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Levesque v. Schroder Investment Management North America Inc.

United States District Court, D. Massachusetts

March 27, 2019

Shaun Levesque, Plaintiff,
v.
Schroder Investment Management North America, Inc. and Karl Dasher Defendants.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton, United States District Judge

         This case arises out of an employment dispute over commissions allegedly owed, retaliation and age discrimination in an action brought by a plaintiff who was terminated following a company's reorganization in 2017.

         I. Factual Background

         Shaun Levesque (“Levesque” or “plaintiff”), a resident of Wrentham, Massachusetts was employed by Schroder Investment Management North America, Inc., (“SIMNA”) from 2008, until his termination in September, 2017. Levesque was initially hired as the east coast director of SIMNA's Institutional Sales division. He received his offer letter in 2008, by mail, in Massachusetts and continued to work for SIMNA while in Massachusetts.

         At SIMNA, Levesque reported to Jamie Dorrien-Smith (“Dorrien-Smith”), then-CEO of SIMNA, from 2008 to 2012, and then to Karl Dasher (“Dasher”), a resident of New York and Georgia, in 2013, after Dasher became the new CEO.

         From 2009 to 2012, Levesque received an annual management bonus ranging from $100, 000 to $350, 000. Those management bonuses were consistent with the oral representations made by Dorrien-Smith. That agreement was presumably memorialized in an internal memorandum which has not yet been produced.

         In 2013, SIMNA implemented a new incentive compensation plan (“the 2013 Plan”). Under the 2013 Plan, employees qualified for two kinds of incentive-based compensation schemes: quantitative and qualitative. The quantitative based compensation was further broken down into two components: individual and team. Quantitative compensation was earned when revenues were generated and individual quantitative awards were based on a percentage of the employee's gross sales. By contrast, qualitative compensation was earned at the end of each fiscal year, when the company determined whether the employee had met his or her stated goals.

         Under that compensation scheme, SIMNA also had the discretion to defer the team quantitative and qualitative compensations into its Equity Compensation Plan (“the ECP”). As part of the ECP, employees were given either an amount of shares in the parent company, Schroders plc (“a share award”) and/or units in a range of investment products for Schroders plc (“a fund award”) that was equal to the value of their earned incentive-based compensation that was deferred.

         In February 2014, Dasher allegedly told Levesque that he would not be receiving his customary management bonus for work performed in 2013. Dasher allegedly promised, instead, that Levesque would continue to receive a total compensation package of $1.4 million, even if Levesque's commission sales were lower than his 2013 numbers. Shortly thereafter, Levesque began reporting directly to Marc Mayer (“Mayer”) instead of Dasher. Mayer informed Levesque that he was no longer needed as an Institutional Sales manager but reiterated Dasher's earlier promise of $1.4 million in total compensation. Mayer refused to put that agreement in writing and Levesque alleges that he was not compensated as promised for work performed in 2013.

         In 2015, Mayer, unbeknownst to Levesque, contacted Allan Conway, the head of Emerging Markets, to discuss transferring Levesque to the Emerging Products division. In 2016, Levesque agreed to the transfer with the understanding that 1) his targeted annual compensation would be between $750, 000 and $1 million and 2) he would be entitled to the quantitative commissions he had already earned for the three-year commission cycle within the Institutional Sales division. In June, 2016, the parties memorialized the terms of Levesque's compensation (“the 2016 Internal Memorandum”).

         Following his transfer, Levesque avers that SIMNA breached its contractual obligations by failing to pay him: 1) a $250, 000 management bonus for 2013, 2) a $300, 000 qualitative bonus for 2013, 3) a $367, 000 quantitative incentive compensation for work performed in 2016, 4) a $500, 000 qualitative incentive compensation for work performed in 2016, and 5) a $732, 000 quantitative incentive compensation to which he would have been entitled had he not been terminated in 2017.

         Levesque discussed his compensation complaints with several managers and in 2017, Dasher informed him that his Emerging Markets compensation was intended to replace his quantitative compensation previously earned while in Institutional Sales. Levesque then contacted Human Resources but was told to handle the issue directly with Dasher. Shortly thereafter, Levesque was terminated on the basis that his position had been upgraded and moved to the London office. Levesque, who is a British national, was not offered the position and was told to tell his co-workers that he intended to retire.

