Zolner v. U.S. Bank National Association et al

Filing 32

MEMORANDUM OPINION & ORDER: Defendant Hartford's Partial Motion to Dismiss Counts Two and Three 31 is GRANTED. Defendant Hartford's earlier Motion to Dismiss 18 based on the original Complaint is DENIED AS MOOT. Additionally, if P laintiff wants the Court to entertain a motion to amend, IT IS HEREBY ORDERED that she shall submit her motion and amended complaint no later than fifteen (15) days from the entry of this Memorandum Opinion and Order. Signed by Chief Judge Joseph H. McKinley, Jr on 12/1/2015. cc: Counsel(JBM)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
OWENSBORO DIVISION
CIVIL ACTION NO. 4:15-cv-00048
JESSICA ZOLNER

PLAINTIFF

v.
U.S. BANK NATIONAL ASSOCIATION
A/K/A U.S. BANK
A/K/A ULTON PROCESSING SERVICES, INC.
and
HARTFORD-COMPREHENSIVE EMPLOYEE
BENEFIT SERVICE COMPANY
A/K/A THE HARTFORD

DEFENDANTS

MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendant Hartford-Comprehensive Employee Benefit
Service Company’s Partial Motion to Dismiss Counts Two and Three [DN 31]. Fully briefed,
this matter is ripe for decision. For the following reasons, the Partial Motion to Dismiss is
GRANTED.
I. BACKGROUND
Plaintiff, Jessica Zolner, “began her employment with Defendant U.S. Bank in
Henderson, Kentucky in December 2012.” (Pl.’s Second Am. Compl. [DN 28] ¶ 9.) Defendant
U.S. Bank provided Plaintiff with employee benefits, including disability benefits, and
Defendant

Hartford-Comprehensive

Employee

Benefit

Service

Company

(hereinafter

“Hartford”) “assisted in management of these benefits and in administration of U.S. Bank’s
Family and Medical Leave Act” leave for employees. (Id. ¶ 10.)
Around January 2014, Plaintiff alleges that she began experiencing health issues that
caused her to be “exhausted” and to “experienc[e] extreme pain.” (Id. ¶¶ 13, 15.) Plaintiff states
that she suffers from multiple sclerosis, depression, carpel tunnel, and bipolar disorder, which

cause “her trouble with or the inability to do tasks including caring for herself, performing
manual tasks, walking, standing, lifting, bending, learning, concentrating, thinking,
communicating, and working.” (Id. ¶ 16.) “In or before January 2014,” Plaintiff requested
FMLA leave and disability benefits from “defendants.” (Id. ¶¶ 18, 19.) Plaintiff states that she
was then approved on January 18, 2014 for FMLA leave through June 18, 2014. (Id. ¶¶ 21, 22.)
When communicating with both Defendants after January 18, 2014, she asserts that she was told
that she “need not communicate her absences . . . because she was approved for continuous
FMLA leave through June 2014.” (Id. ¶ 21.) Plaintiff allegedly received two letters from
Hartford informing her of her approved FMLA leave, one received on February 24, 2014,
approving leave between February 15, 2014 and June 18, 2014, and one received on March 31,
2014, approving leave between March 2, 2014 and June 18, 2014. (Id. ¶¶ 23, 24.)
However, on April 14, 2014 Plaintiff received a letter from U.S. Bank informing her that
she had been terminated due to the fact that she had not communicated her absences to U.S.
Bank. (Id. ¶ 25.) Plaintiff contends that her termination was caused by her taking FMLA leave
and because of her disabilities. (Id. ¶ 26.) She asserts that she experienced harassment by fellow
U.S. Bank co-workers and was met with agitation, annoyance, and inconvenience due to her
taking “intermittent FMLA” leave. (Id. ¶ 27–29.) Later, she alleges Defendants refused to
provide her with her requested medical records and FMLA certifications, and Defendants denied
her disability benefits. (Id. ¶¶ 31, 32.)
Plaintiff then “filed a disability discrimination charge with the Equal Employment
Opportunity Commission” (hereinafter “EEOC”), and she “received a ‘right-to-sue’ letter dated
November 20, 2014.” (Def.’s Mem. Supp. Partial Mtn. Dismiss [DN 31-1] at 4.) Subsequently,
Plaintiff filed her original Complaint on April 2, 2015, which contained three claims: one for

