Opinion
NO. 3-02-CV-2435-L.
June 17, 2003.
FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Defendants General Electric ("GE") and GE Capital Information Technology Solutions ("GECITS") have filed a motion to dismiss this case alleging violations of Title VII of the Civil Rights Act of 1964, as amended ("Title VII"), 42 U.S.C. § 2000e-3(a), the Texas Commission on Human Rights Act ("TCHRA"), TEX. LAB. CODE ANN. § 21.055, and tortious interference with business relations and prospective business relations. For the reasons stated herein, the motion should be granted in part and denied in part.
I.
Plaintiff Kathy D. Kern, a female, went to work for GECITS on March 25, 1991. (Plf. Orig. Compl. at 1, ¶ 1 2, ¶ 7). She was promoted to Senior Product Marketing Manager in August 1999 and assumed responsibility for the GE account and GECITS's software line of business. ( Id. at 2, ¶ 7). As part of her job, plaintiff worked as a facilitator, or reseller, of software packages purchased by GE and its affiliated companies, including products manufactured by Novell, Microsoft, Veritas, and others. ( Id. at 4, ¶ 12). Plaintiff enjoyed a good relationship with GE until she was laid-off by GECITS on July 17, 2000. ( Id. at 2, ¶ 7).
Plaintiff acknowledges that GE and GECITS, a subsidiary of GE Capital, are separate and distinct companies in the sense that they are not parent and subsidiary. (Plf. Orig. Compl. at 1-2, ¶¶ 2-3 3, ¶ 10). However, according to plaintiff, employees of GECITS and GE Capital are subject to the same personnel polices and procedures which are formulated by GE. This includes an internal dispute resolution system known as RESOLVE. Additionally, plaintiff alleges that GE Capital and GECITS "are recognized members of the GE family of companies, which is evidenced by the information contained on GE's website,www.ge.com." ( Id.). The extent to which GE controls the operations and employment decisions of GE Capital and its subsidiary, GECITS, is central to many of the issues raised by defendants in their motion to dismiss.
Some months later, plaintiff was hired by Amherst International ("Amherst"), an independent reseller of computer hardware and software packages. (Id. at 4, ¶ 12). In an attempt to develop her customer base, plaintiff contacted Susannah Jacobson and Mark Mastrianni, two GE representatives who negotiate licensing agreements for the GE family of companies, to inquire whether she could bid on GE business. (Id. at 4-5, f 13 15). Jacobson told plaintiff that GE's Microsoft license was not up for renewal, but that she would consider plaintiff for the Veritas and Novell licensing agreements. (Id. at 5, ¶ 15). With Jacobson's approval, plaintiff successfully negotiated an extension of GE's global agreement with Novell in March 2001. (Id. at 5, ¶ 16). She also began working on securing business from a GE affiliate, GE Plastics. (Id. at 5-6, ¶ 18). However, shortly after April 18, 2001, plaintiff learned that Jacobson had negotiated a new deal with Novell directly. (Id. at 5, ¶ 17). When asked why GE would not allow Amherst to fulfill the contract, Jacobson told plaintiff that she "needed to drop it . . ." (Id.). Jacobson also said that plaintiff would not be getting any future GE business and not to call her again. (Id.).
Plaintiff now believes that GE refuses to do business with her because she filed a charge of sex discrimination against GECITS when she was terminated in July 2000. ( Id. at 6, ¶ 18). As a result, plaintiff alleges that she lost $13,500 in commissions on the Novell contract, was deprived of the opportunity to bid on a $24 million contract with Microsoft in December 2001, and continues to be locked out of business opportunities with GE and its related companies. ( Id. at 6, 1 19). On July 8, 2002, plaintiff filed a second charge of discrimination, this time against GE, alleging that she was retaliated against for engaging in protected legal activity. (Def. App., Exh. A). Plaintiff received right-to-sue letters from the EEOC and the TCHR on September 30, 2002 and November 7, 2002, respectively. (Plf. Orig. Compl. at 6, ¶ 20).
