Thurston v. Western Alliance Bank

• Court: District Court, D. Arizona
• Decided: March 6, 2024
• Docket: 2:23-cv-01097
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Julie Thurston, No. CV-23-01097-PHX-DLR

10 Plaintiff, ORDER

11 v.

12 Western Alliance Bank, et al.,

13 Defendants. 14 15 Plaintiff Julie Thurston accuses Defendants Western Alliance Bank (“Western 16 Alliance”) and Michelle Lance of violating the Family and Medical Leave Act (“FMLA”) 17 and the Equal Pay Act (“EPA”).1 Before the Court is Defendants’ partial motion to dismiss 18 for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), which is fully 19 briefed. (Docs. 14, 17, 18.) The Court heard oral argument on February 22, 2024. For the 20 following reasons, Defendants’ motion is granted in part. 21 I. Background 22 Thurston began working for Western Alliance as a Senior Product Manager in 23 December 2019. (Doc. 13 at ¶ 12.) Around March 2020, Lance became Thurston’s direct 24 supervisor. (Id. at ¶ 17.) 25 Shortly after beginning her employment, Thurston learned that female Product 26 Analysts were on a lower pay scale than their male peers. (Id. at ¶ 25.) Though not herself 27 a Product Analyst, this discovery led Thurston to believe that she might have been

28 1 Thurston also alleges a state law claim of intentional infliction of emotional distress against Western Alliance, which Western Alliance has not moved to dismiss. 1 underpaid compared to three male Senior Managers2 who performed similar work to her. 2 (Id. at ¶¶ 27–29.) 3 Before Western Alliance hired her, Thurston had been diagnosed with non-celiac 4 gluten intolerance. (Id. at ¶¶ 21–22.) By May 2020, Thurston began to feel that she was not 5 recovering from her diagnosis and saw her physician. (Id. at ¶¶ 22–23.) Thurston notified 6 Defendants of her medical issue because she needed to take time off. (Id. at ¶ 24.) In July, 7 Thurston returned to her physician and was diagnosed with uterine fibroids. (Id. at ¶¶ 35– 8 37.) Throughout these months, Thurston took time off pursuant to Western Alliance’s Paid 9 Time Off (“PTO”) policy. (Id. at ¶¶ 38, 43.) Western Alliance was aware Thurston’s 10 requests for time off were related to her medical issues because she informed Lance of the 11 symptoms and updated Lance about her health problems. (Id. at ¶ 46.) Western Alliance 12 generally granted Thurston’s accommodation requests to work from home during this time. 13 (Id. at ¶ 45.) 14 In August, Thurston received a positive mid-year performance review from Western 15 Alliance. (Id. at ¶ 39.) Lance stated that Thurston was “instrumental” and “a great asset to 16 the team” and expressed that Western Alliance was pleased with how Thurston was 17 assisting her colleagues on projects. (Id. at ¶¶ 39–41.) Though aware Thurston’s medical 18 issues sometimes required accommodations, Lance indicated in Thurston’s mid-year 19 review that Thurston was always available to help her colleagues. (Id. at ¶¶ 49–51.) 20 Thurston notified Defendants around this time, however, that she needed more support 21 from someone with knowledge about consumer accounts. (Id. at ¶ 42.) 22 In late August, Thurston learned she would need surgery and scheduled it for 23 October 2020. (Id. at ¶¶ 47–48.) Thurston used two weeks of PTO to undergo and recover 24 from surgery before returning to work in November. (Id. at ¶ 52). Upon returning, Thurston 25 discovered that Lance had created a new position in consumer accounts, stripping Thurston 26 of her duties. (Id. at ¶ 53.) After she returned, Thurston continued to request remote work 27 and use her PTO to accommodate her medical issues. (Id. at ¶¶ 55–56, 60, 69.) During this

