Anthony Artuso v. Vertex Pharmaceuticals, Inc.
637 F.3d 1
| 1st Cir. | 2011Background
- Vertex offered Anthony Artuso at-will employment as VP for strategic planning in 2008; the Agreement integrated stock/option grants and a start-up equity package; Stock Options were exercisable only if vested and employment continued; Stock Plan provision limited exercise to rights exercisable at termination with a three-month window; bonuses were discretionary under the board’s policy; plaintiff was terminated in December 2009 and sought unvested options and a prorated 2009 bonus; district court dismissed all claims under Massachusetts contract interpretation and implied covenant law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to unvested stock options at termination | Artuso claims unvested options should vest upon termination. | Stock Options ceased vesting upon termination; Plan 11 bars unvested rights. | No; unvested options are not exercisable after termination per the Plan. |
| Right to prorated 2009 bonus | Plaintiff should receive prorated bonus for 2009. | Bonus is discretionary and not guaranteed; prorating not provided by the Agreement. | No; discretionary, not guaranteed, and 2009 prorating not provided. |
| Implied covenant of good faith and fair dealing | Bad-faith termination claims exist to support contract breach. | Bare-bones, conclusory assertion of bad faith insufficient; no factual basis shown. | Dismissed; claim insufficiently pleaded. |
Key Cases Cited
- Cochran v. Quest Software, Inc., 328 F.3d 1 (1st Cir. 2003) (contract interpretation and at-will employment principles)
- Harrison v. NetCentric Corp., 433 Mass. 465, 744 N.E.2d 622 (Mass. 2001) (implied covenant limits on bad-faith termination; unpaid compensation rule)
- Twombly v. Bell Atl. Corp., 550 U.S. 544 (U.S. 2007) (pleading standard requires plausible claims)
- Iqbal v. United States, 556 U.S. 662 (U.S. 2009) (standard for pleading facial plausibility)
- Tambone v. SEC, 597 F.3d 436 (1st Cir. 2010 (en banc)) (tethering pleading to incorporated documents; regulatory actions in diversity context)
- New England Fin. Res., Inc. v. Coulouras, 30 Mass.App.Ct. 140, 566 N.E.2d 1136 (Mass. App. Ct. 1991) (integration clause and contract interpretation under Massachusetts law)
- I& R Mech., Inc. v. Hazelton Mfg. Co., 62 Mass.App.Ct. 452, 817 N.E.2d 799 (Mass. App. Ct. 2004) (promissory- and conditional-rights required for contract breach claims)
- Okmyansky v. Herbalife Int'l of Am., Inc., 415 F.3d 154 (1st Cir. 2005) ( incorporation by reference does not create ambiguity)