Branson v. Ikea Holding U.S., Inc., Civil Action 20-5556

• Decision Date: 22 September 2021
• Docket Number: Civil Action 20-5556
• Parties: LUCINDA BRANSON, et al., Plaintiffs, v. IKEA HOLDINGS US, INC. et al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

LUCINDA BRANSON, et al., Plaintiffs, v. IKEA HOLDINGS US, INC. et al., Defendants.

Civil Action No. 20-5556

United States District Court, E.D. Pennsylvania

September 22, 2021

MEMORANDUM

ANITA B. BRODY, J.

Plaintiffs LuCinda Branson, Evan Ganz, Darlene Hughes, Thomas Isaak Monica Rausert, Barbara Rose, Jack Shannon, and Octavia Washington (“Plaintiffs”) bring suit against Defendant IKEA Holdings US, Inc., IKEA U.S. Retail, LLC, and IKEA North America Services, LLC (“IKEA”) alleging that IKEA's policies discriminate on the basis of age in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”). Plaintiffs bring both disparate treatment and disparate impact claims against IKEA.^[1] IKEA moves to dismiss the Complaint in part pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), to sever claims and transfer the parties, and to stay discovery. For the reasons set forth below, I deny IKEA's motion to dismiss, deny IKEA's motion to sever and transfer, and deny IKEA's motion to stay as moot.

I. BACKGROUND

Defendant IKEA is a multinational company that specializes in the retail of home goods. Second Am. Compl. ¶ 77, ECF No. 44. Plaintiffs are eight current IKEA employees who work in different stores across the United States.^[2] See id. ¶¶ 1-31. Plaintiffs are over 40 years old and have each been rejected for promotion by IKEA. See id. ¶¶ 2, 6, 10, 14, 18, 22, 26, 30 (age); ¶¶ 118, 160, 185, 215, 233, 255, 294, 312 (rejected for promotion).

In Spring of 2020, each Plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC charges”). Charges of Discrimination, Compl. Ex. A-I, ECF No. 1. The EEOC charges assert, among other allegations, that IKEA “has engaged, and continues to engage, in an ongoing, systemic pattern or practice of discriminating against employees age forty (40) and over, including failing to promote older employees.” Id. The EEOC charges also assert that IKEA's “training and development programs intentionally discriminate against employees age forty (40) and over and disparately impact employees age forty (40) and over.” Id.

On November 6, 2020, Plaintiffs filed an initial complaint and on November 12, 2020, before IKEA filed a responsive pleading, Plaintiffs filed a First Amended Complaint. See Compl.; First Am. Compl., ECF No. 6. Pursuant to a stipulation between the parties, Plaintiffs filed a Second Amended Complaint on June 7, 2020. See Joint Stipulation, ECF No. 42; Second Am. Compl. In the Second Amended Complaint, Plaintiffs assert a disparate treatment cause of action under the ADEA based on allegations that IKEA “intentionally discriminated against Plaintiffs because of their age” through a “pattern and practice of age discrimination against older employees.” Second Am. Compl. ¶¶ 332-33. Plaintiffs also assert a disparate impact cause of action under the ADEA alleging that IKEA's “assessment and identification of the potential of its employees has resulted in a statistically significant disparity in the promotion rates of its older employees” (“Potential Policy”) and that IKEA's “policies regarding relocation have resulted in a statistically significant disparity in the promotion rates of its older employees.” (“Relocation Policy”) Id. at ¶ 342. Plaintiffs attached to the Complaint and referenced in both Amended Complaint the EEOC charges filed by each individual Plaintiff as Exhibits A through I.

II. DISCUSSION

A. Rule 12(b)(1) Motion to Dismiss

IKEA moves to dismiss Plaintiffs' disparate impact claim for lack of subject-matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) on the basis that Plaintiffs lack standing to bring these claims. See Def.'s Mot. at 16, ECF No. 8-1. “The objection that a federal court lacks subject-matter jurisdiction, see Fed. Rule Civ. Proc. 12(b)(1), may be raised by a party, or by a court on its own initiative, at any stage in the litigation, even after trial and the entry of judgment.” Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006). A court cannot have subject matter jurisdiction over a plaintiff who lacks standing. Hartig Drug Co. Inc. v. Senju Pharm. Co., 836 F.3d 261, 269 (3d Cir. 2016).

