Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 1 of 21
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
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`JAMES WICKENS,
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`Plaintiff
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`v.
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`RITE AID HDQTRS CORP.,
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`Defendant
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`No. 1:19-cv-02021
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`(Judge Kane)
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`MEMORANDUM
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`This case arises out of the termination of Plaintiff James Wickens (“Plaintiff”)’s
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`employment with Defendant Rite Aid Hdqtrs. Corp. (“Defendant” or “Rite Aid”) in January
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`2018, which Plaintiff alleges was retaliation in violation of Section 806(a) of the Sarbanes-Oxley
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`Act (“SOX”), 18 U.S.C. § 1514A. (Doc. No. 1.) Before the Court is Defendant’s motion for
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`summary judgment. (Doc. No. 31.) For the reasons that follow, the Court will grant the motion.
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`I.
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`BACKGROUND1
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`Plaintiff is an attorney who graduated from law school in 1993 and has approximately
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`two decades of legal experience in private practice and in-house corporate representation.
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`(SUMF ¶ 1.) In approximately 2003, Plaintiff accepted a position as Immigration Counsel in
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`Rite Aid’s Human Resources (“HR”) Department, which he held until 2010 when he became
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`“Associate Counsel—Human Resources,” also in Rite Aid’s HR Department. (Id. ¶¶ 2-3.)
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`Plaintiff worked in the HR Department for his entire tenure with Rite Aid, and neither of his
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`positions required a full Pennsylvania law license. (Id. ¶ 4.) As Immigration Counsel, Plaintiff
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`was responsible for immigration legal assistance, including securing business visas for
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`1 The following relevant facts of record are taken from Defendant’s Statement of Undisputed
`Material Facts (“SUMF”) (Doc. No. 31-1), and Plaintiff’s Response to Statement of Facts
`(“RSUMF”) (Doc. No. 39), and are undisputed unless otherwise noted.
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 2 of 21
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`pharmacists and information technology specialists. (Id. ¶ 5.)2 Plaintiff’s immigration-related
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`duties decreased as Rite Aid shifted away from sponsoring new immigration visas and Plaintiff
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`took on his new role as Associate Counsel. (Id. ¶ 6.)3 As Associate Counsel, Plaintiff continued
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`to provide immigration support in addition to reviewing and drafting HR policies, collaborating
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`on employee trainings, performing legal research, and responding to pre-litigation demands. (Id.
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`¶ 7.)4 Plaintiff also served as the Chair of the HR Compliance Sub-Committee and a HR
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`Representative for Rite Aid’s Policy Oversight Committee. (Id. ¶ 8.) At the time of his
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`termination, five other employees reported to Plaintiff. (Id. ¶ 10.)5 During the course of his
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`2 Plaintiff clarifies that he was responsible for “the day-to-day direction of up to 3 corporate
`Paralegals and an International Recruitment Manager. He also worked closely with Operations
`and recruiters to recruit, hire, and staff IT professionals and international pharmacists.”
`(RSUMF ¶ 5.)
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` 3
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` Plaintiff denies this allegation in part, asserting that Defendant’s citation to Plaintiff’s
`deposition testimony “does not support” the assertion that Rite Aid moved away from sponsoring
`new immigration visas. (RSUMF ¶ 6.) However, the Court’s review of the portion of Plaintiff’s
`deposition transcript at issue shows that Plaintiff clearly and specifically stated that his
`immigration duties decreased in 2010 or 2011 because “Rite Aid made a business decision to
`decrease the amount of sponsoring new visas.” (Doc. No. 35, Exh. B at 28.)
