Li v. China Merchants Bank Co., LTD.

Background

Hui Li sued China Merchants Bank Co., Ltd. and Kang Pan, the Bank’s former employee and supervisor, respectively. Li alleged discrimination based on age, gender, and citizenship, as well as retaliation for complaining about discrimination. The opinion states that Li worked for the Bank from 2012 to 2020 and most recently served as Deputy Head of its Legal and Compliance Department before her termination in August 2020.

Li had previously litigated against the Bank in New York state court. That earlier case concerned the parties’ mediation and alleged settlement agreement. The state court granted the Bank’s summary-judgment motion, finding that no binding settlement agreement had been formed. Pan was not a party to that earlier litigation.

The Motion

The Defendants made a partial motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to support a legally plausible claim. They argued that Li’s retaliation claims under Section 1981, the Family and Medical Leave Act, the New York State Human Rights Law, and the New York City Human Rights Law were barred by res judicata, also called claim preclusion. That doctrine can prevent a party from bringing later claims arising from the same transaction or connected series of transactions already resolved in an earlier case.

The Defendants also argued that Li’s age-discrimination claims under the New York State Human Rights Law and New York City Human Rights Law did not state a claim. The court considered the well-pleaded allegations as true for purposes of the motion and drew reasonable inferences in Li’s favor.

Retaliation Claims

The court concluded that the Defendants had not waived the res judicata defense. They timely raised it in their motion, and statements by defense counsel during the earlier state-court litigation did not create an enforceable agreement waiving the defense.

The court nevertheless held that res judicata did not bar the retaliation claims. It accepted that the earlier state-court judgment was a decision on the merits and that the parties were the same or sufficiently connected for purposes of the doctrine. But the court found that the required third element was missing: the two cases did not arise from the same transaction or factual grouping.

The earlier case concerned the parties’ conduct during mediation and negotiations over a proposed settlement. Li’s retaliation claims instead concerned alleged retaliatory conduct during her employment and her eventual termination, including alleged adverse actions after she complained to Pan and after she requested leave under the Family and Medical Leave Act. Because the claims were based on different transactions, the court denied the request to dismiss the retaliation claims.

Age-Discrimination Claims

The court also denied the request to dismiss Li’s age-discrimination claims. Under the standards applied for this motion, Li had to allege that she was treated worse, at least partly because of her age, and that age was one motivating factor in the unequal treatment.

The court found Li’s allegations sufficient at the pleading stage. They included allegations that a younger man effectively replaced her despite having less relevant experience; that she was excluded from meetings in favor of him; that Pan assigned her demeaning tasks and criticized her; and that Pan made statements indicating a preference for a younger workforce. The court stated that these allegations plausibly showed that Li was treated worse because of her age.

Disposition

The court DENIED the Defendants’ partial motion to dismiss. The retaliation and age-discrimination claims were not dismissed, and the court stated that the age claims would proceed alongside Li’s gender- and citizenship-discrimination claims. The court directed the parties to meet and confer and submit a revised case-management plan by September 13, 2024.