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Lankau v. Luxoft Holding, Inc.

United States District Court, S.D. New York

July 10, 2017

MAIK LANKAU, Plaintiff,
v.
LUXOFT HOLDING, INC. and LUXOFT USA, INC. Defendants.

          Attorneys for Plaintiff TAYLOR & COHEN LLP, Robert Cohen, Esq., Zachary S. Taylor, Esq.

          Attorneys for Defendants SHERMAN WELLS SYLVESTER & STAMELMAN LLP Anthony J. Sylvester, Esq., Jordan D. Weinreich, Esq.

          OPINION

          ROBERT W. SWEET U.S.D.J.

         Defendants Luxoft USA, Inc. ("Luxoft USA") and Luxoft Holding, Inc. ("Luxoft Holding") (collectively, the "Defendants" or "Luxoft") have moved pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss the complaint of Plaintiff Maik Lankau ("Lankau" or the "Plaintiff") (the "Complaint"). Based on the conclusions set forth below, Defendants' motion is granted in part and denied in part.

         Prior Proceedings

         Plaintiff filed his Complaint in this diversity action on November 9, 2016. (Dkt. 1.) In the Complaint, Plaintiff alleges: fraudulent inducement by Defendants (Compl. ¶¶ 82-90); fraud by Defendants (Compl. ¶¶ 91-98); violation of Section 10(b) of the 1934 Securities Act and Rule 10(b)-(5) by Luxoft Holding (Compl. ¶¶ 99-105); breach of contract by Defendants (Compl. ¶¶ 106-11); and tortious interference with contract by Luxoft Holding (Compl. ¶¶ 112-18) .

         On January 9, 2017, Defendants filed the instant motion to dismiss. The motion was heard and marked fully submitted on February 23, 2017.

         Facts

         The Complaint sets forth the following allegations, which are assumed true for the purpose of this motion to dismiss. See Koch v. Christie's Int'1 PLC, 699 F.3d 141, 145 (2d Cir. 2012).

         Luxoft Holding, and its wholly-owned subsidiary Luxoft USA, provide software development and support, product engineering and testing, technology consulting services for multinational corporations. (Compl. ¶¶ 18, 20.) Defendants have dedicated delivery centers and offices throughout the world. (See Compl. ¶ 20.)

         From May through July 2014, Defendants recruited Lankau to become Luxoft's Managing Director for Telecommunication and Embedded Systems; Defendants were looking for someone to lead its international Telecommunication and Embedded Systems division. (Compl. ¶¶ 2, 24, 27-28, 34.)

         During the negotiations with a Luxoft-hired recruiter, Lankau expressed disinterest in any new position that did not have an equity component as part of the compensation, as Lankau would forfeit unvested stock options if he left his current employer, Danaher Corporation ("Danaher") as well as sufficient managerial breadth. (See Compl. ¶¶ 25, 33, 58). In response, both the recruiter and Luxoft employees, such as Michael Minkevich ("Minkevich"), made oral and written assurances that the Managing Director's compensation would include a stock options award. (Compl. ¶¶ 26, 32, 38-40). In email messages to Lankau, Minkevich estimated the value of the proposed equity award at $1.3 million over a four-year vesting period. (See Compl. ¶ 38). Lankau was assured by Luxoft that he would receive his stock options sometime in August 2014, but that the equity compensation plan, termed "Stock Option Plan III" or "SOP III, " still needed to be approved by Luxoft's Board of Directors. (Compl. ¶¶ 39-40.)

         Lankau executed the final employment contract with Luxoft USA (the "Employment Agreement") on July 11, 2014. (Compl. ¶ 42.) After signing the Employment Agreement, Lankau left Danaher and began working at Luxoft USA in mid-August 2014. (Compl. ¶¶ 5, 42, 44.)

         Of relevance to the present case, the Employment Agreement has several provisions detailing Lankau's employment responsibilities, compensation, and at-will status.

         First, with regard to employment responsibilities, the Employment Agreement states that Lankau's responsibilities included "Business Development" and "Delivery and Operations, " which in further detail entailed the following: "Accountable for operational/financial metrics and overall business results of practice"; "Manage/oversee multiple delivery teams (Delivery Centers) to ensure client satisfaction"; "Provide risk assessment and reliable forecasting"; "Cultivate cross-functional communication with other Lines of Business/practices"; "Provide mentoring for the practice senior technical management (Delivery Managers)." (Compl. ¶ 57; see also Compl., Ex. 1 at Ex. A.) Lankau left Danaher, in part, because of these broad managerial responsibilities. (See Compl. ¶ 58-59.)

