Vasquez v. Whole Foods Market, Inc. ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_________________________________________
)
VICTOR VASQUEZ, et al., )
)
Plaintiffs, )
)
v. ) Case No. 17-cv-00112 (APM)
)
WHOLE FOODS MARKET, INC., et al., )
)
Defendants. )
_________________________________________ )
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
Plaintiffs Victor Vasquez, Nadeem Sheikh, Katia Sadoudi, Svetlana Bautista, Ibrahima Ba,
Nicholas Miano, Pa M. Njie, Michael Amegnaglo, and David Berger (collectively, “Plaintiffs”)
are former Store Team Leaders for various Whole Foods grocery stores in the Washington, D.C.,
metropolitan area. They bring this action against Defendants Whole Foods Market, Inc.
(“WFMI”), Whole Foods Market Group, Inc. (“WFM Group”), Whole Foods Market Services,
Inc. (“WF Services”), and Whole Foods spokeswoman Brooke Buchanan (collectively,
“Defendants” or “Whole Foods”), alleging that they were terminated in retaliation for blowing the
whistle on the improper manner in which Whole Foods conducted its “Gainsharing” program, a
bonus program designed to incentivize individual grocery store departments to operate under
budget by sharing cost savings with employees. Plaintiffs also assert that, following their
terminations, Defendants falsely accused them through published news stories of manipulating the
Gainsharing program for their own benefit.
Before the court are the following motions: (1) Defendants’ Motion to Dismiss Plaintiffs’
Amended Complaint; (2) Plaintiffs’ Motion for Leave to File Second Amended Complaint; and
(3) Defendants’ Motion to Stay. For the reasons herein, the court grants in part and denies in part
Defendants’ Motion to Dismiss. The court dismisses all claims against all Defendants, except
Plaintiffs’ claims for defamation and false light invasion of privacy, which may proceed against
WFM Group and WF Services only. Additionally, the court grants Plaintiffs’ Motion to File a
Second Amended Complaint and denies Defendants’ Motion to Stay as moot.
II. BACKGROUND
A. Factual Background
Each of the nine Plaintiffs in this action worked as a Store Team Leader—the highest level
of leadership at a store location—for a Whole Foods grocery store in the Washington, D.C.,
metropolitan area before his or her termination in December 2016. Am. Compl., ECF No. 11,
¶ 24. During Plaintiffs’ employment, Whole Foods used a profit-sharing program—what Whole
Foods referred to as its “Gainsharing” program—in its stores to incentivize department
productivity and revenue. Id. ¶ 28. Under the program, Whole Foods awarded bonuses to
employees whose departments performed under budget by distributing the surplus savings among
the employees in that department. Id.
According to Plaintiffs, Whole Foods’ corporate leadership undermined the Gainsharing
program by imposing a nationwide scheme of “shifting” labor costs. Id. ¶ 29. Under this
practice, if a department came in over budget, Whole Foods corporate leadership instructed store
leadership—including Store Team Leaders—to “shift” the labor costs of that department to a
department that had a budget surplus. Id. Payroll Specialists at each Whole Foods store then
effectuated labor cost shifting by manually altering employee time records and submitting the
manipulated records to corporate headquarters for payroll processing. Id. ¶ 33. As a result of
this practice, the Gainsharing bonuses owed to employees of departments that performed under
budget were reduced by the costs unlawfully “shifted” to those departments. Id. ¶ 29. Plaintiffs
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allege that Whole Foods corporate leadership imposed this practice of “shifting” labor costs in
every Whole Foods grocery store to steal bonuses earned by employees and pad company profits.
Id. ¶ 30.
In October 2016, a Whole Foods employee from the Mid-Atlantic region submitted an
anonymous complaint to Whole Foods’ employee tip line, complaining that he or she did not
receive the proper Gainsharing bonus because labor costs had been shifted from another
department to the employee’s department. Id. ¶ 34. Whole Foods thereafter launched an
investigation into this complaint. According to Plaintiffs, however, the investigation was a sham.
Its true goal was “to concoct support for Whole Foods’ pre-determined outcome that the ‘shifting
of labor costs’ was limited to the store complained about” in the anonymous tip. Id. ¶ 35.
In early November 2016, Whole Foods investigators interviewed each Plaintiff about the
Gainsharing program implemented in his or her respective store. Each Plaintiff explained that
shifting labor costs was a standard practice throughout Whole Foods stores and some Plaintiffs
stated they received explicit instructions from corporate officials to do so. Am. Compl. ¶¶ 35–
37. After these meetings, Plaintiffs were immediately placed on administrative leave. Am.
Compl. ¶ 37.
Soon thereafter, Plaintiffs were fired. On November 30, 2016, Plaintiffs were instructed
to meet at Whole Foods’ regional office on the following day. Am. Compl. ¶ 38. Each Plaintiff
met individually with Regional President Scott Allshouse, Regional Vice-President Nicole
Wescoe, and Human Resources Executive Coordinator David Gearhart. Each Plaintiff was
terminated, purportedly (according to Whole Foods) for shifting labor costs and falsifying
documents in violation of company policy. Id.
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The firings made the news. On December 13, 2016, the Associated Press reported in an
article titled “Whole Foods Fires 9 Store Managers Over Bonus Manipulation” that nine store
managers of Whole Foods stores in Maryland, Virginia, and the District of Columbia were
dismissed after a company-wide investigation determined that the managers “engaged in a policy
infraction that allowed the managers to benefit from a profit-sharing program at the expense of
store employees.” Defs.’ Mot. to Dismiss, ECF No. 12 [hereinafter Defs.’ Mot], Ex. C-2, ECF
No. 12-7 [hereinafter AP Article]. The Associated Press article attributed Whole Foods’
statements and details about the investigation to Defendant Brooke Buchanan, a spokeswoman for
Whole Foods. Two days later, The Washington Post published a news article titled “Whole Foods
Fires Managers in Md., Va., and D.C. for Manipulating Bonus System.” Defs.’ Mot., Ex. C-3,
ECF No. 12-8 [hereinafter Washington Post Article]. In the article, Whole Foods confirmed that
nine managers of Whole Foods stores in Maryland, Virginia, and the District were fired for
manipulating a store bonus program. Washington Post Article, at 1. Whole Foods stated that the
conduct was still under investigation but was isolated to a relatively small number of its 457 stores.
Speaking on behalf of Whole Foods, Brooke Buchanan stated that “[Whole Foods] took swift
action, but, relative to the rest of company, this manipulation only happened in nine of our
locations.” Id.
B. Procedural Background
Plaintiffs filed this action in the Superior Court for the District of Columbia on December
20, 2016, and Defendants removed the case to this court on January 17, 2017. See Notice of
Removal, ECF No. 1. Plaintiffs’ Amended Complaint asserts the following claims: (1) wrongful
termination and retaliation for whistleblowing against all Defendants except Buchanan (Count I);
(2) wrongful termination and retaliation for whistleblowing as to Plaintiff Bautista only against all
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Defendants except Buchanan (Count II); (3) breach of contract and breach of the duty of good faith
and fair dealing against all Defendants except Buchanan (Count III); (4) defamation as to all
Defendants (Count IV); and (5) false light invasion of privacy as to all Defendants (Count V).
Am. Compl. ¶¶ 49–91.
Defendants moved to dismiss the Amended Complaint on April 3, 2017. Defs.’ Mot.
Defendants WFMI, WF Services, and Buchanan moved to dismiss pursuant to Rule 12(b)(2) of
the Federal Rules of Civil Procedure for lack of personal jurisdiction, and, in the alternative, for
failure to state a claim pursuant to Rule 12(b)(6). Defs.’ Mot. at 1 n.1. WFM Group moved to
dismiss the complaint solely under Rule 12(b)(6). Id. Plaintiffs opposed Defendants’ Motion
and simultaneously sought leave from the court to amend their Amended Complaint to add a
whistleblower retaliation claim under the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, 15 U.S.C. § 78u-6, against all Defendants except Buchanan. Pls.’ Mem.
in Opp’n. to Defs.’ Mot., ECF No. 17 [hereinafter Pls.’ Opp’n]; Pls.’ Mot. for Leave to File a
Second Am. Compl., ECF No. 16 [hereinafter Pls.’ Mot. to Am.]. Defendants subsequently
moved the court to stay consideration of Plaintiffs’ Motion to Amend until the court ruled on the
pending Motion to Dismiss. Defs.’ Mot. to Stay Consideration of Pls.’ Mot. to Am., ECF No. 21
[hereinafter Defs.’ Mot. to Stay].
The parties’ motions are now ripe for consideration.
III. LEGAL STANDARD
Upon a motion to dismiss under Rule 12(b)(2), the plaintiff bears the burden of establishing
a factual basis for personal jurisdiction. Crane v. N.Y. Zoological Soc., 894 F.2d 454, 456 (D.C.
Cir. 1990)). A plaintiff can survive a motion to dismiss if she makes a “prima facie” showing of
personal jurisdiction. Edmond v. U.S. Postal Serv. General Counsel, 949 F.2d 415, 424 (D.C.
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Cir. 1991). “[T]o establish a prima facie case, plaintiffs are not limited to evidence that meets the
standards of admissibility required by the district court. Rather, they may rest their argument on
their pleadings, bolstered by such affidavits and other written materials as they can otherwise
obtain.” Mwani v. bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005). The court resolves all factual
discrepancies in the record in favor of the plaintiff. See Crane, 894 F.2d at 456.
When evaluating a motion under Rule 12(b)(6), the court “construe[s] the complaint ‘in
favor of the plaintiff, who must be granted the benefit of all inferences that can be derived from
the facts alleged.’” Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012) (quoting
Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979)). The court need not accept as true,
however, “a legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To survive a motion
to dismiss, the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’” Id. (quoting Twombly, 550 U.S. at 570). A claim is
plausible on its face “when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id.
IV. DISCUSSION
A. Personal Jurisdiction
Before turning to the legal sufficiency of Plaintiffs’ allegations, the court begins, as it must,
by determining whether it can exercise personal jurisdiction over Defendants Brooke Buchanan,
WFMI, and WF Services. 1 E.g., Forras v. Rauf, 812 F.3d 1102, 1105 (D.C. Cir. 2016). Personal
1
Defendant WFM Group, a Delaware corporation with its principal place of business in Texas, did not assert lack of
personal jurisdiction when it moved to dismiss the Amended Complaint; it moved for dismissal only under Rule
12(b)(6). WFM Group therefore has waived lack of personal jurisdiction as a defense. See Fed. R. Civ. P. 12(h);
Gilmore v. Palestinian Interim Self-Gov’t Auth., 8 F. Supp. 3d 9, 13 (D.D.C. 2014) (quoting Candido v. District of
Columbia, 242 F.R.D. 151, 161 (D.D.C. 2007) (“[I]f a party files a Rule 12(b) motion to dismiss, it may not
subsequently assert any Rule 12(b) defenses that were available when the first Rule 12(b) motion was filed.”)). The
court later asked the parties to brief the impact of a recent Supreme Court decision, Bristol-Myers Squibb Co. v.
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jurisdiction takes two forms: (1) “general or all-purpose jurisdiction” or (2) “specific or case-linked
jurisdiction.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011).
