JANE MAGNUS-STINSON, District Judge.
Presently pending before the Court in this breach of contract case is Defendant Bradley Consulting & Management, Inc.'s ("
Federal Rule of Civil Procedure 8(a)(2) "requires only `a short and plain statement of the claim showing that the pleader is entitled to relief.'" Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). "Specific facts are not necessary, the statement need only `give the defendant fair notice of what the...claim is and the grounds upon which it rests.'" Erickson, 551 U.S. at 93 (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007)).
A 12(b)(6) motion to dismiss asks whether the complaint "contain[s] sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). In reviewing the sufficiency of the complaint, the Court must accept all well-pled facts as true and draw all permissible inferences in favor of the plaintiff. See Active Disposal, Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir. 2011). The Court will not accept legal conclusions or conclusory allegations as sufficient to state a claim for relief. See McCauley v. City of Chicago, 671 F.3d 611, 617 (7th Cir. 2011). Factual allegations must plausibly state an entitlement to relief "to a degree that rises above the speculative level." Munson v. Gaetz, 673 F.3d 630, 633 (7th Cir. 2012). This plausibility determination is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.
The factual allegations in the Second Amended Complaint filed by Plaintiff John Hurlburt, which the Court must accept as true for purposes of ruling on the pending motion, are as follows:
Mr. Hurlburt began working for Bradley as a Sales Consultant in August 2014, earning an annual salary of $43,000. [
On or about June 5, 2015, Mr. Bradley emphasized to Mr. Hurlburt in a telephone conversation the importance of Mr. Hurlburt's service at Bradley and convinced Mr. Hurlburt to stay on at Bradley. [
In a series of email messages that followed the June 5, 2015 telephone conversation, Mr. Bradley offered to beat Alpha's base salary offer by $20,000.
The Director of Sales oversaw the individual sales representatives, attended conferences and association meetings, interfaced with prospective and existing clients, and was the "face of the company." [
On February 3, 2016, Bradley terminated Mr. Hurlburt's employment. [
Mr. Hurlburt initiated this litigation on March 13, 2016, and filed the operative Second Amended Complaint (the "
Bradley argues that Mr. Hurlburt has failed to allege that he was not an at-will employee and that, in any event, he has failed to adequately allege claims for breach of contract, promissory estoppel, or negligent misrepresentation. [
At the outset, the Court notes that it is exercising diversity jurisdiction over this matter. [See
Bradley argues that Mr. Hurlburt does not allege that he had anything other than an employment at-will relationship with Bradley, so Bradley could terminate his employment without incurring any liability. [
Mr. Hurlburt responds that he falls within two of the three exceptions to Indiana's employment-at-will doctrine — that there was adequate independent consideration to support an employment contract (here, the fact that he gave up the job at Alpha), and that promissory estoppel applies because Mr. Hurlburt accepted the new position at Bradley with the understanding that it would be permanent. [
On reply, Bradley argues that the Complaint does not contain allegations that the new position at Bradley was permanent, that Bradley ever told Mr. Hurlburt it was offering him permanent employment, or that Bradley actually promised him permanent employment. [
Indiana follows the employment-at-will doctrine, which provides that "employment may be terminated by either party at will, with or without a reason." Harris v. Brewer, 49 N.E.3d 632, 639 (Ind. Ct. App. 2015). Under Indiana law, "[t]here is a strong presumption that employment...is at-will." Harris, 49 N.E.3d at 639 (citing Ogden v. Robertson, 962 N.E.2d 134, 145 (Ind. Ct. App. 2012)). There are three exceptions to the employment-at-will doctrine:
Orr v. Westminster Village North, Inc., 689 N.E.2d 712, 718 (Ind. Ct. App. 1997). Mr. Hurlburt does not argue that his employment was anything other than at-will, but argues that his situation falls within the first and third exceptions to Indiana's employment-at-will doctrine.
First, Mr. Hurlburt contends that he provided adequate, independent consideration such that his at-will employment should be converted into employment which could only be terminated for good cause. [
Although these principles apply when an employee has left a job, and then was terminated from a new job, it does not appear that any Indiana court has recognized that turning down an offer of employment to stay at a current job, even in a new position, constitutes adequate independent consideration. Indeed, none of the cases Mr. Hurlburt relies upon involved that scenario. Conversely, at least one case in this District, applying Indiana law, has rejected the notion that turning down an offer of employment constitutes adequate independent consideration. In Sweet v. Indianapolis Jet Center, Inc., 918 F.Supp.2d 801 (S.D. Ind. 2013), the plaintiff accepted a job offer from a new employer because he was concerned he would have to relocate with his current employer. Id. at 803. When he notified his current employer, the current employer offered him a six-year contract if he agreed to stay on. Id. at 803-04. The plaintiff withdrew his acceptance of the job offer from the new employer, and agreed to stay on with his current employer. Id. at 804. Shortly thereafter, the plaintiff's salary was cut, his title was changed, and he was asked to relocate. Id. at 804. Unwilling to relocate, the plaintiff resigned and sued his employer for, among other things, breach of contract and promissory estoppel. Sweet found that the facts plaintiff pled did not plausibly suggest that adequate independent consideration existed because the plaintiff only alleged that he gave up the job he was offered by the new employer and "[t]hat is, as a matter of law, insufficient." Id. at 808 (citing Wior v. Anchor Indus. Inc., 669 N.E.2d 172, 176 (Ind. 1996)).
