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Spangler v. East Kentucky Power Cooperative, Inc.

United States District Court, E.D. Kentucky, Central Division, Lexington

December 6, 2018



          Danny C. Reeves United States District Judge

         Defendant East Kentucky Power Cooperative, Inc. (“EKPC”) has filed a motion to dismiss Plaintiff Minnie Spangler9');">9;s first Amended Complaint for failure to state a claim for which relief can be granted. [Record No. 8] More specifically, EKPC asserts that Spangler9');">9;s wrongful termination claim is preempted by the Employee Retirement Income Security Act of 19');">974 (“ERISA”). The Court concludes that the defendant9');">9;s argument is correct. Further, Spangler has not pled facts sufficient to state a plausible claim for interference with her rights under ERISA. Therefore, for the reasons explained in more detail below, the defendant9');">9;s motion will be granted.

         I. Factual Background

         Spangler and her husband worked together as full-time employees at EKPC until her husband9');">9;s death on October 11, 2014. [Record No. 6');">6');">6');">6, p. 1-2] Spangler returned to work for EKPC after a brief period mourning the loss of her husband. [Record No. 6');">6');">6');">6, p. 2');">p. 2] She sought help navigating EKPC9');">9;s spousal death benefit options from one of EKPC9');">9;s human resources employees and EKPC9');">9;s General Counsel. [Id.]

         The plaintiff attended a meeting on December 8, 2014, where she allegedly was “verbally assailed, harassed, and physically threatened.” [Id.] Spangler reports that, after the meeting, she went to a hospital for severe chest pains and was subsequently advised to take a leave of absence from EKPC. [Id.] She returned to work a few weeks later but continued to struggle to obtain information about the supplemental death benefits for her husband9');">9;s passing. [Id.] Spangler then contacted a National Rural Electric Cooperate Association (“NRECA”) representative for assistance in figuring out her husband9');">9;s death benefits. [Id.] She attended another meeting with EKPC9');">9;s human resources employee on May 15, 2015, and the employee allegedly verbally assailed and harassed her, “directing her to grab her purse and go home.” [Record No. 6');">6');">6');">6, p. 3] Spangler advised her supervisor following this interaction that she would not return to EKPC. [Id.] She filed suit in state court in Clark County, Kentucky, alleging wrongful termination (Count I) and constructive termination (Count II).

         EKPC moved to dismiss for failure to state a claim in state court on August 17, 2018. [Record No. 1-2] Spangler filed a response on September 28, 2018, in which she mentioned for the first time that her wrongful termination claim was based on an alleged violation of the 29');">9 U.S.C. § 1140, commonly noted as § 510');">10 of the ERISA. [Record No. 1-3] The defendant filed a notice of removal on October 2, 2018, alleging that federal courts have exclusive subject matter jurisdiction over claims arising under ERISA. [Record No. 1, p. 1-2]

         Spangler amended her Complaint on October 12, 2018, re-alleging her claim of wrongful termination (Count I of the First Amended Complaint) and explicitly claiming a violation of ERISA (Count II of the First Amended Complaint). [Record No. 6');">6');">6');">6] The Court denied the first motion to dismiss as moot and EKPC subsequently filed a motion to dismiss the Amended Complaint. [Record No. 8]

         II. Standard of Review

          A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). When evaluating a motion to dismiss under Rule 12(b)(6');">6');">6');">6) of the Federal Rules of Civil Procedure, a court must determine whether the complaint alleges “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.9');">9;” Ashcroft v. Iqbal, 6');">6');">6');">6 U.S. 6');">6');">6');">66');">6');">6');">62');">556');">6');">6');">6 U.S. 6');">6');">6');">66');">6');">6');">62, 6');">6');">6');">678 (2009');">9) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The plausibility standard is met “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. (quoting Twombly, 550 U.S. at 556');">6');">6');">6). While a complaint need not contain detailed factual allegations, a plaintiff must provide more than mere labels and conclusions, and “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. The plaintiff is not required to plead facts showing that the defendant is likely to be responsible for the harm alleged, but the plaintiff must demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556');">6');">6');">6 U.S. at 6');">6');">6');">678.

         In deciding a motion to dismiss under Rule 12(b)(6');">6');">6');">6), a court must “accept all of plaintiff9');">9;s factual allegations as true and determine whether any set of facts consistent with the allegations would entitle the plaintiff to relief.” G.M. Eng9');">9;rs & Assoc., Inc. v. W. Bloomfield Twp., 9');">922 F.2d 328');">9');">922 F.2d 328, 330 (6');">6');">6');">6th Cir. 19');">99');">90). However, a court is not “bound to accept as a true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 6');">6');">6');">65');">478 U.S. 26');">6');">6');">65, 286');">6');">6');">6 (19');">986');">6');">6');">6).

         III. Analysis

         (i) The plaintiff9');">9;s state law termination claim is preempted by ERISA.

         A cause of action for wrongful discharge in violation of public policy arises as a narrow exception to the terminable-at-will doctrine. Hill v. Kentucky Lottery Corp. 327 S.W.3d 412, 420 (Ky. 2010');">10); see also Grzyb v. Evans, 700 S.W.2d 39');">99');">9, 401 (Ky. 19');">985) (discussing the judicial exceptions to the employment-at-will doctrine); Firestone Textile Co. Div., Firestone Tire & Rubber Co. v. Meadows, 6');">6');">6');">66');">6');">6');">66');">6');">6');">6 S.W.2d 730');">6');">6');">6');">66');">6');">6');">66');">6');">6');">6 S.W.2d 730, 732 (Ky. 19');">983) (reviewing the wrongful discharge public policy exception to the terminable at-will doctrine); Barrow v. City of Hillview, 2017 U.S. Dist. LEXIS 205452 *1, *17 (W.D. Ky. 2017) (concluding that to bring a wrongful discharge action one must have been an at-will employee). The plaintiff contends that the motion to dismiss is premature because it has not been proven that she is an at-will employee. [Record No. 9');">9, p. 2');">p. 2] However, Spangler must have been an at-will employee to maintain a claim for wrongful discharge. Assuming Spangler was an at-will employee, her claim is preempted by ERISA.

         Kentucky generally recognizes that an employer may terminate an “at-will employee for good causes, for no causes, or for a cause that some might view as morally indefensible.” Firestone, 6');">6');">6');">66');">6');">6');">66');">6');">6');">6 S.W.2d at 732. The “wrongful discharge exception” applies where the discharge is contrary to a fundamental and well-defined public policy as evidenced by a constitutional or statutory provision. Grzyb, 700 S.W.2d at 401. The Supreme Court of Kentucky has clarified that “only two situations exist where grounds for discharging an employee are so contrary to public policy as to be actionable absent explicit legislative statement prohibiting discharge.” Id. at 402 (internal citations and quotations omitted). They are: “where the alleged reason for discharge of the employee was the ...

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