CAROL E. JACKSON, UNITED STATES DISTRICT JUDGE.
This matter is before the Court on defendants' motion for summary judgment pursuant to Fed. R. Civ. P. 56(a). Plaintiff has responded in opposition, and the issues are fully briefed.
Plaintiff Tonya Graham was employed by defendant Hubbs Machine and Manufacturing, Inc. from February 1996 until her termination in July 2013. From July 2008 until her termination, Graham served as vice president of the company. In the second amended complaint, Graham asserts a claim against Hubbs Machine for wrongful termination in violation of Missouri public policy (Count I)
Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment shall be entered if the moving party shows "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." In ruling on a motion for summary judgment, the court is required to view the facts in the light most favorable to the non-moving party, giving that party the benefit of all reasonable inferences to be drawn from the underlying facts.
The following facts are undisputed in the record. Hubbs Machine and Manufacturing, Inc. is owned by defendant William (Bill) Hubbs. Hubbs Machine manufactures optical targeting for close tolerance noncontact survey systems, which allow for measurements on aircraft tooling. Hubbs Dep. at 22:4-23:6 [Doc. #104-3]. Hubbs Machine hired Graham in February 1996 to answer phones and perform a variety of tasks. Graham Dep. at 15:21-16:7 [Doc. #104-1]. In 2004, Graham became the office manager of Hubbs Machine. In 2008, Graham was named the vice president of Hubbs Machine. Graham Dep. at 73:4-12 [Doc. #104-1]. She held this position until her discharge on July 31, 2013. Graham Dep. at 17:8-16 [Doc. #104-1].
In total, Graham worked at Hubbs Machine for over 17 years. Hubbs Dep. at 92:20-21 [Doc. #104-4]; Graham Dep. at 82:18-21 [Doc. #104-1]. As vice president of the company, Graham handled the administrative side of the business, including purchase orders and financial records. Hubbs Dep. at 73:2-9, 74:17-76:11 [Doc. #104-3]. She also managed employees, read corporate contracts, negotiated sales, and did accounting work. Graham Dep. at 17:20-18:10 [Doc. #104-1]. Hubbs handled the mechanical or technical side of the business. Hubbs Dep. at 75:3-15 [Doc. #104-3].
During her tenure with Hubbs Machine, plaintiff divulged personal information about Hubbs and personal conversations or disputes between herself and Hubbs, using her company email account during work hours. Defs.' Ex. 6 [Doc. #104-7]; Graham Dep. at 102:18-114:14 [Doc. #104-1]. Hubbs became aware of these emails on June 8, 2013. Hubbs Dep. at 11:11-12:2 [Doc. #104-6]. For example, on July 3, 2012, Graham sent an email to Deb Abbot, the wife of a customer of Hubbs Machine, which divulged specifics of Hubbs's relationship with his girlfriend, Mary. Defs.' Ex. 6 at 2-4 [Doc. #104-7]. On July 9, 2012, Graham sent an email to Abbot, in which she called Hubbs a "fucking idiot" because he informed her that he was engaged to be married. Defs.' Ex. 6 at 1 [Doc. #104-7]; Graham Dep. at 30:10-31:8 [Doc. #104-1]; Hubbs Dep. at 36:9-19 [Doc. #104-3].
Additionally, Graham sent emails to Hubbs Machine's distribution broker and customer, Guiseppe Ganci, divulging and discussing Hubbs's personal matters and conversations between herself and Hubbs. Defs.' Ex. 6 [Doc. #104-7]. For example, on July 16, 2012, Graham sent Ganci an email divulging information regarding Hubbs's personal relationship and Graham's personal feelings about Hubbs's fiancée. Defs.' Ex. 6 at 7 [Doc. #104-7] ("Yep engaged. He will never learn. No ... she is not coming for I cannot stand her and have told him that I will not being having relations with her. PERIOD!!!"). On February 28, 2013, Graham divulged to Ganci a "heated conversation" between herself and Hubbs. Defs.' Ex. 1 at 18 [Doc. #104-2]. On October 16, 2012, Grahams sent Ganci an email in which she referred to Hubbs's fiancée as "stupid." Defs.' Ex. 6 at 9 [Doc. #104-7]. On March 21, 2013, Graham sent Ganci an email again divulging details of her personal disputes with and feelings toward Hubbs. Defs.' Ex. 6 at 28 [Doc. #104-7] ("I wish ... that the customers and business had not become SO much mine (within my heart and soul) for I would walk away. I do not feel as though anyone, especially one that has the energy to inflict so much disrespect and ignorance on me, deserves my over dedication."). On May 29, 2013, Graham sent an email to Ganci stating, "Catch my hint ... I know a
Graham also divulged information regarding her personal dispute with Hubbs to one of Hubbs Machine's largest customers, Hexagon.
