Opinion
Civil Action 4:22-cv-0144-JD-TER
10-12-2022
MELISSA KUHN, Plaintiff, v. INLET CREEK PROPERTIES, INC., WAVERLY CREEK PROPERTIES, INC., RJS ENTERPRISES, INC., RALEY D. SMITH, and SAMANTHA RALEY, Defendants.
REPORT AND RECOMMENDATION
Thomas E. Rogers, III, United States Magistrate Judge.
I. INTRODUCTION
This action arises from Plaintiff's employment. Plaintiff alleges causes of action for discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. § 2000(e) et seq., discrimination, failure to provide a reasonable accommodation, and retaliation in violation of the Americans with Disabilities Act (ADA), 42 U.S.C. § 12101, et seq., violation of and retaliation in violation of the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. § 201, et seq., violation of the South Carolina Payment of Wages Act (SCPWA), SC Code Ann. § 41-10-10, et seq., wrongful discharge in violation of public policy, and battery. Presently before the court is Defendants Inlet Creek Properties, Inc., Waverly Creek Properties, Inc., RJS Enterprises, Inc., Homewood Loans, Inc., and Raley D. Smith's Motion to Dismiss Defendant Samantha Raley (ECF No. 21). Plaintiff filed a Response (ECF No. 23), and Defendants filed a Reply (ECF No. 25). All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. 636(b)(1)(A) and (B) and Local Rule 73.02 (B)(2)(g), DSC. This report and recommendation is entered for review by the district judge.
II. FACTUAL ALLEGATIONS
In her complaint, Plaintiff refers to Defendants collectively as “Dick's Pawn” or “Dick's Pawn Superstores.” See, e.g., Compl. ¶¶ 6, 14. Plaintiff alleges that Defendant Samantha Raley is “an employee and owner of the Defendants.” Compl. ¶ 7.
Plaintiff worked for Dick's Pawn from July 14, 2013, until June 9, 2020. Compl. ¶ 14. Plaintiff began her employment as a jewelry sales associate. Compl. ¶ 19. On August 14, 2015, Plaintiff began training with two employees who were preparing to retire to learn their jobs and take over their responsibilities. One employee was responsible for grading and certifying diamonds, pricing jewelry, carat weights, gemstone identifications, scrapping gold and distributing jewelry to stores. The other employee was responsible for processing jewelry and processing paperwork. Compl. ¶ 20. On November 8, 2015, both employees retired and Plaintiff assumed the job responsibilities of both. Compl. ¶ 21.
Throughout Plaintiff's employment, Defendants without notice or explanation changed Plaintiff's pay from hourly to salary and back again to avoid paying her overtime. Compl. ¶¶ 23-24. Plaintiff regularly worked in excess of 45 to 50 hours a week, working through lunch, to complete her responsibilities but rarely received overtime pay. Compl. ¶ 28. On August 28, 2017, Defendant Smith began threatening Plaintiff's employment, claiming she was falling behind. Plaintiff asked Smith for help from her coworkers to help meet his expectations or, alternatively, for approval of overtime. Smith became angry and changed Plaintiff's pay to salary in retaliation for her request. Compl. ¶ 26. Plaintiff objected to being placed on salary at this time and stated that Defendants needed to either pay her overtime or hire someone to help her. Defendant Smith became angry and refused her request. Compl. ¶ 27. After Plaintiff was placed on salaried pay following the August 28, 2017, meeting, she was never switched back to hourly pay and no longer received any overtime pay. Compl. ¶ 28. Defendant Smith's behavior towards Plaintiff changed significantly after she complained about being placed on salary. Compl. ¶ 29. He was increasingly hostile and more demanding, imposing impossible tasks and deadlines on Plaintiff. Compl. ¶ 29. On one occasion Defendant Smith became angry with Plaintiff and cursed at her and struck her on the arm, leaving a small bruise. Compl. ¶ 31. Plaintiff reported the incident to Defendant's General Manager, Richard Cundis. Compl. ¶ 32. Defendant Smith reserved his harshest and most abusive treatment for women, including Plaintiff. Compl. ¶ 42.
