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June 18, 1990


The opinion of the court was delivered by: Edelstein, District Judge:



This order is issued pursuant to defendants' motion to dismiss two of plaintiffs' seven claims for failure to state a claim upon which relief may be granted (Fed.R. Civ.P. 12(b)(6)) and defendants' motion to dismiss the entire action for lack of subject matter jurisdiction (Fed.R.Civ.P. 12(b)(1)). These motions were filed prior to any discovery, and for the purposes of their resolution, the allegations of the complaint are construed favorably to the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974), citing Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 101, 2 L.Ed.2d 80 (1957) (A motion to dismiss must be denied "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."); Morales v. New York State Dep't of Corrections, 842 F.2d 27, 30 (2d Cir. 1988).

In light of the Supreme Court's decision in Patterson v. McLean Credit Union, ___ U.S. ___, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), and the subsequent decisions in this District, both of defendant's motions are granted.


Plaintiffs were employed as salespersons at James II, a New York City antique store selling 19th century English porcelain. On or about June 16, 1988, defendants, George and Barbara Kogan, contacted plaintiff Fernandez and informed her that they wished to open an antique store in New York City that would be modeled after James II. The defendants informed Fernandez that they needed someone of Fernandez's experience to open and manage the store, Kogan and Company.

On the following day, the Kogans and Fernandez had a meeting during which the terms of an oral employment contract were discussed and finalized. Fernandez alleges that she was told that she would not be terminated for the first year except for good cause. After contracting, the parties discussed various plans about the new store's inventory, the composition of defendant Kogan and Company, and the purchasing trip to take place in August 1988. During this meeting, the parties also discussed the need for an additional person, one who knew inventory and other control systems, and Fernandez suggested that plaintiff Leggette would be perfect for the job.

On June 28, 1988, the defendants, Barbara and George Kogan, and plaintiffs met to discuss Leggette's employment. Once again, various terms of employment were discussed and orally agreed upon. Leggette similarly alleges she was offered a term of employment during which she would only be fired for good cause.

During the next two months, the parties made numerous preparations for the opening of the Kogan and Company store. During September and October 1988, Fernandez hired four employees, with the approval of the Kogans, to work as support staff at the store, three black and one Hispanic (hereinafter referred to as "minority employees").

Allegedly, Barbara Kogan told Fernandez that the minority employees should not appear in the store for the press meeting or during the opening evening party on November 3, 1988. Fernandez expressed her disagreement with both the directives, but nevertheless acquiesced. During the first week of business, Ms. Kogan also allegedly complained about the minority employees' use of the store bathroom during operating hours and expressed a desire for them to use another facility. Fernandez complained that this was wrong, discriminatory and would embarrass and dispirit the employees. Although Fernandez disapproved of Ms. Kogan's request, she agreed to inquire about the use of facilities in the basement of the building. Ms. Kogan also allegedly stated that the minority employees should be discouraged from appearing in the public area of the store when customers were present. Fernandez once again expressed her disapproval of the treatment of the employees. Throughout this period, Leggette supported Fernandez's position regarding the treatment of the minority employees.

On Sunday, November 13, 1988, Ms. Kogan told Fernandez not to go to the store but rather to meet with the Kogans at their apartment. When Mr. Fernandez called the store on November 15, 1988 to report that his wife was ill, he was informed she no longer worked there. Later that same day, Leggette was similarly informed that Fernandez was no longer employed at Kogan and Company.

On the evening of November 23, 1988, Leggette had a conversation with Ms. Kogan concerning her medical insurance. After some disagreement, Leggette was told not to bother returning to the store the following working day as she was discharged.

Plaintiffs filed the current action making seven claims for relief. The first five claims concern the alleged breach of oral and express contract provisions and allege that the defendants fraudulently induced the plaintiffs to terminate their positions at James II. The sixth and seventh claims, providing this court with jurisdiction, allege that the plaintiffs were discharged ...

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