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McKeown v. Tectran MFG, Inc.

United States District Court, W.D. North Carolina, Statesville Division

March 22, 2018

JEFFREY MCKEOWN, Plaintiff,
v.
TECTRAN MFG., INC., Defendant.

          ORDER

          Graham C. Mullen United States District Judge

         This matter is before the Court upon the Defendant's Motion to Dismiss the Amended Complaint. The motion is fully briefed and ripe for consideration by the Court.

         I. FACTUAL BACKGROUND

         The Amended Complaint alleges as follows: Since 2009, Plaintiff has worked in North Carolina as Director of OEM and Fleet for Tectran Mfg., Inc. (“Tectran”), a Delaware corporation with its principal place of business in New York. (Amd. Compl. ¶¶ 3-5). Tectran is a distributor and assembler of heavy duty truck and trailer components in the North America market. (Id. at ¶ 17). In 2009, Tectran President Bruce McKie contacted Plaintiff, a veteran of the heavy-duty truck and trailer component industry, and offered an ownership stake in Tectran. (Id. at ¶¶ 15, 19). Following negotiations, Plaintiff agreed to join Defendant to develop Tectran's OEM (original equipment manufacturer) business as employee and shareholder. (Id. at ¶ 19). Plaintiff alleges that throughout his employment, Tectran repeatedly failed to transfer Tectran stock to Plaintiff according to the parties' agreement. (Id. at ¶ 26). Plaintiff began to report motor vehicle component safety issues to Tectran's President and corporate counsel. (Id. at ¶ 42). Plaintiff also became concerned about Tectran's disregard for safety, falsified reports, misrepresentation of company financials, and “cookie jar accounting.” (Id. at ¶¶ 29 - 43). Concerned about his reputation in the industry, Plaintiff resigned his employment on February 24, 2017. (Id. at ¶ 44). Plaintiff remained a Tectran shareholder following his resignation as an employee. (Id. at ¶ 50).

         After his resignation, Plaintiff began employment with Phillips Industries, Inc., an alleged competitor of Tectran. (See Doc. No. 21 at ¶ 2). Plaintiff alleges that Tectran failed to pay employment-related compensation, including but not limited to unpaid stock options, $8239.53 for unpaid vacation pay, approximately $16, 000 for Plaintiff's unpaid quarterly bonus, and approximately $25, 000 for Plaintiff's unpaid management bonus. (Amd. Compl. at ¶ 56). Moreover, Tectran wrongly attempted to repurchase Plaintiff's 600 shares of stock by claiming that it could repurchase the stock at $71.45 per share (the original price Plaintiff paid for the stock), significantly less than market value. (Id. at ¶¶ 58, 60, 80). Plaintiff returned the check to the Defendant and has disputed the validity of any purported closing involving Plaintiff's shares. (Id. at ¶¶ 61-62). Tectran's attempt to repurchase Plaintiff's stock was pursuant to its Stock Option Award Agreement (“Award Agreement”), [1] which provides as follows:

         8. Repurchase Rights.

(a) In the event of your termination of employment by the Company and/or any Parent or Subsidiary, the Company shall have the option, but not the obligation, to repurchase all or any part of the Shares issued pursuant to this Agreement . . .. The following provisions shall apply to a repurchase under this Section 8(a):
(i) The per share repurchase price of the Shares to be sold to the Company upon exercise of its option under this Section 8(a) shall be equal to the Fair Market Value of each such Share determined in accordance with the Plan as of the date of termination, death or Disability; provided, however, that if you are terminated for Cause or you “Compete with the Company” during the one year period following your date of termination, the per share repurchase price shall be equal to the lesser of (x) the Exercise Price of each Share or (y) the Fair Market Value of each such Share determined in accordance with the Plan as of the date of termination.

         Plaintiff has filed this lawsuit alleging claims for Declaratory Judgment, violation of the North Carolina Wage and Hour Act, violation of the Delaware Wage Payment and Collection Act, Breach of Contract, and Breach of the Implied Covenant of Good Faith and Fair Dealing. Defendant has moved to dismiss the Amended Complaint for failure to state a claim upon which relief can be granted.

         DISCUSSION

         A. Standard for Rule 12(b)(6) Motion

         To avoid dismissal, a complaint must contain facts sufficient “to raise a right to relief above the speculative level” and to show that the claim is “plausible on its face.” Bell Atl. Corp.v. Twombly, 550 U.S. 544, 555, 570 (2007). A claim is plausible only “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged” - a standard that requires more than facts “that are ‘merely consistent with' a defendant's liability.” Ashcroft v. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. 662, 678. A court need not accept as true a plaintiff's “unwarranted inferences, unreasonable conclusions, or arguments.” Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (citation and internal quotation marks omitted).

         B. Declaratory Judgement

         Defendant seeks to dismiss Plaintiff's Declaratory Judgment claim, arguing that it is duplicative of his breach of contract claim. Plaintiff seeks a "declaration identifying Mr. McKeown's status and associated rights as an active Tectran shareholder." (Amd. Compl. ¶ 82). A genuine dispute exists over the status of Mr. McKeown's 600 Tectran shares. Tectran claims that it is entitled to repurchase the shares for the price Plaintiff originally paid for them, and Plaintiff contends that Tectran is not ...


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