General jurisdiction exists where a defendant’s contacts with the forum state are sufficiently
“continuous and systematic,” such that the defendant is “essentially at home” in the forum. See
id. For individuals, “the paradigm forum for the exercise of general jurisdiction is the individual’s
domicile.” Id. at 924. For corporations, “it is an equivalent place, one in which the corporation
is fairly regarded as at home,” id., namely “the place of incorporation and principal place of
business,” Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014). In this case, Plaintiffs do not
contend that the court has general jurisdiction over any of the corporate Defendants or Buchanan.
See Pls.’ Opp’n at 6 (conceding lack of general jurisdiction). Thus, the parties dispute whether
exercising specific jurisdiction over these Defendants (except WFM Group, see n. 1, supra) is
appropriate.
Specific jurisdiction is case specific. “In contrast to general, all-purpose jurisdiction,
specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the
very controversy that establishes jurisdiction.” Goodyear, 564 U.S. at 919 (citation omitted).
Stated differently, specific jurisdiction exists if a claim is related to or arises out of the non-resident
defendant’s contacts with the forum. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466
U.S. 408, 414 n.8 (1984).
A plaintiff seeking to establish specific jurisdiction over a non-resident defendant must
make two showings. She must “establish that specific jurisdiction comports with the forum’s
Superior Court of Cal., San Francisco Cty., 137 S. Ct. 1773 (2017). See Order, ECF No. 25. In their response,
WFM Group asserted for the first time that the court lacked personal jurisdiction as to it, as well, except as to one
Plaintiff’s claims. See Defs.’ Suppl. Br. Regarding Personal Jurisdiction, ECF No. 26. The court, however, declines
to consider WFM Group as having asserted a personal jurisdiction defense since the court raised the question of
Bristol-Myer’s application sua sponte. See Kapar v. Kuwait Airways Corp., 845 F.2d 1100, 1105 (D.C. Cir. 1988)
(holding that district court committed error when it sua sponte dismissed claims against a defendant for lack of
personal jurisdiction). Accordingly, only the sufficiency of Plaintiffs’ pleading against WFM Group is at issue.
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long-arm statute, D.C. Code § 13-423(a), and does not violate due process.” FC Inv. Group LC
v. IFX Markets, Ltd., 529 F.3d 1087, 1094–95 (D.C. Cir. 2008). As pertinent to this case, the
District of Columbia’s long-arm statute provides that specific jurisdiction exists if the claim against
the non-resident defendant arises from the defendant’s:
(1) transacting any business in the District of Columbia;
(2) contracting to supply services in the District of Columbia;
(3) causing tortious injury in the District of Columbia by an act or
omission in the District of Columbia;
(4) causing tortious injury in the District of Columbia by an act or
omission outside the District of Columbia if the defendant regularly
does or solicits business, engages in any other persistent course of
conduct, or derives substantial revenue from goods used or
consumed, or services rendered, in the District of Columbia; [or]
(5) having an interest in, using, or possessing real property in the
District of Columbia[.]
D.C. Code § 13-423(a)(1)–(5). Even if plaintiff satisfies one of these prongs, due process supplies
a “constitutional check” and “sets the outer boundary” for the court’s jurisdiction. Crane, 814
F.2d at 762. Whether due process is satisfied depends on weighing “the facts of each case . . .
against notions of fairness, reasonableness and substantial justice.” Shoppers Food Warehouse v.
Moreno, 746 A.2d 320, 329 (D.C. 2000). Thus, the propriety of subjecting a defendant to a
court’s jurisdiction is a case-specific inquiry.
1. The Impact of Bristol-Myers Squibb Co. v. Superior Court of California,
San Francisco County
The court starts the personal jurisdiction inquiry with the Supreme Court’s recent decision
in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 137 S. Ct.
1773 (2017). The court ordered the parties to provide supplemental briefing addressing the
impact of Bristol-Myers on this case. See Order, ECF No. 25. Specifically, the court asked
“whether this court can, consistent with the requirements of due process as articulated in Bristol-
Myers Squibb, exercise specific jurisdiction over Defendants with respect to any of the asserted
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claims, except those by Vasquez.” Id. at 2–3. The court singled out Vasquez because, as the
only Plaintiff employed at a Whole Foods store in the District of Columbia at the time of his
termination, Vasquez is the only Plaintiff to have clearly suffered injury in the District, thus
satisfying the requirement of due process. See id. at 2. By comparison, the other Plaintiffs
resided and worked in either Maryland or Virginia at the time of their terminations, thereby raising
the question whether their claims have any connection to the District of Columbia that would
enable the court to exercise personal jurisdiction over Buchanan, WFMI, or WF Services. See id.
at 2–3.
In Bristol-Myers, “[a] group of plaintiffs—consisting of 86 California residents and 592
residents from 33 other States” brought a mass tort action in California state court arising from
injuries allegedly caused by a drug manufactured by Bristol-Myers Squibb. 137 S. Ct. at 1777–
78. Incorporated in Delaware and headquartered in New York, Bristol-Myers Squibb challenged
the California state court’s exercise of specific jurisdiction over the company as to the claims of
the non-resident plaintiffs, none of whom asserted any injury from the drug in California or any
other connection to the state. Id. at 1777–80, 1782. The Court agreed with Bristol-Myers Squibb
that the California state court’s exercise of personal jurisdiction over the company as to those
claims brought by the non-resident plaintiffs violated the Due Process Clause of the Fourteenth
Amendment. Applying “settled principles regarding specific jurisdiction,” the Supreme Court
explained that the California state court’s exercise of specific jurisdiction as to the non-residents’
claims was unconstitutional because there was no “connection between the forum and the [non-
residents’] specific claims.” Id. at 1781. For instance, the non-resident plaintiffs had not shown
that they were prescribed or had purchased or had ingested the drug in California. Id. Nor were
any of the non-resident plaintiffs injured by the drug in California. Id. In short, the Supreme
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Court reasoned, the non-resident plaintiffs’ claims did not comport with due process because none
involved any activity or occurrence that took place in California. Id. The Court also rejected the
argument that the similarity of the residents’ and non-residents’ claims obviated the due process
infirmity. As the Court explained, “[t]he mere fact that other plaintiffs were prescribed, obtained,
and ingested [the drug] in California—and allegedly sustained the same injuries as did the
nonresidents—does not allow the State to assert specific jurisdiction over the nonresidents’
claims.” Id. Accordingly, the Court held that the non-resident plaintiffs’ claims could not be
heard in California state court.
In this case, Bristol-Myers does not pose a jurisdictional obstacle. All Plaintiffs have
alleged some injury in the District of Columbia as a result of Defendants’ alleged defamatory
statements. Plaintiffs assert that, through Buchanan, Defendants made various defamatory
statements that ran in the local press, including in The Washington Post. Am. Compl. ¶¶ 43, 73;
see AP Article; Washington Post Article. They further allege that “Store Team Leaders, Assistant
Store Team Leaders, and Team Members for Whole Foods in the Mid-Atlantic region knew and
understood the defamatory statements published by Whole Foods referred to Plaintiffs.” Am.
Compl. ¶ 81. Viewing these alleged facts in the light most favorable to Plaintiffs, Plaintiffs have
plausibly asserted that Defendants’ defamatory statements reached residents of the District of
Columbia. Such an allegation is sufficient to establish injury in the District of Columbia, even by
a plaintiff who does not reside or work here. See Charlton v. Mond, 987 A.2d 436, 438 (D.C.
2010) (agreeing with a plaintiff asserting a defamation claim, who was a Maryland resident and
whose business was registered in Maryland, that “the situs of the alleged injury was certainly in
the District because the allegedly defamatory material reached some who were indisputably
District residents”). This case, therefore, does not present the jurisdictional deficiency at issue in
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Bristol-Myers—the lack of any connection between the claim and the forum. Because Plaintiffs
have alleged injury in the District of Columbia, there is no due process impediment to Defendants
being held to account for their alleged actions in this court.2
Having concluded that Bristol-Myers does not preclude the exercise of personal jurisdiction
over WFMI, WF Services, and Buchanan on constitutional grounds, the court turns to address
whether dismissal of the Amended Complaint is warranted for lack of specific jurisdiction as to
those Defendants under the D.C. long-arm statute.
2. Specific Jurisdiction over Brooke Buchanan
The court starts its long-arm inquiry with Buchanan. Buchanan is a Texas resident and is
the Global Vice President of Communications for WF Services, which is headquartered in Austin,
Texas. See Defs.’ Mot., Decl. of Brooke Buchanan, ECF No. 12-4 [hereinafter Buchanan Decl.]
¶¶ 3–4. Plaintiffs allege that, shortly after their termination, Buchanan contacted reporters located
in the District of Columbia and made false and defamatory statements about them and the
circumstances of their termination. Am. Compl. ¶¶ 22, 41–43. Plaintiffs attribute an even more
expansive role to Buchanan in their opposition memorandum. See Pls.’ Opp’n at 14–15; Pls.’
Suppl. Br., ECF No. 27 [hereinafter Pls.’ Suppl. Br.], at 3–4. Plaintiffs contend that, because WF
Services provided “legal services related to the investigation . . . within the District of Columbia,”
Pls.’ Opp’n at 14 (citing Defs.’ Mot., Decl. of Patricia Yost, ECF No. 12-3 [hereinafter Yost Decl.]
¶ 12), and because Buchanan was part of WF Services’ investigative team, she engaged in a
“persistent course of conduct” and received “substantial revenue” from the investigation of
2
The court need not evaluate whether every claim advanced by Plaintiff satisfies the requirements of due process.
So long as Plaintiffs obtain personal jurisdiction as to one claim—and here they have via their defamation cause of
action—the doctrine of pendent personal jurisdiction permits the court to exercise personal jurisdiction over
Defendants as to other “claims that arose out of the same core operative fact[s].” Oetiker v. Werke, G.m.b.H., 556
F.2d 1, 4 (D.C. Cir. 1977). All of Plaintiffs’ claims in this case concern their termination from Whole Foods for
disclosures made about the Gainsharing program; therefore, the court has pendent personal jurisdiction with respect
to Plaintiffs’ non-defamation causes of action.
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Plaintiffs in the District of Columbia, see id. at 14–15; Pls.’ Suppl. Br. at 3–4. Plaintiffs maintain
that these contacts are sufficient to establish specific jurisdiction over Buchanan under subsection
(a)(4) of the long-arm statute. The court disagrees.
Section 13-423(a)(4) allows for the exercise of personal jurisdiction over a defendant that
causes “tortious injury in the District of Columbia by an act or omission outside the District of
Columbia if the defendant regularly does or solicits business, engages in any other persistent
course of conduct, or derives substantial revenue from goods used or consumed, or services
rendered, in the District of Columbia.” D.C. Code § 13-423(a)(4). As the Circuit has observed,
the drafters of the long-arm statute “apparently intended that the (a)(4) subsection would not
occupy all of the constitutionally available space.” Crane, 814 F.2d at 762. The subsection’s
required “plus” factors—regularly doing or soliciting business, engaging in persistent conduct, or
deriving substantial revenue—are meant “to filter out cases in which the in-forum impact is an
isolated event and the defendant has no, or scant, affiliations with the forum.” Id. at 763.
Consequently, subsection (a)(4) requires “something more” of plaintiffs than simply asserting that
tortious conduct outside the District caused injury inside the District. Id.
