The opinion
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION and Civil Action No. 21-cv-16937
COGNIZANT TECHNOLOGY
SOLUTIONS U.S. CORPORATION
MEMORANDUM AND ORDER
Plaintiffs,
V.
JEAN-CLAUDE FRANCHITTI, and
VARTAN PIROUMIAN
Defendants.
This case is before the Court on Plaintiffs Cognizant Technology Solutions
Corporation’s and Cognizant Technology Solutions U.S. Corporation’s
(collectively “Plaintiffs” or the “Company”) motion to dismiss Defendants
Jean-Claude Franchitti’s ("Franchitti") and Vartan Piroumian’s (“Piroumian”
and collectively, “Defendants” or “Employees’”) counterclaims to the
Complaint under Title VII of the Civil Rights Act of 1964 and the New Jersey
Law Against Discrimination ("NJLAD"). (ECF No. 61). Oral argument was
heard on October 5, 2023.
For the reasons stated below, this motion is DENIED.
I.
The Court has jurisdiction under 28 U.S.C. § 1332(a) because this action
is between citizens of different states and the amount in controversy exceeds the
sum or value of $75,000. Venue is proper as the matter was previously removed
from New Jersey State Court. 28 U.S.C. § 1441(b).
II.
a. Background
Defendant Jean-Claude Franchitti was employed by the Company from April
16, 2007 until July 20, 2016. (ECF No. 1 at 16). Defendant Vartan Piroumian was
employed by the Company from April 2, 2012 until August 2, 2017. (/d. at J 16).
Franchitti was employed first as Chief Architect and then later as Assistant Vice
President. (ECF No 1-2 § 16). Piroumian was employed in several Associate
Director level roles such as a Principal Architect and an Enterprise Architect. (Id.
at J 18).
Due to the nature of their positions, Defendants were privy to “proprietary
and competitively sensitive information, including, but not limited to, employee
information, pricing discussions and negotiations, client negotiations and sales
processes.” (Id. at J] 16, 18). Additionally, each of the Defendants signed non-
disclosure agreements (the “NDAs”) and agreed to maintain the confidentiality of
the Company’s business information pursuant to the Company’s Employee
Handbook and Code of Conduct. (/d. at JJ 33-38).
Defendants in this matter have filed numerous lawsuits and Equal
Employment Opportunity Commission (“EEOC”) complaints against the
Company. The Court summarizes them chronologically below:
e On October 7, 2016, Franchitti filed a charge of discrimination against
the Company with the EEOC; this complaint was filed after Franchitti
had ceased working with the Company. (/d. at § 35). There, Franchitti
alleged retaliation and age and national! origin discrimination in that
he was “discharged due to age, national origin and in retaliation” and
that “[dJuring the last several years of [his] employment, hundreds
of employees at Cognizant have been fired due to their age and/or
non-Indian born national origin.” (ECF No. 55 at § 30). His claim
before the EEOC similarly alleges his claim of Cognizant's
commission of visa fraud. (Id.). The EEOC ultimately issued a Letter
of Determination finding Cognizant had violated Title VII and
sought to resolve the claims. (ECF No. 55 at 31). A settlement
between Franchitti and the Company as to the Title VII claim was
discussed in 2020, but it was not finalized because Franchitti refused
to waive his right to other pending complaints or charges because
Franchitti had already filed suit in 2017 against the Company under
the FCA. (ECF No. 55 at § 32).
e On October 14, 2016, Piroumian—before his employment with the
Company had ended—filed a charge of discrimination against the
Company with the EEOC at which time he was issued a preservation
notice. (ECF No. 55 at ¥ 16).
e On August 22, 2017, Franchitti filed a gui tam lawsuit asserting False
Claims Act (“FCA”) claims against the Company in the District of New
Jersey captioned Franchitti v. Cognizant Tech. Sols. Corp., et al., No.
17-06317 (hereinafter the “Qui Tam Action”). (Id. at J 36).
e On September 18, 2017—following his separation from the
Company—Piroumian and two other named plaintiffs filed an action in
the United States District Court for the Central District of California,
captioned Palmer, et al. v. Cognizant Technology Solutions Corporation
and Cognizant Technology Solutions U.S. Corporation, No. 17-06848
(C.D. Cal.) (hereinafter “the California Action”). (ECF No. 55 at § 21).
e On February 16, 2021, Franchitti filed an individual action against the
Company in the United States District Court for the Southern District of
New York (hereinafter the “New York Action”). (/d. at § 39).
e On February 20, 2021, Franchitti filed a second charge of
discrimination against the Company on the basis that the proposed
Settlement Agreement was in furtherance of the Company’s
.
discriminatory scheme and retaliation for Franchitti's speaking out.
