Daniels v. Alvaria, Inc.

1

KAREN DANIELS, Plaintiff, v. ALVARIA, INC., NOBLE SYSTEMS CORPORATION, and ASPECT SOFTWARE, INC., Defendants.

No. 23-cv-10419-DJC

United States District Court, D. Massachusetts

February 23, 2024

MEMORANDUM AND ORDER

DENISE J. CASPER, UNITED STATES DISTRICT JUDGE

I. Introduction

Plaintiff Karen Daniels (“Daniels”) has sued Defendants Alvaria, Inc. (“Alvaria”), Noble Systems Corporation (“Noble”) and Aspect Software, Inc (“Aspect”) alleging violation of the Massachusetts Wage Act (the “Wage Act”), Mass Gen. L. c. 149, §§ 148, 150, (Count I), retaliation under the Wage Act (Count II), sex discrimination, harassment and retaliation (Counts III and IV), breach of contract (Count V), breach of the implied covenant of good faith and fair dealing (Count VI), fraud (Count VII), estoppel (Count XIII), quantum meruit (Count IX) and unjust enrichment (Count X). D. 14-1. Defendants have moved to dismiss all claims except the Wage Act retaliation claim (Count II). D. 16. For the reasons stated below, the Court ALLOWS the motion to dismiss in part and DENIES it in part.

II. Standard of Review

On a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the Court must determine if the facts alleged “plausibly narrate a claim for relief.” Germanowski v. Harris, 854 F.3d 68, 71 (1st Cir. 2017). Reading the complaint “as a whole,” the Court must conduct a two-step, context-specific inquiry. Garda-Catalan v. United States, 734 F.3d 100, 103 (1st Cir. 2013). First, the Court must perform a close reading of the claim to distinguish the factual allegations from the conclusory legal allegations contained therein. Id. Factual allegations must be accepted as true, while legal conclusions are not entitled credit. Id. Second, the Court must determine whether the factual allegations present a “reasonable inference that the defendant is liable for the misconduct alleged.” Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). In sum, the complaint must provide sufficient factual allegations for the Court to find the claim “plausible on its face.” Garda-Catalan, 734 F.3d at 103 (quoting Iqbal, 556 U.S. at 678). On a Rule 12(b)(6) motion, the Court may also consider documents incorporated into the complaint, as well as “documents the authenticity of which are not disputed by the parties,” “official public records,” “documents central to plaintiffs' claim” and “documents sufficiently referred to in the complaint.” Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993).

III. Factual Background

Except where otherwise noted, the following facts are drawn from the amended complaint, D. 14-1, and accepted as true for the purpose of resolving the motion to dismiss.^[1]

Daniels was a salesperson for Noble, a developer of call center technology, for more than twelve years. Id. ¶¶ 14, 15. Daniels sold Noble's software to customers who paid over a contractually agreed-upon period after the software was deployed. Id. ¶¶ 17-20. As customers made their post-deployment payments, Noble would pay Daniels sales commissions from those payments. Id. ¶ 22; D. 17-2 at 2. As alleged, Daniels did not need to take “further action for the commission to be earned.” D. 14-1 ¶ 22.

In March 2021, Daniels signed a compensation plan providing for specific commission rates (the “Legacy Noble Plan”). D. 17-1. The Legacy Noble Plan incorporated by reference “company policy PO-ACCT-0001” (the “Noble Commissions Policy”).^[2] Id. at 1; D. 17-2. The Noble Commissions Policy describes the circumstances under which commissions are deemed earned and the impact of termination on an employee's receipt of commissions. D. 17-2 at 2-4.

Some time in 2021, Noble merged with Aspect, forming Alvaria. See D. 14-1 ¶¶ 26-30. Alvaria thus assumed Noble's contracts and inherited Noble's workforce. See id. On May 18, 2021, Alvaria informed the former Noble sales team that as of June 30, 2021, Alvaria would not pay commissions on customer contracts it inherited from Noble, despite continuing to receive customer payments on those contracts. Id. ¶¶ 34-36. Later that month, Alvaria laid off 75% of the Noble sales team. Id. ¶ 38. The remaining sales team, including Daniels, did not receive commissions for Noble customer contracts, even those that remained under Alvaria. Id. ¶ 40.

Believing that Alvaria's decision was “wrong,” Daniels complained to various Alvaria executives regarding the payment of commissions. Id. ¶¶ 42, 45. She complained to Alvaria's Head of North American Sales, Rob Clarke (“Clarke”). Id. ¶ 45. Clarke informed Daniels that “Alvaria was working on a solution to keep whole [sic] and pay for her commissions coming in after June 30, 2021.” Id. ¶ 48. Clarke further stated that “Alvaria was working to pay her for a large sale [Daniels] made in 2020 for Comenity/Alliance Data.” Id. ¶ 49. Daniels then scheduled a meeting with “former-CEO Patrick Dennis . . . who directed her back to [the individual overseeing commissions].” Id. ¶ 50.

