Opinion
Civil Action 20-cv-03644-CNS-STV
10-31-2022
STEVEN FARABAUGH, Plaintiff, v. ISLE, INC., ISLE GROUP, LTD., and ISLE UTILITIES LTD., Defendants.
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Scott T. Varholak Magistrate Judge
This matter comes before the Court on Defendants' Motion to Dismiss Plaintiff's Second Amended Complaint [#70] (the “Motion”). The Motion has been referred to this Court. [#71] The Court has carefully considered the Motion and related briefing, the entire case file, and the applicable case law, and has determined that oral argument would not materially assist in the disposition of the instant Motion. For the following reasons, this Court respectfully RECOMMENDS that the Motion be GRANTED IN PART.
The facts are drawn from the allegations in the Second Amended Complaint [#68], which must be taken as true when considering a motion to dismiss. Wilson v. Montano, is also a wholly-owned subsidiary of Isle Group Ltd. [Id. at ¶¶ 3-4] Defendants Isle Group Ltd. and Isle Utilities Ltd. (collectively referred to as the “Isle UK Entities”) provide consultancy services to water utilities around the world, including support to municipal F.3d 847, 850 n.1 (10th Cir. 2013) (citing Brown v. Montoya, 662 F.3d 1152, 1162 (10th Cir. 2011)).
Plaintiff Steven Farabaugh is a citizen of the United States and of Colorado, who works as a licensed Professional Engineer. [#68 at ¶¶ 7, 15] Plaintiff was employed as a Senior Consultant by one or more of Defendants, beginning on March 29, 2017. [Id. at ¶ 16] Plaintiff performed the majority of his work from his home in Denver, Colorado. [Id. at ¶ 20]
The Second Amended Complaint refers to the Principal Statement of Terms and Conditions (the “Statement”) Plaintiff signed when he began his employment. [#68 at ¶¶ 30-32] Defendants have attached the Statement to their Motion [#70-2 at 9-16] and Plaintiff has not challenged the authenticity of this document [#79 at 4-5]. The Court may therefore consider the Statement without converting the Motion to a motion for summary judgment. Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017) (a court may “consider documents attached to or referenced in the complaint if they ‘are central to the plaintiff's claim and the parties do not dispute the documents' authenticity.'” (quoting Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002))). According to the Statement, US-based Isle, Inc. “offer[ed] [Plaintiff] an appointment” and “the Company” is defined as Isle, Inc. [#70-2 at 9, 15] As discussed in detail below, whether Plaintiff was employed only by Isle, Inc., or also by either of the Isle UK Entities is at issue in the present Motion. Because Plaintiff's employment status is a legal conclusion, the Court need not give deference to Plaintiff's characterization of the relationship in his Second Amended Complaint. See Woods v. Nationbuilders Ins. Servs., Inc., No. 11-CV-02151-CMA-KMT, 2012 WL 4478948, at *5-7 (D. Colo. Sept. 27, 2012) (noting that the determination of employment status is a question of law, so an allegation that an individual was an employee was merely a legal conclusion, not a factual allegation); see also Dole v. Snell, 875 F.2d 802, 805 (10th Cir. 1989) (whether a worker is an employee within the meaning of the Fair Labor Standards Act is a legal conclusion to be drawn from underlying facts).
Defendant Isle, Inc. is a Delaware corporation with its principal place of business in California, and is a wholly-owned subsidiary of Defendant Isle Group Ltd. [Id. at ¶¶ 2, 4] Isle Group Ltd. is a foreign entity, registered in the United Kingdom. [Id. at ¶ 3] Defendant Isle Utilities Ltd. is also a foreign entity registered in the United Kingdom, and water utilities. [Id. at ¶ 14] Isle, Inc. and the Isle UK Entities' job postings represent that Isle, Inc. is “the U.S. division of Isle.” [Id. at ¶ 24]
Piers Clark is the Chairman of Isle, Inc. and the Isle UK Entities. [Id. at ¶¶ 17, 25] Plaintiff alleges that Mr. Clark had final decision-making authority on hiring and firing employees of Isle, Inc. and the Isle UK Entities, and that employees of Isle, Inc. and the Isle UK Entities work as one team under Mr. Clark's guidance and supervision. [Id. at ¶¶ 25-26] Mr. Clark had at least partial control over whether Plaintiff received an annual bonus. [Id. at ¶ 32]
Cristina Ahmadpour, President and Managing Director, was one of Plaintiff's managers. [Id. at ¶¶ 18-19] Ms. Ahmadpour, who worked from California, completed Plaintiff's performance reviews but did not always directly supervise his work. [Id.] Ms. Ahmadpour had at least partial control over whether Plaintiff received an annual bonus. [Id. at ¶ 32] Ms. Ahmadpour told Plaintiff on more than one occasion that she did not have decision-making authority over the terms and conditions of his employment because Mr. Clark made all important personnel and business decisions for Isle, Inc. and the Isle UK Entities' operations. [Id. at ¶ 33] Indeed, prior to Plaintiff's hire, Ms. Ahmadpour told Plaintiff that Mr. Clark would interview and sign off on his hiring before they would extend him a formal offer of employment. [Id. at ¶ 34]
It is not explicit on the face of the Second Amended Complaint for which entity or entities Ms. Ahmadpour served as the President and Managing Director. [See also #68 at ¶ 32] However, because Ms. Ahmadpour was “based in California” [id at ¶ 18], the Court presumes she was President and Managing Director of the California-based Isle, Inc. only.
