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UNITED STATES DISTRICT COURT

 EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

TERRENCE SHAUGHNESSY,

Plaintiff,

v. Case Number: 09-12077

Honorable Julian Abele Cook, Jr.

INTERPUBLIC GROUP OF COMPANIES, INC.,

Defendant.

______________________________________________/

 

ORDER

This case arises out of a wrongful termination lawsuit by the Plaintiff, Terrence

Shaughnessy, who complains that his former employer, The Interpublic Group of Companies, Inc.

(“IPG”), retaliated against him for having reported a supervisor’s unlawful conduct. On April 23,

2010, the IPG filed a motion to dismiss the complaint because, in its opinion, Shaughnessy had

failed to state a viable cause of action under the law, citing to Federal Rules of Civil Procedure 8,

12(b)(6), and the new pleading standards as set forth in Bell Atlantic Corp. v. Twombly, 550 U.S.

544 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937 (May 18, 2009). In addition to formally expressing

his opposition to the IPG’s dispositive motion, Shaughnessy also filed a request for leave to file a

first amended complaint. Both of the parties’ applications for relief are now before the Court for

decisions.

 I.
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The word, “Company,” may be used interchangeably with the name of Shaughnessy’s

former employer, the IPG, during the course of this order. Unless the Court states otherwise or it

is plainly evident from a reading of the sentence structure, a reader of this order should not

assume or attach any significance to the interchange of these words. 

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The IPG1

 is a holding company which encompasses thirty eight advertising and/or marketing

agencies, including General Motors R*Works (“GM R*Works”), whose sole client is the automotive

company, General Motors. During the five years which preceded the commencement of this lawsuit,

Shaughnessy had worked with IPG where his work as an at-will employee was rated as outstanding

by the Company. 

Every year during Shaughnessy’s tenure with the IPG, he and his colleagues were required

to sign a form on which they would formally acknowledge their awareness and understanding of

the written confidentiality and non-solicitation policies of the Company, as well as the substantive

content of its Code of Conduct. This Code of Conduct consisted of two parts which collectively

outline the policies of the IPG on, inter alia, the solicitation of clients, the receipt of gifts, and the

prohibition against trading with inside information. The document also included the following

relevant clauses:

! A statement in Part 1, which after outlining its policy on confidentiality and

non-solicitation, notes that “[n]othing herein shall change the at-will nature

of [the employee’s] employment relationship with the Company.” Code of

Conduct at 2.

! A preamble to Part 2 which states that the IPG “take[s] pride in a reputation

of high moral and ethical standards” and which expresses the Company’s

commitment to “act with fairness, honesty and integrity” in its business

dealings. Code of Conduct at 3.

! A preliminary statement in Part 2 about the limitations of the Code of

Conduct, including that the document “expresses in general terms the

standards of conduct . . . expected of all Company employees in their day-today activities and in their relationships with those with whom the Company
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does business. . . .[,]” that it “is not a comprehensive document intended to

address every legal or ethical issue that [an employee] might face, nor . . . a

description of all laws and policies that apply to Company businesses. . . .,”

and that the Code of Conduct “should be used as a guide and a resource to

alert [the employee] to significant legal and ethical issues that frequently

arise.” Code of Conduct at 3.

! A notation that employees with sensitive matters should “feel free” to direct

questions to the Human Resources Director or Corporate Legal Department.

Code of Conduct at 10.

! A statement that “[n]o retaliation will be taken against any employee for

raising any concern, question or complaint in good faith,” and an assurance

that all such matters will be handled confidentially. Code of Conduct at 10.

! An indication that the Company established an “Alertline” on which

employees could call to report violations of the Code of Conduct or any of

its standard policies and procedures. Code of Conduct at 9.

The IPG also issued two additional documents, both of which were ostensibly designed to

encourage its employees to (1) familiarize themselves with the Code of Conduct, and (2) report any

violations of the Code to management. Shaughnessy claims that, while working for Momentum (a

subsidiary of the IPG), he learned that his supervisor had, inter alia, falsely billed General Motors

for personal expenses, stolen the client’s property which was subsequently sold on eBay, and

misused the client’s funds. According to Shaughnessy, he reported this misconduct to the IPG’s

corporate attorney who, in turn, advised him to notify senior management. Shaughnessy, relying

upon the IPG’s confidentiality and anti-retaliation policies, reported this alleged misconduct on the

Alertline on March 17, 2007 and April 7, 2007.

