United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO
Dennis Saylor IV, United States District Judge.
a lawsuit claiming an alleged wrongful termination. Dr. Hugh
Duckworth contends that because his employer wrongfully
categorized his termination as “for cause, ” he
was deprived of his rights under a Securityholders Agreement
and Stock Option Agreement. The complaint asserted claims
under the Americans with Disabilities Act
(“ADA”), the Massachusetts anti-discrimination
statute, and state contract law. Defendants have moved to
dismiss the complaint under Fed.R.Civ.P. 12(b)(6) for failure
to state a claim. For the following reasons, the motion to
dismiss will be granted.
following facts are as stated in the complaint.
Hugh Duckworth was employed by R3 Education, Inc.
(“R3”), a holding company that owns three medical
schools in the Caribbean: St. Matthews University School of
Medicine, Medical University of the Americas, and the Saba
School of Medicine. (Compl. ¶ 10). Duckworth served as
Executive Dean at the Saba University School of Medicine and
Associate Dean of Basic Sciences at Medical University of the
Americas and the Saba University School of Medicine.
(Id. ¶ 13).
R3 is a
Delaware corporation with a principal place of business in
Massachusetts. (Id. ¶ 2). Steven Rodger and
Terry Moya are, respectively, the Chief Executive Officer and
the Chief Financial Officer of R3. (Id. ¶¶
1, 2013, Duckworth received a letter signed by Rodger
confirming that he had been placed on paid leave from his
employment because of “repeated insobriety while
rendering services as an employee.” (Id.
¶ 36; Docket No. 9, Ex. 5). The letter indicated that
his salary would be reduced to $110, 000 while he remained on
paid leave. (Docket No. 9, Ex. 5). It also stated that his
“repeated insobriety would justify [his] termination
for cause, ” but that Rodger “was willing to
continue [his] employment with the Company, ” subject
to various terms and conditions. (Id.).
the terms and conditions were that Duckworth would be
relieved of his current duties, although he would retain
certain titles; that he would “perform such duties as
requested, ” but he would cease to come in to the
office; and that he would surrender all keys and other
company property. (Id. ¶¶ 1-4). It also
provided that he would lose certain non-vested or
non-exercised stock option rights. (Id. ¶ 6).
It directed him to “immediately seek appropriate
professional help for [his] substance abuse problem.”
(Id. ¶ 7). It included a paragraph releasing
the company and its officers and employers from all claims.
(Id. ¶ 9). It included a statement that his
continued employment would be at-will. (Id. ¶
8). Finally, it included an integration clause that
superseded and cancelled “all prior or contemporaneous
discussions, negotiations, representations or agreements with
respect to the matters addressed herein.” (Id.
was given until 5:00 p.m. on July 28, 2013, to decide whether
to accept the offer. (Id. ¶ 10). The release
language of the letter also stated he would have seven days
from the date of execution to revoke his acceptance of the
agreement. (Id.). According to the complaint, Rodger
orally assured Duckworth that he could keep his job provided
he signed the letter. (Compl. ¶ 36). Duckworth
ultimately signed the letter on July 29, 2013. (Docket No. 9,
year later, on July 14, 2014, Duckworth received a letter
signed by Moya stating his employment would be terminated
effective August 15, 2014. (Compl. ¶¶ 26-27). The
termination was “for cause, ” although the letter
did not specify the specific basis. (Id. ¶ 30).
July 1, 2013 letter did not provide any specific examples of
Duckworth's insobriety. The complaint alleges that R3
encouraged a “party atmosphere” and that other
employees, including top management, were intoxicated at
company events but did not suffer similarly adverse
employment consequences. (Id. ¶¶ 48-49).
The Securityholders Agreement and Stock Option
noted, the letter provided that Duckworth would lose certain
rights concerning R3 stock options. In December 2008,
Duckworth became a party to R3's Securityholders
Agreement by executing a joinder document to become a
“management stockholder.” (Id. ¶
14). As relevant here, the agreement stated:
[U]pon the occurrence of a Call Event affecting a Management
Stockholder, the Company shall have the right to purchase . .
. all . . . of the Shares held by such Management Stockholder
at the Purchase Price and during the Exercise Period
applicable thereto as described . . . in Schedule 2 hereto.
(Id. ¶ 15). The agreement defined “Call
Event” as “the first to occur of any of the
Triggering Events.” (Id. ¶ 16). A
“Triggering Event” in turn was defined as the
“termination of [the] employment relationship . . . for
any reason.” (Id. ¶ 17). There were six
categories of triggering events, including “a
termination for Cause.” (Id.). Justification
for termination with cause included “repeated
insobriety or any use of illegal drugs while rendering
services as an employee.” (Id. ¶ 19).
2 of the Securityholders Agreement provided that in the event
of a termination for cause, the “purchase price”
of the securities would be the “lower of initial value
and book value.” (Id. ¶ 18). The
“initial value” of the securities at
Duckworth's termination was $0.001 per share.
(Id. ¶ 43). Because Duckworth held 319 shares
of R3 common stock at his termination ...