Osei v. Coastal International Security Inc.

Citations: 69 F. Supp. 3d 566; 2014 U.S. Dist. LEXIS 162289; 2014 WL 6608762Docket: Civil Action No. 1:13-cv-1204

Court: District Court, E.D. Virginia; November 18, 2014; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Defendant Coastal International Security's motion for summary judgment in the case involving plaintiff Naomi Osei is denied by the Court. Osei, a security guard at a GSA warehouse in Springfield, Virginia, was disciplined in April 2013 for procedural violations related to flag handling and a fire alarm, which she contested by refusing to sign the disciplinary notices. Following an allegedly aggressive reaction to her supervisor, she was placed on administrative leave. Osei’s counsel later asserted that Coastal’s actions constituted a pattern of discouraging her exercise of Family Medical Leave Act (FMLA) rights, citing denied leave requests related to her daughter’s health issues. Despite an earlier excused absence for her daughter’s hospitalization, Osei's request for leave in March 2013 was deemed unexcused. After her suspension, Coastal attempted to facilitate her return to work by offering part-time positions, but there was a dispute regarding the availability of full-time opportunities and the breakdown of communication. Osei’s first amended complaint included claims of FMLA reprisal, wrongful termination, violation of a Virginia statute, and breach of contract, with only the FMLA claim remaining after a previous dismissal. The Court applied Rule 56(c) of the Federal Rules of Civil Procedure, emphasizing that summary judgment is appropriate only when there are no genuine issues of material fact.

The Supreme Court established that a motion for summary judgment is not defeated by a mere factual dispute; a genuine issue of material fact must exist. A dispute is deemed "genuine" if reasonable evidence could lead a jury to favor the nonmoving party. In summary judgment evaluations, courts must view facts favorably towards the nonmoving party. 

Coastal has filed for summary judgment regarding Osei’s FMLA reprisal claim, which hinges on two primary issues: (1) whether Coastal qualifies as a successor in interest to Osei's prior employer, thus making her an FMLA “eligible employee,” and (2) whether Coastal's actions constituted materially adverse treatment towards Osei. To establish a claim for FMLA retaliation, a plaintiff must demonstrate that she engaged in protected activity, that her employer took adverse action, and that a causal link exists between the two. An “eligible employee” under the FMLA is one who has worked for at least 12 months and logged 1,250 hours in the preceding year.

Coastal contends Osei was not an eligible employee during relevant times, while Osei claims eligibility based on her belief of coverage under the FMLA and asserts that Coastal's status as a successor in interest to her previous employers meets the 12-month employment requirement. The court finds that Osei qualifies as an “eligible employee” through the successor in interest analysis, rendering the alternative theory of “reasonable belief” unnecessary to address.

The successor in interest determination follows a three-part test that evaluates (1) the employee's interests, (2) the employer's interests, and (3) the federal policy goals of the FMLA.

Courts evaluate the interests of employees and employers using a Department of Labor (DOL) regulation that outlines eight factors for determining an employee's eligibility for Family and Medical Leave Act (FMLA) benefits based on previous employment. This regulation allows an employer to be recognized as a successor in interest, meaning employees' entitlements are treated as continuous employment with a single employer. The eight factors to assess this include: continuity of business operations, use of the same facility, workforce continuity, job and working condition similarities, similarity in supervision, equipment and production methods, product or service similarities, and the predecessor's ability to provide relief. However, the last factor is often deemed irrelevant since a prior employer cannot grant leave to someone no longer employed.

Determining whether an employer qualifies as a successor in interest is a legal question for the court. In this case, Coastal took over the contract from American Security, which had previously acquired the contract from DTM. Osei, employed as a security officer since December 2009, continued to work at the same site, with Coastal retaining a similar workforce and many physical aspects of the job unchanged. This continuity in responsibilities and management supports the conclusion that Osei’s employment was continuous and the factors favor her claim for FMLA eligibility, alongside overarching equitable considerations that further establish successor-ship.

The FMLA aims to provide long-term employees with reasonable medical leave and to balance workplace demands with family needs. The Sixth Circuit has determined that not applying successor liability to companies vying for government contracts undermines the FMLA's implementation, as it could result in new companies being awarded contracts that prevent employees from qualifying for FMLA leave. Coastal has not demonstrated any interest that would negate a finding of successorship. In comparing cases, the court found that the DOL factors favor recognizing Osei's eligibility for FMLA leave, given her long tenure with Coastal's predecessors since December 2009, which exceeds the 12-month requirement for eligibility. Consequently, Coastal, as Osei's successor, must consider her previous employment when determining FMLA eligibility, thereby denying its claim that Osei's opposition to alleged FMLA violations was not protected activity due to her ineligibility.

