Kuklenski v. Medtronic USA, Inc.

Background

Jan Kuklenski alleged that Medtronic ended her employment after she took medical leave. She began working for Medtronic in 1999 and, by December 2018, was a Senior Director, Value Based Healthcare Partnership Lead, Americas. Although she was a Michigan citizen, she alleged that she routinely worked in Minnesota, was physically present there for about 20% of her 22 years of employment, reported to Minneapolis-based supervisors, and had frequent work-related contacts with Minnesota-based personnel.

During a 2021 reorganization, Kuklenski agreed to remain at Medtronic and take on additional responsibilities on the condition that her compensation, compensation structure, and title would remain the same. She alleged that Medtronic later changed her compensation from the Medtronic Incentive Plan to a commission-based Sales Incentive Plan. She objected in writing, stating that the change violated agreements with four health-care partnerships and the understanding that her commercial and value-based health-care work would remain separate.

Kuklenski then took leave under the Family and Medical Leave Act, or FMLA, beginning June 7, 2021, because of an inner-ear disease and related surgery. Her twelve weeks of FMLA leave ended August 30, and she requested an extension through December 7. Medtronic told her it would try to fill her position but that she could return to the same position if it remained available. Medtronic later offered the position to another applicant and told Kuklenski that it could not accommodate further leave. She alleged that Medtronic ended her employment, refused to pay severance, and hired a younger, less qualified replacement.

Kuklenski asserted six claims: two age-discrimination claims and one disability-discrimination claim under the Minnesota Human Rights Act; promissory estoppel; FMLA discrimination; and retaliation under the Minnesota Whistleblower Act.

Motion to Dismiss Standard

Medtronic moved under Federal Rule of Civil Procedure 12(b)(1) and Rule 12(b)(6). Rule 12(b)(6) tests whether a complaint alleges enough facts to state a legally plausible claim. At this stage, the court accepted the complaint’s factual allegations as true and drew reasonable inferences in Kuklenski’s favor.

Minnesota Human Rights Act Claims

Medtronic argued that the Minnesota Human Rights Act protects only an employee who resides or works in Minnesota and that Kuklenski did neither. Kuklenski agreed that she did not reside in Minnesota but argued that her physical work there and her frequent communications with Minnesota-based personnel showed that she worked there for purposes of the statute.

The court distinguished constitutional standing—the requirement that a plaintiff have a concrete injury that the court can remedy—from statutory standing, which asks whether the statute gives that plaintiff the right to sue. The court found no question that Kuklenski had constitutional standing. It treated the dispute over whether she was within the group protected by the Minnesota Human Rights Act as a merits issue rather than a jurisdictional one.

The court found that the phrase “works in this state” was ambiguous and that the Minnesota Supreme Court had not resolved its meaning in this context. The court noted that decisions from the District of Minnesota generally considered the nature and amount of an employee’s work-related Minnesota contacts. Kuklenski’s allegations of regular physical work in Minnesota, reporting to Minneapolis-based supervisors, and frequent contacts with Minnesota personnel were sufficient to plausibly meet that approach. Because the parties had not fully addressed the statutory-interpretation questions and a more complete factual record could help resolve them, the court denied the motion to dismiss the Minnesota Human Rights Act claims.

FMLA Claim

Kuklenski alleged that Medtronic discriminated against her for taking FMLA leave. The court explained that, under Eighth Circuit terminology, a claim that an employer takes adverse action because an employee exercised FMLA rights is an FMLA “discrimination” claim, not a retaliation claim. To proceed at the pleading stage, Kuklenski needed to allege facts plausibly showing that Medtronic ended her employment at least partly because she exercised FMLA rights.

The court found that she had not done so. Her twelve weeks of FMLA leave ended on August 30, 2021, and Medtronic began trying to fill her position after learning that she could not return then. The court found that the roughly four-month gap between the start of her leave and the termination was not enough, by itself, to show causation. It also found that her allegations about Medtronic’s statements, refusal to pay severance, the “hardship” comment, and the replacement’s duties did not otherwise plausibly show unlawful intent.

The court therefore granted the motion as to the FMLA discrimination claim and dismissed that claim without prejudice for failure to state a claim on which relief could be granted.

Promissory Estoppel Claim

Kuklenski alleged that Medtronic promised to keep her compensation, compensation structure, and title unchanged if she stayed through the reorganization. She claimed that she relied on that promise by giving up 52 weeks of severance pay.

The court explained that promissory estoppel generally requires a clear and definite promise, intended reliance that actually caused a detriment, and enforcement necessary to prevent injustice. In the employment setting, the court said the promise generally must be one of long-term employment terminable only for cause. It also said that an at-will employee must show an actual change in position or that the employee declined another valuable opportunity or job offer because of the promise.

The court found that Kuklenski did not allege the duration of the promise or facts showing that she was promised long-term employment terminable only for cause. It also found that she merely continued working for Medtronic and did not allege that she pursued or declined more valuable employment elsewhere. The court granted the motion as to the promissory-estoppel claim and dismissed it without prejudice for failure to state a claim.

Minnesota Whistleblower Act Claim

Kuklenski alleged that she reported, in good faith, that Medtronic’s change to the commission-based compensation plan breached contracts with four third-party health-care partnerships and that Medtronic retaliated by ending her employment and threatening legal claims against her.

The Minnesota Whistleblower Act protects an employee who makes a good-faith report of an actual, suspected, or planned violation of law. The court stated that the reported violation need not ultimately prove true, but the alleged conduct must have violated an existing law if the reported facts were true. Medtronic challenged whether Kuklenski had alleged protected activity, arguing that she had not shown that the compensation change breached a contract and that her report concerned only her own contract.

The court rejected those arguments at this stage. It found that Kuklenski’s allegations, although limited, clearly described a good-faith report that Medtronic’s compensation change breached contracts with identified third parties. The court therefore denied the motion to dismiss the Minnesota Whistleblower Act claim.

Order

The court granted in part and denied in part Medtronic’s motion to dismiss. It granted the motion as to the promissory-estoppel claim and the FMLA discrimination claim, dismissing both without prejudice. It denied the motion in all other respects, leaving Kuklenski’s Minnesota Human Rights Act and Minnesota Whistleblower Act claims in the case.