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denial of disability benefits under the Employee Retirement Income Security Act of 1974
(hereinafter “ERISA”), one for disability discrimination under the Americans with Disabilities
Amendments Act (hereinafter “ADA”), and one for Family Medical Leave Act (hereinafter
“FMLA”) interference and retaliation. (Pl.’s Compl. [DN 1] ¶¶ 35–60.) On July 30, Defendant
Hartford filed a Motion to Dismiss Counts Two and Three of Plaintiff’s Complaint. (Def.’s Mtn.
Dismiss [DN 19].) On August 8, 2015, Plaintiff then amended her Complaint, adding an alleged
violation of the Kentucky Civil Rights Act (hereinafter “KCRA”) to her discrimination claim.
(Pl.’s Am. Compl. [DN 24] ¶ 45.) On August 12, 2015, Plaintiff amended her complaint once
more, dropping her claim under the ADA and pursuing her disability claim only under the
KCRA. (Pl.’s Second Am. Compl. [DN 28] ¶¶ 44–48.) Plaintiff then filed her Response to
Hartford’s Motion to Dismiss on August 24, 2015, in which she requested leave to amend her
Complaint once more if the Court did not rule in her favor. (Pl.’s Resp. [DN 30] at 4.) On
August 26, 2015, Defendant Hartford then filed this Partial Motion to Dismiss Counts Two and
Three of Plaintiff’s Second Amended Complaint.

(Def.’s Partial Mtn. Dismiss [DN 31].)

Plaintiff failed to respond to this Motion. Because the Partial Motion to Dismiss at issue here
addresses the most recent version of the Complaint and noting no opposition from Plaintiff, the
Court will only rule on the instant motion, as the earlier is now rendered moot.
II. STANDARD OF REVIEW
Upon a motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6),
a court “must construe the complaint in the light most favorable to plaintiffs,” League of United
Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (citation omitted), “accept all
well-pled factual allegations as true,” id., and determine whether the “complaint . . . states a
plausible claim for relief,” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Under this standard, the

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plaintiff must provide the grounds for its entitlement to relief, which “requires more than labels
and conclusions, and a formulaic recitation of the elements of a cause of action.” Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007). A plaintiff satisfies this standard only when it “pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S. at 678. A complaint falls short if it pleads facts
“merely consistent with a defendant’s liability” or if the facts do not “permit the court to infer
more than the mere possibility of misconduct.” Id. at 679. Instead, “a complaint must contain a
‘short and plain statement of the claim showing that the pleader is entitled to relief.’” Id. at 663
(quoting Fed. R. Civ. P. 8(a)(2)). “But where the well-pleaded facts do not permit the court to
infer more than the mere possibility of misconduct, the complaint has alleged—but it has not
‘show[n]’—‘that the pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
III. DISCUSSION
Defendant Hartford moves this Court to Dismiss Count Two and Three of Plaintiff’s
Second Amended Complaint regarding disability discrimination under the KCRA and FMLA
interference and retaliation. (Def.’s Mem. Supp. Partial Mtn. Dismiss. [DN 31-1] at 6–15.)
Hartford argues that Plaintiff has failed to state a claim for which relief can be granted for either
count because none of the purported acts of disability discrimination involve Hartford and
because Hartford was not Plaintiff’s employer under the KCRA or the FMLA. (Id.) The Court
agrees, and will address these counts in turn.
A. Count Two: Disability Discrimination under the KCRA
Under the KCRA, “[i]t is an unlawful practice for an employer . . . to discharge any
individual, or otherwise to discriminate against an individual . . . because the person is a
qualified individual with a disability.” KRS § 344.040(1)(a). “Because the language of the

