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Iqbal v. Teva Pharmaceuticals USA, Inc.

United States District Court, S.D. New York

December 27, 2017

MOHAMMED ZAFAR IQBAL, Plaintiff,
v.
TEVA PHARMACEUTICALS USA, INC., Defendant.

          OPINION AND ORDER

          VINCENT L. BRICCETTI, UNITED STATES DISTRICT JUDGE.

         Plaintiff Mohammed Zafar Iqbal brings this action under New York Labor Law (“NYLL”) Section 198(1-a), and for breach of contract, alleging that when defendant Teva Pharmaceuticals USA, Inc. (“Teva”), fired Iqbal, Teva failed to pay Iqbal earned compensation in the form of an increased salary payment, a bonus, stock options, unused vacation time, and severance.

         Before the Court is defendant's motion for summary judgment (Doc. #54), and plaintiff's cross-motion for partial summary judgment. (Doc. #59).

         For the reasons set forth below, defendant's motion is GRANTED, and plaintiff's cross-motion is DENIED.

         The Court has subject matter jurisdiction under 28 U.S.C. § 1332.

         BACKGROUND

         The parties have submitted briefs, statements of fact pursuant to Local Civil Rule 56.1, declarations and affidavits, and supporting exhibits, which reflect the following factual background.

         Iqbal was hired by Teva's predecessor company, Barr Laboratories, Inc. (“Barr”), in 1997. Barr became a wholly-owned subsidiary of Teva in 2010, at which time Iqbal became an employee of Teva.

         On December 20, 2012, Iqbal was promoted to Associate Director, Process Engineering, memorialized in an offer letter, which Iqbal signed on January 2, 2013[1] (the “offer letter”).

         Iqbal had an ownership interest in Suffern Pharmacy (“Suffern”), a retail pharmacy and wholesale supplier of branded drugs, which Iqbal and others formed in February 2014. Iqbal never disclosed this ownership interest in Suffern to Teva in writing. Iqbal also had an ownership interest in at least two other businesses, Mydesh, Inc. (d/b/a Monroe Pharmacy), and Aloft, LLC (d/b/a Dry Clean Center).[2]

         Teva's Research and Development Department obtains branded drugs after the applicable patents on those drugs expire or when they are about to expire and, through clinical testing, creates generic versions of those drugs.

         Between February and May 2015, Teva purchased approximately $470, 000 in branded drugs from Suffern, Iqbal's company. Suffern made approximately $50, 000 in profit from these transactions. In July 2015, Teva terminated its business relationship with Suffern.

         On March 12, 2015, pursuant to an award letter, Teva awarded Iqbal 1, 304 stock options.

         In late 2015, as part of a routine audit, an agent of Teva identified Suffern as a supplier in need of further review. As a result of the audit, and because two Teva employees (including Iqbal) had ownership interests in Suffern, the review of Suffern was transferred to Teva's Office of Business Integrity (“OBI”).

         The OBI investigator assigned to the matter was James Mikalic, a former FBI agent and former Assistant Director of Intelligence for the New York State Office of Homeland Security. Mr. Mikalic's initial investigation lasted from December 8, 2015, to February 9, 2016. Mr. Mikalic documented the results of his investigation in a report, originally dated February 9, 2016, and updated on March 8, 2016. (Def.'s App. at A.128-146; the “Mikalic report”).[3]

         As part of his investigation, Mr. Mikalic reviewed purchase orders, invoices, registration documents, and other records of Teva's relationship with Suffern as well as Iqbal's Teva-owned email and computer files. Mr. Mikalic interviewed Iqbal, Daud Hosain, another Teva employee and co-owner of the Suffern and Monroe pharmacies, and Miriam Morris, a Clinical Supply Coordinator at Teva.

         The investigation determined, and Iqbal does not dispute, that Iqbal used his Teva email to correspond on behalf of his outside business interests during regular Teva business hours.

         Teva terminated Iqbal on February 26, 2016. Teva did not provide Iqbal with written notice of his termination or a general release form.

         Teva paid Iqbal his salary during January and February 2016 at the same rate he was paid in 2015. Iqbal was not employed at Teva when bonuses for 2015 were paid later in 2016. Teva did not pay Iqbal any severance. After Iqbal was fired, his stock options expired. Iqbal was paid for unused vacation time after this action was commenced.