According to Shaughnessy, the Company’s retaliation efforts against him began shortly

thereafter, as evidenced by lost job assignments, being reprimanded in the presence of clients and

coworkers, and receiving undue scrutiny of his work performance. It is his contention that this form

of retaliatory conduct continued and escalated until November 3, 2008, when he was fired. While
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acknowledging that Shaughnessy had been fired, the IPG maintains his layoff had been precipitated

by an economic reduction in the work force which occurred (1) approximately eighteen months after

the supervisor’s alleged illegal activity had been reported to the Company management via the

Alertline, and (2) nine months after he had been offered a position with GM R*Works. 

 II.

Shaughnessy seeks leave from the Court to amend his complaint with the addition of a third

claim for promissory estoppel, and to further clarify the allegations that had been raised in his initial

filing. Under Fed. R. Civ. P. 15(a)(2), a court may “freely give leave [to amend a pleading] when

justice so requires.” This rule reaffirms the principle that cases should be tried on their merits

“rather than [on] the technicalities of pleadings.” Moore v. City of Paducah, 790 F.2d 557, 559 (6th

Cir.1986) (quoting Tefft v. Seward, 689 F.2d 637, 639 (6th Cir.1982)). Nevertheless, a court is

entitled to consider various factors that weigh in favor of rejecting requests for leave to amend a

pleading, such as undue delay, bad faith, or prejudice to the opposing party. Wade v. Knoxville

Utils. Bd., 259 F.3d 452, 458 (6th Cir. 2001). If, in the opinion of a court, a proposed amendment

will not survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), such a request should be

disallowed because of its futility. Thiokol Corp. v. Dept. of Treasury, 987 F.2d 376, 382 (6th

Cir.1993). Here, the IPG submits that it would be futile for the Court to allow Shaughnessy to

amend his complaint, inasmuch as the newly stated claims cannot survive a challenge under Fed.

R. Civ. P. 12(b)(6). Fed R. Civ. P. 8(a)(2) requires a complaint to provide “a short and plain

statement of the claim showing that the pleader is entitled to relief [in order to] give the defendant

fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957) and
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Fed.R.Civ.P. 8(a)(2)). While this pleading standard does not mandate “detailed” factual allegations,

it does require more than the bare assertion of legal conclusions. See Twombly, 550 U.S. at 555.

Therefore, a plaintiff must offer more than “an unadorned, the defendant-unlawfully-harmed me

accusation.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

Generally, when considering a motion to dismiss, a court must construe the complaint in a

light that is most favorable to the plaintiff, whose factual allegations must be accepted as true. A

court must also draw all reasonable factual inferences in the plaintiff's favor. Tipton v. Corr. Med.

Services, Inc., No. 08-421, 2009 WL 2135226 (W.D.Mich. July 15, 2009). However, “[a] pleading

that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will

not do.’” Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555). Moreover, “[t]hreadbare

recitals of the elements of a cause of action, supported by mere conclusory statements, do not

suffice.” Id. Claims are capable of surviving a Rule 12(b)(6) motion only if the “[f]actual allegations

[are] enough to raise a right to relief above the speculative level . . . on the assumption that all [of]

the allegations in the complaint are true . . . .” Twombly, 550 U.S. at 555.

As emphasized by Iqbal, a complaint must contain sufficient factual matter that, when

accepted as true, states a claim that is “plausible” on its face:

[O]nly a complaint that states a plausible claim for relief survives a motion to

dismiss. Determining whether a complaint states a plausible claim for relief [is] . .

. a context-specific task that requires the reviewing court to draw on its judicial

experience and common sense. But where the well-pleaded facts do not permit the

court to infer more than the mere possibility of misconduct, the complaint has

alleged-but it has not “show[n]”-“that the pleader is entitled to relief. Iqbal, 129

S.Ct. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)) (internal citations omitted).

