United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO
STRIKE AND MOTION FOR SUMMARY JUDGMENT
DENNIS SAYLOR, IV UNITED STATES DISTRICT JUDGE
an employment dispute arising out of alleged terminations on
the basis of age. Jurisdiction is based on diversity of
Douglas Gordon and William Reumann were salespersons at
EarthLink, Inc. Following a whistleblower complaint and
internal investigation, they were terminated. Earthlink
contends that they were terminated for misconduct; plaintiffs
contend that they were in fact terminated on the basis of
their age, and that EarthLink engaged in a reduction in force
that disparately impacted employees over the age of 40.
have brought claims for discrimination based on both
disparate treatment and disparate impact pursuant to Mass.
Gen. Laws ch. 151B. EarthLink has moved for summary judgment
as to all claims of both plaintiffs. For the reasons stated
below, those motions will be granted.
following facts are either undisputed or set forth in the
light most favorable to plaintiffs, the non-moving parties.
Inc. is a telecommunications company based in Atlanta,
Georgia, that provides technology, network, and
communications services. (Def. SMF. ¶ 1). On April 1,
2011, EarthLink acquired One Communications Corp
(“OneComm”). (Id. at ¶ 2).
time of the acquisition, Douglas Gordon and William Reumann
were both salespersons in the Burlington, Massachusetts
office of OneComm. (Sincavage Dep. at 43). Gordon was a
Premier Account Executive who reported directly to Reumann, a
Regional Sales Manager. (Gordon Aff. ¶ 5,
Reumann reported to Terri (Radford) Sincavage, a Vice
President in the Burlington office. (Id.).
members of the sales team, both Gordon and Reumann were
compensated with a base salary plus commissions.
(Id. at ¶¶ 8, 10). As a sales
representative, Gordon's commissions were determined
based on the revenue generated by the sales he completed.
(Sen. Decl. ¶¶ 6-10). Reumann's commissions
depended on the commissions of the team he managed. (Gordon
Aff. ¶ 8; Reumann Dep. at 42).
customers paid monthly recurring charges (“MRCs”)
for services. (Id. at ¶ 7). Commissions were
calculated, in part, based on the net incremental revenue
growth of MRCs. (Id. at ¶ 8). When a customer
purchased a new service that did not replace any pre-existing
services, the entire gross MRC constituted net incremental
revenue growth. (Id. at ¶ 9). When a member of
the sales team sold a service conversion that expanded a
customer's pre-existing services, the resulting net
incremental revenue growth was the difference between the
existing MRC and the MRC of the newly purchased service.
(Id. at ¶ 10).
representatives at EarthLink documented their sales by signed
order forms. If a salesperson misrepresented previously
existing MRCs on an order form, or reported a conversion as a
new sale, it could lead to a higher stated revenue growth on
the customer's account, and inflate his or her
commissions. (Porter Dep. at 55-56; Reumann Dep. at 122).
EarthLink has safeguards in place to identify improper sales
reporting. It asserts, however, that because of the high
volume of sales, employee honesty is crucial to maintaining
the integrity of the commission payment system. (Sen Decl.
Policies Regarding the Use of Company Resources
plaintiffs were employees of OneComm, the company maintained
written policies concerning the use of company resources. For
example, the OneComm handbook stated, “[y]ou may not
establish or maintain an outside business that could cause
any potential or actual conflict with your employment with
the Company or the Company's interests. . . . Employees
may not use OneCommunications' resources, equipment,
property or time to work on or support a non-business
activity.” (Gordon Dep. Ex. 3). Another section of the
handbook stated, “[d]uring work hours, you may not
engage in any activity on behalf of another employer, entity,
or your own business.” (Id.).
also maintains a written Code of Business Conduct and Ethics
that states, among other things, “[p]ersonal use of the
technology system must not disrupt the operation of
EarthLink's networks or of other users, and such use may
not interfere with the productivity of any employees.”
(Gordon Dep. Ex. 7).
Whistleblower Complaint and Investigation
2011, a former EarthLink employee contacted EarthLink's
Chief People Officer and lodged a whistleblower complaint.
(Sen Decl. Ex. A). The complaint alleged that Gordon openly
took personal calls and completed work for other businesses
while working at EarthLink's Burlington office.
