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Charles v. N.G.T. Corp.

United States District Court, W.D. Kentucky, Louisville Division

March 21, 2019



          Greg N. Stivers, Chief Judge United States District Court

         This matter is before the Court on Defendant's Motion for Summary Judgment (DN 38). The motion is now ripe for a decision. For the reasons outlined below, the motion is GRANTED.


         On February 9, 2009, Plaintiff Cindy Charles (“Charles') was hired by Defendant N.G.T. Corporation (“NGT”) as a sales representative; at the time of her hiring she was 49 years of age. (Compl. ¶ 7, DN 1-1; Charles Dep. 29:2-6, Sept. 27, 2017, DN 38-7). NGT, which does business as Coverall Service Company, “is a franchisor of commercial cleaning franchises throughout the United States.” (Schroter Dep. 8:11-13, Sept. 28, 2017, DN 38-3; Def.'s Mem. Supp. Mot. Summ. J. 1, DN 38-1).

         During the pertinent time period, NGT had seven different territories-one of which was Louisville, Kentucky. (Schroter Dep. 15:1-7). Each of those territories was overseen by a regional director and, prior to her termination, Charles served as the regional director for Louisville. (Charles Dep. 100:24-101:5; Schroter Dep. 15:7-8). Regional directors are responsible for overseeing the sales and operations staff comprised of sales representatives, franchise advisors, and administrative staff. (Schroter Dep. 29:14-19). Within the management structure of NGT, the regional directors report to Michael Ward (“Ward”), Vice President of Operations, and Scott Schroter (“Schroter”), Executive Vice President, which along with many other members of management operate out of NGT's executive officer in Columbia, Maryland.[1] (Schroter Suppl. Decl. ¶ 7, DN 44-5; Schroter Dep. 26:5-14, 27:10-28:3). At the top of NGT's management structure are: Tom Gilliland (“Gilliland”), President and Chief Executive Officer, who lives in Jacksonville, Florida; Dick Grummell (“Grummell”), Vice President and Chief Operating Officer, who lives in Phoenix, Arizona; and Earol Bert (“Bert”), Vice President and Chief Financial Officer, who lives in Fort Myers, Florida. (Schroter Dep. 24:20-25:9).

         The parties disagree on the events precipitating Charles' termination on April 25, 2016. In general, NGT maintains that it terminated Charles' employment due to poor job performance, while Charles contends that it was due to age discrimination and in retaliation for reporting workplace misconduct. At the time of her termination, Charles was 56 years of age. (Charles Dep. 211:13-21).

         Charles filed this action in Jefferson Circuit Court, Kentucky, asserting claims of age discrimination and retaliation in violation of the Kentucky Civil Rights Act (“KCRA”), KRS Chapter 344; wrongful termination; negligent retention and supervision; and intentional infliction of emotional distress (“IIED”). (Compl. ¶¶ 11-40). NGT timely removed the case to this Court. (Notice Removal, DN 1).


         This Court has subject-matter jurisdiction of this matter based upon diversity jurisdiction. See 28 U.S.C. § 1332.


         In ruling on a motion for summary judgment, the Court must determine whether there is any genuine issue of material fact that would preclude entry of judgment for the moving party as a matter of law. See Fed.R.Civ.P. 56(a). The moving party bears the initial burden stating the basis for the motion and identifying evidence in the record that demonstrates an absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the moving party satisfies its burden, the non-moving party must then produce specific evidence establishing the existence of a genuine issue of fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

         While the Court must view the evidence in the light most favorable to the non-moving party, the non-moving party must do more than merely show the existence of some “metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (citation omitted). Rather, the non-moving party must present specific facts proving that a genuine factual issue exists by “citing to particular parts of the materials in the record” or by “showing that the materials cited do not establish the absence . . . of a genuine dispute.” Fed.R.Civ.P. 56(c)(1). “The mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson, 477 U.S. at 252.


         In NGT's motion, it seeks summary judgment on Charles' claims. (Def.'s Mem. Supp. Mot. Dismiss 16-38). Each of the claims is addressed below.