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` 4
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` Plaintiff clarifies that he was “responsible for the day-to-day direction of Corporate Human
`Resources Managers” as well as “counsel[ing] and advis[ing] Senior Corporate Human Resource
`Managers responsible for HR investigations”; “provid[ing] daily legal advice and services to
`support both human resource and senior business leaders”; “responding to pre-litigation demand
`letters”; “participating in issues regarding labor unions”; “preparing the annual HR risk
`assessment”; “overseeing background checks”; “working with pharmacy operations and
`compliance on licensures and sanctions”; “creating trainings related to workplace
`discrimination”; “handling of EEOC compliance and state and federal labor, wage, and hours
`issues”; and “obtaining visas and permanent residency for pharmacists and IT staff.” (RSUMF ¶
`7.)
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` 5
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` Defendant states these direct reports were non-attorneys. (SUMF ¶ 10.) Plaintiff asserts that
`those individuals were attorneys. (RSUMF ¶ 10.) The Court’s review of the deposition
`transcript at issue indicates that Plaintiff testified his direct reports were individuals with law
`degrees working in non-attorney positions. (Doc. No. 35, Exh. B at 32-33) (stating that
`Plaintiff’s direct reports “were not working as attorneys for Rite Aid. They were working as HR
`managers”).
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`2
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 3 of 21
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`employment, Plaintiff himself reported to Michelle Belsey (“Belsey”) (Vice President,
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`Recruitment), then Traci Burch (“Burch”) (former Vice President of Labor Relations and
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`Employment Counsel), then, finally, Ken Black (“Black”) (former Chief Human Resources
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`Officer), but never Ron Chima (“Chima”) (Vice President of Litigation and Commercial Law).
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`(Id. ¶¶ 11-12.)
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`On October 27, 2015, Rite Aid and Walgreens Boots Alliance (“Walgreens”) announced
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`that they entered into a merger agreement (the “Merger Agreement”), under which Walgreens
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`would acquire all outstanding shares in Rite Aid for nine dollars ($9.00) per share. (Id. ¶ 34.)
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`Approximately a year later, Rite Aid and Walgreens announced that they had agreed to extend
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`the end date of the Merger Agreement to January 27, 2017; however, they ultimately announced
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`an amended merger agreement (the “Amendment”), extending the end date to July 31, 2017 and
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`lowering the price per share from $9.00 to between $6.50 and $7.00. (Id. ¶¶ 35-36.) On June 29,
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`2017, Rite Aid and Walgreens announced the termination of the Merger Agreement and the
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`Amendment, and entered into an asset purchase agreement under which Walgreens would
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`acquire approximately half of Rite Aid’s retail locations. (Id. ¶ 37.)6 Rite Aid subsequently
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`worked to transfer its stores to Walgreens. (Id. ¶ 38.)
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`Plaintiff alleges that in late February or early March 2017, he was informed that various
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`vice presidents at Rite Aid sold their stock in January 2017 after learning that the Merger
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`Agreement would be extended at a lower per-share sale price. (Doc. No. 1 ¶ 18.) Thereafter,
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`Plaintiff believed that those vice presidents “had engaged in conduct in violation of securities
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`laws,” namely, insider trading. (Id.) Plaintiff alleges that he protested any insider trading to
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`6 Plaintiff clarifies that the asset purchase agreement provided that Walgreens “would acquire
`2,186 stores, related distribution assets, and inventory from Defendant.” (RSUMF ¶ 37.)
`3
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 4 of 21
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`Chima and informed Chima that it needed to be investigated. (Id. ¶ 22.) Plaintiff also alleges
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`that he raised the same issue with Burch, Frank Ho (“Ho”) (former Vice President of Indirect
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`Procurement), and Bob Dwulet (“Dwulet”) (former Senior Director of Indirect Procurement),
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`and similarly demanded an investigation. (Id. ¶¶ 23-25.) Plaintiff asserts that Burch informed
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`Black of his allegations of insider training. (Id. ¶ 24.) Black, Chima, Ho, and Dwulet testified in
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`their depositions that they did not recall ever speaking to Plaintiff about any concerns he may
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`have had about insider trading. (SUMF ¶ 44.) Burch testified that she recalled speaking with
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`Plaintiff about his concerns and that she informed Black that Plaintiff requested an investigation
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`into insider trading, but noted that she did not inform either Black or Chima that Plaintiff ever
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`raised any duty or alleged any violation that Rite Aid itself may have committed. (SUMF ¶ 49;
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`RSUMF ¶ 49; Doc. No. 35, Exh. F at 74-77.) At no time during the course of his employment
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`with Rite Aid did Plaintiff himself conduct any legal research regarding whether Rite Aid’s
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`alleged failure to investigate Plaintiff’s allegations of insider trading constituted a crime by Rite
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`Aid. (SUMF ¶ 64.)7 At no time has Plaintiff identified what specific law he believes Rite Aid
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`(as opposed to certain individual employees) to have violated. (Id. ¶ 65.)
