Stephens v. Mnuchin ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
LISA STEPHENS,
Plaintiff,
v.
Civil Action No. 17-1252 (DLF)
STEVEN MNUCHIN, Secretary, U.S.
Department of the Treasury,
Defendant.
MEMORANDUM OPINION
Lisa Stephens brings this Title VII action against her former employer, the U.S.
Department of the Treasury, asserting that it discriminated against her based on race and gender,
subjected her to a hostile work environment, and retaliated against her for engaging in protected
activity. Before the Court is Treasury Secretary Steven Mnuchin’s Partial Motion to Dismiss.
Dkt. 9. For the reasons that follow, the Court will grant the motion.
I. BACKGROUND
The Office of the Comptroller of the Currency, a bureau within the Treasury Department,
hired Stephens as a Bank Examiner and Shared National Credit Program Manager on July 1,
2012. Compl ¶ 6; Dkt. 9-1 at 5. Stephens worked for the Treasury Department for nearly one
year. Compl. ¶ 35. During that time, Stephens’ supervisor was Vance Price, the Deputy
Comptroller for Large Bank Supervision. Id. ¶ 7. According to the complaint, Price did not
adequately explain Stephens’ managerial duties, and he did not provide Stephens with necessary
training, documents, performance plans, assistance, and feedback. Id. ¶¶ 7–11, 25, 29, 32. Also,
Stephens “was forced to supervise” Jamie-Jo Perry, “an insubordinate and disgruntled
employee.” Id. ¶¶ 7, 13, 21–22. The Treasury Department failed to address the insubordination,
id. ¶ 13, and Price undermined Stephens’ authority over Perry when, for example, he granted
Perry’s leave request without consulting Stephens and when he reassigned tasks to Perry that
Stephens had previously removed from Perry, id. ¶¶ 16, 24.
On June 5, 2013, Stephens received a negative performance review, id. ¶ 33, and on June
12—shortly before her one-year probationary period ended—Stephens received a notice of
termination, id. ¶ 34. Stephens then resigned in lieu of termination on June 28, the day before
her termination would have taken effect. Id. ¶¶ 34–35. On July 16, Stephens initiated contact
with an Equal Employment Opportunity (EEO) Counselor. The Counselor ultimately issued a
Report of Counseling. Dkt. 9-1; see also Compl. ¶ 2. On August 26, 2013, Stephens submitted
an individual complaint to the Treasury Department. Dkt. 9-2; see also Compl. ¶ 2. After the
Treasury Department completed an investigation, Stephens opted for a hearing before an
administrative judge of the Equal Employment Opportunity Commission (EEOC). The
administrative judge conducted an initial teleconference that discussed the nature of Stephens’
claims, then issued an order identifying the issues to be adjudicated and setting a schedule for
discovery and dispositive motions. See Dkt. 9-4. After discovery was completed and after the
Treasury Department’s motion for a decision had been pending before the administrative judge
for approximately one year, Stephens withdrew her individual complaint. See Dkt. 9-5.
Stephens then filed this case, asserting three claims under Title VII of the Civil Rights
Act: disparate-treatment discrimination based on race and gender, hostile work environment, and
retaliation. Compl. ¶¶ 36–54. The Treasury Department answered the complaint, see Dkt. 4, but
in the parties’ ensuing meet and confer statement, the Department stated that it “intend[ed] to file
a dispositive motion on [Stephens’] failure to exhaust administrative remedies as to at least one
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of her claims.” Dkt. 6 at 2. Because exhaustion is a question that can be resolved on the
pleadings and the administrative record, the Court permitted the Treasury Department to file a
dispositive motion as to exhaustion of administrative remedies. Dkt. 7 at 2; Dkt. 8 at 1. But
because the motion would not dispose of the entire case, the Court also permitted initial
discovery to begin while specifying that further discovery was stayed pending resolution of the
exhaustion motion. Dkt. 7 at 2; Dkt. 8 at 1–2.
