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Sullivan v. Paycor, Inc.

United States District Court, Sixth Circuit

May 23, 2013

TERIN SULLIVAN, Plaintiff,
v.
PAYCOR, INC., Defendant.

MEMORANDUM OPINION AND ORDER

JOHN G. HEYBURN, District Judge.

This matter is before the Court on Defendant's Motion to Dismiss. Plaintiff, Terin Sullivan, brought suit against her former employer, Defendant, Paycor, Inc. ("Paycor"), claiming that Paycor acted improperly during the course of her employment because of her sex and pregnancy. Specifically, Sullivan advances five Counts in her Complaint: (I) gender discrimination in violation of KRS § 344.010; (II) hostile work environment; (III) constructive discharge in violation of KRS § 344.040 by threatening termination; (IV) retaliation in violation of KRS § 344.280; and (V) fraud. Paycor moves for dismissal of Counts II, III, IV, and V. For the forgoing reasons, the Court will sustain in part and deny in part Paycor's motion.

I.

The Court presents the following statement of relevant facts, which are either undisputed or viewed in the light most favorable to Sullivan. In October 2009, Paycor hired Sullivan as a member of the four-person Small Market Division in its Louisville, Kentucky office. During her employment, Sullivan's immediate supervisor, Victor Wolford, discussed his sex life with her and asked Sullivan to arrange dates for him. In October 2010, Wolford commenced an affair with a subordinate, and, as a result, allegedly neglected obligations to train, supervise, and assist Sullivan in her job duties. Consequently, Sullivan sought other employment. Paycor's regional supervisor, Chad Gunnera, discovered Sullivan's resume online and requested she stop looking for another job.

In December 2010, Sullivan informed Gunnera that the relationship between Wolford and his paramour interfered with her ability to perform her job responsibilities. One month later, Sullivan announced her pregnancy. Two weeks after the announcement, she received her first negative performance review. By the end of February, Paycor presented Sullivan with a choice of either resigning immediately, on the condition that Paycor would not contest Sullivan's unemployment claim, or improving her performance within a month or face termination. Finding the former her only practical option, Sullivan resigned, but alleges Paycor contested her unemployment claim.

II.

Sullivan claims that Paycor: (1) discriminated against her on the basis of her gender; (2) created a hostile work environment; (3) constructively discharged her by threatening to terminate her employment following a discrimination complaint and pregnancy announcement; (4) retaliated against her for engaging in protected activities when she reported Wolford's relationship with his paramour and announced her pregnancy; and (5) committed fraud when it falsely represented it would not contest her application for unemployment benefits if she voluntarily resigned. Paycor moves to dismiss all claims except the first, concerning gender discrimination. Sullivan contends the motion is premature, and, even so, that she properly pled the claims in the Complaint and subsequent briefing, such that the Court should deny the motion.

To survive dismissal, "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)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. This Court "must (1) view the complaint in the light most favorable to the plaintiff and (2) take all well-pleaded factual allegations as true." Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009). But, it "need not accept a bare assertion of legal conclusions.'" Id. at 488 (quoting Columbia Natural Res., Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir. 1995)).

While it is unusual to dispose of claims such as these on a motion to dismiss, the Court will consider each claim in turn.

III.

In Count II of the Complaint, Sullivan contends that Wolford subjected her to persistent and unwanted communications of a sexual nature, sufficient to create a hostile work environment claim. The seminal hostile work environment case, Harris v. Forklift Sys., Inc., 510 U.S. 17 (1993), establishes the minimum standards for such a claim. In Harris, the defendant explicitly and routinely targeted the plaintiff with gender-based insults and sexual innuendos, even instructing the plaintiff to retrieve coins from the front pocket of his pants. Id. at 19. The Supreme Court found in favor of the plaintiff, holding that "when the workplace is permeated with discriminatory intimidation, ridicule, and insult, ' that is sufficiently severe or pervasive to alter the conditions of the victim's employment and create an abusive working environment, ' Title VII is violated." Id. (quoting Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 65-67 (1986)).

To establish a prima facie case of hostile work environment on the basis of gender under KRS § 344.040, Sullivan must show: "(1) she is a member of a protected class, (2) she was subjected to unwelcome sexual harassment, (3) the harassment was based on her sex, (4) the harassment created a hostile work environment, and that (5) the employer is vicariously liable." Clark v. United Parcel Serv., Inc., 400 F.3d 341, 347 (6th Cir. 2005) (construing Kentucky law); see, e.g., Thompson v. Louisville Metro Gov't, 2013 WL 191878, *3 (Ky. Ct. App. Jan. 18, 2013).

Here, Sullivan, an undisputed member of a protected class, alleges Wolford regularly discussed his sex life with her and would ask Sullivan to arrange dates for him with women she knew. Sullivan contends that these discussions interfered with her ability to perform her work duties. These facts alone fall well short of establishing a hostile work environment claim under Harris. In particular, the severity or pervasiveness of Wolford's comments are not at all well-established. However, the Complaint need not state every fact in support of a claim. Sullivan has presented a facially plausible hostile work environment claim sufficient to support the reasonable inference that Wolford made these comments because of her gender and that the defendant is liable for the misconduct alleged. Twombly, 550 U.S. at 556. ...


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