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`As a result of the asset purchase agreement with Walgreens and subsequent transfer of
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`Rite Aid retail locations to Walgreens, Rite Aid determined that its “need for the retention of
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`associates within certain units of the corporate structure” changed, and that, Rite Aid selected
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`certain associates for termination as part of a top-down reduction in force across multiple
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`7 Plaintiff states that he “did not need to research what constituted illegal insider trading as he
`already knew that such conduct violated Rule 10b-5 of the Securities Exchange Act” and that it
`was his “belief” that if Rite Aid failed to self-report insider trading to the Securities and
`Exchange Commission (“SEC”), that “may also constitute a crime.” (RSUMF ¶ 64.) The Court
`notes that Plaintiff does not dispute that he conducted no research into whether Rite Aid did or
`did not have a legal obligation to self-report to the SEC. (Id.)
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`4
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 5 of 21
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`departments. (Id. ¶ 74.)8 Ultimately, Rite Aid eliminated over eighty (80) positions, and
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`executed a reduction in force that included severance benefit options based on length of service
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`and pay level. (Id. ¶ 77.) Black selected Plaintiff for termination. (Id. ¶ 78.) Black testified at
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`his deposition that he selected Plaintiff after reviewing “the overall structure of HR and the
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`overall layers of management . . . as well as evaluat[ing] the roles that each held” and
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`“identif[ying] the individuals where the work could either not be done or could be reallocated in
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`some fashion.” (Id. ¶ 79.)9 Defendant asserts that Plaintiff’s work was “easily reallocated” to
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`outside counsel, as well as various individuals already employed, including Steve Chesney
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`(“Chesney”) (former Senior Director of Corporate Human Resources), Mike Atcovitz
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`(“Atcovitz”) (former Vice President, Field Human Resources), Chima, and Emily Edmunds
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`(“Edmunds”) (Senior Counsel). (Id. ¶ 80.)10
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`On January 24, 2018, Black and Chima met with Plaintiff and informed him that his
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`employment was being terminated. (Id. ¶ 81.) Plaintiff’s five direct reports also left Rite Aid in
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`2018. (Id. ¶ 82.) From January 1, 2018 through January 1, 2020, staffing levels in the HR
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`Department declined from eighty-seven (87) employees to sixty-seven (67) employees. (Id. ¶
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`8 Plaintiff does not clearly dispute that Rite Aid engaged in a reduction in force; however,
`Plaintiff disputes that Plaintiff’s position was eliminated as part of that reduction in force.
`(RSUMF ¶ 74.)
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` 9
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` As noted, supra, Plaintiff denies that Black selected Plaintiff for termination for the reasons
`stated by Defendant and further denies that Plaintiff’s position was eliminated, but rather asserts
`that he was replaced. (RSUMF ¶ 79.)
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`10 Plaintiff denies that his immigration work was outsourced entirely to outside counsel and
`reiterates his belief that he was replaced by Edmunds. (RSUMF ¶ 80.)
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`5
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`83.) Rite Aid has not replaced Plaintiff’s position of “Associate Counsel—Human Resources.”