         II. Legal Analysis

         A. Personal Jurisdiction over Dasher

         On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of satisfying the Massachusetts long-arm statute and the Due Process Clause of the Fourteenth Amendment. Cossart v. United Excel Corp., 804 F.3d 13, 18 (1st Cir. 2015). In accordance with that burden, all facts alleged by the plaintiff are taken as true and construed in favor of his jurisdictional claim. Massachusetts Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26, 34 (1st Cir. 1998).

         1. Massachusetts Long Arm Statute

         Jurisdiction over the individual officers of a corporation under the Massachusetts long arm statute may not be based on jurisdiction over the corporation. Johnson Creative Arts, Inc. v. Wool Masters, Inc., 573 F.Supp. 1106, 1111 (D. Mass. 1983). Rather, this Court must determine that there is an “independent basis” for jurisdiction. LaVallee v. Parrot-Ice Drink Prod. of Am., Inc., 193 F.Supp.2d 296, 300 (D. Mass. 2002).

         Levesque has demonstrated that Dasher, as SIMNA's CEO, has attempted to participate in the Commonwealth's economic life as a “primary participant” in corporate activities. Cossart, 804 F.3d at 18-19 (holding that the term “transacting any business” is construed broadly). Here, Dasher retained and supervised Levesque, had significant business-related communications with him and made promises to him regarding compensation, all while Levesque retained significant Massachusetts clients and operated out of his Massachusetts office. See id. (finding that a nonresident defendant who unsuccessfully negotiated a contract for sale of Massachusetts land while outside the Commonwealth was sufficient to satisfy the “transacting any business” requirement). Thus, because Levesque has demonstrated an independent basis for jurisdiction, the requirements of the long arm statute have been met.

         2. Due Process Clause

         Specific jurisdiction over a defendant exists if a plaintiff demonstrates a nexus between his claims and the defendant's forum-based activities. In determining whether the requisite nexus is satisfied, the Court evaluates 1) relatedness, 2) purposeful availment and 3) reasonableness. Cossart, 804 F.3d at 20.

         Dasher's actions seem to be the catalyst for this action because he allegedly 1) made oral promises to plaintiff regarding his compensation and 2) retaliated against plaintiff for complaining about his compensation. Thus, relatedness is satisfied. See Harlow v. Children's Hosp., 432 F.3d 50, 60-61 (1st Cir. 2005) (the defendant's in-state conduct must form an “important” or “material” element of proof in the plaintiff's case”).

         Moreover, Dasher, as plaintiff's supervisor, 1) knew and approved of plaintiff's Massachusetts-generated business, 2) presumably discussed that business with Levesque, 3) negotiated his compensation with respect to Massachusetts-related business and 4) knew of plaintiff's complaints regarding his unpaid compensation. Because Dasher had repeated contacts with the Commonwealth, it was reasonably foreseeable that he would be subject to the forum state's jurisdiction.

         Finally, with respect to reasonableness, courts assess 1) the defendant's burden of appearing, 2) the forum state's interest, 3) the plaintiff's interest, 4) the judicial system's interest in obtaining effective resolution and 5) the common interests of all sovereigns in promoting substantive social policies. Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 209 (1st Cir. 1994).

         Dasher has not demonstrated that litigating the suit in Massachusetts presents a “special or unusual burden”. See Pritzker v. Yari, 42 F.3d 53, 64 (1st Cir. 1994). Moreover, Massachusetts has a strong interest in adjudicating the dispute because a Massachusetts resident was allegedly injured in Massachusetts and is now claiming relief under Massachusetts law. Ticketmaster-New York, Inc., 26 F.3d at 211. Furthermore, Levesque resides in Massachusetts and by bringing suit in that forum he is most likely to obtain convenient and effective relief. In fact, because this Court has jurisdiction over plaintiff's claims against SIMNA, effective resolution of the case renders the forum state suitable. Finally, litigation of the suit does not impugn the common interests of all sovereigns with respect to promoting social policies. Thus, on balance, the Court finds that Levesque has alleged facts establishing that Dasher had minimum contacts with Massachusetts such that maintenance of the suit in this forum would not “offend traditional notions of fair play and substantial justice”. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).

         B. Motion to ...


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