Franey v. American Battery Solutions Inc.

Background

Catherine Franey sued American Battery Solutions Inc. (ABS) and its founder and chief executive officer, Subhash Dhar. The complaint asserts six claims under California’s Fair Employment and Housing Act, Title VII of the federal Civil Rights Act, and Michigan’s Elliott-Larsen Civil Rights Act. Franey alleges that Dhar sexually harassed her, created a hostile work environment, and retaliated against her after she rejected his advances. She also alleges that ABS failed to prevent the harassment, participated in the retaliation, and terminated her employment.

Franey began working for ABS in Michigan in January 2019 and moved to San Francisco in April 2020 while continuing to work for ABS. The opinion says ABS provided her with workspace equipment, health insurance, phone expenses, and airline travel expenses. The alleged retaliation included blocking or delaying transfers and promotions and terminating her employment in May 2022.

The defendants moved under Federal Rule of Civil Procedure 12(b)(2) to dismiss for lack of personal jurisdiction. They also sought dismissal or transfer for improper venue under Rule 12(b)(3), or transfer to the Eastern District of Michigan under 28 U.S.C. § 1404(a). They relied in part on a forum-selection clause in an unsigned employment agreement.

Personal Jurisdiction

Personal jurisdiction is a court’s authority to exercise power over a defendant. The court considered specific personal jurisdiction, which applies when the lawsuit is connected to the defendant’s activities in the forum state.

The court held that the defendants purposefully engaged with California. It relied on allegations and evidence that ABS allowed Franey and another employee to work in California, listed a Los Angeles “Sales Support” location on its website, employed a person in Los Angeles, pursued California business opportunities, and allegedly retaliated against Franey while she worked in California. The court also considered ABS’s support of Franey’s California employment, including office supplies, travel expenses, and health insurance.

The court held that Franey’s claims arose out of or related to those California contacts because they concerned harassment and retaliation during an employment relationship that included more than two years of work in California. It also concluded that exercising jurisdiction was reasonable. Although defending the case in California would be more burdensome for the defendants than defending it in Michigan, the court found that most of the relevant factors were neutral or favored Franey.

Venue

Venue concerns the proper federal district in which a case may be litigated. The court held that venue was proper in the Northern District of California under Title VII’s special venue rule because Franey worked in San Francisco from April 2020 until her termination. The court said it did not matter that she worked from a home office rather than an ABS office, because the record showed that San Francisco was her permanent work location.

Transfer and Forum-Selection Clause

The court first considered whether the forum-selection clause required litigation in Michigan. It found that the record did not establish an enforceable agreement restricting the forum to Michigan. Franey had not signed the agreement, and the agreement referred to her position as “Chief of Staff” but did not expressly state that it governed her later position as “Director of HR.” The court resolved the relevant factual conflicts in Franey’s favor at this stage.

The court then weighed the private- and public-interest factors under § 1404(a), which allows transfer for convenience and fairness. Franey’s choice of California received substantial weight because she worked there for more than two years and much of the alleged retaliation occurred there. The location of some witnesses and court-congestion statistics slightly favored transfer, but other considerations—including California’s connection to the alleged harm and its familiarity with California law—weighed against transfer. On balance, the court concluded that transfer to the Eastern District of Michigan was not appropriate.

Disposition

The court denied the defendants’ motion to dismiss for lack of personal jurisdiction and improper venue. It also denied the motion to transfer the case to the Eastern District of Michigan under § 1404(a). The order disposed of ECF No. 11 but did not decide the merits of Franey’s harassment, discrimination, or retaliation claims.