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acknowledging that there may be circumstances where franchisor controls the day to day operations of a franchisee to such an extent that the franchisee becomes its agent
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1:18-cv-11413 (AT) (SDA)
03-18-2021
Anthony B. Nelson, Plaintiff, v. Diane Argyropoulous et al., Defendants.
TO THE HONORABLE ANALISA TORRES, UNITED STATES DISTRICT JUDGE:
REPORT AND RECOMMENDATION
STEWART D. AARON UNITED STATES MAGISTRATE JUDGE
INTRODUCTION
Pro se Plaintiff Anthony Nelson (“Plaintiff” or “Nelson”) brings this action against Defendants Diane Argyropoulous, Philip Argyropoulous, Chris Orsaris, Alex Lettas, Victory Auto Group, Spartan Auto Group LLC, Victory Mitsubishi (“Victory”) and Mitsubishi Motors North America, Inc. (“MMNA”) alleging that he was terminated and suffered other adverse employment actions based on his race and age in violation of Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq.; the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621 et seq.; Section 1981 of the Civil Rights Act of 1866, 42 U.S.C. § 1981; the New York State Human Rights Law, N.Y. Exec. Law §§ 290-297; and the New York City Human Rights Law, N.Y. City Admin. Code §§ 8-101-8131. (Am. Compl., ECF No. 101.)
Currently before the Court is a motion by Defendant MMNA to dismiss the Amended Complaint. (Second Mot. to Dismiss, ECF No. 122.) For the reasons set forth below, I recommend that the motion be GRANTED.
For purposes of this motion, the Court accepts Plaintiff's allegations as true and draws all reasonable inferences in his favor. See City of Providence v. BATS Glob. Mkts., Inc., 878 F.3d 36, 48 (2d Cir. 2017).
Plaintiff, a 67-year-old black man, worked as a certified product specialist at Victory, a car dealership in the Bronx. (Compl., ECF No. 2, at 4; Am. Compl. at 2.) Plaintiff alleges that he was subject to a hostile work environment and suffered various adverse employment actions, including termination, based on his race and age. (Compl. at 5, 9, 11; Am. Compl. at 2-6.) As set forth in the Court's March 16, 2020 Order, the basis of Plaintiff's discrimination claims is as follows:
Plaintiff's Amended Complaint incorporates by reference the allegations of the Complaint. (Am. Compl. at 1.)
While the Court's prior Order cited to the Complaint, the substance of Plaintiff's discrimination claims remains the same. Moreover, as already noted, the Amended Complaint incorporates the allegations of the Complaint. For purposes ofthis motion, the Court focuses on facts relating to whether MMNA was an employer of Plaintiff.
When referring to Plaintiff, his supervisor at Victory, Chris Orsaris, regularly used racial and age-based epithets, including “Uncle Ben” and “Bill Cosby.” Another manager, Alex Lettas, who was also Chris Orsaris' cousin, referred to racial-minority customers using a racial slur. At some point, another employee at Victory, who undermined Plaintiff's work by pulling him away from the sales floor at inopportune moments and paid him reduced commissions, physically struck Plaintiff. After that event the floor manager, Stavros Orsaris, told Plaintiff to go home for the day. While Plaintiff was waiting for the bus, Chris Orsaris drove by, got out of his car, and shouted at Plaintiff, “Go home and get your gun. You're fired!” In addition, Plaintiff alleges that Chris Orsaris and Alex Lettas scammed Plaintiff and other sales personnel out of commission and reward monies from Mitsubishi, by changing their Social Security numbers in the Mitsubishi Diamond Rewards database.Nelson v. Argyropoulous, No. 18-CV-11413 (AT), 2020 WL 1244295, at *1 (S.D.N.Y. Mar. 16, 2020) (internal citations, quotation marks and alterations omitted).
With respect to his relationship with MMNA, Nelson alleges that, as a franchisor, MMNA exercised significant control over Victory's daily operations, including by publishing detailed policies and procedures; setting the hours that franchise locations must be open; picking/approving sales localities and setting recordkeeping requirements. (Am. Compl. at 6, 89; see also Am. Compl. Ex. E.) Nelson further alleges that Victory retained “the responsibility for decision[s] regarding employment[, ]” but that MMNA required sales personnel to complete mandatory training programs, monitored performance through the use of customer surveys, and provided sales training assistance and advisors (field sales personnel) to dealers. (Id. at 6, 8; see also Am. Compl. Ex. A.) Nelson also alleges that MMNA exercised control over employees by paying them, through the Diamond Rewards Program, for each MMNA vehicle sold. (Id. at 8; see also Am. Compl. Exs. C & D.) In addition, Nelson alleges that the Dealer Agreement sets forth certain circumstances in which MMNA could terminate the Dealer Agreement, including if an employee failed to participate in mandatory programs. (Id. at 7-8; see also Deal Agmt. Addendum at 22-23.)
