Gonzalez v. Wells Fargo Bank, N.A.
Filing
63
ORDER granting in part and denying in part 22 Motion to Dismiss. Signed by Judge Kenneth A. Marra on 9/27/2013. (ir)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 12-80937-CIV-MARRA
YOVANY GONZALEZ,
Plaintiff,
vs.
WELLS FARGO BANK, N.A.;
f/k/a WACHOVIA BANK, N.A.;
WELLS FARGO & COMPANY;
WELLS FARGO & COMPANY DEPENDENT TERM LIFE PLAN;
WELLS FARGO & COMPANY HEALTH PLAN;
UNITED HEALTHCARE;
UNITED HEALTHGROUP, INC.;
UNTIED HEALTHCARE SERVICES, INC. and
MEDCO HEALTH SOLUTIONS, INC.,
Defendants.
____________________________/
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT WELLS FARGO BANK, N.A.’S
MOTION TO DISMISS AMENDED COMPLAINT
This matter is before the court on the defendant Wells Fargo Bank, N.A. f/k/a Wachovia
Bank, N.A.’s motion to dismiss the plaintiff’s amended complaint for failure to state claim upon
which relief can be granted under Fed. R. Civ. P. 12(b)(6) [DE 22]. For reasons stated below,
the motion is granted in part and denied in part.
BACKGROUND1
Plaintiff Yovany Gonzalez (“Gonzalez”) was employed by Wachovia Bank, N.A., now
known as Wells Fargo Bank, N.A. (“the Bank”) as a mortgage consultant from 2007 to 2010. As
1
The recited facts are drawn from plaintiff’s operative amended complaint [DE 20] and, for purposes of this motion,
are assumed to be true and interpreted in the light most favorable to the plaintiff. Erickson v. Pardus, 551 U.S. 89,
93-94, 127 S. Ct. 2197, 167 L. Ed. 2d 1081 (2007); Pierre v. City of Miramar, Florida, Inc., ___ Fed. Appx. ___,
2013 WL 4750080 (11th Cir. September 5, 2013); Miyahira v. Vitacost.com, Inc., 715 F.3d 1257 (11th Cir. 2013).
1
a benefit of that employment, Gonzalez participated in the Wells Fargo & Company Health Plan
and Life Plan, securing health and life insurance coverage for himself, his spouse and his
children.2 UnitedHealthcare (“UHC”) provided insurance verification for medical services under
the Health Plan in which Gonzalez participated, while Medco Health Solutions (“Medco”)
provided insurance verification for prescription drug services.
In December 2008, Gonzalez’s then four-year old daughter, Mackenzie, was diagnosed
with cancer. When Gonzalez requested leave under the Family Medical Leave Act (FMLA) to
attend to his daughter’s emergent medical needs, the Bank initially told him it “didn’t
participate” in that program and threatened to fire him if he took leave. After counsel intervened
on his behalf, the Bank ultimately allowed Gonzalez to take intermittent FMLA leave. The Bank
also acquiesced in his request to work from remote branch locations while he traveled with his
daughter for medical treatment after initially refusing his request. In this same time frame, the
Bank changed Gonzalez’s compensation structure from that of a full-time salaried employee to
that of an hourly paid employee.
Shortly after Wells Fargo Bank acquired Wachovia, new management approached
Gonzalez suggesting that he simply quit his position and take an unpaid leave of absence, instead
of using intermittent FMLA leave, until his daughter’s medical situation was resolved. Gonzalez
refused. The Bank then asked Gonzalez to forego taking any additional intermittent leave, and he
again refused.
2
The Bank contends that the Wells Fargo & Company Life Plan and Health Plan are
established under and controlled by the Employee Retirement Income Security Act of 1974
(ERISA), 29 U.S.C § 1001 et seq. Although plaintiff does not stipulate to the applicability of
ERISA, he does not challenge this contention and, indeed, asserts a cause of action for
interference with protected rights under ERISA (Count 3).
2
At or about this same time frame, the Bank reassigned Gonzalez to its downtown West
Palm Beach office, where he reported to branch manager Shaskia Rodriguez. At the outset, Ms.
Rodriguez warned Gonzalez to “be careful,” because Wells Fargo “was looking for reasons to
get rid of him.”
Rodriguez assisted Gonzalez in entering time records for work performed in
previous time periods, as required by newly implemented changes in the Bank’s time-entry
policy. Ms. Rodriguez encouraged him to rely on his “best recollection” in reconstructing his
time, and then inputted the time for him on the basis of that reconstruction.
In late 2009, the Bank accused Gonzalez of receiving over $9,000 in compensation
overpayments, and then unilaterally deducted $1,500 from his deposit account under a claimed
“right to offset.” After Gonzalez’s attorney again intervened, the Bank dropped its demand for
additional payments but did not refund the $1,500 deduction.
In July, 2010, Gonzalez learned that his daughter needed surgery for removal of a tumor,
and he began making arrangements to visit Memorial Sloan-Kettering Cancer Center (SloanKettering) in New York for treatment. However, on August 3, 2010, just days prior to his
scheduled departure, the Bank fired Gonzalez for falsification of time records. A few weeks
later, on August 23, 2010, the Bank filed a Form U-5 Uniform Termination Notice for Securities
Industry Registration with the Financial Industry Regulatory Authority (FINRA) and advised
Gonzalez that his securities registration through Wells Fargo Advisors, LLC Wealth Brokerage
Services had been terminated. The Form U-5 identified the reason for Gonzalez’s termination as
“conduct unrelated to the business of Wells Fargo Advisors,” and specifically, “ent[ry] of
inaccurate time information into the firm’s time management system.”
3
After arriving in New York, Gonzalez waited for hours while Sloan-Kettering attempted,
unsuccessfully, to verify insurance coverage through United Healthcare (UHC). According to
Gonzalez, his coverage was in place through the end of August, 2010, and UHC’s failure or
refusal to verify this coverage for Mackenzie caused her to miss scheduled doctor’s visits,
chemotherapy, radiation treatments and prescription drug refills.