 Therefore, in evaluating the IPG’s motion for dismissal pursuant to Fed.R.Civ.P. 12(b)(6),

the Court is guided by the standard formulated under Iqbal.
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Ordinarily, in order to prevail on a cause of action for breach of contract, a plaintiff

would have to initially establish that a valid contract exists between the parties. Once a valid

contract has been proven, a plaintiff who seeks to recover for its breach must show that (1) the

terms of the parties’ agreement require the performance of certain actions; (2) a party violated

the terms of the contract; and (3) the breach caused an injury to the other party. Webster v.

Edward D. Jones & Co., L.P., 197 F.3d 815, 819 (6th Cir.1999).

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 A. Shaughnessy’s Claim for Breach of Contract (Count I)

For the purpose of the issue now before the Court, both parties agree that they had a valid

and binding employment contract.2

 Michigan courts have adopted a presumption that, with narrow

exceptions, those persons who work for an indefinite period of time are considered to be “at-will”

employees. Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579 (1980). In order

to overcome this presumption, a plaintiff may offer evidence to the contrary, including company

policies and procedures that show an intent to convert a position to one with job security which, in

turn, authorizes the termination of employment for just cause only. Dolan v. Continental Airlines

/ Continental Express, 454 Mich. 373, 383-84 (1997). 

Here, Shaughnessy points to the anti-retaliation provision within the IGP Code of Conduct,

which states that “no retaliation will be taken against any employee for raising any concern, question

or complaint in good faith.” Code of Conduct at 10. In advancing this position, he asks the Court

to construe this language as a separate binding contract. However, his argument must fail under a

proper interpretation of Michigan law. 

In Dolan, supra the Michigan Supreme Court recognized that it could not, as a matter of law,

authorize a breach of contract claim which is based on the mere dissemination of an employee

handbook with an implied discharge-for-cause policy within its pages. Id. at 386. The court noted

that if an employer establishes such a policy, it “may become part of an employment contract only
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when the circumstances (e.g., the language in the handbook itself, or an employer’s oral statements

or conduct) clearly and unambiguously indicate that the parties so intended.” Id. (quoting Rood v.

General Dynamics Corp. et al, v. SPX Corp., 444 Mich 107, 137 (1993)). Based on these cases, the

IPG contends that this Code of Conduct is a general statement of the Company’s policy. Moreover,

it submits that this general statement does not have any language which reflects a clear and

unambiguous intent to protect employees from retaliatory discharge. A review of the record reveals

that as to Shaughnessy’s Count I breach of contract claim, the analysis by the IPG is correct.

Part 1 of the Code of Conduct contains a disclaimer which states that nothing therein “shall

change the at-will nature of [the employee’s] employment relationship with the Company.” Code

of Conduct at 2. Shaughnessy urges the Court to limit the reach of this language to the Company’s

confidentiality and non-solicitation agreement. Yet, aside from its physical location within this

document, there is nothing that expressly restricts the application of the “at-will” clause to Part 1.

Moreover, the prefatory language in the Code of Conduct suggests that the IPG intended this

document to be a general statement of its policy, rather than a binding contractual agreement. See

Code of Conduct at 3 (noting that the Code of Conduct “expresses in general terms the standards of

conduct . . . expected of all Company employees,” that it “is not a comprehensive document intended

. . . [as] a description of all laws and policies that apply to Company business” and that it “should

be used as a guide and a resource to alert [the employee]” to common legal and ethical issues)

(emphasis added). Inasmuch as this Code of Conduct does not clearly and unambiguously reflect

the intent of the IPG to form an anti-retaliation contract with its employees, Shaughnessy cannot

prevail on this issue as a matter of law. Accordingly, the Court must deny Shaughnessy’s motion

for leave to amend the complaint as to Count I because it cannot survive an application for dismissal
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under Rule 12(b)(6).

