United States District Court, W.D. Virginia, Charlottesville Division
Glen E. Conrad Senior United States District Judge.
James Tolle filed this employment discrimination action under
the Uniform Services Employment and Reemployment Rights Act
of 1994 ("USERRA"), 38 U.S.C. §§
4301-4335, against PocketSonics, Inc.
("PocketSonics"), Analogic Corporation, Analogic
Limited (collectively, "Analogic"), Jeff Pompeo,
Travis Blalock, Farley Peechatka, and Ronald Rios. The
defendants previously moved to dismiss the complaint under
Federal Rule of Civil Procedure 12(b)(6), arguing that
Tolle's claims are barred by a Bonus & General
Release Agreement ("Release Agreement") that Tolle
signed in consideration for certain bonus and severance
payments, and that Tolle had not sufficiently stated a claim
against Blalock, Peechatka, or Rios. In response, Tolle
conceded that Blalock and Peechatka are not subject to
individual liability under USERRA. However, he opposed the
defendants' motion in all other respects.
March 5, 2018, the court issued a memorandum opinion and
order granting in part and denying in part the
defendants' motion to dismiss. Although the court found
the Release Agreement to be clear and unambiguous, the court
did not believe that the record had been sufficiently
developed to determine whether the Release Agreement provided
benefits that were greater than those that Tolle gave up in
signing the agreement, rendering it enforceable under §
4302 of USERRA. In particular, the court found that
"limited discovery into a comparison of benefits,
including whether the other employees received severance
agreements, [was] necessary." Mar. 5, 2018 Mem. Op. 6,
Dkt. No. 24. Because a ruling on the enforceability of the
Release Agreement could be dispositive of Tolle's claims,
the court declined to decide whether Tolle stated a plausible
claim against Rios.
parties have completed the limited discovery permitted by the
court. The defendants have since filed a renewed motion to
dismiss the complaint or, in the alternative, for summary
judgment. The court held a hearing on the motion via
teleconference on August 28, 2018. The motion has been fully
briefed and is now ripe for review.
is a veteran of the United States Navy Reserve. Compl. ¶
15, Dkt. No. 1. He completed his last active duty assignment
in July of 2009. Id. ¶ 17. Tolle was honorably
discharged from the Navy Reserve in September of 2011.
Id. ¶ 19.
February of 2011, Tolle began working as a senior engineer
for PocketSonics, a technology company that developed a
handheld ultrasound device known as the "Sonic
Window." Id. ¶ 18; see also Decl.
of Jeffrey Pompeo ("Pompeo Decl.") ¶ 10, Dkt.
No. 47. Tolle remained with PocketSonics until September 19,
2013, the day before the company merged with Analogic,
another technology company. Compl. ¶¶ 77-78. Prior
to the merger, PocketSonics employed eight individuals,
including Tolle. Defs.' Resp. to Pl.'s 1st Set of
Interrogs. 2, Dkt. No. 46-1. The other employees were Chief
Executive Officer Jeff Pompeo, Travis Blalock, Drake
Guenther, Michael Fuller, Jermaine Headley, Karen Morgan, and
Jacob Wegman. Id. Tolle alleges that Pompeo failed
to appreciate Tolle's military experience, exhibited bias
toward Tolle for that service, and gave preferential
treatment to the other employees of PocketSonics, all of whom
were non-veterans. Compl. ¶¶ 21 -41.
August of 2013, two of Analogic's executive officers,
Ronald Rios and Farley Peechatka, met with all of the
PocketSonics employees to discuss Analogic's pending
acquisition of PocketSonics. Id. ¶ 51. Tolle
alleges that "Rios and Peechatka promised that all
PocketSonics employees, including Tolle, would retain their
positions and receive permanent positions with Analogic after
the merger with PocketSonics." Id. ¶ 52.
During the meetings, Tolle advised Rios and Peechatka of his
military background and requested that they "consider
giving him opportunities to use his extensive leadership and
management skills from being a senior Navy Officer."
Id. ¶ 53.
September 4, 2013, PocketSonics' Board of Directors
("Board") held a meeting to discuss matters related
to the pending merger with Analogic. Board Meeting Minutes 1,
Dkt. No. 51-1. The Board also discussed the proposed payment
of bonuses to certain employees. The minutes from the meeting
indicate that the Board approved the payment of
"Transaction Bonuses" to four employees, including
Tolle, which would be contingent upon the successful
completion of the merger with Analogic and the execution of a
release agreement by the recipient. Id. 7. The Board
also approved the payment of "FDA Bonuses" to the
same four employees, which would be contingent upon the
submission of the Sonic Window to the Food and Drug
Administration ("FDA"). Id. The Board
proposed to pay Tolle a Transaction Bonus in the amount of
$13, 500 and an FDA Bonus in the same amount. Id.
The bonuses proposed for the other three employees ranged
from $19, 125 to $54, 000 each. Id.
Board also approved the payment of "Special Pre-Closing
Bonuses" to all eight PocketSonics employees.
Id. 8. The Board proposed to pay Tolle and four
other employees a . Special Pre-Closing Bonus of $2, 000. The
remaining bonuses ranged from $15, 000 to $30, 000.