Plaintiff references, and attaches to the Amended Complaint, portions of the Dealer Sales and Services Agreement (“Dealer Agreement”) and Addendum between MMNA and Victory. (See Am. Compl. Exs. A, B, D, E.) In support of its motion to dismiss, MMNA attaches the entire agreement. (Dealer Agmt., Def.'s Ex. 5, ECF No. 122-8.) The Court properly may consider the Dealer Agreement as integral to Amended Complaint. See Cullen v. Citibank, N.A., No. 08-CV-10317 (KMK), 2010 WL 11712913, at *4 (S.D.N.Y. Sept. 30, 2010) (considering entirety of document when plaintiff relied upon it and attached portions to operative complaint); Albers v. Guardian Life Ins. Co. of Am., No. 98-CV-06244 (DC), 1999 WL 228367, at *1 (S.D.N.Y. Apr. 19, 1999) (considering entirety of document when plaintiff attached only excerpt to complaint); see also DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010) (“In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint.”).
Nelson alleges that MMNA sent customer surveys to rate salespersons based upon a Sales Satisfaction Index (“SSI”). (Am. Compl. at 8; see also Am. Compl. Ex. C (including, inter alia, list of SSI questions).)
PROCEDURAL HISTORY
On June 29, 2018, Nelson filed a charge of discrimination with the Equal Employment Opportunities Commission (“EEOC”) and the New York State Division of Human Rights. (Compl. at 11-12.) Nelson received a Right to Sue Letter on September 19, 2018, and filed the original Complaint in this action on December 4, 2018. (Id. at 8.) On July 26, 2019, MMNA filed a motion to dismiss. (First Mot. To Dismiss, ECF No. 44.) On November 13, 2019, the Court ordered MMNA to respond to limited interrogatories from Plaintiff. (Order, ECF No. 68.) On March 16, 2020, District Judge Torres granted MMNA's first motion to dismiss, but granted Plaintiff leave to amend. (Order, ECF No. 85.) Nelson filed an Amended Complaint on July 9, 2020. (Am. Compl., ECF No. 101.) On October 14, 2020, MMNA filed the motion to dismiss the Amended Complaint that is now before the Court. (Second Mot. to Dismiss, ECF No. 122.) Plaintiff filed his opposition papers on December 1, 2020 (see Pl.'s Opp. Mem., ECF No. 134; Pl.'s Letter Response, ECF No. 135) and MMNA filed its reply on December 13, 2020. (Reply Mem., ECF No. 140.)
With respect to the motion now before the Court, MMNA incorporates by reference its briefing on the original motion to dismiss. (See Def.'s Mem. at 1-2.)
Because Plaintiff is proceeding pro se, the Court considers both of Plaintiff's filings in opposition to MMNA's motion.
LEGAL STANDARDS
To survive a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), 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 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court “must accept as true all of the [factual] allegations contained in a complaint[, ]” but “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citation omitted).
“Where, as here, a plaintiff is proceeding pro se, the Court must ‘construe his complaint liberally and interpret it to raise the strongest arguments that it suggests.'” Nelson, 2020 WL 1244295, at *2 (quoting Chavis v. Chappius, 618 F.3d 162, 170 (2d Cir. 2010)). “Even in a pro se case, however, although a court must accept as true all of the allegations contained in a complaint, that tenet is inapplicable to legal conclusions, and threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (internal citation and quotation marks omitted). “The Court is obligated to draw the most favorable inferences that the complaint supports, but it cannot invent factual allegations that the plaintiff has not pled.” Id. (internal citation, quotation marks and alterations omitted).
DISCUSSION
I. Exhaustion Of Administrative Remedies
MMNA first argues that Plaintiff's Title VII and ADEA claims against it must be dismissed because Plaintiff did not name MMNA in his EEOC Charge and, thus, failed to exhaust his administrative remedies. (Def.'s Mem. at 5-7.) Nelson does not dispute that he did not name MMNA in his EEOC Charge (Pl.'s Opp. Mem. at 5), and an examination of the EEOC Charge itself confirms that MMNA was not a named party. (EEOC Charge, ECF No. 2, at 11-12.) Instead, Plaintiff suggests that his pro se status should excuse this omission. (Pl.'s Opp. Mem. at 5.)