         DISCUSSION

         I. Legal Standard

         The Court must grant a motion for summary judgment if the pleadings, discovery materials before the Court, and any affidavits show there is no genuine issue as to any material fact and it is clear the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

         A fact is material when it “might affect the outcome of the suit under the governing law. . . . Factual disputes that are irrelevant or unnecessary” are not material and thus cannot preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         A dispute about a material fact is genuine if there is sufficient evidence upon which a reasonable jury could return a verdict for the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 248. The Court “is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried.” Wilson v. Nw. Mut. Ins. Co., 625 F.3d 54, 60 (2d Cir. 2010) (citation omitted). It is the moving party's burden to establish the absence of any genuine issue of material fact. Zalaski v. City of Bridgeport Police Dep't, 613 F.3d 336, 340 (2d Cir. 2010).

         If the non-moving party has failed to make a sufficient showing on an essential element of his case on which he has the burden of proof, then summary judgment is appropriate. Celotex Corp. v. Catrett, 477 U.S. at 323. If the non-moving party submits “merely colorable” evidence, summary judgment may be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. at 249-50. The non-moving party “must do more than simply show that there is some metaphysical doubt as to the material facts, and may not rely on conclusory allegations or unsubstantiated speculation.” Brown v. Eli Lilly & Co., 654 F.3d 347, 358 (2d Cir. 2011) (internal citations omitted). The mere existence of a scintilla of evidence in support of the non-moving party's position is likewise insufficient; there must be evidence on which the jury could reasonably find for him. Dawson v. Cty. of Westchester, 373 F.3d 265, 272 (2d Cir. 2004).

         On summary judgment, the Court construes the facts, resolves all ambiguities, and draws all permissible factual inferences in favor of the non-moving party. Dallas Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir. 2003). If there is any evidence from which a reasonable inference could be drawn in favor of the non-moving party on the issue on which summary judgment is sought, summary judgment is improper. See Sec. Ins. Co. of Hartford v. Old Dominion Freight Line, Inc., 391 F.3d 77, 83 (2d Cir. 2004).

         In deciding a motion for summary judgment, the Court need only consider evidence that would be admissible at trial. Nora Bevs., Inc. v. Perrier Grp. of Am., Inc., 164 F.3d 736, 746 (2d Cir. 1998).

         A court may grant summary judgment on a contract claim when the contractual language is “‘plain and unambiguous.'” Zurich Am. Ins. Co. v. ABM Indus., Inc., 397 F.3d 158, 164 (2d Cir. 2005) (quoting Brass v. Am. Film Techs., Inc., 987 F.2d 142, 148-49 (2d Cir. 1993)). “Contract language is not ambiguous if it has ‘a definite and precise meaning, unattended by danger of misconception in the purport of the [contract] itself, and concerning which there is no reasonable basis for a difference of opinion.'” Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989) (alteration in original) (quoting Breed v. Insurance Company of North America, 46 N.Y.2d 351, 355 (1978)).

         II. Teva's Motion for Summary Judgment

         Teva is entitled to summary judgment because there is no genuine dispute that (i) Iqbal was terminated for cause for violating Teva policies, and (ii) Iqbal is not entitled to the compensation he seeks under the terms of the applicable Teva benefits policies.[4]

         A. Termination for Cause

         Teva asserts Iqbal was terminated for cause because he violated the Conflicts of Interest Policy, the Outside Employment Policy, and the Electronic Communications Policy.

         The Court agrees.

         Behavior that constitutes cause for termination is defined by contract, including company policies and procedures, even if the employee is at will. See Benoit v. Commercial Capital Corp., 2008 WL 3911007, *6 (S.D.N.Y. Aug. 25, 2008).

         Whether an employee was terminated for cause is generally a question of fact unsuitable for disposition on summary judgment when the employee denies the underlying conduct. Benoit v. Commercial Capital Corp., 2008 WL 3911007, *6 (collecting cases).

         Here, however, Iqbal's underlying conduct is undisputed. Because of that undisputed conduct, Iqbal was in violation of ...


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