Edwards v. Granite Techs., LLC

ELISA EDWARDS, Plaintiff, v. GRANITE TECHNOLOGIES, LLC and SHANE HOFF, Defendants.

Civil Action No. 19-cv-12330-ADB

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

July 1, 2020

MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO DISMISS AND PLAINTIFF'S MOTION TO REMAND

BURROUGHS, D.J.

Elisa Edwards ("Edwards") brought this action in Massachusetts Superior Court against her previous employer, Granite Technologies, LLC ("Granite Technologies") and its Regional Vice President, Shane Hoff ("Hoff" and, with Granite Technologies, "Defendants"). [ECF No. 1-1 ("Compl." or "Complaint")]. Defendants removed the case to federal court on November 12, 2019. [ECF No. 1].

Edwards names Hoff in three counts of the complaint including for violation of the Massachusetts Wage Act (Count V), fraud (Count VIII), and negligent infliction of emotional distress (Count IX). See [Compl.]. Currently before the Court is Defendants' Motion to Dismiss each of these claims based on fraudulent joinder, [ECF No. 5], and Plaintiff's Motion to Remand, [ECF No. 13]. For the reasons set forth below, Defendants' motion to dismiss the claims against Hoff, [ECF No. 5], is GRANTED, and the motion to remand, [ECF No. 13], is DENIED as moot.

I. BACKGROUND

A. Factual Background

For purposes of this motion, the relevant facts are drawn from the complaint, [Compl.], and viewed in the light most favorable to the plaintiff. See Ruivo v. Wells Fargo Bank, N.A., 766 F.3d 87, 90 (1st Cir. 2014) (citations omitted). Granite Technologies is a telecommunications company that "allows companies with more than one location to consolidate their telecommunication services through a single point of contact." [ECF No. 6-1 ¶ 5]. The company is incorporated in Delaware and has its principal office in Massachusetts. [Compl. ¶ 2]. Granite Technologies employs Hoff as a Regional Vice President, [id. ¶ 3], a position involving "duties [that] are managerial in nature," [ECF No. 6-1 ¶ 7].

In May 2016, Granite Technologies hired Edwards as a Regional Account Manager for its Atlanta office. [Compl. ¶ 6]. Edwards' primary responsibility was to sell Granite Technologies' telecommunication services. [Id. ¶ 6]. In her role, Edwards was eligible for commissions from sales. See [Id. ¶ 13].

In 2016, Edwards requested permission from her immediate supervisor and Hoff to pursue business from Duke Energy, a large electric company, through her own contact. [Compl. ¶¶ 8-12]. Her request was approved, [id.], but "contrary to her compensation agreement" her supervisors informed her "that she could [either] receive no commission from the Duke Energy account or accept half of the commission," [id. ¶ 13]. On November 3, 2016, Hoff sent an email clarifying that, with regards to Duke Energy, "[another employee] own[ed] full responsibility to lead and manage the sales process along with coordinating all of the collaboration needed," but that Edwards was "expected to be involved and included in every step to contribute as well as develop skills and learn the process." [Id. ¶ 14]. He also confirmed that the commission would be "[s]plit 50/50 between [Edwards] and [the] energy team for all upfront and residualcommissions." [Id.] Edwards nonetheless "remained vigilant in her pursuit of the Duke Energy account." [Id. ¶ 15].

Although Edwards was supposed to be included in all parts of the deal, she was excluded from communications with Duke Energy, [id. ¶¶ 14-18], and then "chastised" for her lack of involvement, [id. ¶ 19]. Edwards alleges that this criticism "demonstrates the illicit goal of excluding [Edwards] from the Duke Energy account so that Granite [Technologies] could avoid its responsibility to pay her the wages that she had earned." [Id. ¶ 19]. Further, after the deal was secured, "Edwards' superiors at Granite [Technologies] began a campaign of unfair scrutiny, imposition of disparate employment requirements, and harassment of [Edwards]." [Id. ¶ 20]. Granite Technologies also held her to different standards than her fellow employees, including by setting higher quotas for her, telling her to arrive at her desk well before her shift began, and requiring her to make more cold calls than her peers. [Id. ¶ 21]. When Edwards complained, Hoff responded "with a marginalization of [her] work." See [Id. ¶ 28].

On or about April 7, 2017, the Duke Energy deal closed. [Id. ¶ 50]. At this time, although the conditions "for payment of 50% of [u]pfront [c]ommissions to [Edwards] were satisfied," [id. ¶ 50], Edwards alleges that Granite Technologies did not pay her the commissions she was due, [id. ¶ 51].

