Bartholomew v. Delahaye CV-95-20-B 11/08/95 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Irene Bartholomew
v. Civil No. 95-20-B
Delahave Group, Inc., Katherine D. Paine, and James Hasl
O R D E R
_____ Defendants Delahaye Group, Inc., Katherine D. Paine, and
James Hasl move to dismiss plaintiff Irene Bartholomew's
Complaint claiming that defendants maintained a hostile work
environment, discharged her in retaliation for complaining about
the work environment and to avoid paying her commissions,
assaulted her, falsely imprisoned her, and intentionally
inflicted emotional distress on her, wrongfully discharged her,
breached her employment contract by failing to pay her the
commissions and violated the New Hampshire Consumer Protection
Act. Plaintiff also claims that I should pierce the corporate
veil to hold defendant Paine liable for any judgement rendered
against Delahaye Group, Inc. For the reasons stated below,
defendants' motion to dismiss is granted regarding plaintiff's
Consumer Protection Act claim and granted in part and denied in
part regarding plaintiffs' hostile work environment, retaliatory
discharge, "piercing the corporate veil," intentional tort,
wrongful discharge, and breach of contract claims. I. BACKGROUND
Plaintiff alleges the following facts:
Plaintiff began working for defendant Delahaye Group, Inc.
["Delahaye"] a of which defendant Paine was the sole officer and
shareholder, on July 10, 1992. Delahaye performs marketing and
advertising analysis. Most of Delahaye's clients are high-tech
computer companies. Plaintiff was hired to use her expertise in
computer technology to translate clients' difficult technical
language for Delahaye's account executives so that Delahaye could
serve its clients more effectively. Delahaye agreed to pay
plaintiff a salary of $35,000 per year plus commissions on all
the new business she generated.
Plaintiff was specifically assigned to cater to Intel
Corporation, one of Delahaye's major new clients. She was very
successful. When plaintiff began working for Delahaye, Intel did
approximately $80,000 to $100,000 worth of business with
Delahaye. By December 8, 1993, when plaintiff was terminated,
Intel was doing approximately $400,000 worth of business with
Delahaye. Earlier that year, following an internal
reorganization at Delahaye, Intel demanded that Delahaye place
plaintiff in charge of its account.
Despite her success, plaintiff found it difficult to work at
Delahaye. Her co-workers used vulgar language, fondled each
other's necks, shoulders and earlobes, addressed each other by
sexually charged nicknames, and freguently interrupted
plaintiff's business conversations to hug or kiss or tell sexual
- 2 - jokes or to graphically describe various sexual acts. They also
intertwined their legs and arms during staff conferences. To
convene office meetings, Delahaye's vice president of production
would announce "All you penis-breaths and bimbos get in here! We
have a meeting!" over the public address system.
Plaintiff found this behavior ubiguitous and inescapable.
She complained repeatedly to defendant Paine, Delahaye's
president, and to other superiors, to no avail. She also
complained to James Varn, an independent consultant who Paine
hired to handle Delahaye's personnel problems. Paine simply told
plaintiff that she, not Delahaye, had to change, and did nothing
to solve the problem.
Defendants Delahaye and Paine punished plaintiff for
complaining about the work environment at Delahaye by criticizing
her interpersonal skills in her six-month employee evaluation.
Although plaintiff's productivity and technical skill were
outstanding, the evaluation stated that plaintiff had difficulty
with "teamwork" and was "abrasive." Subseguently, plaintiff was
branded a "troublemaker" and told that she "didn't fit in" at
Delahaye.
Defendant Hasl was hired on December 1, 1993. One of his
duties was to get rid of plaintiff. Delahaye announced that Hasl
would increase productivity by evaluating each employee's work
and recommending ways to eliminate waste. Without conducting any
such evaluation of plaintiff or any other employee, acting on
behalf of defendants Paine and Delahaye, Hasl fired plaintiff on
- 3 - December 8, 1993, to punish her for complaining of the work
environment at Delahaye and to deprive her of commissions which
she had earned. As plaintiff cleaned out her desk, Hasl
attempted to bully plaintiff into signing a document entitled
"Terms of Termination" which significantly altered the terms of
plaintiff's termination in Delahaye's favor. Hasl hovered
menacingly over plaintiff and told her that she "was not leaving
the building until she signed the memorandum." He physically
blocked her egress from her work area. Finally, Hasl agreed to
let plaintiff leave if she signed a document stating only that
she had read the "Terms of Termination" memorandum. He then
escorted her all the way to her car. This incident distressed
and humiliated plaintiff.
