Giddings v. Media Lodge, Inc.

District Court, D. South Dakota·Decided April 12, 2018·No. 4:17-cv-04068·Unknown

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF SOUTH DAKOTA SOUTHERN DIVISION

CALEB GIDDINGS, 4:17-CV-04068-RAL Plaintiff, OPINION AND ORDER Vs. DENYING MOTION TO DISMISS AND STAYING CASE MEDIA LODGE, INC., IA TECH, LLC, ADAMS KEEGAN, INC., ADAMS KEEGAN- GA, LLC, and JEFF SIEGEL, Defendants.

Plaintiff Caleb Giddings, a Senior Airman in the United States Air Force Reserves, accepted a job as the director of sales for Media Lodge, Inc. (Media Lodge) in the spring of 2015. Shortly thereafter, Giddings left to serve active duty for five-plus months with the Air Force. After returning from active duty, Giddings allegedly was demoted and then terminated from Media Lodge without cause. Giddings sued Media Lodge, Media Lodge’s Chief Executive Officer Jeff Siegel, Media Lodge’s majority owner IA Tech, LLC (IA Tech), Adams Keegan, Inc., and Adams Keegan-GA, LLC alleging that they violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Doc. 41. Media Lodge, Siegel, and IA Tech (collectively “Media Lodge Defendants”) filed a motion arguing that the Federal Arbitration Act and the arbitration clause in Giddings’s employment agreement required this Court to stay or dismiss Giddings’s case and compel arbitration. Doc. 18. Adams Keegan, Inc. and Adams Keegan-GA, LLC (collectively “Adams Keegan” or “Adams Keegan

Defendants’) then moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that Giddings failed to state a claim upon which relief could be granted as against the Adams Keegan Defendants. Doc. 45. This Court granted the Media Lodge Defendants’ motion to compel □ arbitration under the arbitration clause, but stayed the case rather than dismissing it. Doc. 65. For the reasons explained below, this Court now denies the Adams Keegan Defendants’ motion to dismiss and stays the claims against them. L Facts Relevant to Motion to Dismiss Media Lodge is an electronic media marketing company whose content targets outdoor enthusiasts interested in hunting, shooting, and fishing. Doc. 41 at {3. At all times relevant to the amended complaint, Media Lodge maintained a place of business in Sioux Falls, South Dakota. Doc. 41 at [4. Adams Keegan, Inc., a Tennessee corporation, is a national human resources and professional employer organization (PEO) that provides businesses with human resources management services, including hiring and retention services. Doc. 41 at | 8. Adams Keegan-GA is a Georgia company owned and operated by Adams Keegan, Inc. Doc. 41 at J 10. It provides the same services as Adams Keegan, Inc. to clients in the Atlanta, Georgia area. Doc. 41 at [10. According to Giddings, Media Lodge and Adams Keegan both qualify as his employers under USERRA. Doc. 41 at 8-9, 13. Giddings alleges that “all Media Lodge employees were employed through Adams Keegan, including those working at its Sioux Falls, South Dakota location;” that “Adams Keegan contracted to provide employees through a lease agreement to Media Lodge, including but not limited to, providing payroll and human resources’ services;” and that “Adams Keegan retains the authority to hire and fire employees, dictate work rules including the employment handbook policies and procedures and to set the conditions of employment for employees who work at Media Lodge.” Doc. 41 at {fff 8-9.

In early April 2015, Giddings signed an employment agreement with Media Lodge to work as a director of sales. Doc. 21-1; Doc. 41 at {17. Among other things, Giddings’s responsibilities as director of sales included selling advertising for Media Lodge’s network of websites. Doc. 41 at The employment agreement, which stated that it was between “Media Lodge” and “Caleb Giddings,” set forth Giddings’s salary and benefits, Media Lodge’s non- compete and confidentiality policies, and the circumstances under which Media Lodge could terminate Giddings’s employment. Doc. 21-1: The employment agreement did not mention Adams Keegan. Doc. 21-1. Giddings went on mandatory active duty with the United States Air Force from late April 2015 until September 30, 2015. Doc. 41 at { 21. Giddings alleges that when he returned to work upon completing his service, he was assigned sales accounts with a poor likelihood of yielding commissions rather than the high-performing sales accounts he had before going on military leave, Doc. 41 at 9/37, told that he would either have to accept a demotion to a lesser-paying contract position or be “transitioned” out of the company, Doc. 41 at 41, and eventually was terminated, Doc. 41 at 44. Although Giddings’s allegations describing these actions focus on Media Lodge and Siegel, he alleges that “Defendants” (a term that encompasses the Adams Keegan Defendants, Media Lodge, IA Tech, and Siegel), “were involved in the decisions to take” the actions. Doc. 41 at [ 45. Giddings asserts that Defendants violated USERRA by failing to properly reemploy him, demoting him without just cause, and terminating him without just cause. Doc. 41 at [1 49-75. This Court held a hearing on the motions in this case in late 2017. Il. Standard of Review and Requests for Judicial Notice

On a motion to dismiss under Rule 12(b)(6), courts must accept a plaintiffs factual allegations as true and construe all inferences in the plaintiff's favor, but need not accept a plaintiffs legal conclusions. Retro Television Network, Inc. v. Luken Comme’ns, LLC, 696 F.3d 766, 768-69 (8th Cir. 2012). To survive a motion to dismiss for failure to state a claim, 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). Although detailed factual allegations are unnecessary, the plaintiff must plead enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible on its face “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” Iqbal, 556 U.S. at 678, “even if it strikes a savvy judge that actual proof of those facts is improbable, and ‘that a recovery is very remote and unlikely,’” Twombly, 550 U.S. at 556 (quoting Scheuer _v. Rhodes, 416 U.S. 232, 236 (1974)). Still, “conclusory statements” and “naked assertion[s] devoid of further factual enhancement” do not satisfy the plausibility. standard. Iqbal, 556 U.S. at 678 (alteration in original) (citation and internal marks omitted). When determining whether to grant a Rule 12(b)(6) motion, a court generally must ignore

materials outside the pleadings, but it may “consider matters incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint whose authenticity is unquestioned . . . without converting the motion into one for summary judgment.” Dittmer Props., L.P. v. EDIC, 708 F.3d toll, 1021 (8th Cir. 2013) (internal marks omitted) (quoting Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 931 n.3 (8th Cir. 2012)). Both parties

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