There is no exhaustion requirement for claims under 42 U.S.C. § 1981, the NYSHRL or the NYCHRL. See Payne v. McGettigan's Mgmt. Servs. LLC, No. 19-CV-01517 (DLC), 2020 WL 2731996, at *4 n.2 (S.D.N.Y. May 26, 2020).
“In employment discrimination actions, the court can generally consider the contents of the plaintiff's EEOC charge, because it is integral to (and attached to) the complaint.” Nelson, 2020 WL 1244295, at *2.
“Under Title VII and the ADEA, an aggrieved person must file an EEOC charge against a party, and follow the requisite procedures, before bringing suit against that party.” Nelson, 2020 WL 1244295, at *4 n.2 (citing Vital v. Interfaith Med. Ctr., 168 F.3d 615, 619 (2d Cir. 1999) (Title VII); Holowecki v. Fed. Exp. Corp., 440 F.3d 558, 562 (2d Cir. 2006), aff'd, 552 U.S. 389 (2008) (ADEA)). The purpose of the exhaustion requirement is “to give the administrative agency the opportunity to investigate, mediate, and take remedial action.” Fowlkes v. Ironworkers Local40, 790 F.3d 378, 384 (2d Cir. 2015) (citation omitted).
In granting MMNA's motion to dismiss the original Complaint, Judge Torres noted that “Plaintiff's Title VII and ADEA claims also likely contain a fatal flaw, because Plaintiff's EEOC charge made no mention of MMNA[, ]” but declined to address the issue because she granted MMNA's motion on other grounds. See Nelson, 2020 WL 1244295, at *4 n.2.
Despite this general rule, courts have recognized an “identity of interest” exception “where there is a clear identity of interest between the unnamed defendant and the party named in the administrative charge.” Johnson v. Palma, 931 F.2d 203, 209 (2d Cir. 1991). “The purpose of the identity of interest exception is to avoid frustration of Title VII's remedial goals by accommodating plaintiffs who are not well versed in the statute's procedural formalities and requirements.” Juhua Han v. Kuni's Corp., No. 19-CV-06265 (RA), 2020 WL 2614726, at *12 (S.D.N.Y. May 22, 2020) (citation omitted).
To determine whether this exception applies, courts consider four factors: (1) “whether the role of the unnamed party could through reasonable effort by the complainant be ascertained at the time of the filing of the EEOC complaint, ” (2) “whether, under the circumstances, the interests of a named party are so similar as the unnamed party's that for the purpose of obtaining voluntary conciliation and compliance it would be unnecessary to include the unnamed party in the EEOC proceedings, ” (3) “whether its absence from the EEOC proceedings resulted in actual prejudice to the interests of the unnamed party, ” and (4) “whether the unnamed party has in some way represented to the complainant that its relationship with the complainant is to be through the named party.” Id. (alterations and citation omitted). “In addition to these factors, Johnson implied a fifth factor relevant to the identity of interest inquiry: whether the defendant, although not named as a respondent in the caption, is named in the body of the charges as having played a role in the discrimination.” Batiste v. City Univ. of New York, No. 16-CV-03358 (VEC), 2017 WL 2912525, at *3 (S.D.N.Y. July 7, 2017); see also Frilando v. New York City Transit Auth., 463 F.Supp.3d 501, 512 (S.D.N.Y. 2020). “This multi-factor test is not a mechanical one, and no single factor is dispositive.” Batiste, 2017 WL 2912525, at *3 (quoting Zustovich v. Harv. Maint., Inc., No. 08-CV-06856 (HB), 2009 WL 735062, at *8 (S.D.N.Y. Mar. 20, 2009)).
The Court is mindful that failure to exhaust is an affirmative defense. See Hardaway v. Hartford Pub. Works Dep't, 879 F.3d 486, 491 (2d Cir. 2018). “An affirmative defense is grounds for dismissal when it is clear from the face of the complaint and documents integral thereto that plaintiff's claims are barred.” Payne, 2020 WL 2731996, at *3 (citing Sewellv. Bernardin, 795 F.3d 337, 339 (2d Cir. 2015)). “When there is insufficient information at the motion to dismiss stage for a court to determine whether named and unnamed defendants share an identity of interest, it is appropriate to deny the motion to dismiss and revisit the issue on a motion for summary judgment.” Shannon v. Credit Agricole Sec. (USA) Inc., No. 17-CV-00667 (AJN), 2018 WL 1474390, at *3 (S.D.N.Y. Mar. 22, 2018). As a threshold matter, I find that there is sufficient information, contained in the Amended Complaint and the documents attached thereto, to determine whether MMNA and Victory share an identity of interest. Thus, I consider each of the Johnson factors in turn.