(ECF No. 55 at 35). In support of this theory, he pled that former
employees Mohan Ramachandran, Vipul Khanna, Nandagiri
Narasimha Srinivas, and Venugopal Lambu failed to return their
Cognizant laptop(s) upon their departure from the company, but the
Company had not sued these individuals. (ECF No. 55 at § 44).
According to Plaintiffs, the claims at the heart of this lawsuit arose when
sometime in 2020, Plaintiffs claim they learned that Defendants had breached their
NDAs when Defendants each produced a .pst file containing thousands of
Plaintiffs documents during discovery in the California Action. (ECF No. 55 at 9
40). This .pst file allegedly contained “every email [Plaintiffs] ever sent or received
while they were employed by the Company” after they no longer worked for the
Company. (T5:6-9). Plaintiffs claim that such retention is in breach of (1) the
NDAs; (2) the requirements set forth in the Company’s Employee Handbook and
Code of Ethics; and (3) the duty of loyalty the Employees owed to the Company.
(ECF No. 61-1 at 5).
b. Procedural History .
On July 23, 2021, Plaintiffs filed their initial Complaint alleging breach of
contract and breach of fiduciary duty. (ECF Nos. 1-2). On September 14, 2021,
Defendants moved to remove the matter from New Jersey State Court to the District
Court of New Jersey. (ECF No. 1). On March 1, 2023, Defendants filed their
Amended Answer to the Complaint containing the Counterclaims presently before
the Court. (ECF No. 55).
Defendants plead two counts in their Counterclaim against the Company.
First, Defendants allege retaliation in violation of Title VII of the Civil Rights Act
of 1964, as amended, 42 U.S.C. § 2000e-3 ("Title VII"). (ECF No. 55 at 19).
Second, Defendants allege retaliation in violation of New Jersey Law Against
Discrimination, N.J.S.A. 10:5-12(d) ("NJLAD"). (/d.).
The Counterclaims contend the Company retaliated against Defendants for
engaging in protected activities. (ECF No. 55 at 19). Specifically, Defendants
allege that they engaged in the following protected activities: (/) they filed
charges of discrimination against the Company with the EEOC; (2) they
commenced the California Action alleging claims of race and national origin
discrimination; and (3) Franchitti filed (a) the Qui Tam Action against the
Company under the FCA alleging the Company participated in pervasive and
ongoing visa fraud and (b) the New York Action for claims of retaliation based
termination. (ECF No. 55 at 19).
As a consequence of these activities, Defendants allege that the Company
filed this lawsuit to (1) divest Defendants of “all financial compensation paid to
[them] during their employment with Cognizant” (this compensation totals “in
the millions of dollars for Counterclaim Plaintiffs' collective fourteen years of
employment with [the Company]’”) and (2) to “intimidate and coerce [the
Defendants] to settle or withdraw from participation in the aforementioned
lawsuits and charges.” (ECF No. 55 at 19-20). Defendants further allege that
the Company “has not taken similar action against other former employees who
retained their [Company] assets and/or confidential [Company] documents
following their departure ... .” (/d.).
Plaintiffs present two arguments on which they argue that Defendants’
Counterclaims should be dismissed for failure to state a claim for retaliation
under Title VII and NJLAD: (1) Defendants failed to sufficiently plead they
suffered an adverse employment action and (2) the Complaint is protected by
the Noerr-Pennington Doctrine. .
TID □ .
Under Federal Rule of Civil Procedure 8(a)(2), a complaint “requires only
a short and plain statement of the claim showing that the pleader is entitled to
relief.” To survive a motion to dismiss, the complaint must allege “‘enough facts
to state a claim to relief that is plausible on its face.’” Burtch v. Milberg Factors,
Inc., 662 F.3d 212, 220 (3d Cir. 2011) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)). “A claim has facial plausibility when the pleaded factual
content allows the court to draw the reasonable inference that the defendant is liable
□
for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The
plausibility standard is not akin to a probability requirement; it asks for more than
a sheer possibility that the defendant acted unlawfully. Jd.
In reviewing a motion to dismiss, the Court “accept[s] as true all allegations in
the plaintiff's complaint as well as all reasonable inferences that can be drawn from
them, and . . . construe[s] them in a light most favorable to the non-movant.”
