Evans v. Business Development Sales, Inc.

Background

Sheila Evans sued Business Development Sales, Inc., doing business as BDS Laundry Systems, BDS Laundry Management Company, BDS Laundry, and BDS Laundry Commercial Solutions. Her complaint asserted claims under the Emergency Paid Sick Leave Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the Minnesota Human Rights Act, and Minnesota Statutes § 144.4196.

Evans alleged that she worked for the defendants as an administrative assistant beginning in 2015. After her husband developed flu-like symptoms, the defendants directed her to stay home and be tested for COVID-19. Evans later developed symptoms, tested positive, and received a Minnesota Department of Health letter advising her to quarantine until at least August 4, 2020. She forwarded the letter to company officials. On August 5, she reported that she felt much better; on August 6, company officials told her she was being furloughed until September. The defendants later terminated her. Evans alleged that less experienced employees continued working during her furlough.

The court’s pretrial scheduling order set December 1, 2021, as the deadline for motions to amend pleadings to add punitive or bad-faith damages. Evans sought permission to file a Fourth Amended Complaint adding a punitive-damages request under Minnesota Statutes § 144.4196 and adding factual allegations to support that request. The court treated the existing complaint as already asserting punitive-damages claims under the Minnesota Human Rights Act, the Americans with Disabilities Act, and the Emergency Paid Sick Leave Act. The motion therefore sought to add punitive damages specifically for the § 144.4196 claim.

The parties’ arguments

The defendants argued that the request to add factual allegations was late because the scheduling order set an earlier deadline for amendments generally. They also argued that the proposed amendment would be futile, meaning it could not survive a motion to dismiss. In particular, they contended that Evans had not plausibly alleged that the relevant decision-makers knew she had a right under § 144.4196 not to be penalized because of quarantine, or that they furloughed and terminated her because of her quarantine status.

Evans argued that the additional facts were included to provide the required support for her punitive-damages claim. The court applied Federal Rule of Civil Procedure 15, which generally requires courts to freely allow amendments when justice requires. For an amendment to be futile under that rule, the proposed complaint must be unable to withstand a motion to dismiss for failure to state a claim.

Court’s analysis

The court held that the motion was timely. Although Evans filed the formal motion after the scheduling deadline, the defendants agreed that her request to add punitive damages under § 144.4196 was timely. The court also concluded that the additional factual allegations supporting that punitive-damages request were timely because they were directly connected to the punitive-damages claim. The court rejected the defendants’ reliance on an earlier case involving an unrelated request to add attorney’s fees after the amendment deadline.

The court further held that Federal Rule of Civil Procedure 15, rather than the procedure in Minnesota Statutes § 549.191, governed the motion. Section 549.191 requires a motion to add punitive damages in Minnesota state court to include affidavits showing the factual basis for the claim. The court concluded that Rule 15 controlled in federal court and therefore rejected the defendants’ argument that Evans had to present clear and convincing evidence at this stage.

Under Rule 15, the proposed complaint needed to plausibly allege facts showing that the defendants acted with “deliberate disregard” for Evans’s rights or safety. The court found that the proposed complaint plausibly alleged that relevant company officials knew of Evans’s rights. Evans alleged that she sent the health department letter to the company’s administrative manager and chief financial officer, and that the chief financial officer forwarded it to the company’s president and chief executive officer and executive vice president. The letter stated that Minnesota law provided employment protections when a person was isolated for public-health purposes. Evans also alleged that the president had signed an employee handbook describing protections against disability discrimination and retaliation.

The court recognized that the more difficult issue was whether the proposed complaint plausibly connected the furlough and termination to Evans’s quarantine. It found that connection plausible because the defendants furloughed Evans one day after she reported that she was ready to return to work. Considering that timing, the health department letter, the alleged lack of performance problems, and the fact that less experienced employees continued working, the court concluded that the proposed complaint plausibly alleged that the defendants acted because Evans had been in quarantine.

Disposition

The court ordered that Evans’s Motion for Leave to Amend the Third Amended Complaint was GRANTED as set forth herein. The order allowed Evans to add the proposed punitive-damages claim and supporting allegations. It did not decide whether Evans will ultimately prove the underlying violation or obtain punitive damages.