Franklin v. Whole Foods Market Group, Inc.

Background

Henry Franklin brought a proposed class action against Whole Foods Market Group, Inc., Amazon.com, Inc., and Cornucopia Logistics, LLC. Franklin applied in April 2019 for delivery-worker employment with Cornucopia, which had a contract with Amazon to provide delivery workers for Whole Foods. Franklin alleged that Amazon conducted a criminal-background check and later sent him a letter stating that his application had been denied, in whole or in part, because of information in the report.

Franklin had been paroled in 2018 after serving nearly 25 years for a second-degree murder conviction. He alleged that the defendants discriminated against him because of his criminal history and used hiring procedures that violated the New York State Human Rights Law, the New York City Human Rights Law and Fair Chance Act, and the New York State Fair Credit Reporting Act.

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the amended complaint failed to state a claim, and under Rule 12(b)(1), arguing that Franklin lacked constitutional standing. The court concluded that it had subject-matter jurisdiction under the statute governing certain large proposed class actions.

Prospective-employer allegations

At the time Franklin applied, the relevant New York State and New York City nondiscrimination provisions applied to employers. Amazon and Whole Foods argued that Franklin had not adequately alleged that either company was his prospective employer because Cornucopia was the entity expected to employ him.

The court applied New York’s four-factor test for employer status: selection and engagement, payment of wages, power to dismiss, and control over the worker’s conduct. It found that Franklin’s allegations were largely conclusory but were sufficient, “although just barely,” to allege that Amazon and Whole Foods exercised enough control over hiring to qualify as prospective employers alongside Cornucopia. The court relied particularly on Amazon’s apparent authority to reject Franklin as someone eligible to deliver Amazon products on Cornucopia’s behalf. It noted that the issue could be revisited at summary judgment.

New York State discrimination claim

The New York State Human Rights Law, through Article 23-A of the New York Correction Law, generally bars denying employment because of a prior criminal conviction unless the conviction has a “direct relationship” to the job or hiring would create an “unreasonable risk” to people or property.

The court held that Franklin adequately pleaded a discrimination claim. It found that he plausibly alleged that neither exception applied. Regarding the direct-relationship exception, Franklin alleged that the job involved driving to deliver groceries and that he had not been convicted of a vehicle-related offense. The court stated that it did not see how a murder conviction was directly or indirectly related to the ability to deliver groceries, while recognizing that other offenses, such as theft, might be more directly related.

Regarding the unreasonable-risk exception, Franklin alleged that he had been released on parole, had been rehabilitated, and could provide evidence of rehabilitation and good conduct. The court also considered the nearly 25 years since the conviction and Franklin’s changed age since the offense. These allegations were enough at the pleading stage to support an inference that the public-risk exception did not apply.

The defendants argued that Franklin had lied on his application by answering “no” to a question about prior convictions or recent release from prison. The court stated that this potentially legitimate, nondiscriminatory reason for not hiring him could not be resolved on a motion to dismiss. Whether that reason was the true reason for the decision was reserved for summary judgment or trial.

The court therefore denied the motion to dismiss Franklin’s New York State discrimination claim. Because Franklin met the more demanding pleading standard under that law, the court also concluded that he stated a claim under the New York City Human Rights Law.

Procedural claims and standing

Franklin alleged that the defendants violated hiring procedures designed to prevent criminal-history discrimination. The alleged violations included asking about his criminal history before making a conditional offer, failing to provide an analysis of the Article 23-A factors and an opportunity to respond, failing to provide an opportunity to submit rehabilitation evidence, and using a consumer report without first providing a copy of his Article 23-A rights.

The court held that Franklin adequately alleged standing. Standing requires a concrete injury, a connection between that injury and the challenged conduct, and a likelihood that a favorable court decision would address the injury. The court found that Franklin alleged a concrete interest in participating in a hiring process free from criminal-history discrimination, rather than merely alleging an abstract procedural violation. It also found that the alleged discriminatory process and procedural failures plausibly caused the injury.

The court emphasized that it was not deciding whether Franklin had ultimately proved every procedural violation. The defendants had not moved to dismiss those allegations for failure to state a claim; they challenged only Franklin’s standing to pursue them.

Disposition

The opinion’s discussion states that, to the extent Franklin intended to assert a separate New York State claim based on the defendants’ failure to provide an opportunity to submit rehabilitation evidence—and to the extent the defendants moved to dismiss that claim—the motion was granted as to that portion. The court explained that the New York State law requires employers to consider rehabilitation information but does not require them to affirmatively give prospective employees an opportunity to submit it.

Despite that statement, the conclusion says: “Defendants’ motion to dismiss is DENIED.” The court also directed that the parties be referred to the Court-annexed Mediation Program by separate order and directed the clerk to terminate the pending motions.