CHANG v. THE BANK OF NEW YORK MELLON CORPORATION

CourtDistrict Court, D. New Jersey
DecidedMarch 31, 2021
Docket2:17-cv-11061
StatusUnknown

This text of CHANG v. THE BANK OF NEW YORK MELLON CORPORATION (CHANG v. THE BANK OF NEW YORK MELLON CORPORATION) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CHANG v. THE BANK OF NEW YORK MELLON CORPORATION, (D.N.J. 2021).

Opinion

NOT FOR PUBLICATION UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

KENNETH CHANG a/k/a KAN ZHANG,

Plaintiff, Civil Action No. 17-11061 v. OPINION THE BANK OF NEW YORK MELLON CORPORATION, et al.,

Defendants.

ARLEO, UNITED STATES DISTRICT JUDGE THIS MATTER comes before the Court by way of Defendants The Bank of New York Mellon Corporation’s, The Bank of New York Mellon’s (“BNY Mellon”), BNY IHC, LLC’s, and Technology Services Group, Inc.’s (“TSG”) (collectively “Defendants”) Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56, ECF No. 102. Plaintiff Kenneth Chang a/k/a Kan Zhang (“Plaintiff”) opposes the Motion. ECF No. 112. For the reasons explained below, the Motion is GRANTED. I. FACTUAL BACKGROUND1

This matter arises out of BNY Mellon’s termination of Plaintiff’s employment on July 10, 2017. Def. SOMF ¶ 8. Plaintiff alleges that his termination was in retaliation for concerns he had raised about Defendants’ data storage procedures during the course of his employment.

1 Unless otherwise indicated, the Court draws the following facts from Defendants’ Statement of Material Facts (“Def. SOMF”), ECF No. 105, and Plaintiff’s Responsive Statement of Facts (“Pl. RSOMF”), ECF No. 112.1. A. Plaintiff’s Employment and Defendants’ Outsourcing of Data Backup Functions Plaintiff began his employment with TSG, an indirect wholly owned subsidiary of BNY Mellon, on October 28, 1996. Id. ¶¶ 2, 10. Plaintiff joined TSG as a “Unix system administrator.” In this role, Plaintiff’s job responsibilities included, among other things, managing computer server setups and providing computers with storage space. Id. ¶¶ 10-11. Plaintiff held this role for approximately five years. Id. ¶ 12. In or around September 2001, Plaintiff became a “data backup administrator,” where his job responsibilities included, among other things, maintaining BNY Mellon’s data on media for long-term storage, performing disaster recovery, and providing a data backup plan, including off- site data storage in case the primary storage operation got damaged. Id. ¶ 13. As a data backup

administrator, Plaintiff held various “internal” job titles such as Senior Systems Programmer, Software Systems Specialist, and Specialist Systems Engineer/Programmer. Id. ¶¶ 24-25. Plaintiff described his various internal job titles as promotions with a salary increase, but his core job responsibilities, which included ensuring proper data backup and management, remained the same throughout. Id. Plaintiff was part of TSG’s United States operations, while many of his peers worked overseas. Id. ¶ 19. His group was comprised of approximately 20 members, separated into U.S. and Indian teams. Id. ¶ 20. Of the U.S. team, only two others were BNY Mellon employees and the rest were consultants. Id. Plaintiff had no formal management responsibilities on his team. Rather, his role was on the technical side of the operation, and he interfaced directly with users to

provide solutions for the business-side of BNY Mellon. Id. ¶ 26. From 2001 onward, Plaintiff had several different managers including William Telford, Timothy Gladson (“Gladson”), and Joseph Wholey (“Wholey”). Id. ¶¶ 14-17. Wholey was hired by TSG in 2016 as Senior Group Manager for Infrastructure Operations within TSG’s Enterprise Storage Services (“ESS”) group. Wholey managed Plaintiff until Plaintiff’s termination in 2017. Id. ¶ 17. In 2015, prior to Wholey’s hiring, BNY Mellon had independently performed a risk analysis and review of their electronic backup infrastructure and the related support staff. Id. ¶ 30.

