IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

EDWARD KIM, 

Plaintiff, 

v. 

PRUDENTIAL FINANCIAL, INC., 

Defendant. 

P ANNER, Senior District Judge. 

Civ. No. 3:15-cv-2029-PA 

OPINION AND ORDER 

This matter comes before the Court on Defendant's Motion to Dismiss (#10). For the 

reasons set forth below, Defendants' Motion is GRANTED. Plaintiff shall have thirty (30) days 

to file an amended complaint. 

BACKGROUND 

Plaintiff Edward Kim is an Asian-American businessman with decades of experience in 

insurance services and the financial industry. Plaintiff operated his own company, Hawaii 

Pacific Insurance Corp., from 1984 until he sold the business in 2011. 

Defendant Prudential Financial Inc. ("Prudential") provides financial services to 

individuals and businesses, including investment services and insurance. 

Page 1 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 1 of 20
At some point, Plaintiff was approached by two of Prudential's managers, Randy Cox 

I ("Cox") and David Johnston ("Johnston") with an offer of employment with Prudential. Plaintiff 

alleges that Cox and Johnston promised him that he would be responsible for Hawaii. Plaintiff 

alleges that the promise of the Hawaii territory induced him to accept the offer from Prudential. 

On April 25, 2014, Plaintiff received an offer letter from Prudential which described his 

position as "Regional Sales Vice President for Prudential's Oregon territory." The base salary 

for the position was $85,000 per year with benefits, plus bonus and commission incentives. 

Plaintiff accepted the offer and began working for Prudential on May 5, 2014. Plaintiff alleges 

l 

I 

that his responsibilities included Oregon and parts of Washington, and that Cox promised that 

Plaintiff would also receive the Hawaii territory. 

Plaintiff attended a new-employee orientation, where he learned that another employee 

had been promised the Hawaii territory as "part of a resolution to a conflict over some other 

promises that were not being honored." Plaintiff contacted Cox, who reiterated that Plaintiff was 

to receive the Hawaii territory and that the issue would be resolved. Plaintiff believed that Cox 

presented the matter to Johnston, but Plaintiff did not receive the Hawaii territory. 

At some point, Plaintiff initiated an internal complaint alleging that he was being denied . 

the Hawaii territory because of race and color discrimination, either against Cox, who is AfricanAmerican, or against Plaintiff himself. Plaintiff alleges that Prudential conducted only a cursory 

investigation into the allegations before concluding that there was no evidence of discrimination 

or unfair treatment. 

At some point, Cox left his position with Prudential. Plaintiff believes that Cox's 

l departure was related to racial discrimination. Plaintiff applied for promotion to Cox's position, 

Page 2 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 2 of 20
I 

l 

.1:.1 

·' 

but the position was filled by "a non-Asian who had much less experience than Plaintiff in the 

industry." 

Plaintiff alleges that management ignored him at social events and gave him "the cold 

shoulder" and "the silent treatment." Plaintiff alleges that this treatment created a hostile work 

environment. On September 3, 2015, Plaintiff submitted a letter of resignation by email, 

effective October 2, 2015. Prudential terminated Plaintiff on September 17, 2015. 

LEGAL STANDARD 

The Federal Rules of Civil Procedure provide for dismissal for "failure to state a claim 

upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In considering a motion to dismiss 

made pursuant to Rule 12(b)(6), the court views well-pleaded factual allegations as true, but also 

requires the complaint to contain enough facts to state a claim that is plausible on its face. Bell 

At!. Corp. v. Twombly, 550 U.S. 544, 570 (2007). 

The requirements for pleading a federal claim in federal court were set forth in Ashcroft 

v. Iqbal, 556 U.S. 662 (2009): 

To survive a motion to dismiss, a complaint must contain sufficient factual matter, 

accepted as true, to "state a claim for relief that is plausible on its face." A claim 

has facial plausibility when the plaintiff pleads factual content that allows the 

court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged. 

Id. at 678 (quoting Twombly, 550 U.S. at 570). 

In ruling on a 12(b )( 6) motion, a court may generally consider only allegations contained 

in the pleadings, exhibits attached to the complaint and matters properly subject to judicial 

notice. Akhatar v. Mesa, 698 F .3d 1202, 1212 (9th Cir. 2012) (citation omitted). However, a 

court "may consider a writing referenced in a complaint but not explicitly incorporated therein if 

Page 3 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 3 of 20
the complaint relies on the document and its authenticity is unquestioned." Swartz v. KPMG 

LLP, 476 F.3d 756, 763 (9th Cir. 2007) (citation omitted). 