Plaintiff subsequently sued GECITS in federal district court for violations of Title VII, the TCHRA, the Equal Pay Act, and for quantum meruit and fraud. That case was dismissed on defendant's motion for summary judgment and is currently on appeal. Kern v. GE Capital Information Technology Solutions, No. 3-01-CV-2109-P (N.D. Tex. Feb. 19, 2003), appeal docketed, No. 03-10191.
On November 7, 2002, plaintiff filed this suit against GE and GECITS for: (1) retaliation in violation of Title VII and the TCHRA; and (2) tortious interference with business relations and prospective business relations. Defendants now move to dismiss these claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The motion has been fully briefed by the parties and is ripe for determination.
II.
A motion to dismiss under Rule 12(b)(6) "is viewed with disfavor and is rarely granted." Lowrey v. Texas AM University System, 117 F.3d 242, 247 (5th Cir. 1997), quoting Kaiser Aluminum Chemical Sales, Inc. v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir. 1982), cert. denied, 103 S.Ct. 729 (1983). A district court may dismiss a complaint "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984). The complaint must be liberally construed in favor of the plaintiff and the allegations contained therein must be taken as true. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
The exacting standards governing Rule 12(b)(6) motions must be considered in light of the liberal pleading requirements of Rule 8(a). In what has been characterized as a "seminal pleading case," the Supreme Court has reminded lower courts that, in order to survive a motion to dismiss, a complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 122 S.Ct. 922, 998, 152 L.Ed.2d 1 (2002), quoting FED. R. CIV. P. 8(a)(2). This simplified pleading standard applies to all civil actions. Id., 122 S.Ct. at 998. Except in a limited set of cases, a plaintiff is not required to plead facts supporting each and every element of his claim or legal theory. Id. Rather, a complaint is sufficient if it "give[s] the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Id., quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957). See also Higgs v. Carver, 286 F.3d 437, 439 (7th Cir. 2002) (interpreting Swierkiewicz to mean that "[a] complaint that complies with the federal rules of civil procedure cannot be dismissed on the ground that it is conclusory or fails to allege facts"). Liberal discovery rules and summary judgment motions, not motions to dismiss, should be used to define disputed facts and issues and to dispose of unmeritorious claims. See Swierkiewicz, 122 S.Ct. at 998.
These exceptions are found in Rule 9(b), which provides:
In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.
FED. R. CIV. P. 9(b).
III.
Defendants argue that plaintiff's retaliation claims against GE and GECITS are barred by limitations. Alternatively, defendants contend that the retaliation claims should be dismissed because plaintiff has failed to establish the existence of an employment relationship with GE and did not name GECITS as a party in her EEOC charge. The court will address these grounds for dismissal in turn.
A.
A retaliation claim brought under Title VII or the TCHRA must first be presented to the appropriate federal or state agency in a charge of discrimination. In deferral states such as Texas, the charge must be filed within 300 days after the "alleged unlawful employment practice occurred." See 42 U.S.C. § 2000e-5(e)(1); Hadad v. American Airlines, Inc., 2003 WL 292170 at *2 n. 5 (N.D. Tex. Feb. 7, 2003) (citations omitted). The 300-day filing period is not jurisdictional, but operates as a statute of limitations. See, e.g. Blumberg v. HCA Management Co. Inc., 848 F.2d 642, 644 (5th Cir. 1988), cert. denied, 109 S.Ct. 789 (1989); Pruet Production Co. v. Ayles, 784 F.2d 1275, 1279 (5th Cir. 1986). The period commences on the date the alleged unlawful practice occurred. Waltman v. International Paper Co., 875 F.2d 468, 474 (5th Cir. 1989), citing Delaware State College v. Ricks, 449 U.S. 250, 258, 101 S.Ct. 498, 504, 66 L.Ed.2d 431 (1980).