The Court need not, and does not, consider the Declarations or wage and tax statements filed by MMNA, which would require me to convert the motion to one for summary judgment. See DiPilato v. 7-Eleven, Inc., 662 F.Supp.2d 333, 342 (S.D.N.Y. 2009) (“When the parties present the Court with materials outside the pleadings both in support of and in opposition to a 12(b)(6) motion to dismiss, the Court must either exclude such materials and decide the motion to dismiss on the complaint alone or convert it to a summary judgment motion pursuant to [Federal Rule of Civil Procedure] 56.”).
First, the alleged role of MMNA could have been ascertained by Nelson at the time he filed his EEOC Charge. Nelson alleges that he “worked with MMNA regularly” for two-and-a-half or three years” and that “MMNA remunerated him for his work.” (Am. Compl. at 10.) In his original Complaint, Plaintiff named MMNA as a separate defendant and included allegations regarding the Diamond Rewards program, which suggests that he was able to distinguish the relationship between MMNA and Victory. Thus, the first factor weighs in favor of MMNA. See Kearney v. Kessler Family LLC, No. 11-CV-06016, 2011 WL 2693892, at *3 (W.D.N.Y. July 11, 2011) (first factor weighed in favor of defendant when plaintiff identified franchise relationship in complaint, and thus appeared able to distinguish such relationship, but nonetheless failed to name franchisor in EEOC charge); see also Hulett v.Am.'s FinestServ. Co., No. 03-CV-02497, 2005 WL 2233261, at *7 (N.D. Ohio Sept. 14, 2005) (“[A] complainant's awareness of the unnamed party at the time of the EEOC filing weighs against a finding of a clear identity of interest.”) (applying same four factor test).
With respect to the second factor-the similarity of the named and unnamed parties' interests-Nelson does not sufficiently plead facts demonstrating that the interests of MMNA and Victory are so similar as to make naming MMNA in the EEOC Charge unnecessary. The Amended Complaint does include various allegations as to the relationship between MMNA and Victory, including references to the Dealer Agreement. (Am. Compl. at 6-12.) However, “[c]ourts have regularly found the identity of interest exception inapplicable in the franchisor-franchisee context when a plaintiff fails to identify the franchisor in the EEOC charge, and later sets forth conclusory allegations regarding the franchisor's ‘right to control' the franchisee.” Kearney, 2011 WL 2693892, at *7 (citing Manos v. Geissler, 377 F.Supp.2d 422 (S.D.N.Y. 2005) (dismissing Title VII claims for failure to satisfy statutory prerequisites because plaintiff did not provide notice of charge to the franchisor)).
Turing to third factor, MMNA argues that it has been prejudiced because, if it had been named in the EEOC Charge, it could have responded earlier and participated in conciliation efforts. (Def.'s Mem. at 7.) Courts have differed as to whether this constitutes actual prejudice when no conciliation efforts occurred. Compare Tunne v. Duane Reade, Inc., No. 09-CV-10187, 2011 WL 979475 (BSJ) (JCF), at *5 (S.D.N.Y. Mar. 14, 2011) (no actual prejudice when EEOC charge dismissed for plaintiff to pursue litigation) with Kearney, 2011 WL 2693892, at *4 (lack of notice and absence from EEOC proceedings prejudiced unnamed party's interest “by preventing it from initiating steps toward conciliation or resolution.”). Even if MMNA could not show prejudice, however, “courts have declined to apply the identity of interest exception at the motion to dismiss stage, even in the absence of actual prejudice” when the other factors weigh against application of the exception. Ruiz v. New Avon LLC, No. 18-CV-09033 (VSB), 2019 WL 4601847, at *12 (S.D.N.Y. Sept. 22, 2019) (citing cases).
The fourth Johnson factor also weighs in favor of MMNA as Nelson does not allege that MMNA represented that its relationship to him would be conducted through Victory. See Tunne, 2011 WL 979475, at *5; Reeve v. SEI/Aaron's, Inc., No. 06-CV-0642C, 2008 WL 905908, at *3 (W.D.N.Y. Mar. 31, 2008). Finally, with respect to the fifth implied factor, MMNA is not mentioned in the EEOC Charge and, thus, this factor also weighs in its favor. Accordingly, I find that the limited “identity of interest” exception does not apply and recommend that the Court dismiss Plaintiff's Title VII and ADEA claims against MMNA for failure to exhaust administrative remedies.