Plaintiffs have failed to meet their burden of making a prima facie case of personal
jurisdiction under subsection (a)(4) as to Buchanan. For starters, Plaintiffs offer no “specific
facts” to support their contention that Buchanan was part of the WF Services’ team that
investigated Plaintiffs in the District of Columbia. Lans v. Adduci Mastriani & Schaumberg, LLP,
786 F. Supp. 2d 240, 263 (D.D.C. 2011) (citation omitted). The only fact that Plaintiffs offer to
place Buchanan on the investigative team is that she received information about the investigation
before making statements about Plaintiffs to the press. See Pls.’ Opp’n at 14. But Buchanan’s
mere receipt of investigative findings does not plausibly make her a member of the investigative
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team that supposedly engaged in a persistent course of conduct in the District. Moreover, even if
she were part of the investigative team, Plaintiffs offer nothing to establish that Buchanan herself
was involved in a “persistent course of conduct” in the District of Columbia. Plaintiff cannot
“aggregate factual allegations concerning multiple defendants”—or, in this case, impute to
Buchanan the acts of other WF Services employees or agents—“in order to demonstrate personal
jurisdiction over” her. Lans, 768 F. Supp. 2d at 264 (internal quotation marks omitted); accord
Mouzon v. Radiancy, Inc., 85 F. Supp. 3d 361, 372–73 (D.D.C. 2015) (rejecting, for purposes of
subsection (a)(4) jurisdiction, the plaintiffs’ attempt to treat the employee’s contacts with the
forum state as the same as his employer’s contacts). Finally, insofar as they claim that Buchanan
received “substantial revenue” from the investigation, Plaintiffs concede that such revenue is “by
virtue of her employment” with WF Services, and is not directly personal to her. Pls.’ Opp’n at
15. Even if the court accepts that WF Services derived substantial revenue from the investigation,
“it would not necessarily follow” that Buchanan did so as well. Mouzon, 85 F. Supp. 3d at 373.
In sum, Plaintiffs’ allegations about Buchanan’s contacts with the District are insufficient to “make
a prima facie showing of the pertinent jurisdictional facts to survive a motion to dismiss for lack
of personal jurisdiction.” Livnat v. Palestinian Auth., 851 F.3d 45, 56–57 (D.C. Cir. 2017)
(emphasis and internal quotation marks omitted). The court therefore dismisses without prejudice
all claims against Buchanan for lack of personal jurisdiction.
3. Specific Jurisdiction over WFMI and WF Services
a. WFMI
Turning next to WFMI, WFMI is a Texas corporation with its principal place of business
in Austin, Texas. Am. Compl. ¶ 18. According to a declaration submitted by Patricia Yost, an
officer with WF Services, “WFMI is . . . a holding company that owns shares of other operating
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companies, which in turn own and operate the individual Whole Foods market stores.” Yost Decl.
¶ 5. Yost further attests that WFMI does not own or operate any stores in the District of Columbia;
has no employees, office space, or telephones in the District; and has no bank accounts or other
tangible personal or real property in the District. See id. ¶¶ 5, 9. WFMI also does not, according
to Yost, set policies for Whole Foods stores and does not regulate or assure uniformity of policies
in the stores. See id. ¶ 10.
To counter these assertions, Plaintiffs point to two pieces of evidence and one set of
allegations. First, Plaintiffs offer WFMI’s Form 10-K filing with the Securities and Exchange
Commission for the fiscal year ending September 2016, which states that, “As of September 25,
2016, we operated 456 stores: 436 stores in 42 U.S. states and the District of Columbia,” and
identifies four such stores in the District. Pls.’ Opp’n., Ex. 1, ECF No. 17-4 [hereinafter 10-K
filing], at 14 (emphasis added). Second, Plaintiffs cite to the Complaint and Answer filed in
FTC v. Whole Foods Market, Inc., 07-cv-1021-PLF (D.D.C.), an antitrust enforcement action
brought by the Federal Trade Commission (“FTC”) to enjoin the merger of Whole Foods and
another grocery chain. In the Complaint, the FTC defined “Whole Foods” to mean “Whole Foods
Market, Inc.” and alleged that “Whole Foods transacts business in the District of Columbia,” an
allegation WFMI admitted in its Answer. See Pls.’ Opp’n. at 9–10. Plaintiffs also cite to another
response in the Answer, in which WFMI admitted that it “operates approximately 190 stores in
more than 30 states and the District of Columbia.” Pls.’ Opp’n, Ex. 3, ECF No. 17-6, at 2 ¶ 2.
Third, Plaintiffs point to their allegations that the shifting of labor costs to undermine the
Gainsharing program was a “nation-wide corporate practice” and Plaintiffs were instructed by
“Whole Foods corporate leadership . . . to shift labor costs.” Am. Compl. ¶¶ 29, 31. Plaintiffs
argue this “nation-wide” practice only could have come from the “corporate parent,” thereby
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creating relevant contacts between WFMI and the District of Columbia. Based on the foregoing,
Plaintiffs maintain that this court may exercise specific jurisdiction over WFMI because their
claims in this case arise from WFMI’s “transacting [ ] business in the District,” D.C. Code § 13-
423(a)(1); “contracting to supply services in the District,” id. § 13-423(a)(2); and “having an
interest in, using, [and] possessing real property in the District,” id. § 13-423(a)(5). Pls.’ Opp’n
at 7–8. They further assert that personal jurisdiction also is available under subsections (a)(3) and
(a)(4) by virtue of WFMI’s agents terminating Plaintiff Vasquez, who was a Store Team Leader
at a store in the District of Columbia, 3 and defaming all Plaintiffs in the District of Columbia. Id.
at 8. Plaintiffs therefore insist that WFMI “qualifies under all five of the cited bases for this Court
to exercise specific personal jurisdiction under the long-arm statute.” Id.
The court disposes of two of the asserted bases quickly. Neither subsection (a)(2) nor
subsection (a)(5) supports the exercise of long-arm jurisdiction. None of Plaintiffs’ claims
“aris[e] from,” D.C. Code § 13-423(b), WFMI’s “contracting to supply services in the District of
Columbia,” id. § 13-423(a)(2), or its “having an interest in, using, or possessing real property in
the District of Columbia,” id. § 13-423(a)(5). Accordingly, long-arm jurisdiction over WFMI, if
it exists at all, must come under subsections (a)(1), (a)(3), or (a)(4).
Subsection (a)(1) does not, however, provide a basis to exercise jurisdiction over WFMI.
Save an argument buried in a footnote, Plaintiffs do not argue that WFMI’s subsidiaries’ contacts
with the District of Columbia should be imputed to WFMI. 4 Rather, Plaintiffs contend that WFMI
3
Plaintiffs also maintain that Plaintiff Sheikh was employed in the District of Columbia when terminated. See Pls.’
Opp’n at 8. But that assertion is contradicted by their Amended Complaint, which alleges that Sheikh was a Store
Team Leader in Reston, Virginia, at the time of his termination. Am. Compl. ¶ 10. For that reason, the court only
identifies Vasquez as having been employed in the District of Columbia when terminated.
4
In that footnote, Plaintiffs argue that WFMI “exercises such active and substantial control over Whole Foods Group,
it is merely an alter ego of its subsidiary and its individual stores.” Pls.’ Opp’n at 11 n.6. For that proposition,
Plaintiffs point only to WMFI’s statements in the Form 10-K. See id. The 10-K, on its own, however, cannot
establish, even at the pleadings stage, that WFMI is the alter ego of its subsidiaries. See Khatib v. Alliance Bankshares
15
directly “transacts business” in the District of Columbia through its operation of stores and its
setting of policies for stores. Pls.’ Opp’n at 8–10. Plaintiffs’ evidence and fact allegations do
not support that proposition, let alone overcome Defendants’ contrary evidence. WFMI’s Form
10-K, on which Plaintiffs so heavily rely, does not establish WFMI’s direct control of stores in the
District. “[I]t is widely acknowledged that ‘consolidating the activities of a subsidiary into the
parent’s reports is a common business practice.’” Khatib v. Alliance Bankshares Corp., 846 F.
Supp. 2d 18, 33 (D.D.C. 2012) (internal quotation marks omitted). That is precisely what WFMI
did here. WFMI expressly noted that when the word “we” is used in the Form 10-K, unless
otherwise specified, “we” includes “Whole Foods Market, Inc., and its consolidated subsidiaries.”
10-K filing, at 1 (emphasis added). So, even though WFMI’s Form 10-K says that “we” operate
stores in the District of Columbia, id., it cannot reasonably be read to mean that WFMI itself
operates those stores. Likewise, WFMI’s admission in its Answer in FTC v. Whole Foods Market
that it “transacts business within the District of Columbia” does not advance Plaintiffs’ cause.
The court views that admission much like the Form 10-K—an acknowledgment that the corporate
entity as a whole operates stores in the District of Columbia, and no more. After all, FTC v. Whole
Foods Market involved a federal government enforcement action to block a $565 million merger
between the country’s two largest premium, natural, and organic supermarket chains. See FTC v.
Whole Foods Market, Inc., 548 F.3d 1028, 1032 (D.C. Cir. 2008). In such circumstances, the
court finds it highly improbable that, by admitting to conducting business in the District of
Columbia, WMFI intended to disavow its corporate structure and convey that it, in fact, transacts
such business directly, instead of through a subsidiary. Finally, Plaintiffs’ allegations that the
cost-shifting practice was “nation-wide” and that “corporate leadership” instructed Plaintiffs to
Corp., 846 F. Supp. 2d 18, 31–33 (D.D.C. 2012).
16
take such action, see Am. Compl. ¶¶ 29, 31, is simply too vague to ascribe jurisdictional contacts
to WFMI in the District. Plaintiffs do not allege specific facts supporting their assertion that labor
cost-shifting occurred at stores outside the Mid-Atlantic region; nor do they identify the “corporate
leadership” that directed Plaintiffs’ conduct. Absent such allegations, Plaintiffs cannot overcome
Yost’s sworn declaration that WFMI does not “set policies for any Whole Foods Market store, nor
does WFMI regulate or assure the uniformity of policies in Whole Foods Market stores . . . . [,
which] is set and regulated by other Whole Foods entities, not WFMI.” Yost Decl. ¶ 10. Thus,
having failed to provide specific facts to contradict Yost’s testimony, Plaintiffs have not satisfied
their burden of establishing specific jurisdiction as to WFMI under subsection (a)(1).
Next, subsection (a)(3) provides no refuge. The only alleged tortious conduct occurring
in the District of Columbia, as required under subsection (a)(3), is Vasquez’s firing. 5 Plaintiffs
aver that “regional president Scott Allshouse, vice-president Nicole Newscoe, and executive
coordinator of HR David Gearhart” terminated Plaintiffs “at the regional office on December 1,
2016.” Am. Compl. ¶ 16. That allegation, however, is insufficient to attribute Vasquez’s firing
(or any other Plaintiff’s firing for that matter) to WFMI because nowhere do Plaintiffs allege that
Allshouse, Wescoe, or Gearhart are officers, employees, or agents of WFMI. Cf. Livnat, 851 F.3d
at 57 (observing that “bare allegations” of agency are insufficient to make out a prima facie case
of personal jurisdiction). In fact, the only record evidence suggests that they are not. See Yost
Decl. ¶ 7. Nothing alleged in the Amended Complaint, therefore, establishes jurisdiction over
WFMI under subsection (a)(3).
