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Khazarian v. Gerald Metals, LLC

United States District Court, D. Connecticut

November 9, 2017

ROXANNE KHAZARIAN, Plaintiff,
v.
GERALD METALS, LLC, METALS TRADING CORP., GERALD HOLDINGS, LLC, CRAIG DEAN, AND DAN GAMEZ, Defendants.

          RULING ON DEFENDANTS' MOTION TO DISMISS

          Victor A. Bolden United States District Judge.

         Roxanne Khazarian (“Plaintiff”) filed this lawsuit and brings numerous claims, alleging that Gerald M s, LLC, M s Trading Corp. (“MTC”), Gerald Holdings, LLC, Craig Dean, and Dan Gamez (together, “Defendants”) discriminated against her based on her age and her sex, fraudulently misrepresented her compensation, and exceeded their authorization to access her computer and cell phone by secretly monitoring her work and personal devices. Second Am. Compl., ECF No. 50.

         Defendants now move to dismiss Ms. Khazarian's claims for fraudulent misrepresentation (Count Twelve), failure to pay wages (Count Fifteen), computer fraud and abuse (Counts Sixteen, Seventeen, Eighteen, and Nineteen), invasion of privacy (Count Twenty), and defamation (Count Twenty-One). Mot. to Dismiss, ECF No. 54.

         For the reasons discussed below, Defendants' motion to dismiss is GRANTED IN PART AND DENIED IN PART. Defendants' motion to dismiss is GRANTED as to Counts Fifteen and Twenty-One, and DENIED as to Counts Twelve, Sixteen, Seventeen, Eighteen, Nineteen, and Twenty. In addition, the motion to dismiss Counts Sixteen, Seventeen, Eighteen, and Nineteen as to Dan Gamez in his individual capacity is GRANTED. Ms. Khazarian may serve an Amended Complaint within twenty-one days of this order, if she wishes to address the dismissed claims.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Factual Allegations

         Gerald M s, LLC, a commodity trading company, is a part of the Gerald Group. Second Am. Compl. ¶ 14. From January 2008 until she was fired on April 5, 2016, Ms. Khazarian, an attorney, served as Gerald M s's General Counsel. Id. at ¶ 36. She had a starting salary of $260, 000. Id. at ¶ 32.

         Ms. Khazarian's starting salary allegedly resulted in “a substantial reduction” from her previous salary. Id. at ¶ 33. A Gerald M s executive, Fabio Calia, allegedly “told her that her base salary would have to be lower to fit within Gerald M s' compensation structure, ” but explained that the reduction would be offset by an annual bonus of 100-150 percent of her base salary.[1] Id. at ¶¶ 33, 75-76.

         For her first six months at Gerald M s, Ms. Khazarian worked on a trial basis; after that period, she worked as General Counsel and her salary increased to $285, 000. Id. at ¶¶ 26, 34. She alleges that her trial period lasted twice as long as other employees' required trial periods. Id. at ¶ 27.

         The company re-organized in 2010; Gerald Holdings, Inc., became the top company within the Gerald Group, and Ms. Khazarian became General Counsel for Gerald Holdings, Inc. Id. at ¶¶ 18, 28. With this new title, she gained new responsibility as the Anti-Corruption Compliance Officer, but no increase in salary. Id. at ¶ 28. Ms. Khazarian alleges that Gerald M s raised the salaries of similarly situated younger, male employees. Id. at ¶ 28.

         In November 2011, Ms. Khazarian's salary increased to $305, 000, allegedly only after she said that she was considering filing claims for age and sex discrimination. Id. at ¶ 35.

         Ms. Khazarian also alleges that, on November 21, 2013, as part of her 2013 compensation, she was promised $25, 000 in MTC stock. Id. at ¶ 152. She alleges that she was never provided further notice or information about that stock. Id. at ¶¶ 157-59. She alleges that, during the eight years that she worked for Defendants, her average annual bonus was $44, 000, or 14.8 percent of her annual base salary. Id. at ¶ 77.

         Gerald M s hired Craig Dean as its Chief Executive Officer in January 2013. Id. at ¶ 42. Ms. Khazarian claims that, at the beginning of his tenure, Mr. Dean announced “that he wanted to lower the average age of employees by 15 years, run the company with employees in their 30's and 40's and ‘marginalize' employees over 50.” Id. at ¶ 43. Mr. Dean allegedly intended to accomplish this goal by restructuring the Legal Department in Stamford, Connecticut, and by hiring younger, male employees and freezing or reducing compensation for older and female employees. Id. at ¶¶ 53-57.

         For about four months, starting in late 2015, Ms. Khazarian went on leave from Gerald M s, first, to care for a terminally ill elderly parent, and then, to tend to her own health issues. Id. at ¶ 86. She alleges that Defendants reduced her bonus by nearly one-third, or $30, 000, that year. Id. at ¶ 89.

         In January 2016, Ms. Khazarian filed complaints with the Connecticut Commission on Human Rights and Opportunities (“CHRO”), and with the Equal Employment Opportunity Commission (“EEOC”).[2] Id. at ¶¶ 6-9. She later received a release of jurisdiction from the CHRO and a notice of right to sue from the EEOC. Id.

