W. EARL BRITT, Senior District Judge.
This matter is before the court on the 23 January 2013 motion for summary judgment filed by defendants Law Enforcement Associates Corporation ("LEA"), Anthony Rand ("Rand"), James J. Lindsay ("Lindsay"), Joseph A. Jordan ("Jordan") and Paul Briggs ("Briggs").
This case was previously before the court on defendants' motion to dismiss. (DE # 37.) On 10 March 2011, the motion was granted in part and denied in part. (DE # 57.) See Feldman v. Law Enforcement Assocs. Corp., 779 F.Supp.2d 472 (E.D.N.C.2011). Although the 10 March 2011 order set forth the relevant factual allegations that were before the court at the time of the decision, subsequent discovery has revealed facts that differ in varying degrees from those alleged in the amended complaint. The court also notes that the parties sharply dispute a large number of facts at the summary judgment stage of the proceedings. Instead of cataloging and discussing each of these disputes,
LEA is a manufacturer of security and surveillance equipment used by local, state, federal, and international law enforcement agencies and by public and private companies. (Am. Compl., DE # 34, ¶¶ 4, 22; M. Perry Dep., DE # 99-2, at 14:7-20; J. Lindsay Dep., DE # 99-7, at 15:10-14; J. Jordan Dep., DE # 99-17, at 31:17-32:2.) The company was founded by John Carrington ("Carrington"), who also owned Sirchie Fingerprint Laboratories, Inc. ("Sirchie"). (P. Feldman Dep., DE # 99-4, at 13:12-18; 17:4-7.) Carrington appointed Feldman to become President of LEA at some time prior to 2001, and Feldman remained the company's President and CEO through 27 August 2009. (Id. at 23:16-28:7.)
Perry was initially a sales contractor who conducted business with LEA. (M. Perry Dep., DE # 99-2, at 15:1-17:7; P. Feldman Dep., DE # 99-4, at 28:8-19.) In 2006, Feldman hired Perry to be LEA's Vice President of Sales and Marketing. (M. Perry Dep., DE # 99-2, at 21:5-24.) Perry was the second highest ranking employee at LEA and reported directly to Feldman. (Id. at 22:10-13; 27:18-21; P. Feldman Dep., DE # 99-4, at 42:14-16.)
In 2005, Carrington pled guilty to export violations involving Sirchie. (M. White Dep., DE # 92-8, Ex. 19.) As a result, he was subjected to an Export Denial Order, which precluded him from engaging in certain export activities for five years. (Id.) In relation to these legal issues, Carrington resigned from LEA's Board of Directors ("Board") in April 2005, and he has not been a Board member, officer, or employee of LEA since that time. (P. Feldman Dep., DE # 99-4, at 39:25-40:25; J. Lindsay Dep., DE # 99-7, at 14:5-10.) Carrington did continue to hold a significant amount of LEA stock. (P. Feldman Dep., DE # 99-4, at 26:7-13.)
During the time period relevant to this lawsuit, LEA's Board consisted of five members: Feldman, Perry, Rand, Lindsay, and Jordan. (A. Rand Aff., DE # 92-15, ¶ 2; J. Jordan Aff., DE # 92-16, ¶ 2; J. Lindsay Aff., DE # 92-17, ¶ 2; A. Rand Suppl. Aff., DE # 92-19, ¶ 2; M. Perry Dep., DE # 99-2, at 29:6-30:21 & Ex. 38, DE # 92-3, at 222;
An "extraordinarily palpable" split existed between the Inside Directors and the Outside Directors since at least 1 November 2007. (M. Finkelstein Dep., DE # 99-9, at 20:18; see also id. at 22:2-7; 42:7-11; 69:14-19; P. Briggs Aff., DE # 92-7, ¶ 5; Pls.' Statement Material Facts, DE # 99-1, at 2 ¶ B; P. Briggs Dep., DE # 99-5, at 262:16-263:2; E. Littman Dep., DE # 99-15, at 39:20-40:12; Pls.' Mem. Opp'n Mot.
In or around December 2007, plaintiffs confirmed that Carrington owned fifty percent of a company called SAFE Source. (M. Perry Dep., DE # 99-2, at 243:9-12; 245:14-247:11; P. Feldman Dep., DE # 99-4, at 178:8-180:5; P. Briggs Dep., DE # 99-5, at 184:16-185:1.) In 2005 or 2006, LEA had shipped some of its products to SAFE Source, and SAFE Source then exported the products to Chile. (M. Perry Dep., DE # 99-2, at 247:8-11; P. Feldman Dep., DE # 99-4, at 176:13-16; P. Briggs Dep., DE # 99-5, at 169:10-170:12; 174:10-18.) Because Carrington had been banned from making exports for five years and because he had an ownership interest in SAFE Source, plaintiffs maintain that it was illegal for SAFE Source to engage in the export business. (Pls.' Mem. Opp'n Mot. Summ. J., Ex. 44, DE # 99-45.)
A meeting of LEA's Board was conducted on 27 December 2007. There is a sharp dispute about what was said and by whom at the meeting, and competing versions of the meeting minutes were subsequently circulated. (Defs.' Mem. Supp. Mot. Summ. J., DE # 92-1, at 4-5; M. Perry Dep., DE # 99-2, at 249:16-250:6 & Ex. 38, DE # 92-3, at 221, 227-28; P. Feldman Dep., DE # 99-4, at 188:13-24.) At this meeting, plaintiffs contend that Feldman notified the Board that there were possible export violations relating to Carrington and SAFE Source and that these violations needed to be reported to the proper governmental agencies. (M. Perry Dep., DE # 99-2, at 324:3-325:20; P. Feldman Dep., DE # 99-4, at 188:13-191:12.) Plaintiffs believed that LEA's involvement with SAFE Source caused LEA to engage in illegal exports and that this involvement with SAFE Source also constituted violations of the Securities and Exchange Commission's rules governing internal accounting controls. (M. Perry Dep., DE # 99-2, at 324:3-325:1.) On 14 January 2008, plaintiffs sent a letter to Phil Kuhn, an agent with the Bureau of Industry and Security, which is a division of the Department of Commerce, regarding Carrington's ownership of SAFE Source and the illegal export business that SAFE Source conducted with LEA. (M. Perry Dep., DE # 99-2, at 222:3-6; 228:9-21; 264:13-265:1; P. Feldman Dep., DE # 99-4, at 166:7-167:2; Pls.' Mem. Opp'n Mot. Summ. J., Ex. 44, DE # 99-45.)
In February or March 2008, Feldman relocated LEA's headquarters from Youngsville, North Carolina to Raleigh,
In 2009, Feldman and other LEA representatives met with LEA shareholders Joseph and Barbara Wortley (the "Wortleys"), who were threatening to sue LEA. (M. Perry Dep., DE # 99-2, at 39:2-14; P. Feldman Dep., DE # 99-4, at 65:19-66:3; P. Briggs Dep., DE # 99-5, at 154:11-155:1; E. Littman Dep., DE # 99-15, at 92:8-93:13.) Joseph Wortley "voiced his dissatisfaction with the board of directors...." (E. Littman Dep., DE # 99-15, at 94:12-13.) In response, Feldman stated that the Board "could do more to help the company" and that "he too wished they would do more." (Id. at 95:11-12, 17; see also id., Ex. 26, DE # 92-12, at 256:21-258:10; P. Briggs Dep., DE # 99-5, at 155:14-157:19.) After meeting with the Wortleys, Feldman wrote to the Outside Directors and urged them to resign from the Board. (E. Littman Dep., Ex. 26, DE # 92-12, at 253:25-254:20; J. Jordan Dep., DE # 99-17, at 35:14-36:3.)