Finally, subsection (a)(4) does not, as Plaintiffs maintain, confer jurisdiction over WFMI
5
Any assertion that Buchanan’s alleged defamatory statements—made in Texas—constitute tortious activity in the
District of Columbia because they were published here is squarely foreclosed by precedent. See Forras, 812 F.3d at
1107 (observing that “this court has twice held that publishing defamatory or otherwise tortious statements within the
District that were made outside the District falls short of what subsection (a)(3) requires”).
17
through Plaintiffs’ defamation claim. That contention suffers from two defects. First,
Buchanan, who uttered the alleged defamatory statement, is not alleged to be an officer, employee,
or agent of WFMI. Cf. Livnat, 851 F.3d at 57. Indeed, the only evidence about her employment
comes from Buchanan herself, who attests that she is the “Global Vice President of
Communications” for WF Services. Buchanan Decl. ¶ 1. Second, Plaintiffs’ argument that
WFMI “derives substantial revenue” from the operation of Whole Foods stores in the District of
Columbia is unpersuasive. As a holding company, to the extent WFMI earns any revenue from
the District, it does so only indirectly through the shares it holds in the subsidiary that owns and
operates the District’s Whole Foods stores. To attribute such District-generated earnings to
WFMI would run afoul of the rule that “it is generally improper to impute the contacts of a
subsidiary to a corporate parent that is a holding company because the subsidiary is not performing
a function that the parent would otherwise have to perform itself (the holding company could
simply hold another type of subsidiary).” Khatib, 846 F. Supp. 2d at 33 (internal quotation marks
and citation omitted). Plaintiffs offer no reason for the court to deviate from that general rule in
this case.
In the end, Plaintiffs have not offered a sufficient factual basis upon which this court can
exercise personal jurisdiction over WFMI. Accordingly, all claims against WFMI are dismissed
without prejudice.
b. WF Services
The final jurisdictional inquiry concerns WF Services. WF Services is a Delaware
corporation with its principal place of business in Texas. Yost Decl. ¶ 3. Yost describes WF
Services “as the administrative arm of the Whole Foods Market family of companies, providing
accounting, legal, and other administrative services to the Whole Foods Market [regional]
18
operating entities,” such as WFM Group. Id. ¶ 6; see also id. ¶ 11. WF Services charges WFM
Group and other operating companies the cost of the services provided, “plus a nominal upcharge.”
Id. ¶ 11. The amounts charged by WF Services for its services “are not connected to any goods
or services sold by WFM Group, including goods or services sold in the District of Columbia.”
Id. Moreover, WF Services has no permanent presence in the District of Columbia. It has no
employees, office space, or telephones in the District; nor does it have any bank accounts or other
tangible or real property in the District. Id. ¶ 13. It also does not render services directly to
persons or entities operating within the District. Id. With regard to the events at issue in this
case, according to Yost, WF Services provided “legal services related to the investigation and
preparation for this and related pending legal matters.” Id. ¶ 12. Additionally, it provided “non-
legal services . . . in relation to the Gainsharing issues generally . . . at WFM Group’s office in
Rockville, Maryland.” Id. Finally, Yost attests that WF Services does not derive revenue from
any goods sold or services rendered in the District of Columbia. Id. ¶ 13.
Plaintiffs offer no facts of their own in opposition to Yost’s affidavit. Instead, they assert
that Yost makes their case for them. They contend that WF Services does not provide its services
“in a vacuum,” but instead provides administrative services “directly” to the four stores located in
the District of Columbia. Pls.’ Opp’n at 12. They also point to Yost’s admission that
WF Services provided legal services in connection with the investigation of Plaintiffs and other
related pending matters. Id. at 13. And, finally, they rely on Buchanan’s defamatory utterances,
attributing those to her employer, WF Services. Id. Based on these specific facts, Plaintiffs
assert that long-arm jurisdiction over WF Services is warranted under subsections (a)(1), (2), and
(4).
19
The court views it as a close call, but ultimately concludes that Plaintiffs have satisfied
their burden of making a prima facie showing of personal jurisdiction under subsection (a)(4). As
previously discussed in connection with Buchanan, Plaintiffs have alleged tortious conduct outside
the District of Columbia—Buchanan’s alleged defamatory statements—as well as injury in the
District of Columbia, because Buchanan’s statements were received in the District. But, unlike
with Buchanan, Plaintiffs have satisfied one of the “plus” factors required by subsection (a)(4)
with regard to WF Services. Plaintiffs have pointed to facts connecting WF Services to the
District of Columbia that render it plausible that WF Services either “regularly does . . . business”
or “engages in any other persistent course of conduct” in the District. Yost’s concession that WF
Services provided legal services in connection with the investigation of Plaintiffs in the District of
Columbia makes it “plausible” that WF Services has provided similar services in the past in this
forum. Cf. Forras, 812 F.3d at 1105. It may be that WF Services’ legal and investigative
contacts in this case are an isolated instance of contacts with the District of Columbia, in which
case they would not qualify as either “regular” or “persistent” conduct sufficient to satisfy
subsection (a)(4). But the ultimate determination of whether the court can exercise personal
jurisdiction over WF Services will have to wait until after the conclusion of discovery.
* * *
Before moving on, the court recaps the results of the personal jurisdiction inquiry.
Plaintiffs did not meet their burden of showing pertinent facts to make out a prima facie case of
personal jurisdiction against WFMI and Buchanan; thus, the claims against them are dismissed
without prejudice. Plaintiffs did meet their burden as to WF Services, and WFM Group did not
contest jurisdiction. The court now turns to address the merits of Defendants’ 12(b)(6) motion as
to WF Services and WFM Group.
20
B. Merits
1. Wrongful Termination in Violation of Public Policy (Count I)
All Plaintiffs concede that they were at-will employees. Nevertheless, in Count I of the
Amended Complaint, they bring a claim for wrongful termination, asserting that the public policy
exception to the at-will employment doctrine applies. Plaintiffs assert that, because Whole Foods
terminated them for blowing the whistle on the nationwide practice of shifting labor costs to
undermine the Gainsharing program and steal bonuses from employees, they can maintain a claim
for wrongful termination as a matter of public policy. As Plaintiffs were terminated from
employment in different jurisdictions, the law applicable to Count I varies. District of Columbia
law applies to Vasquez; Maryland law applies to Bautista and Njie; and Virginia law applies to
Sheikh, Sadoudi, Ba, Miano, and Amegnaglo. Regardless of the differences in law, none of
Plaintiffs’ wrongful termination claims survive, albeit for different reasons.
a. Public-Policy Exception in District of Columbia
The District of Columbia recognizes a common law tort of wrongful discharge “as an
exception to the traditional at-will doctrine governing termination of employment, where the
discharge violates ‘a clear mandate of public policy.’” District of Columbia v. Beretta, USA
Corp., 872 A.2d 633, 645 (D.C. 2005) (en banc) (quoting Carl v. Children’s Hosp., 702 A.2d 159,
164 (D.C. 1997)). When asked to apply the exception:
A court should consider seriously only those arguments that reflect
a clear mandate of public policy—i.e., those that make a clear
showing, based on some identifiable policy that has been officially
declared in a statute or municipal regulation, or in the Constitution,
that a new exception is needed. Furthermore, there must be a close
fit between the policy thus declared and the conduct at issue in the
allegedly wrongful termination.
Rosell v. Long Rap, Inc., 121 A.3d 775, 778 (D.C. 2015) (quoting Carl, 702 A.2d at 163). In view
21
of these strict requirements, District of Columbia courts have described the public policy exception
as “narrow.” Id.
Identifying a public policy and satisfying the “close fit” requirement does not, however,
necessarily get a plaintiff across the finish line to stating a wrongful termination claim. Other
public policies can foreclose the claim. “Even where there is a showing of a clearly identifiable
policy, the D.C. Court of Appeals has refused to find new exceptions to the doctrine of at-will
employment where the legislature has already ‘creat[ed] a specific, statutory cause of action to
enforce’ the public policy at issue.” LeFande v. District of Columbia, 864 F. Supp. 2d 44, 50
(D.D.C. 2012) (quoting Carter v. District of Columbia, 980 A.2d 1217, 1225–26 (D.C. 2009)).
In LeFande, the court rejected a plaintiff’s attempt to premise a claim for wrongful discharge in
violation of public policy based on his belief that he was terminated for engaging in protected
speech and criticizing his employer in a news article. Id. at 46–47, 49–51. Reasoning that the
plaintiff could vindicate any perceived First Amendment violation pursuant to 42 U.S.C. § 1983—
a specific statutory cause of action enacted to enforce exactly the kinds of deprivations the plaintiff
complained of—the court declined “to recognize a novel, competing cause of action for wrongful
discharge at common law.” Id. (internal quotation marks omitted).
The same fate befalls Vasquez here. Vasquez invokes the District of Columbia’s Wage
Payment and Collection Law (“DCWPCL”), D.C. Code § 32-1301 et seq., arguing that those
provisions reflect a public policy that warrants departing from the general rule of at-will
employment. Am. Compl. ¶ 49a–c. Employers in the District of Columbia must “pay all wages
earned to his or her employees on regular paydays designated in advance by the employer and at
least twice during each calendar month,” id. § 32-1302, and pay a departing employee’s wages
within a statutorily-designated period of time, id. § 32-1303. The DCWPCL also imposes
22
criminal penalties upon employers who negligently or willfully fail to comply with its provisions.
Id. § 32-1307. Thus, Plaintiffs argue, the DCWPCL reflects a public policy requiring an
employer’s timely payment of all employee wages, including bonuses. See Pls.’ Opp’n at 18
(defining “wage” to include “bonus” under D.C. Code § 32-1301(3)(A)). The problem with that
argument, however, is that the DCWPCL itself affords Vasquez a statutory remedy: It prohibits an
employer from “discharg[ing], threaten[ing], penaliz[ing], or in any other manner discriminat[ing]
or retaliat[ing]” against an employee who has “made a complaint to his or her employer . . . or to
any other person that the employer has engaged in conduct that the employee, reasonably and in
good faith, believes violates a provision” of the DCWPCL. D.C. Code § 32-1311(a)(1). An
aggrieved employee has recourse under the DCWPCL: An employee “may bring a civil action in
a court . . . against any employer” alleged to have violated the statute. Id. § 32-311(c). The
availability of this private cause of action forecloses Vasquez’s attempt to recover under the
common law. Stated differently, “this is not a case where [the court has] any need to create a new
exception to the at-will employment doctrine in order to vindicate an important public policy.”
See Carter, 980 A.2d at 1226. The court therefore dismisses Vasquez’s wrongful termination
claim. 6
b. Public Policy Exception in Maryland
Turning next to Plaintiffs Bautista and Njie, Maryland law also recognizes that “there is a
public policy exception to the at-will employment rule for wrongful termination ‘when the
motivation for the discharge contravenes some clear mandate of public policy[.]’” Yuan v. Johns
Hopkins Univ., 157 A.3d 254, 262 (Md. 2017) (quoting Adler v. Am. Standard Corp., 432 A.2d
6
In their Opposition to Defendants’ Motion to Dismiss, Plaintiffs raise for the first time a statutory claim for retaliation
under the DCWPCL itself, D.C. Code § 32-1311. Pls.’ Opp’n at 16, 20–21. However, “[i]t is axiomatic that a
complaint may not be amended by the briefs in opposition to motion to dismiss,” and the court therefore declines to
consider this claim. See Arbitraje Casa de Cambio v. US Postal Serv., 297 F. Supp. 2d 165, 170 (D.D.C. 2003).
