Boyd v. Teachers Insurance and Annuity Association of America et al

Filing 12

ORDER Denying 8 Motion to Dismiss for Failure to State a Claim. Signed by Senior Judge Graham Mullen on 9/20/2017. (jaw)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL ACTION NO. 3:17-cv-00224-GCM
BARRINGTON BOYD,

Plaintiff,
v.
TIAA-CREF INDIVIDUAL &
INSTITUTIONAL SERVICES, LLC
TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA,
Defendants.

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ORDER

THIS MATTER is before the Court on Defendants’ Motion to Dismiss for Failure to State
a Claim (Doc. No. 8) filed with a Brief in Support of Motion to Dismiss (Doc. No. 8-1) on June
26, 2017. On July 10, 2017 Plaintiff filed his Memorandum in Opposition to the Motion to Dismiss
(Doc. No. 9). Defendants filed a Reply in Support of Motion to Dismiss on July 21, 2017. (Doc.
No. 11). For the following reasons, Defendants’ Motion to Dismiss is DENIED.
I. BACKGROUND
Plaintiff Barrington Boyd (“Boyd”) is a licensed investment advisor with Series 7 and 66
qualifications. (Compl. at 2, ¶ 9). He is an African-American man. (Compl. at 2, ¶ 9). Boyd
began working for Defendants Teachers Insurance and Annuity Association of America and
TIAA-CREF Individual and Institutional Services, LLC (collectively, “TIAA”) in June 2005,
and his employment was terminated on March 15, 2015. (Compl. at 2, ¶¶ 10–11). On March 24,
2015, TIAA submitted to the Financial Industries Regulatory Authority (“FINRA”) a Uniform

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Termination Notice for Securities Industry Regulation (“U-5”). (Compl. at 2, ¶ 12). In the
section on the U-5 form provided for “Termination Explanation,” TIAA stated, “Did not meet
internal performance expectations for position. No violation of industry rules, no customer
harm, not securities related.” (Compl. at 2, ¶ 12).
Boyd filed two Charges of Discrimination with the Equal Employment Opportunity
Commission (“EEOC”), asserting that TIAA discriminated against him on the basis of race, and
on June 16, 2015, Boyd and TIAA participated in a mediation with the EEOC. (Compl. at 2, ¶
13–14). As a result of that mediation, on June 26, 2015, Boyd and TIAA entered into a
Separation Agreement and Release in Full (“Separation Agreement” or “the Agreement”).
(Compl. at 2, ¶ 15). Pursuant to that Agreement, on July 22, 2015, TIAA submitted a revised U5, replacing the language in the Termination Explanation section with “Disagreement regarding
internal policy requirements for position. No violation of industry rules, no customer harm, not
securities related.” (Compl. at 3, ¶ 19). In the “Amendment Explanation” box immediately
below the Termination Explanation, TIAA stated, “The failure to meet internal policy
expectations precipitated a conversation with the employee as to what those expectations were
and should be. Ultimately, it was the inability to reach an understanding as to what the job
expectations were that resulted in the separation.” (Compl. at 3, ¶ 20).
Boyd objected to the additional language in the Amendment Explanation, and TIAA
again amended the U-5 on December 7, 2015, stating in the Amendment Explanation section,
“Amended to accurately reflect the intent of the previous amendment.” (Compl. at 3, ¶ 22–23).
Boyd alleges that he subsequently applied for numerous positions in the securities
industry and was denied as a result of the inaccurate language provided in the U-5 form, as well
as a result of negative references provided by TIAA. (Compl. at 4, ¶ 24–28).

