Doe v. Innovate Financial, Inc.

Background

Jane Doe sued Michael Nakashima, Kelly Nakashima, Innovate Financial, Inc., and ProEquities over alleged sexual misconduct and harassment in the workplace. The opinion states that Doe worked for Innovate beginning in May 2011 and alleged that Michael Nakashima subjected her to sexually explicit language, sexual advances, and unwanted touching beginning in 2014.

After Doe, the Nakashimas, and Doe’s spouse discussed Doe’s continued employment, the Nakashimas told Doe that she would need to work from home and that she could not continue coming into the office. Doe alleged that this affected her business and that she eventually resigned based on constructive termination.

Pseudonym

Kelly Nakashima asked the court to require Doe to disclose her real identity. The court recognized a strong presumption that parties should be identified but concluded that Doe’s interest in protecting her identity outweighed the public interest in disclosure. The court emphasized the case’s allegations of years of sexual abuse and harassment, the intimate matters likely to be explored, the potential harm to Doe’s reputation and family relationships, and the absence of demonstrated prejudice to the defendants. The court ordered that Doe may proceed pseudonymously.

Claims Against Kelly Nakashima

Doe initially asserted four claims against Kelly Nakashima: a Title VII violation, battery, wrongful termination, and tortious interference. Doe represented that she would dismiss three claims. The court therefore denied Kelly Nakashima’s motion to dismiss Counts II, VIII, and XI as moot. The order did not state that the court itself dismissed those counts.

The remaining claim was Count IX, tortious interference with an employment contract. Because the Title VII claim providing original federal jurisdiction had been dismissed, the court considered whether to exercise supplemental jurisdiction over the state-law claim. It decided to do so because the claim arose from facts related to the claims against the other defendants and keeping the claims together would be more efficient, convenient, and fair to Doe.

Count IX: Tortious Interference

Applying Federal Rule of Civil Procedure 12(b)(6), which asks whether a complaint plausibly states a claim for relief, the court accepted the complaint’s factual allegations as true and viewed reasonable inferences in Doe’s favor. Under Minnesota law, the elements of tortious interference are: an existing contract, the defendant’s knowledge of the contract, intentional procurement of a breach, lack of justification, and damages. Minnesota law recognizes such a claim involving an at-will employment agreement.

Kelly Nakashima agreed that Doe had an employment contract with Innovate and that she knew about it. She argued that Doe had not adequately alleged that she intentionally procured a breach or suffered damages. Doe alleged that Kelly Nakashima insisted that Michael Nakashima require Doe to work from home, interfering with a material term requiring office access, and that Kelly Nakashima also helped alter the standards governing Doe’s employment. Doe alleged that these actions harmed her ability to generate income and damaged her.

The court concluded that, taking the complaint’s allegations as true, Doe had plausibly alleged intentional procurement of a breach and damages. It declined to weigh Kelly Nakashima’s argument that Doe’s revenues and compensation had increased, explaining that factual disputes of that kind were not properly resolved on a motion to dismiss. The court denied Kelly Nakashima’s motion to dismiss Count IX.

Disposition

The order allowed Jane Doe to proceed pseudonymously, denied as moot Kelly Nakashima’s motion to dismiss Counts II, VIII, and XI, and denied the motion to dismiss Count IX.