Opinion
No. 02-1019-WEB
June 4, 2002
Memorandum and Order
The plaintiffs in this action are twelve current or former employees of the Boeing Company who allege that Boeing has discriminated against them on account of sex. The matter is now before the court on Boeing's motion to dismiss plaintiffs' fifth and sixth causes of action. The court informed the parties of its tentative ruling on this motion during the status hearing of May 1, 2002. This written memorandum will supplement the court's oral remarks.
Plaintiffs' complaint is styled as a class action on behalf of themselves and all others similarly situated, with the alleged class consisting of "all females employed by defendants in the State of Kansas since January 16, 1996 who, because of their gender . . ." have suffered various forms of alleged sex discrimination. To date, plaintiffs have not filed a motion to certify the matter as a class action.
I. Plaintiffs' Complaint.
The following allegations in the complaint are assumed to be true for purposes of determining whether plaintiffs' fifth and sixth causes of action state claims upon which relief can be granted.
According to the complaint, Boeing has engaged in sex discrimination against the plaintiffs in various facets of employment, including in Boeing's hiring practices, its failure to provide training opportunities, failure to promote, failure to pay equal wages for similar work, and by subjecting female employees to a hostile working environment. Furthermore, Boeing has allegedly failed to abide by various company policies and pronouncements proscribing gender discrimination and requiring employment decisions to be based on non-gender related considerations. Doc. 1, ¶ 61. Plaintiffs further allege that Boeing has violated collective bargaining agreements under which the company agreed not to discriminate on account of gender. Id. at ¶ 62.
In 1999, the U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) found pay inequities affecting female employees at Boeing. Id. at ¶ 36. In November of 1999, Boeing entered into a settlement of racial and gender discrimination charges with the Department of Labor. Id. In the settlement, Boeing agreed to make across-the-board salary adjustments for women, to conduct internal monitoring, and to report its results to the Department of Labor. Id. The settlement entailed creation of a back-pay fund to compensate females at Boeing for past salary inequities. Plaintiffs allege that these changes did not bring about parity in compensation between males and females at Boeing, and that many women were left out of the settlement distribution. Id.
Plaintiffs' fifth cause of action, entitled "Breach of Contract," incorporates the foregoing allegations and further alleges:
138. Boeing has entered into contracts, and made oral and written representations to plaintiffs and member of the Class, regarding the terms and conditions of their employment, including but not limited to assurances that women would and will have the same employment opportunities as others. Boeing has entered into contracts with the United States government that, pursuant to Executive Order No. 11246, include terms prohibiting discrimination on account of sex.
139. Boeing's representations constitute binding contractual commitments with plaintiffs and members of the Class, and defendant has contractual obligations with others as to these matters, which were designed to protect plaintiffs and the Class from the alleged conduct at issue.
140. Boeing has breached its employment contracts with plaintiffs and members of the Class and its contractual commitments to others to treat their female employees fairly and not discriminate against them because of their gender.
141. Boeing's contractual breaches have directly and proximately caused plaintiffs and the Class to suffer damages. . . .
Plaintiffs' sixth cause of action, entitled "Negligent Supervision," incorporates the foregoing allegations and further alleges:
143. Defendant owed plaintiffs and the Class a duty to adequately supervise its staff regarding employment practices at Boeing's facilities.
144. Boeing breached its duty to adequately supervise the employment practices at their facilities by allowing managers, supervisors, and others to discriminate against plaintiffs and the Class because of their sex by, among other things, denying them an equal opportunity to perform and advance in their careers and under-compensating them as compared to their male colleagues.
145. As a result of Boeing's illegal conduct plaintiffs and the Class suffered lost wages and other benefits. . . .
II. Defendant's Motion to Dismiss.
Boeing argues that plaintiffs' fifth and sixth causes of action fail to state claims upon which relief can be granted, and it contends the claims should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6). According to Boeing, the fifth cause of action (breach of contract) fails for three reasons: (1) because insofar as it is based on Boeing's contracts with the federal government, the courts have refused to recognize a private cause of action on such contracts; (2) because insofar as the claim is based on breach of a collective bargaining agreement, it is preempted by Section 301 of the Labor-Management Relations Act; and (3) because plaintiffs' non-specific references to various "agreements" and "assurances" by Boeing are insufficient to establish the existence or breach of a contract. With regard to plaintiffs' sixth cause of action (negligent supervision), Boeing contends that no such cause of action is recognized under Kansas law in the employment context.III. Standards Governing Motion to Dismiss.
