RICHARD F. BOULWARE, II, District Judge.
This case is before the Court on a Motion to Dismiss filed by Defendants Eldorado Resorts Corporation ("Eldorado") and Michael Marrs, Bruce Polansky, Kristen Beck, Dominic Taleghani, and James Grimes, all of whom are directors, project managers, or vice presidents at Eldorado. ECF No. 18. In their motion, Defendants seek dismissal of Plaintiff Saeed Azizi's First Amended Complaint.
Plaintiff alleges the following facts in his Amended Complaint. During the times relevant to this case, Plaintiff was an employee of Eldorado. Plaintiff is of Middle Eastern descent and 57 year-old at the time he brought this action. He began his employment with Eldorado from 2003-2009 and again from October 2011-July 2014. He worked as as a Project Director, and later a Sales Director during his employment. Plaintiff earned a salary of $455 per week and a commission percentage of 7%. On approximately July 2, 2014, Plaintiff was constructively discharged.
During Plaintiff's employment he was subjected to harassment on a daily basis. His supervisors would refer to him as a "Camel Jockey," a "Little Terrorist" and a "Bomb Maker." They had Plaintiff purposefully not wear his name tag because it sounded "Arabic."
Plaintiff was also instructed by senior management at Eldorado to target FMLA employees for "write ups" for poor performance so that Eldorado would have cause to fire these employees. Plaintiff was told to obtain three write ups as soon as possible on FMLA employees, and alleges that this was part of a practice by Eldorado in which middle managers and human resources officers were ordered to place employees on administrative leave for long enough periods of time that they would not qualify for FMLA leave the following year. When Plaintiff refused to comply with senior management's orders, his positions, income, and commissions were changed in ways that appeared to be promotions, but operated as demotions because they negatively impacted his income. Plaintiff also alleges that he endured verbal abuse in his work environment and was threatened with loss of his job and physical harm if he did not like it. After reporting these comments, Plaintiff's positions, commissions, and sales teams were changed to negatively impact his income.
Plaintiff alleges that Defendants repeatedly retaliated against him for reporting the hostile work environment at the Las Vegas Eldorado facility. He experienced extensive stress and verbal abuse in his work environment and was forced to stay for extended periods afterhours senior management, including but not limited to Michael Marrs. He was continuously threatened with loss of employment, loss of limbs and his head and was told to go "flip burgers if he doesn't like it." Plaintiff repeatedly reported this abuse; however nothing changed other than Plaintiff's positions, commissions and sales teams in a way that negatively impacted his income.
Throughout his employment at Eldorado, Plaintiff witnessed discrimination by supervisors based on race, color, religion, and national origin. Eldorado has admitted that the random matching system, which pairs sales representatives with customers, has a manual override that is frequently utilized to match sales representative with customers of corresponding races. While Eldorado claims that this was to overcome language barriers, plaintiff alleges this is mere pretext. Eldorado regularly forced race-based matches. Eldorado ordered its sales representatives to sit in the lobby and target customers based on similar race, color, religion, and/or national origin.
In addition, Plaintiff makes several allegations against Eldorado with respect to his pay. Plaintiff alleges that Eldorado changed his pay rate and commission percentage several times without any notice or opportunity for Plaintiff to review the changes, and that there were no set criteria to determine when his pay rate would change or how it would change. Further, Plaintiff alleges that during his employment with Eldorado, he was not provided with rest or meal breaks, was not paid overtime despite consistently working over 40 hours per week, and was charged commission reversals by Eldorado without any explanation for sales made months or years earlier. Finally, Plaintiff alleges that Eldorado engaged in "backdoor" sales by offering customers a better deal, waiting for the customer to accept, canceling Plaintiff's sales in order to sell the property directly to the customer, and cutting Plaintiff's commissions on the sales.
In his Amended Complaint, Plaintiff asserts 11 causes of action: 1) race, color, religion, and national origin discrimination under Title VII and N.R.S. 613.330; 2) breach of contract; 3) retaliation under the FMLA, Title VII, and N.R.S. 613.330; 4) breach of the implied covenant of good faith and fair dealing; 5) tortious discharge; 6) failure to pay overtime under the Fair Labor Standards Act (FLSA) and N.R.S. 608.018; 7) failure to pay each hour worked under N.R.S. 608.016; 8) failure to pay wages for periods for meal and rest under N.R.S. 608.019; 9) unlawful taking of wages under N.R.S. 608.100; 10) willful failure/refusal to pay wages under N.R.S. 608.190; and 11) waiting time penalties under N.R.S. 608.040.
Plaintiff filed his original Complaint on April 23, 2015. ECF No. 1. Defendants filed a Motion to Dismiss on June 23, 2015. ECF No. 8. This Motion was denied on March 30, 2016. ECF No. 40.
On July 10, 2015, Plaintiff filed an Amended Complaint, which is now the operative complaint in this action. ECF No. 14;
The Court held a hearing on March 30, 2016 in which it granted in part and denied in part Defendants' second Motion to Dismiss. ECF No. 40. The Court held a status conference on May 31, 2016. ECF No. 47.