On 26 August 2009, Rand asked Perry to meet him for lunch. (A. Rand Aff., DE # 92-15, ¶ 14; M. Perry Dep., DE # 99-2, at 33:6-34:8.) Perry told Feldman about the invitation, and they decided to surreptitiously tape the meeting. Perry wore a hidden recorder to the lunch. (M. Perry Dep., DE # 99-2, at 34:14-36:12; P. Feldman Dep., DE # 99-4, at 59:15-61:23; 63:10-17.) At the lunch, Rand informed Perry in confidence that the Outside Directors planned to terminate Feldman during the Board meeting scheduled for the following day because the Board had lost confidence in him and because of the "Wortley situation." (M. Perry Dep., DE # 99-2, at 38:1, 25; see also id. at 37:2-39:1; 39:25-40:5 & Ex. 4, DE # 92-3, at 18:2-22; 20:13-22:4; A. Rand Aff., DE # 92-15, ¶¶ 11, 14; J. Jordan Aff., DE # 92-16, ¶ 5; J. Lindsay Aff., DE # 92-17, ¶¶ 7-8; A. Rand Dep., DE # 99-3, at 262:12-21 & Ex. 33, DE # 92-10, at 70; J. Lindsay Dep., DE # 99-7, at 66:13-20; J. Jordan Dep., DE # 99-17, at 35:14-36:3; 53:15-54:11.) Rand also told Perry that Alan Terry would be named Interim President of LEA and that the Outside Directors wanted Perry to stay employed. (A. Rand Aff., DE # 92-15, ¶¶ 13-14; M. Perry Dep., DE # 99-2, at 38:11-12; 39:15-20 & Ex. 4, DE # 92-3, at 18:9-18; 25:17-18; 26:3-4; 40:9-20; 54:21-55:6.) Immediately thereafter, Perry told Feldman what Rand said during the lunch. (M. Perry Dep., DE # 99-2, at 43:6-45:2; P. Feldman Dep., DE # 99-4, at 65:7-18.)
After learning of his impending termination, Feldman went to the hospital during the evening of 26 August 2009, claiming that he was possibly having a transient ischemic attack. (P. Feldman Dep., DE
Perry, who had a history of multiple sclerosis, was also unable to attend the 27 August 2009 Board meeting because he was taken to the hospital that day. (M. Perry Dep., DE # 99-2, at 57:1-60:10; 154:1-156:5 & Ex. 30, DE # 92-3, at 192-99.) He was diagnosed as having suffered an acute multiple sclerosis flare. (Id., Ex. 30, DE # 92-3, at 198.) Perry did not return to work after 27 August 2009. (Id., DE # 99-2, at 66:1-4.) On 14 September 2009, Alan Terry ("Terry"), LEA's new President, sent Perry a letter stating that Perry had failed to respond to communications from LEA. (Id., Ex. 14, DE # 92-3, at 132.) Terry also demanded an immediate response from Perry regarding his intentions about returning to work. (Id.) When LEA did not receive a response to the 14 September 2009 letter, Briggs, LEA's Chief Financial Officer, sent a letter to Perry on 23 September 2009. (Id., Ex. 15, DE # 92-3, at 133.) Briggs stated that LEA had no choice but to conclude that Perry had "abandoned" his job. (Id.) LEA considered Perry to have voluntarily quit as of the date of the letter. (Id.)
Although plaintiffs initially filed separate complaints, they subsequently filed a consolidated complaint in this matter on 16 April 2010. (DE # 31.) Plaintiffs filed an amended complaint on 7 June 2010. (DE # 34.) Defendants filed a motion to dismiss on 21 June 2010, which was granted in part and denied in part on 10 March 2011. (DE ## 37, 57.) The claims remaining in this case are (1) both plaintiffs' claims against LEA under the Americans with Disabilities Act; (2) both plaintiffs' whistleblower claims against all defendants under the Sarbanes-Oxley Act of 2002 to the extent that they rely on actions taken by Feldman prior to 27 August 2009 or actions taken by Perry prior to 23 September 2009; (3) Perry's claim against LEA under the North Carolina Wage and Hour Act; and (4) Perry's breach of contract claim against LEA. See Feldman, 779 F.Supp.2d at 502. Also remaining before the court is LEA's counterclaim against plaintiffs for breach of fiduciary duty. (Defs.' Answer, DE # 36, at 44-57.)
As an initial matter, the court considers plaintiffs' motion for leave to file a separate statement of material facts in dispute in conjunction with their opposition to defendants' motion for summary judgment. (DE # 97.) Defendants argue that plaintiffs' opposition, taken as a whole, violates Local Civil Rule 7.2(e), which requires a memorandum filed in opposition to a motion to be thirty pages or less, excluding the certificate of service page. In this case, while the body of plaintiffs' memorandum is thirty pages long (DE # 99), the memorandum also includes a separate fifty-two page statement of material facts in dispute that is attached as an appendix (DE # 99-1). This district's Local Rules do not explicitly permit a separate submission of a statement of facts, and the court agrees with defendants that the document is an attempt to avoid the page limits set by Local Civil Rule 7.2(e). Nevertheless, the court will not disregard the separate statement of facts, and plaintiffs' motion for leave to file the statement will be granted. Cf. Trustees of Nev. Resort
Summary judgment is proper only if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Summary judgment should be granted only in those cases "in which it is perfectly clear that no genuine issue of material fact remains unresolved and inquiry into the facts is unnecessary to clarify the application of the law." Haavistola v. Cmty. Fire Co. of Rising Sun, Inc., 6 F.3d 211, 214 (4th Cir.1993). "[T]he substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. Id.
In considering a motion for summary judgment, the court is required to draw all reasonable inferences in favor of the non-moving party and to view the facts in the light most favorable to the non-moving party. Id. at 255, 106 S.Ct. 2505. The moving party has the burden to show an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party opposing summary judgment must then demonstrate that a triable issue of fact exists; he may not rest upon mere allegations or denials. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A mere scintilla of evidence supporting the case is insufficient. Id. at 252, 106 S.Ct. 2505. Furthermore, evidence that is "merely colorable" or "not significantly probative" will not suffice to defeat a motion for summary judgment. Id. at 249, 106 S.Ct. 2505. Rather, if the adverse party fails to bring forth facts showing that "reasonable minds could differ" on a material point, then disposition by summary judgment is appropriate. Id. at 250, 106 S.Ct. 2505; see also Teamsters Joint Council No. 83 v. Centra, Inc., 947 F.2d 115, 119 (4th Cir.1991).
As mentioned previously, defendants' 21 June 2010 motion to dismiss was granted in part and denied in part. See Feldman, 779 F.Supp.2d at 502. A motion to dismiss, granted or denied, may have an effect on a subsequent motion for summary judgment. However, "[i]n general, `the ruling on a motion to dismiss for failure to state a claim for relief is addressed solely to the sufficiency of the complaint and does not prevent summary judgment from subsequently being granted based on material outside the complaint.'" PDK Labs Inc. v. Ashcroft, 338 F.Supp.2d 1, 6-7 (D.D.C.2004) (quoting 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure: Civil 3D § 2713 at 233 (2d ed. 1998)); see also Wilderness Soc'y v. Griles, 824 F.2d 4, 16 (D.C.Cir.1987) ("In sum, while a motion to dismiss may be decided on the pleadings alone, construed liberally in favor of the plaintiff, a motion for summary judgment by definition entails an opportunity for a supplementation of the record, and accordingly a greater showing is demanded of the plaintiff.").
