Brough v. O.C. Tanner Company

Filing 33

MEMORANDUM DECISION AND ORDER denying Defendant's 25 Motion to Dismiss for Failure to State a Claim. Signed by Judge Ted Stewart on 7/25/2017. (eat)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
ROXANNE BROUGH,

MEMORANDUM DECISION AND
ORDER DENYING DEFENDANT’S
MOTION TO DISMISS

Plaintiff,
v.
O.C. TANNER COMPANY, and JOHN
DOES 1-5,

Case No. 2:16-CV-1134 TS

Defendant.

District Judge Ted Stewart

This matter is before the Court on Defendant O.C. Tanner Company’s Motion to Dismiss.
For the reasons discussed below, the Court will deny the Motion.
I. BACKGROUND
Plaintiff Roxanne Brough worked for Defendant O.C. Tanner Company (“O.C. Tanner”
or “Employer”) from April 1977 until November 2014, at which time Plaintiff and several other
employees over 40 years old were allegedly forced to leave. 1 Shortly after receiving notice of
Defendant’s intent to terminate her employment, Plaintiff retained Mr. Morgan to represent her,
and asked him “to attempt to negotiate a more favorable post-termination settlement
agreement.” 2
Early on in the negotiations, the parties “acknowledged the deadlines that may apply in
timely filing complaints with the EEOC.” 3 “In response to specific proffers by Mr. Morgan
throughout 2015 and early 2016 to forgo and delay filing any complaint with the EEOC pending
1

The facts are taken from Plaintiff’s Complaint and construed in the light most favorable
to Plaintiff.
2
Docket No. 22 ¶ 17.
3
Id. ¶17(a).
1

the good faith efforts of the parties to settle . . . [two attorneys for Defendant] specifically
represented that they each believed that a negotiated settlement was forthcoming and accepted
Mr. Morgan’s request not to prejudice his client should she delay her filing the matter with the
EEOC, if that should become necessary in any event.” 4
Negotiations concluded without an agreement being reached at the end of May, 2016.
Plaintiff received a right to sue letter on September 28, 2016, and filed a Charge of
Discrimination with eh EEOC on August 25, 2016, more than 300 days after her termination.
Defendants previously argued that Plaintiff’s action was time-barred, and the Court agreed,
finding that Plaintiff had failed to allege sufficient facts to justify equitably tolling of the statute
of limitations. 5 The Court dismissed Plaintiff’s ADEA claim without prejudice. 6 Plaintiff filed
an Amended Complaint, and Defendant renewed its statute of limitations argument.
II. STANDARD OF REVIEW
To prevail on a 12(b)(6) Motion to Dismiss, a complaint “must contain sufficient factual
matter, accepted as true, ‘to state a claim to relief that is plausible on its face.’” 7 A facially
plausible claim requires “factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” 8 The court must accept all the factual
allegations in the complaint as true, but need not consider merely conclusory statements that

4

Id.
Brough v. O.C. Tanner Co., No. 2:16-CV-1134 TS, 2017 WL 1102622 (D. Utah Mar.
23, 2017).
6
Id. at *3.
7
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)).
8
Id.
5

2

recite legal elements. 9 “The nature and specificity of the allegations required to state a plausible
claim will vary based on context.” 10
“Generally, the sufficiency of a complaint must rest on its contents alone.” 11 There are
limited exceptions to this restriction, 12 but the affidavit submitted by Plaintiff with her
Memorandum in Opposition does not fall within any exception, and therefore was not considered
by the Court in deciding this Motion.
III. DISCUSSION
The ADEA requires that a charge of discrimination be filed with the EEOC within 300
days of the alleged discriminatory practice. 13 It is undisputed that Plaintiff’s claim was not filed
within the 300 day limit. Plaintiff argues: (1) that the limitations period was tolled by express
agreement, or in the alternative, (2) that the limitations period should be equitably tolled. Each
theory will be discussed in turn.
A. TOLLING BY EXPRESS AGREEMENT
“Federal statutes of limitations can often be tolled by agreement.” 14 The Supreme Court
has explained that parties are ordinarily “permitted to contract around a default statute of
limitations” and can “agree not only to the length of a limitations period but also to its

9

Id.
Kan. Penn Gaming LLC v. Collins, 656 F.3d 1210, 1215 (10th Cir. 2011).
11
Gee v. Pacheco, 627 F.3d 1178, 1186 (10th Cir. 2010).
12
Id. (naming the following exceptions: documents incorporated by reference in the
complaint; documents referred to in the complaint when authenticity is undisputed; and matters
of which a court may take judicial notice).
13
Almond v. Unified Sch. Dist. No. 501, 665 F.3d 1174, 1176 (10th Cir. 2011).
14
Nat’l Credit Union Admin. Bd. v. Barclays Capital Inc., 785 F.3d 387, 392 (10th Cir.
2015) (citing Heimeshoff v. Hartford Life & Acc. Ins. Co., ––– U.S. ––––, 134 S.Ct. 604, 611
(2013)).
10