By October, 2010, Gonzalez learned that his daughter’s cancer had metastasized, and the
surgery was never scheduled. His daughter died on March 2, 1011 at the age of six.
Gonzalez later applied for death benefits under his Wells Fargo Dependent Term Life
Plan, but Minnesota Life Insurance Company, the Claims Administrator, advised that the policy
on Mackenzie had been cancelled for lack of payment. Eight months later, on April 7, 2011, the
Bank sent Gonzalez a notice advising of his possible eligibility for continuation of life insurance
benefits conditioned upon his contact with Minnesota Life “within 31 days of [the] coverage end
date.”
In July 2011, Gonzalez secured new employment with Chase Bank. He asked Chase to
sponsor him for a securities registration with the FINRA in order to become licensed once again
to sell securities, but Chase declined citing the grounds listed on the Wells Fargo Form U-5
termination notice.
On August 3, 2011, Gonzalez’s attorney delivered a Technical Assistance Questionnaire
(“TAQ”) to the Florida Commission on Human Relations (“the Commission” or “FCHR”). In the
TAQ, Gonzalez expressed his belief that Wells Fargo terminated his employment to avoid the
inconvenience and disruption caused by accommodation of his intermittent leave requests, as
well as the expense of treatment of his daughter, which by then had run into “several millions of
4
dollars.” The Commission accepted the TAQ as a formal administrative complaint. On February
6, 2012, the Commission issued a 180-day letter indicating that it had not yet completed its
investigation. The letter stated that Gonzalez had the option of proceeding to file suit in a court
of competent jurisdiction, filing an administrative petition before the Florida Division of
Administrative Hearings or waiting for the Commission to conclude its investigation. This notice
identified the filing date of Gonzalez’s complaint as “8/3/2011,” and the date of harm as
“8/3/10.” On April 11, 2012, the Commission issued its formal determination of cause, expressly
finding that all “timelines and [] jurisdictional requirements have been met,” and that “reasonable
cause exists to believe that an unlawful employment practice occurred.”
On August 2, 2012, plaintiff filed a civil action in Florida state court against the Bank,
pleading associational disability discrimination under the Florida Civil Rights Act (FCRA), as
well as common law claims of defamation and breach of fiduciary duty. Gonzalez alleged that
the Bank discriminated against him in violation of the FCRA by firing him to avoid the need to
further accommodate his work schedule because of his daughter’s illness, and to avoid the
additional expense associated with her treatment. On September 4, 2012, Wells Fargo filed a
petition to remove the case to this court, alleging that Gonzalez’s claims arose under the
Employee Retirement Income Security Act (ERISA) and were therefore removable under 28
U.S.C. §1331 and §1441.
Gonzalez thereafter filed an amended complaint identifying the following claims3:
3
The Amended Complaint also adds new defendants – Wells Fargo & Company, Wells Fargo & Company
Dependent Term Life Plan, Wells Fargo & Company Health Plan, United Healthcare, United Healthgroup, Inc.,
Healthgroup, Inc., United Healthcare Services, Inc. and Medco Health Services. However, the court file does not
reflect that any of the newly added defendants have been served with process or have otherwise filed appearances in
this case .
5
(1) the Bank violated the Florida Civil Rights Act (FCRA), § 760.01-11, Florida Statutes,
by engaging in “associational disability discrimination,” and specifically, by firing
him in order to avoid (i) the need to further accommodate him in light of his
daughter’s illness (ii) disruptions or distractions occasioned by his caretaker
responsibilities, and (iii) additional expenses associated with treatment of his
daughter;
(2) the Bank violated the Family Medical Leave Act (FMLA), 29 U.S.C. § 2615, by
firing him in retaliation for exercising his right to take intermittent leave to attend to
the medical needs of his daughter;
(3) the Bank violated the Employee Retirement Income Security Act (ERISA), 29 U.S.C.
§§ 1132, 1140, by interfering with his entitlement to collect benefits under his Wells
Fargo Health Plan, and specifically, by firing him to evade the further obligation to
pay benefits for his daughter’s mounting medical expenses;
(4) the Bank defamed him by filing a Form U-5 with the Financial Industry Regulatory
Authority (FINRA) which falsely accused Gonzalez of theft by claiming that he
entered inaccurate time records, a direct attack on his personal and professional
character;
(5) the Bank (as Plan Administrator) and the Life Plan breached their fiduciary duties
under ERISA, 29 U.S.C. §1132, by failing to give timely notice of his life insurance
conversion rights before or during the 31-day conversion period, causing Gonzalez
and his family to lose valuable death benefits for Mackenzie and to lose coverage for
the remainder of the family;
6
(6) the Bank (as Plan Administrator) and the Health Plan breached their fiduciary duties
under ERISA, 29 U.S.C. § 1132, by failing to give timely notice of his health
insurance conversion rights at the time of termination, causing Gonzalez to suffer the
loss of “time and effort [needed] to obtain the information,” as well as “increased
medical expenses;”
(7) the Bank converted money belonging to Gonzalez by unilaterally misappropriating
$1,500 from his employee deposit account as a purported “set off” of a mistaken
compensation overpayment;
(8) United Health Care and Medco negligently failed to verify and affirm the existence of
health and prescription drug insurance coverage through the end of August 2010 for
the benefit of Gonzalez’s daughter, causing a disruption in delivery of necessary
medical care and loss of medical and prescription drug services that should have been
provided to Mackenzie.