23
363, 473 (Md. 1981)). Whether the exception applies is decided on a case-by-case basis, and
requires that “the employee must be discharged, the basis for the employee’s discharge must
violate some clear mandate of public policy, and there must be a nexus between the employee’s
conduct and the employer’s decision to fire the employee.” Id. at 262–63 (internal quotations
marks omitted). But, like District of Columbia law, Maryland law will not recognize a wrongful
discharge claim where an adequate statutory remedy exists. As the Court of Appeals of Maryland
has stated: “[Wrongful] discharge is inherently limited to remedying only those discharges in
violation of a clear mandate of public policy which otherwise would not be vindicated by a civil
remedy.” Makovi v. Sherwin-Williams Co., 561 A.2d 179, 180 (Md. 1989) (refusing to recognize
wrongful discharge claim based on sex discrimination in light of remedies available under
Title VII); see also Wholey v. Sears Roebuck, 803 A.2d 482, 490 (Md. 2002). Thus, in Maryland,
the availability of a statutory remedy forecloses recognition of a common law wrongful discharge
claim.
Here, much like Vasquez, Bautista and Njie premise their claim on Maryland’s Wage
Payment and Collection Law, Md. Code Lab. & Empl. § 3-501 et seq. (“Maryland Wage Law”).
Am. Compl. ¶ 49d–f. That statute, however, provides injured employees a remedy. If an
employer fails to pay employee “wages”—a term that includes bonuses, Md. Code Lab. & Empl.
§ 3-501(c)(2)(i)—the employee may “bring an action against the employer to recover the unpaid
wages.” Id. § 3–507.2(a). And, if “a court finds that an employer withheld the wages of an
employee in violation of [the Wage Law] . . . the court may award the employee an amount not
exceeding 3 times the wage, and reasonable counsel fees and other costs.” Id. § 3–507.2(b). As
a District Court in Maryland has held, these statutory remedies foreclose a common law claim for
wrongful discharge. “[A]n at-will employee terminated for asserting her rights under [the Wage
24
Law] may not bring an action for [wrongful] discharge because the judicial exception to the at-
will employment doctrine was created to generate a remedy only where none exists.”
See Tarquini v. Superior Prods., Inc., No. 05-3292, 2007 WL 763186, at *6 & n.5 (D. Md. March
12, 2007) (dismissing wrongful discharge claim premised on argument that plaintiff was
discharged in retaliation for asserting her rights under the Maryland Wage Payment and Collection
Law because the Wage Law already “contain[ed] [its] own remed[y] for violation”: “Md. Code
Lab. & Empl. § 3-507.[2]). 7 Accordingly, Plaintiffs Bautista’s and Njie’s wrongful termination
claims are dismissed.
c. Public Policy Exception in Virginia
Plaintiffs Sheikh, Sadoudi, Ba, Miano, Amegnaglo, and Berger’s claim for wrongful
discharge arises under Virginia law. Like the District of Columbia and Maryland, Virginia
recognizes a narrow exception to the at-will employment doctrine, “known as the ‘Bowman’
exception,’” which allows an employee to bring a common-law wrongful discharge claim “if the
‘termination violates Virginia’s public policy.’” Lester v. TMG, Inc., 896 F. Supp. 2d 482, 487
(E.D. Va. 2012) (citing Bowman v. State Bank of Keysville, 331 S.E.2d 797, 800–01 (Va. 1985)).
Virginia courts have recognized a common law wrongful termination claim in “only three
circumstances”:
(1) When an employer violated a policy enabling the exercise of an
employee’s statutorily created right . . . ;
(2) When the public policy violated by the employer was explicitly
expressed in the statute and the employee was clearly a member of
that class of persons directly entitled to the protection enunciated by
the public policy . . . ; [or]
(3) When the discharge was based on the employee’s refusal to
7
Prior to October 2010, the cause of action provision in the Maryland Wage Payment and Collection Law was codified
at Md. Code Lab. & Empl. § 3-507.1 (2010).
25
engage in a criminal act . . . .
Francis v. Nat’l Accrediting Comm’n of Career Arts & Sciences, Inc., 796 S.E.2d 188, 190–91
(Va. 2017). In this case, Plaintiffs do not assert that their discharges spring from a refusal to
engage in a criminal act. Nor do they cite to a statute that “explicitly state[s] that it expresses the
public policy of the Commonwealth.” Miller v. Wash. Workplace, Inc., 298 F. Supp. 2d 364, 379
(E.D. Va. 2004). Instead, they assert they were wrongfully terminated for calling attention to
Whole Foods’ violation of Virginia’s Wage Payment Act, Va. Code Ann. § 40.1–29, which
requires employers to pay employees at regular intervals (at least once per month for salaried
employees, and at least once every two weeks for hourly employees) and by certain enumerated
methods. Am. Compl. ¶ 49g–h. Thus, the court must determine whether the Amended
Complaint plausibly pleads that Defendants “violated a policy enabling the exercise of an
employee’s statutorily created right.” Francis, 796 S.E.2d at 190.
The narrowness of Virginia’s public policy exception is demonstrated by the Virginia
Supreme Court’s recent decision in Francis. There, an employee who was threatened and
harassed at her workplace sought and obtained a preliminary protective order against her
colleague. Id. at 190. Days later, the plaintiff’s employer terminated her because she did not “fit
the vision of the organization.” Id. (internal quotation marks omitted). The plaintiff then filed a
claim for wrongful discharge under Bowman, based on the theory that her termination violated the
public policy embodied in the Virginia Protective Order Statutes, Va. Code Ann. §§ 19.2-152.7:1,
et seq. That law grants individuals the right to obtain a protective order and, according to the
Francis court, states a clear public policy “to protect the health and safety of the petitioner or any
family or household member of the petitioner.” Francis, 796 S.E.2d at 191 (quoting Va. Code
Ann. § 19.2.-152.9(A)). Notwithstanding this strong public policy designed to protect the health
26
and safety of Virginians, the court held that the public policy exception did not support a wrongful
discharge claim. Id. at 191–92. The court noted that Bowman “does not recognize ‘a generalized
cause of action for the tort of ‘retaliatory discharge.’’” Id. (quoting Miller v. SEVAMP, Inc., 362
S.E.2d 915, 918 (Va. 1987)). The court accordingly framed the question before it as whether “a
viable Bowman claim in this context would require a showing that the termination of employment
itself violated the stated public policy of protection of health and safety.” Id. at 191. In holding
the plaintiff had no viable Bowman claim, the court emphasized that the plaintiff “only alleges that
she was terminated because she exercised her rights under the Protective Order Statutes.” Id. at
192. The court contrasted this allegation to the one in Bowman, in which the court upheld a
wrongful discharge claim where employee-shareholders were fired after failing to vote their shares
in support of a proposed merger. Id. Ultimately, the court concluded that, “[u]nlike in Bowman,
where the public policy existed to protect the exercise of the statutory right to vote one’s shares,”
in the instant case “there exist[ed] no corresponding public policy in the Protective Order Statutes
protecting the exercise of the right to seek a protective order.” Id. Accordingly, the court held,
“There is no public policy violated by the termination of [the plaintiff’s] at-will employment.” Id.
In light of the Supreme Court of Virginia’s decision in Francis, the court concludes that
Plaintiffs here do not have a viable claim for wrongful termination under Virginia law. “To
analyze such a claim, it is important to discern what right was conferred on an employee by statute,
and then whether the employer’s termination of employment violated the public policy underlying
that right.” Id. at 191. As to the first inquiry, the Virginia Wage Payment Act does not itself
confer a right on employees to receive pay. Rather, the sole state appellate court in Virginia to
have interpreted the Wage Payment Act describes its purpose as “establish[ing] the public policy
of the Commonwealth as to the manner in which employers pay wages to employees.” Mar v.
27
Malveaux, 732 S.E.2d 733, 738 (Va. Ct. App. 2012) (emphasis added). The court in Mar
emphasized that the Act is a “regulatory not a remedial statute” and, as a result, “we are not
required to liberally construe this statute as a remedy for the benefit of employees.” Id. The
court further noted that the Act does not provide a private right of action, only an administrative
one, and to the extent it creates an “underlying right to receive pay or wages,” that right “derives
not from the Act, but from the contract of employment, express or implied.” Id. at 739 (emphasis
added) (quoting Pallone v. Marshall Legacy Inst., 97 F. Supp. 2d 742, 746 n.11 (E.D. Va. 2000)).
Thus, the court observed, “a[n] aggrieved employee can pursue his private civil action based on
claims of breach of contract or quantum meruit.” Id. Mar, therefore, stands for the proposition
that the Act itself confers no right on employees to receive wages; that right instead is rooted in
contract law.
From that conclusion it naturally follows that each Plaintiff’s termination itself did not
violate public policy. At most, the Wage Payment Act establishes an employee’s right regarding
when and how to get paid. There is no correlative public policy in the Act that protects an
employee’s “exercise” of her right to receive wages. Indeed, if the statutory right to seek a
protective order to safeguard one’s health and safety does not reflect a public policy to protect the
exercise of such a right, then surely the more passive right of receiving earned wage payments on
a regular basis, to the extent it exists statutorily, cannot as a matter of public policy receive greater
protection. The court therefore finds that Plaintiffs have failed to state a claim of wrongful
discharge under Virginia law.
In so ruling, the court recognizes that numerous state and federal courts in Virginia have
gone the other way. Those courts have concluded that the Wage Payment Act confers “an
individual’s right to compensation” and, as such, “implicates a property right that falls within the
28
Bowman exception.” Clark v. BayDocs, Inc., No. 3:12-cv-896, 2013 WL 1333520, at *5 (E.D.
Va. March 9, 2013) (collecting cases); see Blanchard v. Capital One Servs., LLC, No. 2015-6937,
2015 WL 12591838, at *2–*4 (Va. Cir. Ct. Oct. 26, 2015) (“[A] plaintiff’s grounds for wrongful
termination does offend the public policy to protect an employee’s property right in earned
compensation, which can include bonuses, thereby falling within the Bowman exception and
giving a plaintiff a cause of action.”). This court’s obligation, however, is to predict how the
Supreme Court of Virginia would rule in the present case. Cf. Earle v. District of Columbia, 707
F.3d 299, 310 (D.C. Cir. 2012) (stating that in the absence of a case directly on point from the D.C.
Court of Appeals, the court is to predict how that court would decide the case). None of the state
or federal cases that have found in favor of a wrongful termination claim have had the benefit of
the Supreme Court of Virginia’s reasoning in Francis, which was decided in 2017. And the two
cases that have come after Mar v. Malveaux did not cite that important decision. See, e.g., Clark,
2013 WL 1333520; Blanchard, 2015 WL 12591838. In this court’s view, Francis and Mar
dictate a result different than the one reached by prior courts.