Plaintiff suffers from depression, anxiety, and attention deficit hyperactivity disorder, which require medical treatment. Compl. ¶¶ 17, 18. On June 7, 2019, Defendant Smith told Plaintiff she could not return to work until she saw a counselor about depression and started taking antidepressant medication. Defendant Smith insisted that Plaintiff talk to his sister, who is a retired nurse, about depression and medication for depression. The sister “diagnosed” Plaintiff with severe depression and disclosed her “diagnosis” to Defendant Smith. Plaintiff did eventually seek treatment for depression and anxiety. She began seeing a counselor every other week and taking medication. Compl. ¶ 34. Beginning June 13, 2019, Defendants provided Plaintiff the reasonable accommodation of leaving work at 3:30 once every other week for counseling appointments. She made up the time by working longer on other days. Compl. ¶ 35. In October of 2019, at the request of Defendant Smith, Plaintiff switched her counseling appointments to 8:00 am, once every other week. She continued to work longer on other days to ensure her work was done. Compl. ¶ 36. In December of 2019, Defendant Smith told Plaintiff that Defendants would no longer accommodate her counseling appointments. Compl. ¶ 37. Defendant Smith frequently referred to Plaintiff's depression in his abusive speech towards Plaintiff and within earshot of coworkers and customers. Compl. ¶¶ 38, 46.
In March of 2020, in the midst of the onset of COVID, Defendants changed Plaintiff's compensation from salary to hourly again, significantly reducing her pay. Compl. ¶ 39. Defendants did not require male managers to clock in and clock out but did require female managers, including Plaintiff, to do so. Compl. ¶ 43. As a result, male managers qualified for bonuses that female managers did not due to supposed clock-in, clock out issues. Compl. ¶ 44.
On June 8, 2020, Defendant Smith called Plaintiff and was extremely upset and verbally abused because of tasks he accused Plaintiff of not completing. He warned Plaintiff, “get ready, I'm going to come there to hand you your ass,” which required Plaintiff to take her anxiety medication in hopes of avoiding a panic attack. Compl. ¶ 47. When Defendant Smith arrived at Plaintiff's store, he berated her, screamed at her, threatened her, cursed at her, and threw a book at her. He told her to clock out while also telling her clock out. He stated “when you decide you want to work you can come back.” Compl. ¶ 48. Plaintiff continued to work to ensure that necessary paperwork was completed to allow other employees to get paid and then clocked out. Compl. ¶ 49.
The next day, Plaintiff returned to work and worked most of the day. Defendant Smith called Plaintiff and told her she was suspended for two weeks for recording Smith's verbal attack on her the previous day. Plaintiff resigned, being unable to bear any further abuse. Compl. ¶ 50.
III. STANDARD OF REVIEW
Defendants move to dismiss Defendant Samantha Raley pursuant to Fed.R.Civ.P. 12(b)(6). A Rule 12(b)(6) motion examines whether Plaintiff has stated a claim upon which relief can be granted. The United States Supreme Court has made clear that, under Rule 8 of the Federal Rules of Civil Procedure, the complaint must contain sufficient factual matter, accepted as true, to state a claim that is plausible on its face. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The reviewing court need only accept as true the complaint's factual allegations, not its legal conclusions. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555.
Expounding on its decision in Twombly, the United States Supreme Court stated in Iqbal:
[T]he pleading standard Rule 8 announces does not require “detailed factual allegations,” but it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation. A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.”
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.” 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.Iqbal, 556 U.S. at 677-78 (quoting Twombly, 550 U.S. at 555, 556, 557, 570) (citations omitted); see also Bass v. Dupont, 324 F.3d 761, 765 (4th Cir.2003).
IV. DISCUSSION
Defendants move to dismiss Samantha Raley from this action, first arguing that no such individual exists, at least in connection to the remaining Defendants and the allegations in the complaint. They further argue that, to the extent Plaintiff is referring to Defendant Smith's wife, Tina Louise Raley, who is often referred to as “Sam Raley,” Plaintiff still fails to state any claim for relief against this individual because Ms. Raley has never been an employee or owner of any corporate Defendant, nor was she ever a supervisor of Plaintiff. Defendants present these facts with respect to Ms. Raley in the form of an affidavit from Defendant Smith. See Smith Aff (ECF No. 251). However, a motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint, and this court's review of such a motion is generally limited to the allegations of the complaint itself. Occupy Columbia v. Haley, 738 F.3d 107, 116 (4th Cir.2013). Rule 12(d) provides that if the Court considers matters outside the pleadings, the Rule 12(b)(6) motion “must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d). “A district judge has ‘complete discretion to determine whether or not to accept the submission of any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion and rely on it, thereby converting the motion, or to reject it or simply not consider it.' ” Whitaker v. Md. Transit Admin., No. ELH-17-00584, 2018 WL 902169, at *7 (D. Md. Feb. 14, 2018) (quoting 5C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1366, at 159 (3d ed. 2004, 2011 Supp.)). The court declines to convert Defendants's motion to one for summary judgment or otherwise consider the affidavit at this stage of the litigation.