Even if the Court were to find that the identity of interest exception applied and that Nelson's failure to name MMNA in the EEOC Charge should be excused, I also recommend dismissing Plaintiff's claims against MMNA for the independent reason that he fails to adequately allege the existence of an employeremployee relationship. See infra Discussion Section II.
II. Existence Of Employer-Employee Relationship
MMNA next argues that Plaintiff's claims against it should be dismissed because MMNA was not Plaintiff's employer or joint employer. (Def.'s Mem. at 8-16.) “A necessary element of a claim for employment discrimination is the existence of [an employer-employee] relationship.” Nelson, 2020 WL 1244295, at *2 (citing cases under Title VII, ADEA, Section 1981, NYSHRL and NYCHRL).
The term “employer” has been construed liberally under Title VII and the ADEA, “and does not require a direct employer/employee relationship.” Local 1180, Commc'ns Workers of Am., AFL-CIO v. City of New York, 318 F.Supp.3d 672, 679 (S.D.N.Y. 2018) (quoting Laurin v. Pokoik, No. 02-CV-01938 (LMM), 2004 WL 513999, at *4 (S.D.N.Y. Mar. 15, 2004) (noting same standard applies for Title VII and ADEA)); see also Shipkevich v. Staten Island Univ. Hosp., No. 08-CV-01008 (FB) (JMA), 2009 WL 1706590, at *3 (E.D.N.Y. June 16, 2009) (“The analysis used to determine whether an entity is an individual's employer pursuant to the NYHRL and NYCHRL is substantially the same as that used under Title VII.”). Thus, “[a] plaintiff may maintain an employment discrimination action against an entity related to, but legally distinct from, the direct employer if the two entities operated as a single, integrated employer or as joint employers.” DeMarzo v. Urb. Dove, Inc., 41 Misc.3d 1209(A), 980 N.Y.S.2d 275 (Sup. Ct. Kings Cty. 2013) (addressing NYSHRL and NYCHRL claims); see also Laurin, 2004 WL 513999, at *4-10 (discussing same two doctrines in Title VII and ADEA context). Though Nelson primarily asserts that MMNA was a joint employer with Victory (see Am. Compl. at 1-2, 6-12), the Amended Complaint also references factors relevant to a direct employment relationship. (Id. at 9-10.) Thus, I consider both theories in determining whether Plaintiff has adequately alleged an employment relationship.
The Court is mindful that “NYCHRL claims must be analyzed separately and independently from federal and state discrimination claims[.]” Mihalik v. Credit Agricole Cheuvreux N. Am., Inc., 715 F.3d 102, 113 (2d Cir. 2013). “Nevertheless, . . . ‘[i]nterpretations of New York state or federal statutes with similar wording may be used to aid in interpretation of [the NYCHRL],' so long as courts do not treat similarly worded provisions of those statutes as a ‘ceiling above which the [NYCHRL] cannot rise.'” Wang v. Phoenix Satellite Television US, Inc., 976 F.Supp.2d 527, 535 (S.D.N.Y. 2013) (quoting N.Y.C. Local Law No. 85 § 1 (2005)).
A. Direct Employment
To determine whether an individual is an employee, courts first consider “whether an individual . . . [has] been hired in the first instance” and, if that prerequisite is met, then apply the common law of agency. Nelson, 2020 WL 1244295, at *2 (citing Salamon v. Our Lady of Victory Hosp., 514 F.3d 217, 226 (2d Cir. 2008); Gulino v. New York State Educ. Dep't, 460 F.3d 361, 372 (2d Cir. 2006)). For hiring, “courts look ‘primarily to whether a plaintiff has received direct or indirect remuneration from the alleged employer.'” Id. (quoting Gulino, 460 F.3d at 372). “Where no financial benefit is obtained by the purported employee from the employer, no plausible employment relationship of any sort can be said to exist.” Id. (quoting Gulino, 460 F.3d at 372). “If the prerequisite of hiring is shown, then the question of ‘[w]hether a hired person is an employee under the common law of agency depends on a fact-specific analysis of thirteen factors.'” Id. (quoting Salamon, 514 F.3d at 226). Those factors are:
[1] the hiring party's right to control the manner and means by which the product is accomplished[;] . . . [2] the skill required; [3] the source of the instrumentalities and tools; [4] the location of the work; [5] the duration of the relationship between the parties; [6] whether the hiring party has the right to assign additional projects to the hired party; [7] the extent of the hired party's discretion over when and how long to work; [8] the method of payment; [9] the hired party's role in hiring and paying assistants; [10] whether the work is part of the regular business of the hiring party; [11] whether the hiring party is in business; [12] the provision of employee benefits; [13] and the tax treatment of the hired party.Id. at *3 (quoting Salamon, 514 F.3d at 227); see also Farmer v. Shake Shack Enters., LLC, 473 F.Supp.3d 309, 321 (S.D.N.Y. 2020) (noting same test applies under both the NYSHRL and the NYCHRL). In anti-discrimination cases such as this one, the Second Circuit has held that courts should “place special weight on the extent to which the hiring party controls the manner and means by which the worker completes [his] assigned tasks.” Eisenberg v. Advance Relocation & Storage, Inc., 237 F.3d 111, 117 (2d Cir. 2000) (internal quotation marks omitted).
