United States District Court, E.D. Pennsylvania
SASWATI N. CHAND, Plaintiff,
MERCK & CO., INC., Defendant.
E.K. PRATTER UNITED STATES DISTRICT JUDGE
26, 2019 Dr. Saswati Chand received a conditional offer of
employment at Merck & Co., Inc. The offer was contingent
upon, among other things, Dr. Chand's completion of
paperwork regarding her immigration status and eligibility
for work in the United States. Although Dr. Chand had
previously told her Merck interviewers that she held a
temporary work visa (effective until 2020), when Dr. Chand
submitted her immigration paperwork, Merck rescinded its
employment offer because Dr. Chand would eventually require
Chand initially filed a complaint premised on theories of
promissory estoppel, negligent misrepresentation, and breach
of the implied covenant of good faith and fair dealing (the
“original Complaint”). After Merck moved to
dismiss all three claims and the Court held oral argument on
the motion, Dr. Chand sought leave to amend her complaint
(the “Amended Complaint”). Merck maintains that
dismissal is proper because Dr. Chand's proposed
amendments are futile.
Court grants Dr. Chand's motion for leave to amend the
negligent misrepresentation claim. As for all of Dr.
Chand's other claims, they are dismissed and leave to
amend is denied with prejudice.
Chand applied for a Philadelphia-based Global Medical
Information Scientist position with Merck in late 2017. While
her application was pending, Dr. Chand accepted a different
position in San Diego, California with Crown Bioscience.
Chand interviewed with several Merck employees in early 2018.
During that interview, Dr. Chand-a foreign citizen who came
to the United States for graduate school in
2011-told Heather Sutcliffe, a Merck recruiter,
that she did not require sponsorship because she had a
2.5-year work visa (lasting until May 2020) and because
“she had a long-term boyfriend and they had plans of
settling down in the near future.” Amended Compl.
¶ 12. Dr. Chand also met with an operations team of
Merck medical professionals. As a result of that meeting,
“[e]ach member of the Merck operations team that
interviewed Dr. Chand knew she was on an F-1 student visa and
had moved to the United States for her post graduate
degree.” Id. ¶ 15.
Merck made a hiring decision, Dr. Chand moved to San Diego to
begin working for Crown Bioscience. About a month after Dr.
Chand started working at Crown Bioscience, Ms. Sutcliffe
contacted Dr. Chand on behalf of Merck to informally offer
Dr. Chand a position with the company; Merck also told Dr.
Chand that she would receive a formal “offer
letter” soon. Id. ¶ 18. The subsequent
offer letter (attached to Dr. Chand's original Complaint
and Amended Complaint) includes the following statements
• “Your employment with Merck is ‘at
will'. This means that just as you are free to leave the
Company at any time, the Company retains the same right to
terminate your employment at any time, with or without cause
and with or without notice. Nothing herein shall be construed
as creating a contractual relationship between you and
• “This offer is contingent upon your successful
completion of a pre-placement drug screen, satisfactory
verification of your employment history, education, criminal
history and background check results. We advise you not to
alter your current employment status until we advise you that
the above contingencies have been successfully
• “This offer is contingent upon proof of your
identity and eligibility to work in the United States, as
required by the Immigration Reform and Control Act of 1986.
This includes completion of the I-9 form and production of
the required documentation.”
Amended Compl., Ex. 2 (Offer Letter).
receiving the offer letter-but before Merck finalized her
onboarding-Dr. Chand resigned from her position with Crown
Bioscience. A week later, Dr. Chand and her significant other
paid a $10, 000 deposit on a townhouse in Manayunk.
thereafter, Merck contacted Dr. Chand to rescind the offer of
employment. In a letter emailed to Dr. Chand, Merck stated
its decision was “based on information [Dr. Chand]
disclosed regarding [her] visa status[.]” Amended
Compl., Ex. 3 (Rescission Letter). In subsequent
communications between Dr. Chand and Merck, Merck stated that
“because Dr. Chand answered ‘no' to the
[onboarding] question of ‘will you now or in the future
require sponsorship for employment visa status?', Merck
could not hire [Dr. Chand] because a person working on a F-1
student visa would require sponsorship once the visa
expired.” Amended Compl. ¶ 36 (punctuation in
Chand eventually secured alternative employment at Thomas
Jefferson University as a Post Doc Fellow. Dr. Chand's
salary at the University is about half of what her salary
would have been at Merck (not counting bonuses and/or
incentives she may have been entitled to).
the at-issue motions include Merck's Rule 12(b)(6) motion
to dismiss for failure to state a claim and Dr. Chand's
motion for leave to amend the complaint, which Merck opposes
as futile. The legal standards applied to both motions are
the same: “In assessing ‘futility,' the
district court applies the same standard of legal sufficiency
as applies under Rule 12(b)(6).” In re Burlington
Coat Factory Litigation, 114 F.3d 1410, 1434 (3d Cir.
1997) (citations omitted).
“a complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, a
plaintiff's obligation to provide the ‘grounds'
of his ‘entitlement to relief' requires more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(citations omitted). To survive a Rule 12(b)(6) motion,
therefore, the plaintiff must plead “factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Specifically, “[f]actual allegations must be enough to
raise a right to relief above the speculative level.”
Twombly, 550 U.S. at 555. The question is not
whether the plaintiff “will ultimately prevail . . .
but whether [the] complaint [is] sufficient to cross the
federal court's threshold.” Skinner v.
Switzer, 562 U.S. 521, 530 (2011) (citation and
quotation omitted). Thus, assessing the sufficiency of a
complaint is “a context-dependent exercise”
because “[s]ome claims require more factual explication
than others to state a plausible claim for relief.”
