The opinion of the court was delivered by: DENISE COTE, District Judge
Pro se plaintiff Nathan J. Colodney ("Colodney") worked for
approximately one year and two months as a Chief Information Officer
("CIO") at Continuum Health Partners ("Continuum"). Colodney brought this
diversity*fn1 action on September 17, 2003, against Continuum and seven
other defendants alleging, inter alia, defamation, breach of good faith, breach of implied contract,
and constitutional and statutory violations, arising from his loss of
employment. On November 5, Colodney amended his complaint to add
additional claims against the same defendants.*fn2 All eight defendants
have moved to dismiss the amended complaint. For the reasons that follow,
the motion is granted in part.
All the facts in this Opinion are taken from the complaint and
documents upon which the complaint relies.*fn3 The events at issue
principally span the period between March 2001 and August 2002.
On March 15, 2001, Colodney was interviewed by Continuum*fn4 for a
position as its CIO. At the interview, Joseph Szmadzinski
("Szmadzinski"), a consultant to Continuum's technology department, explained that Continuum's technology operations had
been outsourced to Cap Gemini Ernst & Young ("CGEY") for a seven-year
period starting in December 2000. The CIO would be responsible for
managing Continuum's contract with CGEY, and for overseeing the
technology department's strategic planning. Szmadzinski informed Colodney
that the CIO position would be "steady employment throughout the term of
the outsourcing agreement."
On March 16, Colodney received a tentative job offer from Continuum. On
March 23, Colodney returned to Continuum for a follow-up interview with
Gail Donovan ("Donovan"), the Interim Chief Operating Officer of St.
Luke's-Roosevelt Hospital Center and the Chief Operating Officer of Beth
Israel Medical Center (the "Medical Center"). At the meeting, Colodney
asked Donovan if Continuum engaged in strategic planning, and whether it
had a business plan. Donovan answered yes to both questions. That day,
Colodney also met with Pamela Abner ("Abner"), a Human Resources
executive at Continuum. Abner explained that Colodney would be required
to complete a six-month probationary period, during which his employment
could be terminated at any time.
In a letter from Abner dated March 26 (the "Offer Letter"), Continuum
extended to Colodney a formal offer of employment. The Offer Letter
described Colodney's salary, job title, and the company's retirement
savings plan. Nothing in the Offer Letter referred to a fixed term of
employment or to the six-month probationary period. Colodney accepted the
job offer, rented out his Virginia home, resigned from his job at the United States Air
Force, and relocated to the New York City area.
Colodney began his employment at Continuum on June 4. On that day, he
received a copy of an employee handbook (the "Handbook"). The front page
of the Handbook bears the logos of both the Medical Center and Continuum.
The Handbook's first page contains a disclaimer that is boxed off and
shaded a different color. It states:
Neither this handbook nor any other Medical Center document, give you
right [sic], either express or implied, to remain employed by the Medical
Center. Nor does it guarantee any fixed terms and conditions of your
employment. Your employment is not for any specific time and may be
terminated at will with or without cause and without prior notice,
by Medical Center.
(Emphasis supplied.) The second page of the Handbook describes
Continuum as the parent corporation of several hospitals, including the
The Handbook provides that its list of "serious violations," which
subject an employee to disciplinary actions "up to and including
suspension and discharge," is not intended to be "comprehensive." The
list includes, inter alia, the misuse of property belonging to the
employer; the unauthorized possession, use, and copying of records or "disclosure of information contained
in such records to unauthorized persons;" and the "failure or refusal to
perform satisfactorily the duties and responsibilities of one's job or
related duties as assigned."
According to Colodney, "the Handbook does not state a single basis for
firing for cause." Moreover, Colodney asserts, none of the reasons for
his firing are listed.