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`(Id. ¶ 84.)11
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`With regard to Edmunds, Defendant asserts that she was offered the position of Senior
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`Counsel within the Legal Department on November 16, 2017, and that she joined Rite Aid
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`shortly thereafter. (Id. ¶ 86.) Edmunds reports to Chima, to whom Plaintiff never reported. (Id.
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`¶ 87.) Defendant asserts that Edmunds’ responsibilities are “purely legal, and include managing
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`active litigation” and also that “her role requires a full Pennsylvania law license.” (Id. ¶ 88.)12
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`Defendant further notes that Plaintiff has filed various administrative complaints since his
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`termination alleging that he was terminated because of his age or in retaliation for voicing
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`complaints about, inter alia, improper payroll deductions, sexual harassment, race discrimination,
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`and violations of the Americans with Disabilities Act. (Id. ¶¶ 91, 94.)
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`On July 31, 2018, Plaintiff submitted his charge of discrimination in violation of SOX
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`with the Occupational Safety and Health Administration (“OSHA”). (Id. ¶ 95.) OSHA
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`subsequently forwarded Plaintiff’s charge of retaliation to the Securities and Exchange
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`Commission (“SEC”), which initiated an investigation into Plaintiff’s insider trading allegations.
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`(Id. ¶¶ 97-98.) As a result of this investigation, the SEC has pursued complaints against two
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`former Rite Aid executives. (Id. ¶ 106.) Chima testified at his deposition that, to the best of his
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`knowledge, the SEC did not find that Rite Aid itself engaged in any wrongdoing. (Id. ¶ 108;
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`Doc. No. 31, Exh. 17 at 37-38.)
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`11 Plaintiff disputes that Defendant has not replaced his position—he reiterates that he was
`replaced by Edmunds. (RSUMF ¶ 84.)
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`12 Plaintiff disputes that Edmunds’ role is “purely legal” but does not dispute that Edmunds is
`responsible for managing active litigation, nor does Plaintiff assert that any of his positions
`involved managing active litigation. (RSUMF ¶ 88.)
`6
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 7 of 21
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`Plaintiff filed a complaint in this Court on November 25, 2019, asserting a single claim
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`against Defendant for retaliatory discharge in violation of SOX. (Doc. No. 1.) Specifically,
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`Plaintiff alleges that Defendant retaliated against him for reporting apparent violations of federal
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`securities law. (Id. ¶ 2.) Defendant filed the instant motion for summary judgment on January
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`15, 2021, followed by a brief in support of the motion on January 19, 2021. (Doc. Nos. 31, 32.)
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`Having previously been granted an extension of time to file a response (Doc. No. 30), Plaintiff
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`filed his brief in opposition to Defendant’s motion (Doc. No. 35) and a Response to Statement of
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`Facts (Doc. No. 34) on February 12, 2021.13 Defendant filed a brief in reply on February 26,
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`2021. (Doc. No. 37.) Accordingly, the motion has been fully briefed and is ripe for disposition.
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`II.
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`LEGAL STANDARD
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`Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment is
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`warranted “if the movant shows that there is no genuine dispute as to any material fact and the
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`movant is entitled to judgment as a matter of law.” See Fed. R. Civ. P. 56(a). A factual dispute
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`is material if it might affect the outcome of the suit under the applicable law, and it is genuine
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`only if there is a sufficient evidentiary basis that would allow a reasonable factfinder to return a
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`verdict for the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49
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`(1986). At summary judgment, the inquiry is whether the evidence presents a sufficient
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`disagreement to require submission to the jury or whether it is so one-sided that one party must
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`13 Plaintiff’s originally filed Response to Statement of Facts (Doc. No. 34) contains redacted
`portions consistent with the parties’ expressed need for confidentiality and request to seal
`portions of the record (Doc. Nos. 28, 33). The Court ultimately granted the parties’ request to
`seal portions of the record, finding that the parties made the required showing pursuant to In re
`Avandia Mktg., Sales Practices & Prods. Liability Litig., 924 F.3d 662 (3d Cir. 2019) regarding
`the justification for sealing court records (Doc. No. 36), and subsequently ordered Plaintiff to file
`an unredacted Response to Statement of Facts under seal (Doc. No. 38). Accordingly, for
`purposes of this motion, the Court relies on the unredacted, sealed version of Plaintiff’s RSUMF.