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On December 27, 2016, Boyd filed a Charge of Discrimination with EEOC asserting a
claim of retaliation under Title VII of the Civil Rights Act of 1964. (Compl. at 4, ¶ 29). On
January 23, 2017, the EEOC issued Boyd a Right to Sue Letter. (Compl. at 4, ¶ 30). On April
26, 2017, Boyd filed his Complaint alleging breach of contract and retaliation under Title VII.
(Compl. at 4–5).
II. LEGAL STANDARD
When faced with a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, the Court must “accept as true all well-pleaded allegations and . . . view the complaint
in a light most favorable to the plaintiff.” Mylan Labs, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th
Cir. 1993). The Court “assume[s] the[] veracity” of these factual allegations, and “determine[s]
whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679
(2009). However, the court “need not accept as true unwarranted inferences, unreasonable
conclusions, or arguments.” E. Shore Mkts., Inc. v. J.D. Assocs. LLP, 213 F.3d 175, 180 (4th
Cir. 2000). Thus, to survive a motion to dismiss, the plaintiff must include within his complaint
“sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
III. DISCUSSION
A. Consideration of the Separation Agreement
Because both the breach of contract claim and the retaliation claim rely heavily on the
terms of the Separation Agreement, the Court must decide, as a threshold issue, whether or not
the Separation Agreement in its entirety may be considered at this stage of the litigation. Boyd
referenced it extensively in his Complaint but did not attach the entire Separation Agreement to
his Complaint. (See Compl. at 4–5). TIAA subsequently attached it to its Motion to Dismiss as

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Doc. No. 8-2 and argues that the Court may consider it because it “directly gives rise to Boyd’s
claims and is expressly referred to in Boyd’s Complaint.” (Defs.’ Br. at 6). Boyd likewise urges
the Court to consider the Separation Agreement without converting Defendants’ Motion into a
motion for summary judgment.
The Fourth Circuit has held that “[a]lthough as a general rule extrinsic evidence should
not be considered at the 12(b)(6) stage, . . . ‘a court may consider it in determining whether to
dismiss the complaint [if] it was integral to and explicitly relied on in the complaint and [if] the
plaintiffs do not challenge its authenticity.’” Am. Chiropractic Ass’n v. Trigon Healthcare, Inc.,
367 F.3d 212, 234 (4th Cir. 2004) (quoting Phillips v. LCI Int’l Inc., 190 F.3d 609, 618 (4th Cir.
1999)). Because the Separation Agreement provides the basis for Boyd’s claim, is referenced
throughout the Complaint, and is not disputed, the Court concludes that it can consider the
Agreement in its entirety in assessing the plausibility of Boyd’s claims at this stage of the
litigation.
B. Breach of Contract
Boyd’s first cause of action is for breach of contract. Under North Carolina law, “[t]he
elements of a claim for breach of contract are (1) existence of a valid contract and (2) breach of
the terms of that contract.” Supplee v. Miller-Motte Bus. Coll., Inc., 768 S.E.2d 582, 590 (N.C.
Ct. App. 2015) (quoting Branch v. High Rock Lake Realty, Inc., 565 S.E.2d 248, 252 (N.C. Ct.
App. 2002)).
Here, TIAA concedes that the Separation Agreement constitutes a valid contract.
However, TIAA argues (1) that Boyd’s breach of contract claim is barred by a release under the
Separation Agreement, and (2) that even if Boyd did not release this claim, TIAA’s actions—as
alleged in Boyd’s Complaint—do not establish a plausible claim for breach of contract.

