Price v. Wisconsin Services Corp., Civ.A. 98-C-0721.
| Decision Date | 14 July 1999 |
| Docket Number | No. Civ.A. 98-C-0721.,Civ.A. 98-C-0721. |
| Citation | 55 F.Supp.2d 952 |
| Parties | John R. PRICE, Plaintiff, v. WISCONSIN SERVICES CORP., d/b/a Metro Milwaukee Auto Auction, Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
William D. Whitnall, Attorney-at-Law, Racine, WI, Willie J. Nunnery, Attorney-at-Law, Madison, WI, for plaintiff.
Scott R. Halloin, Ellen E. Nowak, Mallery & Zimmerman, Milwaukee, WI, Jill M. Wood, Dow, Lohnes & Altertson, Atlanta, GA, for defendant.
DECISION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS
Plaintiff John R. Price ("Price") sued his employer, Wisconsin Services Corp., d/b/a Metro Milwaukee Auto Auction ("MMAA"), for racial discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a) and 42 U.S.C. § 1981. On March 15, 1999, MMAA moved to dismiss the complaint, arguing that Price: (1) failed to exhaust his administrative remedies, a condition precedent for the Title VII claim; and (2) failed to state a claim under § 1981 for either disparate treatment or racial harassment. The court will grant the motion to dismiss Price's Title VII claim and deny the motion to dismiss Price's § 1981 claim.
Price is an African-American, who worked for MMAA between December 7, 1993, and February 12, 1998. He began his employment as an automobile pick-up driver and progressed to a supervisor position. During this period, co-workers repeatedly referred to Price as a "nigger" and other epithets. Price reported this mistreatment to his managers, but they told him that he would simply have to put up with it if he expected to work at MMAA. In 1994, Price complained about these matters to the Equal Employment Opportunity Commission ("EEOC"). This prompted MMAA to give an offending worker one week's suspension with pay — essentially a paid vacation. Judging from MMAA's response to these problems, Price concluded that such mistreatment was indeed a continued condition of his employment.
Nevertheless, Price diligently applied himself at work until January 20, 1998. On that day, a supervisor accused him of making sexual advances to a white, female employee. MMAA conducted an investigation and interviewed two employees who witnessed the interaction between Price and the white female. According to Price, these witnesses provided statements saying that the female was the aggressor and that Price had directed her to stop her advances. MMAA's manager, however, announced that the two witnesses had actually verified Price's misconduct, and, consequently, the manager terminated him.
On July 29, 1998, Price sued MMAA for racial discrimination in violation of Title VII, the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a) and 42 U.S.C. § 1981. On March 15, 1999, MMAA filed a motion to dismiss, asserting that the complaint contained four defects. First, Price failed to allege a condition precedent for his Title VII claim — namely, that he had exhausted his administrative remedies. Second, Price failed to state a claim for racial harassment. Third, Price failed to state a claim for disparate treatment under either Title VII or § 1981. And fourth, Price failed to state a claim under § 1981 because he did not have a contractual relationship with MMAA.
This court will grant a motion to dismiss for failure to state a claim if it is clear that the plaintiff would not be entitled to relief even if he could prove the complaint's factual allegations. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The court must accept the plaintiff's factual allegations as true and draw all reasonable inferences from the pleadings in the plaintiff's favor. See Gillman v. Burlington N.R.R., 878 F.2d 1020, 1022 (7th Cir.1989). However, the court need not ignore facts alleged in the complaint that undermine the plaintiff's claim or assign weight to unsupported conclusions of law. See Gray v. County of Dane, 854 F.2d 179, 182 (7th Cir.1988). Furthermore, the court must dismiss a complaint if it fails to allege an element which is essential to a claim for relief. See Cannon v. Univ. of Chicago, 648 F.2d 1104 (7th Cir.), cert. denied, 454 U.S. 1128, 102 S.Ct. 981, 71 L.Ed.2d 117 (1981).
MMAA's primary challenge to the Title VII claim is that Price failed to allege a condition precedent. Before filing a Title VII claim, a party must meet a number of prerequisites. See 42 U.S.C. § 2000e-5. Rush v. McDonald's Corp., 966 F.2d 1104, 1110 (7th Cir.1992). These are not jurisdictional prerequisites, but they are "conditions precedent" with which the plaintiff must comply. Furthermore, Fed. R.Civ.P. 9(c), requires a plaintiff to plead that "all conditions precedent have been performed or have occurred." When a Title VII plaintiff neglects to plead that he has complied with EEOC filing requirements, his complaint is subject to dismissal. See Perkins v. Silverstein, 939 F.2d 463, 471 (7th Cir.1991).