DISCUSSION 

Plaintiffs First Amended Complaint brings claims for discrimination and retaliation 

under state and federal law, breach of contract, promissory estoppel, and fraud. Prudential 

moves to dismiss the complaint. 

I. Discrimination 

Plaintiff brings claims for discrimination under ORS 659A.030 and 42 U.S.C. § 1981. 

Claims brought under ORS 659A.030 and 42 U.S.C. § 1981 are analyzed under the same legal 

standards. See DeWeese v. Cascade General Shipyard, 2011 WL 3298421, at *7 (D. Or. May 9, 

2011) ("The same legal standards apply when analyzing claims brought pursuant to [ORS 

659A.030, 42 U.S.C. § 1981, and Title VII]."). 

To state a claim for discrimination, a plaintiff must allege facts showing that (1) he 

belongs to a protected class; (2) he was performing according to his employer's legitimate 

expectations; (3) he suffered an adverse employment actions, and (4) other employees with 

qualifications similar to his were treated more favorably. Cornwell v. Electra Cent. Credit 

Union, 439 F.3d 1018, 1028 (9th Cir. 2006) (citing McDonnell Douglas Corp. v. Green, 411 

U.S. 792, 802 (1973)). 

To prevail on his claims for discrimination, Plaintiff must establish a prima facie case of 

discrimination. Vasquez v. Cty. of Los Angles, 349 F.3d 634, 640 (9th Cir. 2003). 

Id. 

If the plaintiff succeeds in doing so, then the burden of shifts to the defendant to 

articulate a legitimate, nondiscriminatory reason for its allegedly discriminatory 

conduct. If the defendant provides such a reason, the burden shifts back to the 

plaintiff to show that the employer's reason is a pretext for discrimination. 

Page 4 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 4 of 20
To establish a prima facie case, a plaintiff "must offer evidence that gives rise to an 

inference of unlawful discrimination, either through the framework set forth in McDonnell 

Douglas Corp. v. Green [411 U.S. 792 (1973)] or with direct or circumstantial evidence of 

discriminatory intent." Id. (internal quotation marks and citations omitted). 

In this case, Plaintiff asserts that he can meet this burden both through direct evidence of 

discrimination and under the McDonnell Douglas framework. 

A. Direct Evidence of Discrimination 

Direct evidence of discriminatory intent is "evidence which, if believed, proves the fact 

of discriminatory animus without inference or presumption." Godwin v. Hunt Wesson, Inc., 150 

F .3d 121 7, 1221 (9th Cir. 1998) (internal quotation marks and citation omitted). Plaintiff asserts 

that he has sufficiently alleged direct discrimination in that he alleged that (1) Prudential, acting 

through Johnston, racially discriminated against Cox by preventing Cox from providing the 

Hawaii territory to Plaintiff; (2) management ignored Plaintiff at social events; (3) management 

gave Plaintiff the cold shoulder and the silent treatment; ( 4) Prudential failed to provide Plaintiff 

with the Hawaii territory; (5) Prudential failed to properly consider Plaintiff for promotion to 

Cox's position; (6) Prudential failed to investigate Plaintiff's complaints of race and color 

discrimination; and (7) Prudential failed to investigate Plaintiff's complaints about not receiving 

the Hawaii territory. 

1. "Zone of Interests" 

Plaintiff's first claim of direct discrimination relies not on any alleged racial 

discrimination against Plaintiff, but rather against Cox. Prudential asserts that Plaintiff lacks 

standing to pursue this claim. In the context of Title VII, the Supreme Court has held that a 

plaintiff may not sue unless he falls within the "zone of interests" sought to be protected by the 

Page 5 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 5 of 20
l 

statutory provisions which form the basis for his complaint. Thompson v. N Am. Stainless LP, 

562 U.S. 170, 177-78 (2011). The "zone of interests" test "den[ies] a right of review ifthe 

plaintiffs interests are so marginally related to or inconsistent with the purposes implicit in the 

statute that it cannot reasonably be assumed that Congress intended to permit the suit." Id. at 

178 (quotation marks and citation omitted). In order to fall within this "zone of interests," the 

plaintiff cannot be an "accidental victim" or "collateral damage" of the employer's unlawful act. 

