Santana-Coln v. Houghton Mifflin Harcout Publishing Co.

Citations: 81 F. Supp. 3d 129; 2014 WL 7714400Docket: Civil No. 13-1053 (PAD)

Court: District Court, D. Puerto Rico; September 30, 2014; Federal District Court

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Plaintiffs José Santana-Colón, Iris Vizcarrondo, and their conjugal partnership filed a lawsuit against Houghton Mifflin Harcourt Publishing Company, alleging violations of the Family and Medical Leave Act, Puerto Rico Law No. 80, and Puerto Rico Law No. 115. Additionally, they claim Houghton owes Santana unpaid commissions and is liable for damages under Articles 1802 and 1803 of the Puerto Rico Civil Code. Jurisdiction is established under 28 U.S.C. 1331, 1332, and 1367. 

The case involves Santana's employment as an Associate Sales Representative, during which he experienced significant medical issues leading to hospitalization and a subsequent leave request under the Family and Medical Leave Act. Houghton designated this leave to run concurrently with a workers' compensation leave. In February 2012, Houghton terminated Santana’s employment, which plaintiffs argue was a pretext for downsizing. 

Houghton filed a motion to dismiss the claims based on Federal Rule of Civil Procedure 12(b)(6). The court outlines the standard of review for such motions, indicating that a complaint must present a plausible entitlement to relief, distinguishing between factual and conclusory allegations. It emphasizes that while detailed facts are not mandatory, the complaint must provide more than mere labels or bare assertions to survive dismissal. The court's decision on the motion to dismiss is pending, with the motion being granted in part and denied in part.

Plaintiffs allege that the defendant violated the Family and Medical Leave Act (FMLA) by discriminating against Santana and terminating him in retaliation for taking protected leave. The defendant argues that the plaintiffs did not adequately demonstrate that Santana was an eligible employee under the FMLA or that he faced discrimination or retaliation due to taking FMLA leave. The FMLA aims to help employees balance work and personal life, featuring prescriptive provisions that establish substantive rights and proscriptive provisions that protect these rights from employer retaliation. Eligible employees can take up to 12 weeks of leave and must be reinstated in the same or an equivalent position without loss of seniority. To qualify for FMLA protection, employees must meet specific criteria, including employment for at least 12 months, working 1,250 hours in the prior year, and being at a worksite with at least 50 employees within a 75-mile radius. Failure to meet these eligibility criteria can result in dismissal of interference claims, as demonstrated in various case precedents where ineligible employees were denied statutory relief under the FMLA.

To establish a claim for retaliation under the Family and Medical Leave Act (FMLA), a plaintiff must qualify as an eligible employee, which requires meeting specific criteria including a minimum of 1,250 hours worked in the past 12 months and the employer having at least 50 employees within a 75-mile radius. Several court cases (Humenny v. Genex Corp., Walker v. Elmore County Bd. of Educ., McSweeney v. Dinner’s Served, Inc., and Goode v. Heritage Hospice, Inc.) reinforce that lack of eligibility is grounds for dismissal of FMLA claims, as an employee cannot claim retaliation or discrimination if they are not entitled to protected leave under the FMLA.

The First Circuit has acknowledged some ambiguity regarding whether ineligible employees can ever bring retaliation claims, but it has clarified that if an employee's leave is not protected by the FMLA, they cannot claim they were discharged for taking such leave. A complaint must contain sufficient factual details to support a reasonable inference of the plaintiff’s eligibility. In this case, the plaintiffs failed to provide enough facts to demonstrate that Santana met the required eligibility criteria, leading to the conclusion that their FMLA claims were not viable.

The plaintiffs argued that Santana's granted FMLA leave implied eligibility, but statutory benefits rely on meeting eligibility requirements. Their assertion that the defendant should be estopped from contesting Santana’s eligibility hinges on the claim that he relied on misrepresentations by the defendant. However, the plaintiffs did not sufficiently establish that Santana was on leave protected by the FMLA when he was terminated, nor did they demonstrate any misrepresentations regarding the duration of the leave. Thus, the allegations did not support a plausible claim under the FMLA.