28 2 At oral argument, Thurston clarified that the Senior Managers are Senior Product Managers, and Defendants did not contest this assertion. 1 time, Defendants did not notify Thurston that she could use intermittent leave under the 2 FMLA. (Id. at ¶¶ 57, 60, 69.) 3 In February 2021, Lance demoted Thurston from Senior Product Manager to 4 Product Manager. (Id. at ¶ 66.) Lance also began to complain Thurston was not working 5 enough despite knowing Thurston was working on less visible projects. (Id. at ¶¶ 71–72.) 6 In March, Thurston scheduled an immediate appointment with her physician after a 7 negative reaction to new medicine. (Id. at ¶¶ 75–76.) In late April, Thurston was diagnosed 8 with polycystic ovarian syndrome (“PCOS”). (Id. at ¶ 77.) Within a month of the diagnosis, 9 Lance prepared and presented Thurston with a Performance Improvement Plan (“PIP”). 10 (Id. at ¶¶ 79–80.) The PIP stated that Thurston relied on her colleagues too much, had 11 missed meetings, failed to properly record her PTO, and also reprimanded Thurston for 12 making so many requests to work from home. (Id. at ¶¶ 83–86.) Defendants also presented 13 Thurston with a list of issues to be addressed by June 14, 2021. (Id. at ¶ 90.) Lance 14 scheduled a follow-up meeting for June 14 to assess Thurston’s progress on these issues. 15 (Id. at ¶ 96.) 16 At the end of the initial meeting regarding the PIP, Defendants informed Thurston 17 for the first time that she could use intermittent leave under the FMLA. (Id. at ¶ 92.) 18 Thurston applied for FMLA leave and was approved for intermittent leave on June 4. (Id. 19 at ¶ 93.) Prior to June 14, Defendants postponed the follow-up PIP meeting without 20 rescheduling a date. (Id. at ¶ 98.) Thurston emailed a detailed report of everything she had 21 accomplished to show she had satisfied the goals of the PIP. (Id. at ¶ 98.) 22 On June 18, 2021, two weeks after Thurston was approved for FMLA leave, 23 Defendants terminated her employment. (Id. at ¶¶ 95, 100–01.) When Thurston mentioned 24 delivering on everything in the PIP, Lance, who made the termination decision, stated it 25 was “too little too late.” (Id. at ¶¶ 102–03.) 26 Thurston filed this action on June 15, 2023 (Doc. 1), and an amended complaint on 27 October 11 (Doc. 13). Thurston’s amended complaint alleges, in pertinent part, that 28 Defendants “intentionally and willfully interfered with her right to take leave by failing to 1 notify her of her benefits under the FMLA, . . . discouraging her from taking leave under 2 the FMLA, and ultimate[ly] terminating her employment just two weeks after she had been 3 approved for leave under the FMLA[.]” (Id. at ¶ 111.) Thurston also alleges Western 4 Alliance “willful[ly] and/or reckless[ly]” paid “female employees less than male 5 employees for equal work” in “violation of the . . . the EPA.” (Id. at ¶¶ 131–32.) 6 II. Legal Standard 7 To survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), a 8 complaint must contain factual allegations sufficient to “raise a right to relief above the 9 speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The task when 10 ruling on a motion to dismiss “is to evaluate whether the claims alleged [plausibly] can be 11 asserted as a matter of law[.]” See Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004). 12 When analyzing the sufficiency of a complaint, the well-pled factual allegations are taken 13 as true and construed in the light most favorable to the plaintiff. Cousins v. Lockyer, 568 14 F.3d 1063, 1067 (9th Cir. 2009). The Court does not accept “[t]hreadbare recitals of the 15 elements of a cause of action” and “legal conclusion[s] couched as factual allegations.” 16 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Dismissal of a complaint, or any claim within 17 it, may be based on a “lack of a cognizable legal theory or the absence of sufficient facts 18 alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 19 699 (9th Cir. 1990). 20 III. Analysis 21 Defendants argue that Thurston’s amended complaint fails to plausibly allege: (1) a 22 violation of the EPA; (2) that Defendants acted willfully; and (3) that Lance is an employer 23 within the meaning of the FMLA.3 (Doc. 14 at 6–14.). The Court addresses each argument 24 in turn. 25 3 Defendants also move to dismiss Thurston’s FMLA retaliation claim. Thurston, in 26 her response, agrees that her retaliation claim is subsumed within the broader umbrella of an FMLA interference claim. She has no objection to dismissing the retaliation claim 27 provided that the factual allegations associated with that claim remain as part of her interference claim. Accordingly, the Court will dismiss Thurston’s FMLA retaliation 28 claim, but will consider those factual allegations when assessing Defendants’ arguments regarding Thurston’s interference claim. 