II. LEGAL STANDARD
A motion to dismiss Title VII claims for failure to exhaust administrative remedies is
properly analyzed under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Jones v. Bush,
160 F. Supp. 3d 325, 337 (D.D.C. 2016), aff’d, No. 16-5103, 2017 WL 2332595 (D.C. Cir. Feb.
21, 2017); Mount v. Johnson, 36 F. Supp. 3d 74, 80 (D.D.C. 2014). Rule 12(b)(6) allows a
defendant to move to dismiss the complaint for failure to state a claim upon which relief can be
granted. Fed. R. Civ. P. 12(b)(6). To survive a Rule 12(b)(6) motion, a complaint must contain
factual matter sufficient to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). A facially plausible claim is one that “allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009). This standard does not amount to a specific probability
requirement, but it does require “more than a sheer possibility that a defendant has acted
unlawfully.” Id. A complaint need not contain “detailed factual allegations,” but alleging facts
that are “merely consistent with a defendant’s liability . . . stops short of the line between
possibility and plausibility.” Id. (internal quotation marks omitted).
When deciding a Rule 12(b)(6) motion, the court may consider only the complaint itself,
documents attached to the complaint, documents incorporated by reference in the complaint, and
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judicially noticeable materials. EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624
(D.C. Cir. 1997). Relevant here, the Court may consider Stephens’ EEO documents. See
Bowden v. United States, 106 F.3d 433, 437 (D.C. Cir. 1997) (considering “the pleadings and
undisputed documents in the record” while reaching the merits on a motion to dismiss); Vasser v.
McDonald, 228 F. Supp. 3d 1, 11 (D.D.C. 2016) (taking judicial notice of informal and formal
administrative complaints on a motion to dismiss); Williams v. Chu, 641 F. Supp. 2d 31, 35
(D.D.C. 2009) (“A plaintiff’s EEOC charge and the agency’s determination are both public
records, of which this Court may take judicial notice.” (quotation marks and alteration omitted)).
Finally, Rule 12(b)(6) dismissal for failure to state a claim “is a resolution on the merits and is
ordinarily prejudicial.” Okusami v. Psychiatric Inst. of Wash., Inc., 959 F.2d 1062, 1066 (D.C.
Cir. 1992).
III. ANALYSIS
“Title VII complainants must timely exhaust their administrative remedies before
bringing their claims to court.” Payne v. Salazar, 619 F.3d 56, 65 (D.C. Cir. 2010) (internal
quotation marks and alterations omitted); see also 42 U.S.C. § 2000e-16(c). The exhaustion
requirement “serves the important purposes of giving the charged party notice of the claim and
narrowing the issues for prompt adjudication and decision,” Park v. Howard Univ., 71 F.3d 904,
907 (D.C. Cir. 1995) (internal quotation marks and alteration omitted), and it “ensure[s] that the
federal courts are burdened only when reasonably necessary,” Brown v. Marsh, 777 F.2d 8, 14
(D.C. Cir. 1985). In the Title VII context, failure to exhaust is an affirmative defense, and thus
“the defendant bears the burden of pleading and proving it.” Bowden v. United States, 106 F.3d
433, 437 (D.C. Cir. 1997); see also Smith-Haynie v. District of Columbia, 155 F.3d 575, 578
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(D.C. Cir. 1998) (“[A]n affirmative defense may be raised by pre-answer motion under Rule
12(b) when the facts that give rise to the defense are clear from the face of the complaint.”).
Pursuant to Title VII, the EEOC has promulgated detailed procedures for the
administrative resolution of employment discrimination claims against federal agencies. See 42
U.S.C. § 2000e-16(b); 29 C.F.R. § 1614.105. The relevant procedures are as follows:
[E]mployees who believe they have been discriminated against must first consult
an Equal Employment Opportunity (EEO) Counselor within 45 days of the alleged
discriminatory acts. 29 C.F.R. § 1614.105(a)(1). Should the employee and the
Counselor fail to resolve the discrimination claim within 30 days, the Counselor
sends the employee a notice explaining the administrative complaint procedure. Id.
§ 1614.105(d). The employee then has 15 days to file an individual and/or class
complaint with the employing agency. Id. § 1614.106 (regulations governing
individual complaints); id. § 1614.204 (regulations governing class complaints);
see also id. § 1614.103 (noting types of complaints governed by agency processing
procedures outlined in regulations).
