Wexler v. Allegion (Uk) Ltd.

374 F. Supp. 3d 302
CourtDistrict Court, S.D. Illinois
DecidedMarch 19, 2019
Docket16 Civ. 2252 (ER)
StatusPublished
Cited by13 cases

This text of 374 F. Supp. 3d 302 (Wexler v. Allegion (Uk) Ltd.) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wexler v. Allegion (Uk) Ltd., 374 F. Supp. 3d 302 (S.D. Ill. 2019).

Opinion

Ramos, D.J.

Elias Wexler and various entities related to his former company, Zero International, Inc. ("Zero"), brought this action against Allegion (UK) Limited ("Allegion") and its subsidiary Schlage Lock Company, LLC ("Schlage"), asserting a host of claims arising out of Schlage's acquisition of Zero. Schlage asserted various counterclaims against Wexler. Pending before the Court is Wexler's motion to dismiss Schlage's counterclaims for defamation and breach of a non-disparagement clause pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, Wexler's motion is GRANTED in part and DENIED in part.

I. Factual and Procedural Back ground1 *306A. The Parties' Transaction

In April 2015, Schlage purchased substantially all the assets of Wexler's company, Zero, a door, window, and hardware manufacturer. Countercl. ¶¶ 1-2, Doc. 88. As part of the transaction, Schlage and Allegion executed an Asset Purchased Agreement ("APA") with Wexler and Zero, and Wexler also signed a Non-Competition and Non-Solicitation Agreement (the "Non-Compete"). Id. ¶¶ 29, 32. Under the APA, Schlage hired Wexler to serve as "President Emeritus" of Zero, and the Non-Compete barred Wexler from competing with Zero for five years. Id. ¶¶ 30, 33. The Non-Compete also contained a non-disparagement clause, which prohibited Wexler from directly or indirectly making any disparaging or derogatory statement about Schlage.2 Id. ¶ 35.

The relationship quickly turned sour, and Schlage fired Wexler in September 2015. Id. ¶ 6. Schlage alleges that Wexler then embarked on a campaign to compete against and harm Zero in violation of his Non-Compete by, among other things, having his son form a competing company and making defamatory and disparaging statements about Zero to the media, as discussed further below. Id. ¶¶ 7, 14, 20.

B. Wexler's Complaint

On February 29, 2016, Wexler and various entities related to Zero sued Schlage and Allegion in New York state court for allegedly terminating and discriminating against him because of his age, breaching the employment provisions of the APA, breaching other contracts with Zero entities and misappropriating their services or property, and defaming him to his colleagues.3 Compl. ¶¶ 125-183, Doc. 97-2. Wexler's Complaint included the following allegations:

• "Elias Wexler ... has been robbed of his hard-earned career and reputation through Defendants' tortious and discriminatory conduct, which violated New York law and standards of professional decency." Id. ¶ 1.
• "Defendants have acted dishonorably by repeatedly breaking their word and their obligations to Wexler...." Id. ¶ 6.
• "Defendants did not keep their word to Zero International's Canadian distributors. Defendants severed ties with these distributors, proving the rumors [that they would do so] true. Defendants wrongfully traded on Wexler's reputation and trustworthiness *307to mislead the Canadian distributors into believing that their business relationships with Zero International would remain intact, when Defendants knew all along (but Wexler did not) that the industry rumors were true." Id. ¶ 56.
• "Defendants falsely informed prominent members of the door and hardware, acoustics and fireproofing industries, that Wexler's work for Defendants had been unsatisfactory, and that Wexler was unworthy of continued employment. They informed prominent members of these industries about Wexler's termination, including the humiliating details surrounding the manner in which Wexler was terminated [by] ... being escorted from the building by security guards...." Id. ¶¶ 83-84.
• "Despite [an Allegion manager's] agreement to the contrary, Defendants have refused to use Zero Latina, Zero Asia and Zero East as their exclusive suppliers and distributors for Zero International products. Defendants have bypassed Zero Latina, Zero Asia and Zero East and have sold Zero International products on their own in these markets." Id. ¶ 95.
• "Defendants, through their words and conduct, made false statements about Wexler to third parties, including Defendants' employees, Wexler's former colleagues and co-workers, and members of the door and hardware, acoustics and fireproofing industries." Id. ¶ 146.

C. Wexler's Press Release

On April 5, 2016, about a month after the Complaint was filed, Wexler's then-counsel issued a press release announcing his lawsuit through the website Business Wire. Countercl. ¶ 130; see Doc. 97-4 ("Press Release"). The headline on the Press Release was "International Security Expert Elias Wexler Files Suit against Allegion, Schlage over Damage to Business and Reputation." The Press Release stated in pertinent part:

• "Calling them predators bent on achieving their growth ambitions at the expense of the entrepreneurs who developed many of their most successful product lines, international security, fireproofing and door hardware expert Elias Wexler has filed suit against Allegion (UK) plc and Schlage Lock Company, LLC, alleging age discrimination, breach of contract, defamation, unjust enrichment and a pattern of other damaging conduct and business practices...."
• "According to the complaint filed in New York State Supreme Court, Allegion acquired Zero International on April 1, 2015, making numerous commitments and assurances to Wexler in the process, including an 18-month employment contract, a promise to continue working with Wexler's companies in South America, Asia and the Middle East, the permanent title of president emeritus of Zero International and support for the continuation of his leadership roles on numerous government and industry committees and standards-setting bodies."
• "Despite hiring Wexler with great fanfare, however, in September 2015 Allegion terminated him without notice and publicly humiliated him by having him escorted from his office by security guards in front of colleagues and co-workers. The defendants gave no explanation of Wexler's abrupt and public termination, *308creating the false impression that Wexler had engaged in some kind of misconduct. They also allowed damaging rumors to circulate unchecked throughout the industry to which he had dedicated his entire professional life. As a result, the suit says, Wexler suffered irreparable damage to his reputation, was asked to step down from several prominent industry positions and is no longer invited to speak as an expert in his field, the complaint says."
• " 'The damage my family and I have suffered as a result of Allegion's dishonesty and shameful acquisition practices goes well beyond financial harm,' Wexler said.

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Bluebook (online)
374 F. Supp. 3d 302, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wexler-v-allegion-uk-ltd-ilsd-2019.