Plaintiff does not allege that Mr. Clark actually did interview him, or sign off on his hiring, only that Ms. Ahmadpour told Plaintiff he would. [See generally, #68]
From October 9 to 11, 2018, Isle, Inc. and the Isle UK Entities held a conference for senior managers in Scotland (the “Retreat”). [Id. at ¶ 36] Plaintiff, Ms. Ahmadpour, and Mr. Clark all attended, along with other managers of Isle, Inc. and the Isle UK Entities. [Id. at ¶¶ 36-37] On Wednesday, October 10, 2018, during a conversation between Plaintiff and Mr. Clark about Ms. Ahmadpour and Plaintiff's role with Isle, Inc. and the Isle UK Entities, Mr. Clark allegedly called Plaintiff a “terrorist.” [Id. at ¶ 37] This allegation was later confirmed and contextualized in a report following an investigation by Katherine Easter, Global Head of Human Resources for Isle, Inc. and the Isle UK Entities. [Id. at ¶¶ 29, 61] Ms. Easter's report said that Mr. Clark had cautioned Plaintiff about being an “internal terrorist.” [Id. at 61]
On Thursday, October 11, 2018, the attendees of the Retreat went to a restaurant for dinner. [Id. at ¶ 38] One of the attendees at the dinner was Mr. Clark. [Id. at ¶ 39] Plaintiff alleges that “[d]uring the dinner, Mr. Clark stood to address the group. He then unbuckled his belt and unfastened his pants, exposing his underwear. He then thrust his crotch into Ms. Ahmadpour's face as she was seated nearby.” [Id.] Ms. Easter's report later confirmed that Mr. Clark had unbuckled his belt and lowered his pants enough to expose his underwear during an event at the Retreat. [Id. at ¶ 62]
After dinner, the group moved to a bar. [Id. at ¶ 40] One of the attendees at the bar was Thomas Jacks, Head of Dealflow for Isle, Inc. and the Isle UK Entities, who was born and based in the United Kingdom. [Id. at ¶¶ 40-41] At the bar, Plaintiff saw Mr. Jacks slap Ms. Ahmadpour on her backside/upper thighs with an open hand. [Id. at ¶ 40] Ms. Easter's report later confirmed that Mr. Jacks had “playfully” “hit” Ms. Ahmadpour on her backside, “below her rear-end.” [Id. at ¶ 64]
As the group walked from the bar back to their lodging, Mr. Jacks approached Plaintiff silently from behind, pinned Plaintiff's arms to his sides, and then tackled Plaintiff to the ground using the force of his entire body. [Id. at ¶¶ 42, 44] When the pair landed, Mr. Jacks was on top of Plaintiff, who was lying face down on the ground. [Id. at ¶ 44] Mr. Jacks and Plaintiff continued the walk back to the group's lodging with the rest of the group. [Id. at ¶ 47] Ms. Easter's report later confirmed that Mr. Jacks had assaulted Plaintiff, calling it “high jinks” and indicating the others tackled that night “found the incident to be good natured and in good fun.” [Id. at ¶ 63]
It is unclear from the Second Amended Complaint who comprised “the group” walking from the restaurant to the lodging.