`(Doc. No. 39.)
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 8 of 21
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`prevail as a matter of law. See id. at 251-52. In making this determination, the Court must
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`“consider all evidence in the light most favorable to the party opposing the motion.” See A.W.
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`v. Jersey City Pub. Schs., 486 F.3d 791, 794 (3d Cir. 2007).
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`The moving party has the initial burden of identifying evidence that it believes shows an
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`absence of a genuine issue of material fact. See Conoshenti v. Pub. Serv. Elec. & Gas Co., 364
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`F.3d 135, 145-46 (3d Cir. 2004). Once the moving party has shown that there is an absence of
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`evidence to support the non-moving party’s claims, “the non-moving party must rebut the motion
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`with facts in the record and cannot rest solely on assertions made in the pleadings, legal
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`memoranda, or oral argument.” See Berckeley Inv. Grp. Ltd. v. Colkitt, 455 F.3d 195, 201 (3d
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`Cir. 2006); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the non-moving party
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`“fails to make a showing sufficient to establish the existence of an element essential to that
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`party’s case, and on which that party will bear the burden at trial,” summary judgment is
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`warranted. See Celotex, 477 U.S. at 322. With respect to the sufficiency of the evidence that the
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`non-moving party must provide, a court should grant a motion for summary judgment when the
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`non-movant’s evidence is merely colorable, conclusory, or speculative. See Anderson, 477 U.S.
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`at 249-50. There must be more than a scintilla of evidence supporting the non-moving party and
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`more than some metaphysical doubt as to the material facts. See id. at 252; see also Matsushita
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`Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Further, a party may not
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`defeat a motion for summary judgment with evidence that would not be admissible at trial. See
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`Pamintuan v. Nanticoke Mem’l Hosp., 192 F.3d 378, 387 (3d Cir. 1999).
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`III. DISCUSSION
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`A.
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`Legal Standard Applicable to SOX Retaliation Claims
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`Under Section 806 of SOX, a publicly traded company, and any officer, employee, or
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`other agent of that company, may not:
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`discharge, demote, suspend, threaten, harass, or in any other manner discriminate
`against an employee in the terms and conditions of employment because of any
`lawful act done by the employee—
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`(1) To provide information, cause information to be provided, or
`otherwise assist in an investigation regarding any conduct which the
`employee reasonably believes constitutes a violation of section 1341
`[mail fraud], 1343 [wire fraud], 1344 [bank fraud], or 1348 [securities
`fraud], any rule or regulation of the Securities and Exchange
`Commission, or any provision of Federal law relating to fraud against
`shareholders, when the information or assistance is provided to or the
`investigation is conducted by—
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`(A) a Federal regulatory or law enforcement agency;
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`(B) any Member of Congress or any committee of Congress; or
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`(C) a person with supervisory authority over the employee (or
`such other person working for the employer who has the
`authority to investigate, discover, or terminate misconduct).
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`See 18 U.S.C. § 1514A. The United States Department of Labor (“DOL”) has promulgated
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`regulations that apply a two-part burden-shifting framework to SOX complaints filed with
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`OSHA. See 29 C.F.R. §§ 1980.104(e)(1)-(4); 1980.109(a)-(b). Federal courts apply the same
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`framework when reviewing SOX complaints during litigation. See, e.g., Wiest v. Tyco
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`Electronics Corp. (Wiest II), 812 F.3d 319, 329 (3d Cir. 2016) (applying DOL’s two-part
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`burden-shifting framework in reviewing a summary judgment record).
