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Gordon v. EarthLink, Inc.

United States District Court, D. Massachusetts

July 27, 2017

EARTHLINK, INC., Defendant.



         This is an employment dispute arising out of alleged terminations on the basis of age. Jurisdiction is based on diversity of citizenship.

         Plaintiffs 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.

         Plaintiffs 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.

         I. Background

         A. Factual Background

         The following facts are either undisputed or set forth in the light most favorable to plaintiffs, the non-moving parties.

         EarthLink, 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).

         At the 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, 8).[1] Reumann reported to Terri (Radford) Sincavage, a Vice President in the Burlington office. (Id.).

         1. Sales Process

         As 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).

         EarthLink 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).

         Sales 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. ¶¶ 11-12).

         2. Policies Regarding the Use of Company Resources

         When 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.).

         EarthLink 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).

         3. Whistleblower Complaint and Investigation

         In July 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.).

         In 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.).[2] None of the members of the committee were located at the company's Burlington office. (Sen Dep. at 9).

         Sen 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).

         In 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).

         4. Terminations

         Sen and 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).[3]

         Gordon 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. (Id.).

         As to the moonlighting allegations, Gordon admitted to managing outside businesses while he was an EarthLink employee. (Id. at 273).[4] 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).

         At the 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.).[5] 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 ¶ 17).

         Shortly 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.).

         Earthlink had no specific policy in place prohibiting sales managers from signing an order on behalf of one their salespeople. (Id.).[6] EarthLink did not require Reumann to return any ...

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