Hamilton v. French/West/Vaughan, LLC

Filing 17

ORDER granting in part and denying in part 7 Motion to Dismiss for Failure to State a Claim. Defendant's counterclaims for breach of contract and defamation per se are DISMISSED for failure to state a claim upon which relief can be granted. Defendant's counterclaim for defamation per quod is allowed to proceed. Signed by District Judge Louise Wood Flanagan on 3/12/2025. (Collins, S)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
NO. 5:24-CV-456-FL
ALLECIA HAMILTON,
Plaintiff,
v.
FRENCH/WEST/VAUGHAN, LLC,
Defendant.

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ORDER

This matter is before the court on plaintiff’s motion to dismiss counterclaims pursuant to
Federal Rules of Civil Procedure 12(b)(3) and (6). (DE 7). The issues raised are ripe for ruling.
For the following reasons the motion is granted in part and denied in part.
STATEMENT OF THE CASE
Plaintiff commenced this employment discrimination action August 7, 2024, relying on a
charge of discrimination filed with the Equal Opportunity Employment Commission and its right
to sue letter. She alleges retaliation in violation of Title VII of the Civil Rights Act of 1964, 42
U.S.C. § 2000(e), et seq., and wrongful discharge in violation of the North Carolina Equal
Employment Practices Act, N.C. Gen. Stat. § 143-422.2, et seq. Plaintiff seeks economic, noneconomic, and punitive damages, costs, and attorneys’ fees.
Defendant answered, raising counterclaims for breach of contract, defamation, and
defamation per se October 8, 2024.1 Defendant relies upon a Nondisclosure and Restrictive

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Defendant refiled its answer and counterclaims October 29, 2024, correcting deficiency in labeling attached
exhibits. (DE 10). All references to the answer and counterclaims in citations herein are to this refiled document
and attached exhibits.

Covenant Agreement (the “Agreement”) and an employee handbook executed by plaintiff, as
well as articles of organization and a limited liability company annual report for Southstar
Creative LLC (“Southstar”). Defendant seeks compensatory and punitive damages, costs, and
injunctive relief.
Plaintiff filed the instant motion to dismiss counterclaims October 29, 2024, asserting
improper venue and failure to state a claim. Defendant responded in opposition November 19,
2024.
STATEMENT OF FACTS
The facts alleged by defendant in support of its counterclaims can be summarized as
follows. Defendant is a marketing firm that offers public relations, advertising, and digital media
services. (Countercl. (DE 10) ¶ 5). Plaintiff began working as a creative project manager for
defendant on or around September 12, 2023. (Id. ¶ 8). At the outset of her employment, plaintiff
entered into the Agreement with defendant. (Id. at ¶ 9; DE 10-2). The Agreement states, in
relevant part, that “[t]he parties agree that any litigation arising out of or involving this contract
shall take place in Wake County, North Carolina, in the courts of the State of North Carolina,
and [plaintiff] hereby submits [her]self to the personal jurisdiction and venue of the state courts
for Wake County.” (Agreement (DE 10-2) ¶ 11).
The Agreement also has a non-compete clause, prohibiting plaintiff from competing for
defendant’s customers by “engag[ing] in lines of business, any of which . . . are the same,
similar, or related to any products, services or other benefits offered or provided by [defendant],
or the same, similar or related to, any of the business, or lines of business, done by [defendant].”
(Id. ¶ 5(c)(i)).

The Agreement’s non-compete clause applies for one year following the

termination of plaintiff’s employment without geographic limitations.

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(Id. ¶ 5(b)).

The

Agreement also has clauses requiring plaintiff to “devote [her] entire time and best efforts to
advancing the interests of [defendant]” and prohibiting her from doing “anything that would
inure to the benefit of any person who competes or might compete with [defendant]” during
plaintiff’s employment. (Id. ¶ 1).
Defendant alleges numerous problems with plaintiff’s job performance, including
attendance and communication issues, which defendant believed “stemmed from [plaintiff’s]
fundamental misunderstanding of [defendant’s] work.”

(Countercl. ¶¶ 20-42).