Price's complaint makes one passing reference to the EEOC. He alleges that in 1994, he complained of "racially based treatment" to the EEOC and that this accusation prompted MMAA to place an offending worker on a one-week paid vacation. But Price continued to work for MMAA up until February 1998, when he was fired. His complaint does not assert that he ever filed a timely EEOC action or that he received a right-to-sue letter. MMAA highlighted this oversight in its motion to dismiss, and Price essentially conceded the point. He responded only with: "[t]he Plaintiff can still raise his racial harassment claim under § 1981." (Pl.'s Resp. to Def.'s Mot. to Dismiss at 4). In short, Price has failed to plead a condition precedent, and therefore, the court must dismiss his Title VII claim.
Price's § 1981 claim highlights a bone of contention among federal courts. MMAA contends that Price was an at-will employee and that § 1981 does not protect at-will employees. Price admits that he was an at-will employee and argues that he can maintain a suit under § 1981 in spite of this fact.
Section 1981 guarantees all persons "the same right ... to make and enforce contracts ... and to the full and equal benefit of all laws and proceedings ... as is enjoyed by white citizens...." 42 U.S.C. § 1981(a). Initially, courts interpreted this provision as barring discrimination only in the making of a contract, not in the administration or termination of a contract. See Patterson v. McLean Credit Union, 491 U.S. 164, 171, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989). But then Congress passed the 1991 Civil Rights Act, which supplied a broader definition of the term "make and enforce contracts," and thereby prohibited racial discrimination in almost every aspect of a contract. See Spriggs v. Diamond Auto Glass, 165 F.3d 1015, 1017-18 (4th Cir.1999). The question for this court is whether an at-will employment relationship qualifies as a contract.
Federal courts are split over this issue. Some hold that at-will relationships are not, by definition, contractual because they are terminable at any time for any reason. See, e.g., Moorer v. Grumman Aerospace Corp., 964 F.Supp. 665 (E.D.N.Y.1997). Others hold that even without a set duration, an at-will employment arrangement can still create enforceable contract rights (i.e., the employee performs specified work in consideration for specified pay). See, e.g., Spriggs, 165 F.3d at 1018-19; Fadeyi v. Planned Parenthood Ass'n of Lubbock, Inc., 160 F.3d 1048, 1049-52 (5th Cir.1998); Miller v. Reynolds Wheels Int'l, No. 98-C-755 .
The Seventh Circuit has not addressed this issue head-on. However, Judge Posner has noted in dicta that "[a] contract for employment at will may end abruptly but it is a real and continuing contract nonetheless, not a series of contracts each a day — or a minute — long." McKnight v. General Motors Corp., 908 F.2d 104, 109 (7th Cir.1990). Recently, the Seventh Circuit (again in dicta) questioned the validity of McKnight's reasoning given that it relied on Patterson, which Congress essentially overruled when it amended § 1981. See Gonzalez v. Ingersoll Milling Mach. Co., 133 F.3d 1025, 1035 (7th Cir.1998). Neither McKnight nor Gonzalez bind this court. Todd v. Societe Bic S.A., 21 F.3d 1402, 1411 (7th Cir.1994) () (citing Northwestern Nat'l Ins. Co. v. Maggio, 976 F.2d 320, 323 (7th Cir.1992)).
The court finds the reasoning in Miller, Spriggs, and Fadeyi more persuasive. The Miller court noted that in Wisconsin, at-will employment contracts are on equal footing with other contracts. Miller, No. 98-755, slip op. at 7 ). The Fadeyi court pointed out that:
To hold that at-will employees have no right of action under § 1981 would effectively eviscerate the very protection that Congress expressly intended to install for minority employees, especially those who, by virtue of working for small businesses, are not protected by Title VII.
Fadeyi, 160 F.3d at 1050. For these reasons, the court holds that an at-will employee, like Price, can maintain a discrimination action under § 1981.
Next, MMAA asks the court to dismiss Price's disparate treatment claim under § 1981 for failure to state a claim. To establish disparate treatment, Price must prove that: (1) he is in a protected class; (2) he was performing his job satisfactorily; (3) he was the subject of a materially adverse...
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