Similarly, here, Mr. Hurlburt alleges that he turned down the Alpha job offer to stay at Bradley. He does not allege that Bradley offered him the Director of Sales position for a definitive amount of time, but only that the position was "permanent." Under Indiana law, even a promise of "permanent" employment is not sufficient to allege independent consideration. See Urbanski v. Tech Data, 2008 WL 141574, *8 (N.D. Ind. 2008) (allegation that plaintiff was promised a "permanent job after she performed well for two months" did not change plaintiff's status as an at-will employee).
In sum, Mr. Hurlburt's allegations that he gave up a job offer to stay at Bradley in a different position has not been recognized as adequate consideration under Indiana law, such that Mr. Hurlburt's employment would not be considered at-will.
Mr. Hurlburt also alleges that his employment should not be considered at-will because his situation falls within the promissory estoppel exception to the doctrine. [
The promissory estoppel exception to the employment-at-will doctrine applies when the plaintiff "`plead[s] the doctrine with particularity, demonstrating that the employer made a promise to the employee, the employee relied on the promise to his detriment, and the promise otherwise fits within the Restatement test for promissory estoppel.'" Harris v. Brewer, 49 N.E.3d 632, 644 (Ind. Ct. App. 2015) (quoting Peru School Corp. v. Grant, 969 N.E.2d 125, 133 (Ind. Ct. App. 2012)). The Restatement (Second) of Contracts provides, in relevant part:
A promise which the promisor should reasonably expect to induce action or for-bearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.
Restatement (Second) of Contracts § 90(1) (1981).
Mr. Hurlburt alleges in the Complaint that Bradley offered him the Director of Sales position to "entice and induce" him to stay at Bradley, that he accepted Bradley's offer, and that he relied upon Bradley's promises to his detriment. [
The Court finds that Mr. Hurlburt has not adequately alleged that he was anything other than an at-will employee at Bradley. The Court will address the effect of this finding, as well as Bradley's other dismissal arguments, below.
Because the Court has found that Mr. Hurlburt has not adequately alleged that he fell within an exception to Indiana's employment-at-will doctrine, Bradley could terminate his employment at any time and for any reason. See Orr, 689 N.E.2d at 717. Accordingly, Mr. Hurlburt's breach of contract claim fails at the outset. See Kpotufe v. J.B. Hunt Transport, Inc., 2011 WL 6092159, *5 (S.D. Ind. 2011) (breach of contract claim failed as a matter of law because plaintiff was an at-will employee).
Bradley argues, however, that even if Mr. Hurlburt was not an at-will employee, his breach of contract claim still fails because Mr. Hurlburt does not allege that he had a contract with Bradley or an enforceable contract for definite employment, or that Bradley breached a contract. [
Mr. Hurlburt responds that he has adequately alleged that Bradley offered him a promotion to Director of Sales with a substantial pay increase, and that Bradley's representations led him to reasonably believe that the Director of Sales position would be a permanent position — one that "a reasonable person, including [Mr. Hurlburt], would perceive to be of similar permanency to the position he turned down at [Alpha]." [
On reply, Bradley argues that "[Mr. Hurlburt] does not claim that Bradley offered him permanent employment. Instead, [Mr. Hurlburt] asserts that he developed a belief that his position would be permanent.... This one-sided, mistaken assumption is insufficient to create the existence of a contract for a definite term for the purposes of establishing a breach of contract claim. If any contract existed it was for a promotion and a raise, which [Mr. Hurlburt] received." [
Under Indiana law, "[i]t is well-settled that [t]o recover for a breach of contract, a plaintiff must prove that: (1) a contract existed, (2) the defendant breached the contract, and (3) the plaintiff suffered damage as a result of the defendant's breach." Duncan v. Greater Brownsburg Chamber of Commerce, Inc., 967 N.E.2d 55, 57 (Ind. Ct. App. 2012) (second alteration in original) (citations and quotation marks omitted); see also Corry v. Jahn, 972 N.E.2d 907, 913 (Ind. Ct. App. 2012) (elements of breach of contract claim are "the existence of a contract, the defendant's breach thereof, and damages"). Here, Mr. Hurlburt does not allege that a contract existed, but only that Bradley offered to promote him to Director of Sales and to increase his salary (both of which occurred according to Mr. Hurlburt's own allegations), and that during an email exchange Bradley told Mr. Hurlburt his position as Director of Sales would be permanent. As discussed above, Mr. Hurlburt alleges that the promise of permanency was made after he had already accepted the offer to become Director of Sales. Thus, any contract that may have existed could not have included the condition that it was permanent — that condition did not arise until after any alleged "contract" had been entered into, and is the only condition Mr. Hurlburt alleges Bradley did not satisfy.
