG continues immediately to its second disclaimer, advising Whole Foods employees:
This GIG is not an employment contract with you or any other person, nor is it a promise regarding the terms or conditions of your employment. Neither this GIG , nor any other Company policy or representation, is intended to promise or guarantee any right to you or any other person, including employment for any period of time [.]
Relying on the D.C. Court of Appeals' decision in Strass v. Kaiser Foundation Health Plan of Mid-Atlantic , Plaintiffs assert that Whole Foods' disclaimers should not control the outcome. According to Plaintiffs, Strass requires that disclaimers in an employment manual be "considered with reference to the entire document" before a court can rule on an implied employment contract claim. Pls.' Mot. at 35 (quoting Strass ,
Accordingly, Count III is dismissed without prejudice.
4. Defamation and False Light (Counts IV & V)
The court at last reaches Counts IV and V, Plaintiffs' claims for defamation and false light, respectively. These claims are sufficiently pleaded and survive the motion to dismiss.
To state a claim for defamation under District of Columbia law,
(1) that the defendant made a false and defamatory statement concerning the plaintiff; (2) that the defendant published the statement without privilege to a third party; (3) that the defendant's fault in publishing the statement amounted to at least negligence; and (4) either that the statement is actionable as a matter of law irrespective of special harm, or that its publication caused the plaintiff special harm.
Marsh v. Hollander ,
Plaintiffs assert that Whole Foods defamed Plaintiffs and placed them in a false light in an effort to scapegoat them and *63cover up corporate labor-shifting practices. Am. Compl. ¶¶ 72-82; 83-91. The Amended Complaint identifies the following purportedly defamatory statements to substantiate their claims:
a) "[Whole Foods] fired nine store managers in the mid-Atlantic region for manipulating a bonus program to their benefit."
b) "[N]ine managers at stores in Maryland, Virginia, and the District of Columbia engaged in a policy infraction that allowed the managers to benefit from a profit-sharing program at the expense of store employees."
c) "[Whole Foods] is still investigating exactly how much money is involved and plans to ensure that employees at the affected stores are compensated properly. The amounts involved, though, will not be material to the company's quarterly earnings."
d) "Whole Foods Fires 9 Store Managers Who Were Stealing Money From Employees."
e) "Whole Foods has fired nine store managers who were using a bonus program to their benefit...the managers were benefiting from a profit sharing program at the expense of employees...."
f) Whole Foods stated that the "manipulation" of the "Gainsharing" program was "isolated to a relatively small number of its 457 stores."
g) "[Whole Foods] took swift action, but, relative to the rest of the company, this manipulation only happened in nine of our locations."
h) "We are still in the process of investigating.....once our investigation is complete, we will take all necessary steps to correct any errors we identify."
Am. Compl. ¶¶ 73a-h; 74a-b. Plaintiffs attribute to Buchanan statements (a), (b), and (c) above, which appeared in the Associated Press Article, as well as the statement that "Nine managers at Whole Foods stores in Maryland, Virginia and the District have been fired for manipulating a store bonus program," which appeared in The Washington Post.
Defendants contend that Plaintiffs have failed to state defamation and false light claims for three reasons: (1) none of the alleged statements identify Plaintiffs; (2) the statements are neither capable of bearing a defamatory meaning nor highly offensive to a reasonable person; and (3) many of the statements Plaintiffs identify are not attributable to the Defendants. Defs.' Mot. at 40. The court considers each argument in turn.
a. "Of and Concerning" Plaintiffs
Defendants first contend that Plaintiffs' claims must be dismissed because "the statements enumerated in the Amended Complaint do not identify Plaintiffs by name or disclose any personal information sufficient to specifically identify them." Defs.' Mot. at 34. More specifically, Defendants assert that Plaintiffs cannot rely on the "of and concerning" theory to establish the first element of defamation; under that theory, a defamation claim can be sustained if the facts alleged "lead the listener to conclude that the speaker is referring to the plaintiff by description, even if the plaintiff is never named or is misnamed." Defs.' Mot. at 34 (quoting Croixland Prop. Ltd. P'ship v. Corcoran ,
In Croixland , the D.C. Circuit explained that the first element of defamation-that the defendant made a false and defamatory statement of and concerning the plaintiff-can be satisfied without specifically identifying the plaintiff by name. "[I]t suffices that the statements at issue lead the listener to conclude that the speaker is referring to the plaintiff by description."