Defendants also argue that Plaintiff fails to state a claim against Defendant Raley as to any causes of action alleged in the complaint. In her Response, Plaintiff concedes that Defendant Raley is not a proper defendant with respect to the claims under Title VII or the ADA. She argues, however, that she has properly alleged claims against Defendant Raley under the FLSA, the SCPWA, and for wrongful discharge in violation of public policy. Plaintiff's allegations with respect to Defendant Raley are sparse. In the beginning of her complaint, when she sets forth the Defendants named in the action, Plaintiff alleges that “Defendant Samantha Raley is an individual who resides in Georgetown County, South Carolina and who, upon information and belief, is an employee and owner of the Defendants referred to collectively as ‘Dick's Pawn Superstores.'” Compl. ¶ 7. The section of her complaint entitled “Factual Allegations” contains no reference to Defendant Raley. Under the fifth cause of action for violation of the SCPWA, Plaintiff alleges that “Defendants Smith and Raley knew and were responsible for the failure to pay wages under this Act and therefore constitute employers.” Compl. ¶ 87. The only other specific mention of Defendant Raley in the Complaint is under Plaintiff's ninth cause of action for retaliation in violation of the FLSA, where Plaintiff alleges that “Defendants Smith and Railey [sic] were ‘employers' within the meaning of the FLSA, 29 U.S.C. § 203, because they acted directly or indirectly in the interest of Defendant ‘Dick's Pawn' in relation to Plaintiff.” Compl. ¶ 112.
Plaintiff also asserts a cause of action for common law battery, which appears to be directed specifically at Defendant Smith.
The SCPWA provides that “[w]hen an employer separates an employee from the payroll for any reason, the employer shall pay all wages due to the employee within forty-eight hours of the time of separation or the next regular payday which may not exceed thirty days.” S.C. Code Ann. § 41-1050. It defines “employer” as “every person, firm, partnership, association, corporation, receiver, or other officer of a court of this State, the State or any political subdivision thereof, and any agent or officer of the above classes employing any person in this State.” S.C. Code Ann. § 41-10-10. It also allows an employee to seek damages for an employer's failure to comply with § 41-10-50. See S.C. Code Ann. § 41-10-80(C). South Carolina courts interpreting the SCPWA have determined the legislature intended to impose individual liability on agents or officers who knowingly permitted their company to violate the SCPWA. See Allen v. Pinnacle Healthcare Sys., LLC, 715 S.E.2d 362, 365 (S.C. Ct. App. 2011) (citing Dumas v. InfoSafe Corp., 463 S.E.2d 641, 645 (S.C. Ct. App. 1995)). Thus, although Plaintiff's allegations with respect to Defendant Raley are sparse, she has alleged that Defendants failed to pay all wages due to her at the time of her separation and that Defendant Raley knew of and was responsible for the failure to pay her wages. Therefore, she has sufficiently alleged a cause of action against Raley under the SCPWA.
The FLSA establishes the general rule that employers must compensate each employee “at a rate not less than one and one-half times the regular rate” for all overtime hours that an employee works. 29 U.S.C. § 207(a)(1). The “FLSA conditions liability on the existence of an employer-employee relationship, and the employee bears the burden of alleging and proving the existence of that relationship.” Kerr v. Marshall U. Bd. of Governors, 824 F.3d 62, 83 (4th Cir. 2016) (citing Benshoff v. City of Virginia Beach, 180 F.3d 136, 140 (4th Cir. 1999)). The FLSA defines “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). To determine whether an employer-employee relationship exists, including whether an individual qualifies as an employee, courts apply the economic reality test. Kerr, 824 F.3d at 83 (citing Schultz v. Cap. Int'l Sec., Inc., 466 F.3d 298, 304 (4th Cir. 2006)). “Relevant factors include ‘whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.'” Id. (citing Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999)). In Kerr, the Fourth Circuit upheld the lower court's finding that the plaintiff had failed to sufficiently allege that an individually named defendant qualified as an employer under the FLSA because “the complaint ‘utterly fail[ed] to allege any indicia of [the individual defendant's] control over the conditions under which [the plaintiff] worked . . . or that [the individual defendant] held the authority to terminate [the plaintiff's] position.” Id. (internal citations omitted). Likewise in the present case, there are no allegations that Defendant Raley had the power to hire or fire Plaintiff, supervised or controlled her work schedule, determined her rate or method of payment, or maintained employment records. Plaintiff's conclusory allegations that Defendant Raley, “upon information and belief, is an employee and owner of the Defendants,” Compl. ¶ 7, and that “Defendants Smith and Railey [sic] were ‘employers' within the meaning of the FLSA, 29 U.S.C. § 203, because they acted directly or indirectly in the interest of Defendant ‘Dick's Pawn' in relation to Plaintiff,” Compl. ¶ 112, are insufficient to show that Defendant Raley was Plaintiff's employer for purposes of FLSA liability. Therefore, dismissal of this claim as to Defendant Raley is appropriate.
