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Fraize v. Fair Isaac Corp.

United States District Court, D. New Hampshire

January 4, 2018

Josh Fraize
v.
Fair Isaac Corporation

          MEMORANDUM AND ORDER

          Paul Barbadoro, United States District Judge

         Josh Fraize has sued the Fair Isaac Corporation (“FICO”) for breach of contract, breach of the duty of good faith and fair dealing, a violation of New Hampshire's wage act, and wrongful discharge. FICO argues that Fraize's claims must be dismissed because they are subject to choice of forum clauses in agreements between Fraize and FICO that require Fraize's claims to be litigated in Minnesota. For the reasons set forth in this Memorandum and Order, I dismiss Fraize's claims without prejudice to his right to refile his claims in the jurisdiction specified by the choice of forum clauses.

         I. BACKGROUND

         Fraize worked for FICO as a salesperson from January, 2014 until April, 2017. His compensation was determined each year in part based on an annual “Sales Incentive Plan Participation Agreement” (“Agreement”). The 2016 and 2017 Agreements specify commission percentages that vary based on the extent to which designated sales targets are met or exceeded. Under both Agreements, sales generated pursuant to new contracts are rewarded with higher commissions than sales that result from contract renewals. The 2017 Agreement also authorizes FICO to reduce a salesperson's commissions for “large” sales, i.e., sales that comprise more than 50% of a salesperson's annual sales target. The 2016 Agreement covers the fiscal year beginning on October 1, 2015, and the 2017 Agreement covers the fiscal year beginning on October 1, 2016.

         FICO had an established business relationship with Xerox when Fraize was first assigned to work on the Xerox account. In October 2016, after months of negotiation, Xerox and FICO entered into a new contract that yielded substantial additional revenue for FICO. Fraize initially received assurances that sales resulting from the contract would be treated as new sales for commission purposes. In February, 2017, however, FICO reversed its position and informed Fraize that it intended to treat the Xerox contract as renewal business rather than new business. FICO also informed Fraize that even if the Xerox contract were treated as new business, his commission would be reduced because the contract qualified as a “large deal” under the 2017 Agreement. Fraize complained about his proposed compensation and in April 2017 he was fired in retaliation for pressing his complaint.

         The 2016 and 2017 Agreements contain similar choice of law and choice of forum clauses. The 2016 Agreement states:

[u]nless prohibited by applicable law, this Plan will be interpreted and construed in accordance with and governed by the laws of the State of Minnesota. Any action relating to or arising out of this Plan must be commenced exclusively in the State and Federal Courts located in Hennepin County, Minnesota, and all Participants agree to the exclusive venue and jurisdiction of the Minnesota courts and waive any objection based on lack of jurisdiction or inconvenient forum. Doc. 2-4 at 3.

         The 2017 Agreement provides:

[e]xcept with respect to Participants who primarily reside and work in California or unless prohibited by applicable law, this Plan will be interpreted and construed in accordance with and governed by the laws of the State of Minnesota, and all Participants agree to the exclusive venue and jurisdiction of the State and Federal Courts located in Hennepin County, Minnesota and waive any objection based on lack of jurisdiction or inconvenient forum. Doc. 2-3 at 3.

         Notwithstanding these provisions, Fraize filed his action in Hillsborough County Superior Court on May 10, 2017. FICO then removed the case to this court on June 13, II. STANDARD OF REVIEW

         FICO bases its motion to dismiss on Fed.R.Civ.P. 12(b)(6). The First Circuit has determined that a forum selection clause can be enforced through a Rule 12(b)(6) motion. See Claudio-de Leon v. Sistema Universitario Ana G. Mendez, 775 F.3d 41, 46 (1st Cir. 2014); see also Salovara v. Jackson Nat. Life Ins. Co., 246 F.3d 289, 298 (3d Cir. 2001) (“a 12(b)(6) dismissal is a permissible means of enforcing a forum selection clause that allows suit to be filed in another federal forum”).

         When evaluating a Rule 12(b)(6) motion, I “accept as true the well-pleaded factual allegations of the complaint [and] draw all reasonable inferences therefrom in the plaintiff's favor.” Martin v. Applied Cellular Tech., Inc., 284 F.3d 1, 6 (1st Cir. 2002). To survive dismissal, “the complaint must contain ‘enough facts to state a claim to relief that is plausible on its face.'” A.G. ex rel Maddox v. Elsevier, Inc., 732 F.3d 77, 80 (1st Cir. 2013) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         III. ANALYSIS

         FICO bases its motion to dismiss on the forum selection clauses set forth in the 2016 and 2017 Agreements. In resolving FICO's motion, I first determine whether the clauses are enforceable and then evaluate Fraize's argument that they ...


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