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Thompson v. North American Terrazzo, Inc.

United States District Court, W.D. Washington, Seattle

May 19, 2014

JESSE THOMPSON, et al., Plaintiffs,
v.
NORTH AMERICAN TERRAZZO, INC., et al., Defendants.

ORDER

RICHARD A. JONES, District Judge.

I. INTRODUCTION

This matter comes before the court on a motion to dismiss all individual and class claims by defendants North American Terrazzo, Inc. ("NAT"), Randy Rubenstein, Joe Geiger, Paul Singh, and Shawn Navoa. Dkt. # 14. Plaintiffs Jesse Thompson, Ernesto Martinez, Julio Cesar Romero, Justin Taylor, and Vitaliy Ostapyuk allege the following class and individual claims: (1) disparate treatment and hostile work environment discrimination on the basis of race and national origin under Title VII, Title I of the 1991 Civil Rights Act, and the Washington Law Against Discrimination ("WLAD"), (2) outrage, (3) negligence and negligent supervision, (4) negligent infliction of emotional distress, (5) wrongful termination or discharge under Title VII and Washington State common law, and (6) violation of the Fair Labor Standards Act ("FLSA"). Dkt. # 1.

Plaintiffs concede that they are not pursuing a class action claim in this action. Dkt. # 17 at 12. Plaintiffs also seem to concede that Title I of the 1991 Civil Rights Act does not create a substantive right and is not a basis for an independent claim apart from Title VII, where they have referred to Title I as a "companion" to Title VII. Dkt. # 17 at 6; see 42 U.S.C. § 1981a (providing for damages in cases of intentional discrimination under Title VII); Pub.L. 102-166, 105 Stat. 1071 (Title I entitled "Federal Civil Rights Remedies"). Accordingly, the court GRANTS defendants' motion with respect to the class claims and separate cause of action for Title I of the 1991 Civil Rights Act.[1]

Having considered the memoranda, complaint and the record herein, the court GRANTS in part and DENIES in part defendants' motion to dismiss.[2]

II. BACKGROUND

Plaintiff Thompson, who is African-American, worked at NAT from July 2009 to August 2010 when he was terminated "because his supervisor stated NAT was going to be a worksite for Mexicans only, and there would be no more work for him.'" Dkt. # 1 (Compl.) ¶ 4. During his employment, "Thompson was repeated[ly] and openly called a nigger, white wash, black motherfucker, fucking nigger, terron, mayate, and Uncle Tom' by his supervisor, Shawn Navoa[.]" Id. Many of these racially derogatory slurs were said in front of another supervisor, defendant Geiger. Id. Thompson repeatedly complained to supervisors Geiger and Singh and the owner Rubenstein about these racially derogatory slurs, but NAT never investigated the complaints, ignored the complaints, allowed the conduct to continue, and terminated Thompson from his employment with NAT after the numerous complaints to management. Id. ¶¶ 5-6.

Plaintiff Taylor, who is Caucasian-American, worked at NAT from August 2004 to October 2010, when he was terminated "because his supervisor stated NAT was going to be a worksite for Mexicans only, and there would be no work for him." Id. ¶ 7. "Taylor was repeated[ly] and openly called a white boy, honky, white mother****er, and white trash, by his supervisor at NAT." Id. Taylor repeatedly complained to supervisors Geiger and Singh and to owner Rubenstein about Navoa's comments, but NAT never investigated the complaints, ignored the complaints, allowed the conduct to continue, and terminated Romero from his employment with NAT after his numerous complaints to management. Id . ¶ ¶ 8-9.

Plaintiff Ostapyuk, who is Caucasian and of Ukrainian origin, worked at NAT from 2003 to May 2010, when he was terminated "because his supervisor stated NAT was going to be a worksite for Mexicans only, and there would be no more work for him.'" Id. ¶ 10. During his employment, "Ostapyuk was repeated[ly] and openly called a white boy, honky, white mother****er, white trash, and Russian motherfucker, ' by his supervisor at NAT." Id. Ostapyuk repeatedly complained to supervisors Geiger and Singh and to owner Rubenstein about Navoa's comments, but NAT never investigated the complaints, ignored the complaints, allowed the conduct to continue, and terminated Ostapyuk from his employment with NAT after his numerous complaints to management. Id. ¶¶ 11-12.