Some courts have applied a four-factor balancing test to claims under the NYSHRL, see, e.g., Hargett v. Metro. Transit Auth., 552 F.Supp.2d 393, 405 (S.D.N.Y. 2008) (articulating four factors as follows: (1) power of selection and engagement; (2) payment of salary or wages; (3) power of dismissal; and (4) power to control conduct), and that test is “nearly identical to the multi-factor common-law agency test[.]” Wang v. Phoenix Satellite Television US, Inc., 976 F.Supp.2d 527, 536 (S.D.N.Y. 2013); accordSalamon, 514 F.3d at 226 n.9 (“We typically treat Title VII and NYHRL discrimination claims as analytically identical[.]”). “Similarly, under the NYCHRL, ‘common-law principles . . . determine who may be liable as an employer . . . with greatest emphasis placed on the alleged employer's power ‘to order and control' the employee in his or her performance of work.'” Lation v. Fetner Props., Inc., No. 17-CV-03276 (JPO), 2017 WL 6550691, at *3-4 (S.D.N.Y. Dec. 22, 2017) (quoting Griffin v. Sirva, Inc., 29 N.Y.3d 174, 186 (2017)). Here, the Court finds that whichever test is used, the result is the same. Accord Hargett, 552 F.Supp.2d at 405-06 (anlayzing ADEA, NYSHRL and Section 1981 claims together).
Liberally construing the original Complaint, Judge Torres found that while the question of remuneration was “a close one[, ]” Plaintiff's allegations that he had been scammed out of commission and reward monies from Mitsubishi “support[ed] the inference that Plaintiff received at least some compensation from MMNA.” Nelson, 2020 WL 1244295, at *3. However, Judge Torres further found that the Complaint did not plausibly allege that MMNA exercised control over Plaintiff's work or that other common-law factors pointed to the existence of an employment relationship. Id. In particular, the Complaint did “not describe any action taken by MMNA towards Plaintiff, much less allege that MMNA gave Plaintiff ‘orders' or directed him as to ‘where to go and what to do.'” Id. (quoting Eisenberg, 237 F.3d at 117).
In the Amended Complaint, Plaintiff alleges that MMNA paid salespersons for each MMNA vehicle sold as part of the Diamond Reward program. (Am. Compl. at 8; see also Am. Compl. Ex. C.) Although MMNA argues that these payments are inconsequential and do not constitute remuneration, I find that Plaintiff plausibly alleges that he received remuneration from MMNA based on these payments. However, I find that Plaintiff still has not plausibly alleged that MMNA controls the manner and means by which he completes his assigned tasks or otherwise plausibly alleged a direct employment relationship. Plaintiff alleges that MMNA exerts significant control over Victory's daily operations, including, among other things, the hours of operation and exerts control over sales localities and recordkeeping requirements. (Am. Compl. at 7, 9.) Plaintiff further alleges that MMNA requires sales personnel to complete mandatory training that is designed and monitored by MMNA; that MMNA provides guidance to franchisees on how to hire and train employees; and that the Dealer Agreement is terminable based on certain employee conduct. (Am. Compl. at 7-9.) Significantly, however, Plaintiff also alleges that Victory “retains the responsibility for decision[s] regarding employment.” (Id. at 7.)