Graham also divulged her personal dispute with Hubbs in multiple emails to Michele O'Donnell, an employee of Boeing — Hubbs Machine's largest customer.
Also on April 15, 2013, Graham wrote an email to another Boeing employee, Brian Campbell, stating that there had been "some major turning of events within Hubbs Machine and I may be looking for a different job." Defs.' Ex. 6 at 41 [Doc. #104-7]. On April 19, 2013, Graham wrote an email to Joel Martin of Hexagon Metrology, a customer of Hubbs Machine, stating that she was "often too scared to allow Bill one on one time, for he often can speak about things, that I then need to clean up." Defs.' Ex. 6 at 48 [Doc. #104-7]. On July 9, 2013, Graham sent an email to John Visser of Boeing, stating "[l]ots of changes happening to our little company! — It's a wait and see thing around here. It's funny how 18(+) years of over dedication gets you thrown into a bonfire with no explanations and/or answers!" Defs.' Ex. 6 at 71 [Doc. #104-7].
On July 8, 2013, Graham sent an email to Maryse Leveille of Hexagon Metrology, in which she wrote, "I have grown a company, that I have no stake or interest in, to be a VERY successful business. However, the owner has now tak[en] advantage of my over dedication, to stick daggers in my back every time I turn around." Defs.' Ex. 6 at 76 [Doc. #104-7]. On July 9, 2013, Graham sent an email to Linaka Robins of Boeing Optical Services, a unit of Boeing and customer of Hubbs Machine, stating, "it just does not seem worth it to get up in the mornings to come in to make someone SO much more money than the RESPECT he gives me in return." Defs.' Ex. 6 at 74 [Doc. #104-7].
It is undisputed that Graham also divulged confidential personnel matters and called the hiring of defendant Rick Benward as president of Hubbs Machine into question with customers. Pl.'s Resp. ¶ 22 [Doc. #110]. On June 17, 2013, in an email to Darelee Phillips of Boeing, Graham divulged that Hubbs Machine had hired Benward as president and wrote that Benward had "NO knowledge of the industry, company, or company protocol." Defs.' Ex. 6 at 63 [Doc. #104-7]. On June 24, 2013, in an email to Pam Brown, an employee of Geodetic Systems, Inc., a customer of Hubbs Machine, Graham divulged that Hubbs Machine had hired Benward as president and Benward had "pulled the wool over Bill's eyes." Defs.' Ex. 6 at 66
Benward was a registered representative with New York Life in Springfield, Missouri, from 2006 to June 17, 2013. Benward Dep. at 15:21-16:5 [Doc. #104-4]. As a captive agent for New York Life, Benward represented and sold securities and insurance products that New York Life offered. Benward Dep. at 17:5-20:11 [Doc. #104-4]. Around 2007, Benward approached Hubbs about working in the sales and marketing arena at Hubbs Machine with Graham and her husband as a three-person team, but Hubbs chose to not move in that direction. Benward Dep. at 20:23-21:20 [Doc. #104-4]. Around 2008, Benward sold Hubbs some life insurance and investment products. Benward Dep. at 17:11-19:23 [Doc. #104-4]. In 2009, Hubbs Machine moved their profit sharing account to New York Life, for which Benward received an initial commission. Benward Dep. at 42:12-22 [Doc. #104-5]. In or around 2010, Benward became the New York Life representative overseeing Hubbs Machine's profit sharing plan. Benward Dep. at 19:11-20:7 [Doc. #104-4].
