Cochran v. Five Points Temporaries LLC et al

Filing 72

MEMORANDUM OPINION. Signed by Chief Judge Sharon Lovelace Blackburn on 9/28/2012. (KAM, )

FILED
2012 Sep-28 PM 04:21
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
AMY COCHRAN,
Plaintiff,
v.
FIVE POINTS TEMPORARIES,
LLC; DAVID MCNEIL; TRACY
MCNEIL;
Defendants.

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CASE NO. 2:10-cv-3522-SLB

MEMORANDUM OPINION
This case is before the court on defendants’ Motion for Judgment on the Pleadings.
(Doc. 38)1. Upon consideration of the record, the submissions of the parties, the
arguments of counsel, and the relevant law, the court is of the opinion that defendants’
Motion is due to be granted in part and denied in part.
I. STANDARD OF REVIEW
FED. R. CIV. P. 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.”2 “Judgment

1

Reference to a document number, [“Doc. ___”], refers to the number assigned to each
document as it is filed in the court’s record.
2

Plaintiff’s Opposition brief challenges the timeliness and validity of defendants’ Motion
and argues that defendants cannot now assert a 12(c) motion because the defense of failure to
state a claim was not preserved in their Answer to the Amended Complaint. (Doc. 54 at 3-4, 2122.) However, as defendants correctly point out in their Reply Brief, this argument is contrary to
several provisions under Rule 12 of the Federal Rules of Civil Procedure. (Doc. 56 at 2-3.) A
motion under Rule 12(c) is substantively the same as a motion under Rule 12(b)(6) for failure to
state a claim, however, “a Rule 12(b)(6) motion must be made before the responsive pleadings

on the pleadings is appropriate only when the plaintiff can prove no set of facts in support
of his claim which would entitle him to relief.” Moore v. Liberty Nat. Life Ins. Co., 267
F.3d 1209, 1213 (11th Cir. 2001) (internal quotation marks omitted). When considering a
motion for judgment on the pleadings the court “‘must accept all facts in the complaint as
true and view them in the light most favorable to the plaintiff[].’” Hardy v. Regions
Mortg., Inc., 449 F.3d 1357, 1359 (11th Cir. 2006) (quoting Moore, 267 F.3d at 1213).
“Dismissal is not appropriate unless the complaint lacks sufficient factual matter to state a
facially plausible claim for relief that allows the court to draw a reasonable inference that
the defendant is liable for the alleged misconduct.” Jiles v. United Parcel Service, Inc.,
413 F. App’x 173, 174 (11th Cir. 2011) (per curiam) (citing Bell Atl. Corp. v. Twombly,
550 U.S. 544, 556, 570 (2007)).

are filed, while Rule 12(c) motions may be made afterwards.” Am. United Life Ins. Co. v. Bell,
No. 2:09-cv-907-TFM, 2010 WL 1995034, at *2 n.1 (M.D. Ala. May 18, 2010). FED. R. CIV. P.
12(h)(1) sets out when a party “waives any defenses listed in Rule 12(b)(2)-(5)”, but (h)(2) states
that “[f]ailure to state a claim upon which relief can be granted [12(b)(6)] . . . may be raised: . . .
(B) by a motion under Rule 12(c).” (emphasis added). Lest there be any question as to whether
defendants were required to expressly preserve a defense of failure to state a claim in their
Answer to the Amended Complaint, the comments to Rule 12(h) explain that “the more
substantial defense[] of failure to state a claim upon which relief can be granted . . . [is] expressly
preserved against waiver by amended subdivision (h)(2) and (3).” FED R. CIV. P. 12(h)(2), cmt.
Defendants’ Motion is proper under Rule 12(c).
2

II. FACTS3
Plaintiff, Amy Cochran, is a former employee of defendant, Five Points, a staffing
company owned by defendants, Tracy McNeil and David McNeil. (Doc. 36 ¶¶ 5, 9-11.)
After working for Five Points from 2002 to 2006, plaintiff voluntarily terminated her
employment in 2006. (Id. ¶¶ 30-31.) She then began working for a competitor of Five
Points, Lyons HR. (Id. ¶¶ 35-37.) Five Points rehired plaintiff in May 2008 as a sales
representative. (Id. ¶ 32.)
Before departing Lyons HR, plaintiff entered into a non-compete and nonsolicitation agreement (the “non-compete agreement”) with the company. (Id. ¶ 40.)
Plaintiff brought a copy of the non-compete agreement to Tracy McNeil who told plaintiff
that attorneys for Five Points would review it. (Id. ¶ 41.) According to plaintiff, Tracy
McNeil told plaintiff that attorneys for Five Points reviewed the non-compete agreement
and that the “attorneys stated that [it] was ‘not worth the paper on which it was written.’”
(Id. ¶ 42.) Plaintiff alleges that Tracy McNeil also represented on behalf of defendants
that Five Points would pay her attorneys’ fees and expenses in the event plaintiff was
sued for violation of the non-compete agreement. (Id. ¶ 44.)
In June 2008, Lyons HR filed a lawsuit against plaintiff and Five Points in
Alabama state court for allegedly violating the non-compete agreement. (Id. ¶ 48.) Tracy
and David McNeil agreed to pay for plaintiff’s legal expenses in the lawsuit, and the
3

As stated above, for purposes of considering the Motion to Dismiss, the facts in the
Complaint are accepted as true and viewed in the light most favorable to the plaintiff.
3

Frederick Firm was hired to represent her. (Id. ¶¶ 49-52.) On behalf of Five Points,
David McNeil signed an engagement letter with the Frederick Firm wherein Five Points
agreed to pay the legal fees and expenses associated with the firm’s representation of
plaintiff in the Lyons HR case. (Id. ¶ 106.) The Amended Complaint states that at the
time David McNeil signed the agreement attached to the engagement letter, he thought
Five Points retained a right to alter said agreement. (Id. ¶ 107.) However, plaintiff
claims no such right ever existed and that none of the defendants retained any power to
“pre-authorize work of The Frederick Firm in its representation” of plaintiff in the Lyons
HR suit “as a condition of Five Points’ contractual obligation to pay The Frederick Firm’s
bills for that representation.” (Id. ¶¶ 108-09.)
Initially, Five Points paid for some of plaintiff’s attorneys’ fees and expenses
incurred in defense of the Lyons HR suit. (Id. ¶ 61.) Then, in February 2009, Five Points
stopped paying for plaintiff’s representation by the Fredrick Firm in the Lyons HR case.
(Id. ¶ 71.) On February 4, 2009, David McNeil is alleged to have told the Fredericks that
they were “‘not . . . authorized to do any more work’” on plaintiff’s case. (Id. ¶ 72.)
Plaintiff also alleges that around this same time, David McNeil told her not to talk to the
Fredericks, and she further claims that Tracy McNeil said plaintiff would be fired if she
talked to the Fredericks. (Id. ¶¶ 68-69.) In December 2010, the Frederick Firm filed this
lawsuit on behalf of plaintiff against Five Points and David and Tracy McNeil, asserting
counts of race discrimination, retaliation, intentional interference with business

4

relationship, fraud, misrepresentation, and breach of contract. (See doc. 1.) The
Amended Complaint makes similar claims. (Doc. 36.)
In the Amended Complaint, plaintiff alleges that during her last period of
employment with Five Points she frequently heard Tracy McNeil and other Five Points
employees make racially derogatory remarks in reference to the African-American
employees who worked at Five Points. (Doc. 36 ¶¶ 75, 78, 82.) Plaintiff also claims that
Tracy McNeil instituted racially discriminatory placement practices at Five Points. (Id. ¶¶
75-77.) To summarize, the Amended Complaint alleges that Tracy McNeil would fill
customers’ requests for temporary employees based on the race of employees as well as
the racial preferences expressed by customers. (Id.) Plaintiff is Caucasian. (Id. ¶ 22.)
The Amended Complaint states that plaintiff was “personally offended by and opposed”
these placement practices and disparaging remarks. (Id. ¶ 80.)
On February 9, 2009, plaintiff filed her first Charge with the Equal Employment
Opportunity Commission (“EEOC”) against Five Points alleging racially hostile
environment and race discrimination. (Id. ¶ 85.) Plaintiff alleges that after Five Points
received notice of her first EEOC Charge the company “substantially changed the terms
and conditions of [her] employment.” (Id. ¶¶ 87-95.) Then, on March 12, 2009, plaintiff
filed her second EEOC Charge based on “Five Points’ retaliatory actions taken in
response to Plaintiff’s filing her first EEOC charge.” (Id. ¶ 96.) Plaintiff alleges that
after receiving notice of her second EEOC Charge, Five Points further altered the