The fact that MMNA provided certain guidance and training to Victory is not enough to create an employment relationship for purposes of Title VII without some facts to suggest that it controlled the manner and means of Plaintiff's daily tasks. See Reeve v. SEI/Aaron's, Inc., No. 06-CV-0642C, 2008 WL 905908, at *3 (W.D.N.Y. Mar. 31, 2008) (fact that franchisor assisted franchisee with “site selection, personnel selection, training, marketing, communication and volume purchasing” and provided ongoing support did not suggest that franchisor maintained control of employee relationships on day-to-day basis). Moreover, the fact that MMNA retained the authority to terminate the Dealer Agreement is not sufficient to create an employment relationship. Cf. Courtland v. GCEP-Surprise, LLC, No. 12-CV-00349 (PHX) (GMS), 2013 WL 3894981, at *4 (D. Ariz. July 29, 2013) (no joint employer liability based on power to terminate franchise agreement). Thus, I find that Plaintiff has not adequately alleged a direct employment relationship with MMNA.
A second doctrine, the single employer doctrine, also may apply in cases where two or more entities are involved in an individual's employment. See Local 1180, 318 F.Supp.3d at 679. The single employer doctrine applies “when two nominally separate entities are actually part of a single integrated enterprise.” Id.; see also Arculeo v. On-Site Sales & Mktg., LLC, 425 F.3d 193, 198 (2d Cir. 2005) (citation omitted). Examples include “where ‘the plaintiff is an employee of a wholly-owned corporate subsidiary' or where ‘the plaintiff's employment is subcontracted by one employer to another, formally distinct, entity.'” Juhua Han v. Kuni's Corp., No. 19-CV-06265 (RA), 2020 WL 2614726, at *7 (S.D.N.Y. May 22, 2020) (quoting Gulino v. N.Y. State Educ. Dep't, 460 F.3d 361, 378 (2d Cir. 2006)). Plaintiff does not plead this theory in the Amended Complaint, but does mention it in his opposition papers. (See Pl.'s Letter Response at 2.) In any event, Plaintiff does not allege facts to show interrelation of operations, centralized control of labor relations, common management, or common ownership or financial support, the relevant factors in the single employer analysis. See Local 1180, 318 F.Supp.3d at 679. Notably, the Amended Complaint does not contain any allegations with respect to centralized control over labor relations, “the most important prong in the single-employer inquiry.” Laurin, 2004 WL 513999, at *6. To the contrary, Plaintiff alleges that Victory retained responsibility for decisions regarding employment. (Am. Compl. at 7.) Accordingly, I find that the single employer doctrine does not apply.
The joint employer doctrine “is used to analyze an admittedly separate entity's relationship to an alleged employee.” Laurin, 2004 WL 513999, at *8. The joint employer doctrine applies when separate legal entities have chosen to “handle certain aspects of their employeremployee relationships jointly.” Arculeo, 425 F.3d at 198; see also Griffith v. Coney Food Corp., No. 19-CV-01601 (NGG) (JO), 2020 WL 4748452, at *3 (E.D.N.Y. Aug. 17, 2020) (“The joint employer doctrine allows an employee who is ‘formally employed by one entity . . . to impose liability on another' based on ‘the relationship between two possible employers.'”) (quoting Knight v. State Univ. of New York at Stony Brook, 880 F.3d 636, 642 (2d Cir. 2018)).
“[T]he Second Circuit has not enumerated ‘a test for what constitutes joint employment in the context of Title VII[.]'” Farmer, 473 F.Supp.3d at 322 (quoting Arculeo, 425 F.3d at 199 n.7). “Instead, it has held that ‘an essential element' of such a finding requires ‘sufficient evidence of immediate control over the employees.'” Id. at 322-23 (quoting Serv. Emps. Int'l Union, Local 32BJ v. NLRB, 647 F.3d 435, 442 (2d Cir. 2011) (alteration omitted)); see also Griffith, 2020 WL 4748452, at *3 (“In determining joint employer status, courts look to whether the defendant exercised ‘immediate control' over the other company's employees.”). “Similar factors are assessed to determine ‘immediate control' under both federal and state discrimination laws, including ‘commonality of hiring, firing, discipline, pay, insurance, records, and supervision.'” Griffith, 2020 WL 4748452, at *3; see also Farmer, 473 F.Supp.3d at 323 (same factors) (quoting Shiflett v. Scores Holding Co., 601 Fed.Appx. 28, 30 (2d Cir. 2015); Brankov v. Hazzard, 142 A.D.3d 445, 446, 36 N.Y.S.3d 133, 134 (1st Dep't 2016) (applying “immediate control” test to NYSHRL and NYCHRL claims).
