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Nieman v. Nationwide Mutual Insurance Co.

April 8, 2010


The opinion of the court was delivered by: Jeanne E. Scott, U.S. District Judge


This cause is before the Court on Defendants' Motion to Dismiss, In Part, Plaintiff's Complaint (Defendants' Motion) (d/e 9) and Memorandum in Support of Defendants' Motion to Dismiss, In Part, Plaintiff's Complaint (d/e 10). Plaintiff has filed Plaintiff's Reply in Opposition to Defendants' Motion to Dismiss (d/e 12), Memorandum in Support of Plaintiff's Opposition to Defendants' Motion to Dismiss (d/e 13), Plaintiff's Request for Oral Arguments as to Defendants' Motion to Dismiss Plaintiff's Complaint, In Part (Plaintiff's Motion) (d/e 15), and an Index of Documents Submitted in Support of Plaintiff's Motion in Opposition to Defendant's [sic] Motion to Dismiss, In Part, and In Support of Plaintiff's Request for Reconsideration as to the Court's Ruling as to Discovery Stay Pending Motion to Dismiss, In Part, and In Support of Plaintiff's Request for Oral Arguments as to the Defendants' Motion to Dismiss, In Part (Index) (d/e 17). Defendants filed Defendants' Opposition and Objections to Plaintiff's Index of Documents (Objections) (d/e 19), and Plaintiff filed Plaintiff's Reply to Defendants' Opposition and Objections to Plaintiff's Index of Documents (d/e 20).*fn1

This matter is fully briefed and ripe for adjudication. For the reasons described below, Defendants' Motion is granted in part and denied in part, and Plaintiff's Motion is denied. Defendants' Objections to the Index are sustained.


On November 4, 2009, Plaintiff filed suit against Defendants Nationwide Mutual Insurance Company (Nationwide) and Allied Mutual Insurance Company (Allied), as well as M. Diane Koken, Fred C. Finney, Barry J. Nalebuff, William G. "Jerry" Jurgensen, Stephen Rasmussen, Kirt Walker, Eric E. Smith, Timothy Cotter, Natalie Cadwallader, Jocelyn Curry, Vicki Schneider, David Sitz, Joseph Garber, Judy Reynolds, John Raybuck, and Raymond Flowers (collectively Individual Defendants) in the Circuit Court of Sangamon County, Illinois, as case number 2009 L 296. See Notice of Removal (d/e 1), Ex. A, Complaint. The ten-count Complaint alleges violations of various provisions of federal and state law, including Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (Title VII); the Civil Rights Act of 1866, as amended by the Civil Rights Act of 1991, 42 U.S.C. § 1981 (§ 1981); the Civil Rights Act of 1877, 42 U.S.C. § 1983 (§ 1983); the Sarbanes-Oxley Act of 2002, Pub. L. 107-204, 116 Stat. 745 (2002) (SOX); the Illinois Human Rights Act, 775 ILCS 5/1-101 et seq.; the Illinois Whistleblower Reward and Protection Act, 740 ILCS 175/1 et seq. (Whistleblower Act); the Indiana Civil Rights Law, Ind. Code §§ 22-9-1-1 et seq.; and Michigan's Elliott-Larsen Civil Rights Act, Mich. Comp. Laws Ann. §§ 37.2101 et seq.. He also presents claims for libel, slander, retaliatory discharge, intentional or negligent interference with contractual relations, breach of express or implied employment contract, as well as violations of "additional common and/or constitutional law protections against retaliation and/or discrimination which exist in these [states]." Complaint, ¶ 2.

According to the Complaint, Defendant Nationwide, an Ohio corporation, hired Plaintiff as a commercial claims consultant in one of its Ohio offices in 2004. Nationwide promoted Plaintiff on September 21, 2005, to associate commercial claims director for Nationwide's Great Lakes Region. Plaintiff moved from Ohio to Carmel, Indiana, to assume this position, which involved supervising employees in and traveling to Indiana, Illinois, and Michigan. On January 10, 2006, Nationwide again promoted Plaintiff to field director of commercial claims.

Plaintiff had heard of alleged financial reserve reporting improprieties at Nationwide's affiliate, Defendant Allied, prior to being hired by Nationwide in 2004. Specifically, Plaintiff claims that managers at Allied "artificially" suppressed claims reserves so that they were eligible for more lucrative bonuses. Complaint, ¶ 31. Plaintiff claims that Nationwide and Allied began merging their claims operations in Fall 2005. Shortly after Plaintiff started at Nationwide, he queried his supervisor about financial reporting manipulation with regard to Allied's reserves. Plaintiff alleges that his supervisor told him that "financial manipulation was indeed occurring" at Allied. Complaint, ¶ 34. Plaintiff told his supervisor that he would not participate in financial reserves manipulation.