5

conditions of her employment. (Id. ¶¶ 97-100.) Plaintiff’s employment at Five Points
was terminated on March 16, 2009. (Id. ¶ 101.)
Defendants’ Motion for Judgment on the Pleadings challenges every count of the
Amended Complaint except for Count II (retaliation in violation of 42 U.S.C. § 1981 and
Title VII of the Civil Rights Act of 1964). (Doc. 38.)
III. DISCUSSION
A. COUNT I–RACIALLY HOSTILE WORK ENVIRONMENT
Defendants’ Memorandum in Support of their Motion argues that plaintiff’s
discrimination claim for a racially hostile work environment under Count I of the
Amended Complaint is due to be dismissed because the alleged harassment was not based
on plaintiff’s race, and the allegations on which her claim is based are not objectively
discriminatory. (Doc. 39 at 8.) Defendants’ contention that plaintiff does not allege
discrimination based on her race but the race of her co-workers raises the issue of whether
plaintiff’s claims fall within the scope of Title VII.
1. Whether Plaintiff is a “Person Aggrieved” Under Title VII

Although the Amended Complaint alleges that plaintiff endured a hostile work
environment based on race and that she was injured by defendants’ conduct, the court is
of the opinion that plaintiff fails to state a claim for racial discrimination hostile work
environment because she is not a “person aggrieved” within the “zone of interest” of Title
VII.

6

Title VII of the Civil Rights Act of 1964 codified at 42 U.S.C. § 2000e-2(a)(1)
prohibits employers from discriminating against “any individual with respect to his
compensation, terms, conditions, or privileges of employment, because of such
individual’s race, color, religion, sex, or national origin.” Subsection (a)(2) provides that
an employer may not “limit, segregate, or classify his employees or applicants for
employment in any way which would deprive or tend to deprive any individual of
employment opportunities or otherwise adversely affect his status as an employee,
because of such individual’s race, color, religion, sex, or national origin.” 42 U.S.C.
§ 2000e-2(a)(2). Among other observations, the Eleventh Circuit has stated that in terms
of a claim for hostile work environment, “Title VII is not a civility code, and not all
profane . . . language or conduct will constitute discrimination in the terms and conditions
of employment.” Reeves v. C.H. Robinson Worldwide, Inc., 594 F.3d 798, 807 (11th Cir.
2010) (en banc). The court has further explained that hostile work environment is a type
of disparate treatment as opposed to disparate impact: “Disparate treatment can take the
form either of a ‘tangible employment action,’ such as a firing or demotion, or of a
‘hostile work environment’ that changes ‘the terms and conditions of employment, even
though the employee is not discharged, demoted, or reassigned.’ Id. (quoting Hulsey v.
Pride Rests., LLC, 367 F.3d 1238, 1245 (11th Cir. 2004)).
Additionally, the statute states that after exhaustion of one’s administrative
remedies, a civil action under Title VII “may be brought . . . by the person claiming to be

7

aggrieved.” 42 U.S.C. § 2000e-5(f)(1)(A). Thus, there is a question whether the alleged
hostile work environment based on defendants’ statements and placement practices
concerning the African-American employees discriminated against plaintiff such that she
is “aggrieved” as that term is used under Title VII. The Supreme Court recently
addressed the issue of when a person is considered “a person aggrieved” under Title VII.
In Thompson v. N. Am. Stainless, LP, 131 S. Ct. 863, 866 (2011), the Court held that
whether a plaintiff qualifies to sue as a “person aggrieved” under Title VII is determined
by analyzing whether or not she falls within the “zone of interest” of the statute.
In Thompson, petitioner Eric Thompson sued respondent, North American
Stainless (“NAS”) for retaliation against his fiancé after she filed an EEOC charge
against NAS for sex discrimination and Thompson was fired thereafter. Id. at 867. The
U.S. District Court for the Eastern District of Kentucky granted summary judgment for
NAS “concluding that Title VII does not permit third party retaliation claims.” Id.
(internal citations and quotations omitted). The Sixth Circuit Court of Appeals ultimately
affirmed en banc and held that because Thompson did not engage in “statutorily protected
activity” on behalf of himself or his fiancé, he was “not included in the class of persons
for whom Congress created a retaliation cause of action.” Id. (internal quotations and
citations omitted). The Supreme Court reversed. Id. at 869.
After construing the facts as true and deciding that NAS’s decision to fire
Thompson to retaliate against his fiancé violated Title VII’s anti-retaliation provision, the

8

Court then addressed whether Thompson was a proper plaintiff as a “person claiming to
be aggrieved” under Title VII. Id. at 868-69. Prior to Thompson, the Supreme Court in
Trafficante v. Metro. Life Ins. Co., “suggested in dictum that the Title VII aggrievement
requirement conferred a right to sue on all who satisfied Article III standing.” Id. at 869
(citing 409 U.S. 205 (1972)). The Thompson Court, however, rejected both the broad
standard inferred from Trafficante as well as respondent’s urging of a very narrow
reading of the statute and instead settled on the “zone of interest” standard:
We now find that this dictum was ill-considered, and we
decline to follow it. If any person injured in the Article III sense
by a Title VII violation could sue, absurd consequences would
follow. . . . . [T]he term “aggrieved” must be construed more
narrowly than the outer boundaries of Article III.
....
We have described the “zone of interests” test as denying a right
of review “if the plaintiff’s interests are so marginally related to
or inconsistent with the purposes implicit in the statute that it
cannot reasonably be assumed that Congress intended to permit
the suit.” Clarke v. Securities Industry Assn., 479 U.S. 388,
399–400, 107 S.Ct. 750, 93 L.Ed.2d 757 (1987). We hold that
the term “aggrieved” in Title VII incorporates this test, enabling
suit by any plaintiff with an interest “arguably [sought] to be
protected by the statutes,” National Credit Union Admin. v. First
Nat. Bank & Trust Co., 522 U.S. 479, 495, 118 S.Ct. 927, 140
L.Ed.2d 1 (1998) (internal quotation marks omitted), while
excluding plaintiffs who might technically be injured in an
Article III sense but whose interests are unrelated to the
statutory prohibitions in Title VII.