Defendants contend that the limitations period on plaintiff's retaliation claim started to run on April 18, 2001, the day Susannah Jacobson told plaintiff that she would not get the Novell contract or any future business from GE. (Def. Mot. at 3; Plf. Orig. Compl. at 5, ¶ 17). This was more than 300 days before plaintiff filed her charge of discrimination with the EEOC. Plaintiff tacitly concedes that she is barred from suing for any unlawful employment practice that occurred outside this 300 day period, or prior to September 11, 2001. (See Plf. Resp. Br. at 13-14). However, she maintains that each and every business opportunity lost as a result of defendants' retaliatory conduct, including lost opportunities dating back to April 18, 2001, constitutes a continuing or "discrete" violation of Title VII. According to plaintiff:
Kern lost potential commission each and every time that a business opportunity became available with GE and its affiliates, and from which she was prohibited from competing with GECITS or any other reseller of software equipment because of Defendants' continued policy not to do any business with her (i.e., Jacobson's statement for Kern not to call her for any future business) as retaliation against her for filing a charge of discrimination against GECITS.(Id. at 13).
Absent evidence of discrete acts of retaliation occurring after September 11, 2001, plaintiff's Title VII and TCHRA claims will likely be time-barred. See National R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 113-15, 122 S.Ct. 2061, 2072-73, 153 L.Ed.2d 106 (2002) (retaliation claims generally involve discrete acts and must be brought within the applicable limitations period). But the court is unable to say, at this stage of the litigation, that plaintiff can prove no set of facts which would entitle her to relief. In her complaint, plaintiff alleges that she lost the opportunity to bid on GE's contract with Microsoft in December 2001 "due to GE's interference." (Plf. Orig. Compl. at 6, ¶ 19). Plaintiff further alleges that she "continues to this day to be locked out of opportunity to bid on GE business and potentially all of the affiliates' business." (Id.). Liberally construed, these allegations can be read to suggest that defendants have engaged in discrete acts of retaliation against plaintiff within the limitations period, and continue to engage in such unlawful activity. Accordingly, defendants' motion to dismiss should be denied on this ground. See Funches v. City of Dallas, 1999 WL 261842 at *2 (N.D. Tex. Apr. 28, 1999), citing Whirlpool Financial Corp. v. GN Holdings, Inc., 67 F.3d 605, 608 (7th Cir. 1995) (in order for defendant to prevail on limitations defense at pleading stage, "the plaintiff must normally plead himself out of court").
The court notes that the continuing violation doctrine will not salvage plaintiff's retaliation claim based on conduct that occurred outside the limitations period. This doctrine provides an equitable exception to the statute of limitations where an unlawful employment practice manifests itself over time rather than as a series of discrete acts. Hensley v. General Motors Corp., 2003 WL 298902 at *6 (N.D. Tex. Feb. 11, 2003) (citing cases). Notwithstanding the continuing violation doctrine, "discrete discriminatory acts are not actionable if time-barred, even when they are related to acts alleged in timely filed charges." Id., quoting Morgan, 122 S.Ct. at 2072.
B.
Alternatively, defendants contend that plaintiff s retaliation claim against GE should be dismissed for failure to establish the existence of an employment relationship. By its terms, the retaliation provision of Title VII applies only to "employers." See 42 U.S.C. § 2000e-3(a). The term "employer" has been broadly interpreted to include "superficially distinct entitles that are sufficiently interrelated to constitute a single, integrated enterprise." Lusk v. Foxmeyer Health Corp., 129 F.3d 773, 777 (5th Cir. 1997); Trevino v. Celanese Corp., 701 F.2d 397, 404 (5th Cir. 1983). Among the factors to be considered in determining whether separate entities constitute a single, integrated enterprise are: (1) interrelated operations; (2) centralized control of labor relations; (3) common management; and (4) common ownership or financial control. Trevino, 701 F.2d at 404. The second factor, centralized control of labor relations, is traditionally regarded as most important. In analyzing this issue, courts have focused almost exclusively on one question: "[W]hich entity made the final decisions regarding employment matters relating to the person claiming discrimination." Wright v. Cygnet Financial Services/Ugly Duckling, 2001 WL 1658123 at *4 (N.D. Tex. Dec. 21, 2001), citing Schweitzer v. Advanced Telemarketing Corp., 104 F.3d 761, 764 (5th Cir. 1997).