Coastal also argues that Osei should be barred from introducing a successor-in-interest theory in opposition to its summary judgment motion, claiming it would cause undue prejudice since they did not conduct discovery on this issue. Coastal contends that Osei’s Amended Complaint does not reference her past employers or assert her eligibility under this theory. However, since Osei is not amending her complaint but merely asserting her eligibility, the precedents cited by Coastal do not apply.

The Fourth Circuit precedent in Johnson v. Oroweat Foods Co. supports Osei's position by indicating that a motion to add a new cause of action should be granted if it is substantially similar to the original claim. Osei, however, does not seek to add a new claim but asserts her eligibility under the Family and Medical Leave Act (FMLA) by meeting both the hours of service requirement and the employment threshold of Coastal, which has more than 50 employees within a 75-mile radius. DOL regulations allow periods with a predecessor employer to count towards the 12 months of employment needed for FMLA eligibility. Coastal did not challenge Osei's FMLA claim through a motion to dismiss but instead sought strict proof of her eligibility in its answer and chose not to conduct necessary discovery on the issue. Consequently, the court's focus is on whether Osei has provided sufficient evidence to establish her FMLA eligibility, including under a successor-in-interest theory, which she has done.

Regarding retaliation claims under the FMLA, Osei must demonstrate that Coastal took adverse action against her. Recent rulings clarify that adverse actions must be material, meaning they would dissuade a reasonable employee from engaging in protected activity. Adverse actions can include termination, demotion, pay decreases, or reduced promotion opportunities. The central issue is whether Coastal's failure to reinstate Osei after her suspension constitutes termination or another materially adverse action. Osei was suspended on April 7, 2013, following allegations of workplace violence and has not returned to work since.

On May 3, 2013, Osei's attorney notified Coastal of a perceived pattern discouraging her from taking Family and Medical Leave Act (FMLA) leave. Following this, Osei and Coastal's HR manager, Janice Simons, communicated about a possible reassignment within the company. On May 28, Simons assured Osei she was still employed and presented two job opportunities, warning that a lack of response by June 7 would be seen as a refusal to work. Osei responded on June 7, expressing interest in positions in Springfield or Alexandria, Virginia. Simons later detailed available positions at the Veterans Administration, U.S. Geological Survey, and FDA, all part-time and during nights and weekends. Osei requested shift details on June 14, but a subsequent email from Simons on July 3—containing shift hours and additional full-time opportunities—was disputed by Osei, who claimed it was never sent. The final communication was a letter from Osei's counsel on July 5, 2013, forwarding a draft complaint. 

The court noted that viewing the facts favorably for Osei, the diminishing efforts by Coastal to reassign her could lead a jury to conclude she was effectively terminated, which would be a materially adverse action. Additionally, the offers to transition her from full-time to part-time work, resulting in significant pay loss, could also be interpreted as adverse actions. The issue of who ceased communication regarding Osei's reassignment remains a disputed fact that cannot be resolved at summary judgment. The court concluded that Coastal is a successor in interest to Osei's previous employer, making her eligible for FMLA, and that sufficient factual disputes exist regarding Coastal's actions against her after she raised concerns about FMLA violations. Consequently, Coastal's summary judgment motion was denied.

Osei worked for Coastal's predecessors for nearly two and a half years, with unclear specifics regarding her employment duration at each predecessor. She was hired by DTM in December 2009, where she worked for about a year, and then transitioned to American Security before ultimately working for Coastal for over 11 months at the time of her suspension. This timeline makes her eligible for Family and Medical Leave Act (FMLA) benefits when considering her employment period with American Security.

Coastal, which provides private security services, retained a significantly similar workforce from American Security, including her supervisor, and maintained the same equipment and job responsibilities. These factors suggest continuous employment despite a change in management. The totality of the circumstances supports Osei's claim for successor liability, emphasizing the importance of maintaining FMLA protections for long-term employees, as highlighted by the Sixth Circuit's stance against allowing companies to circumvent FMLA eligibility through frequent contract changes.

