Foster v. United Parcel Service of America, Inc.

Background

Matthew Foster brought four actions that were later consolidated. His Consolidated Second Amended Complaint 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 causes of action five through sixteen as asserted against UPS America.

Foster alleged that he had a disability resulting from a traumatic brain injury and that he was qualified to drive tractor-trailers. He alleged that UPS America hired him, provided benefits, required medical testing, denied an accommodation request, terminated him, reinstated him with a demotion, made further decisions concerning his employment and accommodations, and eventually returned him to work. He also alleged that UPS Freight was wholly owned by UPS America and that the companies shared or used UPS-related human-resources systems, documents, websites, email addresses, benefits materials, and employment records.

Motion to Dismiss

UPS America moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim. UPS America argued that the parties’ April 5, 2018 stipulation established that UPS Freight was Foster’s employer and that Foster’s amended complaint did not adequately allege that UPS America and UPS Freight were a single employer.

The court rejected the argument that the stipulation prevented Foster from pleading single-employer liability in the consolidated action. The court explained that an earlier ruling had allowed Foster to replead UPS America’s potential single-employer liability for claims from two of the earlier actions.

Single-Employer Theory

The court applied a four-factor test examining: (1) interrelated operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership or financial control. The court stated that centralized control of labor relations was the most important factor and that the key question was which entity made the final employment decisions relevant to Foster’s claims.

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 Foster’s favor because UPS Freight was alleged to be wholly owned by UPS America, although ownership alone was insufficient. Allegations concerning shared websites, email addresses, letterhead, logos, human-resources systems, and employment records suggested interrelated operations but were not independently conclusive.

The court found that the labor-relations factor favored Foster. Although one allegation that UPS America controlled accommodation requests was conclusory, another allegation—that Foster complained to local management and UPS America human-resources personnel who communicated decisions back to the terminal—could suggest that UPS America exercised some control over employment decisions. The complaint also alleged that UPS America directly hired, terminated, reinstated, demoted, and made accommodation-related decisions involving Foster.

Ruling

The court held that the complaint adequately alleged single-employer liability against UPS America for purposes of the motion to dismiss. The court emphasized that the question was close and generally fact-based, and that the complaint’s allegations were sufficient to put UPS America on notice of Foster’s employer-liability theory. The court therefore denied UPS America’s partial motion to dismiss.

The court also stated that it would not consider new facts raised only in Foster’s opposition papers or attached materials that were not properly part of the complaint. The parties were directed to notify the court within five business days after discovery closed whether they intended to file summary-judgment motions.