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KCRA mirrors that of its federal counterpart, courts interpret the KCRA consistently with federal
anti-discrimination law.” Brown v. Humana Ins. Co., 942 F. Supp. 2d 723, 730 (W.D. Ky. 2013)
(citing Brohm v. JH Props., Inc., 149 F.3d 517, 520 (6th Cir. 1998); Howard Baer, Inc. v.
Schave, 127 S.W.3d 589, 592 (Ky. 2003)). Consequently, the Court will analyze this disability
discrimination claim under the framework provided by the Americans with Disabilities Act, 42
U.S.C. § 12101 et seq. Id.
In order to hold a defendant liable under the ADA or the KCRA, a plaintiff must show
that the defendant was his or her “employer” within the meaning of those statutes, Swallows v.
Barnes & Noble Book Stores, Inc., 128 F.3d 990, 992–93 (6th Cir. 1997); see Bracken v.
DASCO Home Med. Equip., Inc., 954 F. Supp. 2d 686, 697–98 (S.D. Ohio 2013), as KRS §
344.040 specifically “prohibits discrimination by employers,” Spivey v. B.F. Goodrich Co., 246
F. Supp. 2d 714, 718 (W.D. Ky. 2003). Typically, a direct employment relationship provides the
basis for liability under the ADA; however, “courts have fashioned various doctrines by which a
defendant that does not directly employ a plaintiff may still be considered an ‘employer’ under
those statutes.” Swallows, 128 F.3d at 993. These theories examine whether the two entities are
so interrelated that they may be considered a “single employer” or an “integrated enterprise,”
“whether one defendant has control over another company’s employees sufficient to show that
the two companies [act] as a ‘joint employer,’” or “whether the person or entity that took the
allegedly illegal employment action was acting as the agent of another company, which may then
be held liable as the [plaintiff’s] employer.” Id. (citing Deal v. State Farm County Mut. Ins. Co.
of Texas, 5 F.3d 117 (5th Cir. 1993); Rivas v. Federacion de Asociaciones Pecuarias de Puerto
Rico, 929 F.2d 814 (1st Cir. 1991); Carrier Corp. v. NLRB, 768 F.2d 778 (6th Cir. 1985); York

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v. Tennessee Crushed Stone Ass’n, 684 F.2d 360 (6th Cir. 1982); Fike v. Gold Kist, Inc., 514
F.Supp. 722 (N.D. Ala.), aff’d, 664 F.2d 295 (11th Cir. 1981)); see Bracken, 954 F. Supp. at 698.
Here, Plaintiff claims that she “was discriminated against and wrongfully terminated
because of her disabilities,” and because of this, Hartford violated the KCRA. (Pl.’s Second Am.
Compl. [DN 28] ¶ 46.) Plaintiff does not allege that she was, at any time relevant, employed by
Hartford.

Instead, she averred in her Second Amended Complaint that she “began her

employment with U.S. Bank in Henderson, Kentucky in December 2012” and “was qualified for
her position as a teller with U.S. Bank.” (Id. ¶¶ 9, 17.) Further, she “had benefits covered by
ERISA through her employment with U.S. Bank,” she began experiencing extreme pain in
January 2014, “which prohibited her from working at her job at U.S. Bank,” she discussed her
condition with other U.S. Bank employees, and she was terminated by U.S. Bank on April 4,
2014. (Id. ¶¶ 10, 20, 25, 27–30.) Plaintiff never alleged that Hartford was her employer; in all
three Complaints, she only claimed that she was employed by U.S. Bank and was subsequently
terminated by U.S. Bank. Additionally, she failed to plead facts to support any of the above
three theories in order to allow the Court to construe Hartford as her employer. With only the
limited facts provided, it is clear that Plaintiff was not an employee of Hartford’s; therefore,
Plaintiff has not stated a claim for which relief can be granted under the KCRA.
Hartford additionally argues that “in addition to a failure to allege the requisite
employment relationship, none of the discriminatory conduct alleged in the Second Amended
Complaint is directed to [Hartford].” (Def.’s Mem. Supp. Mtn. Dismiss. [DN 31-1] at 8.) And,
Hartford alleges that the disability discrimination claim under the KCRA is preempted by ERISA
because it deals with a wrongful denial of benefits. (Id. at 9.) Plaintiff has not responded to
these arguments, as she did not file a Response to Hartford’s Partial Motion to Dismiss.

