Colbert v. FSA Store, Inc.

Background

Brian Colbert moved to compel discovery from FSA Store, Inc., Health-E Commerce, and Jeremy Miller. He sought information and documents concerning the per-share value of stock options granted in his employment contract, as well as documents concerning business strategies, including web-based strategies, that he authored during his employment and that FSA later implemented.

Colbert also sought documents regarding FSA’s communications with third-party administrators about renegotiating exclusivity provisions in revenue agreements and documents concerning revised web strategies implemented after his termination. Colbert argued that this discovery could help show that FSA’s stated reason for terminating his employment was pretextual because FSA later implemented strategies reflected in his Strategic Action Plan. FSA acknowledged completing certain initiatives Colbert began but argued that it terminated him because he failed to deliver on the plan. FSA also argued that some requests were overbroad, unduly burdensome, confidential, or irrelevant.

Rulings

The court granted Colbert’s motion to compel responses to Interrogatory 13 and Document Request Nos. 23 and 53. FSA was ordered to identify the price per share of FSA stock on the three vesting dates that had occurred—January 17, 2018; January 17, 2019; and January 17, 2020—and to produce documents concerning or establishing those prices, including documents showing how the share price was calculated. FSA also had to produce year-over-year quarterly revenue information from the beginning of Colbert’s employment through the present, as needed to assist with valuing the stock options.

The court explained that relief in an employment-discrimination case may include the value of stock options lost because of discriminatory conduct. FSA’s confidentiality and proprietary-information concerns could be addressed through a protective order and did not justify withholding the requested information.

The court denied the motion as to Document Request No. 54, which sought all documents concerning a February 2019 equity investment in FSA. Colbert had not shown how the method used to set FSA’s share price for that investment, which occurred after his employment ended, was relevant to his claim for relief.

The court also denied Colbert’s request to compel post-termination documents responsive to Document Requests Nos. 50 and 52 because the requests were overbroad and burdensome. The court allowed Colbert to ask during depositions whether FSA pursued the plans described in his Strategic Action Plan after his termination. The court stated that the broader request for documents about how FSA carried out those plans, and whether they succeeded over the following years, had at most marginal relevance and that the burden and expense outweighed the likely benefit. Defendants had agreed to produce documents showing work Colbert completed during his employment, and the court ordered production of documents responsive to that portion of the requests.