Liberally construing the Amended Complaint, I find that Plaintiff has not alleged facts that MMNA had immediate control over Victory's employees. Plaintiff admits that Victory had responsibility for employment decisions. In addition, while Plaintiff argues that MMNA monitored sales personnel to determine the pay scale that applied for purposes of payments under the Diamond Rewards program (Pl.'s Opp. Mem. at 5), he does not allege any involvement by MMNA in Victory's decision to hire, supervise or terminate him. Further, the Dealer Agreement indicates that Defendants Diane Argyropoulous and Philip Argyropoulous, as General Manager and Dealer Principal, respectively, had “full authority to make all decisions on behalf of [Victory] with respect to dealership operations.” (Dealer Agmt., ECF No. 122-8, at 2.) Accordingly, I recommend that MMNA's motion to dismiss be granted. See Parker v. Equinox Holdings, Inc., No. 20-CV-03306 (JPO), 2020 WL 7404788, at *2 (S.D.N.Y. Dec. 17, 2020) (granting motion to dismiss when plaintiff has not alleged facts that would establish employer relationship under either joint or single employer doctrines); accord Boon v. Clark Foods, Inc., No. 7:16-CV-00160 (HL), 2017 WL 6622554, at *5 (M.D. Ga. Dec. 28, 2017) (“Courts have consistently held that the franchisor/franchisee relationship does not create an employment relationship between a franchisor and a franchisee's employees.”).
The Court recognizes that the existence of a joint employer relationship is often resolved at the summary judgment stage, rather than on the basis of the complaint alone. See Griffith, 2020 WL 4748452, at *3. However, in this case, the Court finds that the allegations in the Amended Complaint and the documents attached thereto, do not plausibly allege that MMNA was Nelson's employer. Cf. McHenry v. Fox News Network, LLC, No. 19-CV-11294 (PAE), 2020 WL 7480622, at *21 (S.D.N.Y. Dec. 18, 2020) (granting motion to dismiss when amended complaint “fail[ed] to allege sufficient facts from which the inference reasonably arises that the Fox Corp. and Fox News were [plaintiff's] single employer.”).
To the extent courts have analyzed whether a franchisor could be vicariously liable for the conduct of a franchisee separately from the employer analysis, see, e.g., Johnson v. Wendy's Corp., No. 19-CV-08157 (MKV), 2021 WL 243055, at *5 (S.D.N.Y. Jan. 25, 2021) (franchisor neither employed plaintiff nor had control over franchisee's daily operations or employment decisions) (citing cases), the Court finds no basis for vicarious liability here because Plaintiff has not alleged that MMNA had control over any of the employees alleged to have discriminated against Plaintiff or that MMNA played any role in the alleged discrimination. See Cha v. Hooters of Am., LLC, No. 12-CV-04523 (DLI) (JMA), 2013 WL 5532745, at *2 (E.D.N.Y. Sept. 30, 2013) (franchisor not vicariously liable for alleged discrimination by employees of franchisee when franchisor “lack[ed] day-to-day control over the instrumentality that [gave] rise to a plaintiff's claim.”).
III. Leave To Amend
“In this circuit, ‘[i]t is the usual practice upon granting a motion to dismiss to allow leave to replead.'” Leneau v. Ponte, No. 16-CV-00776 (GHW), 2018 WL 566456, at *18 (S.D.N.Y. Jan. 25, 2018) (quoting Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991)). However, a District Court may deny leave to amend “for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing party.” Holmes v. Grubman, 568 F.3d 329, 334 (2d Cir. 2009). Because I find that Plaintiff's Title VII and ADEA claims against MMNA should be dismissed for failure to exhaust, further amendment of those claims would be futile. See Colquitt v. Xerox Corp., 546 Fed.Appx. 26, 28 (2d Cir. 2013) (“Because [plaintiff's Title VII] claims were not administratively exhausted, and because an amendment to add factual detail to those claims would not cure this substantive flaw, the district court properly dismissed those claims without granting leave to replead.”). With respect to the remaining claims, Nelson already has been given one opportunity to amend his claims against MMNA, and the Court finds that further amendment is not warranted. See Echavarria v. ABM Indus. Grp. LLC, No. 20-CV-09247 (LLS), 2021 WL 794944, at *4 (S.D.N.Y. Feb. 26, 2021) (denying further leave to amend when plaintiff had “already been given an opportunity to amend but ha[d] failed to cure the complaint's deficiencies.”).
CONCLUSION
For the foregoing reasons, I recommend that MMNA's motion to dismiss the Amended Complaint (ECF No. 122) be GRANTED.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d) (adding three additional days when service is made under Fed.R.Civ.P. 5(b)(2)(C), (D) or (F)). A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Torres.
THE FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).