In this case, Perry's breach of contract claim against LEA is brought in the alternative
The court finds that Perry has conceded that summary judgment is appropriate on both the wage claim and the contract claim because he has failed to respond to the arguments raised with respect to these claims in defendants' memorandum in support of the motion for summary judgment. See, e.g., Bayer Schering Pharma AG v. Watson Pharms., Inc., Nos. 2:07-CV-01472-KJD-GWF, 2:08-CV-00995-KJD-GWF, 2012 WL 1079574, at *7 (D.Nev. Mar. 30, 2012) (failure to oppose movant's argument in brief opposing motion for summary judgment implicitly concedes the argument (citing S. Nev. Shell Dealers Ass'n v. Shell Oil Co., 725 F.Supp. 1104, 1109 (D.Nev.1989))); Ferdinand-Davenport v. Children's Guild, 742 F.Supp.2d 772, 777 (D.Md. 2010) (plaintiff abandoned claim by failing to respond to defendant's argument); Klugel v. Small, 519 F.Supp.2d 66, 72 (D.D.C.2007) ("[W]hen a party does not address arguments raised by a movant, the court may treat those arguments as conceded.").
Even if Perry had not made such a concession, the wage claim and the contract claim would still fail. After Feldman's termination, LEA filed for bankruptcy. (A Rand Dep., DE # 99-23, at 6:5-7:8.) On 12 July 2012, the United States Bankruptcy Court for the Eastern District of North Carolina ruled that "Feldman and Perry may continue to pursue their claims against LEA, to the extent that insurance coverage exists, in the U.S. District Court for the Eastern District of North Carolina.... Feldman and Perry will make no claims against the bankruptcy estate or the Chapter 7 trustee; and their recovery against LEA, if any, will be limited to the proceeds of any applicable insurance." (Defs.' Mot. Summ. J., Ex. S, DE # 92-21, at 1.) LEA has insurance coverage under an Employment Practices Liability Insurance policy issued by Zurich American Insurance Company. (Pls.' Mem. Opp'n Mot. Summ. J., Ex. 41, DE # 99-42.) The policy explicitly excludes coverage for contract claims and wage claims. (Id., Exclusions G. & H., at DEF-000418-19.) Accordingly, even if the court assumes arguendo that LEA owes Perry the $50,000 bonus, there can be no recovery as a result of the bankruptcy court's order. See, e.g., Neighbors Law Firm, P.C. v. Highland Capital Mgmt., L.P., No. 5:09-CV-352-F, 2010 WL 5477260, at *3-4 (E.D.N.C. Dec. 28, 2010). Thus, summary judgment on these claims is warranted.
Both Feldman and Perry assert claims against LEA for wrongful discharge and for failure to accommodate under the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq. The ADA prohibits discrimination "against a qualified individual on the basis of disability in regard to ... terms, conditions, and privileges of employment." 42 U.S.C. § 12112(a). It must be noted that Congress made substantial changes to the ADA through the ADA Amendments Act
When only indirect or circumstantial evidence is available, a plaintiff alleging a violation of the ADA must meet the burden-shifting framework of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). See Wilson v. Phoenix Specialty Mfg. Co., Inc., 513 F.3d 378, 387 (4th Cir.2008); Ennis v. Nat'l Ass'n of Bus. & Educ. Radio, Inc., 53 F.3d 55, 58 (4th Cir.1995). Under this framework, the plaintiff must first establish a prima facie case of discrimination. To establish a prima facie case of discriminatory discharge under the ADA, a plaintiff must show: that "(1) he is within the ADA's protected class; (2) he was discharged; (3) at the time of his discharge, he was performing the job at a level that met his employer's legitimate expectations; and (4) his discharge occurred under circumstances that raise a reasonable inference of unlawful discrimination." Haulbrook v. Michelin N. Am., Inc., 252 F.3d 696, 702 (4th Cir.2001); see also Reynolds v. Am. Nat'l Red Cross, 701 F.3d 143, 150 (4th Cir.2012); Rhoads v. FDIC, 257 F.3d 373, 387 n. 11 (4th Cir. 2001).
If a plaintiff establishes a prima facie case of discrimination, the burden shifts to the defendant "to articulate some legitimate, nondiscriminatory reason" for the adverse employment action. McDonnell Douglas, 411 U.S. at 802, 93 S.Ct. 1817. Should the defendant carry this burden, the plaintiff then must prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were a pretext for discrimination. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 143, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). The ultimate burden of proving that "the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff." St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 507, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993) (citation and internal quotation marks omitted).
The first element of Feldman's wrongful discharge claim requires a showing that he was "disabled" within the meaning of the ADA. Reynolds, 701 F.3d at 150; Rhoads, 257 F.3d at 387; Lochridge v. City of Winston-Salem, 388 F.Supp.2d 618, 625 (M.D.N.C.2005). "The question of whether a plaintiff is disabled under the ADA, `and therefore can bring a claim under the statute, is a question of law for the court, not a question of fact for the jury.'" Rose v. Home Depot USA, Inc., 186 F.Supp.2d 595, 608 (D.Md.2002) (quoting Hooven-Lewis v. Caldera, 249 F.3d 259, 268 (4th Cir.2001) (Rehabilitation Act case)). The ADA defines "disability" with respect to an individual as "(A) a physical or mental impairment that substantially limits one or more major life activities of such individual; (B) a record of such an impairment; or
On 26 August 2009, after learning of his impending termination, Feldman went to the hospital claiming that he was possibly having a transient ischemic attack ("TIA"), which is also known as a "mini-stroke." (P. Feldman Dep., DE # 99-4, at 74:1-4; 75:17-21; 132:8-135:20 & Ex. 49, DE # 92-4, at 87.) He was admitted overnight for observation and testing. His diagnostic tests were all normal, and he was discharged the following day with no restrictions. (Defs.' Mot. Summ. J., Ex. P, DE # 92-18; P. Feldman Dep., DE # 99-4, at 136:12-17; 141:18-145:25 & Exs. 49-50, DE # 92-4, at 85-91.) Medical records from his 1 September 2009 follow-up visit with his primary care physician reflect that he may have had a "mild TIA" that had "since resolved." (P. Feldman Dep., Ex. 54, DE # 92-4, at 92.) At that appointment, no restrictions were placed on Feldman, and he continued on his prior medications. (Id. at 93.) He did not see his doctor again until 23 November 2009, and that visit was for stress related to a deposition. (Id. at 96.)
Feldman's only argument with respect to this issue is that his TIA was a disability by virtue of the fact that "[a]n impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active." 42 U.S.C. § 12102(4)(D). However, a TIA is an acute condition that is different from the more chronic conditions — such as cancer, epilepsy, multiple sclerosis, asthma, major depressive disorder, bipolar disorder, schizophrenia, hypertension, diabetes, and post-traumatic stress disorder — that Congress intended to include within the definition of a disability through the enactment of this provision. See 29 C.F.R. Pt. 1630, App'x § 1630.2(j)(1)(vii); Mayo Clinic Staff, Definition of transient ischemic attack (TIA), The Mayo Clinic, http://www. mayoclinic.com/health/transient-ischemic-attack/DS00220 (last visited June 27, 2013) ("A transient ischemic attack (TIA) is like a stroke, producing similar symptoms, but usually lasting only a few minutes and causing no permanent damage. Often called a mini stroke, a transient ischemic attack may be a warning. About 1 in 3 people who have a transient ischemic attack eventually has a stroke, with about half occurring within a year after the transient ischemic attack."); cf. Butler v. BTC Foods Inc., Civ. A. No. 12-492, 2012 WL 5315034, at *3 (E.D.Pa. Oct. 19, 2012) (finding on a Rule 12(b)(6) motion to dismiss that 42 U.S.C. § 12102(4)(D) did not apply to plaintiff's case where he failed to allege that his hernia was "anything more than a one-time occurrence").