(Id.). The complaint also alleged that Gordon and
Reumann improperly reported sales to inflate commission
payments and made generalized complaints concerning
Sincavage's leadership. (Id.).
response, EarthLink assembled its investigations committee to
evaluate the merits of the complaint. (Sen Decl. ¶ 15).
The committee included Alva “Trey” Huffman, Vice
President and Treasurer; Tammy Harley, Director of Internal
Audit; Peter Chronis, Director of Information Security &
Risk Management; Michelle Candelaria, Senior Human Resources
Manager; Ayseli Sen, Senior Manager of Internal Audit; and
members of EarthLink's legal team.
(Id.). None of the members of the committee were
located at the company's Burlington office. (Sen Dep. at
analyzed a sample of Gordon's sale orders as part of the
investigation. (Sen Dep. at 22). She contends that on
multiple occasions, Gordon improperly categorized sales as
new or underreported the MRCs of pre-existing services, which
led to his receiving inflated commissions. (Sen Dep. Ex. 12).
She also contends that all of Gordon's
“irregular” orders were signed by Reumann instead
of Gordon himself. (Sen Dep. at 73).
addition, the committee found e-mails on Gordon's
EarthLink account concerning outside businesses that he
operated. (Sen Dep. Ex. 11). Sen and Candelaria called
Gordon's EarthLink-provided office number, and discovered
that it had been re-routed to a personal line, with the
voicemail answering as “Boston Events
Specialists.” (Sen Dep. Ex. 11).
Candelaria scheduled an interview with Gordon, informing him
beforehand that it was to discuss the business environment at
EarthLink generally. (Gordon Aff. ¶ 15). They did not
notify him in advance that he was under investigation.
(Id.). At the meeting, Gordon was asked to explain
the alleged irregularities in his sales reporting and the
accusations of improper moonlighting. (Id. at ¶
16). He apparently did not provide satisfactory answers. In
explaining one of the alleged sales irregularities, Gordon
told Sen that the problem “could have been an oversight
. . . .” (Gordon Dep. at 244).
now contends that to answer all of Sen and Candelaria's
questions properly, he would have needed additional time to
obtain information and confer with personnel in the billing
department. (Id.). He also contends that Sen was
confused about the commissions process as a whole.
the moonlighting allegations, Gordon admitted to managing
outside businesses while he was an EarthLink employee.
(Id. at 273). He also admitted to re-routing his
EarthLink office telephone number to a private line, which he
claimed he did with the help of EarthLink's IT
department. He claimed, however, it was only on a temporary
basis while a second cell phone that he used specifically for
EarthLink business was broken. (Id. at 235-236;
Gordon Aff. 14). The report from the interview states,
“Doug acknowledged that he did receive some emails
relating to his other businesses but that it didn't
affect his work at EarthLink.” (Sen Dep. Ex. 11). At
his deposition, Gordon stated that while he “[could
not] cite a specific instance . . . if something came up,
then, yes, [he] would answer the email or phone call.”
(Gordon Dep. at 285).
conclusion of the meeting, Gordon was terminated. He contends
he was told that the termination was for violating the
company's moonlighting policy. (Gordon Aff. ¶ 16).
He asserts that Candelaria provided him with a convoluted
explanation as to the specifics of his termination, with the
only concrete justification being his re-routed telephone
line. (Id.). For several months, Gordon continued to
receive commission payments, and EarthLink never asked him to
return any of his commissions, even those corresponding to
the accounts cited in the investigation. (Id. at
after Gordon was terminated, a meeting was held with Reumann
to discuss the alleged irregularities in Gordon's orders.
(Reumann Aff. ¶ 11). Sen and Candelaria participated in
the meeting by telephone, while Sincavage and a human
resources manager were present with Reumann in the Burlington
office. (Id.). As with Gordon, Reumann was not
informed in advance that he was being investigated for
misconduct. (Id.). Reumann contends that the
presentation during the meeting was not logical or coherent.
(Id.). He further contends that Sen and Candelaria
“lacked [a] fundamental understanding of the data and
information they were trying to present.”
(Id.). He admitted at the meeting, however, that he
signed the paperwork on behalf of Gordon and agreed that by
doing so he was attesting to its accuracy. (Reumann Dep. at
124). Reumann contends that he was terminated at the
conclusion of the meeting for “signing too many of
Doug's contracts.” (Id.).
had no specific policy in place prohibiting sales managers
from signing an order on behalf of one their salespeople.
(Id.). EarthLink did not require Reumann to
return any ...