B. Shaughnessy’s Claim for Retaliation In Violation of Michigan Public Policy (Count II)

In Count II of his proposed amended complaint, Shaughnessy seeks to buttress his original

claim that he was terminated in violation of an existing public policy. Within certain limited

constitutional or statutory boundaries, either party to an employment contract for an indefinite term

may end the relationship at any time for any reason whatsoever. Suchodolski v. Michigan

Consolidated Gas Co., 412 Mich 692, 695 (1982). Michigan courts have recognized an exception

to this general rule based on the notion that “some grounds for discharging an employee are so

contrary to public policy as to be actionable.” Id. Generally speaking, courts have upheld three

narrow types of public policy claims, i.e., those where an employee is discharged (1) in violation

of an explicit legislative statement prohibiting discharge, discipline, or other adverse treatment for

those acting in accordance with a statutory duty or right, (2) for failing or refusing to violate an

existing law, or (3) for attempting to exercise a right that had been created by a well-established

legislative enactment. Id. at 695-696. In his pursuit of this point, Shaughnessy appears to be making

an attempt to place his claim within the second and third prongs of the Suchodolski test. 

As to the assertion that he was discharged for refusing to violate an existing law (Suchodolski

prong 2), Shaughnessy points to allegations within his proposed complaint that he (1) was aware of

“likely felonious conduct by his supervisor,” and (2) “could have” been accused of aiding and

abetting crime, compounding or concealing offenses and/or acting as an accessory after the fact had

the supervisor’s misconduct not been disclosed. Even if his arguments were considered,

Shaughnessy has not pled any facts from which the Court could infer that (1) the supervisor was

aware of Shaughnessy’s knowledge of the alleged criminal activity; (2) Shaughnessy was asked to
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conceal the criminal activity; or (3) Shaughnessy had played any actual role in sheltering potentially

criminal conduct which could be reasonably construed as an aiding or abetting crime. See Hein v.

All America Plywood Co., Inc., 232 F.3d 482, 486 (6th Cir. 2000) (noting that an employee has a

valid public policy claim under Michigan law if he was fired because of his failure or refusal to

adhere to his employer’s request or demand to break the law ). Shaughnessy’s claim - standing alone

- that he “failed or refused to violate a law”constitutes a mere formulaic recitation of the Suchodolski

standard, and is insufficient under Twombly and Iqbal, supra. Because these claims are futile in that

they do not cross the line from being merely “possible” to “plausible,” Shaughnessy’s motion to

amend this count must be denied. 

In support of his claim that he was discharged “for exercising a right conferred by a wellestablished legislative enactment” (prong 3 of Suchodolski), Shaughnessy cites the Securities and

Exchange Regulations, the New York Stock Exchange (“NYSE”) Listing Manual, and the Securities

Exchange Act, 15 U.S.C. § 7202. In his view, these provisions collectively conferred a right upon

him to be protected from retaliation for reporting illegal behavior. Notwithstanding this contention,

a closer review of Shaughnessy’s claim reveals that it must also fail.

As an initial matter, Shaughnessy has failed to identify any particular Securities and

Exchange Commission (“SEC”) Regulation which supports his argument. Although he relies in part

upon 15 U.S.C. § 7202, this section merely authorizes the SEC to promulgate rules and regulations

in furtherance of the Sarbanes-Oxley Act. Furthermore, § 7202 points out that only a violation of

the Sarbanes Oxley Act (or any SEC rule or regulation issued thereunder) will be treated as a

violation of the Securities and Exchange Act of 1934. 

In that regard, Shaughnessy’s argument that rules in the NYSE’s Listed Company Manual
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fall within § 7202 is misplaced. It is true that the NYSE rules require such listed companies as the

IPG to maintain a code of conduct. It is also true that these rules advise companies to encourage

whistle-blowing by informing employees “that the company will not allow retaliation for reports

made in good faith.” See NYSE Listed Company Manual §303A.10. That notwithstanding,

Shaughnessy has not proffered any persuasive argument as to why the Court should treat the NYSE

manual as a “well-established legislative enactment.” Suchodolski, supra. To the contrary, as the

IPG points out, the NYSE is a self-regulatory organization which is completely separate and distinct

from the SEC. Thus, the Court cannot find any logical reason to conclude that a violation of an

NYSE rule is the tantamount to a violation of the Securities Exchange Act, and, thus, in

contravention of public policy. Inasmuch as Shaughnessy offers no reliable legal authority to

support this claim, the Court also rejects this portion of his motion for leave to amend the complaint.