1 A. EPA 2 To plead a claim under the EPA, a plaintiff must allege that employees of the 3 opposite sex were plausibly paid different wages for equal work. Stanley v. Univ. of S. Cal., 4 178 F.3d 1069, 1074 (9th Cir. 1999). Jobs are equal when they require “equal skill, effort 5 and responsibility, and [they] are performed under similar working conditions.” Forsberg 6 v. Pac. Nw. Bell Tel. Co., 840 F.2d 1409, 1414 (9th Cir. 1988) (quotations and citation 7 omitted). A plaintiff must plead only that the jobs are substantially equal, not identical. 8 Stanley, 178 F.3d at 1074. 9 Thurston’s amended complaint does not sufficiently allege that she was paid less 10 for equal work. Thurston alleges on information and belief that male Senior Managers were 11 paid at market rate, while she was paid below market rate for substantially similar work. 12 (Doc. 13 at ¶ 28.) Courts permit information-and-belief pleading when the relevant facts 13 are known only to the defendant, or when the belief is a plausible inference drawn from 14 known facts. See Soo Park v. Thompson, 851 F.3d 910, 928–29 (9th Cir. 2017). Neither 15 circumstance applies here. Thurston’s pay and comparable market rate for her position are 16 not facts solely within the control of Western Alliance and could have been alleged in the 17 amended complaint. Nor does Thurston allege facts supporting a plausible inference that 18 she was paid less than male Senior Managers. The only factual basis for this allegation is 19 that female Product Analysts were being paid on a lower pay scale less than male Product 20 Analysts. (Doc. 13 at ¶ 25.) Thurston argues this creates a reasonable inference that her 21 position also was on a different pay scale, but Thurston was not a Product Analyst. The 22 Court disagrees that differential pay among Product Analysts permits a reasonable 23 inference that differential pay existed across the board, and Thurston fails to plead any 24 other facts to support this inference. What’s more, as written, Thurston pleads only that she 25 believes she may have been be paid less than her male counterparts. (Id. at ¶ 27.) At most, 26 this amounts to a mere possibility of a pay difference, and a mere possibility does not satisfy 27 federal pleading standards. See Twombly, 550 U.S. at 546. 28 1 Thurston further does not allege enough facts to support the claim that she 2 performed substantially equal work as the three male Senior Managers. Thurston alleges 3 with specificity that she and the three male Senior Managers share substantially similar 4 responsibilities, including managing products, performing necessary audits, and 5 monitoring relevant regulatory matters. (Doc. 13 at ¶ 28.) But when it comes to skills and 6 experience, Thurston’s amended complaint contains only a rote recitation of the elements. 7 (Id. at ¶ 29 (“All of the Senior Managers had similar skillset and experience[.]”).) Skill 8 includes consideration of a variety of factors to determine whether jobs have similar skillset 9 including “experience, training, education, and ability.” 29 C.F.R. § 1620.15(a); see also 10 Forsberg, 840 F. 2d at 1415. Although Thurston is not required to exhaustively allege facts 11 for all these factors, she must allege more than an unsupported conclusion that she and the 12 male Senior Managers had the same skillset and experience. The amended complaint is 13 devoid of any facts to support that Thurston had similar education, training, or experience 14 as the male Senior Managers. Indeed, as currently pled, it is unclear what skills, education, 15 or experience Thurston and the male Senior Managers shared. 16 For these reasons, Thurston’s EPA claim is dismissed. 17 B. Willfulness4 18 Claims for violations of the FMLA are typically governed by a two-year statute of 19 limitations. 29 U.S.C. § 2617(c). However, claims based on willful violations of the FMLA 20 are governed by a three-year limitations period. Id. A violation is willful if an employer 21 either knew or showed reckless disregard for whether its conduct was prohibited. See Olson 22 v. United States ex rel. Dept. of Energy, 980 F.3d 1334, 1339 (9th Cir. 2020). 23 Defendants contend that the two-year statute of limitations should govern, rendering 24 untimely any portions of Thurston’s FMLA claim predicated on adverse actions prior to 25 that period. (Doc. 14 at 10–11.) Ordinarily, when a motion to dismiss is based on 26 untimeliness, the motion “can be granted only if the assertions of the complaint, read with 27 4 Defendants move to dismiss the allegations that they willfully violated the FMLA 28 and the EPA. Because the Court dismisses the EPA claim on other grounds, it limits its analysis of willfulness to the FMLA claim. 