Equal Employment Opportunity Commission v. Georgina's LLC
Filing
87
OPINION; signed by District Judge Hala Y. Jarbou (aks)
Case 1:18-cv-00668-HYJ-SJB ECF No. 87, PageID.605 Filed 12/04/20 Page 1 of 7
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
______
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff,
Case No. 1:18-cv-668
v.
Honorable Hala Y. Jarbou
GEORGINA’S, LLC, et al.,
Defendants.
___________________________________/
OPINION
This is an action under Title VII of the Civil Rights Act of 1964 and Title I of the Civil
Rights Act of 1991, alleging unlawful employment practices and retaliation. The EEOC claims
that Defendant Georgina’s, LLC (previously doing business as Georgina’s Taqueria), engaged in
sex discrimination toward its female employees by subjecting them to sexual harassment and
maintaining a hostile work environment. It further claims that Anthony’s Little G’s, LLC (doing
business as Little G’s Fusion Cuisine) is liable as a successor to Georgina’s. Before the Court are
two motions by Little G’s, one for judgment on the pleadings (ECF No. 78) and one to stay
discovery pending resolution of the motion for judgment on the pleadings (ECF No. 81). For the
reasons herein, the Court will deny both motions.
I. Background
The EEOC brought this action in June 2018, alleging that Georgina’s, a restaurant located
in Traverse City, Michigan, discriminated against its female employees and subjected them to a
hostile work environment.
(See Compl., ECF No. 1.)
Specifically, Plaintiff alleged that
Georgina’s sole owner and head chef, Gregory Anthony Craig, routinely made inappropriate and
unwelcome sexual comments toward Georgina’s female employees and touched them in improper
Case 1:18-cv-00668-HYJ-SJB ECF No. 87, PageID.606 Filed 12/04/20 Page 2 of 7
ways without their consent. Shortly after one of those employees complained about Craig’s
conduct in January and February 2016, he allegedly terminated her.
The EEOC filed an amended complaint in August 2020, making the same allegations
against Georgina’s. (See Am. Compl., ECF No. 64.) The new complaint also brought a claim
against Little G’s for successor liability. The amended complaint alleges that Georgina’s closed
its restaurant in May 2020. Before doing so, it announced on its Facebook page that it would be
moving to a new location at 531 West Front Street in Traverse City. Georgina’s also told its
customers that it would continue to serve the same menu items, be staffed by the same employees,
and continue to accept Georgina’s gift cards. (Id. ¶ 20.) It then changed the name on its Facebook
page from Georgina’s to Anthony’s Little G’s.
Little G’s allegedly opened for business on July 1, 2020, at 531 West Front Street, offering
the same menu items that were on Georgina’s menu. Plaintiff alleges that Craig is the sole owner
of Little G’s and, thus, Little G’s had notice of the claims against Georgina’s before opening.
Plaintiff claims that Little G’s is liable for Georgina’s Title VII violations because Little G’s is a
successor to Georgina’s.
Little G’s contends that it cannot be liable for a Title VII violation and that Plaintiff’s
allegations are not sufficient to make out a claim that Little G’s is liable as a successor. Little G’s
asks the Court to find that it is entitled to judgment on the pleadings.
II. Standard
“For purposes of a motion for judgment on the pleadings, all well-pleaded material
allegations of the pleadings of the opposing party must be taken as true, and the motion may be
granted only if the moving party is nevertheless clearly entitled to judgment.” JPMorgan Chase
Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007). A motion for judgment on the pleadings
is subject to the same review standard as a motion to dismiss under Rule 12(b)(6). HDC, LLC v.
2
Case 1:18-cv-00668-HYJ-SJB ECF No. 87, PageID.607 Filed 12/04/20 Page 3 of 7
City of Ann Arbor, 675 F.3d 608, 611 (6th Cir. 2012). To survive the motion, the “complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). “Merely pleading facts that are consistent with a defendant’s liability or that
permit the court to infer misconduct is insufficient to constitute a plausible claim.” HDC, 675 F.3d
at 611. Additionally, the Court “‘need not accept as true legal conclusions or unwarranted factual
inferences.’” Id. (quoting Kottmyer v. Maas, 436 F.3d 684, 689 (6th Cir. 2006)).
