955 F. Supp. 2d 528
E.D.N.C.2013Background
- Feldman and Perry sue LEA and several executives alleging ADA wrongful discharge, SOX whistleblower claims, and wage/contract claims; LEA remains in bankruptcy proceedings with insurance exclusions addressing those claims.
- The court previously granted part of LEA’s motion to dismiss and is now addressing cross-motions for summary judgment (including a request to file a separate statement of material facts).
- LEA is a security equipment manufacturer; Feldman was LEA’s President/CEO and Perry was the VP of Sales and Marketing; both Inside Directors alleged a long-standing split with Outside Directors Rand, Lindsay, and Jordan over governance and Carrington’s stock dealings with SAFE Source.
- A contested 2007–2009 board rift centered on Carrington’s stock sale and SAFE Source involvement, affecting management decisions, including Feldman’s relocation of LEA headquarters and governance actions.
- Feldman was terminated in August 2009; Perry was separated in September 2009 after an illness; Perry’s departure was deemed abandonment under LEA’s attendance policy; Feldman’s and Perry’s other asserted protections depend on ADA and SOX theories, all evaluated against bankruptcy insurance exclusions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ADA wrongful discharge for Feldman | Feldman claims he was disabled and fired for disability. | LEA did not know Feldman’s disability; termination was insubordination. | Feldman’s ADA claim granted to summary judgment (discharged for insubordination; no disability shown). |
| ADA wrongful discharge for Perry | Perry’s MS constitutes a disability and termination followed disability. | Perry abandoned his job; there was a legitimate non-discriminatory reason. | Perry’s ADA claim fails; abandonment and neutral policy preclude discrimination finding. |
| SOX whistleblower claims against LEA and individuals | Protected activity included reporting suspected misconduct and insider trading. | Insufficient evidence of protected activity causally linked to adverse actions; temporal gaps and intervening events. | SOX claims fail as to all defendants; no causation shown and no denial of protected activity established. |
| Wage/contract claims and bankruptcy impact | LEA owes Perry a $50,000 bonus under wage/contract theory; discovery and conduct support. | Bankruptcy and insurance exclusions bar recovery; no enforceable contract claim. | Wage and contract claims dismissed due to bankruptcy insurance exclusions; no recovery. |
Key Cases Cited
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) (establishes the burden-shifting framework for discrimination claims)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard; material facts must be dispute-free to defeat)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (burden on the movant to show no genuine dispute as to material facts)
- Reynolds v. Am. Nat’l Red Cross, 701 F.3d 143 (4th Cir. 2012) (discusses prima facie elements for ADA discrimination claims)
- Wilson v. Phoenix Specialty Mfg. Co., Inc., 513 F.3d 378 (4th Cir. 2008) (discusses McDonnell Douglas framework in ADA cases)
- Bechtel v. Admin. Review Bd., 710 F.3d 443 (2d Cir. 2013) (discusses standards for SOX whistleblower causation analysis)