Lively v. Wafra Inv. Advisory Grp., Inc.

• Decision Date: 23 July 2021
• Docket Number: Docket No. 20-2709,August Term, 2020
• Citation: Lively v. Wafra Inv. Advisory Grp., Inc., 6 F.4th 293 (2nd Cir. 2021)
• Parties: Francis P. LIVELY, Plaintiff-Appellant, v. WAFRA INVESTMENT ADVISORY GROUP, INC., aka WAFRA Inc., Fawaz Al-Mubaraki, Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

6 F.4th 293

Francis P. LIVELY, Plaintiff-Appellant,

v.WAFRA INVESTMENT ADVISORY GROUP, INC., aka WAFRA Inc., Fawaz Al-Mubaraki, Defendants-Appellees.

Docket No. 20-2709

August Term, 2020

United States Court of Appeals, Second Circuit.

Argued: May 17, 2021

Decided: July 23, 2021

Philip J. Furia (William A. Brewer III, on the brief), Brewer, Attorneys & Counselors, New York, NY, for Plaintiff-Appellant.

Brette Tannenbaum (Martin Flumenbaum, Edward G. Babbitt, on the brief), Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY, for Defendants-Appellees.

Before: Walker, Park, and Nardini, Circuit Judges.

Park, Circuit Judge:

Francis Lively was terminated by his former employer, WAFRA Investment Advisory Group, Inc. ("WAFRA"), for violating company policies prohibiting sexual harassment in the workplace. He sued, alleging that the stated basis for his termination was pretext and that the real reason he was fired was age discrimination and retaliation, in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 623. Defendants answered, submitting evidence of Lively's improper workplace conduct, and moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). The United States District Court for the Southern District of New York (Oetken, J. ) granted Defendants’ motion, dismissing Lively's age discrimination and retaliation claims. Although on a Rule 12(c) motion the district court should not have weighed the plausibility of competing allegations in the movant's pleading or considered evidence extrinsic to the non-movant's pleading, we affirm because Lively's complaint failed to plead that either his age or protected speech was a but-for cause of his termination.

I. BACKGROUND

A. Factual Background ¹

Lively had worked at WAFRA for 21 years before he was fired in 2018. At the time of his termination, he was around 63 years old and served as WAFRA's Senior Managing Director of Real Estate. Lively had been "a top performer" who "consistently exceeded WAFRA's expectations and was commended as an invaluable member and leader of the Real Estate Division." Compl. ¶ 11.

On April 30, 2018, Lively received a letter from WAFRA's Director of Human Resources ("HR Director") suspending him without pay. The next day, he received a letter from WAFRA's Chief Administrative Officer stating that he was being terminated for "violating company policies and the code of ethics prohibiting sex discrimination and harassment in the workplace." Id. ¶ 12. According to Lively's complaint, the sexual harassment allegation "was nothing more than a pretext to fire him for being an older worker," and Sabine Kraut, the complainant, had "regularly and voluntarily solicited Lively's involvement in her personal and professional life," so he "had no reason to believe that their interactions were anything but welcomed by Kraut." Id. ¶ 16.

Lively's age discrimination claim is based mainly on comments made by his former supervisor, Fawaz Al-Mubaraki. After becoming Lively's supervisor around June 2017, Al-Mubaraki "began making negative comments about Lively's age." Id. ¶ 13. "In meetings with WAFRA executives and others, Al-Mubaraki stated that Lively (and other senior executives) was too old and that he would seek to replace Lively (and them) with younger counterparts." Id. At an after-hours gathering at WAFRA's offices on November 13, 2017, "Al-Mubaraki casually stated to Lively's son that WAFRA needed to replace older employees like his father with younger employees like Lively's son." Id. ¶ 14. Lively alleges that he was terminated as part of a "campaign to purge the company of elder workers." Id. ¶ 17.

Lively also claims that his termination was in retaliation for complaints he made in November 2017 about WAFRA's alleged pattern of age discrimination and Al-Mubaraki's comments. First, Lively alleges that he "complained to his supervisor" about "the discriminatory pattern that was emerging" but was told that there was no such pattern. Id. ¶ 18. Second, Lively claims that he "reported Al-Mubaraki's discriminatory comments and stated plans" to the HR Director and WAFRA's Chief Operating Officer. Id. ¶ 19. The HR Director "expressed frustration that Al-Mubaraki continued to engage in inappropriate conduct," and the Chief Operating Officer "expressed forlorn acceptance of Al-Mubaraki's conduct." Id. (emphasis omitted).