Following this review, BNY Mellon decided to assess the commercial and technical benefits of outsourcing data backup and support functions to a third-party vendor. Id. ¶ 31. Plaintiff was aware of discussions about outsourcing for “many years” but was not involved in the process of selecting a third-party vendor. Id. ¶ 32; see also Declaration of August W. Heckman, III (“Heckman Decl.”), Ex. D, Deposition of Kenneth Chang (“Chang Dep. Tr.”) at 128:11-25, ECF No. 104.4. The same year, the entire ESS team held a meeting to discuss the outsourcing of certain job functions to a third-party vendor. Def. SOMF ¶ 33. Plaintiff and his colleagues were in attendance at this meeting. Id. In December 2016, BNY Mellon engaged IBM to take over its data backup functions. Id. ¶ 55. On or about January 4, 2017, BNY Mellon commenced its transition program to outsource

its data backup functions to IBM. Id. From January to June of 2017, Plaintiff, under the supervision of Wholey, and his fellow team members assisted in a “knowledge transfer” of BNY Mellon’s then-existing data backup and management systems to IBM. Id. ¶ 70. At the time, Plaintiff’s team was comprised of approximately 20 members, 16 of whom were located overseas. On that team, Plaintiff was the only U.S.-based TSG employee because the others were “contractors” or “consultants.” Id. ¶ 72. The goal of the project was to launch Backup as a Service (“BaaS”), which would be fully operated and maintained by IBM. BaaS would fully assume the data backup functions for BNY Mellon. Id. ¶ 76. On May 12, 2017, Wholey emailed BNY Mellon’s Human Resources Department (“HR”) to inquire about the process of terminating Plaintiff’s employment. Id. ¶ 73. In this email, Wholey

stated “[a]s a result of an outsource initiative we are implementing, I have one [full time employee] who becomes redundant on June 1st. I am looking for your guidance as to how I begin the employee separation process.” Id. ¶ 74. On June 2, 2017, BNY Mellon launched BaaS. Id. ¶ 76. The consultant team members on the U.S. team went back to their companies or were reassigned to other accounts, and Plaintiff was the last remaining full-time U.S. employee in his group at TSG. Id. ¶ 77. Paul Corbett (“Corbett”) was the only other remaining full-time employee of the data backup team, and he was located in the United Kingdom. Id. ¶ 72. Ultimately, on July 10, 2017, Mr. Wholey called Plaintiff to notify him that his position had been eliminated and that his employment was terminated. Id. ¶ 96. Plaintiff remained on the

payroll until September 4, 2017 and was offered a severance package, which he refused. Id. ¶¶ 99-102. Plaintiff’s termination happened outside Defendants’ typical quarterly time period for dismissals. Id. ¶ 92. Meanwhile, Corbett was chosen to transition to the “BaaS Governance Team,” which would provide oversight and governance for BaaS. Id. ¶ 94. B. Plaintiff’s Alleged Whistleblowing Activity At different times throughout the course of his employment, Plaintiff voiced concerns about Defendants’ data retention practices. Plaintiff alleges, without record evidence, that he first voiced concerns about Defendants’ limited data storage system in 2010. Compl. ¶¶ 31-33. According to his own deposition testimony, Plaintiff had communicated concerns about the loss of client data to his then-supervisor Mr. Gladson as early as 2015. See Pl. Ex. A, Chang Dep. Tr. at 229:14-231:9. Plaintiff stated at this time he noticed they were having trouble recovering old data records and the situation did not improve after he flagged the issue. Id. Plaintiff also raised concerns about Defendants’ data retention practices in two annual

employee questionnaires. Each year, BNY Mellon employees are required to fill out and submit an online, electronic Code of Conduct Questionnaire providing responses to various questions about compliance and potential conflicts of interest. DSOMF ¶ 35. In his 2016 questionnaire, Plaintiff answered in the affirmative when asked if he was aware of a “significant business decision in which risk, compliance or regulatory concerns” was not appropriately considered. Id. ¶ 57.

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