Milano v. Ikea Holding U.S., Inc.

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DEBRA MILANO Plaintiff, v. IKEA HOLDINGS US, INC. et al., Defendants.

Civil Action No. 20-6307

United States District Court, E.D. Pennsylvania

September 27, 2021

MEMORANDUM

Anita B. Brody, J.

Plaintiff Debra Milano brings suit against Defendant IKEA Holdings US Inc., IKEA U.S. Retail, LLC, and IKEA North America Services LLC (“IKEA”), alleging that IKEA's policies discriminate on the basis of age in violation of the New Jersey Law Against Discrimination. (“NJLAD”).^[1] IKEA moves to dismiss the Complaint in part pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and moves to transfer the action to the District of New Jersey. For the reasons set forth below, I deny IKEA's motion to dismiss and deny IKEA's motion to transfer without prejudice.

I. BACKGROUND

Defendant IKEA is a multinational company with retail stores across the United States. Compl. ¶¶ 5-7, ECF No. 1. Milano is a current IKEA employee who works at the IKEA store in Paramus, New Jersey. See id. at ¶ 3. Milano is 64 years old and has worked for IKEA since 2003. See id. at ¶¶ 2, 65.

In or around February 2019, Milano, then 62 years-old, applied for promotion to two open “Leader” positions at the Paramus, New Jersey IKEA store. See id. at ¶ 68(b). When Milano applied for the two open positions, she had over 15 years of experience with IKEA. See id. at ¶ 79. Milano was interviewed over the phone and was instructed by IKEA representatives to wait for a notice of an inperson interview. See id. at ¶ 74. IKEA never conducted an in-person with Milano. See id. at ¶ 76. In or around February 2019, Milano learned that she was rejected for both positions. See id. at ¶ 77. Instead of Milano, IKEA hired two younger people for the Leader positions. See id. at ¶ 78.

On December 15, 2020, Milano filed the instant Complaint. See id. In the Complaint, Milano asserts a disparate treatment claim under the NJLAD based on allegations that IKEA engages in a “pattern and practice of age discrimination” by maintaining policies that discriminate intentionally. See id. at ¶ 61. In the alternative, Milano asserts a disparate impact claim alleging that “to the extent that [IKEA's] facially neutral employment policies and practices have not been used by [IKEA] to discriminate intentionally, the continued use of one or more of each has resulted in a disparate impact against older employees, including Plaintiff Milano .” Id. at ¶ 64. Milano alleges that IKEA's “assessment and identification of the potential of its employees has resulted in a statistically significant disparity in the promotion rates of its older employees” (“Potential Policy”) and IKEA's “policies regarding relocation have resulted in a statistically significant disparity in the promotion rates of its older employees.” (“Relocation Policy”) Id.^[2]

III. DISCUSSION

A. Rule 12(b)(1) Motion to Dismiss

IKEA moves to dismiss Milano's disparate impact claim for lack of subjectmatter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) on the basis that Milano lacks standing to bring these claims. See See Def.'s Mot. at 7, ECF No. 6-2.. “The objection that a federal court lacks subject-matter jurisdiction, see Fed. Rule Civ. Proc. 12(b)(1), may be raised by a party, or by a court on its own initiative, at any stage in the litigation, even after trial and the entry of judgment.” Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006). A court cannot have subject matter jurisdiction over a plaintiff who lacks standing. Hartig Drug Co. Inc. v. Senju Pharm. Co., 836 F.3d 261, 269 (3d Cir. 2016).

A plaintiff bears the burden of establishing the three elements of standing: that he or she “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc., 578 U.S. at 1547. IKEA challenges the causation, or traceability, requirement for standing, arguing that Milano cannot trace her alleged injuries to the facially neutral Potential and Relocation Policies. See Def.'s Mot. at 7, ECF No. 6-2. IKEA contends that Milano fails “to allege that she was denied a promotion because (a) she expressed unwillingness to relocate to a different store and/or (b) she held a lower potential assessment than a younger employee who received the promotion.” Id.

