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Downing v. Omnicare, Inc.

United States District Court, D. Massachusetts

October 25, 2017



          Saris, C.J.


         Plaintiff Patrick F. Downing was employed by Defendant Omnicare, Inc., a pharmacy services company, from 2004 until his termination in 2012. Plaintiff alleges that, in terminating his employment, Omnicare and Defendants Jeffrey Stamps, John Workman, Nitin Sahney, John Figueroa, and Priscilla Stewart-Jones[1], retaliated against him in violation of Massachusetts General Laws Chapter 151B (Counts I and II). Plaintiff asserts additional claims, including tortious interference with his advantageous or contractual relationship with Omnicare (Count III), breach of contract (Count IV), breach of the covenant of good faith and fair dealing (Count V), and violation of Chapter 93A (Count VI).

         Defendants Omnicare, Stamps, Workman, Sahney, and Figueroa have moved for summary judgment on all claims. After a hearing and consideration of the parties' supplemental briefing, Defendants' Motion for Summary Judgment (Docket No. 46) is ALLOWED IN PART and DENIED IN PART.


         The facts below are interpreted in the light most favorable to the non-moving party. Many are undisputed.

         Plaintiff's Employment

         Omnicare purchased Plaintiff's family-run pharmacy business in 2004. As part of the Settlement and Release Agreement (“the Agreement”), Omnicare granted shares of restricted common stock to Plaintiff on April 1, 2008. The Agreement specified that the stock would be distributed in ten equal installments that would vest on the first ten anniversaries of the grant date. The annual vesting of the stock was “subject to and conditioned upon the continued employment of Patrick F. Downing by Omnicare as of each vesting anniversary date.” Settlement and Release Agreement, Docket No. 56-44, ¶ 4. The simultaneous execution of an employment contract between Plaintiff and Omnicare was an additional condition of the Agreement.

         Plaintiff became an Omnicare employee in 2005. From 2005 to his termination, Plaintiff held multiple high-level positions within Omnicare's Long Term Care Division (“LTC”). Stamps, who was President of the LTC Division, promoted Plaintiff to his final position, Division President of the Northeast Division of LTC, in late 2010 or early 2011. Throughout his entire term of employment with Omnicare, from 2005 to 2012, Plaintiff reported to Stamps.

         Stamps, in turn, reported to Figueroa, who was Omnicare's Chief Executive Officer (“CEO”) from January 2011 to June 2012. Workman served as president and Chief Financial Officer (“CFO”) from 2011 until June 2012, when he was appointed interim CEO. During that same time period, Sahney was the head of the “specialty pharmacy” division, and Stewart-Jones was Omnicare's top human resources executive.

         Plaintiff's Belief about Stamps-Burton Relationship

         During his employment, Plaintiff believed that Stamps and Karen Burton, a member of Omnicare's clinical team, were involved in an “inappropriate” relationship. Downing Dep. at 82:13-83:9. He noticed that Stamps and Burton engaged in “flirting” and touched arms while speaking at work events. Downing Dep. at 85:23-87:7. Burton personally informed Plaintiff that she was getting a bikini wax in advance of a conference that Stamps also would be attending. Burton mentioned that she drove Stamps around Boston when he was in the city for work. Plaintiff became aware that Burton and Stamps were speaking “on an almost daily basis.” Downing Dep. at 83:8-9. Stamps' assistant, Erla Burnside, told Plaintiff that Burton “had strong influence over” Stamps. Downing Dep. at 84:24-85:4. In addition, Plaintiff believed that Burton had no business reason for attending events at which Stamps also was present. Plaintiff also heard that Stamps and Burton attended an event without their spouses, when significant others were welcome. Mindy Ferris, the former Senior Vice President of Operations for LTC, told Plaintiff that she believed Burton and Stamps engaged in sexual activity in a hotel room while at a conference in Amelia Island, Florida.

         Defendants dispute the existence of any inappropriate relationship, explaining that Stamps and Burton were good friends and that Stamps was supportive of Burton during difficult times in her life. They also maintain that Burton worked on customer accounts and had oversight responsibilities in New York City, which explained her attendance at galas and events in the city.

         From 2005 to 2007, Burton reported to Plaintiff. In late 2006, Plaintiff recommended that Burton be terminated based on her performance. After this recommendation, Stamps restructured the clinical departments, and Burton no longer reported directly to Plaintiff. According to Plaintiff, when he recommended Burton's termination, Stamps responded, “[i]f you terminate her, I'll save her.” Downing Dep. at 98:5-14.

         In 2011, two regional vice president (“RVP”) positions opened up in the Northeast Division, one in New York and one in New Jersey/Pennsylvania. Two women and five men applied for the New York position, and on February 24, 2011, Plaintiff hired Paul Jacques for the position. Plaintiff claims that he “sensed [Stamps'] disappointment” when the two finalists, Jacques and Michael Rosenblum, were announced. Downing Dep. at 22:21-23:21. Two women and one man were considered for the New Jersey/Pennsylvania position, and in September 2011, Plaintiff hired Dale Lewis for the position.