A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt the plaintiff can prove no set of facts in support of her claim that would entitle her to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). In considering a motion to dismiss, "[a]ll well-pleaded facts, as distinguished from conclusory allegations, must be taken as true," and all reasonable inferences must be indulged in favor of the plaintiff. Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir. 1984). A Rule 12(b)(6) motion tests the legal sufficiency of the allegations within the complaint after taking those allegations as true. See Williams v. Meese, 926 F.2d 994, 997 (10th Cir. 1991). The question is not whether a plaintiff will ultimately prevail, but whether she is entitled to offer evidence in support of her claims. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).
IV. Discussion.
A. Breach of Contract.
The specific bases of plaintiffs' breach of contract claim are not easily discerned from the complaint. Plaintiffs' response to the motion to dismiss indicates the claim is based on a number of different alleged contracts.
Conciliation Agreement. First, plaintiffs argue that Boeing breached a 1999 conciliation agreement with the Department of Labor. That agreement, according to the complaint, arose out of charges by the OFCCP that Boeing's employment practices violated anti-discrimination contractual provisions mandated by Executive Order No. 11246. Plaintiffs do not dispute that individuals ordinarily have no right to enforce a government contract containing such provisions, but assert that when the government enters a conciliation agreement for the benefit of company employees, the employees, as third-party beneficiaries, may enforce the agreement. Citing, inter alia, Eatmon v. Bristol Steel Iron Works, Inc., 769 F.2d 1503 (11th Cir. 1985) and Terry v. Northrup Worldwide Aircraft Servs., 628 F. Supp. 212 (M.D.Ala. 1984), aff'd in part and rev'd in part, 786 F.2d 1558 (11th Cir. 1986). But cf. Brace v. Ohio State Univ., 866 F. Supp. 1069, 1073-74 (S.D.Ohio 1994) (In a conciliation agreement based on alleged violation of Rehabilitation Act rights, recognizing a third-party beneficiary theory would circumvent administrative remedies and would amount to creating a private cause of action where none is authorized).
The Tenth Circuit has apparently not faced this issue. Although a few courts have permitted third-party claims of the type asserted by plaintiffs, this court believes such claims are inconsistent with the federal regulatory scheme for policing government contracts under Executive Order No. 11246. The Executive Order itself provides that the Department of Labor is responsible for securing government contractor compliance with the provisions mandated by the Executive Order. Department of Labor regulations give the OFCCP discretion to resolve disputes over compliance by entering into conciliation agreements with contractors. The regulations set forth specific procedures to be followed in the event of a violation of a conciliation agreement. See 41 C.F.R. § 60-1.33 1.34. The regulations permit the DOL to pursue a variety of remedies but nowhere suggest that private individuals may sue to enforce the agreement. The regulations provide that individuals may file complaints with the OFCCP for discriminatory acts by government contractors, and the regulations further provide for detailed procedures to be followed on such complaints. See 41 C.F.R. § 60-1.23 60-1.24. The regulations contain a time limit for the filing of such complaints. 41 C.F.R. § 60-1.21. Although the Eatmon court found that third-party beneficiary claims are appropriate in certain limited circumstances, this court concludes that the recognition of such claims would be inconsistent with established case law holding that Executive Order No. 11246 does not give rise to a private cause of action, and it would be inconsistent with the federal regulatory scheme adopted to carry out the purposes of the Executive Order. See Brug v. Nat'l. Coalition for the Homeless, 45 F. Supp.2d 33, 41 (D.D.C. 1999) (plaintiff cannot circumvent the rule against a private action by arguing that she is a third-party beneficiary); Robinson v. Jacksonville Shipyards, Inc., 760 F. Supp. 1486, 1532 (M.D.Fla. 1991). Cf. Hodges v. Atchison, Topeka Santa Fe Ry. Co., 728 F.2d 414, 416 (10th Cir. 1984) (rejecting plaintiff's argument that he was a third-party beneficiary, under federal contracts prohibiting discrimination against the handicapped, as "but another aspect of the implied right of action argument."). The same rationale applies here, and the court concludes that a private suit by an individual seeking to construe and enforce a DOL agreement is precluded by Executive Order No. 11246 and the DOL's administrative scheme. See Brug, 45 F. Supp.2d at 41 ("It would 'be obviously destructive of the administrative scheme to allow it to be short-circuited' through state third-party beneficiary law." [citation omitted]). Accordingly, the court finds that the motion to dismiss should be granted with respect to plaintiffs' allegations that Boeing breached the 1999 DOL conciliation agreement.