C. Shaughnessy’s Proposed Claim for Promissory Estoppel (Count III)

Finally, Shaughnessy seeks authority to add a third count for promissory estoppel to his

complaint. In order to prevail on this claim, he is legally obliged to establish the following

elements: (1) a promise; (2) that the promisor should reasonably have expected to induce action of

a definite and substantial character on the part of the promisee; (3) that the promise produced a

reliance or a forbearance of that nature; and (4) that the claimed reliance or forbearance occurred

under circumstances which required an enforcement of the promise, in order to avoid an injustice.

Zaremba Equipment, Inc. v. Harco Nat'l Ins. Co., 280 Mich. App. 16, 41 (2008). Furthermore,

Michigan courts require that the promise be “definite and clear,” and that the reliance by the injured

party be reasonable. Id. 

Here, the proposed amended complaint provides that (1) the IPG “invited [its] employees
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to report violations of law or the Code of Conduct” and promised not to retaliate against those

persons who made such a report in good faith; (2) the Company reasonably expected the employees

to rely upon its promise; and (3) Shaughnessy, after relying upon this promise, was subjected to acts

of retaliation and subsequent termination action by his employer. At first blush, Shaughnessy’s

claim appears to be reasonable under settled Michigan law. In Rood, 444 Mich. at 137, the

Michigan Supreme Court observed that there is a separate theory which is independent of a

traditional contract analysis and serves as a lawful basis upon which Courts may judicially enforce

employer policies. This doctrine stems from an employee’s “legitimate expectation” that he will not

be terminated, based on the relevant language in the policy. Id. at 137-139. According to Rood,

“[t]he first step in analyzing a legitimate expectations claim under Toussaint, is to determine, what,

if anything, the employer has promised.” Id. at 139. Once it is determined that a promise has been

made, “the second step is to determine whether the promise is reasonably capable of instilling a

legitimate expectation of just-cause employment in the employer's employees.” Id. As such, the

courts must review these policies and decide if they can reasonably be interpreted “as promises of

just-cause employment.” Id. At 140. As to this prong, it was noted that “only policies and

procedures reasonably related to employee termination are capable of instilling such expectations.”

Id. Citing Toussaint, the Rood court noted that “having announced the policy, presumably with a

view to obtaining the benefit of improved employee attitudes and behavior and improved quality of

the work force, the employer may not treat its promise as illusory.” Rood at 138. However, when

applying these principles to the employment documents in this case, it is readily apparent to the

Court that Shaughnessy’s claim lacks merit. 

In its Code of Conduct, the IPG states that “[n]o retaliation will be taken against any
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employee for raising any concern, question or complaint in good faith.” It is true that this language

is unequivocal and absolute, containing no exceptions, and relates to the matter of employee

termination. Nevertheless, this language cannot be read in isolation from the admonition within the

IPG’s Code of Conduct’s that “[n]othing herein shall change the at-will nature of [the employee’s]

employment relationship with the Company.” Code of Conduct at 2. Moreover, as the IPG notes,

the existence of a similar disclaimer in Shaughnessy’s employment application and the offer letter

extinguishes any realistic expectation that the anti-retaliation clause within the Code of Conduct

created a separate contract or otherwise modified Shaughnessy’s at-will status. Read together, the

express language of these documents precludes a finding that the IPG intended to place any

limitations upon its ability to terminate its employees, including Shaughnessy. Because he cannot

establish that the anti-retaliation provisions amounted to the promise of job security, Shaughnessy’s

motion to amend his complaint which, if granted, would include a claim of promissory estoppel,

must be denied.

IV.

For the reasons that have been outlined above, the Court will grant the IPG’s motion to

dismiss the original complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6). As to

Shaughnessy’s motion to amend his complaint, the Court will deny this request in its entirety. 

IT IS SO ORDERED.

Dated: June 28, 2010 S/Julian Abele Cook, Jr. 

 Detroit, Michigan JULIAN ABELE COOK, JR.

 United States District Court Judge

CERTIFICATE OF SERVICE
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The undersigned certifies that the foregoing Order was served upon counsel of record via the Court's ECF System to their respective

email addresses or First Class U.S. mail to the non-ECF participants on June 28, 2010.

s/ Kay Doaks 

Case Manager