This statute provides, in pertinent part:
It shall be an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment . . . because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.42 U.S.C. § 2000e-3(a). The Supreme Court has held that a former employer may be sued under Title VII for retaliatory post-employment actions. See Robinson v. Shell Oil Co., 519 U.S. 337, 346, 117 S.Ct. 843, 849, 136 L.Ed.2d 808 (1997).
Like Title VII, the TCHRA applies only to "employers." See TEX. LAB. CODE ANN. § 21.055. However, a plaintiff need not have a direct employment relationship with the defendant to sue for unlawful employment practices under the Act. See NME Hospitals, Inc. v. Rennels, 994 S.W.2d 142, 146 (Tex. 1999). If no direct employment relationship exists, the plaintiff must show: (1) that the defendant meets the definition of an employer under the TCHRA; (2) that an employment relationship exists between the plaintiff and some other party; and (3) that "the defendant controlled access to the plaintiff's employment opportunities and denied or interfered with that access based on unlawful criteria." Id. at 147.
This statute provides, in pertinent part:
An employer . . . commits an unlawful employment practice if the employer . . . retaliates or discriminates against a person who, under this chapter:
(1) opposes a discriminatory practice;
(2) makes or files a charge;
(3) files a complaint; or
(4) testifies, assists, or participates in any manner in an investigation, proceeding, or hearing.
TEX. LAB. CODE ANN. § 21.055.
Although plaintiff was never directly employed by GE, her complaint at least suggests that this defendant may qualify as an "employer" under Title VII and the TCHRA. More particularly, plaintiff alleges that employees of GE Capital and its subsidiary, GECITS, are subject to personnel polices and procedures formulated by GE. (Plf. Orig. Compl. at 3, ¶ 10). Additionally, GE Capital and GECITS "are recognized members of the GE family of companies . . ." (Id.). Plaintiff further alleges that GE representatives, such as Jacobson and Mastrianni, negotiate license agreements for the entire GE community of companies and act "as a de facto purchaser of the affiliates' licenses — having veto power as to which reseller the affiliates can purchase their licenses." ( Id. at 4, ¶ 13). These allegations, if proved, support an inference that GE controls the labor operations of its affiliates and made the final decisions regarding any retaliatory actions taken against plaintiff. Given the fact-intensive nature of this inquiry, dismissal at the pleading stage is not proper. See Vance v. Union Planters Corp., 279 F.3d 295, 297 (5th Cir.), cert. denied, 123 S.Ct. 83 (2002) (noting that "whether two employers are engaged in an integrated enterprise for purposes of Title VII is a fact intensive determination").
C.
Defendants also point out that plaintiff failed to name GECITS in her EEOC charge. As a general rule, a party not named in a charge of discrimination filed with the EEOC may not be sued under Title VII. See Way v. Mueller Brass Co., 840 F.2d 303, 307 (5th Cir. 1988). However, such a charge must be liberally construed because it is made by persons unfamiliar with the technicalities of formal pleadings. Terrell v. U.S. Pipe Foundry Co., 644 F.2d 1112, 1123 (5th Cir. 1981), vacated on other grounds, 102 S.Ct. 2028 (1982); Tillman v. City of Boaz, 548 F.2d 592, 594 (5th Cir. 1977). The purpose of an EEOC charge is to trigger an investigation by the agency so that, through a conciliation process, voluntary compliance may be achieved and discriminatory policies and practices eliminated. Terrell, 644 F.2d at 1123. Consequently, the scope of a Title VII suit extends "as far as, but no further than, the scope of the EEOC investigation which could reasonably grow out of the administrative charge." Id. The reasonable limits of such an investigation define not only the substantive issues in a subsequent Title VII action, but also the parties potentially liable for any violation found. Id.
