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Sadler v. General Electric Co.

United States District Court, W.D. Kentucky, Louisville

September 19, 2017




         This matter comes before the Court on Defendant General Electric Company's (“Defendant” or “General Electric”) Motion to Dismiss the claims against it, pursuant to Federal Rule of Civil Procedure 12(b)(6). [DN 6.] Plaintiffs Kevin Sadler, Jude Edelen, and Michael Krimm, (collectively, “Plaintiffs”), have responded, [DN 10], and Defendant has replied. [DN 12.] This matter is now ripe for adjudication. For the following reasons, Defendant's Motion is GRANTED in part and DENIED in part.

         I. BACKGROUND

         Kevin Sadler, Jude Edelen, and Michael Krimm were all employees at General Electric when General Electric sold its Appliances division to Haier on June 6, 2016, [DN 1-2, at 3], a Chinese electronics and appliances company. Plaintiffs were all engineering technicians who had worked at General Electric for more than 24 years. [Id.] According to Plaintiffs, General Electric's “common practice” is to permit “employees the opportunity to look for employment through relocation to another [General Electric] plant.” [Id.] However, Plaintiffs aver that they were afforded no such opportunity when the company's Appliances division was acquired by Haier. [Id.] Specifically, Plaintiffs allege that Human Resources manager, Susan LaCoe, as well as Managers Rob Byron and Bridget Blocker, all told Plaintiffs “that the option to relocate was not available.” [Id.] As a result of Plaintiffs' alleged inability to transfer to another General Electric plant, they were thereafter considered Haier employees, a distinction that Plaintiffs contend resulted in their losing “numerous benefits” and General Electric “no longer funding their pension.” [Id. at 4-5.] Additionally, Plaintiffs aver that they “have lost significant financial contributions to their pensions for the remaining number of years the employees would have retained their employment with General Electric until retirement.” [Id. at 5.]

         In Plaintiffs' Complaint, while it is argued that they were informed by LaCoe, Byron, and Blocker that they would not be able to transfer to another plant, and that Plaintiffs were sent a separate email indicating this inability to transfer, it is also stated that “two days before the sale of General Electric to Haier, Plaintiffs were then told by Susan LaCoe that they did in fact have the opportunity to transfer to another General Electric location.” [Id. at 4.] Plaintiffs contend that the short notice given to them regarding their ability to transfer did not allow them sufficient time to do so, and that, as a result, they have suffered economic detriment. [Id. at 4-5.] Plaintiffs initially filed this lawsuit in Jefferson County Circuit Court, but General Electric removed it to this Court. There are three claims at issue in this case: (1) Promissory Estoppel; (2) Breach of Implied in Fact Contract; and (3) Fraudulent Inducement/Misrepresentation. General Electric has filed a Motion to Dismiss all three claims against it. [DN 6.]


         Federal Rule of Civil Procedure 8(a)(2) requires that a plaintiff's complaint include “a short and plain statement of the claim showing that the pleader is entitled to relief.” “Rule 12(b)(6) provides that a complaint may be dismissed for failure to state a claim upon which relief can be granted.” Bloch v. Ribar, 156 F.3d 673, 677 (6th Cir. 1998). Importantly, “[w]hen considering a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the district court must accept all of the allegations in the complaint as true, and construe the complaint liberally in favor of the plaintiff.” Lawrence v. Chancery Court of Tennessee, 188 F.3d 687, 691 (6th Cir. 1999). Thus, “unless it can be established beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief, ” the motion should be denied. Achterhof v. Selvaggio, 886 F.2d 826, 831 (6th Cir. 1989). “However, the Court need not accept as true legal conclusions or unwarranted factual inferences.” Blakely v. United States, 276 F.3d 853, 863 (6th Cir. 2002). A “complaint must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory.” Andrews v. Ohio, 104 F.3d 803, 806 (6th Cir. 1997).

         Even though a “complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). This means that the plaintiff's “[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. The concept of “plausibility” denotes that a complaint should contain sufficient facts “to state a claim to relief that is plausible on its face.” Id. at 570. The element of plausibility is met “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). But where the court is unable to “infer more than the mere possibility of misconduct, the complaint has alleged-but has not show[n]-that the pleader is entitled to relief.” Id. at 1950 (internal quotation marks omitted).


         A. Promissory Estoppel Claim

         The doctrine of promissory estoppel is an equitable one, “which is only applicable if a fraud or some other injustice would result.” Lynch v. Sease, 244 F. App'x 736, 739 (6th Cir. 2007). Under Kentucky law, a successful claim of promissory estoppel necessitates the satisfaction of four separate elements: (1) there must be a promise; (2) this promise must be one “which the promisor should reasonably expect to induce action or forbearance on the part of the promisee[s] or a third person;” (3) the promise must actually “induce such action or forbearance;” and (4) “injustice can be avoided only by enforcement of the promise.” Lichtefeld-Massaro, Inc. v. R.J. Manteuffel Co., 806 S.W.2d 42, 44 (Ky. App. 1991). Additionally, the reliance must be justified. FS Invs., Inc. v. Asset Guar. Ins. Co., 196 F.Supp.2d 491, 507 (E.D. Ky. 2002).

         Defendant's principal argument in support of its Motion to Dismiss the promissory estoppel claim is that there was no “specific promise of job security” made by Defendant to Plaintiffs. See Harris v. Burger King Corp., 993 F.Supp.2d 677, 691 (W.D. Ky. 2014) (“An at-will employee can claim promissory estoppel only if she can show a specific promise of job security.”). Rather, in Defendant's view, Plaintiffs only point to the “standard practice” between Defendant and other employees, leaving the Complaint facially insufficient. However, the Court is satisfied that Plaintiffs have met their burden of pleading sufficient facts “suggest[ing] a ‘right to relief above a speculative level.'” Estate of Smith v. United States, 509 F. App'x 436, 439 (6th Cir. 2012) (quoting Twombly, 550 U.S. at 555-56).

         Specifically, in their Complaint, Plaintiffs lay out facts that, when construed as true, tend to show that Plaintiffs were told directly that they would not have an opportunity to transfer and that they relied to their detriment on that promise, foregoing any attempts to relocate to a different General Electric plant location. Plaintiffs further allege in their Complaint that, as a result of this detrimental reliance on Defendant's promise that they would not be allowed to transfer, Plaintiffs suffered economic harm “in the form of lost wages, benefits, and pain and suffering….” [DN 1-2, at 6.] Defendant argues that, even if a promise was made, the fact that Plaintiffs were eventually told they could transfer renders any promissory estoppel claim legally insufficient. Even so, the Court finds that the incredibly small window Plaintiffs were given during which they were purportedly allowed to seek transfer to a different plant may not render Plaintiffs' promissory estoppel claim untenable. Under the Rule 12(b)(6) standard, Plaintiffs have pled sufficient facts to withstand a Motion to Dismiss. Accordingly, Defendant's Motion to Dismiss this claim is denied at this time. However, the Court believes this to be a close call and discovery may shed some light on this issue.

         B. Breach of Implied in ...

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