9

Id. at 869-870. The Court then applied the “zone of interest” test and concluded that
Thompson fit within the purview of Title VII. Id. at 870. In its reasoning, the Court
found generally that Thompson “was an employee of NAS, and the purpose of Title VII is
to protect employees from their employers’ unlawful actions.” Id. But the Court also
focused on the more narrow factual circumstances that Thompson was “not an accidental
victim of the retaliation.” Id. On the contrary, explained the Court, firing Thompson was
the “employer’s intended means of harming” his fiancé for her filing the EEOC charge of
sex discrimination–“[h]urting him was the unlawful act by which the employer punished
her.” Id. (emphasis added). While the Thompson Court applied the “zone of interest”
test to facts relating to Title VII’s anti-retaliation provision, the holding was in the context
of subsection (f)(1) and narrowed the definition of who may sue civilly as an “aggrieved”
person. Id. at 869-70.
The court is of the opinion that under the “zone of interest” standard articulated in
Thompson, plaintiff’s interests are not those “arguably [sought] to be protected,” and she
is not a person “aggrieved” within the meaning of Title VII. Id. at 869 (alteration in
original) (internal quotation marks and citations omitted). Applying the Supreme Court’s
holding in Thompson to hostile work environment claims, an “accidental” victim of
discriminatory action does not fall within the “zone of interest” of Title VII. Plaintiff
might reasonably be classified as an “accidental” victim; she does not allege that Five
Points took any discriminatory action against its African-American employees with the

10

intent to affect her. Rather, under the allegations in the Amended Complaint, plaintiff
was merely a bystander to whom no discriminatory or harassing conduct was actually
directed. Thus, under the specific facts and circumstances alleged in the Amended
Complaint, and in light of the Supreme Court’s discussion of “zone of interest” in
Thompson, plaintiff is not within the “zone of interest” sought to be protected by Title VII
and therefore lacks standing to assert a claim for a racially hostile work environment.
The court’s finding is consistent with Eleventh Circuit precedent,4 which has held
that third parties or bystanders affected by workplace discrimination only have standing
under Title VII when the discrimination is based on an associational relationship. In Parr

4

Plaintiff’s Opposition brief directs the court’s attention to a case from the former Fifth
Circuit, EEOC v. Mississippi College, in which that court held that a white employee could
maintain a Title VII claim against her employer for its alleged “discriminat[ion] against blacks on
the basis of race in recruitment and hiring.” 626 F.2d 477, 483 (5th Cir. 1980). While the
Eleventh Circuit has adopted as binding precedent all Fifth Circuit decisions prior to October 1,
1981, Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the holding of
Mississippi College was based on that court’s broad interpretation of standing under Title VII,
which it derived from dictum in Trafficante:
We agree with other circuits that have held that the strong
similarities between the language, design, and purposes of Title VII
and the Fair Housing Act require that the phrase “a person claiming
to be aggrieved” in s 706 of Title VII must be construed in the same
manner that Trafficante construed the term “aggrieved person” in s
810 of the Fair Housing Act.
Id. at 482 (citations omitted). As the court discussed above, the Supreme Court’s recent holding
in Thompson rejects such a broad interpretation of an “aggrieved” person under Title VII. 131 S.
Ct. at 869. Based on the holding in Thompson, the court declines to follow the interpretation of
Title VII and holding in Mississippi College.

11

v. Woodmen of the World Life Ins. Co., the Eleventh Circuit reversed the district court’s
dismissal of the appellant’s Title VII race discrimination claim arising out of the
appellee’s alleged refusal to hire appellant because he was white and his wife was
African-American. 791 F.2d 888, 891-92 (11th Cir. 1986). The Parr court explained that
a Title VII claim arising out of discrimination against one’s interracial marriage or
association with another race is actionable even though the alleged discrimination is not
specifically directed at the complainant’s race: “Where a plaintiff claims discrimination
based upon an interracial marriage or association, he alleges, by definition, that he has
been discriminated against because of his race. It makes no difference whether the
plaintiff specifically alleges in his complaint that he has been discriminated against
because of his race.” 791 F.2d at 892; see also Tetro v. Elliott Popham Pontiac,
Oldsmobile, Buick, & GMC Trucks, Inc., 173 F.3d 988, 995 (6th Cir. 1999) (explaining
that a Title VII claim does not have to allege discrimination based specifically on the
plaintiff’s race when “[t]he net effect is that the [defendant] has allegedly discriminated
against [plaintiff] because of his race.”); cf. Floyd v. Amite Cnty. School Dist, 581 F.3d
244, 250-51 (5th Cir. 2009) (Affirming summary judgment against plaintiff’s Title VII
claim because evidence reflected that the alleged racial animus was directed solely
towards plaintiff’s (an African-American track coach) white athletes and was not based
on his relationship with said athletes: “nothing in these statements supports a conclusion
that the animus was directed at [plaintiff] on the basis of his race.”).

12

Unlike the complainants in Thompson and Parr, Count I of the Amended
Complaint alleges no discrimination directed at plaintiff because of her relationship with
her African-American coworkers or any other relationship on which plaintiff could claim
she was discriminated against because she was white and associated with AfricanAmericans. Rather, plaintiff alleges that she was subjected to a hostile environment
“based on race and color” and that she was directed by plaintiffs to “engage . . . in
employment practices that were unlawfully discriminatory based on employees’ race and
color.” (Doc. 36 ¶ 116.) In an almost factually identical case to plaintiff’s, Bermudez v.
TRC Holdings, Inc., the Seventh Circuit affirmed summary judgment against a white
employee’s hostile work environment claim that was based on her employer’s racially
discriminatory employment practices and behavior, neither of which were directed at her
personally or at any relationship between herself and her coworkers. 138 F.3d 1176,
1179-80 (7th Cir. 1998). One of the appellants in Bermudez, Schlichting–a white
female–worked at an employment placement agency owned by appellee, TRC, and
alleged that her coworkers openly discriminated against African-Americans by arranging
placements based on clients’ racial preferences. Id. at 1180. She also alleged that a
supervisor not only treated the company’s only black employee less favorably than whites
but bragged about rewards from a client for accommodating a preference for white-only
placements. Id. Although Schlichting was personally offended by such discrimination

13

and found it difficult to work in such an atmosphere, the Bermudez court found that she
did not have standing under Title VII because the discrimination was not directed at her:
None of these words or deeds was directed against
Schlichting. White women were welcome at TRC and fared well
there. Perhaps TRC was violating the rights of persons who
came to it seeking placement for employment, but Schlichting
is not entitled to enforce their rights . . . . Her claim is not that
white women were harassed on account of their race or sex, but
that persons of any race or sex who were opposed to
discrimination felt uncomfortable. We have never recognized
this as a valid theory of discrimination under Title VII, and it is
hard to see how it could be reconciled with the proposition that
laws must be enforced by the victims (or by public prosecutors)
rather than by third parties discomfited by the violations. If
unease on observing wrongs perpetrated against others were
enough to support litigation, all doctrines of standing and
justiciability would be out the window.
Id.
The Bermudez court went on to distinguish Schlichting’s case from a prior
decision, which held that such third-party hostile environment claims were actionable if
the alleged discrimination resulted in “‘the loss of important benefits from interracial
associations.’” Id. (quoting Stewart v. Hannon, 675 F.2d 846, 850 (7th Cir. 1982)). The
court also noted a decision in which the Fourth Circuit divided evenly on the question of
whether loss of interracial associations and adverse working conditions based on
discrimination gave rise to a “derivative” hostile work environment claim; however, the
Bermudez court did not reach the issue of such claims as it found that Schlichting’s
allegations did not show a “poisoned working atmosphere” and concluded that although

14

her allegations “reflect[ed] actionable discrimination against applicants for employment, a
reasonable person in Schlichting’s position would have found them ‘merely offensive’”,
because they posed no threat to her personally.” Id. at 1181 (citing Childress v.
Richmond, 134 F.3d 1205 (4th Cir. 1998) (en banc) (per curiam)).5
Plaintiff attempts to position herself as a “person aggrieved” within the “zone of
interest” of Title VII. She claims that Tracy McNeil’s comments concerning Five
Points’s African-American employees and the considerations given by Ms. McNeil in
determining which employee to send to different clients created a racially discriminatory
and hostile work environment that, in turn, was a violation of her own personal right to
work in an environment unaffected by racial hostility. However, the court finds that
plaintiff lacks standing under Title VII as she is not within the “zone of interest” for
which the “statutory prohibitions” were created.6 Thompson, 131 S. Ct. at 870. Although

5

In Childress, seven white male police officers appealed from dismissal of their hostile
work environment claims, which were based on a supervisor’s alleged “disparaging remarks to
and about female and black members of the police force that adversely affected vital
relationships and working conditions within the force.” 134 F.3d 1205, 1207. Although the
decision of the district court was originally vacated on appeal and the Fourth Circuit divided
evenly on rehearing en banc, dismissal of the Title VII claims was affirmed. Id.
6