Plaintiff Romero, who is Hispanic-American, worked at NAT from October 2009 to December 2010 when he was terminated "because his supervisor stated NAT was going to be a worksite for whites only, and there would be no more work for him.'" Id. ¶ 13. During his employment, "Romero was repeated[ly] and openly called a wetback, border jumper, spick, and Mexican cockroach' by his supervisor[.]" Id. Romero repeatedly complained to supervisors Geiger and Singh and to owner Rubenstein about Navoa's comments, but NAT never investigated the complaints, ignored the complaints, allowed the conduct to continue, and terminated Romero from his employment with NAT after his numerous complaints to management. Id. ¶¶ 14-15.

Plaintiff Martinez, who is Hispanic-American, worked at NAT from September 2008 to August 2010 when he was terminated "because his supervisor stated NAT was going to be a worksite for whites only, and there would be no more work for him.'" Id. ¶ 16. During his employment, "Martinez was repeatedly and openly called wetback, border jumper, spick, and Mexican cockroach' by his supervisor[.]" Id. Martinez repeatedly complained to supervisors Geiger and Singh and to owner Rubenstein about Navoa's comments, but NAT never investigated the complaints, ignored the complaints, allowed the conduct to continue, and terminated Martinez from his employment with NAT after his numerous complaints to management. Id. ¶¶ 17-18.[3]

III. ANALYSIS

When considering a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), "the court is to take all well-pleaded factual allegations as true and to draw all reasonable inferences therefrom in favor of the plaintiff." Wyler Summit P'ship v. Turner Broadcasting Sys., Inc. , 135 F.3d 658, 663 (9th Cir. 1998). However, the complaint must indicate more than mere speculation of a right to relief. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007). "[F]or a complaint to survive a motion to dismiss, the non-conclusory factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Service , 572 F.3d 962, 969 (9th Cir. 2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009).[4] Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't , 901 F.2d 696, 699 (9th Cir. 1990).

A. Race and National Origin Discrimination

1. Title VII

Defendants argue that plaintiffs fail to allege that they have administratively exhausted their Title VII claim. Dkt. # 14 at 4. Defendants cite two Eastern District of California cases for the proposition that when a plaintiff alleges violations of Title VII, he must also allege that he has administratively exhausted these claims and received a right to sue letter from the EEOC . Id. This court is not bound by other district court decisions, and defendants have failed to explain why those cases are factually analogous. Notably, defendants do not argue that plaintiffs actually did not exhaust their administrative remedies, or that their complaint was filed untimely. Dkt. # 14 at 4. The court takes judicial notice of the EEOC determinations regarding Thompson's and Martinez's claims, and the notice of right to sue letters from all plaintiffs, which indicate that they filed charges and received right-to-sue letters. Dkt. # 17-3 to 17-6. Since these documents are subject to judicial notice, the court may consider them in addition to the allegations in the complaint. Under these circumstances, defendants are not entitled to dismissal based on a failure to also allege facts demonstrating exhaustion.

Defendants also argue that plaintiffs fail "to articulate the factual basis for their Title VII claim against their former employer, [and that in] the absence of any specifics, it is not possible for NAT to determine the nature of Plaintiffs' individual... Title VII claim[.]" Dkt. # 14 at 4. As summarized above in the background section, plaintiffs have alleged the factual basis of their Title VII claims for disparate treatment and hostile work environment against NAT. Whether or not those factual allegations are sufficient to plausibly allege a claim for disparate treatment discrimination or hostile work environment based on race and national origin is a separate question that defendants have not addressed.[5] Dkt. # 14 at 4.

Defendants also argue that "the Ninth Circuit has consistently held that Title VII does not provide a cause of action for damages against supervisors or fellow employees.' Id. (citing Holly v. Cal. Inst. of Tech. , 339 F.3d 1158, 1179 (9th Cir. 2003)). Plaintiffs do not dispute the Ninth Circuit precedent, and this court agrees. Accordingly, the court GRANTS defendants' motion with respect to plaintiffs' Title VII claims against the individual defendants.

2. WLAD

Defendants argue that plaintiffs "have failed to articulate the factual basis for their individual... [WLAD] claims against any of the Defendants[, and that absent] specifics, it is not possible for Defendants to determine the nature of Plaintiffs' individual... discrimination claims[.]" Dkt. # 14 at 5. The court has already rejected this argument with respect to Title VII, and the court's determination applies equally to the WLAD.