To overcome a 12(b)(1) challenge for lack of standing, “‘a complaint must contain sufficient factual matter' that would establish standing if accepted as true.” In re Horizon, 846 F.3d at 633 (quoting Iqbal, 556 U.S. at 678). Milano need not show probable causation, but instead must allege facts that “nudge” her claims “across the line from conceivable to plausible.” Twombly, 550 U.S. at 547.

For the purposes of establishing standing at this stage of the litigation, Milano's complaint sufficiently establishes a plausible causal connection between her failure to be promoted and IKEA's policies. Milano alleges that she sought promotions and was rejected by IKEA. Id. at ¶ 68(b). She alleges that IKEA has policies that discriminate intentionally, or in the alternative, disparately impact Milano and all older employees when seeking promotions. Id. at ¶¶ 52, 64. In particular, Milano alleges that: (1) IKEA used “potential” as a proxy for youth “to assess promotability in an age-biased manner”; and (2) IKEA asks all applicants about their willingness to relocate and considers willingness to relocate in deciding whom to promote, even for positions that do not require relocation Id. at ¶ 52 (e), (q). Milano alleges that these policies have “resulted in a disparate impact against older employees, including Plaintiff Milano.” Id. at ¶ 64.

These facts are sufficient to show a plausible causal connection between Defendant's policies and Milano's repeated lack of promotion. See Houle v. Walmart Inc., 447 F.Supp.3d 261, 275 (M.D. Pa. 2020) (denying Defendant's motion to dismiss because “it is plausible that there is a causal connection between the injuries Plaintiffs allege and Defendant's policies.”) Even when “[Plaintiff's] complaint is not as rich with detail as some might prefer, it need only set forth sufficient facts to support plausible claims.” Fowler v. Univ. of Pittsburgh Med. Ctr. Shadyside, 578 F.3d 203, 211-12 (3d Cir. 2009). Therefore, I deny IKEA's motion to dismiss Milano's disparate impact claims for lack of standing.

B. Rule 12(b)(6) Motion to Dismiss

Pursuant to Rule 12(b)(6), IKEA moves to partially dismiss: (1) Milano's disparate treatment claim for untimeliness; and (2) Milano's disparate treatment claim on the grounds that “pattern-or-practice claims are not permitted outside of the class action context.” See Def.'s Mot. at 4-5.

In deciding a motion to dismiss under Rule 12(b)(6), a court must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). To survive dismissal, a complaint must allege facts sufficient to “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

“As a general matter, a district court ruling on a motion to dismiss may not consider matters extraneous to the pleadings. However, an exception to the general rule is that a ‘document integral to or explicitly relied upon in the complaint' may be considered ....” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (citation omitted) (quoting Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)). Thus, a court may consider any and all exhibits attached to the complaint in addition to the pleadings themselves. Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010).

1. Timeliness of Milano's Claim

A plaintiff must bring a claim under the NJLAD within two years of the alleged adverse employment action. See N.J.S.A. 2A:14-2(a); Montells v. Haynes, 133 N.J. 282, 298 (1993). IKEA acknowledges that Milano has alleged that her rejection in February 2019 is timely under the NJLAD. See Def.'s Mot. at 4-5. IKEA moves to partially dismiss Milano's claim as it relates to her rejection in February 2018. See id. Milano argues that the Complaint refers briefly to her rejection in February 2018 “because it is relevant evidence of IKEA's age bias.” Pl.'s Resp. at 8, ECF No. 12. In the Complaint, Milano clearly states that she seeks relief only for IKEA's “2019 rejections of her applications.” Compl. ¶ 71.

Because Milano only seeks relief for timely claims, IKEA's motion to dismiss claims for untimeliness is denied.

2. Milano' Disparate Treatment Claim

The parties disagree about whether Milano's disparate treatment claim invokes a particular method of proof known as the Teamsters method. In International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977), the Supreme Court held that in class action or government-initiated employment discrimination cases plaintiffs may prove a prima facie violation of the ADEA by showing a pattern and practice of systemic discrimination. This became known as the “pattern or practice” or “Teamsters” method. Chin v. Port Auth. of N.Y. & N.J., 685 F.3d 135, 147 (2d Cir. 2012). After the Plaintiff proves “unlawful discrimination has been a regular procedure or policy followed by an employer or group of employers, ” and that an individual unsuccessfully applied for a job, the...