[DE 20]. In its current motion to dismiss, the Bank argues that Counts 1 through 5 and Count 8
must be dismissed for failure to state a claim under Fed. R. Civ. P. 12(b)(6). More specifically,
the Bank contends:
(1) Count 1, alleging a FCRA violation based on “associational disability”
discrimination, (a) fails to show satisfaction of conditions precedent, where plaintiff’s
TAQ/FCRA complaint, filed August 3, 2011, was not timely filed within 365 days of
Gonzalez’s termination date, August 3, 2010; (b) is preempted by ERISA as a claim
which “relates to” an ERISA plan to the extent it asserts a claim for “expenseavoidance” associational disability discrimination; and (c) fails to state a claim for
7
either “distraction” or “accommodation” associational disability discrimination,
where the complaint does not allege sufficient facts to support the “distraction”
allegation and because, in the first instance, an employer has no obligation under the
FCRA to make scheduling accommodations for disabled relatives or dependents of
nondisabled employees;
(2) Count 2, alleging unlawful retaliation for exercise of protected rights under the
Family Medical Leave Act, fails to allege sufficient facts showing the causal link
between the alleged adverse action (discharge) and the protected activity (exercise of
intermittent FMLA leave);
(3) Count 3, alleging interference with ERISA rights, fails to adequately allege
exhaustion of administrative remedies;
(4) Count 4, alleging common law defamation, fails to allege sufficient facts to
overcome the qualified reporting privilege attached to Form U-5 filings, where it fails
to allege a predicate for “express malice;”
(5) Count 5, alleging a violation of the Bank and Life Plan’s fiduciary duties and
statutory obligations under the Consolidated Omnibus Budget Reconciliation Act
(COBRA), by reason of defendants’ alleged failure to give timely notice of
Gonzalez’s alleged life insurance conversion rights, fails to state a claim because
COBRA applies only to group health insurance plans;
(6) Count 8, alleging negligence claims against UHC and MEDCO, by reason of their
alleged failure to timely and accurately confirm coverage for Mackenzie, are
preempted under ERISA as claims which “relate to” an ERISA plan.
8
II. DISCUSSION
A. LEGAL STANDARD
A court may dismiss a complaint under Fed. R. Civ. P. 12(b)(6) when it does not contain
enough facts to state a claim to relief that is plausible on its face. Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L.Ed.2d 929 (2007). Under the Twombly
“plausibility” standard, “[a] claim has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L.Ed.2d
868 (2009).
In determining the sufficiency of a complaint under a Rule 12(b)(6) motion to dismiss,
the court must accept all factual allegations in the complaint as true and draw all reasonable
inferences in the plaintiff’s favor. Rehberg v. Paul, 611 F.3d 828, 835 n. 1 (11th Cir. 2010);
Hazewood v. Foundation Financial Group, LLC, 551 F.3d 1223 (11th Cir. 2008). However, the
court need not accept legal allegations unsupported by factual allegations, Iqbal at 678; Allah El
v. Avesta Homes, LLC, ___ Fed. Appx. ___, 2013 WL 2321421 (11th Cir. 2013), legal
conclusions couched as factual allegations, McGee v. JP Morgan Chase Bank, NA, ___ Fed.
Appx. ____, 2013 WL 2321782 (11th Cir. 2013), or conclusory factual allegations devoid of any
reference to particular acts or events. United Black Firefighters of Norfolk v. Hirst, 604 F.2d
844, 847 (4th Cir. 1979). The complaint must contain “more than labels and conclusions and a
formulaic recitation of the elements of a cause of action will not do.” Twombly at 555.
9
III.
DISCUSSION
A. Florida Civil Rights Act Disability Discrimination
1. Exhaustion of Administrative Remedies
Gonzalez filed his charge with the Florida Commission on Human Rights (FCHR) on
August 3, 2011, following termination of his employment on August 3, 2010. According to the
Bank, Gonzalez failed to timely file his charge of disability discrimination “within 365 days of
the alleged violation” with the appropriate state agency prior to bringing suit under the Florida
Civil Rights Act, thereby defeating his FCRA claim for failure to demonstrate satisfaction with
all conditions precedent to suit.
To bring a suit for discrimination under the FCRA, Title VII, the ADA or the ADEA, a
plaintiff first must exhaust administrative remedies. To exhaust remedies, the plaintiff must
timely file a discrimination charge with the appropriate commission. See Poulsen v. Publix
Super Markets, Inc., 302 Fed. Appx. 906 (11th Cir. 2008) and cases cited infra. In this case,
plaintiff alleges that he filed his initial “Technical Assistance Questionnaire” (TAQ) with the
Florida Commission on Human Rights on August 3, 2011; that the Commission accepted and
processed the TAQ as a formal complaint pursuant to statute; that the Commission issued a
“180-day” letter on February 6, 2012; that the Commission issued its formal “cause”
determination on April 12, 2012, explicitly finding that “all timeliness and jurisdictional
requirements have been met” and that “reasonable cause” existed to believe an unlawful
employment practice had occurred. Plaintiff also attaches a copy of the Commission’s formal
cause determination as an exhibit to his complaint [DE 20-6].
10
Recognizing that a motion to dismiss tests the legal sufficiency of pleadings contained
“within the four corners of the complaint,” Ashcroft v. Iqbal, 556 U.S. 662, 674 (2009);
American Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288-90 (11th Cir. 2010), and is not
intended to determine issues of ultimate fact, the court concludes, based on the pleadings before
it, that the FCHR’s April 12, 2012 notice of probable cause attached to plaintiff’s complaint
demonstrated FCHR’s satisfaction with Gonzalez’s timely filing of his initial administrative
complaint. This necessarily indicates compliance with the required condition precedent to suit
under §760.11, Florida Statutes, and Gonzalez sufficiently pled this compliance in his complaint.
At this stage of the proceeding, it is not appropriate for the court to go behind Gonzalez’s
pleadings to reweigh the administrative agency’s treatment of his initial administrative complaint
as timely.4 See Maynard v. Taco Bell of America, Inc., 117 So.3d 1159 (Fla. 2d DCA 2013)
(“[T]he determination of whether [an administrative] complaint is timely filed rests with FCHR.
Accordingly, as long as [plaintiff] sufficiently alleged timely compliance with the requisite
condition precedent, it is not part of the trial court’s consideration to reweigh that timeliness
determination on a motion to dismiss.”).