For the remainder of the walk, Mr. Jacks made insulting comments and threats toward Plaintiff. [Id. at ¶ 47] No one did anything to stop Mr. Jacks' behavior toward Plaintiff. [Id.] At some point during the walk, Mr. Jacks also tackled Brittany Burch, another US-born employee. [Id. at ¶ 46] Throughout the course of the evening, Plaintiff, Ms. Ahmadpour, and Ms. Burch were all physically assaulted by Mr. Jacks. [Id. at ¶ 48] Together, they comprised three of the four US-born employees to attend the Retreat. [Id.] Plaintiff acknowledges that he does not know whether any non-US-born employees may also have been assaulted by Mr. Jacks. [Id. at ¶ 59]
Upon his return to the group's lodging, Plaintiff reported his tackling to Ms. Ahmadpour and to Ms. Easter. [Id. at ¶ 49] The next morning, on Friday, October 12, 2018, Mr. Clark visited Plaintiff in his room at the lodging and asked Plaintiff how he was doing. [Id. at ¶ 50] Plaintiff responded that he was not doing well because he had been tackled from behind by Mr. Jacks. [Id.] Mr. Clark told Plaintiff that he had heard what happened, had spoken with “everyone” involved (despite not previously speaking with Plaintiff), and concluded that it was Plaintiff who was to blame for the incident. [Id. at ¶¶ 51-52]
Later that day, Plaintiff spoke with Ms. Easter and Ms. Ahmadpour in separate conversations. [Id. at ¶ 53] During these conversations, Plaintiff informed Ms. Easter and Ms. Ahmadpour that he believed he was targeted by Mr. Jacks and Mr. Clark because he was US-born. [Id.] Plaintiff also told Ms. Easter and Ms. Ahmadpour that he felt Mr. Jacks was intentionally targeting “the Americans” in the group, and that it was his opinion that Mr. Jacks would have assaulted the fourth employee from the United States if Plaintiff had not stopped him. [Id. at ¶ 55] In response to his complaints about Mr. Jacks, Ms. Easter and Ms. Ahmadpour told Plaintiff that he had misinterpreted the events at the Retreat and that what he identified as unlawful and discriminatory conduct was instead “cultural differences” between the US-born and UK-born employees. [Id. at ¶ 56]
On October 14, 2018, Plaintiff emailed Ms. Easter and Ms. Ahmadpour making a “formal notification” that he was still experiencing back and shoulder pain following the incident with Mr. Jacks at the Retreat. [Id. at ¶¶ 57, 67] In response, Ms. Easter requested that Plaintiff provide his written account of events to her so she could investigate. [Id. at ¶ 57] On Monday, October 22, 2018, Ms. Easter contacted Plaintiff and requested that if he did not feel able to work, he should send her an outline of the projects he was working on so that she and Ms. Ahmadpour could distribute his work to others. [Id. at ¶ 58] It is unclear from the Second Amended Complaint whether any of Plaintiff's work was redistributed on this basis. [See generally id.]
On October 25, 2018, Plaintiff submitted his Victim Incident Statement to Ms. Easter, outlining Mr. Jacks' actions at the Retreat and Plaintiff's observation that: “I don't [] have sufficient information to know whether [Mr. Jacks] only targeted U.S. employees or if [] there were many others. There could be a pattern and there could be an underlying motive or issue with U.S. employees.” [Id. at ¶ 59 (alteration in original)]
Ms. Easter completed her investigation and provided her findings via letter to Plaintiff. [Id. at ¶ 60] Ms. Easter confirmed several of Plaintiff's allegations, as noted above. [Id. at ¶¶ 61-64] Ms. Easter indicated that the bulk of these issues would be addressed by “having a larger discussion about best practices at Company events.” [Id. at ¶ 65] No disciplinary action was taken against Mr. Clark or Mr. Jacks for their conduct during the Retreat. [Id.] Ms. Easter advised Plaintiff that if he “ha[d] additional complaints or concerns, those should be raised with [Ms. Easter] or Mr. Clark.” [Id. at ¶ 66 (alteration in original)]
Plaintiff had monthly meetings with Ms. Ahmadpour. [Id. at ¶ 79] Beginning at their monthly meeting after the Retreat, and continuing every month of his employment thereafter, Plaintiff reported to Ms. Ahmadpour that he was still in physical pain from the injury and his injuries continued to have an impact on his work and personal life. [Id. at ¶ 80] Plaintiff also reported each month that Isle, Inc. and the Isle UK Entities had still failed to take responsibility for his injury. [Id.]
On November 28, 2018, Ms. Ahmadpour sent Plaintiff her review of his performance. [Id. at ¶ 69] Plaintiff alleges without specificity that the review was “factually inaccurate” and “unfair and retaliatory.” [Id.] The Second Amended Complaint does not specify what factual inaccuracies the performance review included, or why Plaintiff believed it to be retaliatory. [See id.]
In early January 2019, Plaintiff was assigned to a project team that included Mr. Jacks. [Id. at ¶ 70] On January 14, 2019, Plaintiff complained to unspecified members of Isle, Inc. and the Isle UK Entities' management, telling them he could not be expected to continue working with Mr. Jacks following the incident at the Retreat. [Id. at ¶ 71] Plaintiff was removed from the project, leaving him with less work and fewer billable hours. [Id. at ¶¶ 72-73] The project was never replaced in Plaintiff's portfolio, leaving him unable to meet his production metrics for billable hours. [Id. at ¶ 74] Later in 2019, assignments Plaintiff expected to be assigned to him were instead assigned to a consultant with significantly less experience than Plaintiff, further straining his ability to reach his production metrics. [Id. at 78]
At the end of January 2019, Plaintiff had a telephone conversation with Ms. Easter in which she asked Plaintiff why he was still working at Isle, Inc. and the Isle UK Entities. [Id. at ¶ 75] Plaintiff interpreted this as Ms. Easter making it clear that she felt he should resign. [Id.] Also at the end of January 2019, Ms. Ahmadpour told Plaintiff that “senior management,” wanted him “gone” because he was “checked out.” [Id. at ¶ 77] Plaintiff interpreted the reference to “senior management” as being to Mr. Clark. [Id.]
