Wilson v. Cfmoto Powersports, Inc.

GARRETT WILSON, Plaintiff,and KEVIN LINDSEY, Commissioner of the Minnesota Department of Human Rights, Movant, v. CFMOTO POWERSPORTS, INC., Defendant.

Civil No. 15-3192 (JRT/JJK)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

March 7, 2016

MEMORANDUM OPINION AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND MOVANT'S MOTION TO INTERVENE

Debra S. Nolan, GARY, WILLIAMS, PARENTI, WATSON & GARY, PLLC, 221 S.E. Osceola Street, Stuart, FL 34994, and Christopher J. Kuhlman, KUHLMAN LAW, PLLC, 333 Washington Avenue North, Suite 335, Minneapolis, MN 55401, for plaintiff.

Nicholas M. Wenner and Boris Parker, PARKER & WENNER, 100 South Fifth Street, 2100 Fifth Street Towers, Minneapolis, MN 55402, for defendant.

Timothy S. Christensen and Jonathan D. Moler, Assistant Attorney General, MINNESOTA ATTORNEY GENERAL'S OFFICE, 445 Minnesota Street, Suite 900, St. Paul, MN 55101, for intervenor.

Plaintiff Garrett Wilson brings this wrongful termination action against Defendant CFMOTO Powersports, Inc. ("CFMOTO"), asserting claims for racially based employment discrimination under 42 U.S.C. § 1981, and racially based employment and business discrimination under the Minnesota Human Rights Act ("MHRA"), Minn. Stat. § 363A.08, subdiv. 2, and § 363A.17(3). Wilson alleges that CFMOTO hired him to be a sales representative for the southern region of the United States, but then subsequently fired him after learning that he was black. CFMOTO now moves to dismiss the action in its entirety. Additionally, Kevin Lindsey, Commissioner of the Minnesota Department Human Rights ("MDHR"), moves to intervene under Federal Rule of Civil Procedure 24(b)(2)(A) in order to assert claims against CFMOTO.

The Court will deny CFMOTO's motion to dismiss Wilson's § 1981 claim because Title VII's minimum-employee threshold does not apply to claims brought under § 1981 and Wilson has stated a plausible claim for relief. The Court will also deny CFMOTO's motion to dismiss the MHRA claims because Wilson has pleaded enough facts to establish that he worked in Minnesota and he has stated plausible claims for relief. Finally, the Court will grant Lindsey's motion to intervene because the motion satisfies Rule 24(b)(2)(A), Lindsey has stated plausible claims for relief, and Lindsey's intervention is not per se prejudicial.

BACKGROUND

I. FACTUAL BACKGROUND

For the purposes of this motion to dismiss, the Court takes Wilson's factual allegations as true. Cormack v. Settle-Beshears, 474 F.3d 528, 531 (8^th Cir. 2007). Defendant CFMOTO is a Minnesota corporation that manufactures and sells mopeds and all-terrain vehicles ("ATVs"). (Am. Compl. ¶¶ 13, 20, Sept. 8, 2015, Docket No. 14.)Although its principal place of business and main offices are located in Plymouth, Minnesota, CFMOTO employs "individuals throughout the United States who [are] responsible for selling its products within designated territories." (Id. ¶ 7.)

Plaintiff Wilson is a resident of Kentucky and is black. (Id. ¶ 4.) From 2006 until approximately May 2011, Wilson operated a business called Moped International, which sold mopeds, scooters, and accessories. (Id. ¶ 13.) At some point during that time period, Moped International became an approved CFMOTO dealer and sold mopeds manufactured by CFMOTO. (Id. ¶ 14.)

In early 2011, CFMOTO Operations Manager Faith Ahler contacted Wilson to inquire about his interest in becoming the company's South Regional Sales Manager. (Id. ¶ 16.) Wilson interviewed by phone with CFMOTO's then-CEO, Charles Chen. (Id. ¶ 17.) The parties executed a nondisclosure agreement and Wilson was subsequently hired effective June 1, 2011. (Id. ¶¶ 18-19, 22.) As a condition of employment, Chen informed Wilson that he would have to give up operational control of Moped International; Wilson complied with this condition. (Id. ¶¶ 20-21.)

Wilson's job duties included selling off-road ATVs in the southern United States. (Id. ¶ 20.) Wilson was advised that although he would work remotely from Kentucky, "he would regularly report to and interact with executive level employees of CFMOTO working out of its Plymouth, Minnesota office" and that "he would be required to attend training and other meetings in Minnesota." (Id. ¶¶ 23-24.) Wilson was to receive a "mixed compensation package including salary plus commission based on sales volume." (Id. ¶ 22.)

During his employment, Wilson communicated almost daily by phone or email with employees and supervisors at CFMOTO's Minnesota office regarding potential sales leads, status updates, instructions, tasks, and other information pertaining to his job. (Id. ¶¶ 26-28.) Shortly after being hired, Wilson also attended two separate training sessions in Minnesota. (Id. ¶¶ 29, 36.) The first training lasted approximately one week, and the second training lasted approximately two to four days. (Id.)