Monroe v. Beard, 536 F.3d 198, 205 (3d Cir. 2008). The Court should disregard
legal conclusions and “recitals of the elements of a cause of action, supported by
mere conclusory statements.” Santiago v. Warminster Township, 629 F.3d 121,
128 (3d Cir. 2010) (quoting Iqbal, 556 U.S. at 678). The Third Circuit has set forth
a three-part test for determining whether a complaint may survive a motion to
dismiss for failure to state a claim:
First, the court must "tak[e] note of the elements a plaintiff must plead
to state a claim." Second, the court should identify allegations that,
"because they are no more than conclusions, are not entitled to the
assumption of truth." Finally, "where there are well-pleaded factual
allegations, a court should assume their veracity and then determine
whether they plausibly give rise to an entitiement for relief."
Id. at 130 (alteration in original) (quoting /gbal, 556 U.S. at 675, 679).
IV.
A. Whether Counterclaim Plaintiffs Stated a Claim under
Tiitle VII and NJLAD
A prima facie case of retaliation under both Title VII and NJLAD requires
the complainant to show: “(1) the employee engaged in a protected employee
activity; (2) the employer took an adverse employment action after or
contemporaneous with the employee's protected activity; and (3) a causal link
exists between the employee's protected activity and the employer's adverse
action.” Abramson v. William Paterson College, 260 F. 3d 265, 286 (3d Cir.
2001); see also Davis v. City of Newark, 285 F. App’x 899, 903 (3d Cir. 2008)
(internal citations omitted). “Analysis of a claim made pursuant to the NJLAD
generally follows analysis of a Title VII claim.” Schurr v. Resorts Int’! Hotel,
Inc., 196 F.3d 486, 498 (3d Cir.1999).
Going to the first prong of the prima facie case of retaliation under both
Title VII and NJLAD, the Employees have shown they engaged in a protected
employee activity. It is well-settled that “the filing of formal charges of
discrimination, as well as informal complaints to management are considered
protected employee activity.” Abramson v. William Paterson College, 260 F. 3d
265, 286-88 (3d Cir. 2001). For his part, Piroumian filed a charge of
discrimination against the Company with the EEOC on October 14, 2016—before
his employment with the Company had ended—and was issued a preservation
notice. (ECF No. 55 at 9 16). addition to filing formal EEOC charges after he
left the Company, Franchitti pleads that he complained to his manager, and three
other senior executives along with the Company’s Human Resources
Department regarding alleged discriminatory practices in hiring South Asian
visa workers from India in U.S. positions and the Company’s “practice of
engaging in visa fraud in order to carry out this preference.” (ECF No. 55 at
27-28). Further, Franchitti maintains that at the time of his termination he was
“actively contemplating litigation” against the Company, as evidenced by his
meetings with two separate attorneys to discuss his options on the date of his
termination. (ECF No. 55 at § 29). As such, this is sufficient to plead the first
prong of a prima facie claim of retaliation for both Employees.
As to the second prong of the prima facie case of retaliation under Title VII
and NJLAD—-whether the underlying Complaint constitutes an adverse
action—that is a question before the Court. The Supreme Court has held that
Title VII does not limit adverse action to particular activities, but rather is
broader in scope. “In our view, a plaintiff must show that a reasonable employee
would have found the challenged action materially adverse, which in this
context means it well might have dissuaded a reasonable worker from making
or supporting a charge of discrimination.” Burlington Northern & Santa Fe
Railway v. White, 548 U.S. 53, 67-68 (2006). (internal quotes omitted).
Contrary to the Company’s contentions, the filing of a lawsuit may be
considered a retaliatory act. Brown v. TD Bank, NA., No. 15-5474, 2016 WL
1298973, at *7 (E.D. Pa. Apr. 4, 2016) (citing Bill Johnson's Rest., Inc. v. NLRB,
461 U.S. 731, 740-43 (1983). Specifically, a “[a] lawsuit no doubt may be used
by an employer as a powerful instrument of coercion or retaliation” and can
have a “chilling effect... a an employee's willingness to engage in
protected activity.” Bill Johnson's Rest., 461 U.S. at 740-43. Litigation is
expensive, time-consuming, and demanding. “A reasonable worker, faced with
the prospect or reality ofa civil action, might well decide to abandon his charges
of discrimination rather than move forward.” Brown v. TD Bank, NA., No. 15-
5474, 2016 WL 1298973 at *7 (E.D. Pa. Apr. 4, 2016). It is undisputed that the
Company filed a lawsuit before this Court against the Employees seeking,
among other things, the return of all the monies paid to the Employees during
their employment with the Company. (ECF No. 2 at 14). This is sufficiently
pled for the purposes of a motion to dismiss to constitute a prima facie case of
adverse employment action.