* * *
In summary, because Plaintiffs have not succeeded in meeting the narrow public policy
exception to the at-will employment doctrine under any applicable law, the court dismisses Count I
with prejudice.
2. Wrongful Termination of Plaintiff Bautista (Count II)
In Count II, Plaintiff Svetlana Bautista asserts a separate claim of retaliatory wrongful
termination in violation of the public policy exception to the at-will employment doctrine in
Maryland. Bautista alleges that, on two separate occasions, she reported to Whole Foods
corporate leadership that for eight months, compost collected in Whole Foods stores from
29
customers had been illegally dumped into landfills rather than a compost facility. Am. Compl.
¶¶ 56–57. Bautista asserts that corporate leadership never followed up on her reports and instead
terminated her in retaliation for blowing the whistle on Whole Foods’ violation of the Maryland
Consumer Protection Act, Md. Com. Law Code Ann. § 13–301 et seq. Am. Compl. ¶¶ 55, 58–
59.
The court agrees with Defendants that Bautista’s common law wrongful termination claim
is foreclosed by Parks v. Alpharma, Inc., 25 A.3d 200 (Md. 2000), and accordingly dismisses
Count II. In Parks, the Court of Appeals of Maryland rejected the plaintiff’s claim that she was
wrongfully discharged for reporting her employer’s violations of the Maryland Consumer
Protection Act, concluding that the Act “does not provide the specificity of public policy that we
have required to support a wrongful discharge claim.” 25 A.3d at 214. Perhaps recognizing that
reliance on the Act is misplaced, Plaintiffs cite to statements of Maryland’s Department of the
Environment concerning the importance of composting to reduce waste in an effort to identify
some public policy to support Bautista’s wrongful termination claim. See Pls.’ Opp’n at 23–24.
These efforts, however, fall far short of identifying “the unmistakably clear mandate of public
policy” required by Maryland courts to sustain the tort of wrongful termination. See Parks, 25
A.3d at 214. Thus, because Bautista fails to state a claim of wrongful termination under Maryland
law, the court dismisses Count II with prejudice. 8
3. Breach of Contract and Breach of the Duty of Good Faith and Fair Dealing
(Count III)
The court turns now to Plaintiffs’ breach of contract and breach of the implied duty of good
faith and fair dealing claims contained in Count III of the Amended Complaint. In support of
8
Because the court dismisses Counts I and II in their entirety, it need not reach Defendants’ request to dismiss
Plaintiffs’ claims for punitive damages and attorneys’ fees. See Defs.’ Mot. at 24.
30
these claims, Plaintiffs assert that their employment with Whole Foods was governed by the Whole
Foods General Information Guide (“GIG”), which applies to all Whole Foods stores within the
District of Columbia, Virginia, and Maryland. See Defs.’ Mot., Ex. C-4, ECF No. 24 [hereinafter
2016 GIG].9 In Plaintiffs’ view, the GIG creates an implied contract under District of Columbia,
Maryland, and Virginia common law, and Defendants’ failure to strictly adhere to the “corrective
action process” set forth in the GIG before terminating Plaintiffs constitutes a breach of contract
and breach of the duty of good faith and fair dealing. Am. Compl. ¶¶ 62–71. The court
disagrees.
As already discussed, in the District of Columbia, Maryland, and Virginia, employment is
presumed to be terminable at-will, that is, at any time and without cause. See Turner v. Fed.
Express Corp., 539 F. Supp. 2d 404, 410 (D.D.C. 2008); Towson Univ. v. Conte, 862 A.2d 941,
947 (Md. 2004); Cty. of Giles v. Wines, 546 S.E.2d 721, 723 (Va. 2001). Each jurisdiction,
however, recognizes that an employee may overcome the at-will employment presumption. In
the District, an employee may overcome the presumption by showing that “the parties clearly state
an intention to place limits on the employer’s right to terminate.” Turner, 539 F. Supp. 2d at 410.
In Maryland, “the presumption of at-will employment can be defeated through the inclusion of a
just-cause requirement, or by specifying a duration of employment.” Spacesaver Sys., Inc. v.
Adam, 98 A.3d 264, 272 (Md. 2014). And, in Virginia, the presumption can be rebutted if
sufficient evidence is produced to show that the employment is for a definite term, including that
the employment can be terminated only for cause. Cty. of Giles, 546 S.E.2d at 724.
9
In evaluating the 12(b)(6) motion, the court may consider the portions of the GIG filed by Defendants because
Plaintiffs have incorporated relevant portions of the GIG by reference in their Amended Complaint. See Rand v.
Sec’y of the Treasury, 816 F. Supp. 2d 70, 72–73 (D.D.C. 2011).
31
Plaintiffs’ allegations fail to rebut the presumption of at-will employment under the law of
all three jurisdictions for two reasons. First, Plaintiffs have not identified any language in the
GIG to support their assertion that Whole Foods intended to limit its ability to terminate plaintiffs
without cause. Second, the GIG expressly disclaims that it is a contract and affirms the at-will
nature of the employment relationship.
With respect to the first reason, Plaintiffs maintain that Whole Foods limited its ability to
terminate employees at-will by committing to a “corrective action process,” as set forth in the GIG.
Plaintiffs characterize that process as a promise by Whole Foods to its employees that it would
terminate an employee for misconduct only after subjecting her to a series of incremental
disciplinary actions over a 12-month period, except in the case of a severe offense. See Pls.’
Opp’n at 33–35. By agreeing to adhere to such a process, Plaintiffs assert, Whole Foods
“voluntarily and explicitly mandated dismissal only for cause.” Id. at 35. Plaintiffs’ argument
is unpersuasive, however, because it relies on a selective reading of the GIG. It is true that the
GIG generally prescribes a corrective action process for behavioral or performance deficiencies
that moves from counseling statements to written warnings to a final written warning, instituted
over a “rolling 12-month period,” before Whole Foods discharges an employee. See 2016 GIG
at 46–49. It also, however, vests substantial discretion in Whole Foods to carry out that process.
For instance, when describing the policy, the GIG states at the outset that, “[w]hen practical, Team
Members will be warned and counseled for unsatisfactory performance prior to discharge.” Id. at
46 (emphasis added). The very next sentence states that, “[d]epending on the nature and severity
of the offense . . . , the company reserves the right to discharge any Team Member without
warning.” Id.; see id. (“The process may vary based on the severity of the situation.”). The GIG
also contrasts “[e]xamples of conduct that may lead to corrective action” and “major infractions,”
32
suggesting that the latter category of offenses is more likely to lead to immediate discharge. See
id. at 47–48. The GIG’s use of permissive language makes clear that Whole Foods did not intend
to precondition termination of its employees on participation in the corrective action process, or to
create a “just cause” requirement for termination. Cf. Strass v. Kaiser Found. Health Plan of Mid-
Atl., 744 A.2d 1000, 1013 (D.C. 2000) (construing “mandatory term ‘shall,’ rather than the
permissive ‘may’” contained in personnel policy manual to support employee’s assertion that the
employer intended the manual to “govern the rights and responsibilities” of it and its employees);
Cty. of Giles, 546 S.E.2d at 723 (holding that language providing that an “employee may be
discharged for inefficiency, insubordination, misconduct, or other just cause,” unlike language
providing that an employee “shall only be discharged . . . ,” was insufficient to rebut Virginia’s
strong presumption in favor of the at-will employment relationship).
This reading is confirmed by the series of disclaimers contained in the GIG warning
employees that the manual does not create any contractual rights. It is well-established that
employers may “effectively disclaim any implied contractual obligations arising from” provisions
in employment manuals. Boulton v. Inst. of Int’l Educ., 808 A.2d 499, 505 (D.C. 2002). “The
legal effect of such a disclaimer is, in the first instance, a question for the court to decide.” Id.
(internal quotation marks omitted). In this case, the GIG contains two disclaimers, informing
employees first that:
YOUR EMPLOYMENT IS AT-WILL. THIS MEANS THAT
YOUR EMPLOYMENT IS FOR NO DEFINITE PERIOD OF
TIME, AND EITHER YOU OR WHOLE FOODS MAY
33
TERMINATE YOUR EMPLOYMENT AT ANY TIME, WITH
OR WITHOUT CAUSE OR NOTICE.
2016 GIG at 3. The GIG continues immediately to its second disclaimer, advising Whole Foods
employees:
This GIG is not an employment contract with you or any other
person, nor is it a promise regarding the terms or conditions of your
employment. Neither this GIG, nor any other Company policy or
representation, is intended to promise or guarantee any right to you
or any other person, including employment for any period of time
[.]
Id. These disclaimers could not be any clearer that the GIG creates no judicially enforceable
contractual rights. As such, the court cannot find that Whole Foods has disavowed the general
rule of at-will employment when the GIG plainly states otherwise. See Grove v. Loomis Sayles
& Co., 810 F. Supp. 2d 146, 149 (D.D.C. 2011) (“Even if the employer has provided its employees
with an employee handbook, the handbook is not enforceable as an employment contract if it
disclaims the establishment of contractual obligations and explicitly provides that employment
may be terminated at-will.”); Smith v. Union Labor Life Ins. Co., 620 A.2d 265, 269 (D.C. 1993)
(dismissing implied contract theory based on employment manual that disclaimed it was a contract
and stated that employment was terminable at-will as “to no avail because of the express
disavowals that [the manual] created any contractual rights for employees”); see also Spacesaver
Sys., Inc. v. Adam 69 A.3d 494, 503 n. 15 (Md. Ct. Spec. App. 2013) aff’d by Spacesaver Sys.,
Inc., 98 A.3d at 264) (Maryland courts have “refused to find the provisions of a handbook
enforceable where a clear and unequivocal disclaimer is included therein, such as a disclaimer
stating that [:] ‘this handbook does not constitute an express or implied contract[.]’”) (internal
citation and quotation marks omitted)).
34
Relying on the D.C. Court of Appeals’ decision in Strass v. Kaiser Foundation Health Plan
of Mid-Atlantic, Plaintiffs assert that Whole Foods’ disclaimers should not control the outcome.
According to Plaintiffs, Strass requires that disclaimers in an employment manual be “considered
with reference to the entire document” before a court can rule on an implied employment contract
claim. Pls.’ Mot. at 35 (quoting Strass, 744 A.2d at 1014). The court does not quibble with that
principle; it just does not help Plaintiffs. The manual in Strass contained only a single disclaimer
stating that it was not a contract. The court contrasted that language with other aspects of the
manual that contained language of a mandatory nature. The manual provided that certain
disciplinary steps “will occur” before termination and elsewhere contained the word “shall” to
define the rights and responsibilities of the employee and the employer. See Strass, 744 A.2d at
1013. The court ultimately concluded that, while the disclaimer in the personnel manual suggests
“that it is not a contract,” “this qualifier is rationally at odds with other language in the document,”
such that “a jury could conclude reasonably that the employer intended to be bound by its terms.”
Id. at 1013–14. In this case, by sharp contrast, the GIG disclaims that it is a contract and
affirmatively asserts that employment at Whole Foods remains at-will. Moreover, as discussed,
the GIG uses permissive, rather than mandatory, terms. With respect to the correction action
process, the GIG contains a bevy of permissive words and phrases, such as “when practical,”
“where possible,” “may be used,” “typically,” and “generally.” 2016 GIG at 46. No reasonable
employee could read the GIG’s disclaimers and the permissive language prevalent in the GIG and
conclude that Whole Foods has agreed not to terminate employees without first resorting to the
correction action process. Plaintiffs’ breach of implied contract claim and their breach of duty of
good faith and fair dealing claim thus fail. 10
Accordingly, Count III is dismissed without prejudice.