The administrative process is properly viewed as a condition precedent to a discrimination
suit under the FCRA, Martinez v Abraham Chevrolet-Tampa, Inc., 891 So.2d 579 (Fla. 2d DCA
2004) as it is under Title VII. Fouche v Jekyll Island-State Park Authority, 713 F.2d 1518 (11th
4
Section 760.11(1) provides that when a complaint is filed with the FCHR within 365
days of an alleged violation, FCHR will notify the person who allegedly committed the violation
and that person may file an answer within twenty-five days. Section 760.11(3) provides that
FCHR has 180 days from the date the complaint is filed to investigate and determine if there is
probably cause to believe that a violation has occurred. Under Section 760.11 (8), if FCHR fails
to make such a determination within 180 days, the aggrieved person may proceed as though
FCHR made such a finding by filing a lawsuit or requesting an administrative hearing.
11
Cir. 1983), and is a condition subject to equitable modification. See generally Chappell v. Emco
Machine Works Co., 601 F.2d 1295 (5th Cir. 1979). Because equitable tolling may be available
to plaintiff, the Bank’s challenge to the legitimacy of the FCHR’s finding on the timeliness of his
administrative complaint raises issues outside the four corners of the complaint which are not
properly decided on a motion to dismiss (e.g. equitable circumstances that the Commission may
have considered in accepting the complaint as timely).
In addition, while there may be an issue as to the degree of deference owed an agency’s
positive finding on the timeliness of an initial administrative complaint in the first instance,
compare Boudreaux v Baton Rouge Marine Contracting Co., 437 F.2d 1011, 1014 n. 6 (5th Cir.
1971)(dicta)(questioning whether positive timely finding by EEOC should ever be open to
reconsideration by court), criticized on other grounds, Ingram v. Steven Robert Corp., 547 F.2d
1260 (5th Cir. 1977) with Wade v. Sec’y of the Army, 796 F.2d 1369 (11th Cir. 1986)(recognizing
that adverse agency finding on timeliness of pre-suit administrative charge is subject to
independent judicial review and outlining relevant criteria for judicial inquiry), this issue,
similarly, is not properly before the court at the motion to dismiss stage of the proceeding.
Plaintiff’s complaint adequately alleged compliance with all conditions precedent to suit,
including exhaustion of administrative remedies before the Commission, and he supported this
allegation with written documentation of the Commission’s finding on timeliness. Even if the
court were to ultimately conclude that independent judicial review of the Commission’s positive
timeliness finding is in order – an issue on which the court here expresses no opinion – it is
inappropriate to determine the issue at this stage of the proceeding without a relevant evidentiary
12
predicate since the court’s inquiry is necessarily confined to the four corners of the plaintiff’s
complaint.
The court shall accordingly deny the Bank’s motion to dismiss the complaint based on
the alleged untimeliness of plaintiff’s initial administrative complaint and corresponding failure
to properly exhaust all administrative remedies. This order shall be without prejudice for
defendant to renew the administrative remedy exhaustion issue at a later stage of the proceeding.
2. Failure to State a Claim
The Bank also moves to dismiss the plaintiff’s associational disability discrimination
claims, asserted under the Florida Civil Rights Act, for failure to state a claim upon which relief
can be granted. Plaintiff does not assert an associational disability claim under federal law.
The analysis of a disability discrimination claim under the FCRA is identical to that
employed under the Americans With Disabilities Act, 42 U.S.C. § 12101 et seq. (“ADA”). Albra
v Advan, Inc., 490 F.3d 826, 835 (11th Cir. 2007); Byrd v. BT Foods, Inc., 948 So.2d 921, 925
(Fla. 4th DCA 2007). The ADA generally prohibits employers from discriminating against a
qualified individual on the basis of a known physical or mental disability. 42 U.S.C. § 12112(a).
Under 42 U.S.C. § 12112(b)(4) of the ADA, an employer is further prohibited from
discriminating against a qualified individual “because of the known disability of an individual
with whom [the employee] is known to have a relationship or association.” See also 29 C.F.R.
§ 1630.8 [An employer may not made a decision based on “belie[f] that the [employee] would
have to miss work” in order to take care of a disabled person].
In order to establish a prima facie case of “associational disability discrimination” under this
provision, a plaintiff must show:
13
(1) the plaintiff was subjected to an adverse employment action;
(2) the plaintiff was qualified for the job at the time of the adverse employment action;
(3) the defendant knew that a member of the plaintiff’s family was disabled;
(4) the adverse employment action occurred under circumstances which raise a reasonable
inference that the disability of the relative was a determining factor in the employer’s
decision.
Hilburn v. Murata Electronics North America, Inc., 181 F.3d 1220, 1231 (11th Cir. 1999),
following Den Hartog v. Wasatch Academy, 129 F.3d 1076 (10th Cir. 1997); Stansberry v. Air
Wisconsin Airlines Corp., 651 F.3d 482, 487 (6th Cir. 2011). The fourth element of the Dan
Hartog test, which requires the plaintiff to produce evidence that he was discriminated against
because of the disability of a person with whom he has a relationship or other association,
potentially encompasses three categories of claims: (1) “expense-avoidance,” e.g. where an
employee suffers an adverse action because a spouse or child is covered by the company’s health
plan and has a disability that is costly to the employer; (2) “disability by association,” e.g. where
the employer fears that the employee is likely to develop the disability due to exposure to or a
genetic component of the ailment; and (3) “distraction, ” e.g., where the employee is somewhat
inattentive at work because his spouse or child has a disability that requires his attention, yet is
not so inattentive that he would need an accommodation to perform to
his employer’s
satisfaction. Larimer v. International Business Machines Corp., 370 F.3d 698, 700 (7th Cir.),
cert. den., 543 U.S. 984 (2004).