Id 

Prudential asserts that Plaintiffs claims do not fall within the "zone of interests" 

protected by either 42 U.S.C. § 1981 or ORS 659A.030. Plaintiff does not respond to this 

argument, except to reiterate his claims as alleged in the First Amended Complaint. I find 

Prudential's argument persuasive. Even accepting the allegations contained in the F AC as true, 

Plaintiff has only alleged that he is "collateral damage" in discrimination aimed at Cox. This is 

not sufficient to establish a right to sue under 42 U.S.C. § 1981 or ORS 659A.030. 

2. Racially Discriminatory Motive 

Although Plaintiffs first claim of direct discrimination relates to Prudential's alleged 

discrimination against Cox, Plaintiffs other claims allege that he was discriminated against on 

the basis of his own race. 

In order to sustain such a claim, a plaintiff must allege sufficient facts to show that he 

was discriminated against based on race. See Akmal v. Centerstance, Inc., 592 F. App'x 601, 

602 (9th Cir. 2015) (affirming dismissal where the plaintiff "failed to allege facts sufficient to 

show that the alleged conduct was due to her race or because she engaged in a protected 

activity."); Chocktoot v. Marquis Cos. I, Inc.; No. 1:12-CV-2323-PA, 2013 WL 1953589, at *l 

Page 6 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 6 of 20
(D. Or. May 10, 2013) (dismissing a claim for failure to allege specific facts showing 

discrimination based on race). 

In this case, Plaintiff has not pleaded any specific facts to show that any of the alleged 

conduct was motived by a racially discriminatory animus. 

3. Hostile Work Environment 

Plaintiffs second and third claims of direct discrimination relate to management ignoring 

him at social functions and giving him the cold shoulder and the silent treatment. Plaintiff 

alleges that this created a hostile work environment. To state a claim for a hostile work 

environment, a plaintiff must show that (1) the defendant subjected him to verbal or physical 

conduct based on his race; (2) the conduct was unwelcome; and (3) the conduct was sufficiently 

severe- or pervasive to alter the conditions of his employment and create an abusive working 

environment. Surrell v. Cal. Water Serv. Co., 518 F.3d 1097, 1108 (9th Cir. 2008). 

On the first element, Plaintiff provides only conclusory allegations to show that the 

conduct was related to his race. As for the other elements, courts must consider "all the 

circumstances, including the frequency of the allegedly discriminatory conduct, its severity, and 

whether it unreasonably interferes with an employee's work performance." Id. In this case, 

Plaintiff has not made any factual allegations regarding how frequently he was subjected to 

social snubbing, nor does he allege who ostracized him other than a generalized allegation that it 

was done by "management." Similarly, Plaintiff does not meet his burden in demonstrating the 

severity of this social snubbing. Courts in this district have held that the "silent treatment" is not 

sufficient to sustain a claim for retaliation under Title VII. Jernigan v. Alderwoods Grp., Inc., 

489 F. Supp.2d 1180, 1202 (D. Or. 2007); see also Leland v. US. Bank. NA, No. CV-98-454-ST, 

1999 WL 778569, at *9 (D. Or. Sept. 22, 1999) (being ostracized or given the "cold shoulder" is 

Page 7 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 7 of 20
not enough to sustain a claim for hostile work environment). Nor does Plaintiff allege that being 

ostracized interfered with his work performance. I conclude that this claim is insufficiently 

pleaded. 

4. Failure to Promote 

At some point, Cox left his position at Prudential and Plaintiff applied to fill the vacancy. 

Plaintiff alleges that "the position was filled by a non-Asian who has much less experience than 

Plaintiff in the industry." As previously noted, Plaintiff does not provide any factual allegations 

to support the conclusion that Prudential's decision to hire a different candidate was driven by a 

racial animus. Plaintiff does not allege what the requirements of Cox's position were, or any 

other potentially relevant criteria, such as Plaintiffs performance with the company. Also 

notably absent is any allegation that the person selected had equal or inferior qualifications 

relative to Plaintiff, merely that he had less experience in the industry. 1 I conclude that Plaintiff 

has failed to adequately plead direct discrimination on the basis of failure to promote. 

5. Failure to Investigate 

Plaintiff alleges that Prudential's investigation into his internal complaints about unfair 

treatment and racial discrimination was insufficient because it did not find evidence of 

discrimination. Plaintiff does not provide any other factual allegations to support his claim that 

Prudential's investigation was insufficient. Such circular reasoning is insufficient to sustain a 

claim for discrimination. 