A pleading 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). A defendant may move to dismiss for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). In ruling on a motion to dismiss for failure to state a claim, "[a]ll well-pleaded allegations of material fact in the complaint are accepted as true and are construed in the light most favorable to the non-moving party."
After reviewing the parties' briefs, the Court concludes that Defendants' Motion to Dismiss must be granted in part and denied in part. Defendants raise a variety of arguments in support of their motion. The Court considers each argument below.
To establish a prima facie case for discrimination under Title VII, a plaintiff must demonstrate that: (1) he belongs to a protected class, (2) he was qualified for his job, (3) he suffered an adverse employment action, and (4) similarly situated individuals outside the protected class were treated more favorably, or other circumstances surrounding the adverse employment action lead to an inference of discrimination.
To state a hostile work environment claim, a Plaintiff must allege that (1) the defendants subjected him to verbal or physical conduct based on a protected characteristic; (2) the conduct was unwelcome; and (3) the conduct was sufficiently severe or pervasive to alter the conditions of his employment and create an abusive working environment.
The Court concludes that Plaintiff has stated a claim under Title VII for discrimination based on race, color, religion, and national origin under both disparate treatment and hostile work environment theories.
Defendants argue that Plaintiff has not pleaded facts showing that he was personally discriminated against or how Eldorado's alleged policy of steering customers based on race, religion, and other characteristics was discriminatory in nature. Azizi alleges that Eldorado, pursuant to its policy of steering customers, consistently sent him to tables with Muslim customers and customers of Middle Eastern descent, which negatively affected his income because he was steered away from other customers. Additionally, Azizi alleges that he is Muslim and is from Iran. He alleges that he was subjected to harassment from his supervisors on a daily basis, including being called "camel jockey," "little terrorist," and a "bomb maker." His supervisors also instructed him not to wear a name tag because his name "sounded Arabic." These allegations are sufficient to state a Title VII claim under disparate treatment and hostile work environment theories. Whether these allegations suffice to create a subjectively and objectively hostile work environment is a highly contextual and fact-driven inquiry inappropriate for resolution at this stage.
The Court denies Defendants' Motion as to Plaintiff's Title VII discrimination claim.
In Nevada, breach of contract is "a material failure of performance of a duty arising under or imposed by agreement."
Defendants argue for dismissal of Plaintiff's breach of contract claim for failure to allege sufficient facts to state a claim. Plaintiff responds that his allegations that Defendants intentionally stole money from him through commission reversals and backdoored sales are sufficient to state a claim for breach of contract. The Court finds that Plaintiff has adequately pleaded facts establishing his breach of contract claim.
First, Plaintiff alleges that a valid contract of employment existed between him and Defendants. Plaintiff states that these contracts required him to work to sell timeshares in exchange for a base wage, commissions, and benefits. Although Plaintiff has not attached copies of the operative contract, he is not required to at this stage, particularly since he states that this information is in the possession of Defendants. Second, Plaintiff has alleged that Defendants breached their employment contracts by engaging in intentional acts to steal wages from Plaintiff. These alleged acts include reversing Plaintiff's commissions for sales made months and years earlier, "back-dooring" sales by negotiating with customers with whom Plaintiff had already finalized sales, and failing to pay Plaintiff overtime wages and wages for each hour worked and by depriving him of lunch and rest breaks. In addition, Plaintiff also alleges that Defendants breached his employment contracts by demoting and constructively discharging him for refusing to participate in Defendants' practice of issuing write-ups to FMLA-eligible employees. Finally, Plaintiff has alleged that he was damaged in the form of lost wages and benefits. Therefore, Plaintiff's claim may proceed.
Both Title VII and the FMLA prohibit discrimination against employees because they have opposed any employment practice prohibited under those statutes or because they have made a charge, testified, or participated in an investigation under those statutes. 42 U.S.C. § 2000e-3(a); 29 U.S.C. § 2615(a)(2), (b). A prima facie case for retaliation under Title VII requires the plaintiff to show that: (1) she engaged in a protected activity, (2) she suffered an adverse employment action, and (3) a causal link exists between the protected activity and adverse action.
"Protected activities" under Title VII include opposing allegedly discriminatory acts by one's employer.
The Ninth Circuit defines "adverse employment action" as "any adverse treatment that is based on a retaliatory motive and is reasonably likely to deter the charging party or others from engaging in protected activity."
The Ninth Circuit has not reached the issue of whether this burden-shifting framework also applies to retaliation claims under the FMLA, although it has observed that some version of this framework is applied in at least three other circuits.
The Court finds that Azizi has stated a claim for retaliation under Title VII and the FMLA. After alleging facts supporting his claim of a hostile work environment based on derogatory comments and Eldorado's policy of writing up FMLA-eligible employees, Azizi alleges that he reported this hostile work environment. Pursuant to Ninth Circuit case law, this is sufficient to establish that he engaged in protected activity.