Hubbs approached Benward regarding possible employment at Hubbs Machine in 2013, citing the deteriorating relationship between himself and Graham and the corporate structural weaknesses within Hubbs Machine. Benward Dep. at 20:21-22:19 [Doc. #104-4]; Hubbs Dep. at 18:17-25 [Doc. #104-6]. Around April 25, 2013, Benward contacted Todd Siler, New York Life's senior agency standards consultant, inquiring as to the possibility of providing consulting services to Hubbs Machine while he retained his position as a licensed agent with New York Life. Defs.' Ex. 7 at ¶¶ 3-5 [Doc. #104-8]; Benward Dep. at 52:24-54:2 [Doc. #104-4]; Benward Dep. at 12:18-22 [Doc. #104-5]. Based on his understanding of applicable industry standards, FINRA regulations, and New York Life's policy, Siler informed Benward that he could not maintain his contract with New York Life while acting as a consultant for Hubbs Machine. Defs.' Ex. 7 at ¶¶ 6-7 [Doc. #104-8]; Benward Dep. at 53:22-54:4 [Doc. #104-4]; Benward Dep. at 12:18-13:17 [Doc. #104-5]. Specifically, Siler told Benward he could not receive compensation from New York Life and Hubbs Machine at the same time. Defs.' Ex. 7 at ¶ 8 [Doc. #104-8].
On May 5, 2013, Benward and Hubbs negotiated and agreed to an offer of terms and conditions of Benward's employment with Hubbs Machine. Benward Dep. at 49:16-50:18 [Doc. #104-4]. On May 6, 2013, Benward began preparing his agent succession plan for the placement of his New York Life customers. Benward Dep. at 13:22-14:11 [Doc. #104-5]; Pl.'s Resp. ¶ 38 [Doc. #110]. In Benward's agent succession plan, he identified seven New York Life successor representatives for his seven hundred clients. The plan was prepared online in a software program that required each New York Life representative to approve the assignment of the client. Benward Dep. at 15:5-22 [Doc. #104-5]; Defs.' Ex. 8 [Doc. #104-9].
During the week of May 13, 2013, Benward notified New York Life senior partner Don Angell, managing partner of New York Life in Overland Park, Kansas, Troy Braswell, and Siler of his intent to leave New York Life to become the president of Hubbs Machine. Benward Dep. at 14:18-15:4
Benward's official hire date with Hubbs Machine was June 10, 2013. Benward Dep. at 43:4-6 [Doc. #104-4]. That day, Benward was introduced to Hubbs Machine employees as the president of Hubbs Machine. Graham Dep. at 125:24-126:4, 150:11-15 [Doc. #104-1]; Pl.'s Resp. at ¶ 44[Doc. #110]. After the meeting, Graham contacted Mike Mormino at New York Life and asked if there had been a rep change for Hubbs Machine's New York Life account. Mormino told Graham there had not and instructed her to call compliance. Graham Dep. at 89:25-90:16, 125:24-126:9, 156:1-157:2 [Doc. #104-1]. Graham called New York Life's compliance department in Kansas City that same day. They also stated they had not heard of any rep change. Graham Dep. at 93:4-21, 126:10-11 [Doc. #104-1].
During Benward's first week of employment at Hubbs Machine, Graham first mentioned to Benward that she believed there was a conflict of interest between Benward's employment with New York Life and Hubbs Machine. Graham Dep. at 133:9-22, 152:17-153:10 [Doc. #104-1]; Benward Dep. at 62:23-63:1 [Doc. #104-4]; Benward Dep. at 17:10-18:18 [Doc. #104-5]. In this confrontation with Benward, Graham asked him if he had all his "ducks in a row" with respect to his former employment with New York Life. Graham Dep. at 133:9-134:14, 153:11-17 [Doc. #104-1]. Benward replied that he was not conducting any business for New York Life and was waiting for the New York Life home office's final approval of his agent succession plan. Benward Dep. at 18:19-19:1 [Doc. #104-5]; Graham Dep. at 153:11-154:21 [Doc. #104-1].
Between June 11 and 17, Graham made several calls to New York Life representatives to inquire about New York Life's requirements. Graham Dep. at 96:6-16, 97:9-19, 156:23-160:2 [Doc. #104-1]. Graham asked New York Life representatives about the propriety of the manager of her company's 401K retirement plan becoming the president of that company. Graham Dep. at 95:5-11, 160:3-14 [Doc. #104-1]. Graham did not provide Benward's name or any additional information during her inquiries. Graham Dep. at 95:12-20, 160:15-19 [Doc. #104-1]. A New York Life compliance department employee in New York City told Graham that her described scenario constituted dual employment and would be unethical under to their employee code. Graham Dep. at 94:5-18, 98:1-9, 127:10-19 [Doc. #104-1]. When the New York Life representatives asked her whether she wanted to make a complaint, Graham stated that she did not want to open a case. Graham Dep. at 94:17-18, 160:15-19 [Doc. #104-1]. Graham never filed a formal complaint with New York Life or FINRA. Graham Dep. at 224:24-225:3, 226:1-2 [Doc. #104-1]. Graham also did not file any official complaints with the Missouri Insurance Board, the Securities and Exchange Commission, NASDAQ, or any office associated with ERISA. Graham Dep. at 224:24-225:20 [Doc. #104-1].