In a fourth category of claim, an employer may also be liable for associational disability
discrimination where it terminates an employee based on an unfounded assumption regarding the
14
employee’s need for future leave in order to care for a disabled person. Tyndall v. National
Educ. Centers, Inc. of California, 31 F.3d 209 (4th Cir. 1994); 29 C.F.R § 1630 (employer may
not make decisions based on the “belie[f] that the [employee] would have to miss work” in order
to take care of a disabled person). On the other hand, an employer’s decision to terminate an
employee with a disabled relative is within legal bounds where it is based on an established
record of past absences, or a clear indication of the employee’s intent to take additional time off
to care for the disabled relative. Tyndall at 214; Hilburn at 1232. See also Magnus v. St. Mark
United Methodist Church, 688 F.3d 331 (7th Cir. 2012); Erdman v. Nationwide Ins. Co, 582 F.3d
500 (3d Cir. 2009).
Assuming without deciding that the Florida Civil Rights Act -- which contains no
comparable express prohibition against associational disability discrimination -- is properly
interpreted to encompass such claims, the court examines the sufficiency of Gonzalez’s tripartite
associational disability discrimination theory, as outlined in ¶56 of his Amended Complaint:
Wells Fargo terminated Gonzalez to avoid the need to further accommodate him in light of
his daughter’s illness, to avoid any disruptions or distractions occasioned by his caretaker
responsibilities, and to avoid incurring additional expense associated with her treatment.
[ DE 20].
a. “Expense-avoidance” disability discrimination
The Bank first challenges plaintiff’s “expense–avoidance” theory of associational disability
discrimination on the ground it is preempted by ERISA. The court agrees, and shall accordingly
dismiss this distinct prong of the plaintiff’s FCRA claim with prejudice.
15
There are two strands of ERISA preemption: (1) express preemption under ERISA § 514(a),
29 U.S.C. § 1144(a), also known as defensive preemption, and (2) complete or “super”
preemption due to a conflict with ERISA’s exclusive remedial scheme as set forth in ERISA
§ 502(a), 29 U.S.C. § 1132(a). Connecticut State Dental Ass'n. v. Anthem Health Plans, Inc.,
591 F.3d 1337 (11th Cir. 2009); Fossen v. Blue Cross and Blue Shield of Montana, Inc., 660 F.3d
1102 (9th Cir. 2011), cert. den., 132 S. Ct. 2780 (2012). Complete preemption derives from
ERISA’s civil enforcement provision, §502(a), which has such “extraordinary” preemptive
power that it “converts an ordinary state common law complaint into one stating a federal claim
for purposes of the well-pleaded complaint rule.” Anthem Health at 1344. It is narrower than,
and differs from, defensive preemption because it is jurisdictional in nature, where defensive
preemption functions as an affirmative defense. Id. In this case, the Bank implicitly invokes both
strands, without explicitly articulating this dichotomy.
(i)
express ERISA preemption
ERISA expressly preempts “any and all State laws insofar as they may now or hereafter
relate to any employee benefit plan.” 29 U.S.C. §1144(a).
State laws include “all laws,
decisions, rules, regulations or other State action having the effect of law.” 29 U.S.C.
§1144(c)(1). In determining whether ERISA’s express preemption clause applies to Gonzalez’s
claim, the court addresses two issues: (1) whether the Wells Fargo Health Plan qualifies as an
ERISA “employee benefit plan,” and (2) whether plaintiff’s expense-avoidance disability
discrimination claim “relates to” that plan. See generally Pilot Life Ins. Co. v. Dedeaux, 481
U.S. 41, 47-48, 107 S. Ct. 1549, 95 L.Ed. 2d 39 (1987) (ERSIA’s preemption clause reaches not
16
only those laws specifically designed to affect employee benefit plans, but also common law
causes of action that “relate to” employee benefit plans).
The plaintiff does not contest the Bank’s claim that the subject Health Plan qualifies as an
“employee benefit plan” within the meaning of ERISA. The analysis here therefore focuses on
the question of whether plaintiff’s claim “relates to” that plan. A law “relates” to an employee
benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such
plan. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S. Ct. 2890, 77 L.Ed.2d 490 (1983).
Plaintiff’s “expense-avoidance” associational disability discrimination claim is based on
the allegation that the Bank’s decision to terminate Gonzalez was driven by a desire to avoid
paying costly medical benefits associated with anticipated future cancer treatment of his
daughter. Where an employee alleges that a principal reason for his discharge is his employer’s
desire to avoid paying benefits due under an ERISA plan, that claim necessarily “relates” to the
plan and is expressly preempted by ERISA, even where it states distinct state tort or contract
theories and seeks compensatory or punitive damages not available under ERISA. See e.g.
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111 S. Ct. 478, 112 L.Ed.2d 474 (1990) (state
law claims for wrongful termination based on employer’s desire to avoid making contributions to
pension fund subject to express and implicit ERISA preemption); Altshuler v. Animal Hospitals,
Ltd., 901 F. Supp. 2d 269 (D. Mass. 2012) (express ERISA preemption of claims for retaliatory
discharge in violation of public policy and state statute where claims arose from same nucleus of
facts regarding employee’s disagreement with employer’s administration of employee benefit
plan).
17
In short, the plaintiff’s expense-avoidance disability discrimination claim effectively
charges the Bank with intent to interfere with Gonzalez’s attainment of benefits under an
ERISA-regulated health plan. In this sense, it clearly “relates” to the administration of plan
benefits, and as such,
is expressly
preempted under ERISA.
See e.g. Jones v. LMR
International, Inc., 457 F.3d 1174 (11th Cir. 2006) (state law claims for fraud, breach of contract,
civil theft, unjust enrichment, and negligence arising out of cancellation of employees’ health
insurance held “related to” and preempted by ERISA); Parkman v. Prudential Ins. Co. of
America, 439 F.3d 767, 771 (8th Cir. 2006) (state law fraud claim based on insurer’s mishandling
of claim for benefits preempted by ERISA).
