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Loudon v. Healthsouth Corp.

United States District Court, D. Kansas

June 6, 2017

CATHERINGE J. LOUDON, Plaintiff,
v.
HEALTHSOUTH CORPORATION and K.C. REHABILITATION HOSPITAL, INC. d/b/a MID AMERICA REHABILITATION HOSPITAL Defendants.

          MEMORANDUM AND ORDER

          JULIE A. ROBINSON, UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendants HealthSouth Corporation (“HealthSouth”) and K.C. Rehabilitation Hospital, Inc., d/b/a Mid America Rehabilitation Hospital's (“MARH”) Motion to Dismiss (Doc. 6). The motion is fully briefed and the Court is prepared to rule. For the reasons explained in detail below, the Court grants in part and denies in part Defendants' motion to dismiss. The motion is granted as unopposed as to Defendant HealthSouth and denied as to MARH.

         I. Factual Background

         The following facts are alleged in Plaintiff's Complaint and assumed to be true for purposes of this motion. Plaintiff was employed by Defendant MARH as the Director of Human Resources. Troy Dedecker, CEO of MARH, directly supervised Plaintiff. Plaintiff was terminated from her job as Director of Human Resources on February 25, 2015.

         During the final months of Plaintiff's employment, Mr. Dedecker directed Plaintiff not to suspend a male harasser (“JK”) after a female employee (“LO”) complained of sexual harassment by JK. Plaintiff told Mr. Dedecker she did not agree with this decision because during similar investigations, she had suspended the alleged harasser. LO was upset with Plaintiff for not terminating JK and contacted Mr. Dedecker, calling the situation an “assault” for the first time. Mr. Dedecker contacted corporate Human Resources, which he had previously told Plaintiff not to do; and, corporate Human Resources wanted to know why they had not been contacted immediately once a claim of sexual harassment had been made.

         Mr. Dedecker also instructed Plaintiff to terminate LO three times. Plaintiff refused Mr. Dedecker's request due to lack of evidence.

         Plaintiff alleges Mr. Dedecker assaulted a female employee, DW, in her presence. Further, she alleges Mr. Dedecker tried to downplay the incident and wanted Plaintiff to do the same.

         Plaintiff also expressed concerns to Mr. Dedecker about salary inequity among employees based on gender and race.

         Plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) on December 16, 2015, claiming discrimination based on race and sex, and retaliation. On July 20, 2016, the EEOC issued Plaintiff a Notice of Right to Sue letter. Plaintiff filed her Complaint with this Court on October 18, 2016.

         II. Standard

         Fed. R. Civ. P. 12(b)(6) provides a vehicle for a party to challenge the legal sufficiency of a claim. The requirements underlying the legal sufficiency of a claim stem from Rule 8(a), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief.”[1]

         To survive a motion to dismiss for failure to state a claim, a complaint must present factual allegations, assumed to be true, that “raise a right to relief above the speculative level, ” and must contain “enough facts to state a claim to relief that is plausible on its face.”[2] “[T]he complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.”[3] The plausibility standard does not require a showing of probability that a defendant has acted unlawfully, but requires more than “a sheer possibility.”[4] “[M]ere ‘labels and conclusions, ' and ‘a formulaic recitation of the elements of a cause of action' will not suffice; a plaintiff must offer specific factual allegations to support each claim.”[5] Finally, the court must accept the nonmoving party's factual allegations as true and may not dismiss on the ground that it appears unlikely the allegations can be proven.[6]

         The Supreme Court has explained the analysis as a two-step process. For the purposes of a motion to dismiss, the court “must take all the factual allegations in the complaint as true, [but] we ‘are not bound to accept as true a legal conclusion couched as a factual allegation.'”[7] Thus, the court must first determine if the allegations are factual and entitled to an assumption of truth, or merely legal conclusions that are not entitled to an assumption of truth.[8] Second, the court must determine whether the factual allegations, when assumed true, “plausibly give rise to an entitlement to relief.”[9] “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”[10]

         III. Discussion

         Plaintiff alleges claims of retaliation against Defendants under Title VII of the Civil Rights Act of 1964, and 42 U.S.C. § 1981. The protections of Title VII apply only to discrimination against an employee by that person's employer.[11] Section 1981 prohibits race discrimination in making and enforcing contracts, [12] including employment contracts.[13] Plaintiff concedes that she is not employed by HealthSouth, and that her claims against HealthSouth should be dismissed without prejudice. Therefore, the Court proceeds to consider whether Plaintiff has stated viable claims of retaliation against MARH.