During the course of his employment, Plaintiff claims that he discovered evidence of reserves manipulation, which he reported to his supervisor. No action was taken, and Plaintiff states that he was not selected for a promotion to commercial claims director of the Des Moines regional office in April 2005 because of his complaints. However, in September 2005, Plaintiff applied for and received the position of associate commercial claims director for the Great Lakes Region, after being interviewed by hiring manager Defendant Barrett, Defendant Schmidt, and human resources manager Defendant Barnett.

As associate commercial claims director, Plaintiff and his team were responsible for administrating claims for both Nationwide and Allied in the central United States. After working in this position for approximately one year, Plaintiff again applied for the position of claims director in the Des Moines office. Nationwide did not give Plaintiff the position because Plaintiff admittedly failed to follow internal job-posting procedures in connection with one of his subordinate employees. Nonetheless, Plaintiff claims that the real reason he was not selected was his earlier and continued complaints about Allied's financial reserves practices.

In 2007, Plaintiff alleges that higher-ups in the Nationwide management structure began expressing concern about a lack of racial and gender diversity in the company. Part of Plaintiff's and other management personnel's semi-annual and annual review scores were based on their ability to achieve racial and gender diversity in their teams. Plaintiff claims that he and his team performed exceptionally well in this regard. In September 2007, Plaintiff's manager and claims officer of the Great Lakes Region, Defendant Barrett, was replaced by Defendant Jocelyn Curry, a woman "of Chinese descent." Complaint, ¶ 46. Plaintiff claims that more qualified candidates were passed over for this position because they were white males.

Plaintiff and Curry did not get along. Plaintiff alleges that Curry was inexperienced, unknowledgeable, and did not value the input or cooperation of the more experienced members of her team. Plaintiff claims that "Curry did not interact well with leaders of the male gender in many instances, particularly where those individuals were subordinate." Complaint, ¶ 48. Curry and Plaintiff also butted heads over Allied's alleged financial reserves manipulation, although both were employees of Nationwide. Plaintiff alleges that Curry and management personnel from Allied met and agreed to artificially repress claims reserves.

In November 2007, Plaintiff recommended a candidate for a claims manager position on his team. Only two candidates had applied for the position, which was posted internally. One of the candidates, a Hispanic male, was an hour late for his interview, and had little education, experience and training in the field. The other candidate, a white male, was on time, had supervisory experience, and had a better resume than the other candidate in general. Plaintiff recommended the white male candidate, but Curry quashed his recommendation. Plaintiff suspects this was because the candidate he recommended was not diverse.

Plaintiff applied for an assistant vice president of claims position in one of Nationwide's Texas offices in December 2007. Curry refused to support him in his application, and one of Plaintiff's mentors within the Nationwide organization told Plaintiff that the person who would be selected for the position "would be diverse." Complaint ¶ 54. Nonetheless, Plaintiff applied for the position and was interviewed by Defendants Raybuck and Reynolds. Plaintiff's interview in Dallas, Texas, lasted only forty-five minutes. Plaintiff was not selected for the position, and later learned that the pool of candidates that had advanced to the final interview round was entirely diverse, and that a black male was ultimately selected to fill the position.*fn2

Shortly after this incident, Plaintiff complained to Defendant Cadwallader, the human resources director of the Great Lakes Region, that Nationwide's diversity initiatives were getting in the way of hiring qualified candidates. Several days after this meeting, Plaintiff had his annual review with Curry, who informed him that she had received complaints about him being too strict and having too high of expectations from his employees. Their relationship continued to deteriorate throughout the early part of 2008, when Curry was allegedly complicit in more of Allied's financial reserves manipulation.

On February 22, 2008, Plaintiff filed in internal complaint regarding Allied's financial reserves practices with the assistant vice president of human resources and with the Nationwide Office of Ethics. This complaint included an inquiry about Nationwide's Talent Import Program, which apparently was designed to seek out and advance diverse employees within the Nationwide corporate structure. In July 2008, Nationwide responded to Plaintiff's concerns and told him that nothing untoward was transpiring with respect to the financial reserves issue or the Talent Import Program.

