United States District Court, D. Connecticut
RULING ON DEFENDANTS' MOTION TO DISMISS
A. Bolden United States District Judge.
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.
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.
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.
FACTUAL AND PROCEDURAL BACKGROUND
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.
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. Id. at ¶¶ 33,
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.
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
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
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.
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 ¶¶
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.
January 2016, Ms. Khazarian filed complaints with the
Connecticut Commission on Human Rights and Opportunities
(“CHRO”), and with the Equal Employment
Opportunity Commission (“EEOC”). 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.
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
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.
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.
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.
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
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.
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.
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.
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