Plaintiff did not identify GECITS as a party in her EEOC charge filed on July 8, 2002. In fact, the only reference to GECITS is the following statement contained in an attachment to the charge:
I was formerly employed by GE Capital ITS until July 7, 2000 [sic]. I filed a charge of sex discrimination for my termination, in violation of Title VII of the Civil Rights Act, as amended and the Texas Labor Code on December 5, 2000. That charge number is 310-A1-0559.
(Def. App., Exh. A). Plaintiff goes on to explain that she was prohibited from doing business with GE affiliates because of GE's retaliatory actions after she filed a prior charge of sex discrimination against GECITS. ( Id.) (emphasis added). Although the EEOC charge does not directly accuse GECITS of retaliation, the court is unable to say that the claims against this defendant were beyond the reasonable limits of an EEOC investigation. In this connection, it is significant to note that GE and GECITS are represented by the same attorney who admits receiving a courtesy copy of the EEOC charge. (Def. Mot. at 2). Presumably, GECITS had an opportunity to participate in conciliation proceedings before suit was filed. There is also a clear identity of interest between GE, the party named in the charge, and GECITS, the unnamed party. While GECITS may ultimately prevail on this issue once the underlying facts are more fully developed, dismissal is not proper under the exacting standards of Rule 12(b)(6). See also Morris v. Drs. Coney, Husbands, McCullough, Oliver, Vines Associates, P.A., 1998 WL 59484 at *2 (N.D. Tex. Feb. 9, 1998) (denying motion to dismiss where party not named in EEOC charge had actual notice of charge and had opportunity to participate in conciliation proceedings).
Defendants rely on the affidavit of their attorney, Katie J. Colopy, to show that GECITS was never the subject of a retaliation claim filed with the EEOC. (Def. Mot., Exh. B). Such evidence is improper in the context of a Rule 12(b)(6) motion and will not be considered. See Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000).
IV.
Plaintiff also sues for tortious interference with business relations and prospective business relations. Under Texas law, both claims require proof of intentional or willful conduct. See National Center for Policy Analysis v. Fiscal Associates, Inc., 2002 WL 433038 at *8 (N.D. Tex. Mar. 15, 2002), citing Texas Beef Cattle Co. v. Green, 921 S.W.2d 203, 210 (Tex. 1996) and Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001) (discussing elements of tortious interference with business relations and prospective business relations under Texas law). Defendants argue that plaintiff has failed to allege sufficient facts in her complaint which, if proved, establish that GE and GECITS engaged in any intentional, willful, and independently wrongful conduct that interfered with her current employment relationship with Amherst and any prospective business opportunities.
The gravamen of plaintiff's complaint is that GE, through its representatives, retaliated against her for filing a charge of sex discrimination against GECITS. ( See Plf. Orig. Compl. at 5-6, ¶¶ 17-19). Plaintiff specifically alleges that GE had knowledge of her existing and prospective contracts and business relations, and "willfully and intentionally caused Kern to lose business [and any potential business] that she could have secured for her current employer." ( Id. at 8, ¶ 36 9, 41). Liberally construed, these allegations are sufficient to state a claim against GE for tortious interference with business relations and prospective business relations.
The court reaches a different conclusion with respect to GECITS. Even the most generous reading of plaintiff's complaint fails to disclose any act of intentional or willful interference that would subject this defendant to liability. Accordingly, the tort claims against GECITS should be dismissed.
Plaintiff seeks leave to amend her complaint in lieu of outright dismissal to clarify "the alleged ambiguity of facts" with respect to her tortious interference claims. The proposed amendment would add two allegations to her complaint: (1) plaintiff never informed anyone at GE of her pending charge of discrimination against GECITS when she began doing business with GE and its affiliates on behalf of Amherst; and (2) a representative of GECITS informed GE of plaintiff's charge of discrimination against GECITS. (See Plf. Resp. Br. at 24). While these new allegations clarify the manner in which GE received notice of plaintiff's prior discrimination claim, they do not support an inference that anyone at GECITS intentionally and wilfully interfered plaintiff's business relations or prospective business relations with her current employer.