The court notes the conflicting EEOC opinions cited by the parties addressing whether
employees may assert discrimination claims on behalf of aggrieved co-workers; such opinions,
however, are not binding. Blizard v. Fielding, 572 F.2d 13, 15-16 (1st Cir. 1978) (cited with
agreement by the Eleventh Circuit in Moore v. Devine, 767 F.2d 1541, 1550 (11th Cir. 1985)).
And while the court should give formal opinions handed down after adjudication by an
administrative agency great deference under the Chevron standard, such deference is only
necessary if the court finds that the administrative opinion is “reasonable” and based on a
“permissive construction” of the statute. See Chevron, U.S.A., Inc. v Natural Res. Def. Council,
15

the alleged derogatory slurs and discriminatory employment practices “offended”
plaintiff, at no time did she endure discrimination directed at her personally7 or based on
her race or any association with African-American coworkers. (Doc. 36 ¶ 80.) While
Five Points’s African-American employees “might have been subjected to a hostile work
environment . . . [plaintiff] cannot recover for the harassment allegedly suffered by [her]
co-employee[s].” Holiness v. Moore-Handley, Inc., 114 F. Supp. 2d 1176, 1187 (N.D.
Ala. 1999). Therefore, plaintiff’s Title VII claim in Count I for hostile work environment
will be dismissed.
2. Plaintiff’s Section 1981 Discrimination Claim (Count I)

Count I of the Amended Complaint also alleges a claim for race discrimination in
violation of 42 U.S.C. § 1981.8 (Doc. 36 ¶¶ 114-19.) It has long been held that Section
104 S. Ct. 2778, 2782-83 (1984) (discussing, in general, the deference to be given to an
administrative agency’s interpretation of a statute for which they were appointed to administer
and interpret). Thus, in light of the Supreme Court’s “zone of interest” discussion in Thompson
and the more recent and conflicting EEOC opinion cited by defendant, the broad interpretation of
standing under Title VII found in the EEOC opinions cited by plaintiff are no longer reasonable
or based on a permissive construction of the statute.
7

While the court notes that racially offensive language need not be targeted at the
plaintiff to support a Title VII hostile work environment claim, the discrimination plaintiff
alleges was aimed at African-Americans, not persons of plaintiff’s race. See Walker v. Ford
Motor Co., 684 F.2d 1355, 1359 n.2 (11th Cir. 1982).
8

Section 1981 provides:
All persons within the jurisdiction of the United States shall
have the same right in every State and Territory to make and enforce
contracts, to sue, be parties, give evidence, and to the full and equal
benefit of all laws and proceedings for the security of persons and
property as is enjoyed by white citizens, and shall be subject to like
16

1981 applies to workplace discrimination based on race. See Johnson v. Ry. Express
Agency, Inc., 421 U.S. 454, 459-60 (1975). It is also well-settled that Section 1981 is
applicable to employment discrimination against whites. See McDonald v. Santa Fe Trail
Transp. Co., 427 U.S. 273, 286-87 (1976). Further, the Eleventh Circuit has held that
claims for race discrimination are cognizable under both Title VII and Section 1981 and
“‘have the same requirements of proof and use the same analytical framework.’” Blue v.
Dunn Const. Co., Inc., No. 10-14345, 2011 WL 5903535, at *1 (11th Cir. Nov. 23, 2011)
(quoting Standard v. A.B.E.L. Servs., Inc., 161 F.3d 1318, 1330 (11th Cir.1998)). In
making such an observation, the Eleventh Circuit has stated that the court may
“‘explicitly address the Title VII claim with the understanding that the analysis applies to
the § 1981 claim as well.’” Keith v. MGA, Inc., 211 F. App’x 824, 827 (11th Cir 2006)
(per curiam) (quoting Standard, 161 F.3d at 1330)).
There is some confusion surrounding which claims defendants challenge under
Count I of the Amended Complaint. Defendants’ Motion, (doc. 38), addresses Count I of
the Amended Complaint in its entirety, but defendants’ Memorandum in Support, (doc.
39), appears to only address plaintiff’s Title VII claim under Count I, while defendants’
Reply Brief, (doc. 56), discusses plaintiff’s Section 1981 claim in conjunction with the

punishment, pains, penalties, taxes, licenses, and exactions of every
kind, and to no other.

17

Title VII claim. The court, however, finds that plaintiff’s Section 1981 claim fails for the
same reason her Title VII claim cannot survive: plaintiff is white and only alleges a
pattern of offensive and racially derogatory remarks and employment practices against
defendants’ African-American employees; plaintiff may not enforce a third party’s rights
to be free from the type of discrimination prohibited by Section 1981. While the Eleventh
Circuit has not addressed this exact issue, it has held that a white plaintiff may maintain a
claim under Section 1981 for discrimination based on an interracial marriage or
association. Parr, 791 F.2d at 890. Other courts have indicated, however, that the
concepts of prudential standing bar a Section 1981 plaintiff from stating a claim based on
discrimination against others belonging to a different race. See, e.g., Fair Emp’t Council
of Greater Wash., Inc. v. BMC Mktg. Corp., 28 F.3d 1268, 1279 (D.C. Cir. 1994) (finding
fair employment organization did not have standing under Section 1981 based on
defendant’s alleged discriminatory hiring practices, “concluding that [Section] 1981 does
not confer a cause of action on persons whose injuries derive only from the violation of
others’ rights”); Blanks v. Lockheed Martin Corp., 568 F. Supp. 2d 740, 743 n.4 (S.D.
Miss. 2007) (stating generally that standing in the context of Section 1981 and Title VII
“is typically found where the plaintiff, though not the direct target of a defendant’s
discriminatory practices or harassment, is a member of the same class as those persons
who are the targets of discrimination and harassment”); cf. Drake v. Minn. Mining & Mfg.
Co., 134 F.3d 878, 884 (7th Cir. 1998) (stating that “whether the employee has been

18

discriminated against and whether that discrimination was ‘because of’ the employee’s
race” are the proper threshold inquiries in a Section 1981 claim).
Plaintiff only alleges defendants’ conduct discriminated against AfricanAmericans. Count I claims that defendants mistreated plaintiff “on the basis of [her] race
and color,” however, such allegations have absolutely no support anywhere in the
Amended Complaint. (Doc. 36 ¶ 116.) While plaintiff was “offended by and opposed”
the alleged repeated discrimination in the workplace, nothing in the Amended Complaint
suggests that she endured racial discrimination as a white employee at Five Points.9 (Id. ¶
80.) To borrow from the analysis in Thompson, plaintiff’s claim is not within the zone of
interest of Section 1981 because she does not allege any racial discrimination directed at
her based on her race or her association with African-Americans. Further, plaintiff
cannot assert a claim under Section 1981 based on discrimination and a work
environment hostile to other employees. Plaintiff’s discrimination claim under Section
1981 will be dismissed.

9

The Amended Complaint alleges plaintiff was retaliated against for opposing defendants’
discriminatory conduct; however, the present Motion does not challenge those claims, and
therefore, the court does not address those allegations in conjunction with plaintiff’s
discrimination claims.
19

B. COUNTS III AND VIII–INTENTIONAL INTERFERENCE CLAIMS
1. Intentional Interference–Failure to Pay Legal Fees (Count III)
Count III of the Amended Complaint asserts a claim of intentional interference
with a business relationship. (Doc. 36 ¶¶ 128-31.) This is apparently based on the
alleged statements made by the McNeils in February 2009 ordering plaintiff “not to talk
to her attorneys” and threatening her termination if she did so,10 and Five Points’s
cessation of payments for plaintiff’s legal fees and expenses incurred by the Frederick
Firm in the Lyons HR case. (Id. ¶¶ 48-54, 61-62, 68-69, 71.) Specifically, plaintiff
alleges that she “had a business relation with the Frederick Firm” in the form of an
attorney-client relationship and that defendants were aware of said relationship and were
“strangers” to the relationship and intentionally interfered, thus resulting in injuries to
plaintiff. (Id. 128-30.) Defendants argue that Count III fails under Alabama law because
defendants were not strangers to the business relationship between plaintiff and the
Frederick Firm. (Doc. 39 at 13-18.)