Coastal has not provided justification for denying Osei's claim of successorship, and past cases illustrate that denying such claims could undermine the intent of the FMLA. The overarching equitable considerations favor Osei's position, indicating that the stability and continuity of her employment should be recognized despite the change in contracting companies.

The court found that the Department of Labor (DOL) factors strongly support Osei's claim for Family and Medical Leave Act (FMLA) eligibility, contrasting the case with Sullivan, where the Ninth Circuit determined that the employer was not a successor due to differences in job title, responsibilities, and store operations. The balance of equities favors Osei’s successorship claim, establishing that Coastal is a successor to her previous employer and must account for her prior employment periods when determining FMLA eligibility. Osei worked for Coastal’s predecessors for over 12 months, qualifying her as an “eligible employee” for FMLA leave, including during her suspension on April 7, 2013. Consequently, Coastal's argument that Osei's opposition letter to the alleged FMLA violations is not protected due to her ineligibility fails, and summary judgment on this basis is denied.

Coastal contends that Osei should be barred from asserting a successor-in-interest theory regarding her FMLA eligibility, claiming this would unduly prejudice them as they did not conduct discovery on this issue. Coastal argues that Osei's Amended Complaint does not mention her previous employers or assert her eligibility under a successor-in-interest theory. Citing Fourth Circuit precedent, Coastal suggests the court can deny leave to amend pleadings if discovery has closed, based on information known during that time. However, Osei is not attempting to amend her complaint but rather to clarify her FMLA eligibility, which was already asserted. The cited cases by Coastal do not apply, and the Johnson v. Oroweat Foods Co. precedent supports Osei's position, as her new argument is closely aligned with her original claim. In her Amended Complaint, Osei maintains she is an eligible employee based on meeting the hours of service requirement and Coastal's employee count.

DOL regulations and case law establish that employment periods with a predecessor employer count towards the 12 months required for FMLA eligibility. Coastal could have challenged Osei's FMLA claim by moving to dismiss but instead opted to answer, asserting the need for strict proof of her eligibility. Although Coastal identified this issue, it did not conduct any discovery to support its defense. Consequently, the court's focus is on whether Osei has provided adequate evidence to support her status as an "eligible employee," including under a successor-in-interest theory, which Coastal failed to contest effectively during discovery. 

The second aspect of Osei's FMLA retaliation claim involves demonstrating that Coastal took adverse action against her. Recent legal standards emphasize that adverse actions must be material, as clarified by the Supreme Court and the Fourth Circuit. Adverse actions can include termination, demotion, pay decreases, or other significant job-related detriments. The case hinges on whether Coastal's failure to reinstate Osei after her April 7, 2013 suspension, stemming from allegations of workplace violence, constitutes termination or another form of materially adverse action, given that Osei has not returned to work since her suspension.

On May 3, 2013, Osei’s attorney notified Coastal that its actions regarding her suspension suggested a pattern of discouraging her from taking Family and Medical Leave Act (FMLA) leave. Following this, Osei engaged in discussions with Janice Simons, Coastal's HR manager, about potential reassignment within the company. On May 28, Simons confirmed Osei's employment status and offered her two job opportunities, warning that failure to respond by June 7 would be interpreted as a refusal to work. Osei replied on June 7, expressing interest in positions in Springfield or Alexandria, Virginia.

On June 12, Simons presented job options at the Veterans Administration, U.S. Geological Survey, and FDA, all requiring night and weekend shifts. Osei requested details about the shift hours on June 14; however, the response from Simons is contested. Coastal claims Simons emailed Osei on July 3 with shift details and additional full-time opportunities, while Osei contends she never received this email. The final communication from Osei’s counsel occurred on July 5, 2013, forwarding a draft complaint.

A jury could find that Coastal's diminishing efforts to reassign Osei amounted to her termination, constituting a materially adverse action. Alternatively, the reassignment offers that resulted in a significant pay decrease could also be seen as adverse actions. The question of who halted the reassignment communications, leading to Osei's alleged constructive termination, is a disputed fact that cannot be resolved at the summary judgment stage, leading to the denial of Coastal's claims. The court concluded that Coastal is a successor to Osei’s previous employer, qualifying her for FMLA protection, and sufficient disputed facts exist to support her claim of materially adverse actions by Coastal. Therefore, all of Coastal’s summary judgment motions were denied, with the court acknowledging Osei's nearly two and a half years of employment with Coastal's predecessors, which supports her FMLA eligibility.