Just before her termination, plaintiff had procured a
substantial new contract from Intel Corporation for Delahaye for
which Delahaye owed her a commission. Delahaye also owed
plaintiff commissions for procuring a number of smaller
contracts. Delahaye terminated plaintiff in part to avoid paying
her these commissions, and continues to refuse to pay her these
commissions.
Plaintiff filed a complaint on January 13, 1995, claiming
that:
1) Defendants violated Title VII of the Civil Rights Act of 1964, 42 U.S.C.A. § 2000e et sea. (West 1994), by maintaining and/or condoning a hostile work environment (Count I);
2) Defendants violated New Hampshire's Law Against Discrimination, N.H. Rev. Stat. Ann. § 354-A:l (1984) and New Hampshire's Egual Pay Act, N.H. Rev. Stat. Ann. § 275:37
- 4 - (1984) (Count II);
3) Via defendant Hasl, defendants assaulted, falsely imprisoned, and intentionally inflicted emotional distress on plaintiff (Counts III-V);
4) Defendants wrongfully terminated plaintiff (Count VI);
5) Defendant Delahaye Group, Inc. breached its employment contract with plaintiff (Count VII);
6) Defendants violated New Hampshire's Consumer Protection Act, N.H. Rev. Stat. Ann. § 358-A (1984) (Count VIII); and
7) Defendant Paine should be liable for any judgement rendered against defendant Delahaye Group, Inc. (Count IX).
II. STANDARD OF REVIEW
When considering a motion to dismiss a complaint, I accept
the well-pleaded factual allegations in the complaint as true and
then determine whether the allegations are sufficient, under any
theory, to state a claim for the relief sought. Armstrong v.
Jefferson Smurfit Corp., 30 F.3d 11, 12 (1st Cir. 1994). Neither
bald assertions nor legal conclusions enjoy the presumption of
truth. United States v. AVX Corp., 962 F.2d 108, 115 (1st Cir.
1992). I will, however, draw all reasonable inferences in
plaintiff's favor. Rockwell v. Cape Cod Hosp., 26 F.3d 254, 255
(1st Cir. 1994). I must not consider facts not alleged in the
complaint unless I decide to treat the motion to dismiss as a
motion for summary judgment. Fed. R. Civ. P. 12(b)(6).
Cooperativa de Ahorro Y Credito Aquada v. Kidder, Peabody Co.,
993 F.2d 269, 272-73 (1st Cir. 1993), cert, denied, 115 S.Ct.
1792 (1995).
- 5 - III. DISCUSSION
A. Count I: Sexual Harassment and Retaliatory Discharge
1. Sexual Harassment
_____ Plaintiff alleges that defendants violated Title VII of the
Civil Rights Act of 1964, 42 U.S.C. § 2000e-2 ("Title VII") by
participating in and condoning a hostile work environment. In
Meritor Savings Bank, F.S.B. v. Vinson, 477 U.S. 57 (1986), the
United States Supreme Court stated, "a plaintiff may establish a
violation of Title VII by proving that discrimination based on
sex has created a hostile or abusive work environment." I d . at
66; see also Harris v. Forklift Sv s ., 114 S.Ct. 367, 370 (1993).
Defendants argue that the conduct plaintiff endured while
employed at Delahaye was not discrimination based upon sex for
four reasons. First, defendants argue that they did not
discriminate against plaintiff, but instead, her "sensibilities
were offended" by the vulgar, but "gender-neutral" behavior at
Delahaye. Second, defendants imply that because men also were
exposed to the conduct of which plaintiff complains, if it was
sexual harassment, it was non-discriminatory. Third, defendants
argue that they did not discriminate against plaintiff because
the conduct of which she complains was not specifically directed
at her. Fourth, defendants argue that they committed no
actionable discrimination because most of plaintiff's supervisors
and co-workers were women, and women engaged in the allegedly
offensive conduct.
- 6 - First, defendants argue that plaintiff has confused gender-
neutral vulgarity with sexual harassment. Assuming plaintiff's
allegations to be true and drawing all reasonable inferences in
her favor, I disagree. Plaintiff alleges, among other things,
that her co-workers freguently embraced and caressed each other
and interrupted work to tell each other sexually explicit
stories. It is reasonable to infer that at least some of this
conduct was directed to women on the basis of their sex. More
importantly, plaintiff specifically alleges that Delahaye's vice-
president of production typically convened office meetings by
announcing over the office P.A. system, "All you penis-breaths
and bimbos get in here!" Defendants fail to explain how terms
like "penis-breath" and "bimbo" could possibly be gender-neutral.