W. Pa. Allegheny Health Sys., Inc. v. UPMC, 627 F.3d
85, 98 (3d Cir. 2010) (citations omitted).
evaluating the sufficiency of a complaint, the Court adheres
to certain accepted benchmarks. For one, the Court
“must consider only those facts alleged in the
complaint and accept all of the allegations as true.”
ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir.
1994) (citation omitted); see also Twombly, 550 U.S.
at 555 (stating that courts must “assum[e] that all the
allegations in the complaint are true (even if doubtful in
fact)”). The Court must accept as true all reasonable
inferences emanating from the allegations and view those
facts and inferences in the light most favorable to the
nonmoving party. Rocks v. City of Phila., 868 F.2d
644, 645 (3d Cir. 1989).
admonition does not demand that the Court ignore or discount
reality. The Court “need not accept as true unsupported
conclusions and unwarranted inferences, ” Doug
Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173,
183-84 (3d Cir. 2000) (citations and quotation omitted), and
“the tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal
conclusions. Threadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do not
suffice.” Iqbal, 556 U.S. at 678 (citation
omitted). If a claim “is vulnerable to 12(b)(6)
dismissal, a district court must permit a curative amendment,
unless an amendment would be inequitable or futile.”
Phillips v. Cty. of Allegheny, 515 F.3d 224, 236 (3d
Cir. 2008) (citation omitted).
Chand's original Complaint included three claims: (1)
promissory estoppel, (2) negligent misrepresentation, and (3)
breach of the covenant of good faith and fair dealing. Dr.
Chand's proposed Amended Complaint includes revised
promissory estoppel and negligent misrepresentation claims,
drops the standalone claim for the breach of the covenant of
good faith and fair dealing, and adds two entirely new claims
for breach of implied contract. The breach of implied
contract claims in the Amended Complaint are for (1) breach
of employment contract and (2) breach of contract premised on
the covenant of good faith and fair dealing. First, the Court
addresses the promissory estoppel claims, holding that
promissory estoppel is not available to Dr. Chand as a matter
of law. Second, the Court addresses the negligent
misrepresentation claims, holding that an exception to the
economic loss rule applies and Dr. Chand is entitled to amend
this claim. Third, the Court addresses the two proposed
amended claims premised on the breach of an implied contract,
holding that both fail as a matter of law.
Dr. Chand's Promissory Estoppel Claim
plaintiff states a claim for promissory estoppel where she
alleges that: “(1) the promisor made a promise that
[it] should have reasonably expected would induce action or
forbearance on the part of the promisee; (2) the promisee
actually took action or refrained from taking action in
reliance on the promise; and (3) injustice can be avoided
only by enforcing the promise.” Sullivan v.
Chartwell Inv. Partners, LP, 873 A.2d 710, 717-18 (Pa.
Super. Ct. 2005) (citations omitted). Merck argues that Dr.
Chand cannot state a claim for promissory estoppel for two
reasons: first, promissory estoppel does not apply in the
context of at-will employment, and second, Merck did not make
an actionable promise. The Court agrees with Merck in each
Whether Promissory Estoppel Applies to At-Will Employment
Pennsylvania law, at-will employees cannot bring an action
for promissory estoppel. According to Merck, it therefore
follows that prospective at-will
employees, like Dr. Chand, likewise cannot state a claim for
promissory estoppel. Dr. Chand's case is analogous to
Woods v. Era Med LLC, 677 F.Supp.2d 806 (E.D. Pa.
2010), in which the Court held that a prospective employee
could not bring a promissory estoppel claim. In
Woods, the plaintiff, Roger Woods, was offered a
multi-year position as a helicopter pilot but the employer
rescinded its employment offer before Mr. Woods began
working. Id. at 808. The Court held that Mr.
Woods' promissory estoppel claim failed as a matter of
law, because (1) a future at-will employment relationship was
implied by the parties' negotiations, and (2)
“Pennsylvania does not recognize a cause of action for
promissory estoppel as an exception to the doctrine of
at-will employment.” Id. at 822. Although the
Court did not explicitly discuss the fact that the employment
relationship had not actually begun (or that the at-issue
promise was an employment offer rather than the promise of
continued employment), it held that Mr. Woods could not state
a claim for promissory estoppel in any at-will context.
Chand's case is an even more appropriate candidate for
application of the rule precluding promissory estoppel claims
in the context of at-will employment relationships. Unlike in
Woods, there is no question here whether the
proposed term of employment was at-will. The at-issue offer
letter explicitly said the offer was for at-will employment.
See original Compl., Ex. 1; Amended Compl., Ex. 1
(“Your employment with Merck is ‘at
will[.]'”). Allowing a cause of action for
promissory estoppel for reliance on employment
offers but not for reliance on
continued employment itself would
lead to untenable consequences. At bottom, it would mean that
Merck could have terminated Dr. Chand's employment the
second she became an employee, but could not rescind its
offer of employment up until that point. Such a rule would
make no sense and plainly demonstrates why promissory
estoppel is not available to Dr. Chand here, just as it would
not have been available to Dr. Chand if she had started
working for Merck as an at-will employee.
Chand does not address the long line of cases excluding
at-will employment from the reach of promissory estoppel
claims. See supra n.4. Instead, Dr. Chand appears to
argue that the at-issue contract was not terminable at-will
pursuant to the Restatement of Employment Law. Section 2.02
of the Restatement says: “The employment relationship
is not terminable at will by an employer if . . . (b) a
promise by the employer to limit termination of employment
reasonably induces detrimental reliance by the
employee.” Comment A clarifies that the Section
“lists the principal contractual variations from
at-will employment” and Comment C adds that
“Section 2.02(b) makes clear that promises by employers