Two weeks ago, the
Sixth Circuit Court of Appeals in Cincinnati reversed the dismissal of a race
discrimination complaint where the plaintiff had not named all of the
defendants as respondents in her EEOC Charge. Lockhart v.
Holiday Inn Express Southwind, No. 12-6309
(6th Cir. 7-29-13). In her
EEOC Charge, the plaintiff had named only the trade name of the hotel, as
opposed to the name of the partnership or partners who owned it. In response to her amended complaint (which
was filed and served two years after she first filed her lawsuit), the individual defendants raised the affirmative
defense that she had failed to exhaust her administrative remedies by first
filing an EEOC Charge against them and then successfully moved to dismiss the
complaint. The Sixth Circuit found that the amended
complaint’s allegations about ownership were sufficient to survive a motion to
dismiss because it asserted a possible identity of interest between the named
defendants and EEOC respondent.
Moreover, the Court concluded that the new allegations might relate back
to the date that the original complaint had been filed and that the trial court had
erred in not considering whether the plaintiff had good cause in failing to
serve the complaint upon the defendants within 120 days.
According to the
Court’s opinion, after the plaintiff had been fired from her job at the defendant
hotel, she filed a Charge of Discrimination with the EEOC naming the trade name
of the hotel as the respondent. When she
filed suit pro se, the trial court ordered her to amend her complaint because
the defendant hotel was not registered to do business under that name. She then amended her complaint to name the partnership
and the individual partners who owned the hotel. The individual partners moved to dismiss the amended complaint on
the grounds that they had not been named as respondents in her EEOC Charge and
it was too late (i.e., more than 300 days since her termination) to do so now. In
other words, the plaintiff had failed to exhaust her administrative remedies by
first filing an EEOC Charge against them.
The trial court granted their motion and the Sixth Circuit reversed.
As a general rule, a
plaintiff “may only sue an entity for violating civil rights statutes such as
Title VII . . . if it named the same entity in its prior EEOC charge.” Szoke
v. United Parcel Serv. of Am., Inc., 398 F. App’x 145, 153 (6th Cir. 2010) . . . see
also 42 U.S.C. §
2000e-5(f)(1). This rule is, however, susceptible to a “limited exception”
where there exists a “clear identity of interest” between the party named in
the EEOC charge and the unnamed party that was actually sued.
The Sixth Circuit
follows tests established by the Seventh and Third Circuits to determine
whether a sufficient “identity of interest” exists between the defendant and
respondent named in the EEOC Charge. Under
the Seventh Circuit’s test “an identity of interest exists when the unnamed
party possesses sufficient notice of the claim to participate in voluntary
conciliation proceedings.” Under
the Third Circuit’s test, the court will consider the following factors:
(1) Whether the role of the unnamed party
could through reasonable effort by the complainant be ascertained at the time
of the filing of the EEOC complaint;
(2) Whether, under
the circumstances, the interests of a named [party] are so similar as the
unnamed party’s that for the purpose of obtaining voluntary conciliation and compliance
it would be unnecessary to include the unnamed party in the EEOC proceedings;
(3) Whether its
absence from the EEOC proceedings resulted in actual prejudice to the interests
of the unnamed party;
(4) Whether the
unnamed party has in some way represented to the complainant that its
relationship with the complainant is to be through the named party.
The Sixth Circuit
noted that it is inappropriate to dismiss a complaint based on an affirmative
defense unless the complaint’s own allegations reveal the defense and legally
defeats the claim for relief. In this
case, the complaint alleged that the individual defendants were
co-owner/operators of the hotel that employed her.
This Court has held
that there may be an identity of interest between a corporation and its owners.
. . . at this stage, the record is insufficiently developed to allow us to conduct
the identity-of-interest analyses under Eggleston and Glus. Some, potentially limited, discovery is
necessary before it may be determined whether Defendants have a “clear identity
of interest” with the party named in Plaintiff’s EEOC charge. Therefore, it was
error for the district court to have dismissed Plaintiff’s Title VII claims at
this stage in the litigation.
The defendants also argued that it was too late for her to
amend her complaint to include them as defendants because she was required to
file suit within 90 days of receiving her EEOC right-to-sue letter and her
complaint was not amended and served on them for another two years.
When a plaintiff
seeks to amend a complaint to add a party against whom the claim would otherwise
be barred by the statute of limitations, the amended pleading is considered to
relate back to the date of the original, timely pleading where:
1. “the amendment
asserts a claim or defense that arose out of the conduct, transaction, or
occurrence set out—or attempted to be set out—in the original pleading,” see
Fed. R. Civ. P. 15(c)(1)(B),
and
2. the added party is
“served within 120 days after the [initial] complaint is filed . . . [or] the
plaintiff shows good cause for the failure [to serve the added party within 120
days], see Fed. R. Civ. P. 4(m).
Fed. R. Civ. P.
15(c)(1)(C). If both these criteria are satisfied, then the party may be added
so long as the added party,
3. “received such
notice of the action that it will not be prejudiced in defending on the
merits,” see Fed. R. Civ. P. 15(c)(1)(C)(i), and
4. “knew or should
have known that the action would have been brought against it, but for a mistake
concerning the proper party’s identity,” see Fed. R. Civ. P. 15(c)(1)(C)(ii).
The Court found the
district court erred in applying the 120-day rule “because
it can be excused for good cause.”
However, the trial court failed to consider in this case whether the
plaintiff had good cause to excuse her non-compliance with the 120-day period.
NOTICE: This summary is designed merely to inform and alert you
of recent legal developments. It does not constitute legal advice and does not
apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
