Barger v. BlueSky TelePsych, Inc.

Background

Lynsey Barger alleged that she accepted employment with BlueSky TelePsych, LLC, signed an employment agreement, obtained professional licenses, completed onboarding and training, reviewed patient records, and interviewed a potential employee. She alleged that BlueSky’s credentialing specialist completed and signed licensing, credentialing, and medical documents in Barger’s name without permission. After Barger raised concerns with BlueSky’s owner, her email access was deleted and her employment was terminated.

Barger asserted seven claims: violation of the Fair Labor Standards Act; declaratory judgment; violation of the Minnesota Payment of Wages Act; retaliation under the Minnesota Whistleblower Act; breach of contract; breach of the implied covenant of good faith and fair dealing; and unjust enrichment. BlueSky moved to dismiss the entire action under Rule 12(b)(6), which tests whether a complaint alleges enough facts to plausibly support a legal claim.

Choice of law

The employment agreement contains an Illinois choice-of-law provision for questions concerning the agreement’s validity, enforceability, or construction. The court did not decide whether the agreement is enforceable or which state’s law will govern those questions. It concluded that the specific claims addressed in this order did not fall under that provision and applied Minnesota law to those claims.

Rulings on the claims

Fair Labor Standards Act claim. BlueSky argued that Barger was exempt as a professional employee. Barger voluntarily dismissed this claim, and the court granted BlueSky’s motion to dismiss it with prejudice.

Declaratory-judgment claim. Barger sought a declaration that BlueSky materially breached her rights under the employment agreement. The court held that this claim was wholly duplicative of her breach-of-contract claim. It granted BlueSky’s motion to dismiss the claim and dismissed it with prejudice.

Minnesota Payment of Wages Act claim. BlueSky argued that Barger did not demand unpaid wages before filing suit. The court held that Minnesota law required the demand to be made before the lawsuit began. Because Barger had not made a pre-suit demand, the court granted BlueSky’s motion to dismiss this claim and dismissed it with prejudice.

Minnesota Whistleblower Act claim. BlueSky argued that Barger was not an employee when she was terminated and had not made a legally sufficient report. The court rejected those arguments at the motion-to-dismiss stage. Barger plausibly alleged that she had begun performing services before her termination, including reviewing patient records and interviewing a potential hire. She also plausibly alleged that she reported conduct involving signatures and licensing documents that could implicate legal violations. The court denied BlueSky’s motion to dismiss this claim.

Breach-of-contract claim. Barger alleged that BlueSky failed to reimburse licensing fees and terminated her without just cause and without the required notice. Although BlueSky’s signature was absent from the written agreement, Barger alleged that she performed under it. The court concluded that there was not enough information at this stage to determine whether the agreement was valid and enforceable, but Barger had sufficiently alleged that it governed the employment relationship and that BlueSky breached it. The court also concluded that any agreement concerning a Michigan license would be separate from the written agreement, which required licenses in Illinois and Minnesota. The court denied BlueSky’s motion to dismiss this claim.

Implied covenant of good faith and fair dealing. Barger alleged that BlueSky’s termination violated both the express contract and an implied obligation of good faith and fair dealing. The court held that Barger’s implied-covenant claim merely repeated her allegation that BlueSky violated an express contract term. It granted BlueSky’s motion to dismiss this claim and dismissed it without prejudice.

Unjust-enrichment claim. Barger alleged that BlueSky benefited from her work and from expenses she incurred obtaining licenses without paying or reimbursing her. The court held that she plausibly alleged that she provided benefits, including interviewing a potential hire, completing training, and reviewing patient records. Because the validity and scope of the parties’ agreements remained unresolved, the court allowed Barger to pursue unjust enrichment as an alternative theory. It denied BlueSky’s motion to dismiss this claim.

Disposition

The court granted in part and denied in part BlueSky’s motion to dismiss. It denied the motion as to Barger’s Minnesota Whistleblower Act retaliation, breach-of-contract, and unjust-enrichment claims. It granted the motion as to the implied-covenant, declaratory-judgment, Fair Labor Standards Act, and Minnesota Payment of Wages Act claims. The implied-covenant claim was dismissed without prejudice; the other three dismissed claims were dismissed with prejudice.