Applying the foregoing principles here, the court concludes that Plaintiffs have sufficiently pleaded facts that Buchanan made defamatory statements "of and concerning" them, even though none of the Plaintiffs are specifically named. Plaintiffs have averred that both prospective employers and their Whole Foods colleagues in the Mid-Atlantic region knew and understood that Buchanan's statements referred to them. Am. Compl. ¶¶ 80-81. Not only must the court treat those allegations as true at this stage, but the complaint when read as a whole renders the allegations plausible. It is true, as Defendants point out, that Buchanan's statements do not specify any particular store within the Mid-Atlantic region or any particular type of manager; however, it does not require a large inferential leap to think it plausible that, at a minimum, Plaintiffs' colleagues at Whole Foods stores would have known about their terminations and, if they had heard Buchanan's statements, reasonably believed that they referred to Plaintiffs. After all, as here, when the termination and its publication coincide, it should come as no surprise to the employer that the terminated employee's co-workers would attribute the public statement and the stated reason for firing to their departed colleague. Cf. Elias v. Rolling Stone LLC ,
Defendants' reliance on Stovell v. James is inapposite. See Defs.' Mot. at 34 (citing Stovell ,
Likewise, the court is unpersuaded by Defendants' reliance on Lines v. Cablevision Sys. Corp. , No. 04-CV-2517,
Admittedly, the facts of Lines are analogous to those presented here. The court, however, doubts that Lines , a 2005 case, would come out the same way today, after the Second Circuit's 2017 decision in Elias v. Rolling Stone. See
*66The Second Circuit reversed except as to one claim.
This extended discussion of Elias makes two things clear. First, the court in Lines surely would have reached a different conclusion with the benefit of Elias . After all, if three plaintiffs of a 53-member fraternity could advance a small-group theory of defamation, then surely one plaintiff of a 14-person group of terminated employees could do so, too; a workplace is at least as intimate as a university community, if not more so, and there can be little doubt that the plaintiff's co-workers in Lines would have recognized the plaintiff as among the 14 employees referenced in the company's press release announcing their firings. Second, Elias supports the court's conclusion here. Like the plaintiffs in Elias , Plaintiffs here have plausibly alleged that those acquainted with them and the circumstances would have recognized them as the subjects of Buchanan's statements accusing them of wrongdoing. Indeed, like the plaintiffs in Elias , Plaintiffs here have pleaded that, in fact, prospective employers and their former Whole Foods colleagues were able to make out that Buchanan was referring *67to them in her statements. Thus, consistent with Elias , Plaintiffs in this case have pleaded sufficient facts to support a small-group theory of defamation.
Finally, Defendants reliance on a line of cases that "refus[e], as a matter of law, to find defamatory meaning where the claim of defamation is based on the interpretation third parties place upon termination of an at-will employee" is misplaced. Defs.' Mot. (quoting Lefande ,
In sum, the court concludes that Plaintiffs have pleaded sufficient factual matter to make it plausible that persons acquainted with them would recognize Buchanan's alleged defamatory statements as "of and concerning" them.
b. "Capable of Bearing a Defamatory Meaning" and "Highly Offensive to a Reasonable Person"
The court next addresses Defendants' contention that the alleged defamatory statements are not capable of bearing a defamatory meaning nor would be highly offensive to a reasonable person. Defs.' Mot. at 40. Under District of Columbia law, "a statement is 'defamatory' if it tends to injure the plaintiff in his trade, profession or community standing, or lower him in the estimation of the community." Jankovic v. Int'l Crisis Grp. ,
Plaintiffs' allegations easily satisfy these standards. In context, Buchanan's statements to the Associated Press and The Washington Post paint Plaintiffs as cheats and thieves. True, one of the statements communicates that Whole Foods fired Plaintiffs for merely committing a "policy infraction," but other statements are more specific, asserting that Plaintiffs "manipulated a bonus program to their benefit" and that their misconduct "allowed [them] to benefit from a profit-sharing program at the expense of store employees." It is hardly a stretch to say that such statements, if false, would injure Plaintiffs in their profession and community and "would be offensive to a reasonable person." Zimmerman ,
c. The statements are attributable to Defendants
Finally, the court turns to Defendants' argument that the court should dismiss Plaintiffs' claims with regard to the remaining statements identified in the Amended Complaint because, of the eight allegedly defamatory statements in the Amended Complaint, only four are quotes directly attributed to Buchanan in the Associated Press and Washington Post articles. Defs.' Mot. at 36. The court declines to do so. At this stage, what matters is *68that Plaintiffs have successfully pleaded at least some actionable statements. Discovery will bear out whether the remaining statements are attributable to Defendants or not.
C. Plaintiffs' Motion for Leave to File a Second Amended Complaint and Defendants' Motion to Stay
Finally, the court addresses Plaintiffs' Motion for Leave to File a Second Amended Complaint to add a claim under the whistleblower provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 15 U.S.C. § 78u-6. Federal Rule of Civil Procedure 15(a) instructs courts to "freely give leave" to a party seeking to amend its pleadings. Denying leave to amend is "inconsistent with the spirit of the Federal Rules" and an abuse of discretion, Foman v. Davis ,
Consistent with these principles, the court grants Plaintiffs' motion to amend. Defendants' Motion to Stay is therefore denied as moot. The Second Amended Complaint shall now be the operative pleading in this matter. Defendants may move to dismiss the new claim within 14 days, unless additional time is requested.