         Burton was one of the women who applied for these positions, but she was not hired for either one. Burton was not qualified for the RVP positions, in Plaintiff's opinion. Stamps did not directly lobby for Burton's promotion to an RVP position. However, according to Plaintiff, he called Stamps after he denied Burton the RVP position; while Stamps said he understood, Plaintiff contends that Stamps acted “more coolly” toward him thereafter. Downing Aff., Docket No. 56-43, ¶ 8. Figueroa, the CEO in 2011, told Plaintiff that Stamps had made several negative statements about Plaintiff after Burton was not promoted.

         During the New Jersey/Pennsylvania RVP hiring period, a new interview process was established to insulate Plaintiff and others involved from retaliation by Stamps in case Burton was not promoted. Throughout this process, Stamps criticized the candidates Plaintiff brought forward and indirectly advocated for Burton's promotion to the New Jersey/Pennsylvania RVP position by stressing the importance of “qualities that were strengths of hers, ” including customer relations. Downing Dep. at 61:10-21, 63:4-65:21. While Stamps did not advocate for Burton by name, Plaintiff interpreted Stamps' comments as his pushing for Burton to be promoted instead of a more qualified male applicant. Operations experience -- a qualification which both sides agree that Burton was lacking -- was a priority for the New Jersey/Pennsylvania RVP job.

         After the RVP positions were filled, Plaintiff felt that Stamps was upset that he had not promoted Burton. Stamps made comments about the competency of Jacques, Lewis, and Steve Rappa -- three male RVPs -- that Plaintiff interpreted as pressure to terminate them from their jobs.

         Plaintiff's Performance and Reviews

         The quality of Plaintiff's performance is hotly contested. Prior to 2012, Plaintiff had always received performance evaluations of “exceeds requirements” and “outstanding, ” raises, and incentive compensation including cash bonuses and stock awards, commensurate with those reviews. He met operational goals for his division's budget in 2011, including bed retention. Plaintiff's bed loss and retention percentages for 2011 were within one percent of all but one other LTC division.

         Defendants present a very different account of Plaintiff's performance. Figueroa became concerned with Plaintiff's performance beginning in the summer of 2011. By the end of 2011 or early 2012, Figueroa told Stamps that if he did not take action against Plaintiff, Stamps would be held directly accountable for Plaintiff's poor results.

         From Omnicare's point of view, for calendar year 2011 Plaintiff's Northeast Division was the worst-performing LTC division for bed loss, an important marker of performance. In December 2011, Plaintiff received official notice that a correctional facility with 11, 898 beds was not renewing its bed contract with Omnicare effective February 15, 2012. Downing did not advise Figueroa, Stamps, or Workman about this setback for nearly two months. Overall, Plaintiff's 2012 bed loss through February 2012 totaled 17, 347 beds. The next lowest-performing region in the bed loss category lost only 2, 373 beds.

         In his time as Omnicare's CEO, Figueroa introduced an executive talent review process to the company in which the senior management team, including Workman, Stamps, and Stewart-Jones, rated the executives reporting to them. In January 2012, Stamps evaluated Plaintiff in the “medium” performance level, indicating that he was a “[s]olid performer.” As part of the 2012 Talent Review Summary dated April 16, 2012, Figueroa and the rest of the senior team downgraded Stamps' rating of Plaintiff to “attention needed, ” reflecting that Plaintiff's performance was “inconsistent” and “inadequate.” Stamps contends that, in addition to retention concerns, Plaintiff had “two significant compliance issues” in 2011. Stamps Decl., Docket No. 46-11, ¶ 9. First, Plaintiff backdated a customer contract. The compliance department recognized the issue and timely corrected it. Defendants do not provide any detail concerning the second compliance issue. Furthermore, Plaintiff maintains that Stamps never discussed either of these compliance issues with Plaintiff.

         Figueroa gave Stamps his 2011 performance review on or about February 22, 2012 and scored him an average rating of “3” on a five-point scale, which meant that he “[c]onsistently met expectations.” In early March 2012, Plaintiff met with Stamps to receive his 2011 performance review. Plaintiff's overall performance rating was the same as the one Stamps had received from Figueroa: “3, Consistently Met Expectations.” Figueroa suggested that Plaintiff receive a “2” rating, but Stamps gave Plaintiff a “2.85” rating which rounded up to a “3.” In their meeting, Stamps told Plaintiff that he would be receiving nearly one hundred percent of his projected cash bonus and one hundred percent of his projected incentive stock awards, but no pay raise. Figueroa told Stamps not to give a raise to the lowest-performing division president, and Defendants say that this was the reason Plaintiff did ...

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