Termination after a leave of absence may not constitute a viable estoppel claim for Santana, as there are no allegations that the employer guaranteed him additional leave beyond the twelve weeks permitted under the FMLA. Without such a guarantee, there is no basis for any reliance on a misrepresentation that would prevent the defendant from asserting Santana’s ineligibility for FMLA claims. Even assuming eligibility was adequately pled, the allegations do not support claims of interference or retaliation under the FMLA. By late 2011, Santana had already exhausted his twelve weeks of leave, and there are no facts indicating he was able to return to work afterward. Consequently, the amended complaint lacks sufficient factual content to suggest the defendant interfered with Santana's leave rights or his right to reinstatement. Additionally, the claim that Santana was terminated in retaliation for taking FMLA leave fails, as he was discharged approximately six months after beginning his leave, which does not meet the timeframe necessary to imply retaliatory intent.

The amended complaint lacks sufficient evidence of a retaliatory motive, as no statements from decision-makers suggest such intent. The only relevant allegation involves a supervisor's email to Santana expressing concern over his illness, but this is deemed inadequate for a plausible retaliation claim. Relevant case law highlights instances where a stronger connection between actions and retaliatory motive was established, contrasting with the current situation where the email does not imply hostility. 

Regarding Law 115, which prohibits employer retaliation against employees participating in legal processes in Puerto Rico, the plaintiffs allege Santana was retaliated against for refusing illegal instructions, using FMLA protections, and seeking treatment. While his discharge constitutes an adverse employment action, the defendant argues that these allegations do not meet the requirements of Law 115, which only protects employees who testify or attempt to testify in official capacities. Therefore, Santana's claims do not satisfy the necessary criteria for a retaliation claim under this statute.

The Puerto Rico Supreme Court recognizes that seeking State Insurance Fund (SIF) benefits is a protected activity under Law 115. In evaluating Santana's case, the court examines the causal relationship between his SIF leave and subsequent dismissal. Close temporal proximity between a protected activity and adverse employment action can imply causation. The First Circuit has previously accepted a three-month gap as sufficient to establish this connection, while one-month gaps have also been deemed adequate. However, the allegations in Santana's case, where he sought SIF benefits on August 11, 2011, and was terminated about six months later on February 15, 2012, fail to demonstrate causation. Additional allegations about supervisor comments and the employer's failure to recognize the SIF leave do not alter this conclusion, as they do not substantiate a retaliation claim under Law 115. 

Regarding Santana's claims for unpaid commissions amounting to $192,000 for 2011 and 2012, the plaintiffs assert that he was entitled to these based on a commission plan. However, the defendant argues that the plaintiffs have not provided sufficient factual support for Santana's eligibility for the plan, the sales volume required, or the basis for the claimed commission amount, especially since Santana did not work at all in 2012. As a result, both the retaliation claim and the commission claim must be dismissed due to lack of plausibility and supporting evidence.

The employer-employee relationship is fundamentally contractual, and the adequacy of claims for employment-related benefits is assessed through a contract framework. In *Manning v. Boston Medical Center Corp.*, the First Circuit determined that allegations of providing labor in exchange for specified pay, along with claims of reliance on the employer's promises regarding wages, were sufficient to establish a breach of contract. The court noted the simplicity of the factual allegations aligned with the straightforward elements of a contract claim, requiring no further specificity.

Conversely, in *Doyle v. Hasbro*, the court found that vague allegations regarding the failure to meet contractual obligations were inadequate, as the plaintiff did not specify the nature, terms, or duration of the contract. As a result, the court concluded that the plaintiff's claims lacked the necessary factual basis to demonstrate entitlement to relief.