Defendant

allegedly terminated plaintiff’s employment February 20, 2024, due to her performance not
meeting defendant’s expectations for the role. (Id. ¶ 43).
One day after plaintiff’s termination, defendant became aware of an anonymous post on
Glass Door, a job posting website. (Id. ¶ 45). Defendant attributes this anonymous post to
plaintiff. (Id. ¶ 50). The post gave defendant a “one-star” rating, referred to defendant as a
“TOXIC ZONE,” and stated “Professionals of Color DO NOT APPLY!!” (Id. ¶¶ 45, 47). The
remainder of the post mirrors the allegations made by plaintiff in her complaint in the present
action. (Id. ¶ 50; see, e.g., Compl. (DE 1) ¶¶ 17-26). In relevant part, the post states:
Purchased accolades aside. This is not the place for you if you value art, true
creativity, and professional excellence. [Defendant] is not a safe space if you are
a person of Afro, Caribbean or LatinX descent. Over a 6 month period, I
managed to perform well while overcoming daily exposure to textbook DEI
micro/macro aggressions. 3 instances of public humiliation from a co-worker, and
a trainer. When brought to the attention of other leadership and [defendant’s]
part-time HR Rep, I was told this was “normal behavior”, and that this particular
employee is just…well…..just a character.” After that, the same employee went
so far as to draw on a shared dry erase board..an inappropriate rendition of a
topless curvy woman, with ethnic hairstyle, in a grass skirt, with over-exaggerated
naked breasts. The artwork that included 2 arrows labeled “Coconuts” and
“BahamaMama” displayed a disgusting lack of professionalism and overt cultural
bias.
After taking photos for proof, and articulating the need for incident resolution
during on an [sic] “Informal/formal” 6 month performance review form, I was
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“Let Go” 2 weeks later. In that meeting, I was told for the first time by the same
trainer that she now felt I was “incapable of managing the workload” despite great
review from other department leads, no previous warning, or proof of any
infractions in writing……Textbook. Discrimination. [sic].
(Id. ¶ 48).
Defendant alleges plaintiff formed Southstar June 25, 2021, and has operated it since the
termination of her employment with defendant. (Id. ¶ 63). Southstar currently maintains a
website advertising “design specialists with projects that range from digital design to fine art.”
(Id. ¶ 67). On August 5, 2024, defendant’s counsel informed plaintiff’s counsel that plaintiff was
in violation of the Agreement because Southstar was in direct competition with defendant. (Id. ¶
70).
COURT’S DISCUSSION
A.

Standard of Review
To survive a motion to dismiss under Rule 12(b)(6), “a 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)). “Factual allegations must be enough to raise a right to relief above the speculative
level.” Twombly, 550 U.S. at 555. In evaluating whether a claim is stated, the “court accepts all
well-pled facts as true and construes these facts in the light most favorable to the [moving
party],” but does not consider “legal conclusions, elements of a cause of action, . . . bare
assertions devoid of further factual enhancement[,] . . . unwarranted inferences, unreasonable
conclusions, or arguments.” Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250,
255 (4th Cir. 2009).2

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Throughout this order, internal citations and quotation marks are omitted from citations unless otherwise
specified.

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B.

Analysis
Plaintiff moves to dismiss defendant’s breach of contract counterclaim for improper

venue and failure to state a claim, and to dismiss defendant’s defamation and defamation per se
counterclaims for failure to state a claim. The court addresses these counterclaims in turn.
1.

Breach of Contract
a.

Rule 12(b)(3)

Federal Rule of Civil Procedure 12(b)(3) allows a party to move to dismiss a complaint
for “improper venue” before pleading an answer. “Rule 12(b)(3) [is] not [a] proper mechanism[]
to enforce a forum-selection clause.” Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of
Texas, 571 U.S. 49, 61 (2013). This is because “[w]hether venue is ‘wrong’ or ‘improper’
depends exclusively on whether the court in which the case was brought satisfies the
requirements of federal venue laws, and those provisions say nothing about a forum-selection
clause.” Id. at 55. This rule “clarifie[s] that a party may not seek to enforce a forum selection
clause by moving to dismiss for improper venue.” BAE Sys. Tech. Sol. & Servs., Inc. v.
Republic of Korea’s Def. Acquisition Program Admin., 884 F.3d 463, 470 (4th Cir. 2018).3
Here, plaintiff’s sole argument in support of dismissal for improper venue is the forum
selection clause contained in the Agreement. Pursuant to Atlantic Marine and BAE Sys.,
plaintiff’s motion to dismiss under Rule 12(b)(3) is denied, and the court evaluates plaintiff’s
remaining arguments in accordance with Rule 12(b)(6).
b.

Rule 12(b)(6)

In North Carolina, the “necessary allegations for a breach of contract claim [are]: 1) the
existence of a contract between plaintiff and defendant, 2) the specific provisions breached, 3)
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“Instead, the appropriate way to enforce a forum-selection clause pointing to a state or foreign forum is
through the doctrine of forum non conveniens.” Atlantic Marine, 571 U.S. at 60.