         While a plaintiff does not need to establish a prima facie case of retaliation to survive a Rule 12(b)(6) motion, courts examine the elements of a prima facie case of retaliation to determine whether the plaintiff set forth a plausible claim.[14] The elements of a prima facie claim of retaliation under Title VII and § 1981 are: (1) the employee engaged in protected activity; (2) the employee suffered an adverse employment action; and (3) a causal connection exists between the protected activity and the materially adverse action.[15]

         There is no dispute that Plaintiff's termination on February 25, 2015 constitutes an adverse employment action. At issue is whether Plaintiff sufficiently alleged her engagement in a protected activity and the causal connection between this protected activity and her termination.

         A. Protected Opposition

         Protected activities fall under two categories: participation and opposition.[16] Plaintiff brings her claims under Title VII's “opposition clause.” The “opposition clause” makes it unlawful for an employer to retaliate against an employee who communicates a belief that the employer engaged in unlawful employment practices under Title VII.[17] In her Complaint, Plaintiff alleges she engaged in protected opposition by: (1) suspending an alleged male sexual harasser; (2) refusing to terminate the female accuser because she had complained about sexual harassment; (3) reporting and opposing concerns about salary inequities based on gender/sex and race; and (4) refusing Dedecker's directive not to involve corporate human resources.

         1. Manager Rule

         Defendants first argue that the “manager rule” established by the Tenth Circuit in McKenzie v. Renberg's, Inc.[18] dictates that Plaintiff did not engage in protected opposition to discrimination. Under the “manager rule, ” employees that are required as part of their job duties to report or investigate complaints of discrimination, cannot claim that the reporting or investigating itself is a protected activity under the “opposition clause” because conveying others' discrimination complaints is not the same as opposing unlawful practices.[19] Plaintiff alleges that the “manager rule” is no longer good law because the United States Supreme Court has since clarified the scope of the opposition clause, explaining that to “oppose” an unlawful employment practice under Title VII, means “to resist or antagonize . . .; to contend against; to confront; resist; [or] withstand.”[20] The Court stated that “‘[o]ppose' goes beyond ‘active, consistent' behavior in ordinary discourse, where we would naturally use the word to speak of someone who has taken no action at all to advance a position beyond disclosing it.”[21]

         In Weeks v. Kansas, the Tenth Circuit declined to address Crawford's effect on the “manager rule” because the plaintiff did not raise this argument during the appellate proceedings or at the district court level, but noted, “[w]hether and how this general standard [for opposition] meshes with McKenzie is unclear.”[22] The Court reiterated McKenzie's holding that

to engage in protected opposition [an employee] must . . . ‘step outside . . . her role of representing the company and either file (or threaten to file) an action adverse to the employer, actively assist other employees in asserting [Title VII] rights, or otherwise engage in activities that reasonably could be perceived as directed towards, the assertion of right protected by [Title VII].[23]

         Other circuits have reached varying determinations as to Crawford's impact on the “manager rule.”[24] The Eleventh Circuit limited Crawford's reach, noting that Crawford has not foreclosed the manager rule because it “pertained only to whether the reporting of a harassment claim was covered by Title VII when the reporting was solicited rather than volunteered.”[25]

         Accordingly, the Eleventh Circuit found that Crawford “did not address whether a disinterested party to a harassment claim could use that harassment claim as its own basis for a Title VII action.”[26] Thus, under the Eleventh Circuit's application of Crawford, the ...


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