1 the required liberality, would not permit the plaintiff to prove that the statute [of 2 limitations] has not run.” United States v. Boeing Co., No. C22-0485JLR, 2023 WL 3 3075867, at * 5 (W.D. Wash., 2023) (citing Jablon v. Dean Witter & Co., 614 F.2d 677, 4 682 (9th Cir. 1980)). A claim will be dismissed as time-barred only if the untimeliness 5 appears beyond doubt on the face of the complaint. Ploof v. Arizona, No. 22-15061, 2023 6 WL 2929314, at *1 (9th Cir. 2023). 7 The Court finds that untimeliness does not appear beyond doubt on the face of the 8 complaint. Thurston alleges that Defendants knew she needed FMLA leave and 9 “intentionally and willfully interfered with her right to take leave.” (Doc. 13 at ¶ 111). For 10 support, Thurston alleges that Defendants had knowledge of Thurston’s condition and 11 failed to notify her of her right to take FMLA leave until after providing her with a PIP; 12 that the PIP was pre-textual and incorrectly complained Thurston was not working enough; 13 and that because of prior retaliation and the PIP, Defendants discouraged her from taking 14 intermittent leave and terminated her two weeks after being approved for FMLA leave 15 without an opportunity to discuss the issues addressed in the PIP. (Id. at ¶¶ 60, 74, 78, 84, 16 95, 97–99, 104, 106–07). These factual allegations distinguish Thurston’s complaint from 17 the conclusory complaints found deficient by this Court in cases like Gage v. Ariz. Bd. of 18 Regents, 643 F. Supp. 3d 1013, 1021 (D. Ariz. 2022), upon which Defendants rely. 19 For these reasons, Defendants’ motion to dismiss as untimely any portions of 20 Thurston’s FMLA claim predicated on adverse actions occurring outside the two-year, 21 rather than three-year, limitations period is denied. 22 C. Lance’s Liability Under the FMLA 23 The Ninth Circuit has not squarely addressed whether an individual may be liable 24 under the FMLA, but in dicta the court has signaled its agreement with other circuits that 25 “some supervisory employees can be sued as employers under the FMLA,” while 26 cautioning that “determining which supervisors qualify is not a straightforward matter.” 27 Hibbs v. Dept. of Hum. Res, 273 F.3d 844, 872 (9th Cir. 2001). Because the FMLA and 28 FLSA define “employer” in the same way, courts look to FLSA caselaw for guidance. See, 1 e.g., Craft v. Burris, CV 16-166-BLG-TJC, 2017 WL 4891520, at *5 (D. Mont. Oct. 30, 2 2017); Johnson v. Golden Empire Transit Dist., No. 1:14-cv-001841-JLT, 2016 WL 3 3999996, at *8 (E.D. Cal. July 25, 2016). 4 Using the FLSA’s framework, “the Court employs [an] ‘economic reality’ test to 5 determine whether an individual is an employer under the FMLA[.]” Johnson, 2016 WL 6 3999996, at *8. In doing so, the Court considers factors such as the supervisor’s degree of 7 authority and control over subordinates and the economic control over the employment 8 relationship. Hibbs, 273 F.3d at 872; see also Boucher v. Shaw, 572 F.3d 1087, 1091 (9th 9 Cir. 2009). The term “employer” is interpreted broadly to effectuate the statute’s remedial 10 purpose. See Boucher, 572 F.3d at 1090–91. 11 Thurston pleads sufficient facts to survive a Rule 12(b)(6) motion. She alleges that 12 Lance was her supervisor, took part in her performance review, and had authority to create 13 new positions, demote and terminate employees, and create and enforce PIPs. (Doc. 13 at 14 ¶¶ 17, 39–46, 53, 67, 79–81, 84–91, 95–102.) Together, these facts make it plausible that 15 Lance had sufficient control over Thurston’s job to constitute her an employer for purposes 16 of the FMLA. Defendants’ motion to dismiss the FMLA claim against Lance is denied. 17 D. Leave to Amend 18 The factual defects in Thurston’s EPA claim potentially are curable, and Thurston’s 19 counsel indicated during oral argument that she could allege additional facts to support that 20 claim. Thurston has not sought leave to amend, let alone in a manner that complies with 21 Local Rule of Civil Procedure 15.1(a) or this Court’s standard order regarding Rule 12 22 motions (Doc. 6). If Thurston believes she can cure the deficiencies identified in this order, 23 she may file a motion for leave to amend her complaint that complies with Local Rule 24 15.1(a). 25 / / / 26 / / / 27 / / / 28 1 IT IS ORDERED that Defendants’ partial motion to dismiss (Doc. 14) is GRANTED IN PART as stated herein. 3 Dated this 6th day of March, 2024. 4 5 Ls Ue 8 States Dictric Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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