10

In plaintiff’s Opposition brief, she contends “that the alleged interference is with
plaintiff’s attorney-client relationship with her attorneys, The Frederick firm, in their pursuit, on
Plaintiff’s behalf, of her claims against defendants.” (Doc. 54 at 31.) However, as defendants
point out in their Reply Brief, plaintiff’s argument is contrary to the allegations in the Amended
Complaint, which only refer to the payment of fees and statements regarding the Lyons HR suit.
(Doc. 56 at 23.) Moreover, the alleged statements by the McNeils demanding that plaintiff and
the Fredericks not talk to each other occurred the week before plaintiff even filed her first EEOC
charge. (Doc. 36 ¶¶ 68-70, 85.) In short, all of the allegations in the Amended Complaint that
could support plaintiff’s claim for intentional interference with a business relationship refer to
the Frederick Firm’s representation of plaintiff in the Lyons HR case.
20

The Eleventh Circuit has recognized that under Alabama law, the tort of
interference with a business relationship includes the following elements: “(1) the
existence of a protected business relationship; (2) of which the defendant knew; (3) to
which the defendant was a stranger; (4) with which the defendant intentionally interfered;
and (5) damage.” Edwards v. Prime, Inc., 602 F.3d 1276, 1302 (11th Cir. 2010) (citing
White Sands Grp., LLC v. PRS II, LLC, 32 So. 3d 5, 14-15 (Ala. 2009)). It is plaintiff’s
burden to plead “that the defendant was a stranger to the protected business relationship
with which the defendant interfered.” Edwards, 602 F.3d at 1302 (citing Waddell & Reed,
Inc. v. United Investors Life Ins. Co., 875 So. 2d 1143, 1154 (Ala. 2003)). “The Alabama
Supreme Court has stated that ‘a defendant is a party in interest to a business or
contractual relationship if the defendant has any beneficial or economic interest in, or
control over, that relationship.’” Id. (quoting Tom’s Foods, Inc. v. Carn, 896 So. 2d 443,
454 (Ala. 2004)). Stated differently by the Alabama Supreme Court in Wadell: “A person
with a direct economic interest in the contract is not a stranger to the contract. Parties to
an interwoven contractual arrangement are not liable for tortious interference with any of
the contracts or business relationships.” 875 So. 2d at 1157 (internal quotation marks and
citations omitted). Further, a third party “involved in creating th[e] relationship” between
two other parties is not a stranger to that relationship. Tom’s Foods, 896 So. 2d at 455.
The Amended Complaint fails to adequately plead that defendants were strangers
to the business relationship that appears to be the subject of Count III–the Frederick

21

Firm’s representation of plaintiff in the Lyons HR suit. In fact, plaintiff’s factual
allegations11 lead to the opposite conclusion: defendants were not strangers to plaintiff’s
relationship with the Frederick Firm. The Amended Complaint states that after plaintiff
and Five Points were sued for allegedly violating the non-compete agreement, the
McNeils “suggested that Plaintiff use The Frederick Firm to represent her in the Lyons
HR lawsuit.” (Doc. 36 ¶ 50.) Thereafter, plaintiff agreed to the Frederick Firm’s
representation of her and the Fredericks indeed appeared on her behalf in the Lyons HR
suit. (Id. ¶¶ 51-52.) The Amended Complaint states that in August, 2008, David McNeil
“signed a contract in which Five Points promised and agreed to pay legal fees and
expenses associated with The Frederick Firm’s representation of Plaintiff” in the Lyons
HR case. (Id. ¶ 106.) Five Points then allegedly “paid for some of Plaintiff’s attorneys’
fees” but then “stopped paying, failed and refused to pay.” (Id. ¶ 61-62.)
Based on the allegations in the Amended Complaint, as a matter of law, defendants
were not strangers to the relationship between plaintiff and the Frederick Firm.
Defendants not only helped form the relationship between plaintiff and the Frederick
Firm by recommending that plaintiff use the Frederick Firm to defend her in the Lyons

11

The court notes that Count III of the Amended Complaint asserts that “Defendants were
strangers” to the business / attorney-client relationship between plaintiff and the Frederick Firm.
(Doc. 36 ¶ 128.) However, as discussed herein, the factual allegations elsewhere in the Amended
Complaint contradict plaintiff’s statement. Such conclusory pleading, without more, amounts to
a “formulaic recitation of the elements of a cause of action,” which is insufficient. Twombly, 550
U.S. at 555.
22

HR suit, they entered into an agreement with the Frederick Firm to pay for plaintiff’s
representation. Thus, defendants were “involved in creating th[e] relationship” between
plaintiff and the Frederick Firm both in recommending the firm’s services as well as
agreeing to pay for plaintiff’s representation. Tom’s Foods, 896 So. 2d at 455. Further,
the court finds that defendants were part of an “interwoven contractual arrangement”
between the Frederick Firm and plaintiff. Wadell, 875 So. 2d at 1157. Plaintiff’s
allegations in the Amended Complaint even refer to Five Points’s duty under the
agreement as a “contractual obligation to pay the Frederick Firm’s bills for that
representation.” (Doc. 36 ¶ 109.) What’s more, Count IX of the Amended Complaint
asserts a claim for breach of contract against defendants arising out of Five Points’s
alleged failure “to pay . . . for Plaintiff’s benefit, the Frederick Firm’s fees and expenses
incurred in its representation of Plaintiff in the Lyons HR case.” (Id. ¶ 171.) The
allegations in the Amended Complaint clearly portray the defendants as “participant[s]
[with the plaintiff] in a business relationship arising from interwoven contractual
arrangements.” Waddell, 875 So. 2d at 1157. Such allegations are contrary to any
assertion by plaintiff that defendants are strangers to the claimed business relationship
between herself and the Frederick Firm. Count III of the Amended Complaint thus fails
to state a claim for intentional interference with a business relationship and will be
dismissed.

23

2. Intentional Interference–Defendants’ Motion to Disqualify (Count VIII)
Count VIII of the Amended Complaint asserts an additional claim of unlawful
interference with business relations. (Doc. 36 ¶¶ 162-65.) Although not specifically
plead under Count VIII, the claim is apparently based on a Motion to Disqualify
plaintiff’s counsel, (doc. 5), filed by defendants’ former attorney in this case:
“Defendants, by and through their attorney . . . and the law firm of which she was . . . an
employee and an agent . . . have further intentionally interfered with Plaintiff’s attorneyclient business relationship with The Frederick Firm, further proximately causing injuries
to Plaintiff – even more emotional distress.” (Id. ¶ 164.) To summarize from the
allegations under Count VII (“Additional Unlawful Retaliation”) of the Amended
Complaint, the Motion to Disqualify arises out of the Frederick Firm’s representation of
plaintiff in the Lyons HR suit under an agreement with Five Points to pay for plaintiff’s
fees and expenses coupled with the Frederick Firm’s representation of plaintiff in this
case. (Id. ¶¶ 148-59.) On September 2, 2011, the court entered an Order denying
defendants’ Motion to Disqualify. (Doc. 44 at 1.)
Defendants challenge plaintiff’s “additional unlawful interference” claim in Count
VIII by arguing that plaintiff suffered no damages because her relationship with the
Frederick Firm was not severed or impeded. (Doc. 39 at 17-18; doc. 56 at 25-26.)
Although the court finds that an actual severance of the business relationship is not