1 The factual allegations in the First Amended Complaint indicate that Plaintiff worked for Prudential for less than 

two years. The FAC does not clearly allege when Cox left Prudential or when Plaintiff sought promotion to Cox's 

position. In order to support a plausible claim for failure to promote, a plaintiff whose tenure with the employer was 

brief must plead that he was eligible for the promotion in question. Rubadeau v. MA. Mortenson Co., No. 1: 13-cv339 AWI JLT, 2013 WL 3356883, at *4 (E.D. Cal. July 3, 2013). 

Page 8 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 8 of 20
6. Constructive Discharge 

Finally, Plaintiff alleges that he was constructively discharged in retaliation for his 

internal complaint.2 To state a claim for constructive discharge, a plaintiff must show that "the 

abusive working environment became so intolerable that her resignation qualified as a fitting 

response." Pa. State Police v. Suders, 542 U.S. 129, 134 (2004). The Ninth Circuit requires a 

plaintiff to establish that the employer "create[d] working conditions that are 'sufficiently 

extraordinary and egregious to overcome the normal motivation of a competent, diligent, and 

reasonable employee to remain on the job to earn a livelihood."' Poland v. Chertoff, 494 F.3d 

1174, 1186 (9th Cir. 2007) (quoting Brooks v. City of San Mateo, 229 F.3d 917, 930 (9th Cir. 

2000)). "Where a plaintiff fails to demonstrate the severe or pervasive harassment necessary to 

support a hostile work environment claim it will be impossible for her to meet the higher 

standard of constructive discharge: conditions so intolerable that a reasonable person would 

leave the job." Brooks, 229 F.3d at 930. 

In this case, Plaintiff does not clearly plead what the intolerable working conditions were, 

other than "being treated as an outsider." As discussed above, the social ostracism alleged by 

Plaintiff does not suffice to state a claim for hostile work environment. It cannot, therefore, 

sustain a claim for constructive discharge. 

B. McDonnell Douglas 

In the alternative, Plaintiff asserts that he could establish discrimination under the 

McDonnell Douglas framework regarding Prudential's decision to assign the Hawaii territory to 

a different employee and its decision to not to promote Plaintiff to fill Cox's position. To 

2 Plaintiff does not precisely plead a claim for constructive discharge in the F AC, but alleges that he had "no 

reasonable alternative but to resign his position," and that he was "terminated," as part of his claims for 

discrimination and retaliation under ORS 659A.030 and 42 U.S.C. § 1981. In his Response, Plaintiff more clearly 

argues that he was constructively discharged. 

Page 9 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 9 of 20
I 

establish a prima facie case of discrimination under the McDonnell Douglas framework, a 

plaintiff must show: 

(1) he is a member of a protected class; (2) he was qualified for his position; (3) 

he experienced an adverse employment action; and ( 4) similarly situated 

individuals outside his protected class were treated more favorably, or other 

circumstances surrounding the adverse employment action give rise to an 

inference of discrimination. 

Fonseca v. Sysco Food Serv. of Ariz., Inc., 374 F.3d 840, 847 (9th Cir. 2004) (internal quotation 

marks and citations omitted). 

In this case, there is no dispute that Plaintiff is a member of a protected class or that he 

was qualified for his position as Sales Vice President. 

Plaintiffs claim for discrimination based on a failure to promote suffers the same 

problems under the McDonnell Douglas framework as it did under a theory of direct 

discrimination. On the claim for failure to promote, Plaintiff has not alleged sufficient facts 

about the position Plaintiff sought or the individual who was selected to fill it to plausibly state a 

claim. With regard to the Hawaii territory, the FAC alleges that Prudential assigned Hawaii to a 

colleague as "part of a resolution to a conflict over some other promises that were not being 

honored." The F AC provides no details about the employee who received the Hawaii territory 

and, contrary to Plaintiffs claims, actually alleges that the decision to assign the Hawaii territory 

to that individual was not motivated by a desire to discriminate against Plaintiff. 

II. Retaliation 

Plaintiff brings claims for retaliation under ORS 659A.1993

, ORS 659A.030 and 42 

U.S.C. § 1981. As previously noted, claims brought under ORS 659A.030 and 42 U.S.C. § 1981 

are analyzed under the same legal standards. 

