Jay v. Siemens AG

Citation: 323 F. Supp. 3d 220Docket: CIVIL ACTION NO. 18-10267-RWZ

Court: District Court, District of Columbia; August 30, 2018; Federal District Court

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Andrew Jay, a former at-will employee of Siemens Financial Services, Inc. (SFS), alleges wrongful constructive discharge due to retaliation following his internal report of extortion. The complaint is presently subject to a motion to dismiss. Jay, a Massachusetts resident, worked for SFS and its related entities for 14 years, most recently as Managing Partner/Vice President at Siemens Medical Solutions USA, Inc. (Healthineers), where he received positive performance evaluations and managed healthcare venture investments.

In spring 2017, Thomas Miller of GreyBird Investments sought SFS/Healthineers' investment in a British biotech firm, Base4, claiming to raise $30-50 million in venture capital. Miller, a former Siemens executive, was under a consulting contract with Siemens facilitated by SFS's Head of Strategy, David Stein. Although Jay's team had previously deemed the investment premature, they reconsidered after executive support. However, after further evaluation, Jay remained unconvinced.

In June or July 2017, Base4's CEO, Cameron Frayling, informed Jay that Miller had indicated Siemens would invest only if directed by him, pressuring Frayling to sign a term sheet with GreyBird for potential funding. Following discussions with colleagues and adherence to SFS policy, Jay reported the situation to the compliance department, speaking with Barbara Greenberg and expressing concerns regarding personal and professional ramifications. Greenberg initially found no compliance issues based on an attorney's information that Miller lacked a contract with Healthineers. Upon Jay's clarification that Miller was indeed contracted, Greenberg requested a copy of the contract but did not follow up thereafter. Despite Jay's efforts to eliminate the investment from consideration, it persisted, bolstered by Stein's ongoing advocacy.

Stein and Montag, in their roles at SFS and Siemens Healthcare, allegedly conspired to unjustly demote the plaintiff in retaliation for his compliance report, which addressed extortion involving a company CEO. In September 2017, the plaintiff was demoted from Vice President to Director, with his responsibilities shifted to a new hire. Meetings on October 2 and October 5 revealed that the decision to demote him was made weeks earlier, citing his presentation style as the reason—an issue he had not been previously made aware of. The plaintiff contended that his demotion was retaliatory and informed Human Resources on October 13. Despite his objections, Siemens formalized the demotion and set a deadline for acceptance or resignation. The plaintiff did not accept the demotion, leading to his constructive discharge on November 6, 2017. He filed a wrongful discharge complaint in Suffolk Superior Court on December 27, 2017. The defendants removed the case to federal court based on diversity jurisdiction and moved to dismiss. 

In the motion to dismiss analysis, the court considers whether the complaint presents sufficient factual matter to establish a plausible claim for relief. The defendants argue that the plaintiff's allegations pertain to internal policy complaints rather than protected whistleblowing. However, the plaintiff asserts he reported potential criminal activity, which could invoke public policy protections against retaliation for whistleblowing. Massachusetts law recognizes exceptions to at-will employment where terminations violate public policy, particularly for actions like filing claims or refusing illegal acts, as well as for performing significant public duties, even if not legally mandated.

The legal excerpt addresses the parameters of whistleblowing protections under Massachusetts law, specifically noting that at-will employees are not protected from retaliation for complaints regarding internal company policies or rule violations. Legal precedents establish that only complaints about alleged violations of criminal law may qualify for protection. The plaintiff alleges he was constructively discharged for reporting extortion to Siemens' Compliance Department and claims his demotion was retaliatory due to his compliance report. He asserts that he acted in good faith, consulting colleagues and expressing concern over potential consequences, and has a reasonable belief that the extortion he reported was criminal under Massachusetts law. The definition of extortion includes obtaining a benefit through threats, which Miller's alleged actions meet. Consequently, the court denies the defendants' motion to dismiss the retaliation claim and also denies, without prejudice, their motion to dismiss improperly named entities, allowing for potential renewal after discovery. Defendants' complaints about the plaintiff's perceived overstatement of his role lack clarity, and it remains uncertain whether he provided a contract to a third party involved.