United States District Court, D. Minnesota
G. Rabuse, Esq. and DeWitt Mackall Crounse & Moore, S.C.,
counsel for plaintiff.
Conway, Esq., Daniel Oberdorfer, Esq. and Stinson Leonard
Street LLP, counsel for defendant.
S. Doty, Judge United States District Court
matter is before the court upon the motion for summary
judgment by defendant Cyber Power Systems (USA), Inc. Based
on a review of the file, record, and proceedings herein, the
court grants the motion.
dispute arises out of CyberPower's termination of
plaintiff Daniel Ayala's employment on February 4, 2015.
CyberPower hired Ayala in July 2006 as Vice President
Worldwide Channel. Rabuse Aff. Ex. V, at 26. Ayala was
responsible for value-added resellers (VAR) sales. R. Lovett
Dep. at 27:12-23. At the time, Robert Lovett was President
and Chair of CyberPower, and his son Brent Lovett was the
company's operations manager. Id. at 21:6-13,
26:11-12. Ayala reported directly to Robert Lovett.
Id. at 28:2-3. Ayala resided in Illinois and
commuted to CyberPower's offices in Minnesota every other
week and in the interim traveled elsewhere to visit
customers. Ayala Dep. at 82:13-18.
10, 2006, Ayala signed an agreement acknowledging that he was
an at-will employee. Rabuse Aff. Ex. V, at 24-25. He also
acknowledged that any changes to his at-will status
“must be in writing.” Id. at 24. In
January 2007, Ayala signed another acknowledgment stating
that “no manager, supervisor or representative of the
Company, other than the President or Vice President, has any
authority to enter into any agreement guaranteeing employment
for any specific period of time” and that “any
such agreement, if made, will not be enforceable unless it is
in writing and signed by both parties.” Id. at
2006 and 2012, Ayala performed well and VAR sales grew
exponentially. R. Lovett Dep. at 30:23-31:11. CyberPower
promoted Ayala and increased his compensation several times
during that period. Id. at 30:12-22; see
Rabuse Aff. Ex. V, at 13, 14, 16, 18. On at least two such
occasions, CyberPower reiterated Ayala's at-will status:
“This agreement does not create a vested right to any
term of employment or otherwise change the fact that you
remain ‘employed at will.'” Rabuse Aff. Ex.
V, at 15, 19.
2012, Robert Lovett decided to retire as president of
CyberPower and began the process of finding a replacement. R.
Lovett Dep. at 32:9-17. In April 2012, Ayala expressed his
interest in the position and implied that he would leave
CyberPower if he was not chosen to succeed Robert Lovett.
Rabuse Aff. Ex. F. Ayala was not seriously considered for the
position, however, because he “had a very difficult
time with people.” R. Lovett Dep. at 33:9-19. Robert
Lovett specifically noted that Ayala could become
“autocratic” thereby “creat[ing]
dysfunctional communication tension, argumentative behavior,
pushy monolog, and periodic lapses in judgment.” Conway
Aff. Ex. D, at 1. Robert Lovett ultimately chose Brett Lovett
to replace him. R. Lovett Dep. at 33:20-25. Robert Lovett
asked Ayala to stay at CyberPower to mentor his son and
offered him a promotion and an increased compensation
package. Ayala Dep. at 72:20-24. The parties agreed that
Ayala would become the Executive Vice President Americas
& General Manager LATAM (Latin America) and would receive
an increase in annual base pay from $270, 000 to $400, 000.
The salary increase appears to have been effective as of
September 12, 2012, but the parties continued to negotiate
other aspects of Ayala's compensation. See
Rabuse Aff. Ex V, at 12. Ayala wanted to have an agreement in
place that would ensure him a consistent commission formula
going forward. Ayala Dep. at 79:19-80:11.
appears that over the next few weeks Ayala and Robert Lovett
spoke several times about Ayala's compensation. See
id. at 81:4-84:22. On October 22, 2012, Ayala sent
Robert Lovett an email entitled “Comp Memo, ”
which attached a proposed “compensation
agreement” setting forth a calculation for determining
Ayala's compensation above his base salary of $400, 000.
Conway Aff. Ex. F. It is undisputed that Ayala drafted the
document. The proposed agreement states that the “plan
will remain in place until sales reach $150 million USD on a
calendar year for all territories and VAR team assigned
accounts.” Id. at 2. It did not explicitly
address Ayala's at-will status. See id.
October 28, Ayala sent Robert Lovett a follow-up email
attaching his notes recalling the parties' negotiations
and a copy of the proposed agreement. Id. Ex. G. The
notes set forth the parties' specific negotiations as to
financial terms but do not mention any change to Ayala's
at-will status. See id. at 3-4. Robert Lovett
responded later that day stating that he had “issues
signing such a long term employment contract, this will need
to be run past our outside accounting firm and legal
assistance.” Id. Ex. H. The next morning,
according to Robert Lovett, he told Ayala that the agreement
was for compensation purposes only. R. Lovett Dep. at
21:11-22. Ayala testified that Robert Lovett told him to
“make sure that this is not interpreted as a multiyear
agreement.” Ayala Dep. at 90:16-18. Ayala then modified
the agreement and sent the new version to Robert Lovett with
the following notation:
Please see attached. I modified paragraphs 6 and 7. Please
feel free to modify as you see fit. The agreement is for
compensation purposes and by no means a multiyear contract.
Aff. Ex. I. Paragraph 7 of the compensation agreement reads:
Employment terms. The above-mentioned agreement outlines the
new salary and bonus structure to remain in place until $150
million USD is reached. It is not a multiyear commitment or
employment contract for either party.
Id. at 3.
January 2013, Ayala sent an email to both Lovetts asking them
to sign the agreement even though “[f]or all practical
purposes” it was already in place. Id. Ex. J,
at 1. Ayala said that he wanted to “ensure that the
sales comp. plan” would remain in place until
CyberPower achieved “$150 million in sales.”
Id. Although the date is unclear, the Lovetts
ultimately signed the agreement. Id. Ex. E.
2013, the parties signed a relocation expense agreement under
which CyberPower agreed to finance a portion of Ayala's
purchase of a condominium in Minneapolis. Id. Ex. K.
CyberPower committed to pay Ayala $100, 000 over a three-year
period ending on June 1, 2015. Id. The parties