Also contrary to the Plaintiffs’ contentions, the Court need not determine
whether or not the suit was brought with “retaliatory animus and is baseless” in
order to determine whether or not the claim is an adverse action; the relevant
caselaw pointed to by Plaintiffs—specifically Berrada v. Cohen—concerns
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whether counterclaims are filed with retaliatory motive. No litigant has asserted
that the Counterclaims filed by the Defendants themselves were asserted with
retaliatory motive—and indeed, why would they? Defendants claim that the
underlying Complaint was filed with retaliatory motive, and they filed their
counterclaims to the lawsuit as a result. Accordingly, Berrada and its progeny
are not on point to the issues before the Court. Defendants have sufficiently
pled a retaliatory act of the second prong of prima facie case of retaliation under
Title VII and NJLAD for the purposes of a motion to dismiss.
As to the third prong of the prima facie case of retaliation under Title VII
and NJLAD-—the causal link between the protected activity and the adverse
employment action—a causal link has been sufficiently pled by Defendants.
Although Defendants filed with the EEOC different times, the Defendants together
filed no fewer than six complaints or lawsuits against the Company in a variety
of different forums alleging different wrongs. (See supra Section II(a)). The
Defendants claim that thereafter, the Company filed the underlying Complaint
in reprisal for their protected activities. (ECF No. 55 at § 6; 54; 62-63; 70).
Defendants further allege being named in the lawsuit by the Company caused
Piroumian and Franchitti to suffer financial harm, emotional anguish,
humiliation, and reputational harm. (ECF No. 55 at Jf 6; 54; 62-63; 70). Further,
Defendants further state the Company’s Complaint in this matter has influenced
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employment opportunities with other employers in that employers with knowledge
of the suit are hesitant to hire Piroumian and Franchitti. (ECF No. 55 at ¥ 54,
62-63, 70). Further, Franchitti pleads that he complained to Company
employees and was thereafter retaliated against by (1) the denial of a promotion;
(2) the diversion of business away from Franchitti's group; (3) the refusal to
reimburse Franchitti for $60,000.00 worth of business expenses; and (4)
Franchitti’s exclusion from important meetings and then terminating his
employment. (ECF No. 55 at § 28). Importantly, both Employees are named
plaintiffs in the California Action and had their inboxes produced during
discovery in that action. These facts are sufficiently specific for the factfinder
to reasonably find a causal connection between the filing of the lawsuit and the
protected activities. For the purposes of a motion to dismiss, this satisfies the
causal link under prong three of a.prima facie retaliation claim.
The Court therefore finds that the Counterclaims filed by Piroumian and
Franchitti sufficiently alleges a prima facie case under Title VIJ and NJLAD
and denies the dismissal of this claim.
B. Whether the Noerr-Pennington Doctrine applies to Counterclaims
Plaintiffs argue that Defendants’ Counterclaims are barred by the Noerr-
Pennington Doctrine which protects a company's rights to lobby’ the
government for redress in order to protect its business interests. The Court
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declines to extend the Noerr-Pennington Doctrine to Title VII claims at this
time.
Derived from the First Amendment's guarantee. of “the right of the people
. . . to petition the Government for a redress of grievances,” U.S. CONST.
AMEND. I, the Noerr-Pennington doctrine arose in relation to antitrust actions
holding ““‘ [a] party who petitions the government for redress generally is
immune from antitrust liability even if there is an improper purpose or
motive.’” A.D. Bedell Wholesale Co., Inc. v. Philip Morris Inc., 263 F.3d 239
(3d Cir. 2001), cert denied, 534 U.S. 1081 (2002) (quoting Cheminor Drugs,
Ltd. v. Ethyl Corp., 168 F.3d 119, 122 (d Cir. 1999), cert. denied, 528 U.S. 871
(1999); see E.R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 US.
127, 138 (1961); Prof. Real Estate Investors, Inc. v. Columbia Pictures Indus.,
Inc., 508 U.S. 49, 56 (1993). “This immunity extends to persons who petition
all types of government entities—legislatures, administrative agencies, and
courts.” Cheminor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119, 122 (3d. Cir. 1999).
