Smith v. Zipcar, Inc., 1:13-cv-11430

Michael Smith, a senior technology executive, accepted an offer from Zipcar in December 2012 that promised substantial stock options and a January 21, 2013 start date.
Zipcar was negotiating an acquisition by Avis; a merger agreement was signed December 31, 2012 and the acquisition closed March 14, 2013, after which Zipcar stock ceased public trading.
Smith alleges Zipcar knew the impending Avis deal would nullify the promised options but failed to disclose that fact during recruitment and negotiation.
Smith began work in January 2013, objected when the options became worthless, gave 30 days’ notice of departure for “Good Reason” on March 5, 2013, and was terminated three days later.
Smith sued under Mass. Gen. Laws ch. 93A claiming deceptive practices; Zipcar moved to dismiss Count 7 (the Chapter 93A claim).
The district court allowed the motion, concluding Chapter 93A does not reach disputes rooted in the employer-employee relationship or hiring process under controlling Massachusetts precedent.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Chapter 93A applies to alleged pre-employment misrepresentations about stock options	Smith: Zipcar’s pre-hire concealment of the Avis deal was deceptive commercial conduct separate from a pure employment dispute and thus actionable under 93A	Zipcar: 93A does not cover disputes arising out of the hiring/employment relationship; recruitment and employment promises are outside "trade or commerce"	Court: Dismissed 93A claim—claims arising from hiring/employment are excluded from Chapter 93A under Massachusetts law (Manning line)
Whether pre- and post-employment misconduct together can take the claim outside the employment-exception to 93A	Smith: The commercial context and timing (recruitment to bolster corporate standing during merger talks) make this a broader unfair trade practice	Zipcar: The alleged wrongs are tied to the employment agreement that created the relationship and benefits (the options)	Court: Distinguished cases that combined pre- and post-employment misconduct; here the dispute "arises out of" the employment agreement, so 93A does not apply

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state plausible claim)
Ashcroft v. Iqbal, 556 U.S. 662 (factual allegations must plausibly state a claim)
Manning v. Zuckerman, 444 N.E.2d 1262 (Mass. 1983) (employee–employer relations not "trade or commerce" under Chapter 93A)
Psy-Ed Corp. v. Klein, 947 N.E.2d 520 (Mass. 2011) (Chapter 93A does not provide a remedy for employer-employee disputes)
Whelan v. Intergraph Corp., 889 F. Supp. 15 (D. Mass. 1995) (dismissing 93A claim arising from recruitment process)