United States District Court, N.D. Illinois, Eastern Division
For David Zwick, Plaintiff: Stuart Jay Chanen, LEAD ATTORNEY, Nicole Nehama Auerbach, Valorem Law Group LLC, Chicago, IL; Margot Klein, Valorem Law Group, Chicago, IL.
For Inteliquent, Inc., Richard Monto, John Harrington, Defendants: David W. Garland, John F. Fullerton, III, LEAD ATTORNEYS, PRO HAC VICE, Epstein Becker & Green, P.C., New York, NY; Zachary Charles Jackson, LEAD ATTORNEY, Epstein Becker & Green PC, Chicago, IL; Jiri Janko, PRO HAC VICE, Epstein Becker & Green P.c., Newark, NJ; Nancy L. Gunzenhauser, PRO HAC VICE, Epstein Becker & Green P.c., New York, NY.
For DLA Piper U.S. LLP, Deponent: Martin John O'Hara, LEAD ATTORNEY, Much Shelist Denenberg Ament & Rubenstein, PC, Chicago, IL; Marissa Lynn Downs, Much Shelist, P.C., Chicago, IL.
Memorandum Opinion and Order
Honorable Thomas M. Durkin, United States District Judge.
David Zwick alleges that his former employer, Inteliquent, fired him without cause in violation of his employment contract (Count III), the anti-retaliation provision of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A(c)(2)(C) (Count VII), and anti-retaliation common law in Illinois (Count VIII). See R. 9. Zwick also alleges that because he was fired without cause Inteliquent owes him payments of stock and money pursuant to certain compensation contracts (Counts IV, V, and VI) and the Illinois Wage Payment and Collection Act (" IWPCA" ) (Count IX). Id. Zwick alleges that Inteliquent's in-house counsel, Richard Monto and John Harrington, are also liable for the alleged violation of the IWPCA (Count IX). Id. Separately, Zwick alleges that Inteliquent breached certain stock grant and stock options contracts when Inteliquent failed to pay him stock and allow him to exercise stock options in the wake of an alleged " Change of Control" of Inteliquent (Counts I and II). Id. Defendants have moved pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Zwick's claims against Inteliquent for breach of contract (Counts I and II) and violation of Illinois anti-retaliation common law (Count VIII), and Zwick's claims against Monto and Harrington for violation of the IWPCA (Count IX). R. 19. For the following reasons, Defendant's motion is granted as to Count VIII, and denied as to Counts I, II, and IX.
A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). A complaint must provide " a short and plain statement of the claim showing that the pleader is entitled to relief," Fed.R.Civ.P. 8(a)(2), sufficient to provide defendant with " fair notice" of the claim and the basis for it. Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This standard " demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While " detailed factual allegations" are not required, " labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. The complaint must " contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). " '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.'" Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.
I. Events Precipitating the Termination of Zwick's Employment
Zwick was Inteliquent's Chief Financial Officer and Executive Vice-President. R. 9 ¶ 9. On October 19, 2012, Zwick told Inteliquent's CEO that he had " concerns . . . about insider share sales at Inteliquent." Id. ¶ 69. Inteliquent's CEO urged Zwick to convey his concerns to Inteliquent's Audit Committee Chair. Id. ¶ 70. Zwick also expressed his concerns to Inteliquent's outside counsel. Id. ¶ 71.
Sometime during the second quarter of 2013, Inteliquent commenced an internal investigation regarding the company's financial forecasting practices, including " anonymous allegations of wrongdoing [against] Mr. Zwick." Id. ¶ 39c. Inteliquent retained the law firm DLA Piper to conduct the investigation. Id. ¶ 39a. DLA interviewed Zwick on July 16, 2013 and August 1, 2013, during which interviews Zwick expressed concerns about stock trades made by Rian Wren, who was an Inteliquent director and the company's former CEO. Id. ¶ ¶ 72-73. The investigation " concluded that anonymous allegations of wrongdoing [against] Mr. Zwick and others at the company were completely unfounded." Id. ¶ 39c.
Inteliquent terminated Zwick's employment on August 22, 2013. Id. ¶ 36. Zwick alleges that Inteliquent's stated reason for firing him (or asking him to resign) was that he spoke with another employee about the internal investigation and lied about this conversation to the investigators. Id. ¶ 37. Zwick alleges that this reason is pretextual, and that Inteliquent actually fired him in retaliation for expressing concerns about insider trading at Inteliquent. Id. ¶ 75.
At the time Zwick was fired, Richard Monto was Inteliquent's Senior Vice-President and General Counsel, and John Harrington was Inteliquent's Senior Vice-President for Litigation, Regulatory, and Human Resources. Id. ¶ ¶ 11-12. Zwick alleges that Monto and Harrington were " officers" of Inteliquent. Id. ¶ 85. In his proposed amended allegations (the force of which the Court will discuss below), Zwick alleges that Monto and Harrington both had " significant" or " central" roles in the decision to terminate Zwick's employment, R. 23-3 ¶ ¶ 85A, 85D, in that they advised Inteliquent's board of directors regarding Zwick's termination, id. ¶ 85G. Zwick also alleges that Monto and Harrington " knowingly participated in" and " handled the discussions with Mr. Zwick . . . regarding . . . the nominal severance that was offered ...