Section 205 of Executive Order No. 11246 provides in part:
The Secretary of Labor shall be responsible for securing compliance by all Government contractors and subcontractors with this Order and any implementing rules or regulations. All contracting agencies shall comply with the terms of this Order and any implementing rules, regulations, or orders of the Secretary of Labor. Contracting agencies shall cooperate with the Secretary of Labor and shall furnish such information and assistance as the Secretary may require.
Section 202 provides in part: "(6) In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract or with any of such rules, regulations, or orders, this contract may be cancelled, terminated or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order No. 11246 of Sept. 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order No. 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.
Collective Bargaining Agreements. The second basis asserted by plaintiffs in support of their breach of contract claim is Boeing's alleged breach of unspecified collective bargaining agreements. In their response, plaintiffs seem to concede that any such state law claim is preempted by Section 301 of the Labor Management Relations Act (see Pl. Br. at 18), but plaintiffs argue that the allegations in the complaint are sufficient to state a claim under Section 301. This argument is unpersuasive. The complaint does not mention Section 301 or the LMRA. Nor does it contain allegations to support the essential elements of a "hybrid" claim under Section 301 (the most common type of Section 301 claim). See e.g., Webb v. ABF Freight System, Inc., 155 F.3d 1230, 1239 (10th Cir. 1998) (essential elements of a hybrid claim include a showing that the union violated its duty of fair representation in connection with the alleged breach of the CBA). Plaintiffs argue the "hybrid" standard does not apply here because the complaint does not allege that the collective bargaining agreements contained mandatory grievance or arbitration procedures. Absent such allegations, plaintiffs say, it cannot be assumed that they were obligated to pursue grievance remedies before bringing suit and they should not be required to show that the union failed to properly represent them in such proceedings. Citing Daigle v. Gulf State Utilities, Co., 794 F.2d 974 (5th Cir. 1986).
Plaintiffs concede that Section 301 preempts state law causes of action for breach of a collective bargaining agreement, but they fault Boeing for not distinguishing between represented and non-represented workers. But as Boeing points out, employees who are not covered by a collective bargaining agreement would have no standing to assert a claim for breach of such an agreement.
The absence of such allegations does not save plaintiffs' purported Section 301 claim. To meet the requirements of Fed.R.Civ.P. 8(a), the complaint must set forth a short and plain statement showing the plaintiff is entitled to relief. It is widely recognized that "collective-bargaining contracts . . . generally contain procedures for the settlement of disputes through mutual discussion and arbitration." Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 562 (1976). Plaintiffs under Section 301 are required to avail themselves of such procedures before a Section 301 suit may be brought. See also Republic Steel Corp. v. Maddox, 379 U.S. 650 (1965) (unless plaintiff attempted to utilize the contractual procedures for settling his dispute with his employer, his independent suit against the employer would be dismissed). If the collective bargaining agreements allegedly breached by Boeing did not mandate such procedures, plaintiffs should allege as much in their complaint. As Boeing points out, however, the complaint does not even specify what collective bargaining agreements Boeing allegedly breached. Under the circumstances, plaintiffs have failed to satisfy Rule 8, which requires allegations sufficient to give the defendant fair notice of what the claim is and the grounds on which it rests. See Fed.R.Civ.P. (8)(a)(2); Conley v. Gibson, 355 U.S. 41, 47 (1957). Accordingly, the court concludes that insofar as the allegations of breach of collective bargaining agreements are concerned, the fifth cause of action fails to state a claim upon which can be granted. Because plaintiffs might be able to cure this pleading deficiency, however, the court will grant the plaintiffs thirty days from entry of this order to amend their complaint to adequately state a claim under Section 301.
