Evans, II v. Two Hawk Employment Services et al

Filing 28

MEMORANDUM OPINION & ORDER: 1) Defs' motion to dismiss 24 is GRANTED IN PART AND DENIED IN PART; 2) All claims against Def Harvey Godwin, Jr., are DISMISSED WITH PREJUDICE; 3) Plf's wrongful termination and breach of contra ct against Def Two Hawk Employment Services are DISMISSED WITH PREJUDICE; and 4) The parties are urged to attempt to settle the FCRA claim; if such efforts are unvailing, a SETTLEMENT-STATUS HEARING will be held before the Court on 3/4/2015 at 01:30 PM in COVINGTON before Judge William O. Bertelsman. Signed by Judge William O. Bertelsman on 1/28/2015.(ECO)cc: COR, William J. Evans,II, pro se via U.S. Mail

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
NORTHERN DIVISION AT COVINGTON
CIVIL ACTION NO. 2:14-cv-151 (WOB-CJS)

WILLIAM J. EVANS, II

PLAINTIFF

VS.

TWO HAWK EMPLOYMENT SERVICES, ET AL.

DEFENDANTS

MEMORANDUM OPINION AND ORDER

This
Evans,

is

II,

an

employment

proceeding

dispute

without

an

in

which

Plaintiff

attorney,

William

alleges

J.

wrongful

termination and breach of contract under Kentucky law, and violations
of

his

consumer

civil

rights

(FCRA), 15 U.S.C. § 1681.

under

the

Fair

Credit

Reporting

Act

Evans brings this action against his former

employer, Two Hawk Employment Services, LLC (“Two Hawk”), and Harvey
Godwin,

Jr.,

capacity.
and costs.

member/manager

of

Two

Hawk,

in

Godwin’s

individual

Evans seeks $950,000 in damages, along with attorney’s fees
This matter is before the Court on Defendants’ Motion to

Dismiss (Doc. 24) and to determine the effect of Two Hawk’s Rule 68
offer and Plaintiff’s response.

Having reviewed the filings, the

Court now issues the following memorandum opinion and order.

FACTUAL AND PROCEDURAL BACKGROUND1

I.

A. Plaintiff’s Employment History
Two

Hawk

is

a

North

Carolina

limited

liability

company

that

provides employment services through offices in North Carolina and
Kentucky.
Kentucky,

On December 16, 2013, Plaintiff, a resident of Florence,
applied

for

sanitation worker.
Two

Hawk’s

interviewed

with

Two

Hawk

as

a

third-shift

After Plaintiff completed application paperwork at

office
him

employment

in

in

Florence,

person.

a

Two

Plaintiff

Hawk

employee

asserts

that

named
during

Judy
the

interview, he and Judy discussed his criminal history and he disclosed
that he was on probation.

Judy instructed Plaintiff to return two

days later for orientation.
As

directed,

Plaintiff

returned

on

December

18,

2013,

for

orientation and was then sent to Schwan’s Global Supply Chain2 to
obtain a badge.

Plaintiff was then instructed to return to Two Hawk

to receive a work assignment.

Because Judy was unsure of the date for

the next sanitation worker training course, she assigned him to a
“floater” position.

Plaintiff alleges that Judy said to him, “[Y]ou

can be a floater, until you are given a work schedule, at which time
you will become temp to hire.”

Doc. 1, Complaint, at 2.

Judy then

1

Because the Plaintiff is acting pro se, the Court liberally construes his
complaint and filings.
See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (“A
document filed pro se is to be liberally construed, and a pro se complaint,
however inartfully pleaded, must be held to less stringent standards than
formal pleadings drafted by lawyers[.]”) (internal quotations omitted).
2

It appears that Schwan’s Global Supply Chain is a client for which Two Hawk
provides staffing services.

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instructed Plaintiff to report to work at Schwan’s on December 19,
2013, and December 20, 2013, at 5:45 p.m.
Plaintiff completed the December 19 and December 20 shifts.
alleges

that

during

the

December

20

shift,

his

line

leader,

He
Tony

Davis, told Evans that he wanted Evans on his line and asked the line
operator to assign Evans a work schedule.

At that point, Plaintiff

believes he moved from a “floater” position to “temp-to hire” status,
pursuant to Two Hawk’s employee handbook and Judy’s explanation.
The following week, Evans returned to Two Hawk’s office to pick
up his paycheck and informed a Two Hawk employee named Natalia of
Davis’s request that Plaintiff receive a work schedule.

Plaintiff

alleges that Natalia told him to “do what Mr. Davis told you,” which
again he understood as meaning he had become “temp-to-hire.”
Shortly after Plaintiff arrived to work on January 1, 2014, a
security guard notified him that his badge had been rejected and that
he needed to return to the guard station.

