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The recent case of Pina v. Henkel Corporation, 2008 Westlaw 819901 (E.D. Pa. March 26, 2008), raises the question of whether a company’s chief legal officer can be terminated for being “too much of a lawyer.” The decision, issued on a motion to dismiss under Federal Rule 12(b)(6) also addresses various pleading standards for claims of wrongful discharge and for violations of the Pennsylvania Human Relations Act and the Age Discrimination in Employment Act.

Counsel Opposes Practices

Kenneth Pina was senior vice president, chief legal officer and corporate secretary of Henkel Corporation from October 1999 until February 2006. Pina received “high praise” during the course of his employment. Pina alleges that in 2005 he became aware of, and then opposed, an unlawful bribery scheme at Henkel’s Mexican subsidiary. He also alleges that he opposed questionable investor solicitation practices by Henkel’s corporate parent, opposed and attempted to end Henkel’s practice of discriminating against older workers and highlighted activities that undermined the corporate veil between Henkel’s German parent corporation (Henkel KGaA) and its United States subsidiary.

Pina’s complaint alleges that shortly before his termination an attorney from Henkel KGaA informed him that the parent company was displeased with the positions he had taken on a number of compliance-related issues and that he should “get in the boat.” Henkel KGaA’s general counsel also told Pina that he was “too much of a lawyer,” without providing any performance-related reason. Pina was terminated within weeks of this conversation, allegedly as a matter of “corporate convenience.” He filed a complaint with the Pennsylvania Human Relations Commission (cross-filed with the Equal Employment Opportunity Commission) and subsequently filed a lawsuit claiming wrongful discharge, breach of contract and various claims for age discrimination and retaliation.

Henkel, its corporate parent and individuals named in the complaint filed motions to dismiss for failure to state any legal claim.

Court Applies Twombly

The court initially noted that motions to dismiss under rule 12(b)(6) are to be determined in light of the Supreme Court’s recent decision in Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007). Specifically, the Twombly decision requires that a Rule 12(b)(6) motion will be granted if the plaintiff has not articulated enough facts to “raise a right to relief above the speculative level.” It is not enough for a plaintiff to allege mere “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”

The court most pointedly applied the Twombly standard to plaintiff’s claims for age discrimination under the ADEA and PHRA. Specifically, while Pina alleged that he is over 40, that he was qualified for his position and that he was fired (stating the first three elements of the prima facie case), he “[did not allege] that the individual who replaced him was younger than he was. Furthermore, [he did] not allege any other circumstances that would permit a reasonable inference of age discrimination.” The court rejected Pina’s argument that he met the requisite pleading standard because he twice alleged, “he was fired on account of his age.” The court found “that this conclusory allegation is simply insufficient to state a claim under [ Twombly's] 12(b)(6) standard. . . . ” The court continued that “ in the absence of any factual allegations suggestive of [age] discrimination, much less an explicit allegation that plaintiff was replaced by a younger employee, we find that he has failed to state a claim for age discrimination [as a matter of law].”

Wrongful Discharge Survives

As most practitioners are aware, it is extremely difficult to state a claim for wrongful discharge in Pennsylvania, as a plaintiff must rebut the presumption of at-will employment by establishing “an applicable recognized public policy exception arising out of Pennsylvania law that protects the employee.” In this case, Pina asserted that the Pennsylvania Rules of Professional Conduct provided him with employment protection for questioning what he believed to be improper, and potentially illegal, practices of the company. He claimed that the Rules of Professional Conduct required him to “monitor and ensure Henkel’s compliance with its legal obligations and that it was his adherence to those Rules . . . that resulted in his firing.” Henkel countered that the rules required much less of an attorney and, therefore, did not provide a public policy sufficient to rebut the presumption of at-will employment. The court found that the allegations of Pina’s actions, when read in light of the Rules of Professional Conduct, raised a sufficient claim to avoid a preliminary dismissal.

Retaliation Claim Relates Back

Pina also asserted that he was terminated in retaliation for his opposition to the company’s discriminatory practices against older employees. Henkel moved to dismiss this claim on the grounds that Pina had failed to raise an allegation of retaliation before the EEOC and PHRC in a timely manner. Even though Pina did not amend his PHRC complaint to include a claim of retaliation until well over a year after his termination, the court permitted the retaliation claim to proceed under both the federal and state statute.

Initially, the court found that under the Pennsylvania Human Relations Act, a complaint “may be amended to clarify or amplify allegations . . . or to add material allegations which are related to or grow out of the subject matter of the original complaint,” and that these amendments relate back to the original filing date of the complaint. The EEOC has a similar regulation. The court found that, inasmuch as the original complaint alleged a timely claim of age discrimination, the requirement that the complaint be liberally construed rendered it broad enough to give rise to the subsequent opposition charge.

Moreover, the court found that Pina’s federal claim of retaliation would have survived on the grounds that the investigation into a claim of retaliation “could reasonably be expected to grow out of the original charge of discrimination.”

Corporate Parent A Proper Party

Henkel KGaA also asserted that it should be dismissed as a defendant on the grounds that the company was not named in either the original or amended administrative complaint. The court found that while a “discrimination complaint may ordinarily be brought only against a party previously named [before the administrative agency] . . . the Third Circuit recognizes an exception . . . when the [unnamed] party received notice and when there is a shared commonality of interest with a named party.” Inasmuch as both administrative complaints contained numerous references to Henkel KGaA, and in light of the corporate relationship between the parties, there was both notice and commonality of interest sufficient to state a viable claim against the corporate parent.

The court concluded by finding that Henkel KGaA, a foreign company, “may be liable under ADEA for discrimination on employees on U.S. soil.” The court also found that two individuals could be liable under the PHRA’s “aiding and abetting” clause inasmuch as the complaint stated that both individuals asserted some supervisory control over Pina’s employment situation and were involved in terminating his employment.

It appears that the primary importance of the case is related to the need for more specific pleadings under the Twombly standard. While the court dismissed only two of the five counts at issue (Henkel did not move to dismiss the breach of contract claim), it is clear that the court looked for detailed pleadings in order to rise above speculation and a formulaic recitation of the elements of each claim. Practitioners on both sides of the bar should take note of these requirements.

SID STEINBERG is a partner in Post & Schell’s business law and litigation department. He concentrates his national litigation and consulting practice in the field of employment and employee relations law. Steinberg has lectured extensively on all aspects of employment law, including Title VII, the FMLA and the ADA.

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