(ii.)
complete ERISA preemption
Section 510 of ERISA prohibits the “discharge of a participant or beneficiary for the purpose
of interfering with the attainment of any right to which such participant may become entitled”
ERISA § 510, 29 U.S.C. §1140.
“Congress enacted this section to prevent unscrupulous
employers from discharging or harassing their employees in order to prevent them from
obtaining their statutory or plan-based rights.” Zipf v. American Telephone and Telegraph Co,
799 F.2d 889 (3d Cir. 1986). ERISA § 510 is enforceable under ERISA § 502(a), which provides
in pertinent part:
A civil action may be brought –
(1) by a participant or beneficiary - …
(B) to recover benefits due to him under the terms of his plan, to enforce
his rights under the terms of the plan, or to clarify his rights to future
benefits under the terms of the plan; …
(2) by a participant beneficiary or fiduciary (A) to enjoin any act or
practice which violates any provision of this subchapter or the terms of
the plan, or (B) to obtain other appropriate equitable relief (i) to redress
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such violations or (ii) to enforce any provisions of this subchapter or the
terms of the plan…
29 U.S.C. §1132(a).
In Aetna Health Inc v. Davila, 542 U.S. 200, 210, 124 S. Ct. 2488, 159 L. Ed. 2d 312
(2004), the Supreme Court set forth the following two-part test for ERISA complete
preemption under § 502(a): (1) whether the plaintiff could have brought his claim under
ERISA’s civil enforcement mechanism, § 502(a), and (2) whether no other legal duty
supports the plaintiff’s claim. Because the Davila test is framed in the conjunctive, a state
law cause of action is completely preempted by §502(a) only if both prongs of the test are
met. Montefiore Medical Center v. Teamsters Local 272, 642 F.3d 321 (2d Cir. 2011);
Fossen v. Blue Cross and Blue Shield of Montana, Inc., 660 F.3d 1102 (9th Cir. 2011).
In Davila, the plaintiffs, a participant and a beneficiary, sued their respective ERISA plan
administrators in state court alleging violations of a state health care liability law based on
an alleged failure to exercise “ordinary care” in denying the plaintiffs’ claims for health care
benefits. Observing that the claims were based solely on the denial of benefits under the
plan, and that defendant’s only relationship with plaintiffs was as administrator of their
employer’s ERISA plan, the Davila court concluded, first, that the plaintiffs could have
brought their claims under ERISA §502(a)(1)(B) because they “complain[ed] only about
denials of coverage promised under the terms of ERISA regulated employee benefit plans”
and could have resorted to their remedies under ERISA by filing a claim for benefits and/or
seeking a preliminary injunction. Davila, 542 U.S. at 211-12, 124 S Ct. at 2497. Second, the
court assessed whether the duty on which the plaintiffs’ claims was based arose
independently of the plan. Although the state law imposed a distinct duty on managed care
19
entities to use “ordinary care” in making health care decisions, the court found no
“independent duty” where the administrators’ liability on the state law claims “derive[d]
entirely from the particular rights and obligations established by the benefit plans.” and
“liability would exist [ ] only because of [the defendants’] administration of ERISAregulated benefit plans.” Id at 213, 124 S. Ct. at 2498.
Employing the Davila test here, the first inquiry is whether Gonzalez, “at some point in
time, could have brought [his] [expense-avoidance disability discrimination] claim under
ERISA § 502(b)(1)(B)”. Davila, 542 U.S. at 210, 124 S. Ct. at 2496. Clearly he could have
and in fact did so, asserting a claim for interference with protected ERISA rights in this
action under 29 U.S.C. §1140. Section 1140 provides in pertinent part:
It shall be unlawful for any person to discharge …. or discriminate against a
participant or beneficiary for exercising any right to which he is entitled
under the provisions of an employee benefit plan…or for the purpose of
interfering with the attainment of any right to which such participant may
become entitled under the plan…..
Put another way, Gonzalez’s claim that his employment was terminated solely for the purpose of
evading future responsibility for health insurance benefits is essentially a benefits deprivation
claim falling squarely within the scope of §§ 510 and 502 of ERISA.
The court must next determine whether the plaintiff’s state law expense-avoidance FCRA
claim “arises independently of ERISA or the plan terms.” Davila, 542 U.S. at 212, 124 S. Ct.
2488. That is, the court must determine “whether an independent legal duty .. is implicated by
[the] defendant’s actions.” Id at 210, 124 S. Ct. 2488. Although nominally plaintiff’s claim is
premised on a state statutory cause of action for disability discrimination which is separate from
ERISA, he succeeds on the state law “expense avoidance” disability discrimination claim only to
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the extent he establishes the Bank’s discharge decision was motivated by a benefits avoidance
strategy, i.e. that the plan administrator improperly interfered with the administration of an
ERISA-regulated benefit plan by discharging him for the purpose of “interfering with the
attainment of any right to which [Gonalez] may become entitled” under the plan in violation of
29 U.S.C. §1140.
Because the plaintiff’s “expense avoidance” disability discrimination claim exists only
because of the Bank’s alleged improper administration of an ERISA regulated benefit plan, the
court concludes the plaintiff’s FCRA expense-avoidance claim is not based on an “independent
legal duty” as that term is defined in this context. See e.g. Ingersoll-Rand, supra (termination
motivated by employer’s desire to prevent pension from vesting did not identify independent
duty but rather was based on right expressly guaranteed by ERISA § 510 and exclusively
enforced by § 502(a)); Cleghorn v. Blue Shield of California, 408 F.3d 1222 (9th Cir. 2005)
(ERISA comprehensive scheme of civil remedies preempted state statutory claims arising from
denial of benefits for emergency care, where factual basis of complaint was denial of benefits to
participant under ERISA-regulated health plan); Tingey v. Pixley-Richards West, Inc., 953 F.2d
1124 (9th Cir. 1992) (ERISA preempted state law wrongful termination claim based on allegation
that employer fired participant to avoid cost of paying medical benefits for son born with spina
bifida); Felton v. Unisource Corp., 940 F.2d 503 (9th Cir. 1991) (ERISA preempted state
handicap discrimination claim based on termination following medical leave of absence for lung
cancer); Wood v. Prudential Ins. Co. of America, 207 F.3d 674 (3d Cir. 2000) (ERISA
preempted state disability discrimination claim based on allegation that employer terminated
worker to avoid paying benefits to his dependents). See also Sorosky v Burroughs Corp., 826
21
F.2d 794 (9th Cir. 1987) (ERISA preempted state law breach of contract/wrongful discharge
claims to extent derived from allegations relating to interference with employee’s right to
retirement benefits under employee benefit plan).