Second, defendants imply that the conduct endured by
plaintiff was not discrimination because, if it was sexual
harassment, men and women alike were exposed to it.1 In other
words, defendants argue that conduct which discriminates against
1 Defendants do not state clearly exactly what their argument is. If defendants are instead arguing that men and women were egually sexually harassed at Delahaye, and therefore the sexual harassment of plaintiff was non-discriminatory, plaintiff's allegations, read in the light most favorable to her, do not support them. Therefore I need not answer the guestion of whether egual opportunity sexual harassment constitutes discrimination under Title VII. Compare Steiner v. Showboat Operating C o ., 25 F.3d 1459, 1463-64 (9th Cir. 1994), cert, den. 115 S.Ct. 733 (1995), with Rabidue v. Osceola Ref. Co., Div. of Texas-American Petrochemicals 805 F.2d 611, 620 (6th Cir. 1986) (citing Henson v. City of Dundee, 682 F.2d 897, 904 (11th Cir. 1982)), cert, denied, 481 U.S. 1041 (1987), criticized bv Ellison v. Bradv 924 F.2d 872 (9th Cir. Cal. 1991) and disapproved bv Harris v. Forklift Svs., 114 S. C t . 367 (1993).
- 7 - women due to their gender is non-discriminatory if observed by
men. I reject this argument. Sexual harassment of women is
gender discrimination, no matter whether men happen to be exposed
to it. See Hutchison v. Amateur Electronic Supply, 42 F.3d 1037,
1043 (7th Cir. 1994) (fact that discrimination against women was
egregious enough to offend men as well did not cure
discrimination).
Third, defendants argue that plaintiff has failed to allege
discrimination because she has not alleged that the offensive
conduct was directed at her. This argument is factually and
legally incorrect. First, as stated above, plaintiff alleges
that an officer of Delahaye called her "penis-breath" and "bimbo"
to summon her and other employees to office meetings, and that
other employees freguently interrupted her business conversations
to tell sexually explicit stories. Second, defendant's argument
would reguire me to ignore the Supreme Court's choice of the word
"environment" in describing this cause of action. See Meritor,
477 U.S. at 66. "Environment" implies that in determining
whether defendants discriminated against plaintiff, I must
consider her entire employment situation, including derogatory
conduct towards women but not aimed specifically at plaintiff.
See Lipsett v. University of Puerto Rico, 864 F.2d 881, 905 (1st
Cir. 1988); Hicks v. Gates Rubber Co . , 833 F.2d 1406, 1415, (10th
Cir. 1987); Vinson v. Taylor, 753 F.2d 141, 146 (D.C. Cir. 1985),
a f f 'd 477 U.S. 57 (1986), ("[e]ven a woman who was never herself
the object of harassment might have a Title VII claim if she were forced to work in an atmosphere in which such harassment was
pervasive").
_____ Fourth, defendants argue that there was no discrimination
against plaintiff in violation of Title VII because (1)
plaintiff's supervisors and co-workers were predominantly women,
and (2) women as well as men participated in or condoned the
conduct of which plaintiff complains. The first argument rests
on facts not alleged by plaintiff in her complaint. Because I
decline to treat this as a motion for summary judgment, I may not
consider the facts presented by defendants. Fed. R. Civ. P.
1 2 (b)(6). Cooperativa de Ahorro Y Credito, 993 F.2d at 272-73.
Even if I could consider it, the mere fact that plaintiff's
supervisors and co-workers were predominantly women would be only
marginally relevant to my determination of whether plaintiff
endured a hostile work environment. Defendants' second argument
is also erroneous. That some women participate in or condone
sexual harassment does not shield that conduct from the sanctions
of Title VII. See, e.g., E.E.O.C. v. Hacienda Hotel, 881 F.2d
1504, 1507, 1515 (9th Cir. 1989)1 (Title VII violated where
female supervisor laughed at male supervisor's sexual harassment
of female maid and called maid "slut," "dog," and "whore").
Furthermore, to be prohibited by Title VII, conduct "need not
take the form of sexual advances or of other incidents with
clearly sexual overtones." Lipsett, 864 F.2d at 905, guoting
McKinney v. Dole, 765 F.2d 1129, 1138-39. In Lipsett, male
surgeons' constant statements to female residents that women are incapable of being surgeons, though not explicitly sexual, were
"nonetheless charged with anti-female animus, and therefore could
be found to have significantly contributed to the hostile
environment." Id. Defendants have failed to demonstrate why
men, but not women, violate Title VII when they subject other
women to conduct which is "charged with anti-female animus."
