Foster v. United Parcel Service of America, Inc.

Background

Matthew Foster brought four actions that were later consolidated. He asserted, among other claims, disability-discrimination and retaliation claims under the Americans with Disabilities Act and the New York State Human Rights Law against UPS Freight, TForce Freight, and United Parcel Service of America, Inc. (UPS America). The motion addressed only UPS America’s request to dismiss causes of action five through sixteen of the Consolidated Second Amended Complaint.

Foster alleged that he had a disability resulting from a traumatic brain injury and that UPS America hired him, provided his benefits, controlled or participated in employment decisions, denied an accommodation, terminated and reinstated him, demoted him, and later returned him to work. He also alleged that UPS America and UPS Freight were a single employer because of their shared operations, human-resources systems, letterhead, websites, email addresses, employment records, and involvement in his employment decisions.

Arguments and legal standard

UPS America argued that an April 2018 stipulation established that UPS Freight—not UPS America—was Foster’s employer. It also argued that Foster had not adequately alleged that the two companies were a single employer under the applicable doctrine.

The court applied the standard for a motion to dismiss for failure to state a claim. At that stage, the court generally accepts well-pleaded factual allegations as true, draws reasonable inferences for the plaintiff, and asks whether the allegations plausibly support relief. The court explained that a single-employer theory requires factual allegations concerning four factors: interrelated operations, centralized control of labor relations, common management, and common ownership or financial control. Centralized control of labor relations is the most important factor.

Court’s analysis

The court held that the earlier stipulation did not prevent Foster from pleading that UPS America was a single employer for claims arising in the other consolidated actions. The court noted that an earlier ruling had allowed Foster to replead UPS America’s potential single-employer liability for claims in two of those actions.

The court found that the common-management factor weighed against Foster because the complaint did not allege that directors or officers held positions in both companies. Common ownership weighed in favor of a single-employer relationship because UPS Freight was alleged to be wholly owned by UPS America, although ownership alone was insufficient.

The court found that allegations about shared letterhead, email addresses, websites, human-resources systems, and employment records supported—but did not conclusively establish—interrelated operations. As to centralized labor control, the court found one allegation conclusory but determined that other allegations plausibly suggested UPS America’s involvement in employment decisions. Those allegations included that UPS America hired Foster, provided benefits, terminated and reinstated him, demoted him, decided whether he could be accommodated, and returned him to work. The court also stated that it could not decide at the motion-to-dismiss stage whether those allegations were true.

Ruling and next steps

The court concluded that the single-employer issue was a close question but that Foster had alleged enough facts to put UPS America on notice of his theory of employer liability. Judge Nelson S. Roman therefore denied UPS America’s partial motion to dismiss. The court directed the parties to notify it within five business days after discovery ended whether they intended to file summary-judgment motions and directed the clerk to terminate the motion from the docket.