For the foregoing reasons, the court concludes that Gonzalez’s state law FCRA claim for
“expense-avoidance” associational disability discrimination is subject to express and complete
ERISA preemption, and shall accordingly be dismissed with prejudice for failure to state a claim
upon which relief may be granted.
b. “distraction” disability discrimination
The Bank does not claim that the “distraction” prong of the plaintiff’s associational
disability discrimination FCRA claim is preempted by ERISA, but rather simply attacks the
sufficiency of the factual allegations asserted in support of this claim. Having carefully reviewed
the allegations of the complaint, the court finds the allegations of “distraction” theory disability
discrimination sufficient to satisfy the Twombly plausibility standard.
In addition to alleging that the Bank’s decision to fire Gonzalez was motivated in part by
a desire to avoid inefficiencies attending to his “distraction” in the workplace precipitated by
worry over the health of his child, the complaint also makes specific reference to at least one
manner in which the distraction manifested itself, to wit, Gonzalez’s time keeping efforts: “On
many occasions, Gonzalez was unable to record time when he was working, with bank approval,
from a remote location and/or when he was focused on taking care of Mackenzie.” [DE 20]
[Amended Complaint ¶ 18]. Plaintiff’s subsequent efforts to submit reconstructed time slips,
with the assistance of his branch manager, were ultimately intertwined with Bank’s stated reason
for his termination.
22
The court finds these allegations sufficient to state a claim plausible on its face for
“distraction” associational disability discrimination on theory that Gonzalez labored under a
mental distraction related to his child’s health which caused him to be inattentive at work yet not
so inattentive that he needed accommodation to perform his job to his employer’s satisfaction.
The defendant’s motion to dismiss the “distraction” strand of plaintiff’s associational disability
discrimination claim under FCRA shall therefore be denied.
3. Unfounded Assumption Regarding Future Leave Needs
Finally, the Bank contends that the remainder of plaintiff’s associational disability
discrimination claim must be dismissed on the ground it effectively charges the Bank with failure
to accommodate a non-disabled employee’s need to care for a disabled family member, an
obligation not imposed under the ADA.
The Bank correctly observes that an employee who
cannot meet the attendance requirements of his job is not protected by the associational disability
discrimination provision of the ADA, 29 U.S.C. § 12112 (b) (4). See e.g. Bimberg v. ElktonPigeon-Bay Port Laker Schools, 512 Fed. Appx. 462 (6th Cir. 2013); Magnus v. St. Mark United
Methodist Church, 688 F.3d 331 (7th Cir. 2012); Rocky v. Columbia Lawnwood Regional
Medical Center, 54 F. Supp. 2d 1159 (S. D. Fla. 1999).
However, the plaintiff’s complaint in this case does not allege termination resulting from past
absences or a clear indication of future absences; rather, it alleges that the Bank’s decision to
terminate Gonzalez was motivated in part by desire to avoid “the need to further accommodate
[Gonzalez] in light of his daughter’s illness.”
[emphasis added]
Read as a whole, and
specifically with reference to the chronology of events attending the Sloan-Kettering trip in
August 2010, this allegation is liberally interpreted, in the light most favorable to plaintiff, to
23
adequately state a claim for unlawful associational disability discrimination based on an
“unfounded” employer assumption or perception regarding an employee’s need for future leave
to care for a disabled family member.
Notably, the complaint contains no allegation that Gonzalez submitted a leave request, or
otherwise gave “clear indication” of an intent to take future leave in order to attend his
daughter’s medical treatment at Sloan-Kettering. Without such evidence or allegations, the fact
the Bank terminated him a few days before his scheduled departure for New York is reasonably
susceptible to the inference that the decision to discharge him was motivated by an unfounded
assumption regarding his need for future leave to care for his disabled child, particularly when
read in conjunction with other allegations of the complaint showing: (1) the
employer’s
knowledge of the child’s serious condition and impending surgery; (2) the employer’s history
of resistance to Gonzalez’s use of intermittent family leave to attend to his child’s medical needs
(initial refusal to allow leave and subsequent suggestion that he take administrative leave in lieu
of intermittent leave), and (3) the employee’s past use of intermittent FMLA leave. Read as a
whole, the court finds these allegations sufficient to state a plausible claim for an “unfounded
assumptions” style of associational disability discrimination claim actionable under the ADA or
FCRA.
B. FMLA Retaliation
To state a prima facie case of retaliation under the Family and Medical Leave Act
(FMLA), 29 U.S.C. §2615(a)(2), a plaintiff must show: (1) he engaged in statutorily protected
activity under the FMLA; (2) he suffered an adverse employment action, and (3) there is a causal
connection between the two. Krutzig v. Pulte Home Corp., 602 F.3d 1231 (11th Cir. 2010);
24
Walker v. Elmore County Bd of Education, 379 F.3d 1249 (11th Cir. 2004).
The causal
connection is satisfied if plaintiff shows that the protected activity and adverse action were not
wholly unrelated, which may be shown where the decision-maker was aware of the protected
conduct at the time of the adverse employment action. Id. Where the temporal proximity between
a protected activity and adverse action is unduly suggestive, this also may be sufficient, standing
alone, to create an inference of causality. Lichtenstein v. University of Pittsburgh Medical
Center, 691 F.3d 294 (3d Cir. 2012).