Assessment of the complaint must ordinarily be undertaken without resort to matters
outside the pleadings; otherwise, the motion must be treated as one for summary judgment under
Rule 56. Wysocki v. Int’l Bus. Mach. Corp., 607 F.3d 1102, 1104 (6th Cir. 2010). “However, a
court may consider exhibits attached to the complaint, public records, items appearing in the record
of the case, and exhibits attached to defendant's motion to dismiss, so long as they are referred to
in the complaint and are central to the claims contained therein, without converting the motion to
one for summary judgment.” Gavitt v. Born, 835 F. 3d 623, 640 (6th Cir. 2016).
III. Discussion
Little G’s raises two arguments in favor of judgment on the pleadings. First, it contends
that it cannot be liable under Title VII because it is not an “employer” under that statute. Second,
it contends that the amended complaint has not alleged sufficient facts to show that Little G’s is a
successor to Georgina’s.
A. Employer Requirement
Title VII prohibits “employers” from discriminating based on “race, color, religion, sex, or
national origin.” 42 U.S.C. § 2000e-2. An “employer” is “a person engaged in an industry
affecting commerce who has fifteen or more employees for each working day in each of twenty or
3
Case 1:18-cv-00668-HYJ-SJB ECF No. 87, PageID.608 Filed 12/04/20 Page 4 of 7
more calendar weeks in the current or preceding calendar year . . . .” 42 U.S.C. § 2000e(b). Little
G’s contends that it is not an employer because it does not have fifteen or more employees.
Defendant’s argument falls short because the amended complaint alleges that both
Georgina’s and Little G’s have had at least fifteen employees at all relevant times. (Am. Compl.
¶ 4.) For purposes of Defendant’s motion, the Court must accept this allegation as true. See Iqbal,
556 U.S. at 678.
Moreover, even if the EEOC had failed to allege facts about the number of Little G’s
employees, that failure would not bar the EEOC from proceeding with its claim for successor
liability against Little G’s. Successor liability is a doctrine that effectuates the “broad equitable
powers” that Congress gave to courts to “eradicate the present and future effects of past
discrimination.” EEOC v. MacMillan Bloedel Containers, Inc., 503 F.2d 1086, 1091 (6th Cir.
1974). As the Sixth Circuit explained:
Failure to hold a successor employer liable for the discriminatory practices of its
predecessor could emasculate the relief provisions of Title VII by leaving the
discriminatee without a remedy or with an incomplete remedy. In the case where
the predecessor company no longer had any assets, monetary relief would be
precluded. Such a result could encourage evasion in the guise of corporate transfers
of ownership. Similarly, where relief involved seniority, reinstatement or hiring,
only a successor could provide it.
It is to be emphasized that the equities of the matter favor successor liability
because it is the successor who has benefited from the discriminatory employment
practices of its predecessor.
The nature and extent of liability is subject to no formula, but must be determined
upon the facts and circumstances of each case. The primary concern, however, is
to provide the discriminatee with full relief. . . .
Id. at 1091-92.
Even if Little G’s is not an “employer” in the sense that it does not employ at least fifteen
people, holding it liable for the discriminatory conduct of its alleged predecessor would be
consistent with the goals of Title VII. If, for instance, Georgina’s cannot provide a complete
4
Case 1:18-cv-00668-HYJ-SJB ECF No. 87, PageID.609 Filed 12/04/20 Page 5 of 7
remedy because it is no longer in operation or it is insolvent, holding Little G’s liable for
Georgina’s conduct would allow those affected by the alleged discrimination to obtain more
complete relief. It would also discourage evasion in the guise of transferring the offending
employer’s business and customers to a different entity.
Little G’s insists that Congress did not intend for Title VII to apply to small businesses
with fewer than fifteen employees. However, the EEOC’s claim for successor liability does not
charge Little G’s with violating the employer restrictions in Title VII. Instead, the claim invokes
the “broad equitable discretion” that Title VII gives Courts “‘to fashion the most complete relief
possible.’” Franks v. Bowman Transp. Co., 424 U.S. 747, 763-64 (1976) (quoting 118 Cong. Rec.
7166, 7168 (1972)). In other words, successor liability is a form of relief for the alleged Title VII
violations by Georgina’s. As such, the EEOC’s claim against Little G’s does not necessarily
require that Little G’s meet the statutory definition of employer in Title VII. See Claiborne
Barksdale, Successor Liability Under the National Labor Relations Act and Title VII, 54 Tex. L.
