Hill v. Workday, Inc.

Background

Anthony C. Hill alleged that he worked remotely from Maryland as an attorney for Workday, Inc., a Delaware corporation organized to do business in California with headquarters in Alameda County. He alleged that Workday discriminated against him based on race and disability, retaliated against him, harassed him, failed to maintain a discrimination- and harassment-free workplace, failed to engage in the required interactive process or provide reasonable accommodations, violated California Labor Code § 1102.5, committed promissory fraud concerning his compensation, intentionally inflicted emotional distress, and violated California’s Confidentiality of Medical Information Act.

Among other allegations, Hill claimed that Workday did not promote him while promoting a white female attorney, changed his job duties after medical leave, denied a requested reassignment as an accommodation, placed him on paid administrative leave, and awarded him less compensation than he alleged Workday had promised. He also alleged that Workday arranged a “Wellness Check” that led Maryland police officers to appear at his Maryland home while he was hospitalized.

Hill filed his First Amended Complaint solely against Workday. Workday moved to dismiss it under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not allege enough facts to support a legally plausible claim. Workday argued principally that California law could not apply to Hill’s Maryland-based employment and that the promissory-fraud claim failed to meet the heightened pleading requirements for fraud under Rule 9(b).

California-law claims and extraterritoriality

The court concluded that Hill’s employment was based in Maryland. It noted that he lived and worked there, that his supervisor was based in New York, and that Hill alleged only a short business trip to California. The court found that the amended complaint did not allege sufficient specific facts showing that the significant events underlying most of Hill’s claims occurred in California or were approved or ratified there by identified people.

The court therefore granted Workday’s motion to dismiss the first through seventh causes of action, which were based on California’s Fair Employment and Housing Act and the California Family Rights Act, with prejudice. The court also granted the motion to dismiss the eighth cause of action under California Labor Code § 1102.5 with prejudice. In both rulings, the court relied on Hill’s failure to cure pleading defects identified when the original complaint was dismissed.

The court likewise granted the motion to dismiss the tenth cause of action for intentional infliction of emotional distress with prejudice. It found that the alleged injuries were principally experienced in Maryland, the wellness check occurred in Maryland, and the supervisor’s actions occurred in New York. The court also granted the motion to dismiss the eleventh cause of action under the California Confidentiality of Medical Information Act with prejudice, finding no sufficient California connection to the alleged medical-information violations.

Promissory fraud

The court treated the ninth cause of action differently. Hill alleged that Workday representatives in California made promises about his restricted stock-unit grants, annual stock refreshers, and bonus structure before he accepted employment. He also alleged that decisions about his stock grants and compensation were made at or emanated from Workday’s California headquarters.

The court held that these allegations were sufficient, at the motion-to-dismiss stage, to avoid dismissal based on extraterritoriality. The court also held that Hill pleaded the alleged fraud with enough detail under Rule 9(b), identifying the people involved, the alleged representations, their authority, when and where the representations were made, how Hill relied on them, and the alleged financial harm.

The court denied Workday’s motion to dismiss the ninth cause of action for promissory fraud on both extraterritoriality and Rule 9(b) grounds. The court stated that it did not rule on choice of law because that issue was not raised or briefed.

Disposition

The court granted in part and denied in part Workday’s motion to dismiss. It granted the motion to dismiss the first through eighth, tenth, and eleventh causes of action with prejudice, and denied the motion as to the ninth cause of action for promissory fraud. The opinion does not identify the magistrate judge by name.