Equal Emp't Opportunity Comm'n v. PBM Graphics Inc.

• Decision Date: 28 June 2012
• Docket Number: No. 1:11–cv–805.,1:11–cv–805.
• Court: U.S. District Court — Middle District of North Carolina
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. PBM GRAPHICS INC., Defendant.

877 F.Supp.2d 334

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,

v.PBM GRAPHICS INC., Defendant.

No. 1:11–cv–805.

United States District Court, M.D. North Carolina.

June 28, 2012.

Zoe Gabriele Mahood, Equal Employment Opportunity Comm., Raleigh, NC, for Plaintiff.

John Anthony Zaloom, Moore & Van Allen, Research Triangle Park, NC, Angela B. Cummings, Littler Mendelson, Charlotte, NC, for Defendant.

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, District Judge.

The Equal Employment Opportunity Commission (“EEOC” or “the Commission”)contends that PBM Graphics Inc. (“PBM”) has, since January 2003, engaged in a pattern or practice of employment discrimination in violation of Title VII of the Civil Rights Act of 1964, Pub.L. No. 88–352, 78 Stat. 241 (codified as amended in scattered sections of 42 U.S.C.), by favoring Hispanic temporary workers in its work-assignment practices. PBM, contending that the EEOC's suit is untimely and without merit, has filed motions for dismissal (Doc. 12) and summary judgment (Doc. 14), and PBM's motions came before the court for hearing on June 5, 2012. For the reasons that follow, the court finds that the EEOC has stated a claim upon which relief can be granted and has met all statutory prerequisites for filing suit. However, the record reveals that the EEOC's delay in bringing this litigation was unreasonable and may have unduly prejudiced PBM, and the court will order limited discovery to resolve that question.

I. BACKGROUND

The complaint, viewed in a light most favorable to the EEOC for purposes of PBM's motion to dismiss, alleges the following:

PBM is a commercial printing manufacturer headquartered in Durham, North Carolina, that employs at least fifteen individuals. (Doc. 1 at 2 ¶ 4.) Though the company employs a large number of full-time employees, PBM's employment needs fluctuate based on its workload, and it routinely hires temporary workers from a placement agency to meet its production requirements. ( Id. at 3 ¶ 8.) Despite the turnover in its temporary workforce, PBM employs a “core group” of temporary workers of approximately 10 to 15 individuals per shift for each of its five shifts. ( Id. at 4 ¶ 9.) These “core” temporary workers enjoy the benefits of being told to return to work day after day unless management indicates otherwise, being assigned to longer-term assignments, and occasionally being asked to become permanent employees at PBM. ( Id.)

During the course of an unrelated investigation into the hiring practices of PBM's staffing agency, the EEOC learned that PBM told the staffing agency that it preferred Hispanic temporary workers. ( Id. ¶ 8.) According to the EEOC, although PBM's staffing agency sent both Hispanic and non-Hispanic workers for PBM's consideration, PBM “disproportionately rejected” non-Hispanic workers “while Hispanic temporary workers who were equally or less qualified were allowed to work.” ( Id.) The EEOC contends that this practice has resulted in PBM's “core group” of temporary workers being “disproportionately composed” of Hispanic workers ( id. ¶ 9) and in PBM providing fewer hours to its non-Hispanic temporary workers ( id. at 5 ¶ 11). As a result, the EEOC charges, PBM intentionally engaged in a pattern or practice of employment discrimination against similarly qualified non-Hispanic temporary workers based on their national origin in two ways: first, by predominantly placing or assigning Hispanic temporary workers to its “core group” of temporary workers; and second, by assigning fewer work hours to its non-Hispanic temporary workers. ( Id. ¶¶ 10–11.)