V. CONCLUSION AND ORDER
For the foregoing reasons, Defendants' Motion to Dismiss Plaintiffs' Amended Complaint is granted in part and denied in part, as follows:
1. All claims against WFMI are dismissed without prejudice for lack of personal jurisdiction.
2. All claims against Buchanan are dismissed without prejudice for lack of personal jurisdiction.
3. Plaintiffs' claim for wrongful termination against WFM Group and WF Services (Count I) is dismissed with prejudice for failure to state a claim.
4. Plaintiff Bautista's claim for wrongful termination against WFM Group and WF Services (Count II) is dismissed with prejudice for failure to state a claim.
5. Plaintiffs' claim for breach of contract and breach of implied duty of good faith and failure dealing against WFM Group and WF Services (Count III) is dismissed without prejudice for failure to state a claim.
6. Plaintiffs may proceed with their claims for defamation and false light against WFM Group and WF Services (Counts IV and V).
Plaintiffs' Motion for Leave to File a Second Amended Complaint is granted, and Defendants' Motion to Stay is denied as moot.
Defendant WFM Group, a Delaware corporation with its principal place of business in Texas, did not assert lack of personal jurisdiction when it moved to dismiss the Amended Complaint; it moved for dismissal only under Rule 12(b)(6). WFM Group therefore has waived lack of personal jurisdiction as a defense. See Fed. R. Civ. P. 12(h) ; Gilmore v. Palestinian Interim Self-Gov't Auth. ,
The court need not evaluate whether every claim advanced by Plaintiff satisfies the requirements of due process. So long as Plaintiffs obtain personal jurisdiction as to one claim-and here they have via their defamation cause of action-the doctrine of pendent personal jurisdiction permits the court to exercise personal jurisdiction over Defendants as to other "claims that arose out of the same core operative fact[s]." Oetiker v. Werke, G.m.b.H. ,
Plaintiffs also maintain that Plaintiff Sheikh was employed in the District of Columbia when terminated. See Pls.' Opp'n at 8. But that assertion is contradicted by their Amended Complaint, which alleges that Sheikh was a Store Team Leader in Reston, Virginia, at the time of his termination. Am. Compl. ¶ 10. For that reason, the court only identifies Vasquez as having been employed in the District of Columbia when terminated.
In that footnote, Plaintiffs argue that WFMI "exercises such active and substantial control over Whole Foods Group, it is merely an alter ego of its subsidiary and its individual stores." Pls.' Opp'n at 11 n.6. For that proposition, Plaintiffs point only to WMFI's statements in the Form 10-K. See
Any assertion that Buchanan's alleged defamatory statements-made in Texas-constitute tortious activity in the District of Columbia because they were published here is squarely foreclosed by precedent. See Forras ,
In their Opposition to Defendants' Motion to Dismiss, Plaintiffs raise for the first time a statutory claim for retaliation under the DCWPCL itself,
Prior to October 2010, the cause of action provision in the Maryland Wage Payment and Collection Law was codified at Md. Code Lab. & Empl. § 3-507.1 (2010).
Because the court dismisses Counts I and II in their entirety, it need not reach Defendants' request to dismiss Plaintiffs' claims for punitive damages and attorneys' fees. See Defs.' Mot. at 24.
In evaluating the 12(b)(6) motion, the court may consider the portions of the GIG filed by Defendants because Plaintiffs have incorporated relevant portions of the GIG by reference in their Amended Complaint. See Rand v. Sec'y of the Treasury ,
In light of the foregoing conclusion that Plaintiffs had no implied employment contract with Defendants, Plaintiffs' breach of duty of good faith and fair dealing claim necessarily fails under District of Columbia and Maryland law. E.g., Paul v. Howard Univ. ,
Because both parties apply District of Columbia law to these claims, this court does the same. See Abbas v. Foreign Policy Grp. ,
WFM Group has not argued that Buchanan is not its employee or agent. The court therefore assumes that she is for present purposes.
Defendants cited and relied upon the district court decision in Elias. See Defs.' Mot. at 35-36. The Second Circuit decided Elias after the close of the original round of summary judgment briefing, but before the court ordered briefing on the impact of Bristol-Myers . Defendants did not, however, at any time notify the court that the Second Circuit had reversed the district court's decision in Elias . They should have done so.
Reference
- Full Case Name
- Victor VASQUEZ v. WHOLE FOODS MARKET, INC.
- Cited By
- 22 cases
- Status
- Published