HC2, Inc. v. Messer

Background

HC2, Inc., which also does business as Hire Counsel, sued Andrew Delaney over alleged breaches of contract and related conduct concerning Delaney’s work on a Thai-language document-review project. Delaney worked for HC2 on an at-will basis during two periods between September 2019 and March 2020.

On March 17, 2020, Delaney emailed HC2 and the law firm involved in the project, reporting that workers with flu-like symptoms were coming to the office. He asked to work remotely or remain home with pay. HC2 responded that remote work was not available. Shortly afterward, HC2 announced that the client was suspending the New York project and that the workers should leave the facility. The parties later disputed the reason for the project’s suspension and the end of Delaney’s employment.

Delaney’s original counterclaims included nine causes of action. The court dismissed those claims without prejudice in an earlier ruling and allowed him to replead if he believed he could state a claim. In his amended counterclaims, Delaney brought four claims: retaliation under New York Labor Law sections 740 and 215, breach of a confidential relationship, intentional infliction of emotional distress, and abuse of process. HC2 moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim.

Whistleblower retaliation

The court dismissed the claim under New York Labor Law section 740 because that statute requires an employee to allege an actual violation of a law, rule, or regulation that creates a substantial and specific danger to public health or safety. Delaney relied on two New York executive orders and guidance from the New York City Health Department and the federal Centers for Disease Control and Prevention concerning workplace precautions during the pandemic.

The court held that the executive orders did not prohibit private employers from allowing employees with flu-like symptoms to come to work or require private employers to offer remote work. The court also held that the agency guidance consisted of recommendations, not legally binding laws, rules, or regulations. As a result, Delaney had not alleged conduct that violated a law, rule, or regulation for purposes of section 740.

The court also dismissed the section 215 claim. Delaney did not respond to HC2’s argument that he had not complained about conduct he reasonably and in good faith believed violated the New York Labor Law or an order of the Labor Commissioner. The court treated the claim as abandoned and stated that, even if it had not been abandoned, the allegations did not state a claim.

Breach of a confidential relationship

The court held that Delaney had not plausibly alleged that HC2 owed him a duty to keep his name, resume, employment status, or work on the project confidential. His employment agreement required him to protect confidential information concerning HC2’s clients, but the court found that those obligations were not reciprocal. The agreement contemplated that information Delaney provided to HC2 could be shared with HC2’s clients.

The court also found that Delaney had not adequately alleged that the information was confidential or that HC2 disclosed it. His theory that a tax lawyer in Thailand learned about his work through an improper disclosure by HC2 was speculative. The court further held that HC2 was entitled to identify Delaney in its complaint because the identity of the parties generally must appear in a civil case and the reference to Delaney’s Florida lawsuit was central to HC2’s claims. The court also concluded that the protective order did not give Delaney an entitlement to keep his resume off the public docket.

Intentional infliction of emotional distress

The court rejected Delaney’s emotional-distress claim. It held that allegations concerning the alleged disclosure of information, the termination of his at-will employment, the filing of HC2’s lawsuit, and the filing of his resume were either covered by other legal theories, not sufficiently extreme or outrageous, or protected by the litigation privilege. The court also stated that New York law does not allow an at-will employee to avoid the traditional rule governing termination by recasting the dispute as intentional infliction of emotional distress.

The court separately held that Delaney’s allegations about a suspicious hotel phone call and an alleged industry “do not reuse” blacklist were speculative and lacked enough factual detail to state a plausible claim.

Abuse of process

The court held that filing a civil lawsuit by summons and complaint is not, by itself, legal process that can support an abuse-of-process claim under New York law. Delaney’s allegations that HC2 filed the case to intimidate him, impose litigation costs, gain a tactical advantage, or obtain assistance in the Florida litigation did not identify the required misuse of legal process or an improper collateral objective. The court also held that HC2 was not required to sue in Florida and that cooperation with defendants in the Florida action did not, as alleged, create liability.

Disposition

The court granted HC2’s motion to dismiss the amended counterclaims. It ordered the parties to appear for a post-discovery status conference on January 5, 2021, and directed the clerk to close the relevant docket entries.