Plaintiff continued to report on his physical pain at each monthly meeting with Ms. Ahmadpour. [Id. at ¶ 80] In June 2019, Ms. Ahmadpour asked Plaintiff how he could move past the assault. [Id. at ¶ 81] Plaintiff responded that Isle, Inc. and the Isle UK Entities needed to accept responsibility for what had happened and guarantee that none of the actions that took place at the Retreat would happen again to any employee. [Id.]
Plaintiff's employment was terminated on July 8, 2019. [Id. at ¶ 82] At their monthly meeting, Ms. Ahmadpour explained that “the decision had been made to fire him” in part because of Plaintiff's inability to “get past” the events that occurred at the Retreat, in part because of unspecified “management's apparent frustration” that Plaintiff continued to report his injury on a monthly basis, and in part because of Plaintiff's failure to meet productivity goals. [Id.]
On August 14, 2019, Plaintiff filed a Charge of Discrimination with the United States Equal Employment Opportunity Commission [#70-5 at 2-4] (the “Charge”). The Charge alleged discrimination by “ISLE UTILITIES” an entity asserted to have 15-100 employees and a street address of 2345 Yale Street, 1st floor, Palo Alto, CA 94306. [Id. at 2] The Charge alleged discrimination on the basis of national origin (USA), discrimination on the basis of disability, and retaliation. [Id. at 2-3] Plaintiff asserts that, in the information he provided to the EEOC in support of his Charge, he named Ms. Ahmadpour, Mr. Clark, Mr. Jacks, and Ms. Easter as perpetrators of the alleged discrimination. [#68 at ¶ 10] On September 14, 2020, the EEOC issued a Dismissal and Notice of Rights authorizing Plaintiff to bring suit. [Id. at ¶ 11]
The Court considers Plaintiff's EEOC Charge [#70-5 at 2-4] without converting the Motion to one for summary judgment under Rule 56. As explained earlier, at the motion to dismiss stage, a court may “consider documents attached to or referenced in the complaint if they ‘are central to the plaintiff's claim and the parties do not dispute the documents' authenticity.'” Brokers' Choice of Am, 861 F.3d at 1103 (quoting Jacobsen, 287 F.3d at 941); see also Lincoln v. Maketa, 880 F.3d 533, 537 n.1 (10th Cir. 2018) (upholding the district court's reliance on plaintiff's EEOC charge on a motion to dismiss because “the documents are discussed in the complaint, and their authenticity is undisputed”). Here, the Charge is central to Plaintiff's claim and its ability to survive Defendants' affirmative defense of failure to exhaust. Plaintiff also references the Charge and discusses its contents in his Second Amended Complaint. [#68 at ¶¶ 9-11] Defendants attached the Charge as an Exhibit to their Motion, and Plaintiff did not dispute its authenticity in his Response. [See generally #79] The Court therefore considers the Charge in its analysis.
This may be a reference to the “Pre-Charge Inquiry” document submitted as an exhibit by Defendant. [#70-5 at 5-8] However, it is not sufficiently clear to the Court that the Pre-Charge Inquiry is referenced or discussed in the Second Amended Complaint, or that it is central to Plaintiff's claim. See supra n.2, n.6. The Court therefore does not consider the Pre-Charge Inquiry in the present analysis.
On December 11, 2020, Plaintiff timely filed the instant action. [#1] On April 26, 2021, Isle, Inc. filed a Motion to Dismiss the then-operative First Amended Complaint. [#33] On June 29, 2021, the Isle UK Entities also filed a Motion to Dismiss. [#46] On March 31, 2022, United States District Court Judge Regina M. Rodriguez granted both motions, and dismissed with leave for Plaintiff to file a second amended complaint. [#66]
On May 2, 2022, Plaintiff timely filed the operative Second Amended Complaint. [#68] The Second Amended Complaint brings two causes of action under both Title VII of the Civil Rights Act of 1964 as amended, 42 U.S.C. § 2000e et seq. (“Title VII”) and the Colorado Anti-Discrimination Act, C.R.S. § 24-34-401, et seq. (“CADA”): (1) harassment and discrimination on the basis of national origin [id. at ¶¶ 84-95], and (2) retaliation [id. at ¶¶ 96-104]. Defendants move to dismiss the claims as brought under Title VII pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). [#70] Plaintiff has responded [#79] and Defendants have replied [#80].
II. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(1) empowers a court to dismiss a complaint for “lack of subject-matter jurisdiction.” Fed.R.Civ.P. 12(b)(1). Dismissal under Rule 12(b)(1) is not a judgment on the merits of a plaintiff's case, but only a determination that the court lacks authority to adjudicate the matter. See Castaneda v. INS, 23 F.3d 1576, 1580 (10th Cir. 1994) (recognizing federal courts are courts of limited jurisdiction and may only exercise jurisdiction when specifically authorized to do so). A court lacking jurisdiction “must dismiss the cause at any stage of the proceeding in which it becomes apparent that jurisdiction is lacking.” Basso v. Utah Power & Light Co., 495 F.2d 909, 909 (10th Cir. 1973).
Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” In deciding a motion under Rule 12(b)(6), a court must “accept as true all well-pleaded factual allegations . . . and view these allegations in the light most favorable to the plaintiff.” Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010) (quoting Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). Nonetheless, a plaintiff may not rely on mere labels or 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).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). Plausibility refers “to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs ‘have not nudged their claims across the line from conceivable to plausible.'” Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Twombly, 550 U.S. at 570). “The burden is on the plaintiff to frame a ‘complaint with enough factual matter (taken as true) to suggest' that he or she is entitled to relief.” Id. (quoting Twombly, 550 U.S. at 556). The ultimate duty of the court is to “determine whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed.” Forest Guardians v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).
III. ANALYSIS
Plaintiff has alleged Title VII and CADA national origin discrimination and retaliation claims. [See generally #68] Defendant has moved to dismiss only the Title VII claims. [#70] The Court first analyzes challenges to its subject matter jurisdiction, then the sufficiency of Plaintiff's Title VII claim against each defendant. Because the Court finds that Plaintiff has failed to plead facts sufficient to establish the reasonable inference that either of the Isle UK Entities was his employer, the Court declines to analyze their affirmative defense of failure to exhaust.
A. Subject Matter Jurisdiction
Defendants argue that this Court lacks subject matter jurisdiction over the charges against the Isle UK Entities in this case because: (1) Plaintiff failed to exhaust his administrative remedies against the Isle UK Entities [#70 at 9-10], and (2) the Isle UK Entities are foreign persons not controlled by an American employer [id. at 8-9]. The Court disagrees.
“A federal court must in every case, and at every stage of the proceeding, satisfy itself as to its own jurisdiction, and the court is not bound by the acts or pleadings of the parties.” Citizens Concerned for Separation of Church & State v. City & Cty. of Denver, 628 F.2d 1289, 1301 (10th Cir. 1980). Because federal courts are courts of limited jurisdiction, the Court must “presume no jurisdiction exists absent an adequate showing by the party invoking federal jurisdiction.” United States ex rel. Hafter v. Spectrum Emergency Care, Inc., 190 F.3d 1156, 1160 (10th Cir.1999). Because Plaintiff invoked federal jurisdiction by filing his Complaint in this Court, Plaintiff bears the burden to establish the Court's subject matter jurisdiction. See Merida Delgado v. Gonzales, 428 F.3d 916, 919 (10th Cir. 2005).
Defendants cite to abrogated authority for the proposition that “[i]n the Tenth Circuit, ‘[e]xhaustion of administrative remedies is a jurisdictional prerequisite to suit under Title VII.'” [#70 at 9 (quoting Williams v. Colo. Dept. of Transp., 2010 WL 1781977, at *2 (D. Colo. 2010), in turn quoting, Jones v. Runyon, 91 F.3d 1398, 1399 (10th Cir. 1996), abrogated by Lincoln v. BNSF Ry. Co., 900 F.3d 1166 (10th Cir. 2018))]. Current controlling precedent of the Tenth Circuit holds that “a plaintiff's failure to file an EEOC charge regarding a discrete employment incident merely permits the employer to raise an affirmative defense of failure to exhaust but does not bar a federal court from assuming jurisdiction over a claim.” Lincoln, 900 F.3d at 1185. The Court would therefore analyze the question of exhaustion as an affirmative defense, but declines to do so at this time for the reasons stated below.
