Sklair v. Mike Bloomberg 2020, Inc.

Background

Alexis Sklair, Sterling Rettke, Nathaniel Brown, Brian Giles, Jocelyn Reynolds, and Caryn Austen brought a proposed class action against Mike Bloomberg 2020, Inc. and Michael Bloomberg. They asserted claims for fraudulent inducement and promissory estoppel based on alleged promises that campaign field staff would have work involving both the primary and general elections, either with the Campaign or another Bloomberg-funded entity, and that the Campaign would keep field offices open and employ staff through November 2020.

The plaintiffs alleged that these promises were made during recruitment and interviews, repeated in public statements and after Michael Bloomberg withdrew from the presidential race, and important to their decisions to accept employment. Each plaintiff’s employment agreement with the Campaign stated that the employment was at-will and could be terminated at any time, with or without notice, cause, or reason. The agreements also stated that changes to their terms would not be enforceable unless made in a writing signed by an authorized officer. Michael Bloomberg was not individually a party to those employment agreements.

Bloomberg withdrew from the presidential race on March 4, 2020, and the Campaign terminated the plaintiffs’ employment on March 20, 2020. The plaintiffs alleged that the terminations broke promises of continued employment through the general election.

Motion and materials considered

The defendants moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. They argued that the plaintiffs’ at-will status barred both claims and that the complaint did not adequately plead the required elements. In the alternative, they asked the court to strike the class allegations under Rule 23(d)(1)(D).

The court considered the employment offer letters, the Campaign’s employee handbook, and signed acknowledgment forms. It found that the documents could be considered because the complaint referred to the employment agreements and relied on their terms, including the at-will provisions.

Fraudulent inducement

Fraudulent inducement is a claim alleging that a defendant used a material false statement to persuade someone to enter an agreement. Under the court’s application of New York law, an at-will employee generally cannot reasonably rely on an oral promise of continued employment because the written arrangement permits termination at any time.

The court concluded that the plaintiffs’ alleged reliance on promises of employment through November 2020 was unreasonable after they signed agreements stating that their employment was at-will. The alleged pre-employment promises also concerned the duration of employment, which was addressed by the offer letters rather than being separate or collateral to the employment agreement. The at-will provision therefore meaningfully contradicted the alleged promises.

The court also rejected the plaintiffs’ argument that the promises concerned the present nature of their work rather than future employment. It found that the alleged opportunity to work on both the primary and general elections was tied to remaining employed through the general election, not to different duties or responsibilities. Statements about resources for keeping campaign offices open likewise did not promise to employ any particular person for any specific period.

The court held that the plaintiffs had not adequately pleaded reasonable reliance and therefore did not address the defendants’ separate argument about damages. It granted the motion to dismiss the fraudulent-inducement claims against both the Campaign and Michael Bloomberg with prejudice and denied leave to amend because the court considered the claims legally unavailable under the circumstances.

Promissory estoppel

Promissory estoppel is a claim based on a clear promise, reasonable reliance on that promise, and harm caused by the reliance. The court noted that courts disagree about the full scope of promissory estoppel in employment cases, but generally do not allow the claim when the promise concerns the employment relationship itself.

Here, the alleged promises concerned the length of the plaintiffs’ employment and were therefore central to, rather than separate from, that relationship. The plaintiffs also could not plausibly allege reasonable reliance on promises of continued employment because their agreements expressly made the employment at-will. The no-oral-modification clauses made reliance on contradictory oral statements especially unreasonable.

The court therefore granted the motion to dismiss the promissory-estoppel claims against the Campaign and Michael Bloomberg with prejudice. It did not reach the defendants’ separate argument that the plaintiffs had failed to plead an unconscionable injury, and it denied leave to amend those allegations.

Disposition

Judge Laura Taylor Swain granted the defendants’ Rule 12(b)(6) motion and dismissed the plaintiffs’ fraudulent-inducement and promissory-estoppel claims with prejudice. The court did not reach the alternative motion to strike the class allegations. It directed the Clerk to enter judgment dismissing the First Amended Complaint and to close the case.