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Regardless, Plaintiff has failed to state a claim under the KCRA for disability discrimination
because Hartford was not her employer, as is required under KRS § 344.040. Spivey, 46 F.
Supp. 2d at 718. Therefore, while Defendant’s alternative arguments potentially have merit, they
need not be addressed here. Accordingly, Plaintiff’s second count for disability discrimination
against Hartford must be dismissed.
B. Count Three: FMLA Retaliation and Interference
Generally, “there are ‘two distinct theories for recovery under the FMLA: (1) the
‘entitlement’ or ‘interference’ theory arising from 29 U.S.C. § 2615(a)(1); and (2) the
‘retaliation’ or ‘discrimination’ theory arising from 29 U.S.C. § 2615(a)(2).’” Hampton v. Nat’l
Am. Red Cross, 3 F. Supp. 3d 612, 615 (W.D. Ky. 2014) (citing Killian v. Yorozu Auto. Tenn.,
Inc., 454 F.3d 549, 555 (6th Cir. 2006); Hoge v. Honda of Am. Mfg., Inc., 384 F.3d 238, 244
(6th Cir. 2004)). Under the first theory, it is “unlawful for any employer to interfere with,
restrain, or deny the exercise of or the attempt to exercise, any right provided under this
subchapter.” 29 U.S.C. § 2615(a)(1) (emphasis added). Under the second, it is “unlawful for
any employer to discharge or in any other manner discriminate against any individual for
opposing any practice made unlawful by this subchapter.” Id. § 2615(a)(2) (emphasis added).
As the FMLA makes clear, it is prohibited for an employer to take aforementioned actions
against an employee. Therefore, in order to be liable under the FMLA, a plaintiff must show that
the defendant was his or her employer within the meaning of the statute. Brock v. Marymount
Med. Ctr., Inc., No. CIVA 6:06-CV-285 DCR, 2007 WL 196895, at *8 (E.D. Ky. Jan. 23, 2007);
see Alexander v. Diamond Healthcare Corp., No. 5:12-CV-32, 2012 WL 4049471, at *2 (W.D.
Ky. Sept. 13, 2012) (finding that a plaintiff must plead facts to plausibly show that defendant is
employer under the FMLA in order to survive a motion to dismiss).

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“Normally the legal entity which employs the employee is the employer under FMLA.”
29 C.F.R. § 825.104(c). However, much like under the ADA and KCRA, “[w]here two or more
businesses exercise some control over the work or working conditions of the employee, the
businesses may be joint employers under FMLA.” 29 C.F.R. § 825.106(a). The Code of Federal
Regulations sets forth a standard to determine if two entities comprise one employer:
Joint employers may be separate and distinct entities with separate
owners, managers, and facilities. Where the employee performs work which
simultaneously benefits two or more employers, or works for two or more
employers at different times during the workweek, a joint employment
relationship generally will be considered to exist in situations such as:
(1) Where there is an arrangement between employers to share an
employee’s services or to interchange employees;
(2) Where one employer acts directly or indirectly in the interest of the
other employer in relation to the employee; or,
(3) Where the employers are not completely disassociated with respect to
the employee's employment and may be deemed to share control of the
employee, directly or indirectly, because one employer controls, is
controlled by, or is under common control with the other employer.
29 C.F.R. § 825.106(a)(1)–(3).
In Plaintiff’s Response, she argues that Hartford “should be considered an employer for
purposes of FMLA violations because it specifically administered [Plaintiff’s] FMLA policy and
controlled her leave status.” (Pl.’s Resp. [DN 30] at 4.) Plaintiff offers no other support for this
statement. Because she uses the words “an employer” instead of “her employer,” the Court
interprets this as Plaintiff contending that both Hartford and U.S. Bank were somehow joint
employers instead of Hartford being her sole employer. However, Plaintiff does not set forth
facts in order to show that she was employed by Hartford or that based on Defendants’
relationship, they operated as

joint employers as set forth under 29 C.F.R. § 825.106(a).