2. Retaliatory Discharge
Defendants treat plaintiff's sexual harassment and
retaliatory discharge claims as the same claim. This is
incorrect. A plaintiff who fails to state a claim of sexual
harassment may nevertheless succeed in stating a claim of
retaliatory discharge. See, e.g., Wyatt v. City of Boston, 35
F.3d 13, 15 (1st Cir. 1994); Petitti v. New England Tel. & Tel.
Co., 909 F .2d 28, 33-34 (1st Cir. 1990). 42 U.S.C. § 2000e-3(a)
states, in pertinent part:
It shall be an unlawful employment practice for an employer to discriminate against [an employee] . . . because [that employee] has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.
To state a claim under the "opposition" clause of this
section, plaintiff need only allege facts showing that she
reasonably believed she was subject to sexual harassment. Wyatt,
35 F.3d at 15. To state a claim under the "participation"
clause, plaintiff need not even allege facts showing that she
reasonably believed she suffered sexual harassment. Id. To
state a claim under either clause, plaintiff must allege that
- 10 - (1) [she] engaged in a protected activity as an employee, (2)
[she] was subseguently discharged . . . and (3) there was a
causal connection between the protected activity and the
discharge.'" Id., guoting Hoeppner v. Crotched Mountain
Rehabilitation Ctr., 31 F.3d 9, 14 (1st Cir. 1994) . Reading
plaintiff's complaint in the light most favorable to her, I find
that she has successfully stated a claim for retaliatory
discharge.
3. Individual Liability of Defendants Paine and Hasl
Defendants Paine and Hasl argue that even if plaintiff has
plead facts sufficient to state hostile environment and unlawful
retaliation claims, only defendant Delahaye, plaintiff's
employer, is liable under Title VII.
It is true that Title VII applies only to "employers," but
42 U.S.C. § 2000e(b) states:
The term 'employer' means a person engaged in industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year, and any agent of such a person . . . . (Emphasis added.)
"Agent" has been judicially defined as one who "serves in a
supervisory position and exercises significant control over the
plaintiff's hiring, firing or conditions of employment."
Lamirande v. Resolution Trust Corp., 834 F.Supp. 526, 529 (D.N.H.
1993), guoting Paroline v. Unisys Corp., 879 F.2d 100, 104 (4th
Cir. 1989) .
There is significant disagreement in this circuit concerning
whether 42 U.S.C. § 2000e(b) makes supervisors liable as
- 11 - individuals or whether the "any agent" language was merely
Congress' way of reminding the courts of the doctrine of
respondeat superior. Compare Lamirande v. Resolution Trust
Corp., 834 F.Supp. 526, 529 (D.N.H. 1993) with Hernandez v.
Miranda Velez, 1994 WL 394855, *6 (D.P.R. 1994); cf. Carparts
Distribution Ctr. v. Automotive Wholesalers Ass'n 37 F.3d 12, 17-
18 (1st Cir. 1994) (corporation administering employee's health
insurance plan potentially liable under the ADA because it is an
agent of employer).
The Sixth Circuit Court of Appeals indicated briefly in
dicta that agents may be individually liable, see Jones v.
Continental Corp., 789 F.2d 1225 (6th Cir. 1986), the Third
Circuit has not addressed the issue, and the Fourth and Tenth
Circuits are ambivalent, compare Birkbeck v. Marvel Lighting
Corp., 30 F.3d 507, 510 (4th Cir. 1994), cert, denied, 115 S. C t .
666 (1994), with Paroline v. Unisys Corp., 879 F.2d 100, 104 (4th
Cir. 1989), see Ball v. Renner, 54 F.3d 664, 665-68 (10th Cir.
1995). The courts of appeal for every other circuit have
explicitly held that the "any agent" language of 42 U.S.C. §
2000e(b) was merely Congress' way of reminding courts of the
doctrine of respondeat superior, and does not make supervisors
liable as individuals. See Miller v. Maxwell's Int'l, 991 F.2d
583, 587-88 (9th Cir. 1993), cert, denied. Miller v. La Rosa, 114
S.Ct. 1049 (1994); Tomka v. Seiler Corp., 1995 WL 57112, *16 (2d
Cir. 1995); Grant v. Lone Star Co., 21 F.3d 649, 652-53 (5th Cir.
1994), cert, denied, 115 S. C t . 574 (1994); United States EEOC v.
