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JOWERS v. DME INTERACTIVE HOLDINGS

February 3, 2003

STEPHANIE JOWERS, PLAINTIFF,
v.
DME INTERACTIVE HOLDINGS, INC. AND DARIEN DASH, DEFENDANTS.



The opinion of the court was delivered by: Laura Taylor Swain, United States District Judge

MEMORANDUM OPINION AND ORDER

Stephanie Jowers ("Jowers" or "Plaintiff") alleges that DME Interactive Holdings, Inc. ("DME"), and Darien Dash ("Dash" and collectively "Defendants") violated 42 U.S.C. § 1981 and state and local civil rights laws by failing to negotiate an employment contract with her and terminating her employment on the basis of her race. Defendants have moved pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiff's complaint for failure to state a claim upon which relief may be granted. They contend that Plaintiff, a white woman, lacks standing to bring a race discrimination claim under 42 U.S.C. § 1981, lacks standing to bring the state and local law claims because she was an independent contractor and not an employee of DME, and, finally, that the civil rights counts in her complaint are inadequately pled as a matter of law. For the reasons set forth below, Defendants' motion is denied.

This court has jurisdiction of this matter pursuant to 42 U.S.C. § 1981, 28 U.S.C. § 1331, 28 U.S.C. § 1343(4), and supplemental jurisdiction of Plaintiff's state and local law claims pursuant to 28 U.S.C. § 1367(a). For the purposes of this motion to dismiss, the Court accepts the allegations of the complaint as true. See Cruz v. Beto, 405 U.S. 319, 322 (1972).

BACKGROUND

The following facts are alleged in the complaint. DME is an internet services provider led primarily by Dash, an African-American, who is the company's principal shareholder, Chairman and Chief Executive Officer. Under Dash's leadership, DME has focused on serving minority populations that have not been adequately represented and served in the internet community. In early 2000, Jowers was employed as the Deputy Director of a non-profit organization whose purpose was to use new technology and media to the benefit of racial minorities. Dash, who served on the Board of Trustees of the non-profit organization, became acquainted with Jowers during her tenure there. In March of 2000, Dash initiated discussions with Jowers about the possibility of her working in an executive capacity with "Places of Color," DME's internet venture. During these discussions, Jowers expressed her concern about being a non-minority in a high-profile minority enterprise, but Dash reassured her that her race was irrelevant and subsequently hired her.

Jowers began working at DME on March 20, 2000. Pending the negotiation of a written employment contract, she was given the title Senior Manager and was "characterized as a 1099 worker for payroll purposes." Plaintiff was responsible for the day to day management of DME's staff, which was comprised largely of racial minorities. The staff were openly hostile and antagonistic to plaintiff; "it soon became obvious that DME's staff resented and resisted supervision by plaintiff because of her race." At a staff meeting in April 2000, an employee expressed complaints about recent developments at the company and cast them in racial terms. The following day, Jowers' immediate superior informed her that her position would be restructured so that she would have less direct involvement with the staff. Plaintiff's superior quoted Thomas O'Rourke, DME's Chief Operating Officer as stating that DME "needed someone Black in a leadership role."

Jowers was then given the title of General Manager, with no change in day to day duties and responsibilities. On May 3, 2000, Jowers was told that she would no longer have the title of General Manager but that a new position would be created for her. On May 5, 2000, O'Rourke informed Plaintiff that, for economic reasons and despite her excellent job performance, no new position would be created for her, that DME would not enter into an employment contract with her, and that she was being terminated. Jowers then met with Dash, who told her that the decision to terminate her was not economic. Rather, he said that she was not a good fit. He alluded to staff complaints and said that he would pay Plaintiff's salary only to the right people. An African-American woman replaced Plaintiff at DME, receiving a salary almost 50 percent greater than Jowers had earned. Plaintiff alleges that her employment was terminated, and that she was denied the opportunity to enter into the contemplated written employment agreement with DME, on account of her race.

DISCUSSION

As noted above, in evaluating a motion to dismiss, the Court is obliged to take as true the facts as alleged in the complaint and draw all reasonable inferences in favor of the plaintiff. Grandon v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d Cir. 1998). The action must not be dismissed 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.'" Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 1994) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)); Sims v. Artuz, 230 F.3d 14, 20 (2d Cir. 2000).

Plaintiff's Standing as a Non-Minority Under 42 U.S.C. § 1981

Defendants argue that Jowers lacks standing to bring a suit under Section 1981 because that statute does not protect white persons from race discrimination based on their "whiteness," a form of discrimination often referred to as "reverse discrimination."

Section 1981 provides that:

All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.
42 U.S.C.A. § 1981 (West 1994). The elements required to state a claim under Section 1981 are frequently summarized as follows: i) that plaintiff is a member of a racial minority; ii) that defendant intentionally discriminated against plaintiff on the basis of plaintiff's race; and iii) that the discrimination concerned one or more activities enumerated in the statute. See Mian v. Donaldson, Lufkin & Jenrette Securities, 7 F.3d 1085, 1087 (2d Cir. 1993), cert. denied, 516 U.S. 824 (1995). Absence of the first element, that plaintiff is a member of a racial minority, does not, however, preclude recovery under Section 1981. See, e.g., O'Connor v. 11 West 30th Street Rest. Corp., Nos. 94 Civ. 2951, 93 Civ. 8895, 1995 WL 354904, at *6 (S.D.N.Y. June 13, 1995) (finding that white plaintiff's allegations of race-based discrimination were sufficient to state a claim under § 1981). As the Supreme Court has held, racial minorities are not the only persons entitled to relief under Section 1981. To the contrary, the statute protects from racial discrimination "all persons within the jurisdiction of the United States," regardless of what a person's race may be. See McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 287-96 (1976) (holding that Section 1981 "explicitly applies to `All persons' (emphasis added [by Supreme Court]), including white persons" and discussing legislative history that reveals the statute was not intended to be limited in scope to discrimination against nonwhites). See also St. Francis College v. Al-Khazraji, 481 U.S. 604 (1987) (statute encompasses even discrimination as between groups currently characterized as "Caucasian"); O'Connor, 1995 WL 354904, at *5 ("[a] white person, just as a nonwhite, may state a claim under § 1981").

Defendants observe, correctly, that some courts have held that Section 1981 applies to whites where a white person alleges to have been the victim of discrimination due to animosity directed towards a member of a minority race. Defendants also identify several circuit court cases in which Section 1981 protections have been extended to white plaintiffs who have suffered vicariously the defendants' discrimination against racial minorities. See, for example, DeMatteis v. Eastman Kodak Co., 511 F.2d 306, 311-12 (2d Cir. 1975) (plaintiff contended that he had been ...


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