A plaintiff bears the burden of establishing the three elements of standing: that he or she “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc., 578 U.S. at 1547. IKEA challenges the causation, or traceability, requirement for standing, arguing that Plaintiffs cannot trace their alleged injuries to the facially neutral Potential and Relocation Policies. See Def.'s Mot. at 17. IKEA contends that “not a single Plaintiff alleges that (s)he was denied a promotion (within the applicable limitations period) because (a) (s)he expressed unwillingness to relocate to a different store and/or (b) (s)he held a lower potential assessment than a younger employee who received the promotion.” Id.

To overcome a 12(b)(1) challenge for lack of standing, “‘a complaint must contain sufficient factual matter' that would establish standing if accepted as true.” In re Horizon, 846 F.3d at 633 (quoting Iqbal, 556 U.S. at 678). Plaintiffs in this case need not show probable causation, but instead must allege facts that “nudge[] their claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 547.

For the purposes of establishing standing at this stage of the litigation, Plaintiff's Complaint sufficiently establishes a plausible causal connection between Plaintiffs' failure to be promoted and IKEA's policies. Plaintiffs allege that they sought promotions and were rejected by IKEA. They allege that IKEA has two policies that discriminate intentionally, or in the alternative, disparately impact Plaintiffs and all older employees when seeking promotions. Id. at ¶ 112. Plaintiffs allege that: (1) IKEA asks all applicants about their willingness to relocate and considers willingness to relocate in deciding whom to promote, even for positions that do not require relocation; and (2) IKEA used “potential” as a proxy for youth “to assess promotability in an age-biased manner.” Id. at ¶ 100(q), (e). They further identify more than a dozen promotions that Plaintiffs were rejected for in favor of substantially younger candidates with the same or fewer qualifications. Id. at ¶¶ 118, 119, 125, 130-32, 134-39, 150-53, 140-47, 160, 16568, 169-74, 185, 201-204, 215, 219-24, 233, 236-40, 241-46, 255, 262-67, 268-84, 294, 297-305, 312, 319-27.

These facts are sufficient to show a plausible causal connection between Defendant's policies and Plaintiffs' repeated lack of promotion. See Houle v. Walmart Inc., 447 F.Supp.3d 261, 275 (M.D. Pa. 2020) (denying Defendant's motion to dismiss because “it is plausible that there is a causal connection between the injuries Plaintiffs allege and Defendant's policies.”) Even when “[Plaintiff's] complaint is not as rich with detail as some might prefer, it need only set forth sufficient facts to support plausible claims.” Fowler v. Univ. of Pittsburgh Med. Ctr. Shadyside, 578 F.3d 203, 211-12 (3d Cir. 2009). Therefore, I deny IKEA's motion to dismiss Plaintiffs' disparate impact claims for lack of standing.

B. Rule 12(b)(6) Motion to Dismiss

Pursuant to Rule 12(b)(6), IKEA moves to dismiss: (1) Plaintiffs' disparate impact and disparate treatment claims for untimeliness; (2) Plaintiffs' disparate impact claims for failure to exhaust administrative remedies; and (3) Plaintiffs' disparate treatment claims on the grounds that “pattern-or-practice claims are not permitted outside of the class action context.” See Def.'s Mot. at 7, 10, 13.

In deciding a motion to dismiss under Rule 12(b)(6), a court must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). To survive dismissal, a complaint must allege facts sufficient to “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

“As a general matter, a district court ruling on a motion to dismiss may not consider matters extraneous to the pleadings. However, an exception to the general rule is that a ‘document integral to or explicitly relied upon in the complaint' may be considered ....” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (citation omitted) (quoting Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)). Thus, a court may consider any and all exhibits attached to the complaint in addition to the pleadings themselves. Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010).

1. Timeliness of Plaintiffs' Claim

Under the ADEA, a plaintiff must file a charge of discrimination within 180 days of the alleged unlawful practice, or 300 days if the alleged unlawful practice occurred in a state that prohibits employment discrimination on the basis of age. See 29 U.S.C. § 626(d). IKEA acknowledges that each Plaintiff has alleged one or more timely claims under the ADEA but moves to dismiss the claims that are based on promotion decisions (rejections) that occurred outside the 180-day or 300-day limitations period. See Def.'s Mot. at 4-6, 8-9. Plaintiffs concede that all but one of the promotion decisions that IKEA...