Defendants also argue that this Court has no subject matter jurisdiction over claims against the Isle UK Entities because Title VII provides that “sections 2000e-2 and 2000e-3 of this title shall not apply with respect to foreign operations of an employer that is a foreign person not controlled by an American employer.” [#70 at 8 (quoting 42 U.S.C. § 2000e-1(c)(2))]. However, “any company, foreign or domestic, that elects to do business in this country falls within Title VII's reach and should, and must, do business here according to its rules prohibiting discrimination.” Ward v. W & H Voortman, Ltd., 685 F.Supp. 231, 233 (M.D. Ala. 1988). “Title VII ‘does not expressly exempt from its provisions foreign corporations doing business here. If Congress had intended to exempt such foreign corporations it would have done so expressly,' as it did with other groups such as private membership clubs, and companies employing aliens abroad.” Gaujacq v. Electricite de France Int'l N. Am., Inc., 572 F.Supp.2d 79, 86 (D.D.C. 2008), aff'd in part and remanded sub nom. Gaujacq v. EDF, Inc., 601 F.3d 565 (D.C. Cir. 2010) (quoting Ward, 685 F.Supp. at 232); see also Morelli v. Cedel, 141 F.3d 39, 44 (2d Cir. 1998) (noting that American laws prohibiting employment discrimination would apply to a foreign employer's operations in the United States), U.S. EQUAL EMP. OPPORTUNITY COMM'N, EEOC-CVG-2016-2, EEOC ENFORCEMENT GUIDANCE ON NATIONAL ORIGIN DISCRIMINATION (2006) (“Title VII applies to a foreign employer doing business in the United States to the same extent as an American employer, unless the foreign employer is exempted from coverage by a treaty or international agreement.”).
It is undisputed that the Retreat and the acts of alleged discrimination occurring there took place in Scotland. [#68 at ¶ 36] After returning from the Retreat, however, all subsequent events that might constitute discrimination or retaliation occurred while Plaintiff performed the majority of his work from his home in Denver, Colorado. [See Id. at ¶ 20] The decisions to reduce Plaintiff's portfolio, and therefore his billable hours, were made while he was working in Colorado. [See id. at ¶¶ 70-74, 78] Plaintiff's repeated reporting of his ongoing injury from the Retreat incident occurred principally while he worked from Colorado, and principally to his Colorado-based supervisor. [See id. at ¶¶ 18, 80] His performance reviews and ultimate termination were conducted by Ms. Ahmadpour, a resident of California. [Id. at ¶¶ 18-19, 82] To the extent to which any of these actions are attributable to either of the Isle UK Entities, they were not “foreign operations.” The Court therefore finds that Plaintiff has pled facts sufficient at this stage of the proceedings to satisfy the Court of its subject matter jurisdiction over this lawsuit.
B. Employer Status
To make out a prima facie case of either discrimination or retaliation under Title VII, a plaintiff must first prove the defendant was their employer. Knitter v. Corvias Mil. Living, LLC, 758 F.3d 1214, 1225 (10th Cir. 2014) (citing Lockard v. Pizza Hut, Inc., 162 F.3d 1062, 1069 (10th Cir.1998), Frank v. U.S. West, Inc., 3 F.3d 1357, 1361 (10th Cir.1993)). If a plaintiff cannot meet their burden to prove the defendant was their employer, their discrimination and retaliation claims necessarily fail. Id. (citing Lockard, 162 F.3d at 1069). Plaintiff alleges that he “was employed by Isle, Inc. and the Isle UK Entities.” [#68 at ¶ 7] Defendants argue that “Plaintiff has never been employed by either UK Defendant[].” [#70 at 4] And while Defendants do not challenge that Plaintiff was hired by, and worked for, Isle, Inc., they argue that Plaintiff has not successfully pled that Isle, Inc. meets Title VII's statutory definition of an “employer.” [Id. at 4, 10-12] The Court addresses each alleged employer in turn.
Of course, the question at this stage of the litigation is not whether the Isle UK Entities actually employed Plaintiff, but whether Plaintiff has plausibly pled that the UK Entities employed him. Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010) (In deciding a motion under Rule 12(b)(6), a court must “accept as true all well-pleaded factual allegations . . . and view these allegations in the light most favorable to the plaintiff.” (quotation omitted)). Attached to the Motion, Defendants have submitted two declarations from Ms. Ahmadpour. [## 70-3; 70-6] These affidavits contain numerous factual assertions that are either not referenced in the Second Amended Complaint or affirmatively contradict facts contained within the Second Amended Complaint. [Id.] The only authority that Defendants have provided for the Court's consideration of these affidavits is the general rule that, at the motion to dismiss stage, a court may “consider documents attached to or referenced in the complaint if they ‘are central to the plaintiff's claim and the parties do not dispute the documents' authenticity.'” Brokers' Choice of Am., 861 F.3d at 1103 (quoting Jacobsen, 287 F.3d at 941). [##70 at 3 n.2; 80 at 3-4] But Ms. Ahmadpour's declarations were neither attached to nor referenced in the Second Amended Complaint. [See generally #68] The Court thus does not consider those declarations. Nor does the Court consider the factual assertions made in response to the EEOC charge [#70-2 at 2-7] to the extent those factual assertions contradict the facts alleged in the Second Amended Complaint.