         Ms. Khazarian alleges that, before she returned to work from leave, and after she filed discrimination claims with the CHRO and EEOC, Mr. Dean instructed Gerald M s's Infrastructure Team to monitor Ms. Khazarian's work and personal electronic communications. Id. at ¶ 91. She alleges that Dan Gamez, who worked on Gerald M s's Infrastructure Team, began to review her digital activity on January 26, 2016, by monitoring, among other things, her Internet history, email activity, keystrokes, application activity, user activity, and file tracking. Id. at ¶¶ 92-93. She claims that another co-worker, who also complained of sex discrimination in this workplace, was also monitored in r iation for complaining about age and sex discrimination at the office. Id. at ¶¶ 96-97. She claims that she never authorized surveillance of her work or personal devices, and that the surveillance was “willful, wanton and malicious.” Id. at ¶¶ 105-06. She maintains that Defendants accessed confidential information, including privileged conversations with her attorney. Id. at ¶ 107.

         After being absent from work on February 22, 2016 for two doctor's appointments, Ms. Khazarian returned and found that her office desktop and her work cell phone did not work. Id. at ¶ 119. She claims that her devices continued to malfunction until at least March. Id. at ¶¶ 120-23. She alleges that she later discovered that Defendants had used “Stingray” surveillance to track Ms. Khazarian's cell phone calls. Id. at ¶ 123.

         Two months after Ms. Khazarian raised complaints about Mr. Dean, on March 22, 2016, he allegedly “engaged in acts of inappropriate and physically offensive and threatening behavior at a business dinner at the home of a Gerald Director”; Mr. Dean allegedly “loudly yelled” at Ms. Khazarian, pressured her to drink alcohol, and made her physically uncomfortable. Id. at ¶ 127. Specifically, Mr. Dean “brushed up against her physically rubbing the side of his body against Ms. Khazarian in a vertical motion and stating very loudly ‘should we have a pre-nuptial agreement?'” Id. at ¶ 128.

         The company placed Ms. Khazarian on administrative leave on March 26, 2016, in part because she had allegedly been working on “her ‘personal court case' during work hours.” Id. at ¶ 133. Ms. Khazarian allegedly received a suspicious e-mail in her personal e-mail account approximately forty minutes before she was placed on leave, which she claims could have come only from someone with access to the Gerald M s systems. Id. at ¶ 136. The e-mail requested that Ms. Khazarian provide company documents to the sender. Id. at ¶ 136. She reported the email to the company's Infrastructure Team Helpdesk, but never received a response. Id. Ms. Khazarian alleges that, “at Dean's request, Gamez arranged to have the suspicious email sent to Plaintiff's personal email with Gerald M s' confidential documents attached to the email as a pretext to fabricate a purported basis for her termination.” Id. at ¶ 137.

         In anticipation of a meeting with Mr. Dean, on April 1, 2016, Ms. Khazarian sent him a letter declining to meet in person on April 5 because she “was concerned for her physical well-being in his presence, ” and, “due to the continued pattern of unlawful discrimination, harassment, r iation, and surveillance, Gerald M s' actions constituted constructive discharge, ” forcing her to resign. Id. at ¶ 144. Ms. Khazarian received a termination letter on April 6, 2016, that stated that she would have been terminated in person at the April 5 meeting, and that her actions had “compromise[d] [her] professional integrity as a lawyer.” Id. at ¶¶ 145-46.

         On July 18, 2016, Ms. Khazarian allegedly asked to inspect MTC's books and records, believing that she was a shareholder based on the gift of stock that she received in 2013. Id. at ¶¶ 152, 155. She allegedly discovered in response that: “(i) her shares had been repurchased and cancelled by MTC on April 1, 2016, and, therefore, she was no longer a shareholder (ii) and that this action was taken in accordance with the provisions of a shareholder agreement, an equity incentive plan and other referenced documents.” Id. at ¶ 156. She also allegedly discovered that her shares had been repurchased and cancelled four days before Mr. Dean terminated her employment. Id.

         Ms. Khazarian allegedly was never notified that her stock had been repurchased and cancelled, and she claims that when she has requested information about the stockholder agreement or related documents, MTC has refused to give her information. Id. at ¶ 159. She alleges that Defendants have, as a result, deprived her of wages and compensation. Id. at ¶ 166.

         Ms. Khazarian alleges that Gerald M s has taken intentionally discriminatory actions that have caused her “severe emotional trauma, including, but not limited to, severe anxiety, sleeplessness, breathing difficulties, crying spells, cardiac problems, shortness of breath and visual problems.” Id. at ¶ 167.

         B. Procedural History

         Ms. Khazarian filed this case on October 25, 2016. The Complaint alleges violations of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621 et seq. (Count One); sex discrimination under Title VII of the Civil Rights Act of 1964 (Count Two); age and sex discrimination under the Connecticut Fair Employment Practices Act (CFEPA) (Counts Three and Four); r iation under the ADEA (Count Five); r iation under the CFEPA (Count Six); interference and r iation under the Family and Medical Leave Act (FMLA), 29 U.S.C. § 2601 et seq. (Counts Seven and Eight); discipline and discrimination in violation of the Pay Equity and Fairness Act, Conn. Gen. Stat. § 31-40z (Count Nine); breach of contract (Count Ten); negligent misrepresentation (Count Eleven); fraudulent misrepresentation (Count Twelve); conversion (Count Thirteen); theft, Conn. Gen. Stat. § 52-564 (Count Fourteen); failure to pay wages under Connecticut General Statute § 31-72 (Count Fifteen); unauthorized access of a computer system under Connecticut General Statute §§ 52-570b, 53a-251, 53-451, and 53-452 (Counts Sixteen and Seventeen); unauthorized access of a computer ...


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