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Jay v. Siemens AG

United States District Court, D. Massachusetts

August 30, 2018

ANDREW JAY
v.
SIEMENS AG, SIEMENS FINANCIAL SERVICES, INC., SIEMENS HEALTHINEERS and SIEMENS NEXT 47 GMBH

          MEMORANDUM OF DECISION AND ORDER

          RYA W. ZOBEL, SENIOR UNITED STATES DISTRICT JUDGE

         Plaintiff Andrew Jay, formerly an at-will employee of defendants, alleges wrongful constructive discharge in retaliation for his internal report of extortion. Defendants move to dismiss his single-count complaint.

         I. Factual Background

         The following well-pleaded facts are recited as alleged in the complaint. I accept them as true for the purposes of resolving this motion. See Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 5 (1st Cir. 2011).

         Plaintiff, a Massachusetts resident, worked for 14 years in various capacities for defendant Siemens Financial Services, Inc. (“SFS”), a German healthcare company doing business in Massachusetts, and related entities. In his most recent role, plaintiff worked as Managing Partner/Vice President of Siemens Medical Solutions USA, Inc. (referred to in the complaint and hereafter as “Healthineers”). His responsibilities included managing healthcare venture investment efforts and supervising the Boston office of SFS.[1] He received positive performance reviews throughout his tenure with SFS/Healthineers and oversaw positive financial returns.

         In the spring of 2017, Thomas Miller of GreyBird Investments pitched SFS/Healthineers to invest in a British biotechnology company called Base4. Miller told SFS/Healthineers that he was working to raise $30-50 million in venture capital for Base4. As part of that effort, Miller had submitted a term sheet to Base4 affording him financial incentives if he could secure a syndicate of investors. A former Siemens Healthcare executive, Miller by this time had a consulting contract with Siemens to deliver business proposals and investment opportunities. That contract was arranged by David Stein, SFS Head of Strategy, and Bernd Montag, CEO of Siemens Healthcare. Stein and his deputy, Mary Amor, “openly supported” investing in Base4 through GreyBird. Compl. ¶ 20.

         Having previously considered and rejected this investment as premature after a site visit in the summer of 2016, plaintiff's team revisited the possibility in light of executive support for it. After another visit to Base4, however, plaintiff and his colleagues “remained unimpressed.” Compl. ¶ 21. In June or July of 2017, plaintiff received a phone call from Cameron Frayling, the CEO of Base4. According to Frayling, Miller had told him that Siemens Healthcare would invest or not at Miller's instruction, and that Frayling “should sign the proposed term sheet with GreyBird if he wanted to see any funding from Siemens Healthcare.” Compl. ¶ 22.

         Plaintiff discussed this call with several colleagues and determined, “based on their advice, standing SFS policy and his own conscience” to report the matter to the company's compliance department. He spoke with Barbara Greenberg on the Siemens Compliance hotline, informing her “of the Base4 situation” and expressing concern “about personal and professional implications from his report.” Compl. ¶ 24.

         Greenberg subsequently reported no compliance problem because a Healthineers attorney had informed her that Miller had no contractual relationship with Healthineers. When plaintiff informed her that Miller was in fact under contract as a consultant, a “surprised” Greenberg asked that he provide a copy of the contract.[2]Compl. ¶ 25. Plaintiff received no further communication from the compliance department, but learned that Miller's contract “would not be renewed despite Healthineers' satisfaction with the value it was receiving.” Compl. ¶ 27. Despite plaintiff's “best efforts to remove it from consideration, ” the Base4 investment remained in play for weeks after his report, with Stein's continued advocacy.

         Thereafter, Stein and Montag, “in their capacities as SFS Head of Strategy and CEO of Siemens Healthcare, acted in concert to concoct a pretextual reason to demote Plaintiff, remove many of his job duties, and replace him with an outside hire, all in retaliation for Plaintiff's Compliance report.” Compl. ¶ 30. Pursuant to that scheme, plaintiff was demoted in September 2017 from Vice President reporting directly to the SFS CEO, to Director reporting to Stein's deputy Amor, a Hiring Manager. Amor informed him in a meeting on October 2, 2017, that Stein and Montag had decided several weeks prior that a substantial portion of plaintiff's job responsibilities would be transferred to a new hire acting as his direct superior. At a second meeting three days later, Amor and a human resources employee repeated this information. They emphasized that Stein and Montag had made the decision back in August, adding this time that “the reason for the demotion was his presentation style in Investment Committee Meetings.” Compl. ¶ 37. Plaintiff had never previously been informed of a problem with his presentation style, and in the three Investment Committee Meetings he attended with Montag, the two topics he presented advanced successfully.

         Accordingly, plaintiff informed Human Resources on October 13, 2017 that he believed his demotion to be “in retaliation for his Compliance report regarding Miller's extortion of Base4's CEO.” Compl. ¶ 41. On October 25, 2017, Stein confirmed his and Montag's intention to demote plaintiff, again citing his presentation style. By letter dated October 31, 2017, Siemens informed plaintiff it had found no connection between his compliance report and demotion, and gave him until November 6, 2017 to accept the demotion or resign. By refusing to accept the demotion, plaintiff was constructively discharged on November 6, 2017.

         On December 27, 2017, he brought this one-count complaint alleging wrongful discharge in Suffolk Superior Court. Defendants thereafter removed to this court based on diversity jurisdiction and now move to dismiss.

         II. Standard of Review

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. For purposes of a motion to dismiss, the court accepts all well-pleaded factual allegations as ...


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