By August 2008, though, Plaintiff's relationship with Curry had reached a new low. Plaintiff alleges that Curry became increasingly more abusive toward him after she discovered that he had filed an ethics complaint against her. Curry insisted that Cadwallader be present in all meetings between Plaintiff and Curry, for the latter's "protection." Complaint, ¶ 62. On August 14, 2008, Curry and Plaintiff met for his mid-year review. For the first time in his twenty-year career, Plaintiff received a "Does Not Meet" (DNM) expectations rating from one of his supervisors. Plaintiff alleges that giving an employee the DNM rating without prior warning, or absent subjecting the employee to coaching and discipline, was contrary to Nationwide's standard practices. Plaintiff claims that this evaluation was objectively unreasonable and inconsistent with Plaintiff's accomplishments in light of previously established performance targets. Plaintiff was told that if he did not "get into [Curry's] graces quickly [,] he would be fired." Complaint, ¶ 65.

In late September 2008, Plaintiff's team participated in a reserves reconciliation accounting process with Defendant Flowers. While the minimum accuracy goal for reserves was eighty-five percent, Plaintiff's team only achieved fifty-one percent. Plaintiff's requests to review the results and rebut the findings were denied. Plaintiff later learned that Flowers had allegedly skewed the results of the audit. Later that day Plaintiff met with Curry and Cadwallader, who told him that he was "in the wrong job," and asked him whether he would accept a position as a claims representative, a multi-level demotion. Complaint, ¶ 68. These Defendants told Plaintiff that they would not support his search for a lateral internal position.

Plaintiff then applied for a position as an excess and surplus claims manager with Scottsdale Insurance Company, a subsidiary of Nationwide. After an initial interview, though, the hiring team decided to hire a candidate in the Arizona region to avoid relocation costs. Plaintiff alleges that Curry gave the hiring team a negative recommendation, and that the team ceased being interested in him after Curry poisoned the well.

On September 27, 2008, Plaintiff filed another complaint with the Office of Ethics, which referred the matter to Defendant Schneider in Nationwide's Office of Associate Relations. Plaintiff also conducted an independent audit of the negative reconciliation review, using his free time on the weekends. He determined that the reconciliation team's review was inaccurate, and forwarded his findings to Curry, the team, and executive leadership. He received no response.

Curry placed Plaintiff on a coaching plan in mid October 2008, part of which involved Plaintiff meeting with Curry and Cadwallader on a weekly basis. Curry continued to criticize Plaintiff's performance, and allegedly told Plaintiff that she expected different things from him than she expected from other directors. During this time, Plaintiff continued receiving information about financial reserves manipulation at Allied, this time from a former Allied executive who alleged that Stephen Rasmussen, Nationwide's president at the time, knew about the problems. Eventually, Curry placed Plaintiff on a forty-five day formal performance improvement program, which Plaintiff believed would be a precursor to his termination.

In November 2008, Defendant Schneider completed her investigation of Plaintiff's complaints and determined that they were without merit. Plaintiff was reprimanded in writing for insubordination, allegedly because of his ethics complaints. Plaintiff believes that this was in violation of Nationwide's "no retaliation" policy. Plaintiff sent a letter to Defendants Jurgensen, who was Nationwide's chief executive officer at the time, and Rasmussen on December 6, 2008, laying out his complaints about Allied's reserves reporting and about the allegedly discriminatory hiring practices he had witnessed and experienced.

Also in December 2008, Plaintiff filed written complaints with the U.S. Securities and Exchange Commission (SEC), the Equal Employment Opportunity Commission (EEOC), and the Indiana Department of Insurance. He alleged that Nationwide and Allied were violating federal securities laws, and that Nationwide's Talent Import Program violated federal employment law. On January 25, 2009, Plaintiff met with an EEOC investigator in Indianapolis, Indiana, and filed a formal charge against Nationwide.

Plaintiff continued to believe that Curry and Cadwallader were mistreating him, and later that month filed another complaint with the EEOC. Plaintiff claims that all of these things put him under a great deal of stress, and that he had to be placed on medication to treat high blood pressure because of his employer's actions against him. Plaintiff's relationship with Curry worsened throughout January 2009, particularly when Plaintiff complained that the process used to determine merit increases in salaries for members of his team discriminated against older employees.

In February 2009, Plaintiff contacted the Indiana Department of Insurance to follow up on his complaint. He discovered that Nationwide had requested additional time to respond to the complaint so that it could complete an internal investigation. Plaintiff, fearing that the internal investigation would not be objective, then filed similar complaints with insurance regulatory bodies in Illinois and Michigan. Later that month, Plaintiff was taken off the performance improvement plan.

Defendants Smith and Cotter met with Plaintiff on March 4, 2009. They told him that the Great Lakes Region was merging with the Ohio/West Virginia Region, and that Plaintiff's position was being eliminated. Plaintiff avers that typically employees whose jobs were eliminated due to merger were allowed to re-post for remaining positions, but that he was not given such an opportunity. On March 8, 2009, Plaintiff received his 2008 performance review, and received a DNM for the entire year. Plaintiff claims that Curry did not use established criteria to evaluate him, but instead intentionally slanted the report to give Plaintiff a poor score.