In June 2021, however, “Alvaria told Daniels it would not pay her any commissions on the disputed contracts due after June 30, 2021, including the Comenity/Alliance Data deal.” Id. ¶ 51. The next month, Alvaria distributed a new sales compensation plan which, unlike the Legacy Noble Plan, paid sales representatives when the sales contract was signed, instead of when customer payments arrived, and it would not pay commissions on contracts brought from Noble. Id. ¶¶ 52-53. Daniels continued to seek commissions for customer contracts she signed for Noble. See id. ¶¶ 54-57.

On an October 8, 2021 quarterly business review meeting held by videoconference, Daniels presented her sales pipeline for fourth quarter 2021 and 2022. Id. ¶¶ 58-59. Dennis, to whom Daniels had previously attempted to complain about unpaid commissions, was “unusually harsh about her pipeline” and “specifically referenced her protected activities regarding payment of her commissions.” Id. ¶ 60. Daniels alleges that “Dennis stated that he [did not] care about [her] commissions and how staff is paid, he wants his ‘$1.2 million' for the fourth quarter 2022 and he wanted his ‘fucking money.'” Id. ¶ 61 (alterations in original). “He then said there was nothing more to talk about and they were done with the meeting.” Id. ¶ 62. Daniels reported this incident to Alvaria's human resources department (“HR”). Id. ¶ 65. Alvaria hired an outside agency to investigate and determined that no retaliation occurred, id., but Daniels questions the thoroughness of this inquiry. Id. ¶¶ 66-67.

After Daniels retained counsel, Defendants agreed to pay some portion of the commissions she alleges were due, in the amount of $676,000. Id. ¶ 69. During negotiations with Daniels over her new compensation plan, Alvaria suggested keeping her on the Noble Legacy Plan through December 31,2021. Id. ¶ 72. Although Daniels agreed to this “temporary solution,” she expressed continued concern that under Alvaria's proposal “in 2022, she would not be paid for sales made in the fourth quarter of 2021,” that her claim for “ongoing commissions” from former Noble customers after 2021 would remain unresolved, and that “Alvaria was intentionally stealing commissions from herself and others.” Id. ¶ 73. Alvaria made four commission payments to Daniels in late 2021 and early 2022, but Daniels alleges that Defendants nevertheless failed to timely and fully pay Daniels's commissions, including for the Comenity/Alliance Data sale of October 2021. Id. ¶¶ 74-76.

On January 4, 2022, Alvaria informed Daniels that it would not provide her any information on its anticipated 2022 compensation plan until that plan was distributed. Id. ¶ 80. Daniels then met with an Alvaria HR employee to discuss her various concerns regarding Alvaria's failure to pay commissions. Id. ¶¶ 81-82. On February 9, 2022, Daniels was informed that her employment with Alvaria would be terminated as of February 14, 2022 and that Alvaria would not pay her the commissions requested. Id. ¶¶ 83-84.

IV. Procedural History

Daniels filed this action on December 7, 2022, in Middlesex Superior Court, D. 1-1 at 4. Defendants removed the case to this Court.^[3] D. 1. Daniels moved to amend her complaint, D. 14, and Defendants then moved to dismiss the amended complaint, D. 16. The Court heard the parties on the pending motions, granted the motion to amend and took the matter under advisement. D. 25.

V. Discussion

A. Consideration of Extrinsic Documents on a Rule 12(b)(6) Motion

Although Daniels objects to Defendants' reliance upon the Legacy Noble Plan and the Noble Commissions Policy in their opposition, she concedes that “a court may also consider documents central to a plaintiff's claim or documents sufficiently referred to in a complaint without converting a motion to dismiss into one for summary judgment.” D. 20 at 12; see Watterson, 987 F.2d at 3. The contract between Noble and Daniels governing the payment of Daniels's commissions is central to her Wage Act and breach of contract claims and repeatedly referred to throughout the complaint. D. 14-1 ¶ 44 (alleging that “[t]here is no relevant legal excuse for failing to pay commissions timely according to the commission plan”); id. ¶ 53 (explaining that new Alvaria sales plan “changed how Mrs. Daniels and other sales representatives would be paid” as opposed to “Noble sales plan” that was previously in effect); id. ¶ 72 (alleging that Alvaria offered to keep Daniels “on her prior Noble compensation plan”); id. ¶ 134 (alleging that “Plaintiff and the Defendant were parties to a contract under which the Defendant agreed to and had a duty to timely pay the Plaintiff commissions for her sales activities”); see also id. ¶¶ 64 108, 135. Daniels does not dispute the...