Further, Azizi alleges that he was retaliated against for reporting this conduct, including being threatened with loss of his job and physical harm and being subjected to changes in his job that resulted in a loss of income. The Court finds that these allegations establish that he suffered adverse employment action.
Because the Court finds that these allegations are sufficient to state a claim for retaliation under both Title VII and the FMLA, the Court denies Defendants' Motion as to Plaintiff's retaliation claims.
A contractual claim for breach of the implied covenant of good faith and fair dealing exists where "one party performs a contract in a manner that is unfaithful to the purpose of the contract and the justified expectations of the other party are thus denied[.]"
The Court finds that Plaintiff has stated a claim for contractual liability for breach of the implied covenant of good faith and fair dealing. Plaintiff has alleged that Defendants performed under their employment contracts in a manner unfaithful to its purpose by charging commission reversals against Plaintiff's earnings, "back-dooring" numerous sales by Plaintiff negotiating a better deal with the customer and cutting Plaintiff's commissions.
However, Plaintiff has not stated a claim for tort liability for the breach of the implied covenant of good faith and fair dealing. Plaintiff has not alleged a relationship of "special reliance" like the one present in insurance cases. In determining whether such a special relationship exists, important factors include the promise of permanent employment, the length of employment, and termination involving deception, betrayal, or perfidy.
"An employer commits a tortious discharge by terminating an employee for reasons which violate public policy."
The Nevada Supreme Court has recognized a claim for tortious discharge when an employer terminates an employee "for seeking industrial insurance benefits, for performing jury duty or for refusing to violate the law."
The Court finds that Plaintiff has adequately alleged a claim for tortious discharge. Plaintiff alleges that he was threatened with termination or withholding of pay if he did not write up employees who took leave under the FMLA, that he refused to do so, and that he was verbally harassed, demoted, and constructively discharged for refusing to do so. Plaintiff also alleges that he sought explanations for Defendants' reversal of commissions and failure to pay wages due, were met with resistance and not given any specific explanations, and was subsequently terminated or constructively discharged. These allegations are sufficient to state a claim for tortious discharge in Nevada.
A claim for tortious discharge is "available to an employee who was terminated for refusing to engage in conduct that [she], in good faith, believed to be illegal. Any other conclusion . . . would encourage unlawful conduct by employers and force employees to either consent and participate in violation of the law or risk termination."
Defendants argue that adequate remedies already exist for Plaintiff's public policy tort claims. Defendants cite to the Nevada Supreme Court's decision in
Defendants' Motion is therefore denied as to Plaintiff's tortious discharge claim.
Defendants argue that Plaintiff's tort claims for tortious discharge and breach of the implied covenant of good faith and fair dealing are barred by the Nevada Industrial Insurance Act (NIIA). The Court disagrees and finds that the NIIA does not preclude these claims.
The NIIA provides the exclusive remedies for employees "on account of an injury by accident sustained arising out of and in the course of the employment." N.R.S. 616A.020(1);
Plaintiff's claims for tortious discharge and breach of the implied covenant of good faith and fair dealing relate to Eldorado's alleged reversal of commission fees earned by Plaintiff, failure to pay overtime wages and wages for each hour worked, failure to provide breaks for meals or rest, and termination of Plaintiff. These allegations clearly do not constitute "injuries" or "accidents" within the meaning of the NIIA, as they are not violent or traumatic events producing objective symptoms of injuries. Therefore, the NIIA does not bar these claims.
Next, Defendants argue that Plaintiff's allegations relating to his claim for unpaid overtime are not sufficient to state a claim.
"[I]n order to survive a motion to dismiss, a plaintiff asserting a claim to overtime payments [under the FLSA] must allege that she worked more than forty hours in a given workweek without being compensated for the overtime hours worked during that workweek."
The Court finds that Plaintiff's FLSA overtime claim fails to meet the pleading standard set forth in
First, Defendants argue that Counts 6 through 11 must be dismissed because there is no private right of action to enforce the labor statutes raised in those counts: N.R.S. 608.018 (overtime), N.R.S. 608.016 (failure to pay each hour worked), N.R.S. 608.019 (meal and rest periods), N.R.S. 608.100 (unlawful taking of wages), N.R.S. 608.190 (willful failure to pay wages), or N.R.S. 608.040 (waiting time penalties). Defendants rely on the decision of the Supreme Court of Nevada in
For the purposes of considering possible amendment, this Court notes that it does find that there is a basis under Nevada law for an employee to bring a private right of action under N.R.S. 608.140 to recover "wages earned and due according to the terms of his or her employment." N.R.S. 608.140;
Defendants also argue that the Individual Defendants (Michael Marrs, Bruce Polansky, Kristen Beck, Dominic Taleghani, and James Grimes) should be dismissed from these cases, both because they cannot be held liable for violations of Title VII and because Plaintiff has failed to allege sufficient facts against them. Azizi does not name any of the Individual Defendants in any of his causes of action. Therefore, the Individual Defendants are dismissed without prejudice from his case.