On May 19, 2017, Granite Technologies terminated Edwards. [Id. ¶ 30]. She "suffered severe stress and anxiety associated with the harassment she endured and from her termination from employment at Granite [Technologies]." [Id. ¶ 36]. Edwards, who has ulcerative colitis, reported that her symptoms became more severe, such that she "required multiple extended hospitalizations and corrective surgeries," incurred considerable medical expenses, experienced pain and suffering, and was unable to work and provide for her family. [Id. ¶¶ 37-38].

B. Procedural Background

In October 2019, Edwards filed the instant action in Massachusetts Superior Court, alleging violation of the Massachusetts Wage Act (Count V), negligent infliction of emotional distress (Count IX), and fraud (Count VII) against both defendants, as well as a number of contract-based claims against Granite Technologies alone. [Compl.].

On November 12, 2019, Granite Technologies removed the case to federal court, [ECF No. 1 at 1], and moved to dismiss the claims against Hoff for fraudulent joinder, arguing that Edwards had failed to state a valid claim against Hoff, [ECF No. 6]. Edwards opposed the motion to dismiss, [ECF No. 9], and the Defendants replied, [ECF No. 12]. Edwards then filed a motion to remand, asking that the case be remanded to state court if the Court allows the claims against Hoff and finds that it lacks jurisdiction. [ECF No. 13].

II. LEGAL STANDARD

When considering a motion to dismiss a party for fraudulent joinder, the Court must determine whether the party seeking removal to federal court has carried their "burden of demonstrating by clear and convincing evidence 'either that there has been outright fraud committed in the plaintiff's pleadings, or that there is no possibility, based on the pleadings, that the plaintiff can state a cause of action against the non-diverse defendant in state court." Surabian Realty Co. v. Cuna Mut. Grp., 245 F. Supp. 3d 297, 299 (D. Mass. 2017) (quoting Mills v. Allegiance Healthcare Corp., 178 F. Supp. 2d 1, 5 (D. Mass. 2001)). As the Defendants do not allege outright fraud, [ECF No. 6 at 1], the Court evaluates only whether Edwards has stated a claim against Hoff.

To survive a motion to dismiss for failure to state a claim, the alleged facts must be sufficient to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570 (2007). "To cross the plausibility threshold a claim does not need to beprobable, but it must give rise to more than a mere possibility of liability." Grajales v. P.R. Ports Auth., 682 F.3d 40, 44-45 (1st Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "A determination of plausibility is 'a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Id. at 44 (quoting Iqbal, 556 U.S. at 679). However, "[i]n assessing a claim of fraudulent joinder, the court is not bound by the allegations in the complaint and may consider affidavits and other materials that bear on the question of whether there is a reasonable basis for joinder of a defendant." In re Fresenius Granuflo/Naturalyte Dialysate Prods. Liab. Litig., 76 F. Supp. 3d 321, 333 (D. Mass. 2015).

III. DISCUSSION

Defendants seek to dismiss Edwards' claims only as against Hoff. For the following reasons, the motion to dismiss the claims against Hoff, [ECF No. 5], is GRANTED.

A. Massachusetts Wage Act

In Count V, Edwards alleges Granite Technologies and Hoff violated the Massachusetts Wage Act (the "MWA") by denying her full wages and setting up a special commission system that required her to split the residual commissions for the Duke Energy account. [Compl. ¶¶ 52-61]. Defendants argue that Hoff cannot be held individually liable under the MWA because he does not have sufficient authority over the corporation. [ECF No. 6 at 5-6]. Edwards responds that Hoff's control over "the amount and timing of payment of [Edwards'] wages" is sufficient for liability under the MWA. [ECF No. 9 at 5].

The MWA "provides a cause of action for employees whose wages have been wrongfully withheld." Drachman v. Bos. Sci. Corp., No. 16-cv-11022, 2016 LEXIS 186283, at *14 (D. Mass. Nov. 23, 2016). Under the MWA, a cause of action can be brought against a corporation, as well as "[t]he president and treasurer of a corporation and any officers or agents having themanagement of such corporation." Id. (quoting Mass. Gen. Laws ch. 149, § 148). The MWA's legislative history evidences an "intent to ensure that individuals with the authority to shape the employment and financial policies of an entity be liable for obligations of that entity to its employees." Id. at *16 (citing Cook v. Patient Edu, LLC, 989 N.E.2d 847, 852 (Mass. 2013) (finding that individual liability under the MWA extends to companies organized as LLCs)). "This expansive view of potential liability is circumscribed," however, by the requirement that the individual be able to exercise sufficient control over the employer. See id. at *15-16.

"[M]erely holding a managerial position over some branch, division, or office of a corporation does not, by itself, mean that that manager has the 'management' of the 'corporation' as a whole." Wiedmann v. Bradford Group, Inc., 831 N.E.2d 304, 314 (Mass. 2005), superseded by statute on other grounds, Mass. Gen. Laws ch. 149, § 150, as...