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International Business Machines Corporation v. Amy Dale

September 9, 2011


The opinion of the court was delivered by: Briccetti, J.


Plaintiff International Business Machines Corporation ("IBM") brings this action asserting a state law contract claim related to defendant Amy Dale's resignation from her employment with IBM. In her answer, defendant asserted counterclaims for fraud, negligent misrepresentation, fraudulent inducement, breach of contract, and breach of the covenant of good faith and fair dealing. Plaintiff has filed a motion to dismiss defendant's counterclaims (Doc. #14), which, for the reasons set forth below, is granted.

The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332.


For purposes of ruling on a motion to dismiss, the Court accepts all factual allegations of the amended complaint and answer as true.

Dale was employed by IBM as District EA SAP Partner. As an employee, Dale participated in the IBM PWCC Acquisition Long-Term Performance Plan ("IBM Plan"). Pursuant to the IBM Plan, Dale received stock options four times. These options would be canceled or rescinded if Dale were to leave IBM to work for a competitor within twelve months. Dale exercised her options on 642 shares on October 12, 2009; on 578 shares on May 8, 2010; and on 111 shares on June 8, 2010. She allegedly received gains of $100,827.11 from the exercise of her options.

On July 9, 2010, Dale announced her resignation from IBM to join Accenture PLC, with her last day to be July 16. At the time, IBM inquired as to where Dale was going to work. She did not specify her new employer to IBM, only saying that she would be joining a peer of Deloitte LLP and Ernst & Young LLP, both firms IBM considered to be peers rather than competitors. If Dale was leaving to join a competitor, the usual practice would be for her to leave immediately or within one week.

Dale asserts her unnamed manager, IBM's Enterprise Application Lead, told her that IBM considered Deloitte and Ernst & Young to be partners. Therefore, he urged her to stay for the full four weeks following the announcement of her resignation.*fn1 He told Dale that she would be deemed as not leaving for a competitor if she stayed an additional four weeks. Dale confirmed this position with an IBM lawyer and two other executives. IBM's position was consistent with its conduct a month earlier with a different employee. With such assurances, Dale stayed at IBM until July 30.

On July 28, Dale received an email from an IBM associate general counsel stating that Dale had represented that her new employer is not an IBM competitor. If that were to change, the counsel wrote, she was instructed to notify IBM. On July 30, 2010, Dale resigned from IBM to join Accenture.

By letter dated November 8, 2010, IBM rescinded the options exercised by Dale and made demand for payment of Dale's gains, based on its claim that Accenture is a competitor to IBM. Upon receipt of the letter, Dale spoke to her former manager at IBM who advised her to ignore the letter. Dale has refused to make payment on the demand.


The function of a motion to dismiss is "merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Ryder Energy Distrib. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984). When deciding a motion to dismiss, the court must accept all well-pleaded allegations as true and draw all reasonable inferences in favor of the pleader. Hishon v. King, 467 U.S. 69, 73 (1984). The complaint must contain the grounds upon which the claim rests through factual allegations sufficient "to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A plaintiff is obliged to amplify a claim with some factual allegations to allow the court to draw the reasonable inference that the defendant is liable for the alleged conduct. Ashcroft v. Iqbal, 556 U.S. ___, 129 S. Ct. 1937 (2009).

I. Claims for Damages

Plaintiff first moves to dismiss defendant's counterclaims because defendant has failed to adequately plead damages. In her answer, defendant seeks damages in the amount of $150,000 without an explanation for how she was damaged. In her opposition to plaintiff's motion, defendant specifies she is entitled to damages because (1) the salary she received from July 16 through July 30, 2010 was not commensurate with the value of her time to IBM; (2) she was unable to relax and spend time for herself during those two weeks; and (3) she is ...

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