Nealy v. Shelly & Sands, Inc.

PAUL NEALY, Plaintiff, v. SHELLY & SANDS, INC., et al., Defendants.

Case No. 2:20-cv-1100

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

July 28, 2020

JUDGE SARAH D. MORRISON

MAGISTRATE JUDGE VASCURA

OPINION & ORDER

Plaintiff Paul Nealy asserts that his former employer, Defendant Shelly & Sands, Inc. ("Shelly"), and former supervisor, Defendant Ryan Grezlik, denied him promotions and failed to return him to work based on his race and in retaliation for his prior complaints of race discrimination. (ECF No. 1.) Defendants deny all claims and move to dismiss under Fed. R. Civ. P. 12(b)(1), arguing that the Court lacks jurisdiction due to a mandatory arbitration provision contained within governing collective bargaining agreements. (ECF No. 5.) Mr. Nealy opposes (ECF No. 8) and Defendants' Reply (ECF No. 11) has been filed. For the reasons that follow, the Court GRANTS the motion and dismisses this action in its entirety without prejudice.

I. BACKGROUND

In adjudicating this Motion to Dismiss, the Court accepts as true all well-pleaded factual allegations from the Complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678-9 (2009).

Mr. Nealy began working for Shelly as a seasonal carpenter in 2012. (ECF No. 1 at ¶ ¶ 12, 15-16.) He worked March through November of each year and had a winter layoff between November and March. Id. at ¶ 14.

His position was unionized and covered by two Collective Bargaining Agreements ("CBAs"). Id. at ¶ 18. The CBAs contain identical mandatory grievance and arbitration provisions. They also required him to be paid for transportation costs to any job more than seventy-four miles from his home. Id. Mr. Nealy completed jobs outside of that geographical restriction several times during his tenure at Shelly but Shelly did not reimburse him for related travel expenses. Id. at ¶ ¶ 19, 23-25. Shelly did reimburse Mr. Nealy's white co-workers for those costs. Id. at ¶ ¶ 19, 26. Mr. Nealy did not file a grievance on this issue; rather, he reported the incidents to Myra Johnson, Shelly's Equal Employment Opportunity Officer. Id. at ¶ 21.

In 2015, Mr. Nealy was the only African-American assigned to a welding project. Id. at ¶ 28. Tom Bates served as the foreman of the project. Id. Mr. Bates "consistently singled Mr. Nealy out by yelling at him for how long the tasks were taking to complete." Id. at ¶ 30. Mr. Bates was Mr. Nealy's foreman on a subsequent project. Id. at ¶ 31. Mr. Bates refused to give Mr. Nealy directions to the job site. Id. at ¶ 33. When Mr. Nealy reported Mr. Bates' actions to Ms. Johnson, she sent Mr. Grezlik to the job site. Id. at ¶ 34. Mr. Grezlik told the men that he "hated it when guys call EEO" and specifically mentioned Mr. Nealy's previous complaint for unpaid accommodations. Id. at ¶ 37.

Shelly offered Mr. Nealy a promotion to foreman on a project during 2015, for which he needed training. Id. at ¶ ¶ 39, 43. Mr. Nealy was the only African-American in the training class and the only participant who did not receive paid lodging from Shelly. Id. at ¶ ¶ 45-47. After his training, Shelly did not place him in a foreman position. Id. at ¶ 50. Instead, Mr. Nealy learned that Mr. Grezlik had stated that he did not want Mr. Nealy working at Shelly. Id. at ¶ ¶ 52, 54. Mr. Nealy reported Mr. Grezlik's comment to Ms. Johnson. Id. at ¶ 54. Mr. Nealy never received a foreman position.

In November 2017, Mr. Nealy worked with two other African-Americans on a project. Id. at ¶ 75. All three were laid off from the project due to lack of work but other white carpenters remained on the job. Id. at ¶ ¶ 77-79.

In 2018, Mr. Nealy made numerous calls to Shelly employees asking to be reinstated as a foreman without receiving an answer. Shelly did not return Mr. Nealy to work that year. Id. at ¶ ¶ 83-115. Mr. Nealy did not file a grievance and did not pursue arbitration. Instead, Mr. Nealy lodged a charge with the Equal Employment Opportunity Commission and received his Right-to-Sue Letter on December 11, 2019.

He timely filed the instant Complaint. Therein, he alleges that Defendants violated the Reconstruction Civil Rights Act, 42 U.S.C. § 1981; Title VII of the Civil Rights Act, 42 U.S.C. ¶ 2000e et seq., and related state laws found in Ohio Revised Code Chapter 4112 by refusing to promote him due to his race and by terminating him in retaliation for his complaints to Ms. Johnson. He seeks reinstatement, back pay and compensatory damages.

