United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTION TO DISMISS FIRST AMENDED
COMPLAINT RE: DKT. NO. 30
VIRGINIA K. DEMARCHI, UNITED STATES MAGISTRATE JUDGE
Nicholas Brandt and Gregory James assert the following claims
against defendants Verizon Communications, Inc.
(“Verizon”) and MCI Communications Services, Inc.
(“MCI”) for: (1) intentional concealment and
misrepresentation, (2) promissory fraud, (3) negligent
misrepresentation, (4) violation of California Labor Code
§ 970 (misrepresentation); (5) promissory estoppel, and
(6) declaratory judgment that the general releases that
plaintiffs signed are unenforceable under California Civil
Code § 1668. Dkt. No. 29. Pursuant to Rule 12(b)(6) of
the Federal Rules of Civil Procedure, defendants move to
dismiss all of plaintiffs' claims in the first amended
complaint (“FAC”) as barred by release agreements
plaintiffs signed. Dkt. No. 30. The Court heard oral argument
on defendants' motion on August 13, 2019. Dkt. No. 35.
Court has jurisdiction over this diversity action pursuant to
28 U.S.C. § 1332. Dkt. No. 29 ¶¶ 8-12, 13.
Having considered the parties' briefs and the arguments
made at the hearing, the Court grants the motion to dismiss
without leave to amend.
are residents of California and Arizona and former employees
of defendants. Dkt. No. 29 ¶¶ 8-9. Defendants
are Delaware corporations that do business and maintain
offices in California. Id. ¶¶ 10-11. MCI
is a subsidiary of Verizon and was plaintiffs' direct
employer. Id. ¶ 11.
January 2014, Verizon announced the acquisition of Intel
Media, Inc. (“Intel Media”). At that time, Mr.
Brandt and Mr. James had worked for Intel Media for
approximately 18.5 years and 21 years, respectively.
Id. ¶¶ 2, 19, 28. Following the
announcement of the acquisition, on January 24, 2014,
plaintiffs attended a meeting hosted by Verizon human
resources representatives. Id. ¶¶ 20-26.
At the meeting, the representatives explained Verizon's
severance benefit. Id. ¶ 25. Specifically, the
Verizon representatives stated that the severance benefit
would equal two weeks of compensation at the employee's
ending pay-rate for each year of service. Id. The
representatives stated that Intel Media employees who chose
to work for Verizon would receive full credit under
Verizon's severance program for the years they had worked
for Intel Media in addition to years worked for Verizon.
Id. During the presentation, the Verizon
representatives did not mention any cap on the number of
service years that would be used to calculate the severance
benefit. Id. ¶ 26.
severance benefit was a material factor in plaintiffs'
decisions to accept employment with Verizon following the
acquisition. Id. ¶ 31. In particular, Mr.
Brandt says that he expressly relied on information about
calculation of the severance benefit and even expressly
confirmed that information with Verizon before accepting
employment. Id. ¶ 32. He emailed Verizon
representatives-including those that hosted the January 24
presentation-to confirm that his 18.5 years of service at Intel
Media would transfer to Verizon, and that the severance
benefit was calculated at two weeks per year of service.
Id. ¶¶ 33-38; see also id., Ex. A
at 2. In response, Verizon representatives stated that
“[s]ervice credited by Intel as of the Closing date
will generally be recognized by Verizon for purposes of
eligibility to participate in, vesting and benefit accrual
under the following Verizon benefit plans and programs
[including] Severance.” Id., Ex. A at 2.
Verizon's representatives also stated, “The Verizon
severance plan offers a severance payment of two weeks of
total target compensation (base pay STI) for every year of
service, a prorated STI payment, COBRA subsidy for the terms
of the severance and outplacement services.”
Id., Ex. A at 1. The emails from Verizon
representatives did not mention a cap on service years.
Id. ¶¶ 4, 38. Shortly before their
deadline to accept Verizon's offer of employment,
plaintiffs received an email that included a link to the
Verizon Severance Plan (“the severance plan”).
Id. ¶ 40. Plaintiffs did not read the severance
plan. Id. ¶ 41.
plaintiffs accepted positions with Verizon. Mr. Brandt was
required to relocate from Oregon to California, leaving
behind his network of family and friends and other
professional opportunities in Oregon. Id. ¶ 32.
Mr. James remained in Arizona. Id. ¶ 9.
March 2017, Verizon terminated plaintiffs' employment.
Id. ¶ 6. In connection with the termination,
Verizon advised plaintiffs that their severance benefits were
capped at 17.5 years of service under the severance plan.
Id. Verizon declined to increase the amount of
severance offered. Id. As a condition of receiving
their severance payments, Verizon required plaintiffs to sign
a general release and waiver of claims (“the severance
release”), including a waiver under California Civil
Code § 1542. Id. ¶ 76. Each plaintiff
signed a severance release, which they say they were forced
to do based on economic duress. Id. ¶ 6;
see also Id. ¶ 79.
is not entirely clear regarding what followed, but at some
point, plaintiffs engaged legal counsel who attempted to
negotiate with Verizon on their behalf regarding severance
payments. Id. ¶ 77. Plaintiffs submitted claims
to Verizon and filed appeals as required by Verizon's
internal dispute resolution process, but Verizon declined to
pay any severance benefit beyond the 17.5-year cap.
Id. ¶ 6. Mr. James alleges that he is owed a
further $63, 924.47 in severance pay, and Mr. Brandt alleges
that he is owed a further $24, 621.69 in severance pay.
Id. ¶¶ 87-88.
filed this action on December 17, 2018. Dkt. No. 1. On May
15, 2019, the Court granted defendants' motion to dismiss
pursuant to Rule 12(b)(6), finding that plaintiffs'
claims for breach of contract and promissory estoppel were
preempted under the Employee Retirement Income Security Act
of 1974 (“ERISA”), 29 U.S.C. § 1144(a), and
that the remaining claims were barred by the severance
releases. Dkt. No. 27. The Court granted plaintiffs leave to
amend. Id. at 11-13. Plaintiffs filed the FAC on May
28, 2019, which is the operative complaint and the subject of
defendants' second motion to dismiss. Dkt. No. 29.
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim upon which relief can
be granted ‘tests the legal sufficiency of a
claim.'” Conservation Force v. Salazar,
646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro
v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). When
determining whether a claim has been stated, a court accepts
as true all well-pled factual allegations and construes them
in the light most favorable to the plaintiff. Reese v. BP
Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir.
2011). While a complaint need not contain detailed factual
allegations, it “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 is
facially plausible when it “allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
generally may not consider any material beyond the pleadings
when ruling on a Rule 12(b)(6) motion. If matters outside the
pleadings are considered, “the motion must be treated
as one for summary judgment under Rule 56.”
Fed.R.Civ.P. 12(d). However, a court may consider matters
that are “capable of accurate and ready determination
by resort to sources whose accuracy cannot reasonably be
questioned.” Roca v. Wells Fargo Bank, N.A.,
No. 15-cv-02147- KAW, 2016 WL 368153, at *3 (N.D. Cal. Feb.
1, 2016) (quoting Fed.R.Evid. 201(b)). Documents appended to
the complaint, incorporated by reference in the complaint, or
which properly are the subject of judicial notice may be
considered along with the complaint when deciding a Rule
12(b)(6) motion. Khoja v. Orexigen Therapeutics, 899
F.3d 988, 998 (9th Cir. 2018); see also Hal Roach
Studios, Inc. v. Richard Feiner & Co., Inc., 896
F.2d 1542, 1555 n.19 (9th Cir. 1990).