Payne v. McGettigan's Management Services LLC

Background

Susan Payne sued McGettigan’s Management Services LLC (MMS) and Dennis McGettigan. She alleged that she experienced racial and sexual harassment from a regular customer while working at a McGettigan’s bar in New York City, complained to supervisors, and was fired in February 2018. Her claims arose under Title VII of the Civil Rights Act of 1964, the New York State Human Rights Law, the New York City Human Rights Law, and 42 U.S.C. § 1981. Payne alleged that McGettigan and MMS were her joint employers.

Payne filed a charge with the Equal Employment Opportunity Commission (EEOC) naming only MMS. The original lawsuit also did not name McGettigan, but Payne later added him in an amended complaint. McGettigan moved to dismiss the amended complaint for lack of personal jurisdiction and failure to complete the required administrative process for her Title VII claims. For purposes of the motion, the court treated Payne’s factual allegations as true and drew reasonable inferences in her favor.

Personal Jurisdiction

The court held that Payne made the required initial showing that New York courts could exercise personal jurisdiction over McGettigan. The court relied on allegations that McGettigan routinely visited and managed the New York bar. It also found a sufficient connection between those activities and Payne’s claims because she alleged that the bar’s general manager said he could not take corrective action against the customer because McGettigan would fire him. The court concluded that these allegations were also sufficient under constitutional due-process requirements at the motion-to-dismiss stage.

Administrative Exhaustion

Before filing a Title VII lawsuit, a plaintiff generally must file a timely charge with the EEOC or an authorized state agency. Because Payne’s charge named only MMS, McGettigan argued that the Title VII claims against him had not been exhausted.

The court applied the “identity of interest” exception, which can allow a Title VII lawsuit against an unnamed party when that party has a sufficiently close relationship with the party named in the EEOC charge. The court considered whether Payne could reasonably have identified McGettigan when she filed the charge, whether MMS and McGettigan had similar interests in resolving the matter, whether McGettigan suffered prejudice from not being named, and whether McGettigan had represented that her employment relationship was through MMS.

The court found that the first factor favored McGettigan because Payne could have identified his role. But the second and third factors favored Payne: she alleged that McGettigan owned MMS, centrally controlled the McGettigan’s locations, and controlled the response to her complaints and the termination of her employment; McGettigan also conceded that he suffered no prejudice because no EEOC conciliation occurred. The court found no allegation relevant to the fourth factor. Weighing the factors together, the court held that McGettigan shared a sufficient identity of interest with MMS and that Payne’s Title VII claims against him could proceed.

The court also rejected McGettigan’s argument that the exception was unavailable because Payne’s EEOC charge was filed by counsel. The court noted that the applicable appellate test does not include whether the complainant was represented by a lawyer as a factor, and it held that counsel’s involvement did not bar Payne’s claims.

Ruling and Limits of the Decision

Judge Denise Cote denied McGettigan’s January 16, 2020 motion to dismiss. The opinion did not decide whether McGettigan was actually Payne’s employer, which the court identified as an element Payne would ultimately have to prove for Title VII liability. It also did not decide the ultimate merits of Payne’s discrimination or retaliation claims. The opinion noted that the exhaustion requirement does not apply to Payne’s claims under Section 1981, the New York State Human Rights Law, or the New York City Human Rights Law.