In the current case, the plaintiffs claimed a commission plan for which an individual was eligible but failed to provide sufficient details regarding the conditions for commission eligibility for the relevant years. This omission left a critical element—condition precedent to payment—unaddressed, as such conditions must be established for a contract to be enforceable. The court emphasized that mere labels or conclusory statements are insufficient; specific factual allegations are necessary to support a legitimate inference of entitlement to relief.

Examples from case law illustrate this point: *Williams v. Astra USA, Inc.* was dismissed because the plaintiff did not specify contract terms or obligations, while *Bianchi-Montana v. Crucci-Silva* allowed a breach of contract claim to proceed due to detailed allegations of an agreement regarding labor and compensation.

In Ferrera v. Carpionato Corp., the First Circuit affirmed a directed verdict against the plaintiff due to the absence of a salary term and unspecified percentages in the project participation and bonus sections of the agreement, which constituted a material omission preventing recovery. The court acknowledged that some flexibility in the plausibility standard may be applicable in cases where plaintiffs lack access to information needed to substantiate their claims before discovery. For instance, in Menard v. CSX Transp. Inc., the court initially dismissed a complaint based on speculation regarding the defendant's employees’ knowledge of the plaintiff's injury. However, the First Circuit reversed this dismissal, clarifying that "information and belief" does not equate to mere speculation but is based on secondhand information that the plaintiff believed to be true under the circumstances. In Peñalbert-Rosa, while the court upheld the dismissal of named defendants due to insufficient allegations connecting them to a discriminatory discharge, it allowed the plaintiff to amend the complaint to include a 'John Doe' defendant when the identity of the wrongdoer was unknown despite good faith efforts to identify them.

Conversely, in García-Catalán, the First Circuit determined that the plaintiffs failed to meet the plausibility standard because their allegations did not justify the need for discovery to support their claims. The plaintiffs’ factual assertions lacked the specificity required under the Federal Rules of Civil Procedure and did not rise to the level of plausibility established in Ashcroft and Bell Atlantic v. Twombly. The court concluded that the facts presented by the plaintiffs were merely consistent with the defendant’s liability but did not cross the threshold from possibility to plausibility, leading to the dismissal of the commissions claim.

Plaintiffs claim damages under Articles 1802 and 1803 of Puerto Rico’s Civil Code. Article 1802 establishes liability for damages caused by fault or negligence, while Article 1803 invokes respondeat superior for such claims. However, if the plaintiffs are pursuing damages for conduct addressed by the Family and Medical Leave Act (FMLA), Law 115, or Law 80, they cannot succeed under Article 1802 because Puerto Rican law prohibits using specific labor laws to also claim under the general tort statute. This principle is supported by case law, including Pagán Colón v. Walgreens and Nieves Pérez v. Doctors’ Center, which emphasize that when a specific labor law governs the conduct, it bars additional claims under Article 1802. 

Historically, wrongful dismissal protections in Puerto Rico evolved from the Spanish Commerce Code, which allowed for termination with notice. Changes occurred with the enactment of Law 43 in 1930, establishing a framework for employee protections against unjust dismissal, which evolved through subsequent laws, including Law 80, which increased compensation for unjust dismissals. These laws were designed to provide exclusive remedies for wrongful discharges and have been interpreted to prevent claims under general statutes like Article 1802 for matters already covered by specific labor laws.