35
4. Defamation and False Light (Counts IV & V)
The court at last reaches Counts IV and V, Plaintiffs’ claims for defamation and false
light, respectively. These claims are sufficiently pleaded and survive the motion to dismiss.
To state a claim for defamation under District of Columbia law, 11 Plaintiffs must allege
sufficient facts showing:
(1) that the defendant made a false and defamatory statement
concerning the plaintiff; (2) that the defendant published the
statement without privilege to a third party; (3) that the defendant's
fault in publishing the statement amounted to at least negligence;
and (4) either that the statement is actionable as a matter of law
irrespective of special harm, or that its publication caused the
plaintiff special harm.
Marsh v. Hollander, 339 F. Supp. 2d 1, 5 (D.D.C. 2004) (quoting Crowley v. N. Am. Telecomm.
Ass’n, 691 A.2d 1169, 1172 n.2 (D.C. 1997)). Relatedly, to state a claim for false light invasion
of privacy under District of Columbia law, a plaintiff must show: “(1) publicity; (2) about a false
statement, representation or imputation; (3) understood to be of and concerning the plaintiff; and
(4) which places the plaintiff in a false light that would be offensive to a reasonable person.” Doe
v. Bernabei & Wachtel, PLLC, 116 A.3d 1262, 1267 (D.C. 2015) (internal quotation marks
omitted). The torts of defamation and false light are “often analyzed in the same manner, at least
where the plaintiff rests both his defamation and false light claims on the same allegations.”
10
In light of the foregoing conclusion that Plaintiffs had no implied employment contract with Defendants, Plaintiffs’
breach of duty of good faith and fair dealing claim necessarily fails under District of Columbia and Maryland law.
E.g., Paul v. Howard Univ., 754 A.2d 297, 310 n.28 (D.C. 2000) (“[S]uch a claim [for breach of covenant of good
faith and fair dealing] cannot be made by an at-will employee because there is no contract to provide a basis for the
covenant.”); Suburban Hosp., Inc. v. Dwiggins, 596 A.2d 1069, 1076–77 (Md. 1991) (“[T]here is no implied covenant
of fair dealing with regard to termination by either side in an employment-at-will.”). Furthermore, the
Commonwealth of Virginia “does not recognize a cause of action for breach of an implied covenant of good faith and
fair dealing in employment contracts, and in at-will employment contracts in particular.” Devnew v. Brown & Brown,
Inc., 396 F. Supp. 2d 665, 671 (E.D. Va. 2005) (collecting cases).
11
Because both parties apply District of Columbia law to these claims, this court does the same. See Abbas v. Foreign
Policy Grp., 783 F.3d 1328, 1338 n.6 (D.C. Cir. 2015) (concluding that District of Columbia defamation law governed
dispute in part because the “parties relied on D.C. defamation law in briefing this appeal”).
36
Zimmerman v. Al Jazeera Am., LLC, 246 F. Supp. 3d 257, 273 (D.D.C. 2017) (internal quotation
marks omitted). “Nevertheless, they are two different claims, as the D.C. Circuit has recognized.”
Id. (citing Weyrich v. New Republic, Inc., 235 F.3d 617, 628 (D.C. Cir. 2001)). What is remedied
by each tort is “conceptually distinct”: “a defamation tort redresses damage to reputation,” while
“a false light privacy tort redresses mental distress from having been exposed to public view.” Id.
at 274–75 (internal quotation marks omitted). Given that Plaintiffs rely on the same allegations
to sustain their defamation and false light claims in this case, the court analyzes the claims jointly.
Plaintiffs assert that Whole Foods defamed Plaintiffs and placed them in a false light in an
effort to scapegoat them and cover up corporate labor-shifting practices. Am. Compl. ¶¶ 72–82;
83–91. The Amended Complaint identifies the following purportedly defamatory statements to
substantiate their claims:
a) “[Whole Foods] fired nine store managers in the mid-Atlantic
region for manipulating a bonus program to their benefit.”
b) “[N]ine managers at stores in Maryland, Virginia, and the
District of Columbia engaged in a policy infraction that allowed
the managers to benefit from a profit-sharing program at the
expense of store employees.”
c) “[Whole Foods] is still investigating exactly how much money
is involved and plans to ensure that employees at the affected
stores are compensated properly. The amounts involved, though,
will not be material to the company's quarterly earnings.”
d) “Whole Foods Fires 9 Store Managers Who Were Stealing
Money From Employees.”
e) “Whole Foods has fired nine store managers who were using a
bonus program to their benefit…the managers were benefiting
from a profit sharing program at the expense of employees….”
f) Whole Foods stated that the “manipulation” of the
“Gainsharing” program was “isolated to a relatively small
number of its 457 stores.”
37
g) “[Whole Foods] took swift action, but, relative to the rest of the
company, this manipulation only happened in nine of our
locations.”
h) “We are still in the process of investigating…..once our
investigation is complete, we will take all necessary steps to
correct any errors we identify.”
Am. Compl. ¶¶ 73a–h; 74a–b. Plaintiffs attribute to Buchanan statements (a), (b), and (c) above,
which appeared in the Associated Press Article, as well as the statement that “Nine managers at
Whole Foods stores in Maryland, Virginia and the District have been fired for manipulating a store
bonus program,” which appeared in The Washington Post.12 Pls.’ Opp’n at 36.
Defendants contend that Plaintiffs have failed to state defamation and false light claims for
three reasons: (1) none of the alleged statements identify Plaintiffs; (2) the statements are neither
capable of bearing a defamatory meaning nor highly offensive to a reasonable person; and
(3) many of the statements Plaintiffs identify are not attributable to the Defendants. Defs.’ Mot.
at 40. The court considers each argument in turn.
a. “Of and Concerning” Plaintiffs
Defendants first contend that Plaintiffs’ claims must be dismissed because “the statements
enumerated in the Amended Complaint do not identify Plaintiffs by name or disclose any personal
information sufficient to specifically identify them.” Defs.’ Mot. at 34. More specifically,
Defendants assert that Plaintiffs cannot rely on the “of and concerning” theory to establish the first
element of defamation; under that theory, a defamation claim can be sustained if the facts alleged
“lead the listener to conclude that the speaker is referring to the plaintiff by description, even if the
plaintiff is never named or is misnamed.” Defs.’ Mot. at 34 (quoting Croixland Prop. Ltd. P’ship
v. Corcoran, 174 F.3d 213, 216 (D.C. Cir. 1999)). Defendants here observe that there are at least
12
WFM Group has not argued that Buchanan is not its employee or agent. The court therefore assumes that she is
for present purposes.
38
20 different Whole Foods stores in the Mid-Atlantic region, and the alleged defamatory statements
do not specify the store locations. Moreover, they point out that Whole Foods has many different
types of “store managers,” and the statements do not specify Plaintiffs’ positions as “Team
Leaders.” See id. at 34–35. Consequently, Defendants insist, no defamation or false light claim
can lie against them because Plaintiffs are not the sufficiently identifiable subjects of the
statements. The court disagrees.
In Croixland, the D.C. Circuit explained that the first element of defamation—that the
defendant made a false and defamatory statement of and concerning the plaintiff—can be satisfied
without specifically identifying the plaintiff by name. “[I]t suffices that the statements at issue
lead the listener to conclude that the speaker is referring to the plaintiff by description.” 174 F.3d
at 216. Croixland involved only one plaintiff, but the principle applies all the same when, as here,
the defamatory statement is directed towards a group. “When a statement refers to a group, a
member of that group may claim defamation if the group’s size or other circumstances are such
that a reasonable listener could conclude the statement referred to each member or ‘solely or
especially’ to the plaintiff.” Browning v. Clinton, 292 F.3d 235, 247 (D.C. Cir. 2002) (citing
Restatement (Second) of Torts § 564A (1977)). Importantly, whether a plaintiff within a group
is identifiable need not rest on the face of the statement alone. A plaintiff can rely upon extrinsic
evidence to show that listeners understood the statements to pertain to the plaintiff. “If the
applicability of the defamatory matter to the plaintiff depends upon extrinsic circumstances, it must
appear that some person who saw or read it was familiar with the circumstances and reasonably
believed that it referred to the plaintiff.” Restatement (Second) Torts § 564 cmt. b. Thus, to
establish that the defamatory statement pertains to a plaintiff within a group, the plaintiff can prove
39
“the circumstances of publication reasonably give rise to the conclusion that there is a particular
reference to the [plaintiff].” Id. § 564A(b).
Applying the foregoing principles here, the court concludes that Plaintiffs have sufficiently
pleaded facts that Buchanan made defamatory statements “of and concerning” them, even though
none of the Plaintiffs are specifically named. Plaintiffs have averred that both prospective
employers and their Whole Foods colleagues in the Mid-Atlantic region knew and understood that
Buchanan’s statements referred to them. Am. Compl. ¶¶ 80–81. Not only must the court treat
those allegations as true at this stage, but the complaint when read as a whole renders the
allegations plausible. It is true, as Defendants point out, that Buchanan’s statements do not
specify any particular store within the Mid-Atlantic region or any particular type of manager;
however, it does not require a large inferential leap to think it plausible that, at a minimum,
Plaintiffs’ colleagues at Whole Foods stores would have known about their terminations and, if
they had heard Buchanan’s statements, reasonably believed that they referred to Plaintiffs. After
all, as here, when the termination and its publication coincide, it should come as no surprise to the
employer that the terminated employee’s co-workers would attribute the public statement and the
stated reason for firing to their departed colleague. Cf. Elias v. Rolling Stone LLC, 872 F.3d 97,
106 n.6 (2d Cir. 2017) (in defamation action alleging false accusation of rape during a fraternity
rush process, holding that “[g]iven the prominence of his role in the process and the temporal
proximity of his involvement to the purported rape, it is plausible that some readers of the Article
concluded that he was involved”). Thus, placing Buchanan’s identified statements into “context,”
the court concludes that both the temporal proximity between the Plaintiffs’ termination and the
publication of these statements and their identification as “store managers” in the District of
Columbia, Maryland, and Virginia, all lead to the plausible inference that “a listener could perceive
40
that the [Plaintiffs] [are] connected to [wage theft and bonus manipulation].” Croixland, 174 F.3d
at 217.
Defendants’ reliance on Stovell v. James is inapposite. See Defs.’ Mot. at 34 (citing
Stovell, 810 F. Supp. 2d 237 (D.D.C. 2011)). There, Stovell brought a defamation claim against
NBA basketball star Lebron James and his mother, Gloria, alleging that their purportedly
defamatory statements about “Lebron James’s father” were “of and concerning” him because he
believed himself to be James’s biological father, despite a negative paternity test. Id. at 241–45.
The court concluded that Stovell failed to establish that the statements were made about him
because “no one other than Stovell or Gloria James could have known that Stovell might be LeBron
James’s father.” Id. at 249. Here, distinct from Stovell, knowledge of the circumstances of
Plaintiffs’ termination was not limited to the speaker and defamed; instead, Plaintiffs have
sufficiently alleged that a number of readers would have recognized them to be the subject of the
statements. Cf. Restatement (Second) of Torts § 564 cmt. b (“However, the fact that only one
person believes that the plaintiff was referred to is an important factor in determining the
reasonableness of the belief.”).