Finally, Plaintiff alleges a common law claim for wrongful discharge in violation of public policy. Plaintiff does not specifically name Defendant Raley in this cause of action but alleges that “Defendants' constructive discharge of Plaintiff is pretextual, retaliatory, and done in retaliation for her complaining Defendants' changing her from hourly to salary without seven days advance written notice.” Compl. ¶ 95. Generally speaking, South Carolina law allows an employer to discharge an employee without incurring liability for good reason, no reason, or bad reason. Culler v. Blue Ridge Elec. Coop., 309 S.C. 243, 245, 422 S.E.2d 91, 92 (1992). However, the South Carolina Supreme Court has recognized a “public policy” exception to this doctrine. Ludwick v. This Minute of Carolina, Inc., 287 S.C. 219, 225, 337 S.E.2d 213, 216 (1985). Both Plaintiff and Defendants recognize that the South Carolina Supreme Court has not addressed whether an individual can be liable for wrongful discharge in violation of public policy. This court has previously declined to recognize a cause of action for wrongful discharge in violation of public policy against an individual. See Billioni v. Bryant, No. 0:14-CV-03060-JMC, 2015 WL 4928999, at *10 (D.S.C. Aug. 18, 2015). In Billioni, the court noted that South Carolina's recognition of a public policy exception in Ludwick was based in part on Sides v. Duke Univ., 74 N.C.App. 331, 328 S.E.2d 818, 827 (N.C. Ct.App.1985) (overruled on other grounds by Kurtzman v. Applied Analytical Indus., Inc., 347 N.C. 329, 493 S.E.2d 420 (1997)), and the Sides court rejected individual liability for the wrongful discharge claim. Billioni, 2015 WL 4928999, at *10; Sides, 328 S.E.2d at 826-27. The Sides court reached its conclusion based on the fact that the plaintiff's employment was with Duke University rather than either of the individual defendants. Id. This court also expressed doubt over the existence of individual liability for a wrongful discharge claim prior to Billioni. See Fields v. Cnty. of Beaufort of S.C., No. CV 9:08-3966-SB, 2010 WL 11570520, at *1 (D.S.C. Feb. 25, 2010).
In reaching this conclusion the court noted, “[w]here the law is unclear, a federal court must ‘forecast a decision of the state's highest court [considering], inter alia: canons of construction, restatements of the law, treatises, recent pronouncements of general rules or policies by the state's highest court, well considered dicta, and the state's trial court decisions.'” Id. (citing Wells v. Liddy, 186 F.3d 505, 528 (4th Cir.1999)).
Plaintiff points to VanBuren v. Grubb, 284 Va. 584, 592, 733 S.E.2d 919, 923 (2012), as instructive on this question. In VanBuren, the Virginia Supreme Court, accepting a certified question from the federal court, held that individual employees in a position of power can be held personally liable for wrongful discharge when the discharge arises from the unlawful actions of the individual. Id. at 923. There, the plaintiff was discharged for refusing to submit to her supervisor's sexual advances. Id. at 921. In the present case, there are no allegations that Defendant Raley engaged in any wrongful conduct that in turn led to Plaintiff's discharge. Specifically, as stated above, Plaintiff alleges that her “constructive discharge” was in retaliation for her complaints that her pay was changed from hourly to salary without seven days written notice. Compl. ¶ 95. There are no allegations in the complaint that Defendant Raley changed her rate of pay or engaged in any conduct that led to Plaintiff's constructive discharge. Thus, Plaintiff's reliance on VanBuren is unavailing because even if South Carolina were to apply the same law as Virginia, the facts as alleged do not support an individual liability claim against Defendant Raley. Accordingly, dismissal of this cause of action as asserted against Defendant Raley is appropriate.
V. CONCLUSION
For the reasons discussed above, it is recommended that Defendants' Motion to Dismiss Defendant Samantha Raley (ECF No. 21) be granted as to all causes of action asserted against Defendant Samantha Raley except the SCPWA claim. It is recommended that the motion be denied as to that claim.