Josh Fraize v. Fair Isaac Corporation

2017 DNH 233

• Court: District Court, D. New Hampshire
• Decided: October 30, 2017
• Docket: 17-cv-231-PB
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Josh Fraize

v. Case No. 17-cv-231-PB Opinion No. 2017 DNH 233 Fair Isaac Corporation

MEMORANDUM AND ORDER

Josh Fraize has sued the Fair Isaac Corporation (FICO), for

breach of contract, breach of the duty of good faith and fair

dealing, a violation of New Hampshire’s wage statute, and

wrongful discharge. In this Memorandum and Order, I address

FICO’s motion to dismiss Fraize’s wrongful discharge claim.1

I. BACKGROUND

Fraize worked for FICO as a salesperson from January, 2014

to April, 2017. His compensation was determined in part by an

annual “Sales Incentive Plan Participation Agreement”

(“Agreement”). The 2016 and 2017 Agreements provide for

commission percentages that vary based on the extent to which

specified sales targets are met or exceeded. Revenue generated

1 FICO also argues that Fraize’s claims should be dismissed because they are subject to a choice of forum provision requiring his claims to be brought in Minnesota. I will address the choice of forum provision in a separate Memorandum and Order after the parties have completed discovery on the subject and have submitted supplemental memoranda. pursuant to new contracts are rewarded with higher commissions

than sales pursuant to contract renewals under both Agreements,

and the 2017 Agreement also authorizes FICO to reduce a

salesperson’s commissions for “large” sales, i.e., sales that

comprise more than 50% of a salesperson’s annual sales target.

FICO had an established business relationship with Xerox

when Fraize was first assigned to work on the Xerox account in

December 2015. After months of negotiation, Xerox and FICO

entered into a new contract that yielded substantial additional

revenue for FICO. Fraize initially received assurances that the

revenue generated by the Xerox contract would be treated as new

sales for commission purposes, but FICO later informed Fraize

that it intended to treat the Xerox contract as a renewal rather

than as new business. FICO also informed Fraize that the Xerox

contract would be subject to reduced commissions because it

qualified as a “large deal” under the 2017 Agreement even if it

were to qualify as new business.

Fraize complained about his proposed compensation for the

Xerox contract and he was fired in retaliation for pressing his

complaint.

II. STANDARD OF REVIEW

When evaluating a motion to dismiss under Fed. R. Civ. P.

2 12(b)(6), I “accept as true the well-pleaded factual allegations

of the complaint [and] draw all reasonable inferences therefrom

in the plaintiff's favor.” Martin v. Applied Cellular Tech.,

Inc., 284 F.3d 1, 6 (1st Cir. 2002). Although the complaint

need not set forth detailed factual allegations, “more than an

unadorned, the-defendant-unlawfully-harmed-me accusation” is

required. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

“Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.” Id.

III. ANALYSIS

To maintain a successful wrongful discharge claim under New

Hampshire law, a plaintiff must prove both “that the discharge

was ‘motivated by bad faith, retaliation, or malice’” and “that

the plaintiff was discharged ‘for performing an act that public

policy would encourage or for refusing to do something that

public policy would condemn.’” Leeds v. BAE Sys., Inc., 165

N.H. 376, 379 (2013)(quoting Karch v. BayBank FSB, 147 N.H. 525,

536 (2002)). Whether an employee’s acts or refusals to act

further a public policy interest ordinarily is a question of

fact for the jury to resolve.2 Id.

2 FICO cites Minnesota law but does not present a developed argument that Fraize’s wrongful discharge claim is governed by Minnesota law rather than New Hampshire law. Although the

3 Fraize alleges a plausible claim that FICO terminated him

in retaliation for his complaint that the company was refusing

to pay him commissions he was entitled to under the Agreements.

Although these allegations appear to state a viable wrongful

discharge claim, FICO nevertheless argues that they are

insufficient because Fraize was pursuing only his personal

interests in recovering his commissions and, therefore, his

alleged protests do not further a public policy interest. I

disagree.

New Hampshire’s Wage Act makes it a crime for an employee

to withhold wages that are due to an employee. See N.H. Rev.

Stat. § 275:43. Whether public policy encouraged an employee’s

actions is “typically a question for the jury to decide,” and

should only be decided by the court when the answer is “clear.”

Frechette v. Wal-Mart Stores, Inc., 925 F. Supp. 95, 98 (D. N.H.

1995). Here, at the very least, it is not clear that public

policy would not encourage an employee to demand his overdue

wages. See Tullis v. Merrill, 584 N.W.2d 236, 239 (Iowa Sup.

Ct. 1998) (under Iowa law, there is public policy permitting an

relevant Agreements both contain a choice of law clause stating that “this Plan will be interpreted and construed in accordance with and governed by the laws of the State of Minnesota . . .,” the clause applies only to the Agreements and does not cover Fraize’s wrongful discharge claim. Accordingly, I evaluate Fraize’s claim under New Hampshire law.

4 employee to demand overdue wages). Thus, Fraize’s claim is not

deficient for failing to allege that he was terminated because

he undertook an act that public policy would support.

FICO also argues that Fraize’s wrongful discharge claim is

barred by the New Hampshire Supreme Court’s decision in Cilley

v. New Hampshire Ball Bearings, Inc., 128 N.H. 401, 405-406

(1986). FICO bases its argument on the following language in

the decision:

The plaintiff contends that the company's firing him for his refusal to give up these improperly withheld "wages" violates public policy. We conclude that the argument has no merit. Even if one accepts, for the sake of argument, that use of company resources for personal benefit is a "wage" under RSA chapter 275 and that the "wage" was improperly withheld by the company, then Cilley is provided with remedies by the statute, remedies which do not include insubordination.

Id. at 407. It then reads this language to mean that a

plaintiff cannot sue if he is discharged for complaining about

his employer’s failure to pay his wages because the wage statue

gives employees a statutory remedy for wrongfully withheld

wages. See Wenners v. Great State Beverages, Inc., 140 N.H.

100, 103 (1995) (“a plaintiff may not pursue a common law remedy

where the legislature intended to replace it with a statutory

cause of action”).

FICO’s argument is based on a misreading of Cilley. In

Cilley, the plaintiff was discharged after he engaged in what he

5 claimed was a form of self-help to recover wages that allegedly

were owed to him by his employer. 128 N.H. at 405-406. The

language FICO relies on in Cilley merely concludes that public

policy does not support the use of self-help in such

circumstances because an employee has an available remedy for

withheld wages under the wage statute. Id. The New Hampshire

Supreme Court did not say that the legislature intended for the

wage statute to replace the common law action for wrongful

termination. Because Fraize did not engage in self-help to

recover his commission, his wrongful discharge claim is not

barred by Cilley.

IV. CONCLUSION

For the reasons set forth in this Memorandum and order, I

deny FICO’s motion to dismiss to the extent that it challenges

the sufficiency of Fraize’s wrongful discharge claim.

SO ORDERED.

/s/Paul Barbadoro Paul Barbadoro United States District Judge

October 30, 2017

cc: James P. Harris, Esq. Paul DeCarolis, Esq.