- 12 - AIC Sec. Investigations, 55 F.3d 1276, 1282 (7th Cir. 1995);
Lenhardt v. Basic Inst, of Technology, 55 F.3d 377, 381 (8th Cir.
1995)(no individual liability created by similar language in
state statute); Smith v. Lomax, 45 F.3d 402, 403 n.4 (11th Cir.
1995), citing Busbv v. City of Orlando, 931 F.2d 764, 772 (11th
Cir. 1991); Gary v. Long, 59 F.3d 1391, 1399 (D.C.Cir. 1995). In
this instance, I am persuaded that the majority rule is correct.
Accordingly, these claims are dismissed.
B. Count II: New Hampshire's Law Against Discrimination and New Hampshire's Equal Pay Act
1. New Hampshire's Law Against Discrimination
_____ Plaintiff also alleges that defendant violated New
Hampshire's Law Against Discrimination, N.H. Rev. Stat. Ann.
§ 354-A:l (1984). That statute states, in pertinent part:
It shall be an unlawful discriminatory practice . . . [f]or an employer, because of the age, sex, race, color, marital status, physical or mental disability, religious creed, or national origin of any individual, to refuse to hire or employ or to bar or to discharge from employment such individual or to discriminate against such individual in compensation or in terms conditions, or privileges of employment, unless based upon a bona fide occupational gualification.
I d . at § 354-A:7(I).
No New Hampshire cases interpreting § 354-A address the
issues presented by this case. I may, however, rely on federal
case law interpreting Title VII to interpret § 354-A. See, e.g..
Burns v. Gorham, 122 N.H. 401, 406 (1982); Scarborough v. Arnold,
117 N.H. 803, 807 (1977); Planchet v. New Hampshire Hosp., 115
N.H. 361, 362 (1975). Section 354-A itself states that
"'unlawful discriminatory practice1 includes . . . [p]ractices
- 13 - prohibited by the federal Civil Rights Act of 1964 . . . N.H.
Rev. Stat. Ann. § 354-A:3(XV). Since I hold that plaintiff has
stated a claim against the corporate defendant under Title VII
(see above discussion) , I also hold that plaintiff has stated a
claim against the corporation under § 354-A, and I deny
defendants' motion to dismiss, except as to any sexual harassment
claim against the individual defendants.
2. New Hampshire's Equal Pay Act
Plaintiff also alleges that defendants violated N.H. Rev.
Stat. Ann. § 275:37 ["275:37"] which states:
Equal Pay. No employer shall discriminate in the payment of wages as between the sexes, or shall pay any female in his employ salary or wage rates less than the rates paid to male employees for equal work or work on the same operations.
Plaintiff does not allege that her rate of pay was lower
than that of similarly situated men. Neither does she allege any
facts indicating that Delahaye does not terminate and withhold
commissions or benefits from men who complain about aspects of
the work environment. Section 275:37 necessarily involves a
comparison of the employer's treatment of male and female
employees. Since plaintiff has not alleged any facts indicating
that she was paid less due to her gender, I dismiss plaintiff's
complaint regarding 275:37 for failure to state a claim.
C. Counts III, IV, V: Intentional Torts
In Counts III, IV, and V, plaintiff asserts claims against
defendants for the intentional torts of assault, false
imprisonment, and intentional infliction of emotional distress.
- 14 - Defendants move to dismiss Counts III and IV as to defendants
Delahaye and Paine, and Count V as to all defendants, contending
that these claims are barred by the exclusivity provision of New
Hampshire's workers compensation statute, N.H. Rev. Stat. Ann. §
2 81- A :8 (1987) ["281-A:8"].
The version of 281-A:8 in effect at the time of plaintiff's
employment (not materially different than the current version)
read, in pertinent part: _____
_____ Employees Presumed To Have Accepted. An employee of an employer subject to this chapter shall be conclusively presumed to have accepted the provisions hereof and on behalf of himself, or his personal or legal representatives, to have waived all rights of action whether at common law or by statute or otherwise: I. Against the employer or the employer's insurance carrier; and II. Except for intentional torts, against any officer, director, agent, servant, or employee acting on behalf of the employer or the employer's insurance carrier.
(emphasis added) N.H. Rev. Stat. Ann. § 281:12.
Section 281-A:8 bars employees from suing their employers
for both intentional and unintentional torts. See O'Keefe v.