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First, TIAA asserts that Boyd’s claim is barred by a release in Paragraph 3 of the
Separation Agreement. Paragraph 3 of the Separation Agreement states:
TIAA will file with the appropriate depository within the Financial Industry Regulatory
Authority (“FINRA”) the amended explanation of “discharged: disagreement regarding
internal policy requirements for position. No violation of industry rules, no customer
harm, not securities related” on your “Uniform Notice for Securities Industry Regulation”
or “U-5.” To be clear, you agree not to challenge in any way the accuracy and/or
proprietary [sic] of the U-5 explanation above that TIAA will file with FINRA and to
release TIAA pursuant to Paragraphs 11 and 12 below, from any claim related to the
filing or content of that U-5 amendment.
(Separation Agreement, ¶ 3).
Paragraph 11(b), in turn, states, “This release of claims does not extend to your
contractual right to enforce the terms of this Agreement or to any claims that may not be lawfully
released.” (Separation Agreement, ¶ 11(b)).
With respect to disputes over contract interpretation, “[a] contract that is plain and
unambiguous on its face will be interpreted by the court as a matter of law.” WakeMed v.
Surgical Care Affiliates, LLC, 778 S.E.2d 308, 312 (N.C. Ct. App. 2015) (quoting Commscope
Credit Union v. Butler & Burke, LLP, 764 S.E.2d 642, 651 (N.C. Ct. App. 2014)). On its face,
Paragraph 3 unambiguously prevents Boyd from challenging the “accuracy and/or proprietary
[sic]” of the agreed-upon language of the “amended explanation” to be filed in the U-5, thus
protecting TIAA from future lawsuits challenging that specific language. Nowhere does it
prevent Boyd from suing to compel TIAA to submit the U-5 with the agreed-upon language or
from suing for damages based on TIAA’s failure to submit the U-5 with agreed-upon language.
Further, Paragraph 11 unambiguously preserves Boyd’s right to file suit to enforce the terms of
the Separation Agreement, including TIAA’s promise in Paragraph 3 to amend the U-5 to reflect
the agreed-upon language.

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Boyd’s ability to assert this claim is expressly retained in Paragraph 11. He does not run
afoul of Paragraph 3 by challenging the agreed-upon termination language in the Separation
Agreement. Rather, he seeks relief for TIAA’s alleged violation of Paragraph 3 by inserting
additional language into the U-5, which was “neither accurate nor consistent with the language in
Paragraph 3 of the Separation Agreement.” (Compl. at 3, ¶ 21). Thus, his breach of contract
claim is not barred by the release provisions of the Separation Agreement.
Second, TIAA asserts that, release notwithstanding, Boyd’s Complaint fails to allege
facts that would plausibly amount to a breach of the terms of the Separation Agreement with
respect to the filing of the U-5 form.1 Specifically, TIAA asserts that it did not breach the terms
of the Agreement because the Agreement is silent as to the wording of the “Amendment
Explanation” section of the amended U-5 and, regardless, that the given explanation comports
with the agreed-upon language.
Although the Agreement does not specifically mention the Amendment Explanation
section, Boyd’s Complaint alleges that a central aspect of the Agreement was changing the
language from the original U-5’s language of “did not meet internal performance expectations”
to the agreed-upon language of “disagreement regarding internal policy requirements.” (Compl.
at 2–3, ¶¶ 12, 20). Boyd alleges that TIAA did amend the Termination Explanation to the
agreed-upon language but also placed additional language in the Amendment Explanation
section—immediately following the Termination Explanation—continuing to claim that there
was a “failure to meet internal policy expectations.” (Compl. at 2–3, ¶¶ 12).