Furthermore, even if a TIA is an impairment that is episodic or in remission, and assuming that Feldman did in fact experience a TIA on 26 August 2009, the recognition of a plaintiff's impairment is only a threshold issue in determining whether or not he has a disability under the ADA. Feldman must also show that his TIA "substantially limit[ed] a major life activity when active." 42 U.S.C. § 12102(4)(D); see also 42 U.S.C. § 12102(1)(A) ("disability" defined with respect to an individual as "a physical or mental impairment that substantially limits one or more major life activities of such individual"). "[M]ajor life activities include, but are not limited to, caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working." 42 U.S.C. § 12102(2)(A).
Here, Feldman has not offered any evidence beyond his overnight visit to the hospital to show that the TIA substantially impaired the major life activity of working
Moreover, even if the court were to assume that Feldman's scant evidence created a genuine dispute of material fact regarding the issue of whether he was disabled under the ADA, he must also show that his discharge occurred under circumstances that raise a reasonable inference of unlawful discrimination. To establish the fourth prima facie element of a wrongful discharge claim under the ADA, Feldman must present some "affirmative evidence that disability was a determining factor in the employer's decision." Ennis, 53 F.3d at 59. This burden is "not empty or perfunctory." Id. Furthermore, because liability under the ADA requires the employer to have discriminated because of the employee's disability, it follows that the employee must show that the employer knew of his alleged disability at the time it took the adverse employment action. That is, "an employee cannot be fired `because of' a disability unless the decisionmaker has actual knowledge of the disability." Cordoba v. Dillard's, Inc., 419 F.3d 1169, 1185 (11th Cir.2005) (emphasis in original); see also Huppenbauer v. May Dep't Stores Co., 99 F.3d 1130 (Table), No. 95-1032,
In this case, Feldman fails to point to any evidence which shows that his employer knew that he had been hospitalized when he was terminated during the 27 August 2009 Board meeting. Rather, the evidence demonstrates that neither Feldman nor Perry notified the Outside Directors about Feldman's condition. (M. Perry Dep., DE # 99-2, at 56:9-12; P. Feldman Dep., DE # 99-4, at 77:2-5; A. Rand Suppl. Aff., DE # 92-19, ¶¶ 2-4.) In addition, Feldman's absence from the Board meeting was expected because he had previously indicated that he would not be present. (P. Feldman Dep., DE # 99-4, at 45:7-48:2 & Ex. 45, DE # 92-4, at 84; A. Rand Suppl. Aff., DE # 92-19, ¶ 4.)
Furthermore, although Feldman's personal attorney, Joseph Jorgensen ("Jorgensen"),
Moreover, it is clear from the evidentiary record that the decision to terminate Feldman was made either prior to or at the same time that Feldman began to experience
Assuming for the sake of argument that Feldman could establish a prima facie case of discrimination within the McDonnell Douglas framework, LEA has produced evidence of Feldman's insubordination, which is a legitimate, nondiscriminatory reason for his termination. Cf. Wilson v. UPS, Inc., Civ. A. No. 1:10-cv-636, 2012 WL 405064, at *5 (E.D.Va. Feb. 7) (Title VII case), aff'd, 479 Fed. Appx. 453 (4th Cir.2012) (per curiam) (unpublished); Smith v. Martin, No. 5:10-CV-248-D, 2011 WL 3703255, at *4 (E.D.N.C. Aug. 23, 2011) (same). In particular, LEA has pointed to the fact that Feldman moved the company's headquarters after being instructed not to do so. (See, e.g., A. Rand Aff., DE # 92-15, ¶ 10; J. Jordan Aff., DE # 92-16, ¶ 4; J. Lindsay Aff., DE # 92-17, ¶ 7; A. Rand Dep., DE # 99-3, at 262:12-264:13.) After a history of conflict with the Outside Directors, Feldman was also deemed to have been insubordinate when he made comments to the Wortleys about the Outside Directors's lack of involvement in LEA's operations and then emailed the Outside Directors and urged them to resign from the Board.
Because LEA has offered a legitimate, nondiscriminatory reason for Feldman's termination, the burden shifts back to Feldman to raise a genuine dispute of material fact concerning pretext. Although Feldman attempts to show that he was meeting or actually exceeding LEA's performance expectations (see, e.g., Pls.' Statement Material Facts, DE # 99-1, at 33-35, 41-43 §§ III.F., III.I.), he was fired for insubordination and not just for substandard performance. He also attempts to demonstrate that he was not insubordinate (see, e.g., id. at 35-41, §§ III.G.-H.), but the Fourth Circuit has repeatedly explained that "[i]t is the perception of the decision maker which is relevant, not the self-assessment of the plaintiff." Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 960-61 (4th Cir.1996) (citation and internal quotation marks omitted); see also Wilson, 2012 WL 405064, at *5 (plaintiff's "own subjective belief that he should not have been terminated, or that he was not insubordinate, is irrelevant"). The court need not decide "whether the [proffered] reason was wise, fair, or even correct, ultimately, so long as it truly was the reason for the plaintiff's termination." Hawkins v. PepsiCo, Inc., 203 F.3d 274, 279 (4th Cir.2000) (citation and internal quotation marks omitted).
Here, Feldman has failed to show that his employer did not honestly believe that he was insubordinate,
With respect to Perry's wrongful discharge claim, he too must first show that he was "disabled" within the meaning of the ADA. Reynolds, 701 F.3d at 150; Rhoads, 257 F.3d at 387; Lochridge, 388 F.Supp.2d at 625. In this case, it is undisputed that Perry is proceeding under the first prong of the disability definition and that he suffers from multiple sclerosis ("MS"). (M. Perry Dep., DE # 99-2, at 154:1-156:5 & Ex. 30, DE # 92-3, at 195.) LEA has stated that "Perry can likely establish element 1 because the [ADAAA] seemingly finds MS to be a disability even when in remission." (Defs.' Mem. Supp. Mot. Summ. J., DE # 92-1, at 17-18 n. 17.) As LEA has acknowledged, the ADAAA provides that "[a]n impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active." 42 U.S.C. § 12102(4)(D); see also 29 C.F.R. Pt. 1630, App'x § 1630.2(j)(1)(vii) (listing MS as an example of an impairment that is episodic or in remission). Furthermore, during his deposition, Perry testified regarding his substantial limitations in performing one or more major life activities. For example, he explained that he suffered from significant fatigue and weakness, that he had trouble walking, and that he could not drive a car while he was suffering from his MS flare-up. (M. Perry Dep., DE # 99-2, at 203:1-204:22.) Thus, the court finds that Perry has established the first element of his prima facie wrongful discharge claim.
1. Perry was the second highest ranking employee at LEA and thus had a critical position within the company. (Pls.' Statement Material Facts, DE # 99-1, at 2 ¶ F.)
2. LEA offered continued employment to Perry despite Feldman's termination. (M. Perry Dep., DE # 99-2, at 39:15-20 & Ex. 4, DE # 92-3, at 18:9-10; 25:17-18; 26:3-4; 40:9-20; 54:21-55:6.)
3. Perry neither communicated directly with LEA nor performed work for LEA after he was admitted to the hospital on 27 August 2009. (Pls.' Statement Material Facts, DE # 99-1, at 3 ¶ S; M. Perry Dep., DE # 99-2, at 66:1-4; 85:20-86:1; 99:17-100:15; 208:3-12.)
4. Perry's wife communicated with Briggs on Perry's behalf on only two occasions — 31 August 2009 and 4 September 2009. (M. Perry Dep., DE # 99-2, at 76:12-25; 85:23-24; 205:6-7; 206:9-208:12 & Ex. 12, DE # 92-3, at 130; P. Briggs Dep., DE # 99-5, at 278:6-279:18; 281:13-282:20; 291:17.)