Associated Grocers, 120 N.H. 834, 835-36 (1980) ("statute clearly
prohibits an employee from maintaining a common-law action
against his employer for personal injuries arising out of the
employment relationship"); Censullo v. Brenka Video, Inc., 989
F.2d 40, 43 (1st Cir. 1993); Bourque v. B o w , 736 F.Supp. 398, 404
(D.N.H. 1990). "Intentional tort" includes assault, false
imprisonment, and intentional infliction of emotional distress.
Thompson v. Forest, 136 N.H. 215, 219 (1992). Therefore, I
dismiss plaintiffs' intentional tort claims against defendant
- 15 - Delahaye.
Section 281-A:8 also bars employees from suing their co
workers for unintentional torts committed in the course of their
employment. See i d . It does not, however, bar employees from
suing their co-workers for intentional torts. See id. ; Censullo,
989 F.2d at 44. Defendant Hasl was clearly plaintiff's co
employee, not her employer, therefore I deny defendants' motion
to dismiss plaintiff's intentional infliction of emotional
distress claim against him.
Defendant Paine presents a more difficult problem. To be
able to "pierce the corporate veil" to reach Paine's assets for
any judgment she may win against Delahaye, plaintiff argues in
support of her Count IX that Paine was Delahaye's "alter-ego." If
that is so, and if Paine was acting only as the owner of the
corporation, Paine is entitled to immunity from suit under §
281-A:8. Stevens v. Lewis, 118 N.H. 367, 369-70 (1978) ("The
jury must determine whether the defendant is the corporate alter
ego . . . [I]t must next determine whether the function [the
defendant] allegedly performed negligently is a responsibility of
the corporation or a responsibility of one employee to another.")
However, even if Paine was the alter-ego of the corporation, if
she acted in a "dual capacity," as employer and as an employee,
she may be sued as a co-employee under § 281-A:8. Id. See also
Robbins v. Seekamp, 122 N.H. 318, 321 (1982) (recognizing dual
capacity doctrine where employee is injured by a machine
negligently designed by employer); Quinn v. National Gypsum, Co . ,
- 16 - 124 N.H. 418, 420 (1983) (recognizing, but not adopting, dual
capacity doctrine); Tanquav v. Marston, 127 N.H. 572, 576 (1986)
(president and principal shareholder of corporation was not alter
ego, therefore not immune to suit). But see Mello v. Gouin's
Plumbing & Heating Co., 137 N.H. 675, 678-79 (1993), citing
Holzworth v. Fuller, 122 N.H. 643, 645 (1982) (dual capacity
doctrine did not enable employee to sue employer merely because
employer was also owner of land on which injury occurred). Read
in the light most favorable to plaintiff, her complaint
sufficiently alleges that even if Paine was Delahaye's alter ego,
she had a duty as plaintiff's co-employee and supervisor to stop
the alleged sexual harassment. Therefore, I also deny
defendants' motion to dismiss Counts III-V regarding defendant
Paine.
D. Count V I : Wrongful Discharge
Perhaps due to a mistake, defendants' motion to dismiss does
not literally address plaintiff's Count VI claim for wrongful
discharge. In their non-responsive answer to plaintiff's Count
VII, however, defendants argue that plaintiff has failed to state
a claim for wrongful discharge. Because plaintiff responded to
defendants' arguments, I will decide whether plaintiff has stated
a claim for wrongful discharge.
Plaintiff does not dispute defendants' assertion that
plaintiff was an at will employee under New Hampshire law. See
Panto v. Moore Business Forms, Inc., 130 N.H. 730, 739 (1988)
("an indefinite hiring is prima facie a hiring at will . . . in
- 17 - the absence of legislative and judicial exception or a collective
bargaining agreement") (guotations omitted). As an at-will
employee, to state a claim for wrongful discharge, plaintiff must
allege facts indicating that she was terminated (1) out of bad
faith or malice or in retaliation, and (2) for performing acts
which public policy would encourage or for refusing to perform
acts which public policy would condemn. Short v. School Admin.
Unit No. 16. 136 N.H. 76, 84 (1992).
Defendants concede that plaintiff has satisfied the first
reguirement, but they contend that plaintiff has not alleged
facts indicating that her termination violated any public policy.
Refusing to submit to sexual harassment, however, is clearly
encouraged by public policy in New Hampshire. See N.H. Rev.
Stat. Ann. § 354-A:8; Chamberlin v. 101 Realty, Inc., 915 F.2d
777, 786 (1st Cir. 1990); Godfrey v. Perkins-Elmer Corp., 794
F.Supp. 1179, 1187 (1992). Because I have already held that
plaintiff has successfully stated a claim of sexual harassment
under Title VII and New Hampshire' eguivalent, N.H. Rev. Stat.