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the facts constituting the breach, and 4) the amount of damages resulting to plaintiff from such
breach.” Intersal, Inc. v. Hamilton, 373 N.C. 89, 108-09 (2019). “North Carolina courts will
enforce a covenant not to compete if it is: 1) in writing; 2) reasonable as to the terms, time, and
territory; 3) made part of the employment contract; 4) based on valuable consideration; and 5)
not against public policy.” Wells Fargo Ins. Servs. USA, Inc. v. Link, 372 N.C. 260, 267 (2019).
“The party seeking enforcement of a restrictive covenant has the burden of proving its
reasonableness,” and “[t]he reasonableness of a non-competition covenant is a matter of law for
the court to decide.” Id. “In the absence of an express geographic territory restriction, a court
can enforce a restriction prohibiting a former employee from soliciting customers or clients.” Id.
However, “covenants prohibiting competition for a former employer’s customers are only
enforceable when they prohibit the employee from contacting customers with whom the
employee actually had contact during his former employment.” Id. at 269.
Defendant alleges plaintiff breached the Agreement by operating Southstar during and
after her employment with defendant. According to the Agreement, plaintiff “shall not during
the term of employment provide personal services, whether or not compensated, to any other
business or enterprise.” (DE 10-2 ¶ 1). Additionally,
[f]or a period of one year after the effective date of termination of [plaintiff’s]
employment with [defendant] . . . [plaintiff] shall not, directly or indirectly, alone
or in association with, or through, or for others, . . . compete with [defendant] for,
or with regard to, any clients or customers of [defendant] . . . . During said one
year period, the foregoing sentence means (among other things, and by way of
illustration and not limitation) not only that [plaintiff] shall totally refrain from
soliciting the opportunity, either for himself or other persons, to provide to clients
or customers of [defendant] any products, services or other benefits in
[defendant’s] line or lines of business, but also that [plaintiff] shall totally refrain
from providing, directly or indirectly, to clients or customers of [defendant] any
products, services or other benefits in [defendant’s] line or lines of business, even
if clients or customers of [defendant] come to [plaintiff] without his solicitation or
prior communication to them . . . .

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(Id. ¶ 5(b)).
Defendant does not allege facts giving rise to a plausible inference of breach of the
Agreement. Although defendant alleges plaintiff formed Southstar in 2021, (Countercl. ¶ 63; DE
10-4 at 1-2), which was prior to plaintiff’s employment with defendant, defendant does not
allege any facts regarding plaintiff’s provision of services to Southstar or any other business
during plaintiff’s employment with defendant. (See id. ¶¶ 20-43).
In addition, while plaintiff allegedly operates Southstar currently to provide services that
are “the same or substantially similar to those [services] offered by [defendant],” (Countercl.
¶ 67), defendant does not allege that plaintiff has solicited or provided services to any of
defendant’s clients or customers. (See id. ¶¶ 62-72). By its terms, the Agreement prohibits
competition “for, or with regard to, any clients or customers of [defendant].” (DE 10-2 ¶ 5(b))
(emphasis added). Thus, even if plaintiff owns and operates Southstar as defendant alleges,
defendant has not alleged sufficient facts to “state a claim to relief that is plausible on its face.”
Twombly, 550 U.S. at 570.

Accordingly, defendant’s breach of contract counterclaim is

dismissed for failure to state a claim pursuant to Rule 12(b)(6).4
2.

Defamation and Defamation Per Se

To state a claim of defamation, defendant must plead sufficient facts to “show that
[plaintiff] 1) caused injury to [defendant] 2) by making false, defamatory statements 3) of or
concerning [defendant] 4) that were published to a third person.” Bouvier v. Porter, 386 N.C. 1,
10, (2024). “[I]n order to be actionable as defamation a statement must be one of fact, not
merely opinion.” Desmond v. News & Observer Publ’g Co., 375 N.C. 21, 38 (2020). “A false
statement concerning a corporation, which is, by its very nature, incapable of mental suffering or
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Because the court determines defendant has not pleaded sufficient facts to state a claim, the court does not
address plaintiff’s further argument that the Agreement is unenforceable under North Carolina law.