         A. KCRA Claims

         In the Complaint, Charles asserts two distinct claims under the KCRA: age discrimination and retaliation. (Compl. ¶¶ 11-24). As the Kentucky Supreme Court has noted, “[i]n 1966, the General Assembly passed the KCRA to place the Commonwealth on par with the protections guaranteed in the Federal Civil Rights Act of 1964.” Bd. of Regents of N. Ky. Univ. v. Weickgenannt, 485 S.W.3d 299, 305 (Ky. 2016). The KCRA was subsequently amended to reflect added federal protections including claims brought under the Age Discrimination in Employment Act of 1967 (“ADEA”). See Id. at 305 n.3 (citing KRS 344.020(1)). As this Court has explained, “[c]laims brought under the KCRA are ‘analyzed in the same manner' as ADEA claims.” Winchester v. City of Hopkinsville, 93 F.Supp.3d 752, 762 (W.D. Ky. 2015) (citations omitted).

         1. Age Discrimination

         The Court will first consider Charles' age discrimination under the KCRA. NGT contends that this claim fails as a matter of law because NGT is not subject to the KCRA because it did not have a sufficient No. of employees to qualify as an employer. (Def.'s Mem. Supp. Mot. Dismiss 16, 22-24). Charles argues that there is sufficient evidence that NGT is an employer and relies upon her own declaration. (Pl.'s Resp. Def.'s Mot. Summ J. 23-25, DN 43).

         As the Sixth Circuit has instructed, “[t]he numerosity threshold is an element of the plaintiff's case rather than a jurisdictional requirement.” Sanford v. Main Street Baptist Church Manor, Inc., 449 Fed.Appx. 488, 491 (6th Cir. 2011) (citing Arbaugh v. Y & H Corp., 546 U.S. 500, 504 (2006)). Thus, the Court must determine whether NGT is an employer. If NGT is not, Charles cannot prove a prima facie case of age discrimination.

         Under the KCRA, the term “employer” is defined as “a person who has eight (8) or more employees within the state in each of twenty (20) or more calendar weeks in the current or preceding calendar year and an agent of such a person . . . .” KRS 344.030(2). Charles was terminated in 2016, so the Court must determine NGT's Kentucky employees in 2015 and 2016.

         Because NGT operated in multiple states, the Court also must determine which employees count for the purpose of KRS 344.030(2). As this Court has previously noted, the phrase “‘[w]ithin the state' has been interpreted to mean ‘physically within the state,' and not to refer to those ‘located outside of Kentucky [who] interact [] with individuals inside of the state.'” Himmelheber v. ev3, Inc., No. 3:07-CV-593-H, 2008 WL 360694, at *1 (W.D. Ky. Feb. 8, 2008) (second and third alterations in original) (quoting Holmes v. Fieldstone Mortg. Co., No. 05-230-C, 2006 WL 1523210, at *1 (W.D. Ky. May 25, 2006)); see also Wright v. Swigart, No. 2016-CA-000854-MR, 2018 WL 565824, at *3 (Ky. App. Jan. 26, 2018) (“The limitation of the KCRA to employers with eight or more employees ‘within the state' in the required time precludes the KCRA from having extraterritorial application. Under the terms of the statute, to be counted as an employee, physical presence ‘within the state' of Kentucky is required. In [Union Underwear Co. v. Barnhart, 50 S.W.3d 188, 191-93 (Ky. 2001)], the Court stressed that the KCRA is a supplement to the protections afforded employees under the federal law and cautioned that the KCRA must be interpreted to ‘avoid running afoul of the Commerce Clause of the United States Constitution.' The express language of the statute excludes the argument that merely because a company conducts business in Kentucky it is subject to the provisions of the KCRA.” (internal citations omitted)).

         In support of its motion, NGT proffered two declarations from Sue Clausen (“Clausen”), NGT's Accounting Manager, who reviewed NGT's employee personnel files and payroll records for employees working for NGT during the relevant years. (Clausen Decl. ¶¶ 4, 19-20, DN 38-8; Clausen Suppl. Dec. ¶¶ 3-7, DN ...

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