Graham also informed Hubbs that she had contacted New York Life and they did not have knowledge of Benward's transition to Hubbs Machine. Hubbs Dep. at 112:23-115:23 [Doc. #104-3]. Hubbs told Graham that he was satisfied with Benward's actions and that he did not believe anything was done incorrectly. Hubbs Dep. at 117:21-118:19 [Doc. #104-3]. Hubbs became irritated by Graham's repeated complaints of Benward and her refusal to contact supervisors to whom Benward directly reported at New York Life. Hubbs Dep. at 118:10-19 [Doc. #104-3];
On June 17, 2013, Benward contacted his direct chain of command at New York Life and was instructed to submit his resignation. That same day, Benward submitted his resignation to New York Life. Graham Dep. at 139:3-20 [Doc. #104-1]; Benward Dep. at 20:8-11 [Doc. #104-4]; Defs.' Ex. 10 [Doc. #104-11]. On June 18, 2013, Braswell officially accepted Benward's resignation. Benward Dep. at 20:16-21 [Doc. #104-5]; Defs.' Ex. 9 [Doc. #104-10]. Upon resignation from New York Life, Benward automatically resigned his registered representative status with FINRA. Benward Dep. at 89:17-90:5 [Doc. #104-4].
On October 11, 2013, Gloriann Marchio, a director at New York Life, contacted Hubbs via a letter. Marchio contacted Hubbs because Benward's employment with Hubbs Machine and his role as a New York Life representative potentially raised issues under ERISA and the rules promulgated by the Department of Labor. Pl.'s Ex. 18 [Doc. #110-23]; Hubbs Dep. 128:22-130:23 [Doc. #104-3]. New York Life determined that there was a brief period after Benward became employed by Hubbs Machine where Benward "may have" received compensation in connection with the sale of securities to Hubbs Machine's profit sharing plan. Pl.'s Ex. 39 [Doc. #110-44]. Thus, "to avoid any possible inference of impropriety," New York Life refunded Hubbs Machine $954.13, which represented the compensation paid to New York Life Securities LLC and the commission paid to Benward as a New York Life agent between May and June 2013. Pl.'s Ex. 39 [Doc. #110-44].
On June 11, 2013, Benward asked Graham for all passwords and other customer information. Benward made this request so Graham was not the only person in possession
In a letter dated July 29, 2013, Benward again requested that Graham provide him all information related to ID's and passwords connected to the conduct of Hubbs Machine. Graham Dep. at 193:18-194:11 [Doc. #104-1]. Benward also requested that Graham provide all information required for order processing with all buying groups and that Graham identify all accounts requiring security screenings and the process for submitting applications. Defs.' Ex. 1 at 36 [Doc. #104-2]. Benward asked Graham for a complete response to his request for information numerous times. Benward Dep. at 76:2-12 [Doc. #104-4]. After her termination, Graham provided four ID's and passwords, two of which were repeats and one of which was obsolete. Defs.' Ex. 1 at 31 [Doc. #104-2]; Hubbs Dep. at 102:3-12 [Doc. #104-6].
In July 2013, Benward, Graham, and Hubbs attended an industry conference in San Diego, representing Hubbs Machine.
Benward discussed with Graham the importance of presenting a "united front" to the customer base at the conference. Defs.' Ex. 1 at 36 [Doc. #104-2]; Hubbs Dep. at 134:6-11 [Doc. #104-3]. According to Graham, Hubbs and Benward did not have many contacts to converse with at the conference and blamed her for not introducing them to Hubbs Machine's customers. Graham Dep. at 191:20-192:2 [Doc. #104-1] ("Rick and Bill, because Bill has been so detached, did not have many contacts to converse with, and then it was somehow my fault that they were going to come to the booth and belittle me and scream and yell at me that I did not parade them around and introduce them, that I went about the business of Hubbs Machine and talking to our customers about business.").