1. Isle, Inc.
Title VII defines an “employer” as “a person engaged in an industry affecting commerce who has fifteen or more employees ....” 42 U.S.C. § 2000e(b) The Supreme Court has instructed that “the threshold number of employees for application of Title VII is an element of a plaintiff's claim for relief.” Arbaugh v. Y&H Corp., 546 U.S. 500, 516 (2006). In their Motion, defendants assert that Isle, Inc. employed only nine people at the time of Plaintiff's employment and was therefore not an “employer” under Title VII. [#70 at 10-12]
Defendants do not challenge the sufficiency of Plaintiff's allegation that he was employed by Isle, Inc., and indeed appear to acknowledge such employment. The parties do not dispute that Plaintiff was employed by Isle, Inc. [See #70 at 4 (Defendants' assertion that Plaintiff was employed only by Isle, Inc.)]
The Second Amended Complaint alleges that TriNet, a third-party entity utilized by Isle, Inc. and the Isle UK Entities to administer human resources operations for their employees based in the United States, “maintained a specific website for US-based employees, which reflected that Isle, Inc. had 19 employees during [Plaintiff's] employment.” [#68 at ¶ 21] This is not precisely an allegation, in so many words, that Isle, Inc. had 15 or more employees - only that a third-party's website said that it did. However, when evaluating a motion to dismiss under Rule 12(b)(6), the Court must liberally construe the pleadings and make all reasonable inferences in favor of Plaintiff. Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1105 (10th Cir. 2017). By that liberal standard, the Court finds that a “reasonable inference” to be drawn from TriNet's assertion is that Isle, Inc. had 15 or more employees. Accordingly, the Court respectfully RECOMMENDS that the Motion be DENIED to the extent it seeks dismissal of the claims against Isle, Inc.
2. The Isle UK Entities
Next, the Court considers whether Plaintiff has pled facts sufficient to state a plausible claim that he was employed by either or both of Isle Group Ltd. and Isle Utilities Ltd. The Court finds that he has not.
Throughout the Second Amended Complaint, Plaintiff refers to Isle Group Ltd. and Isle Utilities Ltd. collectively as the “Isle UK Entities.” [See generally #68] After establishing their respective addresses and the fact that Isle Utilities Ltd. is a wholly-owned subsidiary of Isle Group Ltd. [id. at ¶¶ 3-4], Plaintiff only once refers to the two entities individually [id. at ¶ 25 (“Mr. Clark is the Chairman of Isle, Inc., Isle Group, Ltd., and Isle Utilities Ltd.”)]. All other references in the Second Amended Complaint are to the Isle UK Entities collectively. Plaintiff alleges that “Isle, Inc. and the Isle UK Entities together (and both) operated as [Plaintiff's] employing entities.” [Id. at ¶ 4] Defendants dispute this, asserting that Isle Group Ltd. employs only two people, neither of whom was Plaintiff, and that “Isle Utilities Ltd. did not employ Plaintiff as it is a completely separate subsidiary of Isle Group Ltd. and is based solely in the UK.” [#70 at 4]
Once again, the important question at this stage is not whether either or both of the Isle UK Entities actually employed Plaintiff, but whether Plaintiff has plausibly alleged that either or both employed him. See supra n. 8.
In her Order granting the motions to dismiss the First Amended Complaint, Judge Rodriguez noted that this conflation of the Isle UK Entities defendants was problematic:
Nor does the Plaintiff here even identify which of the UK Isle Entities he alleges was his joint employer. He instead alleges that “one or more of the Isle Entities other than Isle, Inc. had ‘significant control' over the terms and conditions of his employment.” ECF 37, p. 11. Even if the facts alleged constituted sufficient control, the Court can not merely assume that the facts apply to both Defendants. Without any facts specific to the two UK Defendants, the Court cannot find that they both exerted a particular level of control over the Plaintiff. For these reasons, the Plaintiff has failed to establish that the UK Isle Entities are his joint employers.[#66 at 11-12; see also id. at 2 n.1 (“Throughout his Amended Complaint, the Plaintiff refers to the Defendants collectively as ‘Isle.' As described in further detail below, the distinction between the Isle entity groups is important in the Court's analysis of the Plaintiff's claims.”)] Despite this clear admonition from the Court, Plaintiff again declined in his Second Amended Complaint to plead any facts specific to either of the two UK Defendants.
Under Federal Rule of Civil Procedure 8, “to state a claim in federal court, a complaint must explain what each defendant did to him or her; when the defendant did it; how the defendant's action harmed him or her; and, what specific legal right the plaintiff believes the defendant violated.” Nasious v. Two Unknown B.I.C.E. Agents, at Arapahoe Cnty. Just. Ctr., 492 F.3d 1158, 1163 (10th Cir. 2007) (emphasis added). Rather than plead with specificity what each defendant did to him, Plaintiff persists in his Second Amended Complaint in alleging facts collectively against the “Isle UK Entities.”
