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Barney v. Zimmer Biomet Holdings, Inc.

United States District Court, N.D. Indiana, South Bend Division

November 26, 2018

ROBIN BARNEY, Plaintiff,
v.
ZIMMER BIOMET HOLDINGS, INC., Defendant.

          OPINION AND ORDER

          JON E. DEGUILIO, JUDGE

         Plaintiff Robin Barney resigned from her post as a senior vice president for Defendant Zimmer Biomet Holdings (“Zimmer”). Based on several events that occurred shortly before and after her resignation, Barney filed this lawsuit, alleging sex discrimination, breach of contract, and constructive discharge. [DE 27][1] Zimmer has filed a partial motion to dismiss, seeking dismissal of Barney's contract and constructive discharge claims (Counts III-V). [DE 30] For the reasons stated herein, the Court will grant the motion.

         FACTUAL ALLEGATIONS

         Barney became senior vice president for operations for Biomet, Inc., in September 2008. In 2015, Biomet, Inc., merged with Zimmer Holdings, Inc., to become Zimmer Biomet Holdings, Inc. As a result of the merger, Barney became Zimmer's senior vice president of global operations and logistics. She served in that role until her resignation in late 2016.

         Several distinct incidents precipitated Barney's resignation. First, around August 2016, Zimmer informed Barney that her position would be moved from Indiana to Switzerland by the end of 2017, and that this would require her to relocate. Eventually, Barney informed Zimmer that she did not wish to relocate with the position. Second, around October 2016, Barney alleges that Zimmer's CFO demanded that she concoct a story to mislead Zimmer's investors about the cause of recent quarterly shortfalls. Barney refused this order, but she does not allege anything resulted from her refusal. Around this same time, Barney alleges that she faced pressure from Zimmer about sales and product shipments related to one of the company's facilities, even though production had already been shut down at that facility due to a Food and Drug Administration audit. On October 28, 2016, Barney alleges that Zimmer's CEO ordered her to make organizational changes that included terminating employees under a false pretext. Again, Barney refused to comply. In response, Barney alleges the CEO stated “he was not happy with her refusal, and that they would talk further about it.” [DE 27 ¶ 22] Barney submitted her resignation that same day, giving two weeks' notice. She now claims that she had no choice but to resign in the face of these incidents; she alleges that, together, they constituted intolerable conditions, and she further wished to extricate herself from the potential securities fraud being committed by other executives.

         Following her resignation, Barney alleges she requested severance benefits in accordance with the 2008 Employment Agreement (the “Agreement”), which governed her employment with Zimmer. Zimmer not only refused to pay Barney these benefits, but also terminated her stock options as provided in the Stock Incentive Plan (the “SIP”) she had with the company.[2]This lawsuit followed.

         STANDARD

         In reviewing a motion to dismiss for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6), the Court construes the complaint in the light most favorable to the plaintiff, accepts the factual allegations as true, and draws all reasonable inferences in the plaintiff's favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). A complaint must contain only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). That statement must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and raise a right to relief above the speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). However, a plaintiff's claim need only be plausible, not probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012). Evaluating whether a plaintiff's claim is sufficiently plausible to survive a motion to dismiss is “‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal, 556 U.S. at 678).

         DISCUSSION

         Zimmer seeks to dismiss Counts III-V of Barney's complaint. With regard to Barney's breach of contract claims (Counts III and IV), Zimmer argues that Barney has failed to allege that she satisfied the necessary conditions precedent to receive severance payments, and that her own allegations demonstrate that she did not qualify for the immediate vesting of her stock options. As for Barney's constructive discharge claim (Count V), Zimmer maintains that Barney's complaint contains insufficient allegations to support the notion that she had no choice but to resign in the face of truly intolerable workplace conditions. As explained below, the Court finds Zimmer's arguments persuasive and will grant the motion.

         1. Breach of Contract

          Barney alleges that Zimmer breached the terms of the Agreement and the SIP by failing to provide her with certain severance benefits and terminating her stock options. In Indiana, it is well settled that “[t]o recover for a breach of contract, a plaintiff must prove that: (1) a contract existed, (2) the defendant breached the contract, and (3) the plaintiff suffered damage as a result of the defendant's breach.” Collins v. McKinney, 871 N.E.2d 363, 370 (Ind.Ct.App. 2007).[3]Neither of Barney's breach of contract theories can survive Zimmer's motion.

         a. Employment Agreement and Severance Benefits

         Barney's first claim for breach of contract refers to the severance benefits that fall under Section 9(e) of the Agreement, which provides enhanced payments should the executive (Barney) terminate the Agreement herself for “Good Reason” following a “Change of Control.”[4]In either scenario, however, payment is conditioned upon the executive's signing and non-revocation of a release “in a form substantively identical in terms” to a sample document attached to the back of the Agreement. (Agreement ¶ 10(h)).

         Zimmer argues that Barney has failed to make out a claim for breach of Section 9(e) because she has not alleged certain conditions precedent to the payment. Specifically, Zimmer maintains that Barney's resignation does not fall under any of the “Good Reason” provisions that establish severance payment eligibility, and that she never alleges to have executed a release form. [DE 31 at 11] Barney responds that she need not allege conditions precedent in order to adequately set forth a claim for breach of contract [DE 32 at 3], but that is not accurate. See Redfield v. Cont'l Cas. Corp., 818 F.2d ...


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