Foster v. United Parcel Service of America, Inc.

Background

Matthew Foster brought four lawsuits 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. The motion addressed causes of action five through sixteen of the Consolidated Second Amended Complaint as asserted against UPS America.

Foster alleged that UPS America hired him, provided benefits and insurance, controlled or participated in employment decisions, and was involved in his accommodation requests, terminations, reinstatements, job assignments, and return to work. He also alleged that UPS America and UPS Freight operated as a single employer. UPS America is identified as UPS Freight’s wholly owned parent company.

Arguments and legal standard

UPS America asked the court to dismiss the claims under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. UPS America argued that the parties’ 2018 stipulation established that UPS Freight, rather than UPS America, was Foster’s employer. It also argued that Foster’s amended complaint did not adequately allege that UPS America and UPS Freight were a single employer.

For a complaint to survive a motion to dismiss, it must contain factual allegations that, accepted as true at this stage, make the claim plausible. The court explained that a plaintiff seeking to treat a parent and subsidiary as a single employer generally must allege facts 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 rejected UPS America’s argument that the 2018 stipulation ended the single-employer issue. The stipulation dismissed UPS America from the first lawsuit with prejudice and stated that, for that lawsuit, UPS Freight was Foster’s employer. But an earlier court order adopting a recommendation had allowed Foster to replead UPS America’s possible single-employer liability in two other consolidated cases. The court therefore held that the stipulation did not prevent Foster from making those allegations in the Consolidated Second Amended Complaint.

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

The court found that Foster’s allegations about shared email addresses, websites, letterhead, logos, human-resources systems, employment records, and hiring procedures pointed toward interrelated operations, although those allegations were not conclusive. On centralized control of labor relations, the court found one allegation—that Foster complained to local terminal management and UPS America human-resources personnel, who communicated decisions or actions back to the terminal—was not entirely conclusory. The court also considered allegations that UPS America hired Foster, provided employment benefits, terminated and reinstated him, decided that he could not be accommodated in certain positions, and returned him to work.

Taken together, the factors presented a close question, but the court concluded that Foster had alleged enough facts to put UPS America on notice of his single-employer theory. The court emphasized that whether related entities qualify as a single employer is generally a fact-based question and that the truth of Foster’s allegations could not be resolved on a motion to dismiss.

Disposition

The court DENIED UPS America’s partial motion to dismiss. The claims against UPS America therefore survived this pleading-stage motion, without a final determination of liability or whether Foster will prevail. The court noted that discovery was proceeding before Magistrate Judge Andrew Krause and directed the parties to report after discovery closed whether they intended to file summary-judgment motions. The clerk was directed to terminate the motion at ECF No. 129.