Before Wilson came to Minnesota for the first training, some of CFMOTO's Minnesota employees, including Ahler and CFO Eric Fan, were unaware that he was black. (Id. ¶¶ 30-31.) Upon his arrival in Minnesota, Wilson met two black employees who worked in the company's warehouse/packaging department. (Id. ¶ 32.) These employees told Wilson "that they were shocked that the company hired a black person for a sales/marketing position" and "that seeing this gave [one of the employees] new hope about his own job with the company." (Id.)

After the first training was over, Fan told Ahler "that an African-American should not have been hired to work in sales, and that [Wilson] would not be allowed to continue with [CFMOTO]." (Id. ¶ 34.) Ahler "opposed" Fan's comments because Wilson had more sales experience than the other four sales representatives (all of whom were Caucasian), customers and dealers liked Wilson, and Wilson's race did not affect his ability to do his job. (Id. ¶ 35.)

When Wilson returned to Minnesota for the second training, he learned that he had not been invited to a national ATV "expo"; the other four sales representatives - all white - had attended the expo. (Id. ¶¶ 40-41.) After the second training was over, GlenWakefield, a fellow sales representative, told Ahler that "he did not believe an African-American would be able to sell CFMOTO . . . products." Wakefield then complained directly to CFMOTO's new CEO, Adam Tao,¹ telling Tao that Wilson "would not be able to sell CFMOTO [products] because black people did not buy mopeds and ATVs," "black people do not ride ATV's [sic], black people do not come to shows, and a black person cannot sell power sports in the South." (Id. ¶¶ 38, 43.)

On August 16, 2011, Wilson called Tao to ask why he was not invited to the national ATV expo. (Id. ¶ 42.) During that phone conversation, Tao fired Wilson. (Id.) After Wakefield learned of Wilson's termination, he told a fellow CFMOTO employee "that he believed he got Wilson fired because" of his complaint to Tao. (Id. ¶ 43.)

II. PROCEDURAL BACKGROUND

On April 19, 2012, Wilson filed an administrative charge of race-based discrimination against CFMOTO with the MDHR. (Aff. of Abbey Bowe ("Bowe Aff."), Ex. 1, Nov. 12, 2015, Docket No. 28.) The MDHR investigated the charge and issued a probable cause determination approximately 24 months later, on April 14, 2014. (Id., Ex. 2; id., Ex. 5 at 9, ¶ 9.) The MDHR found probable cause that CFMOTO racially discriminated against Wilson in violation of the MHRA. (Id., Ex. 2 at 5.) CFMOTO contested the determination, and, on March 20, 2015, the matter was vacated and remanded for further investigation. (Id., Ex. 3; Aff. of Kevin Lindsey ¶ 2, Nov. 12, 2015,Docket No. 27.) Around that time, Wilson filed an amended charge. (Bowe Aff., Ex. 4; Aff. of Boris Parker ("Parker Aff."), Ex. 2 at 1, Nov. 3, 2015, Docket No. 24.) Then, on June 3, 2015, the MDHR issued a second probable cause determination, affirming its first determination and again finding probable cause that CFMOTO engaged in race-based discrimination against Wilson in violation of the MHRA. (Bowe Aff., Ex. 5 at 13; Parker Aff., Ex. 1 at 1.)

Wilson withdrew his charge before the MDHR in July 2015 and initiated this action on August 3, 2015. (Compl., Aug. 3, 2015, Docket No. 1.) Wilson then filed an amended complaint on September 8, 2015. (Am. Compl.) In the amended complaint, Wilson asserts the following claims against CFMOTO: (1) employment discrimination based on race in violation of 42 U.S.C. § 1981, (2) employment discrimination based on race in violation of § 363A.08, subdiv. 2 of the MHRA, and (3) business discrimination based on race in violation of § 363A.17(3) of the MHRA. (Id. ¶¶ 44-56, 57-61.) Wilson alleges that he was paid a lower salary than the other four white sales representatives, that he did not receive the same level of training and sales assistance, that he was excluded from the national ATV expo, and that he was eventually fired, all because of his race. (Id. ¶ 47.)

CFMOTO moves to dismiss the amended complaint in its entirety. (Mot. to Dismiss, Aug. 24, 2015, Docket No. 7.) Also, on October 27, 2015, Commissioner Lindsey of the MDHR filed a motion to intervene under Federal Rule of Civil Procedure 24(b)(2)(A) in order to assert claims against CFMOTO. (Mot. to Intervene, October 27, 2015, Docket No. 19.) The Court will resolve both motions in this Order.

ANALYSIS

I. MOTION TO DISMISS

A. Standard of Review

In reviewing a motion to dismiss brought under Federal Rule of Civil Procedure 12(b)(6), the Court considers all facts alleged in the complaint as true to determine if the complaint states a "claim to relief that is plausible on its face." See, e.g., Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8^th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To survive a motion to dismiss, a complaint must provide more than "'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action.'" Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Although the Court accepts the complaint's...