Chalmers v. Intel Corporation

Filing 15

ORDER, denying Defendant's 8 Partial Motion to Dismiss Plaintiff's First Amended Complaint. Signed by Judge G Murray Snow on 10/1/12.(REW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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William Chalmers,
Plaintiff,

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ORDER
vs.

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No. CV-12-00020-PHX-GMS

Intel Corporation, a Delaware
corporation,

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Defendant.

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Pending before the Court is Defendant’s Partial Motion to Dismiss Plaintiff’s

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First Amended Complaint (Doc. 8) filed by Defendant Intel Corporation. For the

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reasons described below, the motion is DENIED.1

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BACKGROUND

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Defendant Intel Corporation hired Plaintiff William Chalmers on January 10,

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1994. (Doc. 5 ¶ 4.) Over the course of the next 14 years, Chalmers continued his work

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at Intel and received two promotions. (Id. ¶ 6.) In 2008, Chalmers was diagnosed with

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Graves disease. (Id. ¶ 8.) Chalmers claims that, over the course of the next four years,

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Intel and its employees refused to give him appropriate accommodations for his disease

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that amounted to discrimination based upon his disability. (Id. ¶¶ 15-29.)

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The Parties’ requests for oral argument are denied because the parties have had
an adequate opportunity to discuss the law and evidence and oral argument will not aid
the Court’s decision. See Lake at Las Vegas Investors Group v. Pac. Malibu Dev., 933
F.2d 724, 729 (9th Cir. 1991).

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On January 4, 2012, Chalmers filed his first complaint against Intel, alleging that

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Intel violated the Rehabilitation Act. (Doc. 1 ¶¶ 30-38.) After the Equal Employment

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Opportunity Commission (“EEOC”) issued a notice of right to sue, Chalmers amended

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his complaint on April 23, 2012 to include a claim under the Americans With

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Disabilities Act (“ADA”). (Doc. 5 ¶¶ 41-50.) Intel filed this motion on May 16, 2012 to

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dismiss the Rehabilitation Act claim for failure to exhaust administrative remedies.

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(Doc. 8.)

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ANALYSIS

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“[T]he failure to exhaust nonjudicial remedies . . . should be treated as a matter in

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abatement, which is subject to an unenumerated Rule 12(b) motion rather than a motion

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for summary judgment.” Wyatt v. Terhune, 315 F.3d 1108, 1119 (9th Cir. 2003). “In

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deciding a motion to dismiss for a failure to exhaust nonjudicial remedies, the court may

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look beyond the pleadings and decide disputed issues of fact. If the district court

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concludes that the [plaintiff] has not exhausted nonjudicial remedies, the proper remedy

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is dismissal of the claim without prejudice.” Id. at 1119-20 (citation omitted).

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The only question raised by this motion is whether Chalmers was required to

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exhaust his administrative remedies before filing his Rehabilitation Act claim. Section

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504 of the Rehabilitation Act provides that “[n]o otherwise qualified individual with a

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disability in the United States . . . shall, solely by reason of her or his disability, . . .be

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subjected to discrimination under any program or activity receiving Federal financial

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assistance.” 29 U.S.C. § 794(a) (2006). The Ninth Circuit has stated that “private

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plaintiffs suing under section 504 need not first exhaust administrative remedies.” Smith

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v. Barton, 914 F.2d 1330, 1338 (9th Cir. 1990). In 1992, however, Congress made the

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following amendment to § 504 of the Rehabilitation Act:

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The standards used to determine whether this section has been violated in a
complaint alleging employment discrimination under this section shall be
the standards applied under title I of the Americans with Disabilities Act of
1990 (42 U.S.C. § 12111 et seq.) and the provisions of sections 501 through
504, and 510, of the Americans with Disabilities Act of 1990 (42 U.S.C.
§ 12201 to 12204 and 12210), as such sections relate to employment.
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29 U.S.C. § 794(d). Intel argues that the 1992 amendment’s reference to ADA standards
also imported the ADA’s exhaustion requirement into the Rehabilitation Act. See, e.g.,
Santa Maria v. Pacific Bell, 202 F.3d 1170, 1176 (9th Cir. 2000) (“A plaintiff must file
a timely charge of discrimination with the EEOC as a prerequisite to maintaining an
ADA action.”) The Ninth Circuit has not addressed the effect, if any, of the 1992
amendment.
According to its very terms, however, the 1992 amendment imported the
standards of the ADA only “to determine whether this section has been violated.” 29
U.S.C. § 794(d) (emphasis added). Whether a plaintiff has exhausted her administrative
remedies is not the same question as whether the employer has violated the Act.
Exhaustion of administrative remedies is a procedural question. And the Rehabilitation
Act pre- and post-1992 amendment has had a separate provision for procedural
questions: “The remedies, procedures, and rights set forth in title VI of the Civil Rights
Act of 1964 (42 U.S.C. 2000d et seq.) . . . shall be available to any person aggrieved by
any act or failure to act by any recipient of Federal assistance or Federal provider of
such assistance under section 794 of this title.” 29 U.S.C. § 794a(a)(2) (emphasis
added). The administrative remedies available under Title VI of the Civil Rights Act
include “an administrative procedure that can lead to the withdrawal of federal funding
from programs or activities that discriminate on the basis of race, color, or national
origin, but [Title VI] does not require that plaintiffs exhaust the administrative process
before bringing suit.” Freed v. Consol. Rail Corp., 201 F.3d 188, 191-92 (3d Cir. 2000).
That is because those remedies do not afford individual relief. See Kling v. Los Angeles
Cnty., 633 F.2d 876, 879 (9th Cir. 1980) (reasoning that “exhaustion of . . .
administrative remedies is not required before one files a private action because the
procedures do not afford individual complainants adequate relief”). The lack of
individual relief under the Title VI procedural scheme—and therefore under the
Rehabilitation Act—was the rationale underpinning the Ninth Circuit’s holding in Smith