Here, the Bank contends that the plaintiff’s FMLA retaliation claim fails to satisfy the
pleading standards of Twombly where plaintiff alleges only that he was terminated after he took
FMLA intermittent leave, not because he exercised the leave, and where the allegations of
complaint are otherwise inadequate to support an inference of causation.
The court disagrees. The plaintiff’s complaint in this case alleges a variety of direct and
indirect evidence suggestive of retaliatory motive, including allegations that Gonzalez took a
series of intermittent FMLA leaves during the course of his daughter’s cancer treatment, which
was first diagnosed in December 2008; that the Bank initially resisted his request for FMLA
leave, stating the company did “not participate in that program” and threatening to fire him if he
took leave; that the Bank later asked him to quit and take administrative leave in lieu of
intermittent leave; that he was transferred to a relatively inactive branch location in West Palm
Beach after exercising intermittent leave, where a sympathetic branch manager warned him to
“be careful” because the Bank was “looking for reasons to get rid of him;” and that the Bank
ultimately terminated him on August, 2010 following some eighteen months of intermittent
FMLA leave use. Construed in the light most favorable to plaintiff, the court finds these
25
allegations sufficiently satisfy the plausibility requirement of Iqbal and Twombly as related to the
causation element of the FMLA retaliation claim. See e.g. Lichtenstein v. University of
Pittsburgh Medical Center 691 F.3d 294 (3d Cir. 2012); Mayorga v. Sonoco Products Co., 2013
WL 1792554 (D.N.J. 2013).
C.ERISA Interference
The defendant asserts, and the plaintiff does not seriously contest, that the complaint fails
to sufficiently allege exhaustion of administrative remedies as a condition precedent to assertion
of the ERISA interference claim. Rather than dismiss this claim, however, the court has
determined to exercise its discretion and grant plaintiff’s request to stay the claim pending his
pursuit and completion of administrative review. See generally Lindemann v Mobil Oil Corp.,
79 F.3d 647 (7th Cir. 1996) (decision on whether to grant summary judgment as opposed to
staying ERISA interference claim based on failure to exhaust administrative remedies is
discretionary with trial court).
D. Defamation
The defendant seeks dismissal of the defamation claim for failure to state a claim on
which relief can be granted on the theory it is barred as a matter of law by either an absolute or
qualified reporting privilege attaching to Form U-5 filings. It is premature at this stage of the
proceedings and on the limited record to rule on this defense. As a result, the court shall reserve
ruling on whether an absolute or qualified privilege applies, compare Rosenberg v. MetLife, Inc.,
8 N.Y.3d 359, 834 N.Y.S.2d 494 (2007) (finding absolute privilege applicable to statement made
26
by employer on NASD employee termination notice) with Eaton Vance Distributors Inc. v
Ulrich, 692 So. 2d 915 (Fla. 2d DCA 1997) (finding qualified privilege attaches to Form U-5
statements). The court will deny the motion to dismiss without prejudice to renew the issue at
the summary judgment stage.
E. COBRA (Life insurance) Conversion Coverage
Gonzalez does not challenge the Bank’s assertion that COBRA insurance conversion
notice requirements are inapplicable to life insurance. The court shall accordingly dismiss this
claim with prejudice. Cf. Austell v. Raymond James & Associates, Inc., 120 F.3d 32 (4th Cir.
1996) (COBRA covers plans paying for diagnosis, cure, mitigation, treatment or prevention of
disease, and does not require employer to offer continuation coverage for disability insurance).
F. Negligence – Medco and UHC
The court recently dismissed plaintiff’s negligence claims against defendants Medco and
United Healthcare for failure to timely effect service of process [DE 60], rendering the
defendant’s motion to dismiss these claims moot.
The court observes, however, that the negligence claims against these entities are
appropriately classified as claims which “relate to” an ERISA plan, and would therefore
necessarily be preempted by ERISA as an alternative basis for the dismissal of these claims with
prejudice. See e.g. Khul v. Lincoln National Health Plan of Kansas City, Inc., 999 F.2d 298 (8th
Cir. 1993) (state law claims based on HMO’s wrongful delay in recertifying payment for heart
surgery effectively constituted claims for improper processing of benefits, and as such were
preempted by ERISA), cert. den., 510 U.S. 1045 (1994); Cannon v. Group Health Service of
Oklahoma, Inc., 77 F.3d 1270 (10th Cir.) (breach of contract and breach of fiduciary duty claims
27
arising out of death allegedly caused by health organization’s delayed approval of treatment
preempted by ERISA), cert. den., 519 U.S. 816 (1996).
IV.
CONCLUSION
Based on the foregoing, it is ORDERED AND ADJUDGED:
1. The defendant’s motion to dismiss the FCRA associational disability discrimination
claim (Count 1) is GRANTED with respect to the “expense-avoidance” claim on
grounds of ERISA preemption, and this strand of the plaintiff’s FCRA claim is
accordingly DISMISSED WITH PREJUDICE. The motion to dismiss is DENIED
with respect to both the “distraction” theory and “unfounded assumption” theories of
associational disability discrimination.
2. The defendant’s motion to dismiss the FMLA retaliation claim (Count 2) is DENIED.
3. The defendant’s motion to dismiss the ERISA interference claim (Count 3) is DENIED.
This claim shall be STAYED pending plaintiff’s pursuit of administrative remedies and
completion of administrative review.
4. The defendant’s motion to dismiss the Form U-5 defamation claim (Count 4) is DENIED
WITHOUT PREJUDICE.
5. The defendant’s motion to dismiss the COBRA life insurance conversion claim (Count
5) is GRANTED, and this claim is DISMISSED WITH PREJUDICE.
6. The defendant’s motion to dismiss the negligence claims against UHC and Medco based
on improper delay in verification of insurance coverage (Count 8) is DENIED as
MOOT.
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DONE AND ORDERED in Chambers at West Palm Beach, Florida this 27th day of
September, 2013.
KENNETH A. MARRA
United States District Judge
cc. all counsel
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