3 ORS 569A.199 forbids employers from retaliating against employees who have "in good faith reported 

information that the employee believes is evidence ofa violation ofa state or federal law, rule, or regulation." The 

Page 10 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 10 of 20
To state a claim for retaliation under ORS 659A.030 and 42 U.S.C. § 1981, a plaintiff 

must allege facts showing (1) that he engaged in protected activity; (2) that his employer 

subjected him to adverse employment actions; and (3) that there is a causal link between the 

protected activity and the adverse action. Manatt v. Bank of America, NA, 339 F.3d 792, 800 

(9th Cir. 2003). Similarly, to state a claim for retaliation under ORS 659A. l 99, a plaintiff must 

show that he (1) engaged in a protected activity; (2) suffered an adverse employment action; and 

(3) that there was a causal link between the protected activity and the adverse employment 

decision. Neighorn v. Quest Health Care, 870 F. Supp.2d 1069, 1102 (D. Or. 2012). 

To show a causal link between an alleged protected activity and an adverse employment 

action, a plaintiff must show that the protected activity constituted the "but-for cause" of the 

employer's adverse employment action. Univ. of Tex. Sw. Med. Ctr. v. Nassar,_ U.S._, 

133 S. Ct. 2517, 2533 (2013). "Oregon courts use a 'substantial factor' test, but construe the test 

as a 'but-for' standard." Lindsey v. Clatskanie People's Util. Dist., _F. Supp. 3d_, Case No. 

3:14-cv-485-SI, 2015 WL 6443290, at *5 (D. Or. Oct. 23, 2015) (citing Hardy v. Legacy Health 

Sys., 167 Or. App. 425, 436 (2000)). 

A plaintiff may satisfy the causation element through "circumstantial evidence, such as 

the employer's knowledge that the plaintiff engaged in protected activities and the proximity in 

time between the protected action and the allegedly retaliatory employment decision." Yartzoff 

v. Thomas, 809 F.2d 1371, 1376 (9th Cir. 1987). In Yartzoff, the Ninth Circuit held that there 

was sufficient evidence of causation where the adverse actions occurred less than three months 

after the plaintiff filed an administrative complaint, two weeks after the charge was investigated, 

and less than two months after the investigation ended. Id. If the temporal proximity is not 

First Amended Complaint refers to Plaintiffs claim under ORS 659A.199 as a claim for discrimination, but the 

essence of the claim is retaliation. In his Response, Plaintiff also characterizes this claim as retaliation, rather than 

discrimination. 

Page 11 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 11 of 20
"very close," some other evidence is required to satisfy the causation element. Clark Cty. Sch. 

Dist. v. Breeden, 532 U.S. 268, 273 (2001). "[W]here an adverse employment action follows on 

the heels of protected activity," however, time alone suffices to show causation. Villiarimo v. 

Aloha Island Air, Inc., 281 F .3d 1054, 1065 (9th Cir. 2002). 

In this case, Plaintiff alleges that he was retaliated against for his internal complaint about 

racial discrimination. The adverse employment actions are essentially the same as those alleged 

in Plaintiffs claims for discrimination: the decision to assign the Hawaii territory to another 

employee, the decision not to promote Plaintiff to replace Cox, social ostracism amounting to a 

hostile work environment, and constructive discharge. 

Some of the conduct alleged in the F AC and relied upon by Plaintiff does not constitute 

adverse employment actions. The Ninth Circuit has hel<;l that "mere ostracism" in the workplace 

does not constitute an adverse employment action. Ray v. Henderson, 217 F.3d 1234, 1241 (9th 

Cir. 2000); Strother v. S. Cal. Permanente Med. Grp., 79 F.3d 859, 869 (9th Cir. 1996). Plaintiff 

cannot, therefore, rely on being ignored at social functions or being given the cold shoulder or 

the silent treatment to sustain a retaliation claim. 

Turning then to the causation element, Plaintiff alleges that he made the internal 

complaint about racial discrimination after he learned that the Hawaii territory was assigned to 

another employee. The decision to assign the Hawaii territory to another employee could not, 

therefore, have been motivated by Plaintiffs complaint. 

More generally, Plaintiff seems to rely on the timing of the adverse actions to sustain the 

causation element of his retaliation claims. The F AC does not allege when Plaintiff made his 

internal complaint, when Prudential commenced its investigation, or when that investigation was 

concluded. Nor does Plaintiff allege when the other adverse actions occurred, other than that it 

Page 12 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 12 of 20
was some time after he made the internal complaint. "The mere fact that the adverse actions 

took place after plaintiffs protected activity is not sufficient by 'itself to give rise to an inference 

of a causal link." Lacayo v. Donahoe, No. 14-cv-04077-JSC, 2015 WL 3866070, at *12 (N.D. 