Hubbs and Benward testified that Graham became upset when Benward began
On July 30, 2013, Benward and Hubbs met with Graham in-person to discuss and obtain the requested information regarding Hubbs Machine's business. During the meeting, Graham asked Benward a series of questions related to his credentials to serve as president of Hubbs Machine. Benward Dep. at 71:22-72:25 [Doc. #104-4];
On July 31, 2013, Graham's employment at Hubbs Machine was terminated. Her termination letter stated that she had refused to cooperate with Hubbs and Benward by failing to provide a written statement of her side of the story, referenced her behavior at the San Diego trade show, and noted that she had continually refused to provide all keys, access codes, passwords, and materials related to the business. Defs.' Ex. 1 at 39 [Doc. #104-2].
Graham alleges that the defendants' termination of her employment was in retaliation for her complaints regarding Benward's unlawful activities in violation of ERISA section 510. In relevant part to the allegations in the complaint, section 510 of ERISA makes it unlawful for an employer to discharge an employee "because [s]he has given information or has testified or is about to testify in any inquiry or proceeding relating to this chapter." 29 U.S.C. § 1140. An ERISA-based retaliation claim can be established through direct evidence, or in the absence of direct evidence, through the
To establish a prima facie case of ERISA retaliation, plaintiff must prove: "(1) she participated in a statutorily protected activity; (2) an adverse employment action was taken against her; and (3) a causal connection existed between her participation in a statutorily protected activity and an adverse employment action."
Defendants contend that Graham cannot establish the first element of a prima facie case of retaliation, because she has not and cannot establish that an "inquiry or proceeding" was taking place within the meaning of section 510. "It is an open issue in [the Eighth] Circuit whether § 510 protects informal complaints or protests relating to [actions] a participant reasonably believes to be illegal [under ERISA]."
Even assuming plaintiff has established a prima facie case under section 510 of ERISA, however, defendants have articulated legitimate nondiscriminatory reasons for Graham's termination that she has failed to show were pretext for interfering with her rights under ERISA. First, Graham sent numerous emails from her work account disparaging Hubbs and Benward on a personal and professional level to clients of Hubbs Machine and third parties who had a business relationship with Hubbs Machine. She also failed to cooperate fully in providing Benward with information he requested on more than one occasion concerning passwords and customer information. Furthermore, at an industry conference in July 2013, Graham acted disrespectful to Hubbs and Benward in front of customers and other third parties in attendance. Finally, before terminating her employment, Hubbs gave Graham the opportunity to provide an explanation for her conduct, but her response did not address all of the issues raised. Undisputed facts in the record support each of these proffered reasons for plaintiff's termination.
Graham has not set forth affirmative evidence disputing that she sent inappropriate and embarrassing emails about Hubbs to company customers, that she failed to fully provide all of the passwords and account information Benward requested, or that she refused to introduce Benward at an industry conference. Instead, she simply claimed to Hubbs that many of the customer contacts she emailed were her friends with whom she shared stories of personal events to the benefit of Hubbs Machine. Graham also points to evidence in the record of the company's profit success at the time of her termination and the "global outcry" from clients after her termination. These assertions are simply an attempt to minimize the importance of defendants' justifications for terminating her and attack the defendants' business judgment, rather than demonstrating pretext. Graham's difference of opinion as to the seriousness of her attitude and conduct does not create a genuine issue of material fact regarding pretext.
Moreover, the "core question in a retaliation case does not, ultimately, concern the veracity of the facts underlying an employer's legitimate non-discriminatory reason for discharging its employee, but rather concerns whether `the employment decision was based upon intentional discrimination.'"
The only claim that remains is Graham's state law-based claim of wrongful termination in violation of public policy. "A federal district court has discretionary power to decline the exercise of supplemental jurisdiction where the court has `dismissed all claims over which it has original jurisdiction.'"
This case was initiated in a state court, and resolution of the remaining claim depends solely on interpretation of state law and public policy. The Court declines to exercise supplemental jurisdiction over plaintiff's pendent state law claim and will exercise its discretion to remand the case to the state court.
For the reasons set forth above,
A separate Judgment in accordance with this Memorandum and Order will be entered this same date.