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`At the first step of this framework, the plaintiff bears the burden of establishing a prima
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`facie case of retaliation under SOX. See 29 C.F.R. § 1980.104(e)(1)-(2). To this end, the
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`plaintiff-employee must show that: (1) he engaged in a protected activity; (2) the defendant knew
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 10 of 21
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`or suspected that he engaged in the protected activity; (3) he suffered an adverse action; and (4)
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`the protected activity was a contributing factor in the adverse action. See id.; see also Wiest II,
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`812 F.3d at 329. An employee’s activity is “protected” where the employee believes “that the
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`conduct that is the subject of his communication relates to an existing or prospective violation of
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`one of the federal laws referenced in [Section] 806.” See Reilly v. GlaxoSmithKline, LLC, 820
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`F. App’x 93, 96 (3d Cir. 2020) (citing Wiest v. Lynch (Wiest I), 710 F.3d 121, 134 (3d Cir.
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`2013)). The employee’s belief must be both subjectively in good faith and objectively
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`reasonable. See Wiest I, 710 F.3d at 134. “A belief is objectively reasonable when a reasonable
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`person with the same training and experience as the employee would believe that the conduct
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`implicated in the employee’s communication could rise to the level of a violation of one of the
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`enumerated provisions in Section 806.” Id. at 132.
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`With respect to the fourth element, a contributing factor is “any factor, which alone or in
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`combination with other factors, tends to affect in any way the outcome of the decision.” See
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`Wiest II, 812 F.3d at 330 (collecting cases). A plaintiff may satisfy this element with either
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`direct or circumstantial evidence, including temporal proximity between the protected activity
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`and the adverse action. See id. (citing Feldman v. Law Enforcement Assocs. Corp., 752 F.3d
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`339, 348 (4th Cir. 2014)). A causal connection may nonetheless be severed by the passage of a
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`significant period of time or another intervening event. See id.
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`To withstand a motion for summary judgment, a plaintiff must identify evidence in the
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`record to support all four elements of a prima facie case of retaliation under SOX. Once a
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`plaintiff does so, the burden shifts to the employer to demonstrate by clear and convincing
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`evidence that it would have taken the same adverse action in the absence of any protected
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`activity. See 29 C.F.R. § 1980.109(b) (directing that “relief may not be ordered if the
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 11 of 21
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`[defendant] demonstrates by clear and convincing evidence that it would have taken the same
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`adverse action in the absence of any protected activity”). When reviewing a motion for summary
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`judgment, a court should find in favor of the defendant where “there is no genuine issue of
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`material fact casting doubt on [the defendant’s] affirmative defense.” See Wiest II, 812 F.3d at
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`333.
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`B.
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`Arguments of the Parties
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`In arguing that it is entitled to summary judgment on Plaintiff’s retaliation claim,
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`Defendant argues initially that Plaintiff has failed to establish a prima facie case of retaliation
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`because “[Plaintiff] did not engage in SOX-protected activity and his termination was not caused
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`by such alleged activity.” (Doc. No. 32 at 14.) As to the first element of the prima facie case—
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`whether Plaintiff engaged in protected activity—Defendant argues, inter alia, that: (1) Plaintiff
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`did not subjectively believe that Rite Aid—as opposed to individual executives who committed
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`insider trading—committed fraud (id. at 16); and (2) even if Plaintiff believed Rite Aid
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`committed fraud, such a belief was not objectively reasonable for an individual with Plaintiff’s
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`“decades of legal experience” (id. at 21).