Defendants also argue that plaintiffs have failed to plead any facts sufficient to hold any of the individual defendants liable under the WLAD, citing only Brown v. Scott Paper Worldwide Co. , 143 Wn.2d 349, 361 (2001). Dkt. # 14 at 5. In Brown , the Washington Supreme Court held that individual supervisors, along with their employers, may be held liable for their discriminatory acts. Id. The Court construed RCW 49.60.040(3) to mean that "a supervisor acting in the interest of an employer who employs eight or more people can be held individually liable for his or her discriminatory acts." Id. at 358. The Court also reasoned that the Legislature's intent to hold supervisors personally liable is manifested in RCW 49.60.220, which makes it an unfair practice for any person to aid, abet, encourage, or incite the commission of an unfair practice, or to attempt to obstruct or prevent any other person from complying with the provisions of the WLAD. Id. at 360.

Here, plaintiffs have alleged that Geiger, Singh and Navoa are supervisors. Plaintiffs have also alleged that they reported Navoa's discriminatory comments and conduct to Geiger, Singh, and owner Rubenstein, all of whom ignored the complaints, failed to take any action, and allowed the discrimination to continue. Under Brown and RCW 49.60.220, the court believes these allegations are sufficient to plausibly allege individual liability of the supervisors and the owner.[6]

B. Outrage

Defendants argue that plaintiffs' outrage claim should be dismissed because it is "virtually identical" to the outrage claim alleged in Wright v. North American Terrazzo, Inc. , that Judge Robart dismissed as a matter of law. Case No. C12-2065JLR, Dkt. # 20 at 7-8 (2013 WL 441517 (W.D. Wash. Feb. 5, 2013)), # 33 at 13-15 (June 10, 2013). The court disagrees.[7] Plaintiffs' outrage claim, while sharing some common allegations, allege much more egregious conduct here. In Wright , there was only one plaintiff, and his outrage claim consisted of an allegation that the defendants "repeatedly called the plaintiff white boy' and stated that they were going to get rid of all the white motherfuckers' and make the site a minority run site only'" and that defendants called other workers racially disparaging names. Dkt. # 20 at 7 (2013 WL 441517 at *4), # 33 at 14-15. Here, there are five plaintiffs and each of them has alleged that their supervisor repeatedly used racial slurs, racially charged language, and other offensive and hostile statements including, "nigger, white wash, black motherfucker, fucking nigger, terron, mayate, and Uncle Tom[, ]" "white boy, honky, white mother****er, and white trash[, ]" "Russian motherfucker, " "wet back, border jumper, spick, and Mexican cockroach."

The court finds that these allegations are sufficient to plausibly allege extreme and outrageous conduct to survive a motion to dismiss. See Contreras , 88 Wash. at 741 ("When one in a position of authority, actual or apparent, over another has allegedly made racial slurs and jokes and comments, this abusive conduct gives added impetus to the claim of outrageous behavior.").

C. Negligence & Negligent Supervision

Defendants argue that plaintiffs have failed to provide sufficient factual allegations that defendants are subject to liability for negligently failing to properly train and supervise its employees, and for failing to adequately investigate and discipline those employees and supervisors. Dkt. # 14 at 7. Defendants do not provide the court with any legal authority to support their substantive argument.[8] Accordingly, the court has disregarded it.[9]

D. Negligent Infliction of Emotional Distress

Defendants argue that the court should follow the reasoning in Wright , and dismiss plaintiffs' negligent infliction of emotional distress claim for failure to allege facts demonstrating a mental or emotional disorder, such as neurosis, psychosis, chronic depression, phobia, or any other type of severe disabling emotional or mental condition which may be generally diagnosed by professionals trained to do so. Dkt. # 14 at 7 (citing 2013 WL 441517). Plaintiffs concede that they must allege facts demonstrating objective symptomology. Dkt. # 17 (Opp'n) at 8 (citing Washington Supreme Court cases for the proposition that a plaintiff may recover for negligent infliction of emotional distress if she proves duty, breach of the standard of care, proximate cause, damage, and objective symptomology).

The Wright court relied on Hegel v. McMahon , which confirmed that negligent infliction of emotional distress claims require plaintiffs to demonstrate objective symptoms of their emotional injury. 136 Wash.2d 122, 126, 960 P.2d 424 (Wash. 1998). The Court held that to satisfy the objective symptomology requirement, a plaintiff's emotional distress must be susceptible to medical diagnosis and proved through medical evidence. Id. at 135. The Court also noted that examples of emotional distress would include neuroses, psychoses, chronic depression, phobia, shock, post traumatic stress disorder, or any other disabling condition. Id. n. 5.