II. ANALYSISA. Motion to Dismiss

1. Failure to State a Claim

PBM moves to dismiss the EEOC's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that the Commission has failed to allege sufficient facts to state a claim upon which relief can be granted. PBM's arguments rest on the distinction between two provisions of Title VII that grant the EEOC authority to investigate and pursue claims of employment discrimination. The first of these provisions, Section 706, PBM contends, authorizes the EEOC to recover injunctive relief, back pay, and compensatory and punitive damages on behalf of particular individuals who have been victims of a company's discriminatory employment practices. (Doc. 13 at 9 (citing 42 U.S.C. § 2000e–5).) The second provision, Section 707, permits the EEOC to seek equitable relief against an employer who engages in a “pattern or practice” of discrimination. ( Id. at 6 (citing 42 U.S.C. § 2000e–6).) PBM argues that the EEOC may not seek compensatory and punitive damages against an employer, as it purports to do here, merely by alleging a “pattern or practice” of discrimination under section 707. Instead, it contends, the EEOC must allege facts sufficient to state a prima facie case of discrimination—(1) membership in a protected class; (2) satisfactory job performance; (3) adverse employment action; and (4) different treatment for similarly situated individuals outside the protected class—to state a claim for compensatory or punitive damages. ( Id. at 11 (quoting Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir.2010), aff'd––– U.S. ––––, 132 S.Ct. 1327, 182 L.Ed.2d 296 (2012)).) PBM contends that the EEOC's claims fail as a matter of law because the complaint does not identify a single person allegedly discriminated against, allege any facts showing that the workers who were supposedly discriminated against were “equally or more qualified” than the unidentified Hispanic workers favored by PBM, or provide a factual basis to support its claim that national origin was the motivating factor in PBM's decision to assign certain Hispanic workers to its “core group” of temporary employees. ( Id. at 12–14.) PBM also contends that if the EEOC may seek compensatory and punitive damages by alleging a “pattern or practice” of discrimination, it has still failed to allege facts demonstrating that its discrimination was “routine” or the company's “standard operating procedure,” as required by section 707. (Doc. 13 at 7, 9.)

The EEOC responds by characterizing PBM's distinction between sections 706 and 707 as artificial and contends that the complaint states a claim of “pattern or practice” discrimination under both. (Doc. 26 at 10.) Furthermore, argues the EEOC, there is no requirement that it identify any particular individuals subject to discrimination or that it plead specific facts tending to show that similarly-situated non-Hispanic workers were treated differently from PBM's Hispanic workers. As a result, the EEOC contends, the complaint's factual allegations, while admittedly lean, suffice to state a claim for relief that is plausible on its face.

“To survive a motion to dismiss, a complaint must contain sufficient factual matter ... to state a claim to relief that is plausible on its face.” Epps v. JP Morgan Chase Bank, N.A., 675 F.3d 315, 320 (4th Cir.2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)) (internal quotation marks omitted). In evaluating a motion to dismiss, the court must “accept as true all of the factual allegations contained in the complaint,” Kunda v. C.R. Bard, Inc., 671 F.3d 464, 467 (4th Cir.2011) (citation and internal quotation marks omitted), though the court should disregard “statements of bare legal conclusions” which “ ‘are not entitled to the assumption of truth,’ ” Aziz v. Alcolac, Inc., 658 F.3d 388, 391 (4th Cir.2011) (quoting Iqbal, 556 U.S. at 679, 129 S.Ct. 1937). Thus, courts follow a “two-pronged approach” in assessing the sufficiency of a complaint. Robertson v. Sea Pines Real Estate Cos., 679 F.3d 278, 288 (4th Cir.2012). First, the complaint must “contain factual allegations in addition to legal conclusions” and, second, the factual allegations, accepted as true and stripped of all legal conclusions, must state a claim to relief that is “plausible on its face.” Id. (citation and internal quotation marks omitted). Although the complaint need not contain “detailed factual allegations” to be plausible, it must nevertheless “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

Much of the parties' dispute centers on what a plaintiff must allege to plead a “pattern or practice” of discrimination under section 707. However, “[a] pattern or practice case is not a separate and free-standing cause of action ... but is really ‘merely another method by which disparate treatment can be shown.’ ” Celestine v. Petroleos de Venezuella SA, 266 F.3d 343, 355 (5th Cir.2001) (quoting Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1219 (5th Cir.1995), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90, 123 S.Ct. 2148, 156 L.Ed.2d 84 (2003)); see also Lowery v. Circuit City Stores, Inc., 158 F.3d 742, 762 (4th Cir.1998) (finding support in Mooney for its conclusion that private, non-class action plaintiffs may not rely on a pattern or practice method of proof for Title VII claims), vacated on other grounds,527 U.S. 1031, 119 S.Ct. 2388, 144 L.Ed.2d 790 (1999). Indeed, like McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), a case establishing a method for individuals to prove disparate treatment in the absence of direct proof of discrimination, the term “pattern or practice” is a “means by which courts can assess whether a particular form of statutorily prohibited discrimination exists.” Hohider v. United Parcel Serv., Inc., 574 F.3d 169, 183 (3d Cir.2009); Bacon v. Honda of Am. Mfg., Inc., 370 F.3d 565, 575 (6th Cir.2004) (characterizing a “pattern or practice” case as a “method of proving discrimination”); Majeed v. Columbus Cnty. Bd. of Educ., 213 F.3d 631, at *4 n. 2 (4th Cir.2000) (per curiam) (unpublished table decision) (explaining that the term “pattern or practice” normally refers to a method of proving...