United States District Court, D. Minnesota
H. Redden, Esq., and John A. Fabain, Esq., Fabian May &
Anderson PLLP, counsel for Plaintiff.
M. Gilbertson, Esq., Danielle W. Fitzsimmons, Esq., and
Gregory J. Stenmoe, Esq., Briggs & Morgan, PA, counsel
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK United States District Judge
matter is before the Court on a Motion for Summary Judgment
brought by Defendant Federated Mutual Insurance Company
(generally, “Federated”). (Doc. No. 77.)
Plaintiff Jonathan Scarborough filed a claim against
Federated alleging that he was terminated in violation of
Minnesota's Whistleblower Act (“MWA”),
Minnesota Statute §§ 181.931-.932. Additionally,
Federated moves for summary judgment for its counterclaim for
breach of a forum selection clause. For the reasons set forth
below, the Court grants the motion in part.
recently, Scarborough was a Regional Marketing Manager
(“RMM”) for Federated. (Doc. No. 84
(“Redden Decl.”) ¶ 3, Ex. 1.
(“Scarborough Dep.”) at 12; Redden Decl. ¶
3, Ex. 2 (“Kerr Dep.”) at 23.) He had held that
position since 2012. (Id.) Scarborough supervised
six District Marketing Managers (“DMM”). (Doc.
No. 85 (“Scarborough Decl.”) ¶ 2.)
Scarborough's role as RMM included reviewing and
approving DMMs' expense reports. (Doc No. 80
(“Fitzsimmons Aff.”) ¶ 2, Ex. 15.)
Scarborough's DMMs was Frederick Johnston. (Scarborough
Dep. 46.) On July 1, 2014, Johnston's assistant submitted
Johnston's expense report for his company credit card.
(Fitzsimmons Aff. ¶ 2, Ex. 16.) The report included a
personal expense for custom framing. (Id.) The next
day, the Marketing Administration Manager Rhonda Kath
e-mailed Johnston about the framing expense. (Redden Decl.
¶ 2, Ex. 7 (“Kath Dep.”) at 28.) Johnston
lied to Kath about the expense, claiming that it was for
laminating services or printer ink. (Id. at 25.)
Unconvinced, Kath inquired directly with the store and
learned that the expense was for framing pictures of
Johnston's European vacation. (Id. at 35.)
the lie rooted out, Kath e-mailed her supervisor, who brought
in Scarborough's supervisor Michael Pennington.
(Fitzsimmons Aff. ¶ 2, Exs. 18 & 19.) Pennington
then updated Scarborough. (Fitzsimmons Aff. ¶ 2, Ex.
19.) When Pennington and Scarborough spoke about
Johnston's frame expense, Scarborough mentioned that
Johnston liked expensive things, including that,
“Johnston liked to hold meetings at the law offices of
Husch Blackwell, even though he could probably find a less
expensive venue to hold the meetings.” (Doc. No. 38
(“Second Amended Compl.”) ¶ 10.) Pennington
replied, “What are you talking about? [Johnston] gets
those meeting rooms for free.” (Scarborough Dep. at
69.) Scarborough explained that Johnston had been submitting
invoices for those meetings. (Id.) Their
conversation ended with Scarborough telling Pennington that
he would investigate the issue further. (Id. at 52.)
14, 2014, Scarborough exchanged e-mails with Husch Blackwell,
which confirmed that the meetings were free. (Fitzsimmons
Aff. ¶ 2, Ex. 21.) Scarborough forwarded the e-mails to
Pennington, and they agreed to talk with Johnston about the
invoices in addition to the framing expense. (Id.)
21, 2014, Scarborough and Pennington met with Johnston.
(Scarborough Dep. at 87-88; Redden Decl. ¶ 3, Ex. 3
(“Pennington Dep.”) at 109.) Prior to the
meeting, Pennington asked if Scarborough had prior knowledge
about the false invoices, and Scarborough denied it.
(See Fitzsimmons Aff. ¶ 2, Ex. 27.) In the
meeting, Johnston admitted to everything-to the falsified
invoices and to the custom framing. (Pennington Dep. at
109-110.) Later that day, Johnston called Pennington to tell
him that Scarborough had known about Johnston's scheme
“from the very beginning” and that Scarborough
had convinced Braxton Weaver to do the same thing.
(Fitzsimmons Aff. ¶ 2, Ex. 27; Redden Decl. ¶ 3,
Ex. 5 (“Johnston Dep.”) at 170-72.) Federated
would later determine that Johnston had expensed Husch
Blackwell meetings since July 2012, including a few invoices
that occurred before Scarborough began supervising Johnston.
(See Pennington Dep. at 60-61.)
24, 2014, Scarborough met with Pennington and
Pennington's supervisor Mike Kerr. (Fitzsimmons Aff.
¶ 2, Ex. 27.) At the July 24 meeting, Kerr asked
Scarborough about whether he had prior knowledge of
Johnston's invoicing practice. Again, Scarborough denied
having any prior knowledge. (Id.)
and Kerr continued to investigate whether other DMMs had also
falsified invoices. Pennington spoke with Weaver on July 24,
2014. (Pennington Dep. at 135.) Weaver apparently confirmed
that Scarborough had told Weaver to contact Johnston about
falsifying invoices. (Redden Decl. ¶ 3, Ex. 6
(“Weaver Dep.”) at 61.) Then Weaver repeated that
Scarborough knew about the fraudulent scheme in a later
meeting with both Kerr and Pennington. (Kerr Dep. 56-57;
Weaver Dep. 67-71.)
30, 2014, Scarborough met again with Kerr and Pennington.
(Kerr Dep. at 70.) At the meeting, Scarborough allegedly told
Pennington and Kerr that Federated likely violated tax laws
because it had not applied the proper withholdings to the
funds that Johnston had taken. (Doc. No. 83 (“Pl.'s
Opp.”) at 12; Scarborough Decl. ¶ 10.) Neither
Kerr nor Pennington remembers Scarborough bringing up tax
violations or other illegalities related to Johnston's
false invoices. (Kerr Dep. at 86; Pennington Dep. at 165-66.)
August 4, 2014, Pennington, Scarborough, and Johnston met.
(Scarborough Dep. at 110.) At this point, Pennington wanted
to keep Johnston at Federated, while Scarborough wanted
Johnston fired. (Scarborough Decl. ¶ 3.) Instead,
Johnston was offered a choice of resigning or being demoted.
(Fitzsimmons Aff. ¶ 2, Ex. 28.) After Johnston left the
meeting, Pennington issued a warning letter to Scarborough
because Scarborough continued to deny his prior knowledge of
Johnston's fraudulent scheme. (Fitzsimmons Aff. ¶ 2,
the August 4 warning letter, from Federated's
perspective, Scarborough was on thin ice. (Id.
(“[A]ny future misconduct will likely result
in the termination of your employment with
Federated.”).) And by August 20, 2014, Federated would
demote and then ultimately fire Scarborough. What happened
between August 4 and August 20 depends on the party you ask.
According to Scarborough, Pennington manufactured evidence to
create grounds to have Scarborough fired. (Doc. No. 79
(“Def.'s Memo.”) at 13-18.) According to
Federated, after August 4, it learned that ...