Additionally, Mr. Hurlburt alleges his oral contract with Bradley was "permanent" or, in other words, for an indefinite term. Under Indiana law, because a contract for permanent employment cannot be performed within a year, it must be in writing to satisfy the Statute of Frauds. Urbanski, 2008 WL 141574 at *7 (dismissing breach of contract claim because alleged oral contract for permanent employment was not in writing as required by the Statute of Frauds, so was not a valid contract). Mr. Hurlburt's breach of contract claim fails for this additional reason.
Even if Mr. Hurlburt were not considered an at-will employee, he has not adequately alleged a breach of contract claim because he has not alleged the existence of a contract for permanent employment. He accepted Bradley's offer to become Director of Sales before any promise by Bradley of permanency took place, and his allegations of an oral contract are not sufficient under Indiana law and the Statute of Frauds.
Bradley argues that Mr. Hurlburt fails to allege a promissory estoppel claim because his allegations are conclusory and do not support a promissory estoppel claim in any event. [
Mr. Hurlburt responds that he has adequately alleged a promissory estoppel claim because he alleged that Bradley convinced him to accept the Director of Sales position, that he accepted it with the understanding that it would be a permanent position, and that he relied on Bradley's promises to his detriment. [
On reply, Bradley reiterates its argument that Mr. Hurlburt does not allege he relied on a promise that the Director of Sales position would be permanent. [
Promissory estoppel is a quasi-contractual remedy that permits recovery where no contract exists. Ind. Bureau of Motor Vehicles v. Ash, Inc., 895 N.E.2d 359, 367 (Ind. Ct. App. 2008). To adequately allege a claim for promissory estoppel, Mr. Hurlburt must allege: "(1) a promise by the promissor; (2) made with the expectation that the promisee will rely thereon; (3) which induces reasonable reliance by the promisee; (4) of a definite and substantial nature; and (5) injustice can be avoided only by enforcement of the promise." Turner v. Nationstar Mortg., LLC, 45 N.E.3d 1257, 1265 (Ind. Ct. App. 2015).
Mr. Hurlburt's promissory estoppel claim fails for the same reasons he does not fit within the promissory estoppel exception to the employment-at-will doctrine. He does not allege that Bradley made a promise upon which he was induced to rely, nor that he actually relied upon. Specifically, as discussed above, Mr. Hurlburt alleges that Bradley offered to promote him to Director of Sales and to increase his salary substantially, that Mr. Hurlburt accepted Bradley's offer, and that Bradley then told him the position would be permanent. [
Finally, Bradley argues that Mr. Hurlburt fails to adequately allege a claim for negligent misrepresentation because he does not allege that Bradley supplied false information or failed to exercise reasonable care or competence in obtaining or communicating information to him. [
In response, Mr. Hurlburt argues that he alleges that when he told Bradley about the Alpha offer, Bradley told him he would be promoted to Director of Sales, as a consequence he declined the Alpha offer, but Bradley's representation turned out to be false because he was terminated from the Director of Sales position. [
On reply, Bradley contends that its representation that Mr. Hurlburt would be promoted to Director of Sales was not false because he was promoted to that position. [
Indiana courts have described the elements of a negligent misrepresentation claim as follows: "`One who, in the course of his business, profession, or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information.'" McCalment v. Eli Lilly & Co., 860 N.E.2d 884, 896 (Ind. Ct. App. 2007) (quoting Eby v. York-Division, Borg-Warner, 455 N.E.2d 623, 628-29 (Ind. Ct. App. 1983)). Mr. Hurlburt's negligent misrepresentation claim fails for the same reason his promissory estoppel claim fails — he has not adequately alleged that he justifiably relied upon any false information provided by Bradley. The only potentially false information Bradley could have provided was that the Director of Sales position was permanent and, as discussed above, Mr. Hurlburt's own allegations indicate that he did not rely on that information in deciding to accept the Director of Sales position because he accepted the position before receiving that information. He has not adequately alleged a negligent misrepresentation claim.
Based on the foregoing, the Court