Id. The Board agreed that the Special Pre-Closing
Bonuses would be paid immediately prior to the effectiveness
of the proposed merger. Id.
ultimately declined to offer Tolle a permanent position with
the company following the merger. According to the complaint,
this decision was made by Rios, upon the recommendation of
Pompeo and Blalock. See, e.g., Comp. ¶ 87
(describing a written statement from Rios in which he noted
that "both Pompeo and Blalock affected his decision not
to hire or retain Tolle as a regular employee after
Analogic's acquisition of PocketSonics was final").
Instead, Analogic offered Tolle a three-month consulting
arrangement, which Tolle rejected. Decl. of Patricia Dumas
("Dumas Decl.") ¶ 3, Dkt. No. 46. The proposed
consulting agreement was contingent upon the company's
acquisition of PocketSonics by September 13, 2013. Consulting
Agreement ¶ 1, Dkt. No. 46-2. Under the terms of the
proposed consulting agreement, Tolle would have been paid a
maximum amount of $6, 000 per week during the three-month
period specified in the agreement. Id. ¶ 6.
the other PocketSonics employees were offered and accepted
regular employment with Analogic, either before or
immediately after the merger was finalized on September 20,
2013. Dumas Decl. ¶¶ 4-10. The documents
delineating the terms and conditions of their employment with
Analogic, including their respective compensation packages,
have been filed under seal with the court. See Sealed Exs. to
Dumas Decl., Dkt. No. 50. Four of the individuals who
accepted full-time engineering positions with Analogic were
offered annual base salaries that exceeded $100, 000.
Id. They were also given the opportunity to
participate in Analogic's annual bonus program and its
standard benefit program that included medical, dental, and
life insurance, disability protection, and the company's
401(k) plan. Id. Two of the individuals who accepted
full-time engineering positions also received Analogic stock
units as a sign-on equity award, as well as the opportunity
to receive an additional equity award as part of
Analogic's long-term incentive program. Id.
September 13, 2013, Tolle executed a Bonus & General
Release Agreement ("Release Agreement"), under
which Tolle agreed that his employment would terminate on the
business day prior to the closing of PocketSonics' merger
with Analogic, and that he desired to "resolve certain
matters including those related to the provision of certain
bonus opportunities to [Tolle] from PocketSonics, the release
of claims by [Tolle] against PocketSonics, and the
termination of [his] employment." Release Agreement 1,
Dkt. No. 47-3. By signing the Release Agreement, Tolle
acknowledged that he had been given at least 21 days to
consider the agreement, and that he had been advised to
consult with an attorney about the agreement's terms.
Id. ¶ 8. Under the terms of the Release
Agreement, Tolle received a "Transaction Bonus
Payment" of $13, 500, a "Severance Payment" of
$13, 500, and a "Special Bonus Payment" of $2, 000,
all in "valuable consideration" for his general
release of claims against PocketSonics. Id.
¶¶ 1, 3. The release provision of the agreement
states as follows:
I hereby fully and forever generally release and discharge
PocketSonics, its current, former and future parents,
subsidiaries, affiliated companies, related entities,
employee benefit plans, and their fiduciaries, predecessors,
successors, officers, directors, stockholders, agents,
employees and assigns (collectively, the "Company")
from any and all claims, causes of action, and liabilities up
through the date of my execution of this Release. The claims
subject to this release include, but are not limited to,
those relating to my employment with PocketSonics and/or any
predecessor to PocketSonics and the termination of such
employment which will be effective as of the Termination
Date. In understanding the terms of this Release and my
rights, I have been advised to consult with an attorney of my
choice prior to executing this Release. I understand that
nothing in this Release shall prohibit me from exercising
legal rights that are, as a matter of law, not subject to
Id. ¶ 2. In a separate paragraph, Tolle also
agreed as follows: "I understand and agree that by
entering into this Release I am waiving any and all rights or
claims I might have under the Age Discrimination in
Employment Act, as amended by the Older Workers Benefit
Protection Act, and that I have received compensation beyond
that to which I was previously entitled." Id.
¶ 8. Tolle further acknowledged that he had seven days
after signing the Release Agreement in which . to revoke it,
and that the agreement would not be enforceable until after
the revocation period expired. Id.
September 20, 2013, the date on which the merger became
effective, three of the PocketSonics employees who accepted
engineering positions with Analogic entered into a "Side
Letter Agreement" concerning the payment of a bonus
contingent on the submission of the Sonic Window to the FDA
for "510(k) clearance" ("FDA Bonus").
Side Letter Agreement, Dkt. No. 50-8. The amounts of the FDA
Bonuses ranged from $19, 125 to $54, 000. Id., at 2. An
earlier version of Tolle's Release Agreement included a
contingent FDA Bonus in the amount of $13, 500. See Pompeo
Decl. Ex. D., Dkt No. 47-4. That bonus was ultimately
replaced with the Severance Payment in the same amount. The
parties dispute whether Tolle negotiated this particular
change. See 2nd Tolle Decl. ¶ 2, Dkt. No. 59-1.
seven of the other PocketSonics employees received the
"Special Bonus Payment" approved by the Board.
Pompeo Decl. ¶ 12. Four of the other employees received
a Special Bonus Payment in the amount of $2, 000, the same
amount paid to Tolle. Board Meeting Minutes 5. However, one
of the employees who accepted an engineering position with
Analogic received a Special Bonus Payment in the amount of
$25, 000. Id. Additionally, five of the other
PocketSonics employees received a "Transaction Bonus
Payment." Pompeo Decl. ¶ 12. The Transaction Bonus
Payments made to ...