Here, plaintiffs allege that "defendants negligently caused the plaintiffs to suffer severe emotional distress that was supported by objective symptomology diagnosed by a doctor, psychiatrist or psychologist...." Dkt. # 1 ¶ 51. However, plaintiffs have not alleged the factual basis underlying the threadbare recitals of the elements and conclusory statements that the severe emotional distress was supported by objective symptomology diagnosed by a doctor. Accordingly, plaintiffs have not plausibly alleged a claim for negligent infliction of emotional distress. Nevertheless, the court believes leave to amend is appropriate to allow plaintiffs the opportunity to allege the factual basis for their claim.

E. Wrongful Discharge

Defendants argue that plaintiffs fail to identify the nature or source of the employment contract, the dates of alleged employment, the collective bargaining agreement between the Union and NAT, or any document that could create a contractual relationship between plaintiffs and defendants. Dkt. # 14 at 8. Defendants have failed to provide the court any legal authority that would require plaintiffs to allege any of these facts for a wrongful discharge claim. Accordingly, the court has disregarded these arguments.

Defendants also argue that under Washington law, there is no covenant of good faith and fair dealing in the employment context, citing Thompson v. St. Regis Paper Co. , 102 Wn.2d 219 (1984). Dkt. 14 at 8. The Thompson court created a cause of action in tort for wrongful discharge of an employee where there is a violation of a clear mandate of public policy. 102 Wn.2d at 233. In creating this narrow exception to the employment-at-will doctrine, the Court declined to adopt a "bad faith" exception to the employment-at-will rule which would have implied a covenant of good faith and fair dealing in every employment contract. Id. at 227-28. Plaintiffs do not dispute that Washington courts do not recognize a covenant of good faith and fair dealing in the employment context. Accordingly, defendants are entitled to dismissal of the wrongful discharge claim to the extent it relies on a covenant of good faith and fair dealing. Dkt. # 1 ¶ 55 ("The plaintiffs also had... an implied covenant of good faith and fair dealing with the defendants.").

F. FLSA

Defendants argue that the court should dismiss plaintiffs' FLSA claim as time-barred, as the court did in Wright . Dkt. # 14 at 8-9. In Wright , the court dismissed plaintiff's FLSA claim based on the two-year statute of limitations because plaintiff had not alleged that defendant's conduct was "willful" as contemplated by the FLSA. Case No. C12-2065JLR, Dkt. # 33 at 10 (citing 29 U.S.C. § 255(a) & McLaughlin v. Richland Shoe Co. , 486 U.S. 128, 131 (1988)).

An action under the FLSA "must be commenced within two years except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued.'" McLaughlin , 486 U.S. at 129. A defendant acts willfully under the FLSA if it knew or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA. Id. at 130-31. If an employer acts unreasonably, but not recklessly, in determining its legal obligation under FLSA, its action is not willful. Id. at 135 n.13.

Plaintiffs allege that NAT (1) "intentionally and purposefully den[ied] overtime pay which had been owed to plaintiffs"; and (2) "intentionally, purposefully, subjectively and arbitrarily reduced the plaintiffs' hourly salary and their job description based on arbitrary and capricious decisions...." Dkt. # 17 (Opp'n) at 9-10 (citing Compl. ¶¶ 59-60). These allegations fall short to plausibly allege the application of the three-year statute of limitations because they do not allege the factual basis for NAT's knowledge or reckless disregard that its conduct was prohibited by the FLSA.

Plaintiffs do not dispute that their FLSA claim is barred by the two-year statute of limitations. Accordingly, the court dismisses plaintiffs' FLSA claim without prejudice.

IV. CONCLUSION

For all the foregoing reasons, the court GRANTS in part and DENIES in part defendants' motion to dismiss. The court dismisses with prejudice plaintiffs' (1) class claims, (2) Title I of 1991 Civil Rights Act claim, (3) Title VII claim against all individual defendants, and (4) wrongful discharge claim, but only to the extent that it relies on an implied duty of good faith and fair dealing. The court dismisses without prejudice plaintiffs' claims for (1) negligent infliction of emotional distress and (2) FLSA violation. Plaintiffs may file a First Amended Complaint consistent with this order no later than twenty-one (21) days from the date of this order.


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