         Second, with regard to compensation, the Employment Agreement states:

Executive's Base Salary shall be subject to annual review for adjustment at the discretion of the Board (any salary so adjusted shall thereafter be the Base Salary for purposes of this Agreement). The next salary adjustment is scheduled for April 1, 2015.
In addition to (but without duplication of) the Base Salary and any bonus, while Executive is employed by the Corporation, Executive shall be eligible to participate in the Stock Option Plan (subject to approval by the Board and the Corporation's policies), and such other pension, life insurance, health insurance, disability insurance and other employee benefits plans, if any, which the Corporation may from time to time make available to its executive employees generally.

(Cornpl., Ex. 1 ¶¶ 4(a), 4(d).) Lankau alleges that while "Stock Option Plan" was not defined in the Employment Agreement, Defendants informed him that it referred to SOP III. (See Cornpl. ¶ 68.) In addition, Lankau states that his salary was never reviewed for adjustment while employed at Luxoft. (Compl. ¶ 65.)

         Lastly, with regard to Lankau's at-will employment and termination conditions, the Employment Agreement states:

Executive understands, acknowledges, and agrees hat Executive is an "at-will" Employee, and that Executive's employment by the Corporation . . . maybe be terminated by the Corporation (through action by the Board) for any reason or no reason . . . subject only to the contractual rights upon termination set forth herein; provided that if the Corporation terminates the Executive without Cause, the Executive shall be entitled to ninety (90) days prior notice to be given by the Corporation.

(Compl., Ex. 1 ¶ 5(a) .)

         On or about November 11, 2014, Luxoft Holding's board of directors approved SOP III, an equity compensation plan for Luxoft USA employees, with shares scheduled to vest starting on January 1, 2016. (Compl. ¶ 46.) At that time, Lankau was not granted any equity compensation. (Compl. ¶ 47).

         While employed by Luxoft, Lankau alleges that he was repeatedly told, orally and in writing, that he would be awarded his equity compensation package at some future date. (See Compl. ¶¶ 10, 49-53). Examples in the Complaint include being told in November 2014 by Minkevich that Lankau would only receive his equity compensation in August 2015, a year after starting, Compl. ¶ 49); being told in October 2015, by Luxoft Holding's CEO Dmitry Loschinin ("Loschinin"), that Lankau would receive equity compensation at some point in the future, (Compl. ¶ 51); in February 2016, in an email from Loschinin, being told the same and that the equity package was awaiting Board approval, (Compl. ¶ 53).

         Around January 2015, Lankau was informed that his job responsibilities as listed in the Employment Agreement would change-specifically, he would not have oversight with respect to the Delivery Center-which Lankau accepted in conjunction with the promises from Luxoft that he would in the future receive equity compensation. (See Compl. ¶¶ 61, 63.)

         On August 15, 2016, Lankau was told he would be terminated, without cause, and his last day of work would be September 1, 2016. (Compl. ¶ 74.) Upon termination, Luxoft offered Lankau a severance package of $100, 000 if he agreed to waive any and all claims. (Compl. ¶ 12.)

         Applicable Standards

         On a Rule 12(b)(6) motion to dismiss, all factual allegations in the complaint are accepted as true and all inferences are drawn in favor of the pleader. Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir. 1993). 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, 663 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A claim is facially plausible when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 663 (quoting Twombly, 550 U.S. at 556). In other words, the factual allegations must "possess enough heft to show that the pleader is entitled to relief." Twombly, 550 U.S. at 557 (internal quotation marks omitted).

         While "a plaintiff may plead facts alleged upon information and belief, where the belief is based on factual information that makes the inference of culpability plausible, ' such allegations must be * accompanied by a statement of the facts upon which the belief is founded.'" Munoz-Nagel v. Guess, Inc., No. 12 Civ. 1312 (ER), 2013 WL 1809772, at *3 (S.D.N.Y. Apr. 30, 2013) (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010)); Prince v. Madison Square Garden, 427 F.Supp.2d 372, 384 (S.D.N.Y. 2006); Williams v. Calderoni, 11 Civ. 3020 (CM), 2012 WL 691832, at *7 (S.D.N.Y. Mar. 1, 2012)). The pleadings, however, "must contain something more than ... ...


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