5. LEA's employee handbook states that employees who fail to report to work or contact their supervisor for two consecutive work days are deemed to have abandoned their job, and Perry signed a document acknowledging his receipt of the handbook. (M. Perry Dep., Ex. 19, DE # 92-3, at 147; Ex. 20, DE # 92-3, at 186.)
6. On 19 September 2009, Perry received a letter from Terry, LEA's Interim President, dated 14 September 2009,
(Id., DE # 99-2, at 86:2-88:21 & Ex. 14, DE # 92-3, at 132.)
7. Neither Perry nor his wife responded to the 14 September 2009 letter in any way.
8. LEA did not send the final separation letter concluding that Perry had abandoned his job until 23 September 2009, four days after Perry received the 14 September 2009 letter. (M. Perry Dep., DE # 99-2, at 91:19-92:14; 94:3-9 & Ex. 15, DE # 92-3, at 133; P. Briggs Aff., DE # 92-7, ¶ 23.)
These facts show that Perry abandoned his job by failing to respond to Terry's 14 September 2009 letter.
Perry tries to create a genuine dispute of material fact with respect to this issue by arguing that he did not respond to Terry's letter because he was limited in his ability to communicate and because his doctor instructed him not to communicate directly with LEA. (Pls.' Mem. Opp'n Mot. Summ. J., DE # 99, at 23; M. Perry Dep., DE # 99-2, at 100:16-102:3; 213:12-214:5.) Even if the court accepts Perry's arguments as to why he himself failed to respond to the letter, Perry fails to explain why his wife did not respond for him as she had on 31 August 2009 and 4 September 2009. Although the 14 September 2009 letter called for a personal response from Perry, his wife could have informed Terry that Perry was incapable of communicating, that he was instructed by his doctor not to communicate with LEA, and that he needed more time off from work. Perry himself acknowledges that "[t]here was no policy or practice at LEA that made it wrong for a spouse of an employee, on the employee's behalf, to inform the company that the employee was sick." (Pls.' Statement Material Facts, DE # 99-1, at 48 § IV.D. ¶ 14; see also P. Briggs Dep., DE # 99-5, at 295:20-296:16.) Given the history of communication between Perry's wife and Briggs, no reasonable jury could conclude that the directive from Perry's doctor definitively precluded him from having messages communicated to LEA on his behalf. LEA's employee handbook required Perry to communicate with his managers (M. Perry Dep., Ex. 19, DE # 92-3, at 147), and his failure to do so resulted in his being deemed to have abandoned his position, just as he had been warned in the 14 September 2009 letter.
Perry also contends that he did not abandon his position because he claims that he was on medical leave on 23 September 2009, the date that LEA sent the final separation letter. (See Pls.' Statement Material Facts, DE # 99-1, at 46 § IV.D. ("Perry was on medical leave from August 27, 2009 through September 23, 2009 and he did not abandon his position[.]").) It is not disputed that Perry's wife spoke to Briggs over the telephone on 4 September 2009. (M. Perry Dep., DE # 99-2, at 85:23-24; 205:6-7; 206:9-208:12 & Ex. 12, DE # 92-3, at 130; P. Briggs Dep., DE # 99-5, at 278:6-279:18; 281:13-282:20; 291:17.) Perry maintains that his wife offered to provide a doctor's note to Briggs during this call, but Briggs did not want to see it.
Perry also refers to a second doctor's note which stated that he "should be on medical leave for 3 more weeks from today for flare up of his multiple sclerosis." (Defs.' Reply Supp. Mot. Summ. J., Ex. B, DE # 102-2.) Although this note is surprisingly undated, Perry maintains that he obtained it from Dr. Freedman on 17 September 2009. (M. Perry Dep., DE # 99-2, at 96:11-97:6; 182:7-185:19; 202:10-24; see also Pls.' Mem. Opp'n Mot. Summ. J., Ex. 39, DE # 99-40.) However, it is undisputed that this second doctor's note was not offered or provided to LEA until after LEA had deemed Perry to have voluntarily quit his job on 23 September 2009. (M. Perry Dep., DE # 99-2, at 205:18-206:8 & Ex. 15, DE # 92-3, at 133; Defs.' Reply Supp. Mot. Summ. J., Ex. C, DE # 102-3.) Thus, Perry's attempt to rely on the second note from Dr. Freedman to show that he was on medical leave on 23 September 2009 is unpersuasive. Accordingly, no reasonable trier of fact could conclude that Perry was on medical leave on 23 September 2009.
Perry's reliance on the fact that Briggs did not want to see the 3 September 2009 note from Dr. Freedman is also unavailing. While an employer may ask an employee to furnish a doctor's note to determine whether an absence is justified, the court is unaware of any authority requiring the employer to do so, and Perry has not pointed to any such authority. Furthermore, to the extent that Perry is arguing that Briggs was agreeing to an extended or indefinite leave of absence by declining the proffered doctor's note, such an inference is unreasonable based on the record evidence. When the evidence is viewed in the light most favorable to Perry, it demonstrates that his wife did not speak to Briggs in vague terms regarding the amount of time that he would be out of work. Rather, based on the note from Dr. Freedman, she specifically told Briggs that Perry would be out for "10 days" or "two weeks." (M. Perry Dep., DE # 99-2, at 205:22-206:2; 207:14-18; Defs.' Reply Supp. Mot. Summ. J., Ex. 1, DE # 102-1, at 5.) It is simply not reasonable to infer that an extended or indefinite period of medical leave was granted when a very specific period of leave was requested. Moreover, there is no evidentiary support for Perry's contention that his wife told Briggs that he would be out for "several weeks[]" or "at least two to three weeks." (Pls.' Mem. Opp'n Mot. Summ. J., DE # 99, at 2, 23.) Nor is it reasonable to infer that Perry was excused from communicating with LEA indefinitely based on the fact that Briggs did not want to see the note, particularly after Perry received the 14 September 2009 letter from Terry.
Finally, Perry attempts to create a genuine dispute of material fact by referencing the hire of Jay Becker ("Becker"). Perry argues that LEA hired Becker to replace him prior to his separation from employment with the company, thus evidencing LEA's intent to fire him. (Pls.' Mem. Opp'n Mot. Summ. J., DE # 99, at 2, 19, 23.) However, it is undisputed that Becker was hired by Feldman prior to Feldman's termination.
Perry is also unable to demonstrate the fourth element of his prima facie case. Even if the court assumes arguendo that Perry was fired, there is no evidence that LEA terminated him because he had MS. In fact, Perry testified that the Outside Directors knew of his MS for several years and that he had missed a month and a half of work in the past because of MS (M. Perry Dep., DE # 99-2, at 156:6-157:6), yet he has not alleged that LEA took any adverse action against him prior to September 2009. Thus, he has failed to show that his separation from employment occurred under circumstances that raise a reasonable inference of unlawful discrimination. Cf. Brewington v. Getrag Corp., Civ. No. 5:09CV31-V, 2011 WL 4829399, at *6 (W.D.N.C. Oct. 12, 2011) (on a Rule 12(b)(6) motion to dismiss, an inference of discrimination could not be established where employer knew of plaintiff's disability for approximately three years before taking adverse action).
