Virginia Lawyers Weekly VA Lawyers Weekly
Although a former sales consultant alleged he was terminated to avoid paying him a significant bonus, the Virginia Wage Payment Act neither protects an employee’s exercise of his right to receive wages nor sets forth a public policy necessary to prosecute a claim under Bowman v. State Bank of Keysville, 229 Va. 534 (1985). The consultant’s wrongful discharge claim was dismissed.
Background
James Matthew Morris sued Taylor Communications Secure & Customer Solutions Inc., Venture Solutions Inc. and Taylor Corporation, seeking to recover commissions and bonuses. Taylor has moved to dismiss Morris’s complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Taylor also requests that the court transfer any surviving claims to the Minnesota federal district court pursuant to a forum-selection clause.
Wrongful discharge
Morris asserts that Taylor terminated him to avoid paying him commissions and bonuses and thus “in violation of the public policy underlying” the Virginia Wage Payment Act. The court concludes that Morris’s Bowman claim cannot survive the motion to dismiss. Specifically, the court agrees that the Virginia Wage Payment act neither “protect[s] an employee’s exercise of [his] right to receive wages” nor “set[s] forth an explicit public policy necessary to prosecute a Bowman claim,” pursuant to the second Bowman exception.
Implied contract claims
Taylor next contends that Morris’s implied contract claims for unjust enrichment and quantum meruit fail under both Minnesota and Virginia law because “the subject matter of the dispute is governed by an express contract.” As a preliminary matter, Taylor asserts that the court must apply Minnesota law to Morris’s quantum meruit and unjust enrichment claims because “the parties agreed that Minnesota law governs any claims related to compensation.”
In the 2019 sales compensation plan, Taylor reserved “the right to modify or eliminate this plan, or any of its components, at [Taylor’s] sole discretion.” As such, the court finds the sales compensation plan does not constitute an enforceable contract sufficient to defeat Morris’s implied contract claims, and Taylor cannot rely on the choice of law clause.
The court next concludes that Morris has stated claims for unjust enrichment and quantum meruit. The sales compensation plans do not constitute enforceable contracts binding Taylor. Moreover, Morris argues that he worked on Taylor’s behalf “under the understanding, and based on representations by Taylor Communications, that [he] would be paid a significant commission” as compensation, that he “was informed that he would be paid a commission once the master services agreement and statement of work were executed” and that Taylor never paid him a commission for his efforts as expected. Therefore, Morris can assert both a claim for unjust enrichment and a quantum meruit claim “to receive a ‘reasonable value of the work performed.’”
Misrepresentation
Taylor next argues that Morris has not pled his fraudulent and negligent misrepresentation claims with the particularity Rule 9(b) mandates. The court disagrees.
First, Morris asserts that Taylor told him that once it published its 2020 sales compensation plan, it would become effective retroactive back to Jan. 1, 2020. Second, Morris contends that Taylor’s vice-president of sales informed him in mid-March 2020 that the 2020 sales compensation plan was nearly finalized and, as then discussed, would award commissions on a specified scale.
Third, Morris alleges that he worked on the NelNet service agreement for approximately one year prior to its execution “under the understanding, and based on representations by Taylor Communications, that Mr. Morris would be paid a significant commission” for his work. Finally, Morris attests that Taylor informed him that it would pay him a commission once Taylor executed the master services agreement and statement of work with NelNet. The court finds these allegations are sufficiently specific.
Punitive damages
Taylor also seeks to dismiss Count Six, which seeks punitive damages, on the basis that it contravenes both Virginia and Minnesota law. Because the choice of law clause is not enforceable, the court applies Virginia law. Although Virginia courts disfavor punitive damages, because the court has concluded that Morris’s fraudulent and negligent misrepresentation claims must survive the motion to dismiss, the court therefore will not dismiss Morris’s claim for punitive damages at this time.
Transfer
Having previously found that the sales compensation plans do not constitute enforceable contracts, the court similarly concludes that the forum selection clauses contained therein are similarly unenforceable. Therefore, the court will deny Taylor’s motion to transfer.
Defendant’s motion to dismiss granted in part, denied in part. Defendant’s motion to transfer denied.
Morris v. Taylor Communications Secure & Customer Solutions Inc., Case No. 7:20-cv-00604, Jan. 13, 2021. WDVA at Roanoke (Conrad). VLW 021-3-010. 19 pp.