Implied Contract of Employment. Plaintiffs' third basis for breach of contract is Boeing's alleged breach of implied contracts of employment arising from Boeing personnel policies. Although this claim is not spelled out in any real detail, the court concludes that the allegations, assuming they are true, are sufficient to state a claim for relief. Under Kansas law, an implied employment contract arises from facts and circumstances showing a mutual intent to contract. Kastner v. Blue Cross Blue Shield of Kansas, Inc., 21 Kan. App. 2d 16, 22-23, 894 P.2d 909, rev. denied 257 Kan. 1092 (1995). The determination of whether an implied contract exists requires an examination of numerous factors. See Allegri v. Providence-St. Margaret Health Center, 9 Kan. App. 2d 659, Syl. ¶ 5, 684 P.2d 1031 (1984) (listing factors). Boeing's argument that its policies cannot be the basis of an implied contract appears to rely on an assertion that Boeing lacked any intent to form a contract. At the pleading stage, however, plaintiffs' allegation that the policies gave rise to an implied contract is sufficient. Whether or not plaintiff can produce sufficient proof of the essential elements underlying the claim, including a mutual intent to contract, is a question for summary judgment, not a motion to dismiss. Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (dismissal on the pleadings should not be granted unless plaintiff can prove no set of facts in support of the claim that would entitle her to relief). Accordingly, the motion to dismiss is denied with respect to plaintiffs' allegations of breach of an implied contract.
B. Negligent Supervision.
Plaintiffs' sixth cause of action is based on Boeing's alleged breach of "a duty to adequately supervise its staff regarding employment practices at Boeing's facilities." Doc. 1 at ¶ 143. Plaintiffs contend Boeing breached this duty "by allowing managers, supervisors, and others to discriminate against plaintiffs . . . because of their sex. . . ." Id. at ¶ 144.
As Boeing points out, the federal courts in this district have repeatedly held that Kansas law does not recognize a claim for negligent supervision arising from an alleged failure by an employer to prevent discrimination of the type claimed by the plaintiffs. See Wood v. City of Topeka, 96 F. Supp.2d 1194, 1195 (D.Kan. 2000); McClure v. Nolan, No. 96-2357, 1997 U.S. Dist. LEXIS 11423 (D.Kan. 1996); Polson v. Davis, 895 F.2d 705, 710 (10th Cir. 1990). Plaintiffs argue these decisions have been superseded by Marquis v. State Farm Fire Cas. Co., 265 Kan. 317, 329, 961 P.2d 1213, 1222 (1998), because in that case the Kansas Supreme Court said a negligent supervision cause of action could arise from harm to an employee caused by a co-worker. Even a cursory reading of the Marquis decision, however, makes clear that it has nothing to say about negligent supervision claims arising from allegations of employment discrimination.
This court recently adhered to the general view that Kansas would not recognize a negligent supervision claim in this context, finding in Lawyer v. Eck Eck Machine Co., F. Supp.2d ___, 2002 WL 538950 (D.Kan. 2002) that "Kansas courts do not accept a theory of liability for negligent supervision when the underlying behavior is an employee's sexual harassment of [the] plaintiff." (Citing Fiscus v. Triumph Group Operations, Inc., 24 F. Supp.2d 1229, 1242 (D.Kan. 1998) (citations omitted)). The court sees nothing in Kansas case law to alter that view. The common law duty of an employer to a provide a safe workplace has never been held to extend to ensuring that company managers do not discriminate against employees on the basis of sex. To the extent employers have such a duty, it arises not from a common law duty of reasonable care, but from specific legislature acts (including Title VII and the Kansas Act Against Discrimination) imposing a legal duty that was unknown at common law. In sum, the court agrees with Boeing that plaintiffs' sixth cause of action must be dismissed for failure to state a claim upon which relief can be granted.
V. Conclusion.
Boeing's Motion to Dismiss (Doc. 13) is hereby GRANTED IN PART and DENIED IN PART. With respect to plaintiffs' fifth cause of action, the motion is granted insofar as that claim is based on an alleged breach by Boeing of the 1999 DOL conciliation agreement. The motion is also granted insofar as that claim is based on Boeing's alleged breach of collective bargaining agreements, but plaintiffs are granted thirty days leave from entry of this order to amend their fifth cause of action to state a claim under Section 301 of the LMRA. The motion to dismiss is denied with respect to the balance of plaintiffs' fifth cause of action. The motion to dismiss is granted as to plaintiffs' sixth cause of action for negligent supervision.