24

required to maintain a claim for unlawful interference, plaintiff has failed to sufficiently
plead the element of damages such that her claim is plausible and not speculative.
As the court has already stated above, a cause of action in Alabama for unlawful
interference with business relations includes the element of damages. Edwards, 602 F.3d
at 1302. The Alabama Supreme Court has held that damages for unlawful interference
may include emotional distress, as long as it is “reasonably to be expected to result from
the interference.” White Sands Grp., 32 So. 3d at 17 (Ala. 2009) (quoting KW Plastics v.
United States Can Co., 131 F. Supp. 2d 1265, 1268 (M.D. Ala 2001)); see also Bill Salter
Adver., Inc. v. City of Atmore, --- So. 3d ---, 2010 WL 4151989, at *9 (Ala. Civ. App.
2010) (“emotional-distress and harm-to-reputation damages may properly form the basis
of a damages award in an intentional-interference-with-business-relations action.”).
Although plaintiff states that she suffered emotional distress as a result of defendants’
Motion to Disqualify, Count VIII is due to be dismissed because it fails to state a
plausible claim. See Speaker v. United States Dept. of Health and Human Servs. Centers
for Disease Control & Prevention, 623 F.3d 1371, 1381 (11th Cir. 2010) (“[G]iven the
pleading standards announced in Twombly and Iqbal, [plaintiff] must do more than recite
these statutory elements in conclusory fashion. Rather, [her] allegations must proffer
enough factual content to ‘raise a right to relief above the speculative level.’” (quoting
Twombly, 550 U.S. at 555)). Count VIII of the Amended Complaint states that
defendants’ alleged intentional interference “further proximately caus[ed] injuries to

25

Plaintiff – even more emotional distress.” (Doc. 36 ¶ 164.) This statement implies that
the claim for intentional interference is not the only complained of conduct by defendants
causing plaintiff to endure emotional distress. Indeed, the only other mention of such
damages is under plaintiff’s claim for “additional unlawful retaliation” under Title VII
and § 1981, which is also based on defendants’ Motion to Disqualify: “The abovedescribed additional retaliatory conduct on the part of Defendants has injured Plaintiff,
causing her even more emotional distress.” (Doc. 36 ¶ 159.) Aside from these two
conclusory statements, the Amended Complaint does not allege facts reflecting that
plaintiff suffered emotionally due to defendants’ Motion to Disqualify or for any other
reason. The Amended Complaint does not make any other reference to the Motion to
Disqualify except in Counts VII and VIII. Moreover, the business relationship between
plaintiff and the Frederick Firm was never severed, a fact which further erodes the
plausibility of plaintiff’s claim. Plaintiff’s assertion of “even more emotional distress”
does not constitute damages reasonably expected to result from the alleged intentional
interference. Thus, Count VIII will be dismissed.
C.

COUNTS IV-VI, AND X–FRAUD AND SUPPRESSION CLAIMS ARISING
OUT OF THE LYONS HR SUIT
Counts IV-VI, and X of the Amended Complaint assert various claims of fraud and

suppression arising out of the events leading up to and following the Lyons HR lawsuit.

26

The court now addresses each claim individually and will reference the relevant facts
where necessary.
FED. R. CIV. P. 9(b) requires an elevated pleading standard for claims of fraud: “In
alleging fraud . . . a party must state with particularity the circumstances constituting
fraud . . . .” However, the rule also states that elements indicating a person’s state of
mind, such as malice, “may be alleged generally.” Id. Regardless of whether the plaintiff
alleges fraud, she must provide “enough facts to state a claim to relief that is plausible on
its face.” Twombly, 550 U.S. at 570; see also Roe v. Aware Woman Ctr. for Choice, Inc.,
253 F.3d 678, 683 (11th Cir. 2001) (“[W]hile notice pleading may not require that the
pleader allege a ‘specific fact’ to cover every element or allege ‘with precision’ each
element of a claim, it is still necessary that a complaint ‘contain either direct or inferential
allegations respecting all the material elements necessary to sustain a recovery under
some viable legal theory.’” (quoting In re Plywood Antitrust Litig., 655 F.2d 627, 641
(5th Cir. Unit A Sept. 8, 1981))).
1. Count IV–Misrepresentation
Count IV of the Amended Complaint asserts that Tracy McNeil “fraudulently and
falsely misrepresented” that the non-compete agreement plaintiff entered into with Lyons
HR was not enforceable and that plaintiff detrimentally relied on said misrepresentation.
(Doc. 36 ¶ 133.)

27

In Alabama, a claim of misrepresentation requires the plaintiff to allege that
defendant (1) made a false representation, (2) of material existing fact, (3) which plaintiff
relied upon, and (4) as a result, suffered damage. Crowder v. Memory Hill Gardens, Inc.,
516 So. 2d 602, 604 (Ala. 1987). These elements remain the same regardless of whether
the representations at issue were made willfully, recklessly, or by mistake. Burroughs
Corp. v. Hall Affiliates, Inc., 423 So. 2d 1348, 1353 (Ala. 1982) (citations omitted); see
also ALA. CODE § 6-5-101 (1975) (“Misrepresentations of a material fact made willfully
to deceive, or recklessly without knowledge, and acted on by the opposite party, or if
made by mistake and innocently and acted on by the opposite party, constitute legal
fraud.”). Additionally, for a statement to be actionable as misrepresentation, the
statement must be one of fact and not mere opinion. Jones v. McGuffin, 454 So. 2d 509,
512 (Ala. 1984).
Defendants argue that Count IV fails because the allegations in the Amended
Complaint–Tracy McNeil’s representation to plaintiff that Five Points’s attorneys stated
that the non-compete was not enforceable–constitute an opinion and not a statement of
fact. (Doc. 39 at 21.) The court agrees.
It is well-settled in Alabama that statements of future outcomes are considered
opinions. See, e.g., Lawson v. Cagle, 504 So. 2d 226, 227 (Ala. 1987) (per curiam)
(internal citations and quotation marks omitted) (“Ordinarily a prediction as to events to

28

occur in the future is to be regarded as a statement of opinion only, on which the adverse
party has no right to rely.”). Defendants’ Motion will be granted as to Count IV.
2. Count V–Promissory Fraud
Count V of the Amended Complaint, titled “Another Fraud,” apparently asserts a
claim for promissory fraud: “Tracy McNeil fraudulently and falsely represented to
Plaintiff that Defendants would pay Plaintiff’s attorneys’ fees and expenses for Plaintiff’s
defense” if she was sued for breach of the non-compete agreement she signed when she
left Lyons HR.” (Doc. 36 ¶ 138.) Plaintiff further states she relied on the
misrepresentation and sustained damages as a consequence. (Id. ¶ 139.) This claim is
based on a promise to perform in the future. As defendants correctly point out, a common
law cause of action in Alabama for promissory fraud is based on a promise to perform in
the future and includes two elements in addition to those required for ordinary fraud:
“The elements of fraud are (1) a false representation (2) of a

material existing fact (3) reasonably relied upon by the plaintiff
(4) who suffered damage as a proximate consequence of the
misrepresentation. To prevail on a promissory fraud claim . . . ,
two additional elements must be satisfied: (5) proof that at the
time of the misrepresentation, the defendant had the intention
not to perform the act promised, and (6) proof that the defendant
had an intent to deceive.”
Heisz v. Galt Indus., Inc., --- So. 3d ---, 2012 WL 29190, at *6 (Ala. 2012) (quoting
Southland Bank v. A & A Drywall Supply Co., 21 So. 3d 1196, 1210 (Ala. 2008)); see
also Wright v. AmSouth Bancorporation, 320 F.3d 1198, 1204 (11th Cir. 2003) (“‘[T]o