Remedies for labor statute violations are limited to those established within the specific statutes invoked, as supported by precedents such as Nieves, Rosario, and Pagán Colón. Santana's claims do not indicate any tortious conduct separate from the labor laws he has cited, thus precluding an action for damages under Articles 1802 or 1803 of the Civil Code. Unlike employees, relatives of victims of employment discrimination may claim emotional damages under Article 1802, contingent on the success of the principal plaintiff's claim. If the principal claim fails, so does the derivative claim, as established in several cases including Cabán Hernández and Marcano-Rivera. Santana's claims under Law 115 and the FMLA are dismissed, leaving his spouse without a derivative claim. The Puerto Rico Supreme Court has also determined that the FMLA cannot serve as a basis for emotional damage claims by an employee's spouse. Although Santana's Law 80 claim survives, it does not provide for damages. The plaintiffs' allegations under Articles 1802 and 1803 lack sufficient factual support and must be dismissed. In their Law No. 80 allegations, plaintiffs assert that Santana's dismissal was falsely attributed to downsizing, as opposed to actual cause. Law No. 80 holds certain employers liable for unjustified dismissals, defines just cause, and places the burden on employers to demonstrate just cause, particularly in cases of employee misconduct, performance issues, or layoffs.

Just cause for employee discharge is defined as not being arbitrary or whimsical, and it excludes discharges lacking a proper basis related to the establishment's normal operations. The statute outlines specific examples of just cause, including: 1) full, temporary, or partial closures of operations, especially in cases where multiple locations exist; 2) technological or organizational changes, including modifications to products or services; and 3) employment reductions due to decreased production, sales, or profits. Employers must prioritize retaining employees with greater seniority in the same occupational classification during downsizing, particularly if there are vacancies or if hiring occurs within six months post-discharge. In the case of Santana, the defendant argues that the dismissal was justified due to alleged downsizing, which the plaintiffs claim was a pretext since new hires occurred afterward. The plaintiffs must provide sufficient facts to demonstrate a violation of the preferential hiring rule under Law 80, specifically regarding whether new hires were made within Santana's classification and timeframe, and if seniority requirements were not met. At the pleading stage, employees need only allege unjustified dismissal, while the employer must respond with facts supporting the discharge as justifiable.

Plaintiffs' characterization of the downsizing as pretextual does not alter their initial burden or require additional allegations beyond the minimum necessary to initiate a claim under Law 80. Consequently, the defendant's motion to dismiss must be denied on this basis. However, the Law 80 claim carries a potential liability of only $7,792, which is insufficient to meet the jurisdictional threshold of $75,000 required for diversity jurisdiction under 28 U.S.C. § 1332(a). Therefore, this claim must be dismissed without prejudice. 

The court's analysis under Fed. R. Civ. P. 12(b)(6) indicates that the plaintiffs' allegations lack the necessary factual content to support plausible relief, leading to the dismissal of claims under the FMLA, Law No. 115, and the Puerto Rico Civil Code with prejudice, while the Law No. 80 claim is dismissed without prejudice. 

In the context of potential FMLA interference, while plaintiffs assert that any statutory violations amount to interference, this contradicts established First Circuit precedent distinguishing between claims of denial of substantive rights and retaliation. The court interprets the allegations as primarily asserting retaliation. Nonetheless, it will assume that the interference claim is adequately pleaded for the sake of argument. 

The court notes a specific email translation regarding Santana's illness but relies on the plaintiffs' version. As federal claims are dismissed, jurisdiction over state claims typically would be relinquished under 28 U.S.C. § 1367(c)(3). However, since the plaintiffs invoked diversity jurisdiction, which remains unchallenged, the court will also evaluate the state claims.

The reasoning applied to dismiss the plaintiffs' retaliation claim under the Family and Medical Leave Act (FMLA) parallels previous cases. In Muñoz v. Sociedad Española, the First Circuit acknowledged the issue but did not address it due to the defendant's waiver under Federal Rule of Civil Procedure 50(b), which also did not warrant plain error review. Compensation for employees under Puerto Rico Law No. 80 is structured based on years of service: (1) for the first 5 years, employees receive 2 months' pay plus 1 week's pay for each completed year; (2) for 5 to less than 15 years, they receive 3 months' pay plus 2 weeks for each completed year; and (3) for 15 years or more, they receive 6 months' pay plus 3 weeks for each completed year. Additionally, the determination of which employees to retain during comparisons will favor those with greater efficiency or capacity, per Puerto Rico law.