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Nicholas v. Wyndham Hotel Group, LLC

United States District Court, S.D. New York

March 9, 2015

FRANK NICHOLAS, Plaintiff,
v.
WYNDHAM HOTEL GROUP, LLC, and WHG HOTEL MANAGEMENT, INC., Defendants.

MEMORANDUM AND ORDER

P. KEVIN CASTEL, District Judge.

Plaintiff Frank Nicholas brings this action against his former employers, defendants Wyndham Hotel Group, LLC and WHG Hotel Management, Inc. (collectively, "Wyndham"), [1] invoking this court's diversity jurisdiction, 28 U.S.C. § 1332(a). He alleges that Wyndham breached a contract of employment with him when it terminated him. Wyndham now moves to dismiss the complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P. Because the facts alleged in the operative complaint do not overcome New York's presumption of at-will employment, Wyndham's motion is granted.

BACKGROUND

The following facts are taken from the Second Amended Complaint ("SAC") (Dkt. No. 37) and its exhibits, and are accepted as true for the purposes of this motion. From March 2008, Nicholas was employed by Wyndham, first as the General Manager the Wyndham Garden Times Square South Hotel ("WG"), and then, from March 2012, as General Manager of the TRYP Times Square South Hotel ("TRYP"). (SAC ¶¶ 10, 15.) His performance reviews were consistently excellent and noted his effectiveness as a manager and team-builder. (SAC ¶¶ 12, 13, 17.) In a 2010 company-wide employee survey, his team gave him significantly higher ratings than the average manager. (SAC ¶¶ 29-31.) In 2011, he was named "Hotel General Manager of the Year" by the Greater New York Chapter of the Hospitality Sales and Marketing Association International. (SAC ¶ 14.) Wyndham's level of confidence in him is indicated, Nicholas asserts, by the fact that, after WG closed, it retained his services and assigned him to manage TRYP, a new hotel that had been struggling. (SAC ¶¶ 15, 16.) Under Nicholas's leadership, TRYP results improved significantly. (SAC ¶¶ 18, 19.)

Nicholas was thus "shocked" to receive a "Final Warning" memo, dated December 7, 2012, from Ryan Schneider, Wyndham's Vice-President of Operations. (SAC ¶ 19, SAC Ex. A.) The memo, while acknowledging Nicholas's competence in running the hotel's operations and finances, reported that "multiple sources" had expressed dissatisfaction with Nicholas's management and communication style, calling him a "bully" and complaining about his tendency to use profanity and to yell at people in public. It also faulted Nicholas for failing to adhere to company policies, including by failing to follow basic accounting guidelines and by hiring an individual as an independent contractor without authorization. It warned Nicholas that failure to improve his "behavior, communication, and adherence to company policies and procedures" could result in termination of his employment.

Nicholas answered Schneider in a December 21, 2012 memo, denying most of the allegations in the "Final Warning" and complaining that Schneider's investigation was not transparent. (SAC ¶ 23, SAC Ex. B.) He wrote that he was "at a bit of a loss to understand" how TRYP's improvements "in productivity, morale, Trip Advisor Rankings, ownership satisfaction and financial results" "could have been achieved if the environment described in [Schneider's] memo exist[ed]." He also wrote that the accusations against him conflicted with the reports of TRYP employee team building sessions recorded by the human resources department.

Another team building session was held in March 2013. (SAC ¶ 25.) Nicholas did not attend, in order to encourage open discussion among employees. The report of the session, compiled by the Director of Human Resources, contains no complaints about Nicholas. (SAC Ex. C.)

Nicholas was then "again shocked" to receive a second memo, dated April 24, 2013 and labeled "Last Chance Warning, " this time from Scott Marn, another Wyndham executive.[2] (SAC ¶ 26, SAC Ex. D.) The memo reported that two members of Nicholas's management team had requested transfers, complaining of an inability to work with Nicholas. It gave examples of Nicholas's "Rude, Insensitive, Aggressive and Retaliatory Behavior, " and of "Demeaning, Confrontational and Threatening Behavior." It warned: "Further confirmed reports of the behavior or actions by you, described herein, will result in immediate termination of your employment."

In July 2013, Marn visited TRYP and warned Nicholas that he was continuing to receive complaints about him. (SAC ¶ 34.) However, he also interviewed TRYP staff members and told Nicholas that those interviews made it apparent that he had been receiving incomplete or biased information from TRYP's Human Resources Director. (SAC ¶ 35.) The Human Resources Director resigned that month, and subsequently Marn informed Nicholas that no more complaints were being made about him, and that the hotel's "environment had turned around and was positive." (SAC ¶¶ 36-37.) Marn suggested to Nicholas that the Human Resources Director had been "involved with negatively slanting the opinion of plaintiff amongst defendants' management." (SAC ¶ 37.) In September 2013, Marn advised Nicholas that he had been referred to take on the management of the Wyndham Garden Chinatown hotel, in addition to TRYP. (SAC ¶ 38.) On October 18, 2013, however, Nicholas was terminated. (SAC ¶ 39.) Marn advised Nicholas that the termination was "for cause." (Id.)

Nicholas filed a summons and complaint in New York Supreme Court, New York County, on May 9, 2014, asserting one claim for breach of contract. On July 25, the defendants filed a notice of removal to this Court (Dkt. No. 1), and subsequently filed a pre-motion letter arguing for dismissal based on their contention that Nicholas was an at-will employee. (Dkt. No. 8.) Following a pretrial conference on September 23, this Court granted leave to Nicholas to amend his complaint to take account of the defendants' arguments. (Dkt. No. 13.) Nicholas then filed an amended complaint on October 14 (Dkt. No. 16), and the defendants moved to dismiss on November 17. (Dkt. No. 19.) On February 11, 2015, this Court ordered Nicholas further to amend his complaint to properly allege the citizenship of defendant Wyndham Hotel Group, LLC. (Dkt. No. 34.) Nicholas complied and filed his SAC on March 3, 2015.

LEGAL STANDARD

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). "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." Id . "The plausibility standard... asks for more than a sheer possibility that a defendant has acted unlawfully." Id . In assessing the complaint, the district court must draw all reasonable inferences in favor of the non-movant. In re Elevator Antitrust Litig., 502 F.3d 47, 50 (2d Cir. 2007). Legal conclusions and "[t]hreadbare recitals of the elements of a cause of action, " however, are not entitled to any presumption of truth. Iqbal, 556 U.S. at 678.

DISCUSSION

In support of its motion, Wyndham once again asserts that Nicholas was an at-will employee, and thus that he cannot state a breach of contract claim based on the termination of his employment. "Under New York law, employment for an indefinite or unspecified term' is presumed to be at will and... freely termina[ble] by either party at any time without cause or notice.'" Reddington v. Staten Island Univ. Hosp., 511 F.3d 126, 137 (2d Cir. 2007) (quoting Horn v. N.Y. Times, 100 N.Y.2d 85, 91 (2003)) (alterations in original). "[A]bsent a constitutionally impermissible purpose, a statutory proscription, or an express limitation in the individual contract of employment, an employer's right at any time to terminate an employment at will remains unimpaired.'" Smalley v. Dreyfus Corp., 10 N.Y.3d 55, 58 (2008) (quoting Murphy v. Am. Home Prods. ...


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