Likewise, the court is unpersuaded by Defendants’ reliance on Lines v. Cablevision Sys.
Corp., No. 04-CV-2517, 2005 WL 2305010 (E.D.N.Y. Sept. 21, 2005). See Defs.’ Mot. at 35. In
Lines, the plaintiff’s employer fired him, along with 13 other officers and employees, following
an internal investigation that determined the plaintiff and the others had engaged in accounting
fraud. The employer then announced in a press release the group’s termination for that conduct.
Lines, 2005 WL 2305010, at *1. Treating the plaintiff’s claim as one for defamation, the court
held that the plaintiff’s claim could not be sustained under the “group libel doctrine” under New
York law. The court explained: “Plaintiff cannot demonstrate that [the employer’s] citation to
41
‘14 AMC employees’ reasonably gives rise to the conclusion that it particularly referenced
Plaintiff.” Id. at *5.
Admittedly, the facts of Lines are analogous to those presented here. The court, however,
doubts that Lines, a 2005 case, would come out the same way today, after the Second Circuit’s
2017 decision in Elias v. Rolling Stone. See 872 F.3d at 97. Elias involves the infamous Rolling
Stone article that falsely reported that members of the Phi Kappa Psi fraternity at the University
of Virginia had gang raped a female student named “Jackie.” Id. at 102–03. After Jackie’s story
was determined to be fabricated, three fraternity brothers sued Rolling Stone for defamation, even
though the Rolling Stone article identified no brother of the 53-member fraternity by name. Id.
at 104, 108. The district court rejected the plaintiffs’ claims, concluding that the plaintiffs had
not shown that the alleged defamatory statements were “of and concerning” them. 13 Id. at 101.
The Second Circuit reversed except as to one claim. Id. The court explained that, under
New York law, the question whether an alleged defamatory statement is “of and concerning” the
plaintiffs turns on whether “‘[t]he reading public acquainted with the parties and the subject would
recognize the plaintiff as the person to whom the statement refers. . . . It is not necessary that the
world should understand the libel; it is sufficient that those who know the plaintiff can make out
that she is the person meant.” Id. at 104–05 (internal citations and quotation marks omitted).
Viewing the plaintiffs’ complaint through that lens, the Second Circuit held that two of the three
plaintiffs had pleaded sufficient facts “to make it plausible . . . that a reader familiar with each
Plaintiff would identify him as the subject of the statements at issue.” Id. at 105. In reaching
that conclusion, the court emphasized not only the commonality between the article’s allegations
13
Defendants cited and relied upon the district court decision in Elias. See Defs.’ Mot. at 35–36. The Second Circuit
decided Elias after the close of the original round of summary judgment briefing, but before the court ordered briefing
on the impact of Bristol-Myers. Defendants did not, however, at any time notify the court that the Second Circuit
had reversed the district court’s decision in Elias. They should have done so.
42
and the plaintiffs’ attributes, but also that each plaintiff had alleged that his family, friends and
others had identified him as one of the alleged attackers. Id. at 105–06. Additionally, the court
held that all three plaintiffs could proceed under a “small group defamation” theory. Id. at 108–
10. The court observed that, under New York law, “where a statement defames all members of a
small group, the reference to the individual plaintiff reasonably follows from the
statement. . . . Accordingly, an individual belonging to a small group may maintain an action for
individual injury resulting from a defamatory comment about the group, by showing that he is a
member of the group.” Id. at 108 (citation and internal quotation marks omitted). The court
concluded that, given the Rolling Stone article’s broad condemnation of all members of Phi Kappa
Psi as either having participated in the gang rape or having turned a blind eye to it and other alleged
sexual assaults at the fraternity house, “Plaintiffs sufficiently alleged that they were defamed
because they were members of the fraternity at the relevant time.” Id. at 110. Critically, the
court’s reasoning rested in part on the size of the university community and the fraternity’s
prominence. Id. Noting that “a plaintiff is more likely to succeed under a theory of small group
defamation in small communities where individual members are readily associated with the
defamed group,” the court observed that university campuses are “intimate communities” “‘where
people know each other,’” and the plaintiffs had alleged that members of the university community
had identified and harassed them because of their membership in Psi Kappa Psi. Id. (citation
omitted). The court, therefore, concluded that all three plaintiffs had plausibly alleged that the
Rolling Stone article was “of and concerning” them “under a theory of small group defamation.”
Id.
This extended discussion of Elias makes two things clear. First, the court in Lines surely
would have reached a different conclusion with the benefit of Elias. After all, if three plaintiffs
43
of a 53-member fraternity could advance a small-group theory of defamation, then surely one
plaintiff of a 14-person group of terminated employees could do so, too; a workplace is at least as
intimate as a university community, if not more so, and there can be little doubt that the plaintiff’s
co-workers in Lines would have recognized the plaintiff as among the 14 employees referenced in
the company’s press release announcing their firings. Second, Elias supports the court’s
conclusion here. Like the plaintiffs in Elias, Plaintiffs here have plausibly alleged that those
acquainted with them and the circumstances would have recognized them as the subjects of
Buchanan’s statements accusing them of wrongdoing. Indeed, like the plaintiffs in Elias,
Plaintiffs here have pleaded that, in fact, prospective employers and their former Whole Foods
colleagues were able to make out that Buchanan was referring to them in her statements. Thus,
consistent with Elias, Plaintiffs in this case have pleaded sufficient facts to support a small-group
theory of defamation.
Finally, Defendants reliance on a line of cases that “refus[e], as a matter of law, to find
defamatory meaning where the claim of defamation is based on the interpretation third parties
place upon termination of an at-will employee” is misplaced. Defs.’ Mot. (quoting Lefande, 864
F. Supp. 2d at 52 (citing Clampitt v. Am. Univ., 957 A.2d 23, 40–41 (D.C. 2008))). Unlike those
cases, Plaintiffs’ defamation claim does not rest on the interpretation of a third party as to why
they were fired. Rather, Buchanan’s alleged defamatory statements expressly state why Plaintiffs
were terminated: because they manipulated the Gainsharing program for their own benefit. No
third-party interpretation is needed to make such statements have a defamatory meaning.
In sum, the court concludes that Plaintiffs have pleaded sufficient factual matter to make it
plausible that persons acquainted with them would recognize Buchanan’s alleged defamatory
statements as “of and concerning” them.
44
b. “Capable of Bearing a Defamatory Meaning” and “Highly
Offensive to a Reasonable Person”
The court next addresses Defendants’ contention that the alleged defamatory statements
are not capable of bearing a defamatory meaning nor would be highly offensive to a reasonable
person. Defs.’ Mot. at 40. Under District of Columbia law, “a statement is ‘defamatory’ if it
tends to injure the plaintiff in his trade, profession or community standing, or lower him in the
estimation of the community.” Jankovic v. Int’l Crisis Grp., 494 F.3d 1080, 1091 (D.C. Cir.
2007). Similarly, to sustain a false light claim under District of Columbia law, Plaintiffs must
show that the statements “would be offensive to a reasonable person” or that they were “given
unreasonable and highly objectionable publicity that attributes to [them] characteristics, conduct
or beliefs that are false, and so [are] placed before the public in a false position.” Zimmerman,
246 F. Supp. 3d at 275 (quoting Restatement (Second) of Torts § 652E cmt. b (2016)). “[C]ontext
is key to determining whether, as a matter of law, a statement is capable of bearing a defamatory
meaning.” Marsh, 339 F. Supp. 2d at 10.
Plaintiffs’ allegations easily satisfy these standards. In context, Buchanan’s statements to
the Associated Press and The Washington Post paint Plaintiffs as cheats and thieves. True, one
of the statements communicates that Whole Foods fired Plaintiffs for merely committing a “policy
infraction,” but other statements are more specific, asserting that Plaintiffs “manipulated a bonus
program to their benefit” and that their misconduct “allowed [them] to benefit from a profit-sharing
program at the expense of store employees.” It is hardly a stretch to say that such statements, if
false, would injure Plaintiffs in their profession and community and “would be offensive to a
reasonable person.” Zimmerman, 246 F. Supp. 3d at 278. The statements identified by Plaintiffs
therefore are capable of bearing a defamatory meaning and would be highly offensive to the
reasonable person.
45
c. The statements are attributable to Defendants
Finally, the court turns to Defendants’ argument that the court should dismiss Plaintiffs’
claims with regard to the remaining statements identified in the Amended Complaint because, of
the eight allegedly defamatory statements in the Amended Complaint, only four are quotes directly
attributed to Buchanan in the Associated Press and Washington Post articles. Defs.’ Mot. at 36.
The court declines to do so. At this stage, what matters is that Plaintiffs have successfully pleaded
at least some actionable statements. Discovery will bear out whether the remaining statements
are attributable to Defendants or not.
C. Plaintiffs’ Motion for Leave to File a Second Amended Complaint and
Defendants’ Motion to Stay
Finally, the court addresses Plaintiffs’ Motion for Leave to File a Second Amended
Complaint to add a claim under the whistleblower provision of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, 15 U.S.C. § 78u-6. Federal Rule of Civil Procedure 15(a) instructs
courts to “freely give leave” to a party seeking to amend its pleadings. Denying leave to amend
is “inconsistent with the spirit of the Federal Rules” and an abuse of discretion, Foman v. Davis,
371 U.S. 178, 182 (1962), unless the court provides a sufficient reason for so doing, such as
“futility of amendment, undue delay, bad faith, dilatory motive, undue prejudice, or repeated
failure to cure deficiencies by previous amendments,” Boyd v. District of Columbia, 465 F. Supp.
2d 1, 3 (D.D.C. 2006).
Consistent with these principles, the court grants Plaintiffs’ motion to amend.
Defendants’ Motion to Stay is therefore denied as moot. The Second Amended Complaint shall
now be the operative pleading in this matter. Defendants may move to dismiss the new claim
within 14 days, unless additional time is requested.
46
V. CONCLUSION AND ORDER
For the foregoing reasons, Defendants’ Motion to Dismiss Plaintiffs’ Amended Complaint
is granted in part and denied in part, as follows:
1. All claims against WFMI are dismissed without prejudice for lack of personal
jurisdiction.
2. All claims against Buchanan are dismissed without prejudice for lack of personal
jurisdiction.
3. Plaintiffs’ claim for wrongful termination against WFM Group and WF Services
(Count I) is dismissed with prejudice for failure to state a claim.
4. Plaintiff Bautista’s claim for wrongful termination against WFM Group and WF
Services (Count II) is dismissed with prejudice for failure to state a claim.
5. Plaintiffs’ claim for breach of contract and breach of implied duty of good faith and
failure dealing against WFM Group and WF Services (Count III) is dismissed
without prejudice for failure to state a claim.
6. Plaintiffs may proceed with their claims for defamation and false light against
WFM Group and WF Services (Counts IV and V).
Plaintiffs’ Motion for Leave to File a Second Amended Complaint is granted, and
Defendants’ Motion to Stay is denied as moot.
Dated: February 9, 2018 Amit P. Mehta
United States District Judge
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