In re James, 444 F.3d 643, 644 (D.C. Cir. 2006); accord Panarello v. Zinke, 254 F. Supp. 3d 85,
96 (D.D.C. 2017).
For purposes of assessing whether a Title VII complainant exhausted these administrative
procedures in a timely fashion, the Supreme Court has identified two categories of
discrimination, both of which arise in this case. See Achagzai v. Broad. Bd. of Governors, 170 F.
Supp. 3d 164, 175 (D.D.C. 2016). First, when the employee alleges that he or she was the victim
of a “discrete retaliatory or discriminatory act,” the timeliness inquiry focuses on that particular
act. Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 110 (2002); Achagzai, 170 F. Supp.
3d at 175. “[D]iscrete discriminatory acts are not actionable if time barred, even when they are
related to acts alleged in timely filed charges.” Morgan, 536 U.S. at 113. Second, when the
employee alleges a hostile work environment, a different rule applies. In that context, because
the “very nature” of the claim “involves repeated conduct,” the unlawful employment practice
“cannot be said to occur on any particular day.” Id. at 115. Therefore, as long as “an act
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contributing to the claim occurs within the filing period, the entire time period of the hostile
environment may be considered by a court for purposes of determining liability.” Id. at 117
(emphasis added).
A. Disparate-Treatment Discrimination and Retaliation
Count I alleges disparate-treatment discrimination based on race and gender, and Count
III alleges retaliation for engaging in protected EEO activity. See Compl. ¶¶ 36–41, 49–54.
These are “discrete retaliatory or discriminatory acts” that are not actionable if time barred, even
if they are related to acts alleged in timely filed charges. See Morgan, 536 U.S. at 113.
Employees who believe they have been discriminated or retaliated against “must first consult” an
EEO Counselor within forty-five days of the alleged discrete acts of discrimination or retaliation.
29 C.F.R. § 1614.105(a)(1). Stephens first contacted an EEO Counselor on July 16, 2013.
Counting back forty-five days from that date, Stephens timely consulted the EEO Counselor
regarding certain alleged discriminatory or retaliatory acts that occurred on or after June 1, 2013,
namely Stephens’ June 2013 negative performance review, notice of termination, and resignation
in lieu of termination. See Compl. ¶¶ 33–35, 40; see also Def.’s Reply at 1, Dkt. 14
(acknowledging the same); Fed. R. Civ. P. 6(a)(1) (providing a default rule: when a statutory
time period “is stated in days or a longer unit of time . . . exclude the day of the event that
triggers the period”).
But Stephens did not timely consult the EEO Counselor about alleged acts that occurred
before June 2013, specifically that the Treasury Department discriminated or retaliated against
her by providing insufficient training and assistance, failing to address Perry’s insubordination,
undermining Stephens’ attempts to manage subordinates, and requiring her to perform duties
outside her job description. See Compl. ¶¶ 40, 53; see also id. ¶¶ 6–32 (detailing events from
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Stephens’ hiring on July 1, 2012 to May 2013). Because Stephens failed to exhaust
administrative remedies with respect to the alleged discriminatory and retaliatory acts that
occurred before June 2013, Count I and Count III must be dismissed to the extent that they are
based on those acts. See Panarello, 254 F. Supp. 3d at 100 (dismissing Title VII discrimination
claims for failure to exhaust because the claims arose more than forty-five days before the
complainant initiated contact with an EEO Counselor); Achagzai, 170 F. Supp. 3d at 178
(same).1 Going forward in this case, Count I and Count III may only rely on discriminatory or
retaliatory acts alleged to have occurred from June 1, 2013 to July 16, 2013.2
Furthermore, Count III can assert a retaliation claim premised only on protected EEO
activity alleged to have occurred in February and March 2013, not on any other protected EEO
activity. Before the Court, Stephens alleges that she engaged in earlier protected EEO activity in
September through December 2012, when she spoke with a labor and employee relations
specialist about possibly filing an EEO harassment complaint against Perry. Compl. ¶ 20; see
also id. ¶ 53. Before the EEO Counselor and in her individual complaint submitted to the
Treasury Department, however, Stephens did not raise this 2012 protected activity as a premise
1
Because the Court decides the issue as described above, the Court does not address the
Secretary’s additional arguments for dismissing the same portions of Counts I and III, namely
that (1) even if Stephens could have timely raised pre-June 2013 allegations with the EEO
Counselor, she did not actually raise them; and (2) even if Stephens raised the allegations with
the EEO Counselor, she failed to raise them in her individual complaint. See, e.g., Def.’s Mot. at
13–16, Dkt. 9; Def.’s Reply at 1–4.