29

support a claim of promissory fraud, the plaintiff must show that at the time of the alleged
misrepresentation (that is, the promise), the defendant intended not to do the act or acts
promised, but intended to deceive the plaintiff.’” (quoting Goodyear Tire & Rubber Co.
v. Washington, 719 So. 2d 774, 776 (Ala. 1998))). A plaintiff pursuing a theory of
promissory fraud, which requires proof of intent, bears a heavier burden than the one who
relies solely on misrepresentation. Intercorp v. Penzoil, 877 F.2d 1524, 1534 (11th Cir.
1989).
Plaintiff fails to state a claim for promissory fraud because nowhere is it alleged or
inferred from the alleged facts that defendants intended to deceive plaintiff at the time the
promises to perform in the future were made. Accepting the facts in the Amended
Complaint as true, Tracy McNeil, on behalf of defendants, represented to plaintiff that
defendants “would pay” her attorneys’ fees if she was sued for violating the Lyons HR
non-compete agreement. (Doc. 36 ¶ 45.) Then after learning of the suit against plaintiff
and Five Points, the McNeils “again represented to Plaintiff [that] Five Points would pay
for Plaintiff’s attorneys’ fees.” (Id. ¶ 49.) These are not statements of existing facts, they
are promises to perform in the future. Indeed, defendants performed by paying for
plaintiff’s representation from June 27, 2008 when the suit was filed, until sometime in
February 2009. (Id. ¶¶ 48, 61, 71.) Plaintiff must allege facts supporting her claim that at
the time the promise was made, the defendants intended not to do the act or acts
promised, but intended to deceive the plaintiff. Compare Escapes!, Inc. v. Legacy Land

30

& Dev. LLC, No. 09-00515-KD-M, 2010 WL 796987, at *9 (S.D. Ala. Mar. 8, 2010)
(denying defendant’s motion to dismiss and finding that the factual allegations, which
included “the procedures . . . completed” by defendant in furtherance of the promise and a
“[false] assertion that . . . money had been wired, when it had not,” unambiguously set out
the elements of promissory fraud), with Depaola v. Nissan N. Am., Inc., No. 1:04CV267,
2006 U.S. Dist. LEXIS 29084, at *23-24 (M.D. Ala. May 2, 2006) (dismissing
promissory fraud claim against some of the defendants because plaintiff failed “to allege
[defendants] . . . possessed a present intent not to perform any promised acts”). Although
defendants “stopped paying” plaintiff’s fees “[a]fter repeated representations” to the
contrary, (doc. ¶ 62), “[t]he failure to perform a promised act is not in itself evidence of
intent to deceive at the time the promise is made.” Picker Int’l, Inc. v. Parten, 935 F.2d
257, 265 (11th Cir. 1991) (quoting Russellville Prod. Credit Ass’n v. Frost, 484 So.2d
1084, 1086 (Ala. 1986)). Plaintiff does not allege sufficient facts to state a claim for
promissory fraud. Accordingly, Count V of the Amended complaint will be dismissed.
3. Counts VI and X–Fraudulent Suppression
Counts VI and X of the Amended Complaint–titled “Another Fraud” and
“Additional Fraud and Misrepresentation” respectively–appear to assert claims for
fraudulent suppression based on defendants’ failure to truthfully and fully disclose all
facts regarding defendants’ representation to plaintiff that her attorneys’ fees in
connection with the Lyons HR suit would be paid by Five Points. (Doc. 36 ¶¶ 142-44,

31

176-78.) As discussed below, the court finds that plaintiff has not alleged sufficient facts
to state claims for suppression.12
The Alabama Supreme Court has stated that a claim of fraudulent suppression
must include factual allegations “showing ‘(1) that the defendant had a duty to disclose
material facts; (2) that the defendant concealed or failed to disclose those facts; (3) that
the concealment or failure to disclose induced the plaintiff to act; and (4) that the
defendant’s action resulted in harm to the plaintiff.’” Bethel v. Thorn, 757 So. 2d 1154,
1162 (Ala. 1999) (quoting Booker v. United Am. Ins. Co., 700 So. 2d 1333, 1339 n.10
(Ala. 1997)). “‘Without a duty to disclose, there can be no recovery for suppression.’”
Pearson’s Pharmacy, Inc. v. Express Scripts, Inc., 505 F. Supp. 2d. 1272, 1278 (M.D.
Ala. 2007) (quoting Freightliner, L.L.C. v. Whatley Contract Carriers, L.L.C., 932 So. 2d
883, 891 (Ala. 2005)). The duty to disclose can arise either as the result of a confidential
relationship between the plaintiff and defendant or based on the particular circumstances
giving rise to the fraud. Grace v. Interstate Life & Accident Ins. Co., 916 F. Supp. 1185,
1189 (M.D. Ala. 1996) (citing ALA. CODE § 6-5-102 (1975)). According to the Alabama
Supreme Court, some factors to help assess whether the alleged circumstances create a
duty of disclosure include, “‘(1) the relationship of the parties; (2) the relative knowledge
of the parties; (3) the value of the particular fact; (4) the plaintiff’s opportunity to

12

The court notes that Counts VI and X essentially allege the same cause of action and are
based on the same factual circumstances.
32

ascertain the fact; (5) the customs of the trade; and (6) other relevant circumstances.’”
Bethel, 757 So. 2d at 1162 (quoting State Farm Fire & Cas. Co. v. Owen, 729 So. 2d 834,
842-43 (Ala.1998)). This analysis is made on a “case-by-case” basis and is flexibly
applied. Grace, 916 F. Supp. at 1189.
Plaintiff does not allege sufficient facts to state a claim of suppression. According
to the Amended Complaint, which the court must accept as true for purposes of
defendants’ Motion, in reliance on statements by Tracy McNeil that Five Points would
pay plaintiff’s legal fees if sued for breach of the non-compete agreement, plaintiff began
working for Five Points in May 2008. (Doc. 36 ¶¶ 45-47.) Once plaintiff was sued by
Lyons HR, the McNeils repeated this representation. (Id. ¶ 49.) The Frederick Firm was
hired to represent plaintiff, and David McNeil signed a contract which obligated Five
Points to pay for plaintiff’s attorneys’ fees associated with the Lyons HR case. (Id. ¶¶ 5152, 106.) Five Points paid for plaintiff’s attorneys’ fees and expenses until sometime in
February 2009. (Id. ¶¶ 61, 71.) Plaintiff sustained damages due to defendants’ failure to
disclose that Five Points would not pay for all of plaintiff’s attorneys’ fees. (Id. ¶¶ 143,
177.) As defendants correctly argue, plaintiff does not allege any facts showing a special
or confidential relationship existed between defendants and plaintiff, (doc. 39 at 27), and
the particular circumstances plead in the Amended Complaint do not raise a plausible
argument that defendants had a duty to disclose whether Five Points would unequivocally
pay all of plaintiff’s attorneys’ fees in connection with the Lyons HR suit. The facts

33

alleged in the Amended Complaint are unlike the facts in cases where courts have found a
duty to disclose based on the particular circumstances. See, e.g., Grace, 916 F. Supp. at
1189-90 (finding suppression claim sufficiently pled based on the particular
circumstances, that defendant, an insurance agent, owed plaintiff a duty to disclose to her
that the disputed policy duplicated her Medicaid benefits and was thus unnecessary);
Bethel, 757 So. 2d at 1161-62 (reversing trial court’s dismissal of suppression claim and
finding that the circumstances, including defendants’ repeated representations that they
could timely deliver goods under contract, which was “of critical importance,” gave rise
to a duty to disclose).
Accepting the allegations in the Amended Complaint as true, the court finds the
“particular circumstances” arising from plaintiff’s allegations are insufficient to state a
claim of suppression. Defendants’ Motion will be granted as to Counts VI and X.