Cal. June 22, 2015) (quoting Knox v. Donohoe, No. C-11-2596 EMC, 2012 WL 949030, at *9 

(N.D. Cal. Mar. 20, 2012)). 

It is impossible to determine whether Plaintiff can make out a plausible claim for 

retaliation without more specific factual allegations, either to establish the temporal proximity of 

the events or to establish some other causal connection between them. 

III. Breach of Contract 

Plaintiff alleges that Prudential's promise to assign the Hawaii territory to Plaintiff 

constituted an enforceable contract, which Prudential breached. 

A. At-Will Employee 

Absent some agreement to the contrary, an employment contract is at-will under Oregon 

law. Albrant v. Sterling Furniture Co., 85 Or. App. 272, 275 (1987). 

That means that an employer ordinarily may discharge an employe[ e] for any 

reason and at any time. It follows that an employer may also modify the 

employment contract so long as the modification applies only prospectively. An 

employe[ e] impliedly accepts such modifications by continuing employment after 

the modification. 

Id (internal citations and footnotes omitted); see also Elliot v. Tektronix, Inc., 102 Or. App. 388, 

393 (1990) ("[A]n at will employer may make unilateral changes in employment terms, 

notwithstanding its previous representations, and not be subject to contract liability[.]"); Fish v. 

Trans-Box Sys., Inc., 140 Or. App. 255, 259 (1996) ("The law is well established that an 

employer may modify an at-will employment relationship unilaterally."). 

Page 13 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 13 of 20
Plaintiff does not dispute that his employment with Prudential was at-will, but contends 

that Prudential's promise of the Hawaii territory created a reasonable expectation which is 

enforceable as a contract. An action to enforce such promises relies on the benefit or right in 

question having vested. See Funkhouser v. Wells Fargo Corp., 224 Or. App. 308, 312 (2008) 

("Under such contracts, an employer may prospectively modify or eliminate benefits that the 

employee has not already earned as compensation for his or her work, that is, benefits that have 

not vested, at the time of elimination."); Furrer v. Sw. Or. Cmty. Coll., 196 Or. App. 374, 379-80 

(2004) ("Once the employee embarks on performance, the employer cannot unilaterally modify 

the resulting contract so as to alter rights that have vested under it."). 

"An employee's right to an employment benefit vests when that employee has satisfied 

all conditions precedent to eligibility for the benefit under the employer's policy." Funkhouser, 

224 Or. App. at 312; see also State ex rel. Roberts v. Pub. Fin. Co., 294 Or. 713 (1983) 

(employee did not have a vested right to vacation pay because he was terminated before the right 

would have vested). The cases cited by Plaintiff bear this out. See Sabin v. Willamette-Western 

Corp., 276 Or. 1083, 1089 (1976) (plaintiff had earned two weeks of vacation and was denied 

the vacation pay when he was terminated); Wyss v. Inskeep, 73 Or. App. 661, 667-68 (1985) 

(plaintiff had a vested right to be considered for year-end bonuses); Swenson v. Legacy Health 

Sys., 169 Or. App. 546, 549-52 (2000) (plaintiff had a vested right to a larger severance package 

because she worked through an agreed-upon date); Furrer, 196 Or. App. at 381 (finding that a 

change in retirement policy repudiated a contractual promise to pay early retirement benefits to 

eligible employees). 

"The question of when a benefit is earned or vested will vary in each case depending on 

the terms of the contract and the nature of the promised benefit." Olson v. F&D Publi'g Co., 

Page 14 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 14 of 20
Inc., 160 Or. App. 582, 588-89 n. 5 (1999). "[E]ven in the absence of an express agreement, an 

employer's establishment of certain terms or conditions of employment may amount to an offer 

of a unilateral contract; in such instances, the employee's part performance precludes the 

employer from revoking what it offered in exchange for the employee's work." Swenson, 169 

Or. App. at 554 n. 4 (2000). However, as previously noted, "in the absence of an agreement to 

the contrary, an employer has the right to modify benefits unilaterally and prospectively; by 

continuing to work after learning of it, an employee impliedly accepts that modification." Id. at 

553-54. 