Moreover, even if Perry could establish a prima facie case of discrimination within the McDonnell Douglas framework, LEA has produced evidence of a legitimate, nondiscriminatory reason for its actions. At the time of Perry's separation from employment on 23 September 2009, LEA had a published policy which stated that "[e]mployees who fail to report to work or contact their supervisor for two (2) consecutive work days shall be considered to have abandoned the job without notice, effective at the end of their normal shift on the second day." (M. Perry Dep., Ex. 19, DE # 92-3, at 147.) Perry's employment with LEA ended after he failed to make contact with the company for more than two days following the expiration of his alleged ten-day medical leave, in violation of LEA's neutral attendance policy. This is a legitimate, nondiscriminatory reason for LEA's actions. See Ryan v. Columbus Reg'l Healthcare Sys., Inc., No. 7:10-CV-234-BR, 2012 WL 1230234, at *6 (E.D.N.C. Apr. 12, 2012) (employer produced a legitimate nondiscriminatory reason when it explained that plaintiff was terminated consistent with a neutral company policy). Finally, Perry has failed to raise a genuine dispute of material fact concerning pretext. He has failed to show that his employer did not honestly believe that he had abandoned his job, and there is simply no evidence in the record from which a rational fact finder could conclude that LEA's actions in separating Perry from his employment were a pretext designed to mask disability discrimination.
In a failure to accommodate case under the ADA, a plaintiff establishes a prima facie case by showing (1) that he was an individual who had a disability within the meaning of the statute; (2) that the employer had notice of his disability; (3) that with reasonable accommodation he could perform the essential functions of the position; and (4) that the employer refused to make such accommodations. Crabill v. Charlotte Mecklenburg Bd. of Educ., 423 Fed.Appx. 314, 322 (4th Cir.2011) (citing Rhoads, 257 F.3d at 387 n. 11); Haneke v. Mid-Atl. Capital Mgmt., 131 Fed.Appx. 399, 400 (4th Cir.2005).
A failure to accommodate claim requires a showing that the plaintiff is disabled within the meaning of the ADA. As the court has discussed previously with respect to his wrongful discharge claim, Feldman has failed to present evidence of a disability. See discussion, supra, at 537-40.
Furthermore, Feldman cannot meet the second element of his prima facie case, as there is no evidence in the record to show that LEA had notice of his alleged disability. See discussion, supra, at 539-41. With respect to this issue, the court emphasizes that although Jorgensen appeared at the 27 August 2009 Board meeting that resulted in Feldman's termination, he simply "asked that the meeting be postponed." (A. Rand Suppl. Aff., DE # 92-19, ¶ 5.) There is no evidence to show that Jorgensen told the Outside Directors at that meeting that Feldman had been hospitalized or that he was suffering from a TIA. There is also no evidence to show that Jorgensen specifically asked for an accommodation for Feldman for a reason related to a medical condition. See EEOC v. C.R. England, Inc., 644 F.3d 1028, 1049 (10th Cir.2011) (In order to trigger an employer's duty to accommodate a qualifying disability under the ADA, "the employee must make an adequate request, thereby putting the employer on notice."); Bourne v. Exempla, Inc., Civ. A. No. 12-cv-01477-PAB-BNB, 2013 WL 1232139, at *5 (D.Colo. Mar. 27, 2013) ("When an individual decides to request accommodation, the individual ... must let the employer know that s/he needs an adjustment or change at work for a reason related to a medical condition." (alteration in original) (citation and internal quotation marks omitted)); Woods v. Donahoe, Civ. A. No. 5:11-cv-00043, 2012 WL 2994445, at *7 (S.D.W.Va. July 20, 2012) (where plaintiff did not specifically ask for an accommodation, defendant's obligation to participate in the interactive process of determining a reasonable accommodation was not triggered). As a result, LEA is entitled to summary judgment on this claim.
LEA argues that Perry cannot establish the fourth element of his ADA accommodation claim. "Implicit in that fourth element, is the requirement that the employee has, in good faith, engaged in an interactive process to identify, in cooperation with the employer, what would constitute a reasonable accommodation." May v. Roadway Express, Inc., 221 F.Supp.2d 623, 627 (D.Md.2002). As the Fourth Circuit Court of Appeals has emphasized with respect to the ADA interactive process:
Crabill, 423 Fed.Appx. at 323 (emphasis added) (citation omitted). "[A]n employer cannot be found to have violated the ADA when responsibility for the breakdown of the `informal interactive process' is traceable to the employee and not the employer." May, 221 F.Supp.2d at 628 (citation and internal quotation marks omitted).
As discussed with respect to his wrongful discharge claim, it is undisputed that Perry received the 14 September 2009 letter from Terry, which demanded a response from him. See discussion, supra, at 543-44. It is also undisputed that Perry failed to respond to that letter. Id. As with his wrongful discharge claim, Perry argues that he did not respond to the letter because he was limited in his ability to communicate and because his doctor instructed him not to communicate directly with LEA. However, as the court has already determined, Perry's wife had a history of communicating with LEA, and she could have responded to the letter on his behalf. Id. at 543-44. As a result, the court finds that the breakdown of the interactive process in this case is attributable to Perry. His undisputed and complete failure to respond to the 14 September 2009 letter is fatal to his failure to accommodate claim.
Moreover, it is not clear in what manner LEA failed to accommodate Perry. LEA's general awareness of Perry's disability does not trigger the duty to accommodate. See Boyer v. Fette Elec. Servs., LLC, Civ. A. No. 4:10-cv-0704-JMC-TER, 2012 WL 684574, at *5 (D.S.C. Jan. 23, 2012) (report and recommendation), adopted, 2012 WL 684456 (D.S.C. Mar. 1, 2012). Rather, "it is the responsibility of the individual with a disability to inform the employer that an accommodation is needed." 29 C.F.R. Pt. 1630, App'x § 1630.9. In this case, Perry's wife specifically told Briggs on 4 September 2009 that Perry would be out for "10 days" or "two weeks." (M. Perry Dep., DE # 99-2, at 205:22-206:2; 207:14-18; Defs.' Reply Supp. Mot. Summ. J., Ex. 1, DE # 102-1, at 5.) The accommodation requested by Perry's wife was in fact provided by LEA, and Perry requested no other accommodation prior to his separation from employment.
Next, plaintiffs allege that all of the defendants violated the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A ("SOX"). The court initially considers plaintiffs' claims against LEA. SOX "creates `whistleblower' protection for employees of publicly-traded companies by prohibiting employers from retaliating against employees because they provided information about potentially unlawful conduct." Welch v. Chao, 536 F.3d 269, 275 (4th Cir.2008). The statute specifically provides:
18 U.S.C. § 1514A(a).
In order to establish a prima facie showing of a SOX violation, an employee bears the initial burden of demonstrating that: (1) the employee engaged in activity protected by SOX; (2) the employer knew, actually or constructively, of the protected activity; (3) the employee suffered an unfavorable personnel action; and (4) the protected activity was a contributing factor in the personnel action. See, e.g., Bechtel v. Admin. Review Bd., 710 F.3d 443, 447 (2d Cir.2013); Welch, 536 F.3d at 275; Livingston v. Wyeth, Inc., 520 F.3d 344, 351-52 (4th Cir.2008); Miller v. Stifel, Nicolaus & Co., Inc., 812 F.Supp.2d 975, 982 (D.Minn.2011). When a plaintiff establishes a prima facie case of unlawful retaliation under SOX, the burden then shifts to the defendant to demonstrate "by clear and convincing evidence that it would have taken the same adverse employment action in the absence of the plaintiff's protected activity." Welch, 536 F.3d at 275; see also Livingston, 520 F.3d at 352-53; 18 U.S.C. § 1514A(b); 49 U.S.C. § 42121(b)(2)(B).