Overall, Plaintiff’s lack of factual pleadings to support her bare one-sentence contention renders

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it conclusory and wholly insufficient to prove that Hartford was Plaintiff’s employer under the
FMLA.
Additionally, many federal courts have dismissed third-party administrators, such as
Hartford, when plaintiffs have failed to allege facts sufficient to show that the administrator was
an employer within the FMLA’s meaning. Campbell v. Jefferson Univ. Physicians, 22 F. Supp.
3d 478, 479 n.1 (E.D. Pa. 2014); Marshall v. Whirlpool Corp., No. 07-CV-534-JHP-TLW, 2010
WL 348344, at *6 (N.D. Okla. Jan. 26, 2010) (“As a third party administrator, UniCare’s role is
to make benefit determinations and act as a disbursing agent for the payment of disability
benefits, not to make employment related decisions. Therefore, UniCare is not a proper party
under the FMLA.”); Mugno v. Societe Internationale de Telecommunications Aeronautiques,
Ltd., No. 05–cv–2037, 2007 WL 316572, at *8 (E.D.N.Y. Jan.30, 2007) (finding the plaintiff
was not an employee of third-party administrator defendant Hartford because the complaint did
not allege facts to support her status as an “eligible employee” under the FMLA). In order for a
third-party plan administrator to be considered an employer, a plaintiff must allege that “the
entity ‘possessed the power to control the worker in question,’” as in it “had some direct power
over her employment” and the power “to make termination decisions.” Jensen v. AT&T Corp.,
No. 4:06-CV-842 (CEJ), 2007 WL 3376893 (E.D. Mo. Nov. 13, 2007) (quoting Astudillo v. U.S.
News & World Report, No. 02-Civ-7902 WHP, 2004 WL 2075179, at *3 (S.D.N.Y. Sept.17,
2004)) (citing Zheng v. Liberty Apparel Co., Inc., 355 F.3d 61, 66–68, 72 (2nd Cir. 2003)). But,
courts have consistently found that third-party administrators do not exercise sufficient control
over employees of the company for which it administers benefits to be considered employers
under the FMLA. Id.; Shoemaker v. Conagra Foods, Inc., No. 2:14-CV-153, 2015 WL 418271,
at *5 (E.D. Tenn. Feb. 2, 2015) (finding no evidence either asserted in or based on facts from the

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complaint, based on a totality of the circumstances, that both the plaintiff’s employer and thirdparty administrator maintained control over the employee); Murray v. Nationwide Better Health,
No. 10–3262, 2014 WL 53255, at *7 (C.D. Ill. Jan.7, 2014) (finding no evidence that third party
administrator exercised control over the working conditions of AT&T employees and was not a
joint employer); Baer v. Masonite Corp., No. 3:11CV124, 2011 WL 3806279, at *4 (N.D. Ind.
Aug. 29, 2011) (“[A] benefits administrator’s mere tangential involvement with the termination
decision is not sufficient as a matter of law to establish a joint employer relationship.”).
Based on the consistent and persuasive precedent from other federal jurisdictions, and
from the facts presented here, it is clear that Plaintiff has failed show that Hartford was her
employer or a joint employer with U.S. Bank. Therefore, Plaintiff’s second count for FMLA
interference and retaliation against Defendant Hartford must be dismissed.
C. Plaintiff’s Request for Leave to Amend Complaint
Finally, in her Response to Defendant’s first Motion to Dismiss [DN 18], Plaintiff
requests in the alternative that if the Court finds that Plaintiff was not an employee of
Defendant’s under the FMLA, then Plaintiff should be granted leave to amend her Second
Amended Complaint to include a theory of tort liability. (Pl.’s Resp. [DN 30] at 4.) The Court
does not consider this request an appropriate motion to amend. If Plaintiff wants the Court to
consider such a request, she should submit a properly supported motion, with a copy of her
amended complaint attached, no later than fifteen (15) days from the entry of this Memorandum
Opinion and Order. Thereafter, Defendants may file their responses, and the Court will address
the merits of Plaintiff’s motion.

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IV. CONCLUSION
For the reasons set forth above, IT IS HEREBY ORDERED that Defendant Hartford’s
Partial Motion to Dismiss Counts Two and Three [DN 31] is GRANTED. IT IS FURTHER
ORDERED that Defendant Hartford’s earlier Motion to Dismiss [DN 18] based on the original
Complaint is DENIED AS MOOT. Additionally, if Plaintiff wants the Court to entertain a
motion to amend, IT IS HEREBY ORDERED that she shall submit her motion and amended
complaint no later than fifteen (15) days from the entry of this Memorandum Opinion and Order.

December 1, 2015

cc: counsel of record

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