Boyd’s Complaint also alleges that TIAA breached the Separation Agreement by providing negative references
about Boyd to other employers. (Compl. at 4). While TIAA denies this allegation, it concedes that—taken as true—
it raises a plausible claim for relief.
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This Court finds that Boyd’s Complaint raises a plausible claim for a breach of contract.
“In order for a breach of contract to be actionable it must be a material breach, one that
substantially defeats the purpose of the agreement or goes to the heart of the agreement, or can
be characterized as a substantial failure to perform.” Long v. Long, 588 S.E.2d 1, 4 (N.C. Ct.
App. 2003). “The question of whether a breach of contract is material is ordinarily a question for
a jury.” Charlotte Motor Speedway, Inc. v. Tindall Corp., 672 S.E.2d 691, 302 (N.C. Ct. App.
2009). Taking the factual allegations in Boyd’s Complaint as true, a jury could find that by
placing the language of “failure to meet internal policy expectations” into the U-5, just below the
Termination Explanation section, TIAA’s actions “substantially defeat[ed] the purpose of the
agreement or [went] to the heart of the agreement, or can be characterized as a substantial failure
to perform.” See Long, 588 S.E.2d at 4.
Thus, TIAA’s motion to dismiss Boyd’s claim for breach of contract must be denied.
C. Retaliation Under Title VII
Boyd’s second cause of action is for retaliation under Title VII of the Civil Rights Act of
1964. Similar to its response to Boyd’s breach of contract claim, TIAA argues (1) that Boyd’s
retaliation claim is barred by a release under the Separation Agreement, and (2) that even if Boyd
did not release this claim, TIAA’s actions—as alleged by Boyd’s Complaint—do not establish a
plausible claim of retaliation under Title VII.
First, TIAA asserts that it is released from retaliation claims made by Boyd under the
Separation Agreement. Paragraph 11(a) of the Separation Agreement states, “Except as
otherwise set forth in this Agreement, the Separation Payment in Paragraph 2 represents full and
complete settlement in satisfaction of any and all claims you may have against TIAA arising on
or before the date you sign this Agreement.” (Separation Agreement, ¶ 11(a)). Additionally, the

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Agreement releases and discharges TIAA “from any and all claims, in law or equity, which you
ever had or now have regarding any matter arising on or before the date you sign this
Agreement.” (Separation Agreement, ¶ 11(a)).
Although Title VII retaliation claims fit within the category of claims waived in
Separation Agreement, ¶ 11(a)(i), Boyd’s claim did not arise “on or before the date” he signed
the Agreement. Both parties agree—and the Agreement itself shows—that the Separation
Agreement was signed on June 26, 2015. Taking Boyd’s factual allegations as true, TIAA
retaliated against him on July 22, 2015, when it filed the amended U-5 form, and at various other
points in time after the amended U-5 had been filed by providing negative references to other
employers. Prior to TIAA’s actions on these dates, Boyd did not have a colorable claim for
retaliation. Thus, the claims asserted by Boyd arose after the parties signed the Separation
Agreement, and his claim for retaliation under Title VII is not barred by the release.
Second, TIAA asserts that the allegations in Boyd’s Complaint fail to raise a plausible
claim for retaliation under Title VII. Title VII § 704 makes it unlawful for an employer to
discriminate against an employee “because he has opposed any practice made an unlawful
employment practice by this subchapter, or because he has made a charge, testified, assisted, or
participated in any manner in an investigation, proceeding, or hearing under this subchapter.” 42
U.S.C. § 2000e-3 (2012).
At the motion to dismiss stage in a Title VII case, a plaintiff need only “allege facts
sufficient to state all the elements” of a prima facie case for retaliation. Templeton v. First Tenn.
Bank, N.A., 424 F. App’x 249, 250 (4th Cir. 2011) (per curiam) (unpublished). In order to raise a
prima facie case, a plaintiff must allege facts supporting three elements: “(1) that [he] engaged in
a protected activity; (2) that [his] employer took an adverse employment action against [him];