Ann. § 354-A, I deny defendants' motion to dismiss plaintiff's
claim of wrongful discharge.
E. Count VII: Breach of Contract
Plaintiff alleges that by denying her commissions and other
benefits, defendant Delahaye breached its contract with
plaintiff. Defendants mistakenly respond as if Count VII were a
claim for wrongful discharge. Panto v. Moore Business Forms,
Inc., 130 N.H. 730 (1988), which defendants cite in support,
- 18 - appears to undermine their position. "There is no claim in this
case that Moore cannot lay Panto off," the court summarized,
"Panto simply wants the payments and benefits that Moore
represented its laid-off employees would receive." I d . at 739.
Rejecting Moore's numerous arguments, the court held that,
despite the fact that Panto was an at-will employee. Panto and
Moore had formed a contract which Moore had breached. Id.
Because defendants fail to state clearly why plaintiff cannot
recover on a breach of contract theory, defendants' motion to
dismiss Count VII is denied.
F. Count VIII: Consumer Protection Act
In Count VIII of her complaint, plaintiff alleges that
defendants violated New Hampshire's Consumer Protection Act, N.H.
Rev. Stat. Ann. Ch. 358-A (1984) ("CPA"). The CPA simply states,
in pertinent part:
It shall be unlawful for any person to use any unfair method of competition or any unfair or deceptive practice in the conduct of any trade or commerce within this state.
I d . at 358-A:2.
The CPA lists several examples of prohibited activities, all
of which generally deal with the relationship between businesses
and consumers, none of which deals with the relationship between
employers and employees. See, e.g., i d . at 5 VI (falsely
presenting used goods as new goods) . The CPA also provides a
complete list of exempt transactions which does not include
transactions arising out of an employment. I d . at 358-A:3.
- 19 - Plaintiff argues that the CPA should protect employees for
two reasons. First, employees, properly understood, are merely
consumers who trade their labor for money. Second, people are
more vulnerable as employee-consumers than they are as
marketplace consumers, therefore employees need greater
protection.
The New Hampshire Supreme Court has never decided whether
the CPA applies to employer-employee relations. In Roberts v.
General Motors Corporation, 138 N.H. 532 (1994), it generally
described the scope of the CPA, stating:
The Consumer Protection Act is a comprehensive statute whose language indicates that it should be given broad sweep. Despite its broad language, however, it is not unlimited in scope.
I d . at 538 (citations omitted).2
The court also stated that although the CPA's list of
specific examples of prohibited activities is not exhaustive, the
application of the CPA is limited to the kinds of activities
listed. I d . at 539.
I need not, however, extrapolate from Roberts to decide this
issue. When New Hampshire precedent fails to answer a guestion
regarding the CPA, the New Hampshire Supreme Court turns to "a
well developed body of law defining trade and commerce in
2 In Roberts, General Motors initially indicated that it would allow plaintiff to purchase one of its franchises, but later refused to sell the franchise to plaintiff because it preferred another buyer. See i d . at 534. The New Hampshire Supreme Court held that General Motors' refusal to deal with plaintiff was not an unfair business practice under the CPA. Id. at 539.
- 20 - Massachusetts, where the consumer protection statute . . .
contains exactly the same definition of trade and commerce . . ."
See Chase v. Dorais, 122 N.H. 600, 602, 448 A. 2d 390, 391-92
(1982). Accord, Chroniak v. Golden Inv. Corp., 983 F.2d 1140,
1146 n.ll (1st Cir. 1993). Therefore, I examine the Supreme
Judicial Court of Massachusetts' interpretation of Massachusetts'
consumer protection statute, M.G.L.A c. 93A § 2 ("93A").
In Manning v. Zuckerman, 388 Mass. 8, 444 N.E.2d 1262, 1266
(1983), the Supreme Judicial Court held that 93A does not apply
to conflicts arising from employment. I d . at 15. Manning was
the editor of the Atlantic Monthly, Zuckerman the owner. I d . at
9. Manning claimed that Zuckerman engaged in an unfair or
deceptive business practice within the meaning of 93A by refusing
to pay the retirement benefits mandated by Manning's termination
agreement. I d . at 8-10. The Court reasoned that the
legislature intended to regulate the relationship between
separate marketplace actors, not the relationship between members
of the same company or organization. I d . at 12-13. It
specifically rejected Manning's argument that trading his labor
and services for a salary and other benefits was commerce within
the meaning of 93A. I d . at 13. Accord, Bertrand v. Quincy
Market Cold Storage & Warehouse Co . , 728 F.2d 568, 571 (1st Cir.