Despite its antitrust origins, Third Circuit cases analogizing and extending
Noerr-Pennington protections have involved disputes concerning civic or
public affairs. See, e.g., Barnes Found. v. Twp. of Lower Merion, 242 F.3d 151,
159 (3d Cir. 2001); Pfizer Inc. v. Giles (In re Asbestos School Litigation), 46
F.3d 1284 (3d Cir. 1994); Brownsville Golden Age Nursing Home, Inc. v. Weils,
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839 F.2d 155 (3d Cir.1988).
Generally, Noerr-Pennington protection does not extend to “sham” litigation
through what is known as the “sham litigation exception”; that is, the Noerr-
Pennington doctrine “does not extend to [protect] an objectively ‘[b]aseless suit
[that] conceals an attempt to interfere directly with a competitor's business
relationships—through the use [of] the governmental process as opposed to the
outcome of that process—as an anticompetitive weapon.’” Campbell vy.
Pennsylvania School Boards Association, 972 F.3d 213, 219 (3d Cir. 2020). A
suit is baseless within the meaning of Noerr- Pennington if:
no reasonable litigant could realistically expect success on the
merits. If a reasonable litigant could conclude that its suit is
reasonably calculated to elicit a favorable outcome, then the suit is
protected by Noerr-Pennington. If, however, the challenged
litigation is objectively meritless, then the court may consider the
litigant's subjective motivation. A plaintiff must first disprove the
challenged lawsuit's objective legal viability before we may
consider the subjective components of the sham litigation.
Brown v. TD Bank, NA., No. 15-5474, 2016 WL 1298973 at *7 (E.D. Pa. Apr.
4, 2016) (citing Prof] Real Estate Investors, Inc. v. Columbia Pictures Indus.,
Inc., 508 U.S. 49, 56, 60-61 (1993)).
It is worth noting that, although the Third Circuit has not explicitly ruled
as to the applicability of a Noerr-Pennington defense to retaliation claims under
Title VI, the Third Circuit declined to apply the Noerr-Pennington doctrine to
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Title VII in 1999, noting that this was “in part because the prohibition on retaliation
is so explicit and the public policy behind the retaliation provision so compelling.”
Durham Life Insurance Co. v. Evans, 166 F.3d 139, 157 (3d Cir. 1999).
The Court is unprepared to extend Noerr-Pennington protections to the
Title VII context given the strong policy considerations undergirding Title VI
put forth by the Third Circuit in Durham life. Specifically, the Third Circuit
has signified that “the interpretive lodestars of text and purpose militate toward
fully including retaliatory lawsuits in Title II’s anti-retaliation cause of action.”
Lin v. Rohm & Hass Co., No. 11-3158, 2014 WL 1414304, at *9 (E.D..Pa. Apr.
14, 2014), aff'd, Lin v. Rohm & Haas Co., No. 16-1887, 2017 WL 4764798 (3d
Cir. Apr. 14, 2017).
Even if the Court were prepared to extend it to the Title VII arena, it is
premature at this point in litigation to decide whether Plaintiffs’ claims in this
suit constitute a “sham.” While it is possible to determine the applicability of
Noer-Pennington at the motion to dismiss stage, determining whether the suit
is “objectively and subjectively baseless’ . . . turns upon issues of reasonableness
and intent-issues” which are premature to consider upon the current, undeveloped
record. Otsuka Pharmaceutical Co., Ltd. v. Torrent Pharmaceuticals Ltd., Inc., 118
F.Supp.3d 646, 657 (D.N.J. 2015). For instance, there are disputes of fact
concerning the other Company employees who were not sued for not returning
16
their Company laptops; the Company represents that there were certain
situations where the “laptops were obsolete” and that the Company had the
ability to “wipe laptops or to change the log in so that these individuals would
not have been able to go in their laptop.” (T28:12-20). Whether or not the
Company sued other similarly-situated employees would be relevant to the
Court’s inquiry into whether the underlying lawsuit constitutes a “sham” both
objectively and subjectively.
Therefore, the Court declines to extend the Noerr-Pennington affirmative
defense to Title VII claims, and the motion to dismiss the Counterclaims on the
basis of the Noerr-Pennington doctrine is similarly denied.
ORDER
THIS MATTER having come before the Court on Plaintiffs' motion to
dismiss Counterclaim (ECF No. 61); and the Court having carefully reviewed and
taken into consideration the submissions of the parties; and for good cause shown;
and for all of the foregoing reasons,
IT IS on this 2"4 day of November, 2023,
ORDERED that Plaintiffs’ Motion to Dismiss (ECF No. 61) is DENIED.
PRM Aa Be
PETER G. SHERIDAN, U.S.D.J.
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