2001 Meeting with Internal Audit
Shortly after commencing his employment at Continuum, Colodney
discovered that there was no supporting documentation for the pricing of
the CGEY-Continuum outsourcing agreement. Colodney noted this discrepancy
to Edward Shapoff ("Shapoff"), Continuum's Chief Financial Officer, who
suggested that Colodney contact Continuum's Internal Audit Team from
Ernst & Young Accounting ("Internal Audit"). Colodney met with two
Ernst & Young auditors, and turned over to them documents associated
with Continuum's prior technology budgets. Shapoff left Continuum within
sixty days of Colodney's meeting with Internal Audit, and was replaced by
Brendan Loughlin ("Loughlin").
Sometime after Shapoff's departure, Loughlin and Sharon Joy ("Joy"),
Continuum's Vice President of Finance, spoke with Colodney regarding his
meeting with Internal Audit. Loughlin, in Joy's presence, "scolded"
Colodney for turning over Continuum's technology budgets to Internal
Audit, and directed Colodney to seek Loughlin's permission before holding
any future meetings with Internal Audit. Loughlin explained that reports from Internal
Audit were sent directly to the Board of Directors.
Summer 2002; Szmadzinski Makes Bid to Become CIO
In early June 2002, Szmadzinski informed Colodney that there was "no
future" for Colodney at Continuum and that he should "consider looking
elsewhere." On June 22, Szmadzinski, in his role as a consultant to
Continuum, completed a study of the outsourcing agreement. He concluded
that a new retained organization led by a new CIO was needed to monitor
the agreement. Szmadzinski had himself in mind for the new CIO position.
On July 11, Donovan met with Colodney in the presence of Loughlin,
Szmadzinski, and Mark McDougle ("McDougle"), the Chief Operating Officer
of Long Island College Hospital. Donovan informed Colodney that, based on
Szmadzinski's study of the outsourcing agreement, Szmadzinski would be
joining Continuum as the Chief Information Resources Officer (CIRO),
effective immediately. Colodney would now report to Szmadzinski. Donovan
directed Colodney to turn over his CGEY files to Szmadzinski for copying.
The following day, Donovan and Colodney met with the Feld Group, a
consulting company. Donovan asked the company to bid on the same work she
had just awarded to Szmadzinski. At the meeting, Donovan indicated to the
Feld Group that, although she was inclined to use Szmadzinski because of
his familiarity with Continuum, no decision had been reached regarding who would receive
the contract. She stated that she wanted to make a decision as soon as
possible, and asked the Feld Group to submit a proposal within three
days. Donovan noted that the price of the proposal would be "the key
factor" in determining who was awarded the contract. The Feld Group gave
their price and stated that there was no room for compromise. Donovan did
not disclose to the Feld Group the conversation she had had with
Szmadzinski the day before.
July 2002: Colodnev's Meeting with the Feld Group
After the meeting and unbeknownst to Donovan, Colodney met privately
with the Feld Group representatives. He described to them "what was
happening" at Continuum so that the Feld Group could make a "competitive"
proposal. Colodney discussed with the Feld Group the "mess" at the
technology department caused by Donovan's lack of management skills,
described "the roles that each executive played" in the outsourcing
agreement, and gave specific examples of Donovan and Loughlin's
managerial shortcomings. According to Colodney, since all of this
information was already known to Szmadzinski, "nothing was a secret, but
it put the two competitors on the same level."
The Feld Group told Colodney that they were aware that Donovan was
being dishonest with them regarding the status of the contract award, and
expressed doubt about submitting a bid in light of Donovan's preference
for Szmadzinski. Colodney told them that it would be worth it to submit a proposal that "beat all
aspects of Szmadzinski's proposal." To that end, Colodney supplied the
Feld Group with copies of Szmadzinski's study of the outsourcing
agreement in order to "give them a better idea of what they were bidding
on." According to Colodney, none of the documents prepared by Szmadzinski
was marked proprietary by either Continuum or Szmadzinski. Colodney also
informed the Feld Group that their price was "a little high" and that
they would "need to do something about it if they were going to beat
Shortly after the Feld Group submitted its proposal, Donovan sent an
email to Colodney, Loughlin, and McDougle stating that the Feld Group no
longer wanted the job. Colodney expressed his concerns to McDougle
regarding Donovan's selection of Szmadzinski, noting that Szmadzinski was
the person ...