The court initially finds that Perry's SOX claim against LEA must fail because he cannot establish the third element of his claim, i.e., that he suffered an unfavorable employment action. As the court has previously discussed, Perry was not discharged. Rather, he was separated from his employment because he abandoned his position. See discussion, supra, at 542-46. Nevertheless, even if Perry had met his burden of demonstrating this
To establish the first element of their prima facie case, plaintiffs must show that they complained to a "Federal regulatory or law enforcement agency ... or a person with supervisory authority" over them, 18 U.S.C. § 1514A(a)(1)(A), (C), and that their complaint "definitively and specifically"
Here, plaintiffs allege that they engaged in protected activities when they reported to LEA's Board, and to the federal government, that Carrington had involved LEA in possible felonies relating to SAFE Source's export business; when they objected to falsified Board meeting minutes regarding those reports and other LEA matters; when they objected to leaks from the Outside Directors to Carrington regarding their reports of SAFE Source's activities; when they objected to, and refused to pay, what they considered to be fraudulent invoices for legal services submitted by attorney Mark Finkelstein ("Finkelstein"); and when they reported suspected insider trading to a federal agent prior to their being separated from their employment. (Pls.' Mem. Opp'n Mot. Summ. J., DE # 99, at 1, 28-29.) With respect to the first element of plaintiffs' prima facie case, it is unclear whether all of the alleged protected activities are protected by SOX. Nevertheless, the court assumes without deciding that all of these activities meet the definite and specific standard and that they fall within one or more of the six enumerated categories listed in Section 1514A of SOX.
The court initially considers plaintiffs' report of suspected insider trading. In July or August 2009, plaintiffs contacted Phil Kuhn ("Kuhn"), an agent with the Bureau of Industry and Security, which is a division of the Department of Commerce. (M. Perry Dep., DE # 99-2, at 222:3-225:6; 270:10-280:11; P. Feldman Dep., DE # 99-4, at 218:1-222:21.) Plaintiffs informed Kuhn of the existence of a Non-Objecting Beneficial Owner ("NOBO") list which was dated 7 October 2004.(Id.) The NOBO list showed who owned LEA stock
With respect to the first prima facie element, the court finds that plaintiffs have failed to raise a genuine dispute of material fact as to whether they had both a subjective belief and an objectively reasonable belief that their report of possible insider trading was a violation of relevant law. See Welch, 536 F.3d at 275. This element requires an employee to show "both that he actually believed the conduct complained of constituted a violation of pertinent law and that a reasonable person in his position would have believed that the conduct constituted a violation." Id. at 277-78 n. 4 (citation and internal quotation marks omitted).
In this case, plaintiffs did not have an objectively reasonable belief that a violation had occurred because they had very little information on which to make the insider trading allegation. The NOBO list was merely a snapshot in time of who owned shares in LEA. It said nothing about why the owners bought shares, the price they paid, how long they had held the shares, or whether they intended to sell the shares. (P. Briggs Aff., DE #92-7, ¶ 14; M. Perry Dep., DE #99-2, at 279:5-280:8; P. Briggs Dep., DE #99-5, at 325:21-326:9; 330:14-16.) Although plaintiffs' evidence of insider trading was extremely thin, they did not try to obtain any additional information before making their report to Kuhn. Because of this paucity of information, plaintiffs lacked an objectively reasonable basis on which to base their report.
Furthermore, plaintiffs cannot establish the second element of their prima facie case with respect to this particular activity because they have not shown that LEA knew about their report of suspected insider trading. Although plaintiffs contend that Briggs participated in the call to Kuhn (M. Perry Dep., DE #99-2, at 276:10-279:4; P. Feldman Dep., DE #99-4, at 219:21-220:3), it is undisputed that Briggs was a subordinate of Feldman.
Plaintiffs also admit that they did not tell the Outside Directors about the call they made to Kuhn regarding the NOBO list. (M. Perry Dep., DE #99-2, at 225:15-226:1; 280:12-15; P. Feldman Dep., DE #99-4, at 165:19-23.) Nevertheless, they maintain that the Outside Directors were made aware of the report through Briggs. (See Pls.' Mem. Opp'n Mot. Summ. J., DE #99, at 29; Pls.' Statement Material Facts, DE #99-1, at 14 § I.G.) However, this is pure speculation on the part of plaintiffs. They have failed to present any credible evidence in support of their contention that Briggs told the Outside Directors about the call
All of plaintiffs' other alleged protected activities occurred between late December 2007 and early May 2008.
In addition, on 14 January 2008, plaintiffs sent a letter to Kuhn regarding Carrington's ownership of SAFE Source and the illegal export business that SAFE Source conducted with LEA, and they met with Kuhn within two weeks of the date that the letter was sent. (M. Perry Dep., DE #99-2, at 227:22-230:2; 244:15-245:13; 264:13-265:1; P. Feldman Dep., DE #99-4, at 166:7-167:15; Pls.' Mem. Opp'n Mot. Summ. J., Ex. 44, DE #99-45.) Feldman further reported to Kuhn that Rand was revealing the proceedings of LEA Board meetings to Carrington and that Rand knew that competing versions of Board meeting minutes had been drafted without a finalized version ever being adopted. (Pls.' Statement Material Facts, DE #99-1, at 14 § I.F. ¶ 4; M. Perry Dep., DE #99-2, at 249:16-250:6 & Ex. 38, DE #92-3, at 221-229; P. Feldman Dep., DE #99-4, at 249:22-251:2; Pls.' Mem. Opp'n Mot. Summ. J., Ex. 28, DE #99-29; id., Ex. 46, DE #99-47.) Finally, plaintiffs disagreed with and contested the contents of invoices for legal services that Finkelstein submitted to LEA from late 2007 through 1 May 2008. (Pls.' Statement Material Facts, DE #99-1, at 16-17 § I.H. ¶¶ 2, 4; M. Perry Dep., DE #99-2, at 218:7-221:4; P. Feldman Dep., DE #99-4, at 170:7-175:8; J. Jordan Dep., DE #99-17, at 90:19-91:19; Pls.' Mem. Opp'n Mot. Summ. J., Ex. 15, DE #99-16.) The court finds that plaintiffs have presented sufficient evidence to raise a genuine dispute of material fact regarding LEA's awareness of these activities.
With regard to these remaining SOX activities, plaintiffs must demonstrate that their whistleblowing was a contributing factor in the unfavorable personnel actions that were taken against them.
LEA argues that the temporal gap between plaintiffs' last complaint and their separation from employment is not sufficiently proximate to demonstrate that the protected activity was a contributing factor in the adverse personnel actions. In this case, the last protected activity that LEA had knowledge of allegedly occurred following the 1 May 2008 submission of Finkelstein's invoice for legal services rendered. (Pls.' Mem. Opp'n Mot. Summ. J., Ex. 15, DE #99-16.) However, Feldman was not terminated until 27 August 2009, and Perry was not separated from his employment until 23 September 2009. Here, the gap of approximately sixteen to seventeen months between the protected activity and the unfavorable employment actions is simply too attenuated to establish the causation necessary to sustain their SOX claims. See, e.g., Miller, 812 F.Supp.2d at 988 (eight-month gap between plaintiff's last complaint and her discharge was not sufficiently proximate to demonstrate that the protected activity was a contributing factor to her termination); Fraser, 2009 WL 2601389, at *6 (ten-month gap in time defeated SOX claim); Pardy v. Gray, No. 07 Civ. 6324(LAP), 2008 WL 2756331, at *5-6 (S.D.N.Y. July 15, 2008) (six-month gap in time defeated SOX claim).