In this case, Plaintiff alleges that he was told that he would receive the Hawaii territory 

and that by accepting employment with Prudential he tendered part performance and that 

Prudential is liable for breaching the contract. Prudential's offer of employment, which Plaintiff 

accepted, offered him the position of "Regional Sales Vice President for Prudential's Oregon 

territory." Moses Deel. Ex. 1, at 1.4 By accepting Prudential's offer, which refers only to the 

Oregon territory and contains no reference to the Hawaii territory,5 Plaintiff cannot plausibly 

allege that he tendered partial performance in the expectation of receiving the Hawaii territory. 

Furthermore, Plaintiff alleges he learned that the Hawaii territory had been assigned to another 

employee at a new employee orientation. Plaintiff was thereby made explicitly aware that 

Prudential had unilaterally modified its alleged promise to provide Plaintiff with the Hawaii 

territory and, by continuing in his employment with Prudential, Plaintiff impliedly accepted that 

modification. Plaintiff does allege that he went to Cox, who assured Plaintiff "that the matter 

4 Ordinarily, a district court may not consider any material outside of the pleadings when ruling on a Rule 12(b)(6) 

motion, but a court may properly consider documents "whose contents are alleged in a pleading and whose 

authenticity no party questions, but which are not physically attached to the pleading." Failey v. Donahoe, No. 

3:1l-cv-01088-HU,2013 WL 1294697, at *7 (D. Or. Mar. 26, 2013) (quotation marks and citations omitted). The 

contents of Prudential's offer letter are alleged in the FAC and no party has disputed the exhibit's authenticity. 

5 Plaintiff does not, for instance, allege that Hawaii was part of Prudential's Oregon territory. 

Page 15 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 15 of 20
would ·be resolved" and that Cox attempted to "set the deal straight," but such allegations lack 

the specificity needed to determine when, if ever, such a benefit would have become vested and 

enforceable. 

B. The Existence of an Enforceable Contract 

Plaintiffs claim for breach of contract is not free of other defects. To state a claim for 

breach of contract, a plaintiff must allege "the existence of a contract, its relevant terms, 

plaintiffs full performance and lack of breach and defendant's breach resulting in damage to 

plaintiff." Slover v. Or. State Bd. of Clinical Soc. Workers, 144 Or. App. 565, 570 (1996) 

(internal quotation marks and citation omitted). "Oregon subscribes to the objective theory of 

contract, which provides that the existence and terms of a contract are determined by evidence of 

the parties' communications and acts." Rhoades v. Beck, 260 Or. App. 569, 572 (2014). 

The F AC provides few details about the alleged contract. Plaintiff does not, for instance, 

allege what he was to be paid if he had been given the Hawaii territory. He does not allege 

whether he would receive the Hawaii territory in addition to the Oregon territory, or what his 

responsibilities would be. Without more specific factual allegations, I must conclude that 

Plaintiff has not adequately pleaded a claim for breach of contract. 

IV. Promissory Estoppel 

Plaintiff asserts a claim of promissory estoppel, alleging that Prudential promised him the 

Hawaii territory in order to induce him to accept a position with Prudential. The elements of 

promissory estoppel are "(1) a promise, (2) which the promisor, as a reasonable person, could 

foresee would induce conduct of the kind which occurred, (3) actual reliance on the promise, (4) 

resulting in a substantial change in position." Furrer, 196 Or. App. at 382 (2004). 

Page 16 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 16 of 20
"[T]he majority rule in this country is that any promise which is to serve as the basis for a 

promissory estoppel claim or defense be as clear and well defined as a promise that could serve 

as an offer, or that otherwise might be sufficient to give rise to a traditional contract supported by 

consideration." Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1106 (9th Cir. 2009) (internal quotation 

marks and citation omitted). As discussed in the context of Plaintiff's claim for breach of 

contract, the F AC contains very little in the way of detail about Prudential's alleged promise to 

provide the Hawaii territory. There is, for instance, no allegation about what Plaintiff's 

responsibilities were to be or what he would be paid. Plaintiff has not alleged sufficient facts to 

show a "clear and well defined" promise. 

"[P]romissory estoppel derives from a promise that induces reasonably foreseeable, 

detrimental reliance[.]'' Barnes, 570 F.3d at 1108; see also Houston v. Yoncalla Sch. Dist. No. 

32, No. 6:13-cv-01318-AA, 2014 WL 3514984, at *12 (D. Or. July 11, 2014) (granting a motion 

to dismiss because "plaintiff does not allege sufficient detrimental reliance to sustain a claim for 

promissory estoppel."). In this case, as in Houston, Plaintiff has not adequately alleged a 

substantial change in position or detrimental reliance. Plaintiff does not, for instance, allege that 

he rejected other employment opportunities in order to accept a position with Prudential. 