3

commencement.” 15 The Tenth Circuit has found that when a party promises not to assert a
statute of limitations defense in order to continue settlement negotiations, “it is appropriate to
hold [the party] to its promise.” 16
The Amended Complaint alleges that two attorneys for Defendant “accepted Mr.
Morgan’s request not to prejudice his client should she delay her filing the matter with the
EEOC” in order to facilitate settlement negotiations. 17 While Defendant is correct that some
terms of this tolling agreement are unclear, the facts alleged are sufficient at this stage to
represent a promise to which Defendant should be held.
Defendant argues that any oral promise to toll the limitations period is unenforceable.
Defendant points out that every case relied on by Plaintiff involved a written agreement.
However, Defendant cites no authority requiring an agreement to toll this particular limitations
period to be in writing, and Defendant raises no statute of frauds argument. The Court finds that
Plaintiff’s allegations support a theory of tolling by express agreement that is sufficient to
overcome Defendant’s Motion to Dismiss.
B. EQUITABLE TOLLING
Even if the theory of tolling by express agreement fails, the new allegations in the
Amended Complaint justify equitable tolling. ADEA time limits are tolled “only where the
circumstances of the case rise to a level of active deception . . . where a plaintiff has been lulled
into inaction by her past employer.” 18 Generally, pre-suit efforts to settle a claim are not grounds

15

Heimeshoff, 134 S.Ct. at 611.
Nat’l Credit Union, 785 F.3d at 393.
17
Docket No. 22 ¶ 17(a).
18
Martinez v. Orr, 738 F.2d 1107, 1110 (10th Cir. 1984) (quoting Gray v. Phillips
Petroleum Co., 858 F.2d 610, 615 (10th Cir. 1988)).
16

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for equitable tolling. 19 However, courts have applied equitable estoppel where the employee
relied on an employer’s affirmative and false assurance to settle the claim. 20
In the original Complaint, Plaintiff failed to allege that Defendant engaged in affirmative
conduct with the intent of lulling Plaintiff into inaction. However, the Amended Complaint adds
an allegation that two attorneys for Defendant “specifically represented that they each believed
that a negotiated settlement was forthcoming and accepted Mr. Morgan’s request not to prejudice
his client should she delay her filing the matter with the EEOC.” 21
These representations are more than mere offers to consider settlement, and would
reasonably engender more than mere “hope for . . . a continuing employment relationship.” 22
These representations are closer to “actions that the employer should unmistakably have
understood would cause the employee to delay filing [her] charge” while negotiations
continued. 23 The Tenth Circuit has found that equitable tolling may be appropriate where
defendants encouraged a plaintiff to delay filing suit and promised not to raise a statute of
limitations defense if plaintiff waited until after negotiations concluded. 24
Defendant argues that the representations regarding the likelihood of settlement were
mere cajolery, and that it never made any definite promise to settle. Defendants cite to a case

19

See Hulsey v. Kmart, Inc., 43 F.3d 555, 557 (10th Cir. 1994).
See Coke v. Gen. Adjustment Bureau, Inc., 640 F.2d 584, 595 (5th Cir. 1981); United
States v. Reliance Ins. Co., 436 F.2d 1366, 1372 (10th Cir. 1971) (applying equitable estoppel
where defendant affirmatively assured plaintiff of settlement); see also Franci v. Avco Corp.,
Avco Lycoming Div., 538 F. Supp. 250, 254 (D. Conn. 1982) (applying equitable tolling when an
employee did not jeopardize his chances of recall by filing a complaint against his former
employer based on the employer’s actions).
21
Docket No. 22, ¶ 17(a).
22
Price v. Litton Bus. Sys., Inc., 694 F.2d 963, 965 (4th Cir. 1982).
23
Smith v. Johnson Cty. Bd. of Cty. Comm’rs, 56 F. App’x 879, 883 (10th Cir. 2003).
24
Id.
20

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from the District of Kansas, where an employer asked for “‘patience and understanding’ in not
taking any further action until [defendant] reached a decision on [plaintiff’s] settlement
proposal.” 25 There, the court found that the employer did not engage in sufficient affirmative
conduct because it never made a definite promise of settlement. 26 This case is distinguishable
because Defendant also represented that it would not prejudice Plaintiff should she delay her
filing.
The facts of this case are more like those in Smith v. Johnson County Board of County
Commissioners, where defendant’s attorney wrote that defendant would “not raise the statute of
limitations . . . so long as the suit is filed no later than May 1, 2000.” 27 Based on that
communication, the court found it “undisputed that defendants induced Ms. Smith to forbear
filing suit until May 1, 2000.” 28 Like Smith, Defendant’s promise not to prejudice Plaintiff
should she postpone filing induced Plaintiff’s delay.
Defendant argues that even if its actions induced Plaintiff’s inaction, Plaintiff’s delay of
nearly three months after negotiations ended was unreasonable. In Smith, the plaintiff filed suit
later than May 1, 2000—the date defendants gave as the last day that they would not raise the
statute of limitations defense. The court found that although the limitations period may have
been tolled until May 1, further delay made the plaintiff’s claim untimely. 29

25

Foutty v. Equifax Services., Inc., a Div. of Equifax, Inc., 762 F. Supp. 295, 297–98 (D.
Kan. 1991).
26
Id. at 298.
27
56 F. App’x 879, 883 (10th Cir. 2003).
28
Id.
29
Id.
6

Unlike Smith, this Defendant gave no deadline to file a charge. Excluding the time
during negotiations, the total number of days between Plaintiff’s termination and the filing of her
charge was well under 300. Under these circumstances, Plaintiff’s delay was not unreasonable.
In sum, Plaintiff has pleaded enough facts to justify equitable tolling at this stage.
Defendant may renew its statute of limitations argument at summary judgment if Plaintiff’s
allegations are unsupported by evidence.
It is therefore
ORDERED that Defendant’s Motion to Dismiss for Failure to State a Claim (Docket No.
25) is DENIED.
DATED this 25th day of July, 2017.
BY THE COURT:

Ted Stewart
United States District Judge

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