“[T]he Court can not merely assume that the facts apply to both Defendants” [#66 at 11] now, any more than it could when evaluating the motions to dismiss the First Amended Complaint. By insisting on pleading indiscriminately against both Isle Group Ltd. and Isle Utilities Ltd., Plaintiff has declined to state a facially plausible claim that either of them constituted his employer, either individually, jointly, or as part of a “single entity” with Isle, Inc.The Court therefore respectfully RECOMMENDS that the Motion be GRANTED to the extent to which it seeks dismissal of the Title VII claims against Isle Group Ltd. and Isle Utilities Ltd.
As he did previously, Plaintiff argues that all Defendants “were an ‘integrated enterprise' and together, were his single employer.” [#79 at 12 (citing Bristol v. Bd. of Cnty. Comm'rs of Cnty. of Clear Creek, 312 F.3d 1213 (10th Cir. 2002))] “[T]he single-employer test asks whether two nominally separate entities should in fact be treated as an integrated enterprise.” Bristol, 312 F.3d at 1218. But, with one exception, each of the facts relied upon by Plaintiff to establish a single-employer theory of liability were previously rejected by Judge Rodriguez. [Compare #79 at 12-15 (Plaintiff's opposition relying upon: (1) the Defendants' use of the same email system; (2) all of the various Defendants' employees being featured on the joint Isle Utilities' official website; (3) a company-wide work retreat; (4) Mr. Clark being a common officer of the various entities; (5) Ms. Easter being a common employee of various entities and the Global Human Resources Director; (6) Ms. Easter being involved with the investigation of the discrimination claim; (7) Plaintiff having a conversation with both Mr. Clark and Ms. Easter about his continued employment, and (8) Isle Inc. and Isle Utilities Ltd. both being wholly-owned subsidiaries of Isle Group, Ltd.) and #24 at ¶ 21 (First Amended Complaint listing Ms. Easter as “Isle's Global HR Director”) with #66 at 6-10 (Judge Rodriguez's order holding that these factors did not support a single-employer theory of liability)] The Court does not believe that the sole additional fact relied upon by Plaintiff-that during his on-boarding process he was required to sign multiple documents “binding him to laws of the United Kingdom” [#79 at 14]-changes the analysis, especially given that Plaintiff has alleged that Isle, Inc. is a wholly-owned subsidiary of UK registered Isle Group Ltd. [#68 at ¶¶ 2-4]
The Court would certainly be justified in recommending dismissal of these claims with prejudice. Judge Rodriguez identified these very deficiencies in her previous order dismissing Plaintiff's claims [#66 at 11-12] and “repeated failure to cure deficiencies by amendments previously allowed” may constitute grounds for dismissal with prejudice. Foman v. Davis, 371 U.S. 178, 182 (1962). Nonetheless, because the Court is not yet convinced that further amendment would be futile, it further RECOMMENDS that this dismissal be WITHOUT PREJUDICE.
IV. CONCLUSION
For the foregoing reasons, the Court respectfully RECOMMENDS that Defendants' Motion to Dismiss Plaintiff's Second Amended Complaint [#70] be GRANTED IN PART, and that Plaintiff's claims under Title VII against Defendants Isle Group Ltd. and Isle Utilities Ltd. be DISMISSED WITHOUT PREJUDICE.
Within fourteen days after service of a copy of this Recommendation, any party may serve and file written objections to the magistrate judge's proposed findings of fact, legal conclusions, and recommendations with the Clerk of the United States District Court for the District of Colorado. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); Griego v. Padilla (In re Griego), 64 F.3d 580, 583 (10th Cir. 1995). A general objection that does not put the district court on notice of the basis for the objection will not preserve the objection for de novo review. “[A] party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review.” United States v. 2121 East 30th Street, 73 F.3d 1057, 1060 (10th Cir. 1996). Failure to make timely objections may bar de novo review by the district judge of the magistrate judge's proposed findings of fact, legal conclusions, and recommendations and will result in a waiver of the right to appeal from a judgment of the district court based on the proposed findings of fact, legal conclusions, and recommendations of the magistrate judge. See Vega v. Suthers, 195 F.3d 573, 579-80 (10th Cir. 1999) (holding that the district court's decision to review magistrate judge's recommendation de novo despite lack of an objection does not preclude application of “firm waiver rule”); Int'l Surplus Lines Ins. Co. v. Wyo. Coal Refining Sys., Inc., 52 F.3d 901, 904 (10th Cir. 1995) (finding that cross-claimant waived right to appeal certain portions of magistrate judge's order by failing to object to those portions); Ayala v. United States, 980 F.2d 1342, 1352 (10th Cir. 1992) (finding that plaintiffs waived their right to appeal the magistrate judge's ruling by failing to file objections). But see, Morales-Fernandez v. INS, 418 F.3d 1116, 1122 (10th Cir. 2005) (holding that firm waiver rule does not apply when the interests of justice require review).