Lively also claims to have discussed Al-Mubaraki's comments with Adel Mohamad Al-Bader, an executive from WAFRA's parent company who was present during the after-hours gathering where Al-Mubaraki made an age-related comment. Al-Bader advised Lively to "view Al-Mubaraki's statement as humorous, or as a joke." Id. ¶ 20. According to Lively, "[a]s a result of reporting Al-Mubaraki's misconduct, and consoling others enduring similar discrimination, WAFRA seized the opportunity to terminate Lively on the basis of a false accusation of sex discrimination and harassment." Id. ¶ 21.

B. Procedural History

In April 2019, Lively sued WAFRA and Al-Mubaraki for age discrimination and retaliation under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 623(a), (d). He also brought age discrimination and retaliation claims under state and city law, as well as common-law tort and contract claims. In an amended answer, Defendants denied that age discrimination or retaliation was the reason for Lively's termination. According to Defendants, Kraut had reported Lively's "harassing and discriminating" behavior in April 2018. After an investigation, WAFRA concluded that "[b]etween the time Mr. Lively became Ms. Kraut's supervisor in 2012 and his termination for cause on May 1, 2018, Mr. Lively repeatedly confessed his romantic feelings towards Ms. Kraut—and acknowledged that Ms. Kraut did not reciprocate his feelings—during conversations and through numerous cards and handwritten notes," and WAFRA thus "determined that it had no choice but to terminate Mr. Lively as a result of his misconduct." Answer at 2.

In support of their answer, Defendants attached a number of exhibits. In addition to WAFRA's employee handbook and the suspension and termination letters referenced in Lively's complaint, the answer attached the following: (1) a transcript of a conversation recorded by Kraut in which "Lively conceded that he had sustained unsolicited romantic feelings for Ms. Kraut for six years, that she had previously rejected and continued to reject such feelings, and that his feelings negatively affected the way in which he treated employees and made it impossible for him to maintain an appropriate, professional relationship with Ms. Kraut," id. ; (2) several handwritten love letters from Lively to Kraut; (3) a complaint filed by Kraut with the Equal Employment Opportunity Commission ("EEOC") in which she alleged "pervasive, continuous, and egregious" sexual harassment by Lively from 2012 until his termination in April 2018, as well as retaliation by WAFRA for reporting Lively's conduct, Answer Ex. N ¶ 10; and (4) a complaint filed by Kraut in the Southern District of New York on the same claims alleged in the EEOC complaint. Based on the answer and the attached exhibits, Defendants moved for judgment on the pleadings under Rule 12(c).

The district court granted Defendants’ Rule 12(c) motion, dismissing Lively's ADEA claims and declining to exercise supplemental jurisdiction over the remaining city- and state-law claims. As to Lively's age discrimination claim, the court concluded that Lively's complaint was "devoid of facts plausibly alleging but-for causation." Lively v. WAFRA Inv. Advisory Grp., Inc. , No. 19-cv-3257, 2020 WL 4038350, at *5 (S.D.N.Y. July 17, 2020). Specifically, the court identified only one nonconclusory allegation in the complaint: Al-Mubaraki's comment to Lively's son. The court further relied on two factual allegations from the answer: (1) "less than a month separate[d] the claims of sexual misconduct made against Lively and his termination," and (2) Lively's replacement "is currently 66 years old—two years older than [Lively] is." Id. at *5–6 (cleaned up).

According to the district court, these facts "undermined" "any inference of but-for causation." Id. at *5. Thus, the court held that "the only plausible conclusion to be drawn from the facts in the complaint, as supplemented with facts from the answer, is that Lively was terminated as a result of his violation of WAFRA's policies prohibiting sexual harassment and discrimination." Id. at *7.

As to the retaliation claim, the court found that Lively "failed to adequately plead that his termination would not have occurred in the absence of a retaliatory motive." Id. at *6 (cleaned up). The court found that the only nonconclusory allegation—Lively's reporting of Al-Mubaraki's comment to Lively's son—lacked temporal proximity to the termination and was undermined by Al-Mubaraki's intervening praise of Lively's work.

Lively timely appealed.

II. LEGAL STANDARDS

A. Motion for Judgment on the Pleadings

"We review de novo a district court's decision to grant a motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c)." Vega v. Hempstead Union Free Sch. Dist. , 801 F.3d 72, 78 (2d Cir. 2015). Rule 12(c) provides that "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). "Pleadings" include both the "complaint" and the "answer to [the] complaint." Fed. R. Civ. P. 7(a).

"The standard for granting a Rule 12(c) motion for judgment on the pleadings is identical to that for granting a Rule 12(b)(6) motion for failure to state a claim." Lynch v. City of New York , 952 F.3d 67, 75 (2d Cir. 2020) (cleaned up). "To survive a Rule 12(c) motion, [the plaintiff's] complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Hayden , 594 F.3d at 160 (cleaned up). "The assessment of whether a complaint's...