The next day, Plaintiff

contacted Two Hawk and was told that Two Hawk could no longer offer
him employment.

After Evans pressed for a reason, a Two Hawk staff

member said that it was because the company had received the results
of Plaintiff’s criminal background check.
On January 4, 2014, Plaintiff wrote a letter to Two Hawk’s owner,
Defendant Harvey Godwin, Jr.3 explaining the situation.
2014,

Plaintiff

telephone

call

sent

a

follow-up

from

Two

Hawk’s

e-mail
Human

3

to

Godwin

Resources

On January 10,
and

received

Manager,

Defendants assert that Godwin is a citizen of North Carolina.
makes no allegations regarding Godwin’s citizenship.

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a

Harriet
Plaintiff

Johnson.

Johnson said Two Hawk was investigating and would contact

Plaintiff early in the next week.

After not hearing from Defendants,

Plaintiff followed up several times, finally speaking with Johnson on
January 20, 2014.

Johnson informed Plaintiff that Defendants had sent

a letter to him and to call her back if he had questions.
On January 27, 2014, Plaintiff received a letter (Doc. 1-5, at
1), signed by Godwin, stating that Plaintiff’s employment was “denied”
because

of

“dishonesty

in

the

application

process.”

The

letter

attached a commercially prepared “Background Check Report” (Doc. 1-5,
at 2-3) indicating that records had been found in Boone and Grant
County,

Kentucky

Information

criminal

Bureau.

courts

in

report

The

and

the

does

not

National

include

any

Criminal
specific

information regarding Plaintiff’s criminal history.4
More than a month later, Plaintiff received another letter, dated
March 4, 2014 (Doc. 1-7), stating: “A decision has been made to not
offer you employment.
part,

on

This decision was based, either in whole or in

information

contained

in

your

Consumer

Report.

Inadvertently, this letter was not sent earlier, but the delay does
not alter the terms of it.”

The letter also describes how to obtain

the report from Asurint (the commercial background check provider) and
information about how to dispute the report’s contents.
4

Godwin signed

The document appears to be a printout of a website where Two Hawk viewed the
results of various background checks.
The word “View” appears next to
several record sources, suggesting that the page contains hyperlinks that
would allow a user to view the records that were found by clicking on the
links. Thus, although in communicating with Evans, Two Hawk referred to this
document as the background check report on which it relied, the document
itself does not appear to include all of the information on which Two Hawk
based its decision.

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the letter as “Adverse Action Representative.”
he

thereafter

made

numerous

attempts

to

Plaintiff asserts that

settle

filing the instant case on August 15, 2014.

the

matter

before

Doc. 1, Complaint.

Plaintiff’s complaint asserts three causes of action against both
defendants:

a federal claim for violations of the FCRA, a state law

wrongful termination claim, and a state law breach of contract claim.
First,

Plaintiff

alleges

that

Defendants

failed

to

follow

the

procedures set forth in the FCRA regarding the use of consumer reports
for

employment

termination

was

purposes.
wrongful

Second,
because

it

Plaintiff
involved

asserts

improper

that
use

of

his
the

criminal background report; Plaintiff does not assert that he was
terminated

for

a

discriminatory

or

retaliatory

reason.

Third,

Plaintiff alleges breach of contract based on statements in Two Hawk’s
employee handbook and comments by Two Hawk employee, Judy, that once
Plaintiff was assigned a work schedule, he would be in a “temp-tohire” position.
B. Defendant Two Hawk’s Offer of Judgment
On October 8, 2014, Two Hawk made an offer of judgment (Doc. 252) pursuant to Federal Rule of Civil Procedure 68 in the amount of
$11,000 for “Plaintiff’s pending claims against Defendant pursuant to
the Fair Credit Reporting Act,” an amount “inclusive of all damages,
interest, costs, reasonable attorneys’ fees, and any other amounts to
which Plaintiff is or may be entitled to by law under FCRA.”
2, Offer of Judgment.

Doc. 25-

The offer further stated that it was “in

consideration of the dismissal with prejudice of all of Plaintiff’s
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FCRA claims against the Defendant.”

The Rule 68 offer of $11,000 was

not inclusive of “all damages” since the FCRA provides for “punitive
damages” without stating a monetary limit.

See discussion, infra.

On October 16, 2014, Plaintiff responded as follows:
Comes now the Plaintiff (Pro Se), responding to the
Defendants motion for judgment. The Plaintiff would accept
this offer of $11,000.00, but would ask this honorable
Court to allow the Plaintiff, should the other issues in
this action end up in a jury trial, permission to use the
facts surrounding the Background Report such as, not being
given the opportunity to dispute the report, the reports
[sic] inaccuracy, etc., not the violations themselves.
Doc. 22, Plaintiff’s Response to Rule 68 Judgment Motion.