2
The Secretary further argues that Stephens failed to exhaust administrative remedies for one
action that occurred between June 1 and July 16, 2013—Stephens’ negative performance review
on June 5—because Stephens did not identify that action in her individual complaint. See Def.’s
Mot. at 13–14. Although the individual complaint and the subsequent administrative
investigation are far from a model of clarity, the individual complaint does mention the negative
performance review in the general context of asserting race and sex discrimination. See Dkt. 9-2
at 2–3. Therefore, the Court is unpersuaded by the Secretary’s argument.
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for her retaliation claim in any way. Instead, Stephens identified her protected EEO activity as
occurring exclusively in February and March 2013, when she expressed interest in filing her own
EEO complaint against Perry because Perry filed one against her. See Individual Complaint,
Dkt. 9-2 at 3 (“I was discriminated against based on . . . retaliation (complaining of
discrimination during the investigation of a complaint by Jamie-Jo Perry against the OCC with
me named as the primary management official in February-March 2013) . . . .” (emphasis
added)); see also Report of EEO Counseling, Dkt. 9-1 at 2 (checking box for “retaliation/reprisal
for prior protected EEO activity” based on “participation in the EEO complaint process as a
Responsible Management Official named in a case filed by an OCC employee she supervised”);
id. at 5 (“Ms. Stephens alleges reprisal for her participation in the EEO complaint process as an
RMO and for expressing her interest in pursuing an EEO complaint. Ms. Stephens states that,
during the processing of the complaint filed by Ms. Perry, she told Mr. Price that she wanted to
file an EEO complaint herself.”). As a result, Stephens exhausted administrative remedies for a
retaliation claim premised on protected EEO activity that allegedly occurred in February and
March 2013, but not premised on any other protected EEO activity. See Marshall v. Fed.
Express Corp., 130 F.3d 1095, 1098 (D.C. Cir. 1997) (“Allowing a complaint to encompass
allegations outside the ambit of the predicate [administrative] charge would circumvent the
[appropriate agency’s] investigatory and conciliatory role, as well as deprive the charged party of
notice of the charge, as surely as would an initial failure to file a timely [administrative]
charge.”). Count III may therefore rely only on incidents alleged to have occurred from June 1
to July 16, 2013 as retaliation for protected EEO activity in February and March 2013.
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B. Hostile Work Environment
Count II alleges that the Treasury Department subjected Stephens to a hostile work
environment based on her race and gender and in retaliation for engaging in protected activities,
see Compl. ¶¶ 42–48, a claim that ultimately requires Stephens to show “discriminatory
intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of
the victim’s employment and create an abusive working environment,” Baird v. Gotbaum, 662
F.3d 1246, 1250 (D.C. Cir. 2011) (internal quotation marks omitted). Again, the exhaustion
rules for a hostile work environment claim differ from the exhaustion rules for discrete claims of
discrimination or retaliation. According to National Railroad Passenger Corp. v. Morgan,
“[h]ostile environment claims are different in kind from discrete acts” because “[t]heir very
nature involves repeated conduct.” 536 U.S. at 115. Such a claim “is composed of a series of
separate acts that collectively constitute one ‘unlawful employment practice.’” Id. at 117
(quoting 42 U.S.C. § 2000e-5(e)(1)). Therefore, “[p]rovided that an act contributing to the claim
occurs within the filing period, the entire time period of the hostile environment may be
considered by a court for the purposes of determining liability.” Id. (emphasis added).