V. Fraud 

Finally, Plaintiff alleges that Prudential fraudulently induced him to take a position by 

falsely representing that Plaintiff would receive the Hawaii territory. Prudential moves to 

dismiss this claim on the basis that Plaintiff has failed to meet either the special pleading 

requirements under Rule 9 or the common law elements of a fraud claim. 

Under Oregon law, the elements of fraud are: 

(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge 

of its falsity or ignorance of its truth; (5) [the speaker's] intent that it should be 

Page 17 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 17 of 20
acted on by the person and in the manner reasonably contemplated; ( 6) the 

hearer's ignorance of its falsity; (7) [the hearer's] reliance on its truth; (8) [the 

hearer's] right to rely thereon; (9) and [the hearer's] consequent and proximate 

lilJUry. 

Wieber v. FedEx Ground Package Sys. Inc., 231 Or. App. 469, 480 (2009) (quotation marks and 

citation omitted). 

Claims for fraud must be pled with particularity. Odom v. Microsoft Corp., 486 F .3d 

541, 553 (9th Cir. 2007). Rule 9(b) provides that "[i]n alleging fraud or mistake, a party must 

state with particularity the circumstances constituting fraud or mistake. Malice, intent, 

knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 

9(b ). A plaintiff must "state the time, place, and specific content of the false representations as 

well as the identities of the parties to the misrepresentation." Schrieber Distrib. Co. v. ServWell 

Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). "Averments of fraud must be accompanied 

by the who, what, when, where, and how of the misconduct charged." Vess v. Ciba-Geigy Corp. 

USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (internal quotation marks and citation omitted). 

In this case, Plaintiff alleges that Johnston and Cox orally promised that he would receive 

the Hawaii territory in order to induce him to join Prudential. As Prudential points out, this 

satisfies the "who" and the "how" of the alleged fraud claim. As previously discussed, however, 

the F AC does not clearly allege "what" was promised, beyond a vague allegation that Plaintiff 

would be assigned to the Hawaii territory. Nor does the F AC allege when the promises were 

made, or where, or set forth the "specific content" of what Cox and Johnston promised Plaintiff. 

Although knowledge and intent may be alleged generally, Plaintiff does not adequately 

plead that Cox and Johnston knew that their promise to provide the Hawaii territory was false at 

the time it was made. Elsewhere in the F AC, Plaintiff appears to allege that Cox always 

intended to provide Plaintiff with the Hawaii territory but was prevented from doing so. 

Page 18 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 18 of 20
Similarly, Plaintiff has not alleged any facts to support the conclusion that he suffered 

"consequent and proximate injury" as a result of his reliance on Prudential's promise of the 

Hawaii territory. 

Without more specific factual allegations, Plaintiffs claim for fraud does not satisfy the 

requirements of Rule 9(b ). 

VI. Leave to Amend 

If the court dismisses a complaint, it must decide whether to grant leave to amend. "A 

district court may deny a plaintiff leave to amend if it determines that allegation of other facts 

consistent with the challenged pleading could not possibly cure the deficiency, or if the plaintiff 

had several opportunities to amend its complaint and repeatedly failed to cure deficiencies." 

Telesaurus VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir. 2010). 

In its motion, Prudential urges that dismissal be with prejudice, but Plaintiff has 

requested leave to amend. Although Plaintiff has already amended his complaint once and the 

allegations contained in the F AC are generally vague and conclusory, it is not impossible that 

some or all of Plaintiffs claims might be salvaged by the allegation of additional facts, as 

discussed above. Accordingly, dismissal shall be with leave to amend. 

////////////////////////////////////////// 

/////////////////////////////////// 

//////////////////////////// 

//////////////////// 

//////////// 

Page 19 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 19 of 20
,

' 

CONCLUSION 

Defendant's Motion to Dismiss (#10) is GRANTED. Plaintiff's First Amended 

Complaint (#7) is DISMISSED with leave to amend. Plaintiff shall have thirty (30) days from 

the date of this Order to file an amended complaint. Plaintiff is advised that failure to file an 

amended complaint within the allotted time will result in the entry of a judgment of dismissal. 

It is so ORDERED and DATED this ~ day of May 2016. 

~~ANN~fi~ Senior District Judge 

Page 20 - OPINION AND ORDER 

Case 3:15-cv-02029-HZ Document 28 Filed 05/04/16 Page 20 of 20