Defendant

Two Hawk interpreted this response as a rejection of the offer and
filed a joint motion to dismiss on October 24, 2014 (Doc. 24).
II. ANALYSIS
A. Fair Credit Reporting Act Claims
The Fair Credit Reporting Act provides procedural protections for
consumers related to the use of information contained in “consumer
reports” to determine eligibility for employment, credit worthiness,
and other purposes.
FCRA

seeks

to

See 15 U.S.C. § 1681a(d)(1).

protect

consumers

from

being

information in reports that is inaccurate.

Specifically, the

adversely

affected

by

See id. § 1681.

The statute sets forth several requirements for “credit reporting
agencies” –– furnishers of consumer information –– and persons with
permissible uses of consumer reports, such as prospective employers.
Id. §§ 1681a(f), 1681b.

For example, prior to obtaining a consumer

report, a user is required to apprise the consumer of certain rights
under the FCRA and obtain written consent from the consumer to request
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the consumer’s personal information.

See id. § 1681b(b)(2).

If the

user intends to make an adverse action –– such as denial of employment
–– based on information contained in the report, the user must give
the consumer notice of such intent prior to taking the adverse action
and must furnish to the consumer a copy of the report and written
notice of the consumer’s rights under the Act.

Id. § 1681b(b)(3)(A).

Likewise, after taking adverse action “based in whole or in part on
any information contained in a consumer report,” the FCRA requires
users to make certain other disclosures.

Id. § 1681m(a).5

1. FCRA Claim Against Two Hawk
Two Hawk argues that Plaintiff’s FCRA claim should be dismissed
because the rejected offer of judgment mooted the claim, depriving the
Court

of

offer,

subject-matter

representing

jurisdiction.

$1,000

in

Two

compensatory

Hawk

asserts

damages

and

that

$10,000

the
in

punitive damages, encompasses all damages to which Plaintiff would be
entitled under the FCRA.

Having offered Evans all he is entitled to

under the FCRA, Two Hawk argues, there is no case or controversy over
which the Court may preside.
Initially, the Court must determine whether Plaintiff’s response
operated as a rejection to the offer of judgment.

Courts are to apply

contract principles to decide whether there has been a valid offer and
acceptance for Rule 68 purposes.
1279–80 (6th Cir. 1991).

Mallory v. Eyrich, 922 F.2d 1273,

A plaintiff may not partially accept an

5

A private right of action does not exist to enforce violations of the postadverse action disclosure requirements set forth in 15 U.S.C. § 1681m.
15
U.S.C. § 1681m(h)(8).

-7-

offer, and a manifestation which purports to accept the offer but
proposes additional terms is not treated as an acceptance.

See James

Wm. Moore et al., Moore’s Federal Practice ¶ 68.06[4] (3d ed. 2014).
The

requirement

that

an

acceptance

mirror

the

offer

stems

from

a

policy rationale of not imposing settlements to which defendants have
not agreed.

Id.

The Court agrees with Two Hawk that Plaintiff

rejected the offer by attempting to impose an additional term –– that
he

be

permitted

to

use

the

facts

surrounding

the

FCRA

claim

in

pursuing his state law claims.
Although Two Hawk correctly observes “that an offer of judgment
that satisfies a plaintiff’s entire demand moots the case,” O’Brien v.
Ed Donnelly Enters., 575 F.3d 567, 574–75 (6th Cir. 2009),6 the Court
disagrees

that

Two

Hawk’s

offer

of

$11,000

entire potential recovery under the FCRA.
included

$10,000

in

punitive

damages,

satisfies

Plaintiff’s

Although Two Hawk’s offer
based

upon

a

theory

that

punitive damages are “generally” capped at ten times the compensatory
damages,

the

1681n(a)(2).

FCRA

does

Further,

not
State

cap

punitive

Farm

Mutual

damages.
Auto

See

15

Insurance

U.S.C.
Co.

v.

Campbell, 538 U.S. 408 (2003), the case Two Hawk cites to support its
10:1 ratio, specifically declines to impose “a bright-line ratio which
a punitive damages award cannot exceed.”

538 U.S. at 425.

Thus, the

Court concludes that the offer did not moot Plaintiff’s FCRA claim

6

Two Hawk is incorrect, however, in arguing that if a plaintiff rejects an
offer that moots a claim, the claim is simply dismissed. Instead, in such a
circumstance, a district court is to “enter judgment in favor of the
plaintiff[] in accordance with the defendant[’]s Rule 68 offer.”
O’Brien,
575 F.3d at 575.

