James v. Johnstons Subaru, Inc.

Background

Kevin James sued Johnstons Subaru, Inc., alleging racial discrimination under 42 U.S.C. § 1981 and the New York State Human Rights Law. The opinion states that James worked for the company as a detailer for six years. He alleged that the company’s owner, Steve Jardine, repeatedly used racial slurs while speaking to or around him. James also reported racist language and conduct by other employees, including racial slurs, comments supporting white supremacy, and an employee calling him a monkey. According to the complaint, management did not correct this conduct.

James further alleged that, after a Caucasian employee argued and fought with a minority coworker whose car was being detailed, James tried to break up the fight and reported what he saw to management. The local police arrived, but James declined to cooperate. Jardine decided to terminate James and the other minority employee involved in the incident, while the Caucasian employee was not terminated. The company said James was fired because he was “disloyal.”

Motion to Dismiss

Johnstons Subaru moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), which asks whether the complaint contains enough factual allegations to state a legally plausible claim. At this stage, the court accepted the complaint’s factual allegations as true and viewed reasonable inferences in James’s favor.

Section 1981 Claim

Section 1981 prohibits racial discrimination in specified contractual rights, including the terms and conditions of employment. The court explained that James had to allege membership in a protected racial class, intentional discrimination based on race, discrimination involving an activity covered by the statute, and that race was a “but-for” cause of the alleged loss of a protected right.

The company argued that James had not plausibly alleged that he would not have been fired but for his race because the complaint identified disloyalty as the stated reason for termination. The court rejected that argument at the pleading stage. It explained that an employment decision may have more than one but-for cause, so identifying another contributing factor does not by itself defeat the claim.

The court found that the allegations concerning the unequal termination decisions and the history of racist remarks and conduct were sufficient to support an inference that James’s race was a but-for cause of his termination. The court therefore denied Johnstons Subaru’s motion to dismiss the Section 1981 claim.

New York State Human Rights Law Claim

Johnstons Subaru also argued that the court could not exercise supplemental jurisdiction over the New York claim if the Section 1981 claim were dismissed. Because the court upheld the Section 1981 claim at this stage, it concluded that it could continue exercising supplemental jurisdiction over the New York State Human Rights Law claim. The court denied the motion to dismiss that claim as well.

Disposition

Judge Nelson S. Roman denied the defendant’s motion to dismiss. The order directed Johnstons Subaru to answer the complaint by June 3, 2022. The ruling allowed both claims to proceed; it did not determine whether James will ultimately prevail on the discrimination allegations.