Later in March, Plaintiff met with counsel for Defendant Nationwide in Battle Creek, Michigan, and in Carmel, Indiana, regarding the complaints he had filed with the state regulatory agencies. Plaintiff cooperated in the meetings, and was hopeful that Nationwide would address the alleged improprieties he had identified. Plaintiff later sent letters to members of Nationwide's Board of Directors outlining his complaints. However, in May 2009, Nationwide concluded its internal investigation of Plaintiff's complaints, and determined that they were without merit.

Plaintiff received the formal notice of job elimination on April 23, 2009, and was placed on unassigned status as of that date while he searched for a new job. He applied for thirty-one positions internally, and was offered eight interviews. Of the eight interviews, two were canceled after the respective hiring teams reviewed Plaintiff's 2008 performance evaluation. Plaintiff's other internal interviews were unsuccessful. Plaintiff was officially terminated from Nationwide on June 21, 2009. However, he quickly found a new job in Illinois, which he started on July 25, 2009.

Plaintiff then filed this suit in the Circuit Court of Sangamon County, Illinois. The Defendants removed the case to this Court and filed the Motion now before the Court.


For purposes of a motion to dismiss, a federal court accepts as true all well-pleaded factual allegations in the plaintiff's complaint. Hager v. City of West Peoria, 84 F.3d 865, 868-69 (7th Cir. 1996); Covington Court, Ltd. v. Village of Oak Brook, 77 F.3d 177, 178 (7th Cir. 1996); Village of DePue v. Viacom Intern., Inc., 632 F.Supp.2d 854, 861 (C.D. Ill. 2009). The court must also draw all inferences in favor of the plaintiff. Fredrick v. Simmons Airlines, Inc., 144 F.3d 500, 502 (7th Cir. 1998); Village of DePue, 632 F.Supp.2d at 861. The Federal Rules of Civil Procedure require only that a plaintiff provide "a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." Fed. R. Civ. P. 8(a)(2).

Federal Rule 12(b)(6) provides that dismissal is proper where a complaint fails to state a claim on which relief can be granted. Fed. R. Civ. P. 12(b)(6). Although the plaintiff need not plead detailed, specific factual allegations, he must provide sufficient facts to "state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible if the court is able "to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). The U.S. Court of Appeals for the Seventh Circuit has held that a claim is plausible on its face if the defendant has fair notice of what the claim is and the grounds upon which it rests.

George v. Smith, 507 F.3d 605, 608 (7th Cir. 2007). When a court considers the complaint's allegations, it "should not accept as adequate abstract recitations of the elements of a cause of action or conclusory legal statements." Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009).

A federal district court does not hold a complaint submitted by a pro se plaintiff to the same standards as a pleading prepared by a trained attorney. Haines v. Kerner, 404 U.S. 519, 520 (1972) (per curiam); Antonelli v. Sheahan, 81 F.3d 1422, 1427 (7th Cir. 1996). The court should liberally construe a pro se complaint to avoid dismissal on technical grounds. Henderson v. Sheahan, 196 F.3d 839, 845-46 (7th Cir. 1999). Nonetheless, a pro se litigant can "plead himself out of court" if his factual allegations undercut the claims he makes in the complaint. Id. at 846.


As an initial matter, the Court addresses the Index Plaintiff has submitted to support his claims. Plaintiff urges the Court to consider these documents in conjunction with evaluating Defendants' Motion. Defendants argue that consideration of these materials is improper because their Motion is directed at the sufficiency of the Complaint on its face.

The purpose of a motion to dismiss is to evaluate the complaint's adequacy, not to address the merits of the case. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). A federal district court's consideration of materials beyond the complaint converts the motion to dismiss into a motion for summary judgment. Fed. R. Civ. P. 12(d). A narrow exception exists for documents that are central to the plaintiff's claim. Tierney v. Vahle, 304 F.3d 734, 738 (7th Cir. 2002). This exception is not "intended to grant litigants license to ignore the distinction between motions to dismiss and motions for summary judgment . . . ." Id.

In this case, the Court declines Plaintiff's invitation to consider the documents contained in the Index. These materials were not attached to the Complaint, and are not relevant to the issues Defendants raise in their Motion. The Defendants' Motion attacks the Complaint on its face, and the Court sees no reason to look beyond the Complaint in deciding this matter. Furthermore, given the fact that neither side in this dispute has had the ...

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