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`More specifically, Defendant argues that none of Plaintiff’s alleged concerns rise to the
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`level of protected activity “because the record reflects that he did not possess a subjective or
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`objectively reasonable belief that Rite Aid violated any law enumerated by SOX or otherwise
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`committed fraud.” (Id. at 16.) Defendant notes that Plaintiff alleges he engaged in protected
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`activity by “reporting apparent violations of federal securities law” and “demanding that Rite
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`Aid investigate his belief that certain vice presidents traded their [Rite Aid] stock on inside
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`information that the Merger Agreement would be extended at a lower agreed-upon share sales
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`price.” (Id. at 16-17.) Defendant argues that, “at the same time that Plaintiff alleges he engaged
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`11
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 12 of 21
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`in SOX-protected activity, he took deliberate steps to commence a completely separate
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`investigation,” but at no time did Plaintiff “draft a single email, note, or statement regarding what
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`he now alleges are serious securities laws violations.” (Id. at 17.) Defendant further asserts that:
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`Plaintiff vaguely claims he “protested” that Rite Aid vice presidents had
`committed insider trading and demanded an investigation. But these conclusory
`allegations are devoid of any reference to fraudulent acts committed by Rite Aid.
`In fact, at no point in time did Plaintiff have an “actual” belief that [Rite Aid] had
`committed a crime: not in March 2017 when he allegedly learned of the purported
`insider trading, not during the remainder of his Rite Aid employment, and not
`years later when he sat for his deposition.
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`(Id. at 19-20) (emphasis in original). Accordingly, Defendant argues that “[g]iven that Plaintiff
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`failed . . . to raise any concerns of fraud, let alone Rite Aid committing fraud, no reasonable jury
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`would find that Plaintiff meets the subjective belief requirement under SOX.” (Id. at 21)
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`(emphasis in original).
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`Defendant similarly asserts that “Plaintiff cannot proffer any competent evidence
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`demonstrating that a reasonable person with his decades of legal experience would believe that
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`Rite Aid engaged in any conduct that ‘relate[s]’ in an understandable way to one of the stated
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`provisions of Section 806.” (Id. at 21.) Defendants rely on Harkness v. C-Bass Diamond, LLC,
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`No. 08-CV-231, 2010 WL 997101, at *2, *5-6 (D. Md. Mar. 16, 2010), in which the district
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`court found that the attorney-plaintiff, who worked as general counsel for the defendant-
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`company, did not have an objectively reasonable belief that the company violated a securities
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`regulation because, given her experience and available resources, she should have known that no
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`violation occurred. (Id. at 22) (citing Harkness, 2010 WL 997101, at *7).
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`Defendants further rely on Mann v. Fifth Third Bank, No. 09-CV-14/09-CV-476, 2011
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`WL 1575537, at *10-11 (S.D. Oh. Apr. 25, 2011), in which the district court found that a belief
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`that the defendant-company was committing shareholder fraud was not objectively reasonable
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`12
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 13 of 21
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`because the appropriate regulators did not appear to consider them violations. (Id. at 22-23)
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`(citing Mann, 2011 WL 1575537, at *11). To this end, Defendant argues that “while Plaintiff
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`possessed the skills to investigate” his concerns, he “did not research whether Rite Aid would
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`violate securities law by not investigating his claims. Indeed, he admitted that he only looked at
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`the securities laws that might be implicated after he was terminated by [Rite Aid].” (Id. at 23)
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`(emphasis in original). Moreover, Defendant notes that the SEC itself has filed complaints
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`against two former Rite Aid executives, but has never alleged any wrongdoing on the part of Rite
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`Aid and asserts that “[t]he fact that the SEC has taken no action against [Rite Aid] plainly
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`‘militates against finding [Plaintiff’s] belief objectively reasonable.’” (Id. at 25-26) (quoting
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`Mann, 2011 WL 1575537, at *11).
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`As to the fourth element—whether any alleged protected activity was a contributing
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`factor in his termination—Defendant asserts that Plaintiff’s termination was the result of a broad
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`reduction in force and notes that “[Plaintiff] has not proffered a single piece of evidence to
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`suggest that he was singled out for termination” and that “Plaintiff has failed to establish that the
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`decision maker relative to his employment knew of and acted based on Plaintiff’s alleged
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`protected activity.” (Id. at 28-29.) More specifically, Defendant argues that “[t]he ultimate
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`decision to select Plaintiff for termination was made by Mr. Black, whom Plaintiff admitted he
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`never spoke to about his alleged insider trading concerns” and who testified that “Plaintiff was
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`selected for elimination after considering the [HR] Department as a whole and determining
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`whose responsibilities could be eliminated or reallocated.” (Id. at 29.) Defendant asserts that
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`“Plaintiff has proffered little evidence that Mr. Black knew of Plaintiff’s alleged protected
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`activity, and no evidence that Mr. Black terminated Plaintiff because of his alleged activity.”