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loss of social relationships, is not actionable unless the immediate tendency of the publication is
to impair plaintiff’s reputation in its business relationships, or actual pecuniary loss is alleged
and proved.” R.H. Bouligny, Inc. v. United Steelworkers of Am., 270 N.C 160, 169 (1967).
“Generally, a communication is deemed defamatory if it tends so to harm the reputation
of another as to lower him in the estimation of the community or to deter third persons from
associating or dealing with him.” Cannon v. Peck, 26 F.4th 547, 559 (4th Cir. 2022). The court
must consider the full context of the statement, viewing the words “within the four corners” of
the publication and interpreting them “as ordinary people would understand” them. Renwick v.
News & Observer Publ’g Co., 310 N.C. 312, 317, 319 (1984). North Carolina recognizes three
categories of defamation: “1) publications obviously defamatory which are called [defamation]
per se; 2) publications susceptible of two interpretations one of which is defamatory and the
other not; and 3) publications not obviously defamatory but when considered with innuendo,
colloquium, and explanatory circumstances become libelous, which are termed [defamation] per
quod.” Renwick, 310 N.C. at 316 (emphasis in original). The law presumes damages from
publications which are defamatory per se, but damages must be alleged and proved for
publications which are defamatory per quod. Id.
Defamation per se includes any publication which 1) “charges that a person has
committed an infamous crime,” 2) “charges a person with having an infectious disease,” 3)
“tends to impeach a person in that person’s trade or profession,” or 4) “otherwise tends to subject
one to ridicule, contempt or disgrace.” Renwick, 310 N.C. at 317. To impeach a person in his
trade or profession, “the false words 1) must touch the plaintiff in his special trade or occupation,
and 2) must contain an imputation necessarily hurtful in its effect on his business.” Badame v.
Lampke, 242 N.C. 755, 757 (1955). “Defamation of this class ordinarily includes charges made

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by one trader or merchant tending to degrade a rival by charging him with dishonorable conduct
in business.” Id. The publication need not “involve an imputation of crime, moral turpitude or
immoral conduct.” Renwick, 310 N.C. at 317. But to be defamation per se, the defamatory
words must be “susceptible of but one meaning and of such nature that the court can presume as
a matter of law that they tend to disgrace and degrade the party.” Flake v. Greensboro News Co.,
212 N.C. 780, 786 (N.C.1938).
Here, defendant alleges plaintiff falsely represented that she reported the drawing and her
concerns about it to management, (Countercl. ¶¶ 52-53), that she had a six-month review (id. ¶
54), and that her pre-termination performance reviews were all positive, (Id. ¶¶ 57-58). These
are statements of fact, not opinion, and are therefore actionable. Desmond, 375 N.C. at 38.5
Although these statements concern defendant’s internal employment relationship with a former
employee, they do not touch on defendant’s “special trade or occupation,” marketing and
advertising. Badme, 242 N.C. at 757. Additionally, considering their full context and viewing
them as ordinary people would understand them, these statements are not “of such nature that the
court can presume as a matter of law that they tend to disgrace and degrade” defendant. Flake,
212 N.C. at 786. Thus, defendant fails to state a claim for defamation per se on this basis, and
plaintiff’s motion to dismiss is granted as to the defamation per se counterclaim.
By contrast, defendant has stated a claim for defamation per quod. Although plaintiff’s
alleged false statements are “not obviously defamatory,” they may become so “when considered
with innuendo, colloquium, and explanatory circumstances.”

Renwick, 310 N.C. at 316.

Therefore, defendant’s allegations in support of its counterclaim permit a plausible inference that
plaintiff’s statements “lower [defendant] in the estimation of the community or . . . deter third
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Defendant also alleges that plaintiff falsely accused defendant of a “disgusting lack of professionalism,”
“overt cultural bias,” and “textbook discrimination.” (Countercl. (DE 10) ¶ 59). However, these accusations are not
actionable because they are opinion, not fact. Desmond, 375 N.C. at 38.

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persons from associating or dealing with [it].” Cannon, 36 F.4th at 559. Plaintiff argues
defendant fails to state a claim for defamation per quod due to a failure to allege pecuniary loss.
(Pl.’s Mot. Dismiss (DE 8) at 8 n.2). However, the counterclaim expressly states that plaintiff’s
post was “disruptive to [defendant’s] operations,” (Countercl. ¶ 60), and “[a]s a direct and
proximate result of [plaintiff’s] defamatory statements, [defendant] has suffered damages in
excess of $25,000,” (id. ¶ 97). Accordingly, defendant has alleged pecuniary loss. Plaintiff
raises no other grounds for dismissal of the defamation per quod counterclaim. Therefore,
plaintiff’s motion to dismiss is denied in this part.
CONCLUSION
Based on the foregoing, plaintiff’s motion to dismiss (DE 7) is GRANTED IN PART and
DENIED IN PART. Defendant’s counterclaims for breach of contract and defamation per se are
DISMISSED for failure to state a claim upon which relief can be granted.
counterclaim for defamation per quod is allowed to proceed.
SO ORDERED, this the 12th day of March, 2025.

__________________________________
LOUISE W. FLANAGAN
United States District Judge

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Defendant’s