34

D. COUNT VII–RETALIATION BASED ON DEFENDANTS’ MOTION TO
DISQUALIFY
Count VII of the Amended Complaint–“Additional Unlawful
Retaliation”13–asserts claims under Title VII of the Civil Rights Act of 1964 and 42
U.S.C. § 1981 for unlawful retaliation based on defendants’ Motion to Disqualify14 the
Frederick Firm in the present litigation. (Doc. 36 ¶ 146-60.) As discussed below, the
court finds that plaintiff’s allegations fail to state a claim of retaliation. Therefore,
defendants’ Motion will be granted as to Count VII of the Amended Complaint.
The Eleventh Circuit has held that “[a] plaintiff may establish a prima facie case of
retaliation by showing that (1) he engaged in statutorily protected expression, (2) he
suffered an adverse employment action, and (3) there is some causal relationship between
the two events.” Ekokotu v. Fed. Express Corp., 408 F. App’x 331, 337, (11th Cir.) (per
curiam) (citation omitted), cert. denied, 132 S. Ct. 420 (2011). These elements are
applied in both Title VII and Section 1981 claims. See Goldsmith v. Bagby Elevator Co.,
513 F.3d 1261, 1277 (11th Cir. 2008). Filing an employment discrimination lawsuit
constitutes a statutorily protected activity. See Donnellon v. Fruehauf Corp., 794 F.2d
598, 600 (11th Cir. 1986). “Regarding an adverse action, a ‘plaintiff must show that a

13

Count II of the Amended Complaint, which is not addressed in defendants’ Motion, also
asserts a retaliation claim.
14

The facts underlying the Motion to Disqualify are set out briefly supra under the court’s
discussion of Count VIII (additional unlawful interference with business relations).
35

reasonable employee would have found the challenged action materially adverse.’”
Burgos-Stefanelli v. Sec’y, U.S. Dep’t of Homeland Sec., 410 F. App’x 243, 246 (11th
Cir. 2011) (per curiam) (quoting Burlington Northern & Santa Fe Ry. Co. v. White, 548
U.S. 53, 68 (2006)).
According to the Amended Complaint, plaintiff’s claim of retaliation is based on
plaintiff’s “participation in this action.” (Doc. 36 ¶ 149.) During her last term of
employment with defendants, plaintiff “opposed and complained internally at Five
Points” about the racially discriminatory practices in the workplace. (Id. ¶ 79.) Plaintiff
initiated this case and undertook a protected action when she filed her first Complaint on
December 17, 2010. (Id. ¶ 101.) Defendants’ Motion to Disqualify was filed on February
18, 2011. (Doc. 5). Plaintiff contends that her act of filing suit “was a substantial
motivating factor for Defendants’ additional retaliation against Plaintiff in the form of
trying to deny Plaintiff the counsel of her choice in her pursuit of protection of her
rights.” (Doc. 36 ¶ 156.) Accepting these facts as true, the court finds as a matter of law
that a reasonable employee would not find this action (the filing of a motion to disqualify
by the defendants) to be “materially adverse” nor would this action (the filing of such a
motion) dissuade a reasonable person from making or supporting a charge of
discrimination. Therefore, defendants’ Motion will be granted as to Count VII of the
Amended Complaint.

36

E. COUNT IX–BREACH OF CONTRACT ARISING OUT OF THE LYONS HR
SUIT
Count IX of the Amended Complaint asserts a claim of breach of contract. (Doc.
36 ¶¶ 167-73.) This claim arises out of an Engagement Letter (“the contract”) in which
defendants, according to the Amended Complaint, “promised and agreed to pay legal fees
and expenses associated with The Frederick Firm’s representation of Plaintiff in the case
Lyons HR had filed against Plaintiff and Five Points.” (Id. ¶ 106.) Defendants argue
that plaintiff’s breach of contract claim should be dismissed (1) because plaintiff failed to
allege damages arising out of the breach, and/or (2) because the contract was at-will and
thus could be terminated by either party at any time. (Doc. 39 at 34-36.) As discussed
below, the court finds that plaintiff states a plausible claim for breach of contract, and
thus, defendants’ Motion will be denied as to Count IX of the Amended Complaint.15

1. General Allegation of Damages
Under Alabama law, general damages do not have to be specifically plead because
they are considered to flow naturally and necessarily from the alleged wrongful act. See,
e.g., Steele v. Underwriters Adjusting Co., 649 F. Supp. 1414, 1414 (M.D. Ala. 1986)
(discussing Alabama law regarding specificity required in pleading damages); Crommelin

15

If as defendants argue in their reply brief plaintiff has not paid any attorneys’ fees to the
Frederick Firm that she claims should have been paid by Five Points, plaintiff’s breach of
contract claim will fail for failure to prove damages. As defendants correctly argue, “damages
for emotional distress or other suffering plaintiff might claim are not recoverable” in a breach of
contract action. (Doc. 56 at 34.)
37

v. Montgomery Indep. Telecasters, Inc., 194 So. 2d 548, 551 (Ala. 1967) (“General
damages do not have to be pleaded in order to give the defendant notice that they will be
proved at the trial, for they are implied by law.”) Thus, a general statement of such
damages is sufficient to prevail in a motion to dismiss. See Steele, 649 F. Supp. at 1414.
Defendant argues that plaintiff has not plead sufficient facts to show that she
suffered damages based on defendants’ breach of contract. However, in the Amended
Complaint, plaintiff states that “Five Points breached its contract to pay, for Plaintiff’s
benefit, The Frederick Firm’s fees and expenses incurred in its representation of Plaintiff
in the Lyons HR case.” (Doc. 36 ¶ 171.) Accordingly, plaintiff states that she “was
damaged by Five Points’ Breach.” (Id. ¶ 172.) In light of the pleading requirements
regarding general damages that naturally flow from an alleged harm, plaintiff’s
allegations establish a plausible basis for her claim.
2. Duration of the Contract
Defendants also argue that because the contract was silent as to its duration, it
should be considered a contract terminable at will, in which case defendants had a right to
terminate the contract whenever they so chose. (Doc. 39 at 34-35.)16 Plaintiff contends
that the contract did, in fact, include a stipulation regarding duration in that the contract

16

A copy of the Engagement Letter is attached as an exhibit to defendants’ Memorandum
in Support. (Doc. 39-1.) The court notes that the Engagement Letter is “outside the pleadings”
and will not consider it in ruling on this Motion.
38

stated that defendants would pay plaintiff’s legal fees and expenses incurred during the
duration of the Lyons HR lawsuit. (Doc. 54 at 51-53.)
The Alabama Supreme Court has held that “parties to a contract may either
prescribe a fixed term for its duration or make it depend upon some prescribed
contingency.” Phenix City v. Alabama Power Co., 195 So. 894, 897 (1940); see also
Flowers v. Flowers, 334 So. 2d 856, 858 (Ala. 1976) (citing the holding in Phenix City
with approval). According to the Amended Complaint, “on behalf of Five Points, David
McNeil signed a contract in which Five Points promised and agreed to pay legal fees and
expenses associated with The Frederick Firm’s representation of Plaintiff in the case
Lyons HR had filed against Plaintiff and Five Points.” (Doc. 36 ¶ 106.) Accepting the
alleged facts as true, the court finds this statement implies a “prescribed contingency”
upon which duration of the contract–the entirety of the Lyons HR suit–depends, therefore
contradicting defendants’ argument that the at-will nature of the contract warrants
dismissal. Defendants’ Motion will be denied as to Count IX.17

17

On a Motion for Judgment on the Pleadings the will not consider the Engagement Letter
itself and makes no findings as to whether the document is a contract without a fixed term and
therefore terminable at will by either party.
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IV. CONCLUSION
Based on the foregoing, defendants’ Motion will be granted as to defendants’
Motion for Judgment on the Pleadings as to Counts I, III, IV, V, VI, VII, VIII, and X of
plaintiff’s Amended Complaint. Defendants’ Motion for Judgment on the Pleadings as
to Count IX of the Complaint will be denied. An Order in conformity with this Opinion
will be entered contemporaneously with this Opinion.
DONE, this the 28th day of September, 2012.

SHARON LOVELACE BLACKBURN
CHIEF UNITED STATES DISTRICT JUDGE

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