II. STANDARD OF REVIEW

Rule 12(b)(1) provides that the defendant may file a motion to dismiss based on a "lack of jurisdiction over the subject matter."¹ Fed. R. Civ. P. 12(b)(1). The standard of review for a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction depends on whether thedefendant makes a facial or factual challenge to subject matter jurisdiction. Wayside Church v. Van Buren County, 847 F.3d 812, 816-17 (6th Cir. 2017). Only the former is present here. See Jacobs, 375 F. Supp. 3d at 910 n.10 (E.D. Tenn. 2019) (holding defendant's motion to dismiss due to a mandatory arbitration clause under Rule 12(b)(1) raises a facial, rather than a factual, attack). "A facial attack goes to the question of whether the plaintiff has alleged a basis for subject-matter jurisdiction." Arnold v. Liberty Mut. Ins. Co., 392 F. Supp. 3d 747, 762 (E.D. Ky. 2019). This type of challenge "questions merely the sufficiency of the pleading," Gentek Bldg Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007) (citation omitted) and requires the district court to "take[] the allegations in the complaint as true." Id. "If those allegations establish standing, jurisdiction exists (subject, of course, to later challenge if the allegations prove false)." Solis v. Emery Fed. Credit Union, No. 1:19-cv-387, 2020 U.S. Dist. LEXIS 82366, at *9 (S.D. Ohio May 11, 2020). The plaintiff has the burden of proving jurisdiction when subject matter jurisdiction is challenged. Boyd v. United States, 932 F. Supp. 2d 830, 834 (S.D. Ohio 2013) (citation omitted).

III. MATTERS OUTSIDE OF THE PLEADINGS

Each side submits documents outside of the pleadings in support of their respective positions. Typically, the Court does not consider such matters when ruling on a motion to dismiss. The chief concern when considering extrinsic materials on a motion to dismiss is that defendants seeking dismissal not suffer "any prejudicial surprise" as a result of those materials. See Yeary v. Goodwill Indus.-Knoxville, Inc., 107 F.3d 443, 445 (6th Cir. 1997). Thus, where extrinsic materials "add nothing new, but, in effect, reiterate the contents of the complaint itself," they may be considered without converting a motion to dismiss to a motion for summary judgment. Id. at 445.

The Complaint mentions the CBAs. (ECF No. 1 at ¶ 18.) Defendants provide copies of the governing CBAs and authenticate same via the affidavit of Andrew Leffler. (ECF No. 5-1.) Mr. Nealy does not oppose the submission, authentication or content of those documents. "[A] court may consider . . . 'exhibits attached to defendant's motion to dismiss so long as they are referred to in the complaint and are central to the claims contained therein' . . . ." Rondigo, LLC v. Twp. of Richmond, 641 F.3d 673, 680 (6th Cir. 2011) (quoting Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir. 2008)). Thus, the CBAs are not materials outside the pleadings and the Court will consider them while addressing the present motion.

Mr. Nealy proffers his Declaration to buttress his Complaint. (ECF No. 8-1). The Declaration, executed after the Complaint was filed, does provide new information. Specifically, it relays that Mr. Nealy reported his unreimbursed hotel stays to Mr. Richie Brown, the designated Carpenters Business Agent for Shelly's Heavy Highways Operations. Mr. Nealy also states that he told Lead Business Agent Mark Mohen that his layoff was racially motivated. In addition, Mr. Nealy declares that he called the Carpenters Regional Office in May or June 2018 seeking assistance in filing a grievance. Mr. Nealy declares that he contacted Lead Business Agent Troy Woodyard for the same purpose after the Complaint was filed. None of those allegations were contained within the Complaint. In sum, the Declaration avers that Mr. Nealy did lodge grievances with the union while his Complaint concedes that he did not. (ECF No. 1 at ¶ 21.) Because the Declaration provides new and conflicting information that would yield "prejudicial surprise" to Defendants, the Court will not consider the Declaration for purposes of the instant motion.

IV. ANALYSIS

Defendants maintain that the CBAs contain a mandatory grievance and arbitration provision that serves to deprive the Court of subject matter jurisdiction because Mr. Nealy did not attempt to arbitrate his grievances before filing this case. Mr. Nealy admits that the CBAs apply, but argues that they do not mandate arbitration because they fail to specifically reference § 1981, Title VII and Chapter 4112. Alternatively, he contends that the arbitration requirement does not apply to his retaliation claim and that pursuing arbitration would have been futile such that the Court should ignore the arbitration requirement. Defendants reply that the CBAs are sufficiently specific, that the CBAs' scope includes retaliation claims, and that alleged futility does not bar enforcement of the mandatory arbitration provision. Defendants' arguments prevail.

A. The CBAs Contain a Clear and Unmistakable Waiver.

The Court begins its analysis with the content of the CBAs. Each contain the following equal opportunity, "Non-Discrimination" language:

It is a condition of this agreement to provide equal opportunity in employment for all qualified persons, and to prohibit discrimination in employment because of race, creed, color, sex, age or national origin. There shall be full compliance with all applicable Federal and State Statutes, regulations, rules and orders of appropriate Federal or State agencies having

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