1984); Weeks v. Harbor National Bank, 388 Mass. 141, 142-45, 445
N.E.2d 605, 606-08 (1983); Falmouth Ob-Gvn Assocs. v. Abisla 417
Mass. 176, 177, 629 N.E.2d 291, 292 (1994); Evans v. Certified
Eng'g & Testing Co., 834 F.Supp. 488, 499 (D. Mass. 1993).
- 21 - I decline to extend the protection of the CPA beyond the
limit set by the Supreme Judicial Court of Massachusetts for that
state's similar statute. Count VIII of plaintiff's complaint is
dismissed.
G. Count IX: Piercing the Corporate Veil
In Count IX of her complaint, plaintiff asks the court to
pierce the corporate veil so that plaintiff may reach defendant
Katherine D. Paine's assets in addition to the assets of Delahaye
Group, Inc., Paine's corporation, to satisfy any judgment she may
win against Delahaye Group, Inc.3 In general, "New Hampshire
courts do not 'hesitate to disregard the fiction of the
corporation' when circumstances would lead to an ineguitable
result." Terren v. Butler, 134 N.H. 635, 639 (1991) (brackets
omitted), citing Ashland Lumber Co. v. Haves, 119 N.H. 440, 441
(1979) (guoting Peter R. Previte, Inc. v. McAllister Florist,
Inc., 113 N.H. 579, 581, 311 (1973)). More specifically, in
Druding v. Allen, 122 N.H. 823, (1982), the New Hampshire Supreme
Court stated that ". . . a court may pierce the corporate veil if
a shareholder suppresses the fact of incorporation, misleads his
creditors as to the corporate assets, or otherwise uses the
corporate entity to promote injustice or fraud." I d . at 827.
A lack of practical separation between the shareholder and
the corporation, so that the corporation is merely the
shareholder's "alter-ego," is an important sign that the
3 In New Hampshire, the eguitable practice of piercing the corporate veil is also called the "alter-ego" doctrine.
- 22 - shareholder has abused the corporate form. See, e.g., Terren,
134 N.H. at 640 (that defendants were sole officers and
shareholders of corporation and commingled corporate and personal
assets was significant factor in decision to pierce corporate
veil). It is not, however, conclusive. The court must yet find
that the shareholder used the corporate form to "promote an
injustice or fraud." See, e.g.. See, e.g.. Village Press v.
Stephen Edward Co., 120 N.H. 469, 471-72, 416 A. 2d 1373 (1980)
(owner of two one-man corporations was not liable for their
debts).
Plaintiff alleges facts sufficient to show that Delahaye is
Paine's alter-ego, e.g., she alleges that Paine did not observe
corporate formalities in making major corporate decisions, but
plaintiff does not specifically allege that Paine used the
corporate form to commit fraud or to promote injustice. At
worst, she alleges that Paine commingled her assets with
Delahaye's assets, paying for personal assets with Delahaye's
money and vice-versa. Commingling personal and corporate assets
is not as egregious an abuse of the corporate form as
transferring money from corporate to personal assets (or vice-
versa) to avoid existing liabilities, see Terren, 134 N.H. at
639-40 and Stephenson v. Stephenson, 111 N.H. 189, 194, 278 A. 2d
351, 355 (1971), concealing the fact of incorporation, or
misleading creditors as to corporate assets. See Druding, 122
N.H. at 827. It would be ineguitable, however, to limit
plaintiff's recovery to Delahaye's assets if Paine has treated
- 23 - Delahaye's assets as her own and paid her private expenses with
Delahaye's money. Therefore, to the extent that plaintiff claims
she should be able to extract any judgment she may win entirely
from Paine's personal assets, defendant's motion to dismiss is
granted, but to the extent that plaintiff claims she should be
able to extract from Paine's personal assets any portion of any
judgment which Delahaye fails to pay, defendant's motion to
dismiss is denied.
IV. CONCLUSION
In sum, for the foregoing reasons, I decide defendants'
motion to < dismiss (document no . 30) as : f ollows:
Count I Granted in part and denied in p a r t .
Count II Granted in part and denied in p a r t .
Counts III-V Granted in part and denied in p a r t .
Count VI Denied.
Count VII Denied.
Count VIII Granted.
Count IX Granted in part and denied in p a r t .
SO ORDERED.
Paul Barbadoro United States District Judge
November 8, 1995
cc: Duncan J. MacCallum, Esg. Lawrence B. Gormley, Esg.
- 24 -