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`(Id. at 30) (emphasis in original).
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 14 of 21
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`Regarding Plaintiff’s allegation that he was replaced by Edmunds, Defendant asserts that
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`“the evidence demonstrates Ms. Edmunds did not replace Plaintiff.” (Id. at 30.) Defendant notes
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`that:
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`Ms. Edmunds, who was hired weeks before Plaintiff’s separation[,] is Senior
`Counsel (not Associate Counsel like Plaintiff), works in Rite Aid’s Legal
`Department (a Department wholly distinct from Plaintiff’s former Department
`(HR)), and is supervised by Ron Chima, whom Plaintiff admitted never
`supervised him. Ms. Edmunds’ job is purely legal, includes managing litigation,
`and specifically requires a full Pennsylvania law license.
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`(Id. at 30-31.) Defendant contrasts Edmunds’ role with Plaintiff’s, which “did not require a
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`Pennsylvania law license” and “included non-legal responsibilities, including the policy work
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`described above and overseeing non-attorneys, and did not include the legal work performed by
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`Ms. Edmunds, including active litigation.” (Id. at 31.) Finally, Defendant notes that “multiple
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`witnesses testified that Plaintiff’s responsibilities were divided among outside counsel and
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`several Rite Aid employees, not simply shifted to Mr. Edmunds’ plate” and that “[t]hese facts
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`alone make plain Ms. Edmunds did not replace Plaintiff.” (Id. at 31-32.)
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`In the alternative, Defendant argues that, even if the Court finds that Plaintiff has
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`established a prima facie case of retaliation, it has proffered sufficient evidence to establish that
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`it would have terminated Plaintiff’s employment as part of its reduction in force regardless of
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`any alleged protected activity. (Id. at 32-33.) To this end, Defendant asserts that “[a]lthough
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`Plaintiff may disagree with his separation from [Rite Aid], Rite Aid terminated his employment
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`for legitimate business reasons” and that “[Plaintiff’s] subjective beliefs do not change the fact
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`that [Rite Aid] sold approximately half of its retail locations and needed to reorganize from the
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`top down.” (Id. at 32.) Defendant notes that “Plaintiff was one of dozens of employees who
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`separated from [Rite Aid] as a result of that reduction in force”; that “certain of Plaintiff’s
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`Case 1:19-cv-02021-YK Document 40 Filed 04/12/21 Page 15 of 21
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`responsibilities (immigration law) has been diminished for years”; and that “Plaintiff’s entire
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`team of direct reports likewise separated from Rite Aid.” (Id.)
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`Plaintiff argues in opposition that: (1) he engaged in protected activity that was both
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`subjectively and objectively reasonable (Doc. No. 35 at 17-29); (2) Defendant knew he engaged
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`in protected activity (id. at 29-30); (3) his protected activity was a contributing factor in
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`Defendant’s decision to terminate his employment (id. at 30-36); and (4) Defendant has failed to
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`demonstrate by clear and convincing evidence that it would have terminated Plaintiff’s
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`employment regardless of any protected activity (id. at 36-39). More specifically, Plaintiff
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`argues that he “engaged in protected activity when he reported illegal insider trading of
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`Defendant’s stock, demanded that Defendant investigate the insider trading, and demanded that
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`Defendant self-report the insider trading to the SEC.” (Id. at 17-18.) With respect to Plaintiff’s
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`subjective and objective reasonableness, Plaintiff asserts that he had an understanding that
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`insider trading “constituted violations of federal securities laws” and that he told his supervisor,
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`Bur