Rev. 707, 731 n.118 (May 1976) (“If the predecessor but not the successor has fifteen employees,
the Act will . . . cover the successor.”); accord Wallace v. DM Customs, Inc., No. 8:04-cv-115-T23TBM, 2006 WL 2882715, at *13 (M.D. Fla. Oct. 6, 2006).
B. Requirements for Successor Liability
“[T]he liability of a successor is not automatic, but must be determined on a case by case
basis.” MacMillan, 503 F.2d at 1091. “[W]hether successor liability is equitable in a particular
case requires courts to balance 1) the interests of the defendant-employer, 2) the interests of the
plaintiff-employee, and 3) the goals of federal policy, in light of the particular facts of a case and
the particular legal obligation at issue.” Cobb v. Contract Transp., Inc., 452 F.3d 543, 554 (6th
Cir. 2006).
The following factors are relevant when considering successor liability:
5
Case 1:18-cv-00668-HYJ-SJB ECF No. 87, PageID.610 Filed 12/04/20 Page 6 of 7
(1) whether the successor company has notice of the charge; (2) the ability of the
predecessor to provide relief; (3) whether the new employer uses the same plant;
(4) whether there has been substantial continuity of business operations;
(5) whether the new employer uses the same or substantially same workforce;
(6) whether the new employer uses the same or substantially same supervisory
personnel; (7) whether the same jobs exist under substantially the same working
conditions; (8) whether [the defendant] uses the same machinery, equipment and
methods of production; and (9) whether [the defendant] produces the same product.
Id.
Little G’s contends that the EEOC has not alleged facts to support successor liability.
Importantly, the nine factors in MacMillian “are not in themselves the test for successor liability.
Instead, the nine factors are simply factors courts have considered when applying the three prong
balancing approach, considering the defendant’s interests, the plaintiff’s interests, and federal
policy.” Id. In other words, they are not required elements of a claim. Thus, a plaintiff need not
plead facts demonstrating each factor in order to state a plausible claim.
Little G’s argues that the EEOC has not pleaded facts to support the most important factor,
which is whether Georgina’s can provide relief. However, the EEOC’s complaint alleges that
Georgina’s closed for business and announced to its customers that it was moving to a new
location. The restaurant at the new location served the same food but was operated by Little G’s.
In effect, Georgina’s ceased operations and transferred its business to Little G’s.
Indeed,
Defendant itself contends in its motion that the COVID pandemic “destroyed” Georgina’s and that
Georgina’s closed because it “experienced economic distress due to high rent at its location . . .
and a lack of sales.” (Def.’s Br. in Supp. of Mot. for Summ. J. 2-3, ECF No. 78-1.) These facts
are sufficient for the Court to make a plausible inference that Georgina’s does not have the ability
to provide complete relief.
Moreover, other facts alleged in the complaint support additional MacMillan factors
indicating that Little G’s is a successor to Georgina’s. For instance, Little G’s had notice of the
6
Case 1:18-cv-00668-HYJ-SJB ECF No. 87, PageID.611 Filed 12/04/20 Page 7 of 7
discrimination charge. It also continued substantially the same business of Georgina’s, using the
same Facebook page and providing the same menu items under the ownership/supervision of the
same individual. These facts are sufficient to state a claim for successor liability.
Little G’s attempts to refute some of the foregoing facts alleged by the EEOC. For instance,
Little G’s contends that Georgina’s has retained equipment and supplies that would be sufficient
to satisfy a judgment against Georgina’s. In addition, Little G’s contends that it employs different
people than Georgina’s, possesses a different liquor license, and serves different menu items.
These attempts are misguided because a motion for judgment on the pleadings is not the proper
method for challenging the truth of the allegations in the complaint. Such a motion requires the
Court to determine whether those allegations, accepted as true, are sufficient to state a plausible
claim for relief. The assertions and evidence provided by Little G’s to dispute the allegations are
not relevant to that determination.
IV. Conclusion
In summary, Plaintiff’s complaint states a viable claim against Little G’s. Accordingly,
the Court will deny Little G’s motion for judgment on the pleadings. In addition, the Court will
deny Little G’s motion to stay discovery pending resolution of the motion for judgment on the
pleadings. Because the Court will deny Little G’s motion for judgment on the pleadings, the
motion to stay is now moot.
An order will enter that is consistent with this Opinion.
Dated: December 4, 2020
/s/ Hala Y. Jarbou
HALA Y. JARBOU
UNITED STATES DISTRICT JUDGE
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?