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against Two Hawk and Plaintiff is entitled to continue pursuing that
claim.
2. FCRA Claim Against Godwin7
An individual defendant who is employed by a user of consumer
reports may only be considered a “user” of information under the FCRA
if

he

obtains

a

consumer

report

for

personal

purposes

or

while

otherwise acting outside the scope of his or her employment.

See,

e.g., Woodell v. United Way of Dutchess Cnty., 357 F. Supp. 2d. 761,
774

(S.D.N.Y.

company

that

2005)(declining
requested

to

consumer

hold
report

chief

executive

individually

officer

liable

officer did not act outside the scope of his employment).

of

because

Because the

complaint makes no allegation that Godwin acted outside the scope of
his employment in procuring or using Plaintiff’s consumer report, the
Court concludes that the complaint fails to state a claim against
Godwin

in

his

individual

capacity.

Accordingly,

the

FCRA

claim

against Godwin will be dismissed.
B. Wrongful Termination Claim
It

is

well-settled

in

Kentucky

that

absent

a

contractual

provision to the contrary or a statutory cause of action, an employer
may

terminate

an

employee’s

employment

at-will,

meaning

“for

good

cause, for no cause, or for a cause that some might view as morally
indefensible.”

Miracle

v.

Bell

Cnty.

7

Emergency

Med.

Servs.,

237

Godwin also asserts that claims against him should be dismissed for lack of
personal jurisdiction and insufficient service of process under Federal Rule
of Civil Procedure 12(b)(2) and 12(b)(5), respectively.
The Court need not
decide whether these defenses apply because all claims against Godwin can be
disposed of for other reasons.

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S.W.3d 555, 558 (Ky. Ct. App. 2007) (citing Firestone Textile Co.
Div., Firestone Tire & Rubber Co. v. Meadows, 666 S.W.2d 730,731 (Ky.
1983)).

The employment at will doctrine is, of course, subject to

federal and state statutes forbidding discrimination based on race,
gender,

disability,

and

age,

and

other

civil

rights

violations.

Plaintiff has alleged no facts that suggest his termination from
employment

meets

any

of

these

exceptions.

As

such,

the

Court

concludes that Plaintiff has failed to state a claim for wrongful
termination

under

Kentucky

law.

Accordingly,

Plaintiff’s

wrongful

termination claims against Two Hawk and Godwin shall be dismissed.
C. Breach of Contract Claim
Plaintiff asserts that an employment contract was formed between
him and Two Hawk after he received a work schedule.

In making this

claim, he relies on statements by Two Hawk employees that once he
received a work schedule, he would obtain “temp-to-hire” status.
also

emphasizes

that

the

employee

handbook

he

received

does

He
not

mention any probationary period pending the results of a criminal
background check.
But Plaintiff fails to state a claim for breach of contract for
the same reason he fails to state a claim for wrongful termination: he
pleads no facts suggesting that his employment was anything other than
at-will.
his

Moreover, the employment handbook Plaintiff references in

complaint

(and

Defendants’

motion

Employment

Services,

attaches
to

to

dismiss)

Florence,

his

response

specifically

Kentucky
-10-

is

an

in

opposition

states

“Two

‘Employment

At

to
Hawk
Will

Organization.’

Thus meaning, the employee and the employer reserve

the right to terminate the working relationship at any time for any
reason or no reason.”
In

alleging

Plaintiff

merely

Doc. 26-1, Employee Handbook, at 10.

breach
seems

of

to

contract

think

the

and

“wrongful

action

was

termination,”

“unfair,”

but

the

Handbook permits termination for “any reason or no reason.” Thus, the
Court concludes that Plaintiff fails to state a claim for breach of
contract

and

that

claim,

with

respect

to

all

of

case

Defendants,

will

be

offer

of

dismissed.
Thus,

the

present

state

the

is

that

the

judgment was declined and the FCRA claim against Two Hawk remains
pending.

However, Two Hawk may renew the offer or make a new offer

under the terms of Rule 68.
III. CONCLUSION
Therefore,

having

reviewed

the

matter

and

the

Court

being

sufficiently advised,
IT IS ORDERED that:
(1)

Defendants’ motion to dismiss be, and is hereby, GRANTED IN
PART AND DENIED IN PART;

(2)

All claims against Defendant Harvey Godwin, Jr. be, and are
hereby, DISMISSED WITH PREJUDICE;

(3)

Plaintiff’s

wrongful

termination

and

breach

of

contract

claims against Defendant Two Hawk Employment Services, be,
and are hereby, DISMISSED WITH PREJUDICE; and

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(4)

The parties are urged to attempt to settle the FCRA claim;
if such efforts are unavailing, a settlement-status hearing
will be held before the Court on Wednesday, March 4, 2015
at 1:30 p.m.

This 28th day of January, 2015.

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