In response, plaintiffs argue that they are not relying on "mere temporal proximity" but are also relying on "evidence of recurring retaliatory animus" to show that their protected activity was a contributing factor to their separation from employment. (Pls.' Mem. Opp'n Mot. Summ. J., DE #99, at 29 (internal quotation marks omitted).) It is true that where an employee
In determining whether plaintiffs have demonstrated the existence of a recurring retaliatory animus, the court notes that plaintiffs and defendants agree that "[a] split existed between the Outside and Inside Directors...." (Pls.' Statement Material Facts, DE #99-1, at 2 ¶ B; see also Defs.' Mem. Supp. Mot. Summ. J., DE #92-1, at 2.) While the exact cause of the split is hotly disputed, it is clear that it was related to the announcement of Carrington's sale of LEA stock to Raymond James. (See, e.g., P. Briggs Aff., DE #92-7, ¶ 3; P. Briggs Aff., DE #92-13, ¶¶ 14-15; S. Carrington Aff., DE #92-14, ¶ 3; Pls.' Statement Material Facts, DE #99-1, at 22-25 § III.A.; P. Feldman Dep., DE #99-4, at 180:6-181:25; P. Briggs Dep., DE #99-5, at 265:14-266:1; M. White Dep., DE #99-6, at 43:20-44:21; E. Littman Dep., DE #99-15, at 38:7-39:12; 53:4-54:18; 71:19-74:4; 156:21-157:15.) Plaintiffs first learned about the sale sometime in August or September 2007. (P. Briggs Aff., DE #92-13, ¶ 14; P. Feldman Dep., DE #99-4, at 181:5-182-19; Pls.' Mem. Opp'n Mot. Summ. J., Ex. 45, DE #99-46.)
Importantly, plaintiffs admit that this split between the Inside Directors and the Outside Directors "was already in existence at least as of November 1, 2007."
Moreover, plaintiffs have failed to demonstrate that they were actually retaliated against in any way prior to their separation from employment. Although it is evident that palpable tension and disagreements existed between plaintiffs and the Outside Directors, plaintiffs did not experience a demotion, a decrease in salary, a
The lack of causal connection between plaintiffs' complaints and their separation from employment is further bolstered by the intervening events of 2009. See Sussberg, 463 F.Supp.2d at 713 ("a `legitimate intervening event' may defeat any causal inference that might be premised upon temporal proximity" (citation omitted)). Here, the factual record indicates that the legitimate intervening basis for Feldman's termination in August 2009 was the determination that he was insubordinate when he made comments to the Wortleys about the Outside Directors's lack of involvement in LEA's operations and then emailed the Outside Directors and urged them to resign from the Board. (See, e.g., E. Littman Dep., Ex. 26, DE #92-12, at 253:25-254:20; 256:21-258:10; A. Rand Aff., DE #92-15, ¶ 11; J. Jordan Aff., DE #92-16, ¶ 5; J. Lindsay Aff., DE #92-17, ¶¶ 7-8; A. Rand Dep., DE #99-3, at 262:12-21 & Ex. 33, DE #92-10, at 70; P. Briggs Dep., DE #99-5, at 155:14-157:19; J. Lindsay Dep., DE #99-7, at 66:13-20; J. Jordan Dep., DE #99-17, at 35:14-36:19; 53:15-54:11.) Similarly, the factual record indicates that the legitimate intervening basis for Perry's separation from employment was his failure in September 2009 to respond to LEA's request for information regarding his intention to return to work. (M. Perry Dep., DE #99-2, at 90:19-91:2 & Ex. 14, DE #92-3, at 132; A. Terry Aff., DE #102-7, ¶¶ 6, 8.) See Miller, 812 F.Supp.2d at 989 (plaintiff failed to establish causation between protected activity and termination where there was a legitimate intervening basis for the adverse action); Fraser, 2009 WL 2601389, at *6 (same).
In sum, plaintiffs have failed to demonstrate causation based on a combination of factors: the utter lack of temporal proximity between the protected activities and plaintiffs' separation from employment; the rocky relationship that existed between plaintiffs and the Outside Directors prior to the start of any protected activity; and the intervening events of 2009. Examining the evidence in the light most favorable to plaintiffs, no reasonable jury could find that their alleged protected activities were a contributing factor in LEA's decision to separate them from their employment.
Because plaintiffs have failed to establish a prima facie causal connection, the court need not examine whether LEA can show by clear and convincing evidence that it would have taken the same actions against plaintiffs even if it did not know of their complaints. Nonetheless, the court notes that, for many of the same reasons discussed above, LEA has demonstrated that it had a legitimate business reason for its actions, and the court in a SOX case cannot sit as a "super personnel department" to "second guess an employer's facially legitimate business decisions." Riddle v. First Tenn. Bank, Nat'l Ass'n, 497 Fed.Appx. 588, 596 (6th Cir.2012) (unpublished) (citation and internal quotation marks omitted).
Finally, there can be no SOX liability against Rand, Lindsay, Jordan, or Briggs. The claims against them fail just as they have failed with respect to LEA. Plaintiffs have not made a specific argument in their memorandum in opposition to the motion for summary judgment with respect to
Remaining before the court is LEA's counterclaim against plaintiffs for breach of fiduciary duty. (Defs.' Answer, DE #36, at 44-57.) Neither plaintiffs nor defendants have made a motion with respect to this counterclaim. The cause of action described in the counterclaim is founded in state law and lacks any independent jurisdictional basis. The governing statute, 28 U.S.C. § 1367(c)(3), permits a district court, in its discretion, to decline to exercise supplemental jurisdiction over state law claims if it has dismissed all federal claims. Furthermore, in Carnegie-Mellon University v. Cohill, 484 U.S. 343, 350, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988), the United States Supreme Court stated that when all federal claims are eliminated before trial, the balance of factors generally favors declining to exercise pendent jurisdiction over remaining state law claims and dismissing them without prejudice. See also United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) ("It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of... right.... [I]f the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well."). Having now resolved all of the claims asserted in plaintiffs' amended complaint, the court declines to retain and exercise supplemental jurisdiction over LEA's counterclaim and will dismiss that claim without prejudice.
Plaintiffs' motion for leave to file a separate statement of material facts in conjunction with their opposition to defendants' motion for summary judgment (DE #97) is GRANTED. Defendants' motion for summary judgment (DE #92) is GRANTED. Plaintiffs' motion to continue the trial (DE #95) is DENIED AS MOOT. LEA's counterclaim against plaintiffs is DISMISSED WITHOUT PREJUDICE. The Clerk is directed to enter judgment in favor of defendants and close the case.
Furthermore, defendants' summary judgment memorandum states that "[t]he only `accommodation' allegedly requested related to Feldman was Jorgensen's request to postpone the Board meeting after it was already underway." (Defs.' Mem. Supp. Mot. Summ. J., DE # 92-1, at 22 (emphasis added).) It is evident from this language that LEA was not agreeing with Feldman's position but was merely detailing his argument with respect to the accommodation issue. As a result, Feldman has failed to demonstrate that Jorgensen requested a reasonable accommodation on his behalf.
However, Lindsay could not recall exactly when he discussed Feldman's termination with Rand. He testified that the discussion could have occurred on the morning of 26 August 2009. (J. Lindsay Dep., DE # 99-7, at 65:1-3.) Similarly, Feldman could not recall exactly when he began to experience symptoms of a TIA. He testified that the TIA symptoms could have started either before or after Perry's lunch with Rand on 26 August 2009. (P. Feldman Dep., DE # 99-4, at 74:13-21.) Thus, when the facts are viewed in the light most favorable to Feldman, the final termination decision may have been made on the morning of 26 August 2009, which was the same time that Feldman could have started experiencing symptoms of a TIA. As has already been demonstrated, the Outside Directors did not know that Feldman experienced symptoms of a TIA while he was at work on 26 August 2009.
(E. Littman Dep., Ex. 26, DE # 92-12, at 254:8-15.)