“The Morgan principle is not, however, an open sesame to recovery for time-barred
violations. Both incidents barred by the statute of limitations and ones not barred can qualify as
‘part of the same actionable hostile environment claim’ only if they are adequately linked into a
coherent hostile environment claim—if, for example, they ‘involve the same type of employment
actions, occur relatively frequently, and are perpetrated by the same managers.’” Baird, 662
F.3d at 1251 (alterations omitted) (quoting Morgan, 536 U.S. at 120–21); see also id. (citing
other circuits approvingly for the propositions that “acts before and after the limitations period
that are so similar in nature, frequency, and severity must be considered to be part and parcel of
the hostile work environment” and that Morgan requires inquiry into whether incidents
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“occurring outside the statutory period are sufficiently related to those incidents occurring within
the statutory period as to form one continuous hostile work environment” (quoting Wilkie v.
HHS, 638 F.3d 944, 951 (8th Cir. 2011) and Wheaton v. N. Oakland Med. Ctr., 130 F. App’x
773, 787 (6th Cir. 2005) (alterations omitted))); Panarello, 254 F. Supp. 3d at 101 (“The
question whether such incidents are adequately linked into a coherent hostile environment
claim . . . is not easily answered. We know, for example, that it is sufficient that the ‘incidents
involved the same type of employment actions, occurred relatively frequently, and were
perpetrated by the same managers,’ but ‘neither the Supreme Court nor any circuit’ has yet to
offer a definitive test for what is necessary to establish that the incidents are ‘sufficiently related’
to form a ‘coherent’ claim.” (quoting Morgan, 536 U.S. at 120–21 and Baird, 662 F.3d at 1251
(some internal quotation marks and alterations omitted))).
As discussed above, Stephens timely consulted the EEO Counselor regarding incidents
that occurred between June 1 and July 16, 2013, specifically her June 2013 negative performance
review, notice of termination, and resignation in lieu of termination, but Stephens did not timely
consult the EEO Counselor regarding any pre-June 2013 incidents. See supra Section III.A. The
pre-June 2013 incidents thus qualify as part of an actionable hostile work environment claim
only if they are “adequately linked” to an incident that occurred between June 1 and July 16,
2013. Baird, 662 F.3d at 1251; see Vickers v. Powell, 493 F.3d 186, 198–99 (D.C. Cir. 2007)
(applying the Morgan rule to the 45-day window for initiating counseling).
The incidents are not adequately linked. Although the same manager (Price) was
involved in some of the incidents, the pre- and post-June 2013 incidents involved completely
different types of employment actions, and they did not occur frequently or repeatedly. As
Stephens herself states, before June 2013, she did not receive any other performance reviews.
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Compl. ¶¶ 8, 33. And the June 2013 performance review is not similar to any earlier incidents: it
criticized Stephens’ performance, id. ¶ 33, but it did not provide insufficient training and
assistance, fail to address Perry’s insubordination, undermine Stephens’ attempts to manage
subordinates, or require her to perform duties outside her job description, see id. ¶ 47; see also
id. ¶¶ 6–32 (detailing events from Stephens’ hiring on July 1, 2012 to May 2013). Also, before
June 2013, Stephens obviously did not receive a notice of termination from the agency, nor did
she resign in lieu of termination. Furthermore, those incidents ended Stephens’ employment
with the agency, so they do not share anything in common with earlier incidents that allegedly
created an abusive working environment during Stephens’ employment. See Baird, 662 F.3d at
1250. As a result, the pre- June 2013 incidents are not adequately linked to the June 2013
incidents such that they form a coherent hostile work environment claim. Count II must be
dismissed to the extent it is based on the pre-June 2013 incidents, for which Stephens did not
timely consult an EEO Counselor. See Dudley v. WMATA, 924 F. Supp. 2d 141, 164 (D.D.C.
2013); Rattigan v. Gonzales, 503 F. Supp. 2d 56, 82 (D.D.C. 2007). Going forward, Count II may
only rely on incidents alleged to have occurred from June 1, 2013 to July 16, 2013.
CONCLUSION
For the foregoing reasons, the Court grants Treasury Secretary Steven Mnuchin’s Partial
Motion to Dismiss. Dkt. 9. A separate order consistent with this decision accompanies this
memorandum opinion.
________________________
DABNEY L. FRIEDRICH
United States District Judge
Date: July 17, 2018
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