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that exhaustion was not required for Rehabilitation Act claims. See 914 F.2d at 1338

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(“Furthermore, administrative remedies, which result in suspension or termination of the

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federal assistance to the institutional recipient, do not afford individual complainants

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adequate relief. Therefore, private plaintiffs suing under section 504 need not first

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exhaust administrative remedies.”). That rationale remains unaffected by the 1992

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amendment, which addressed standards for determining whether the Act had been

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violated, and not the proper procedure for filing a lawsuit.

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Every circuit to address the question of whether the Rehabilitation Act requires a

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plaintiff suing a private employer under the Rehabilitation Act to exhaust administrative

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remedies has answered in the negative. See, e.g., Freed, 201 F.3d at 191-92; Brennan v.

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King, 139 F.3d 258, 269 n.12 (1st Cir. 1998) (“Unlike the ADA and the Massachusetts

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statutes, the Rehabilitation Act does not require exhaustion. The Rehabilitation Act

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derives its procedural requirements from Title VI, which does not have an exhaustion

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requirement.”); Tuck v. HCA Health Servs. of Tenn., Inc., 7 F.3d 465, 470-71 (6th Cir.

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1993) (“In the context of private employers and private employees, however, there is no

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exhaustion requirement.”). Their rationale mirrored Smith: “This judicial trend

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developed because the applicable remedies provide no individual relief, including no

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damage orders against an employer.” Tuck, 7 F.3d at 471. In addition, the Title VI

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procedural regulations adopted by the Rehabilitation Act are the same as those found in

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Title IX of the Education Amendments of 1972. With regard to Title IX, the Supreme

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Court held that plaintiffs were under no requirement to exhaust their administrative

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remedies because Title IX procedures provide no individual remedy. Cannon v. Univ. of

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Chicago, 441 U.S. 677, 706–08 n.41 (1979). Smith and its rationale remain good law

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despite the 1992 amendments.

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In response, Intel relies on a recent decision by this Court, which did reject an

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argument by a private employer that the Rehabilitation Act did not require exhaustion:

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“Defendant argues that the Rehabilitation Act contains no exhaustion requirement . . .

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This is not correct.” Staton v. U.S. Airways Inc., CV10-1619-PHX-DGC, 2011 WL
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855789 at *4 (D. Ariz. Mar. 11, 2011) 2. However, each case cited in Staton concerned

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claims against a federal employer. See Leong v. Potter, 347 F.3d 1117, 1121 (9th Cir.

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2003) (against U.S. Postal Service); Leorna v. U.S. Dep't of State, 105 F.3d 548, 550

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(9th Cir. 1997); Vinieratos v. U.S., 939 F.2d 762, 773 (9th Cir. 1991). Federal

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employees and their employers operate under a different set of regulations that require

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federal employees to consult an EEO counselor before resorting to litigation. See Leong,

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347 at 1121-22; Leorna, 105 F.3d at 550; see also 29 C.F.R. §§ 1614.103(a),

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1614.105(a) (requiring federal employee to consult a counselor before filing

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“[i]ndividual and class complaints of employment discrimination and retaliation

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prohibited by . . . the Rehabilitation Act (discrimination on the basis of disability).”).

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Thus the Rehabilitation Act has a different set of requirements for federal vis-à-vis

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private employees. Compare Smith, 914 F.2d at 1338 with Leong, 347 at 1121-22. See

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also Freed, 201 F.3d at 191-92 (noting that “federal employees must exhaust Title VII

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administrative remedies before filing suit against a federal employer under section 504”

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but holding that private employees suing private employers do not). Of course, “[a]

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decision by another district court is not binding on this court.” Kentera v. Fremont Inv.

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& Loan, CV–10–8259–PCT–GMS 2012 WL 1438683 at *2 (D. Ariz. Apr. 26, 2012). In

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this Court’s view, Smith remains binding authority for claims against private employers.

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CONCLUSION

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Because exhaustion is not required before bringing a claim under the

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Rehabilitation Act, Intel’s motion to dismiss will be denied.

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The exhaustion issue arose somewhat tangentially in Staton. The employer
sought to dismiss its employee’s Rehabilitation Act claim under the statute of
limitations. 2011 WL 855789 at *4. The employee responded by asserting that the
statute of limitations had been tolled while he exhausted his administrative remedies. Id.
The employer then argued that the Rehabilitation Act had no exhaustion requirement, an
argument which the Court rejected and therefore allowed the statute of limitations to be
tolled. Id. at *4-5.
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IT IS HEREBY ORDERED that Defendant’s Partial Motion to Dismiss
Plaintiff’s First Amended Complaint (Doc. 8) is DENIED.
Dated this 1st day of October, 2012.

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