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and (3) that there was a causal link between the two events.” EEOC v. Navy Fed. Credit Union,
424 F.3d 397, 405–06 (4th Cir. 2005).
Boyd’s Complaint sufficiently alleges that he engaged in a protected activity. Title VII
protects the activity of “employees who pursue their federal rights” by reporting or charging
unlawful employment activity. U.S. EEOC v. Lockheed Martin Corp., 444 F. Supp. 2d 414, 417
(D. Md. 2006) (quoting EEOC v. Bd. of Governors of State Colls. and Univs., 957 F.2d 424, 427
(7th Cir. 1992)). By filing two Charges of Discrimination against TIAA with the EEOC
asserting racial discrimination, Boyd certainly pursued his federal rights. Thus, his conduct is
clearly a protected activity. See U.S. EEOC, 444 F. Supp. 2d at 417 (using “retaliation against
employees who . . . file an EEOC charge” as an example of a protected activity); see also, Price
v. Thompson, 380 F.3d 209, 212 (4th Cir. 2004) (“Price’s EEOC claim is protected activity . . .
.”).
Boyd also sufficiently alleges that TIAA took an adverse employment action against him.
To satisfy Title VII, an adverse employment action must be material—one that “might have
‘dissuaded a reasonable worker from making or supporting a charge of discrimination.’”
Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 68 (2006) (quoting Rochon v. Gonzales,
438 F.3d 1211, 1219 (D.C. Cir. 2006)). Thus, it must actually “produce[] an injury or harm.” Id.
at 67. Such action is prohibited whether taken against a current or former employee. Robinson
v. Shell Oil Co., 519 U.S. 337, 346 (1997).
Boyd alleges that TIAA retaliated against him by “interfering with his job search.”
(Compl. at 5, ¶ 39). Specifically, he alleges that TIAA falsely amended his U-5 form and
provided negative referrals to prospective employers. (Compl. at 5, ¶ 39). Other courts have
allowed cases to proceed past the motion to dismiss stage based on an allegation of negative

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employment references. See e.g., Harris v. Ann’s House of Nuts, No. 4:14-cv-185, 2015 WL
3902017, at *4 (E.D.N.C. June 24, 2015); Alberts v. Wheeling Jesuit Univ., No. 5:09-cv-109,
2011 WL 2132983, at *4 (N.D. W. Va. May 25, 2011). As alleged, the combination of the
Amendment Explanation and TIAA’s negative referrals led potential employers to deny
employment to Boyd. Employers generally rely on references, and employers in the securities
industry rely on information in the U-5 form in making hiring decisions. As a result, a
“reasonable worker” might be dissuaded from making a charge of discrimination if he knows
that he will likely be seriously hindered in his search for employment elsewhere as a result of
making his charge. See White, 548 U.S. at 68. Thus, providing negative referrals and false
information in a U-5 form are sufficient to qualify as adverse employment actions.
Finally, Boyd sufficiently alleges that TIAA’s adverse employment action was caused by
his decision to engage in protected activity. Alleging causation in a prima facie retaliation case
is “less onerous” than meeting the but-for causation standard ultimately required to prove
retaliation. Foster v. Univ. of Maryland-Eastern Shore, 787 F.3d 243, 251 (4th Cir. 2015).
Close temporal proximity between when the employer learns of the protected activity and the
adverse employment action can be enough to make a prima facie claim for causation. Id. at 253.
Prima facie causation can also be found when the adverse employment action occurs “upon the
employer’s first opportunity” to carry out a harmful act to the employee. Templeton, 424 F.
App’x at 251; see also Price, 380 F.3d at 213 (assuming without deciding that “an adverse action
taken at the first opportunity satisfies the causal connection element of the prima facie case”).
At this stage of the litigation, it is unclear exactly at what point TIAA first learned of
Boyd’s EEOC charges. However, it is clear that Boyd participated in an EEOC mediation with
TIAA on June 16, 2015 and that TIAA submitted its revised U-5 form on July 22, 2015. This

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close temporal proximity is sufficient to show causation. And to the extent that TIAA knew
about the EEOC charges months beforehand, the allegation that TIAA took the adverse
employment action at its “first opportunity”—when it filed the amended U-5 form—establishes
sufficient prima facie causation to survive a motion to dismiss.
Thus, Boyd’s Complaint sufficiently alleges all of the requisite elements of a prima facie
claim for retaliation under Title VII and TIAA’s motion to dismiss Boyd’s claim for retaliation
must be denied.
III. CONCLUSION
For the forgoing reasons, Defendant’s Motion to Dismiss for Failure to State a Claim is
hereby DENIED.
SO ORDERED.

Signed: September 20, 2017

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