Hull v. ConvergeOne, Inc.

Background

Samuel Hull worked for ConvergeOne as a National Account Manager. Hull lived in Utah, while ConvergeOne was based in Minnesota. He alleged that he regularly communicated with Minnesota-based personnel, attended mandatory training in Minnesota, and participated in other work activities connected to Minnesota.

Hull claimed that he earned commissions from major sales to Westlake Services, LLC. His compensation was governed at different times by the 2017 Variable Compensation Plan and an April 2019 compensation plan. Hull alleged that ConvergeOne later declared the April Plan void, applied a different plan, miscalculated his commissions, and failed to pay him the amounts owed. He asserted claims under Minnesota and Utah wage statutes, for breach of contract, negligent misrepresentation, promissory estoppel, and unjust enrichment.

ConvergeOne moved to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a legal claim.

Minnesota Wage Claims

The court denied the motion to dismiss Hull’s Minnesota Payment of Wages Act claims. Although Hull was not a Minnesota resident, the court found that his allegations—including mandatory training in Minnesota, supervision and direction from Minnesota, and regular communications with Minnesota employees—were sufficient at the pleading stage to show that he worked in Minnesota. The court noted that discovery could later affect that issue.

The court also denied dismissal of Hull’s claims that ConvergeOne failed to provide enough information to determine how it calculated his commissions and failed to pay commissions owed. The court found that the statutory term “basis” could include information about how commissions were calculated and that Hull plausibly alleged that ConvergeOne provided confusing or inaccurate information. The court further held that Hull could pursue a private claim for unpaid commissions even though the Minnesota Department of Labor and Industry had not acted on his complaint.

The court denied dismissal of Hull’s Minnesota retaliation claim. Hull alleged that ConvergeOne withheld commissions, conditioned payment on releasing legal claims, and changed his compensation terms after he asserted commission rights and filed an earlier lawsuit. The court found those allegations sufficient at this stage to plausibly allege an adverse employment action connected to protected activity.

Utah Wage Claims

The court dismissed with prejudice Hull’s Utah Payment of Wages Act claim for unpaid commissions. The court interpreted Utah law as making the statute inapplicable when an agreement between the employer and employee governs the terms or rate of payment. Because Hull’s claim depended on the commission agreements, the court held that the Utah statute did not apply.

The court also dismissed with prejudice Hull’s Utah wage-law retaliation claim. It held that the Utah statute provides a private right of action for wage claims but does not provide a private right of action for retaliation claims.

Breach of Contract

The court denied dismissal of Hull’s breach-of-contract claim. ConvergeOne argued that the 2017 and April Plans were too indefinite to be enforceable unilateral contracts. The court disagreed at the pleading stage, finding that the plans described commission calculations and eligibility criteria with sufficient specificity. The court also found that ConvergeOne’s general ability to modify the plans did not necessarily prevent contract formation, particularly because Hull alleged that ConvergeOne acted in bad faith and the plans included requirements concerning written modifications or notice.

Negligent Misrepresentation

The court granted in part and denied in part the motion concerning negligent misrepresentation. It dismissed with prejudice the portion based on two statements: that ConvergeOne would act in good faith and that Hull had nothing to worry about regarding the Westlake commission. The court treated those statements as general opinions rather than factual representations on which Hull could reasonably rely.

The court denied dismissal of the remainder of the claim. Hull alleged that ConvergeOne made other statements and omissions about the compensation plans and commission calculations, that he relied on them by signing the April Plan and continuing to work toward the Westlake deal, and that the representations caused him harm. The court found those allegations sufficient to plead causation and reasonable reliance.

Promissory Estoppel

The court granted ConvergeOne’s motion to dismiss Hull’s promissory-estoppel claim and dismissed it with prejudice. Under Minnesota law, detrimental reliance in an employment case generally requires an actual change in position, such as declining another job opportunity. Hull alleged that he continued working for ConvergeOne, but he did not allege that he rejected another opportunity or otherwise changed his position in reliance on ConvergeOne’s promises.

Unjust Enrichment

The court denied dismissal of Hull’s unjust-enrichment claim. Hull alleged that he secured the Westlake deal, ConvergeOne knowingly accepted the resulting benefit, and the company retained the benefit without paying the commissions he earned. The court found those allegations sufficient to plead that retaining the benefit without payment would be inequitable.

Disposition

The court granted in part and denied in part ConvergeOne’s Second Motion to Dismiss. It dismissed with prejudice Hull’s Utah Payment of Wages Act claims, his promissory-estoppel claim, and the specified portion of his negligent-misrepresentation claim. The remaining claims were not dismissed by this order. Judge Susan Richard Nelson signed the order on November 8, 2021.