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Spencer v. International Shoppes

March 29, 2010

ARLEIGH SPENCER, PLAINTIFF,
v.
INTERNATIONAL SHOPPES, INC., AND MICHAEL HALPERN, PERSONALLY AND AS PRESIDENT OF INTERNATIONAL SHOPPES, INC., DEFENDANTS.



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

MEMORANDUM & ORDER

Plaintiff Arleigh Spencer ("Spencer" or "Plaintiff") commenced this action on May 26, 2006, against International Shoppes, Inc. ("ISI") and Michael Halpern, personally and as President of ISI ("Halpern") (collectively, the "Defendants"). In the Amended Complaint dated April 23, 2007 ("Amended Complaint"), Plaintiff alleges discriminatory and retaliatory treatment based on his age and race under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. ("Title VII"), New York State Executive Law § 296 et seq. ("NYHRL"), 42 U.S.C. § 1981 ("§ 1981"), and the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 624 et seq. ("ADEA"). Pending before the Court is Defendants' motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons stated below, the Court GRANTS Defendants' motion for summary judgment in part and DENIES it in part.

BACKGROUND

I. Facts

The facts contained herein are taken from the pleadings, affidavits, depositions, and the parties' Local Rule 56.1 Statements and the exhibits thereto. Solely for the purpose of this motion, the facts are construed in the light most favorable to Plaintiff as the party opposing summary judgment, with any factual conflicts resolved in the Plaintiff's favor.

A. Plaintiff's Employment At ISI

Plaintiff, an African-American male, at the age of fifty- three, started work at ISI as the payroll clerk on September 27, 1999. (Defs.' R. 56.1 Stmt. ("Defs.' Stmt.") ¶¶ 1, 22.) Approximately two months later, Plaintiff advanced to the position of payroll coordinator. (Spencer Dep. 27-28.) Plaintiff was notified at his initial job interview at ISI that the company had no policy requiring annual raises. (Defs.' Stmt. ¶ 34.) Halpern was responsible for determining employees' wage increases at ISI. (Id. ¶ 37.) Plaintiff received annual pay raises from 2000 to 2002; however, in 2003, he did not receive a raise. (Id. ¶¶ 36, 40.) Although most of ISI's employees did not receive raises from 2000 to 2002 (Id. ¶ 39), Annette Balu ("Balu"), the only other employee in Plaintiff's department, received raises in 2001 and 2002, but not in 2000 (Balu Aff. 3). Additionally, while employed at ISI, Plaintiff received six loans and/or salary advances from ISI. (Defs.' Stmt. ¶ 42.) During Plaintiff's employment at ISI, he was not subjected to any comments about his age or race. (Defs.' Stmt. ¶ 21.) Prior to August of 2002, Plaintiff had no issues with his employment at ISI. (Id. ¶ 32.)

In August of 2002, an issue arose regarding an alleged "phantom employee". (Id.) An ISI employee's wife was listed on payroll at a lottery booth even though she did not work at the booth; in reality, hours attributed to the employee's wife were actually worked by the ISI employee. (Halpern Dep. 78; Defs.' Aff., Ex. V.) As a result, the employee did not receive overtime pay that he had earned. (Id.) Spencer notified Halpern of the phantom employee at a meeting on August 8, 2002. (Spencer Dep. 34-36.) Two ISI employees received written warnings for their involvement in the "phantom employee" scheme. (Defs.' Stmt. ¶ 53.) Plaintiff also received a written warning for his failure to timely disclose the existence of a "phantom employee" to senior management because he allegedly had knowledge of the situation for a substantial period of time. (Defs.' Aff., Ex. V.) Halpern, however, later stated that he did not know whether Plaintiff had knowledge of the "phantom employee" for any period of time before disclosing it to him. (Halpern's Dep. 85.)

Subsequent to receiving the written warning, Plaintiff was disciplined for multiple payroll accounting irregularities, including his failure to: (1) make proper tax withholdings from employees' paychecks, including his own; (2) properly pay back a loan taken from ISI's 401(k) account; (3) account for several unauthorized salary advances; and (4) process some garnishments on his checks. (Defs.' Stmt. ¶ 55; Pl.'s Aff., Ex. F, Payroll Accounting Irregularities Mem.) Plaintiff disputes this written warning contending that he complied with ISI's payroll policies. (Spencer Dep. 59-63.) As support, Richard Dombrowski, ISI's former Chief Administrative Officer ("Dombrowski"), called ADP, ISI's payroll services provider, and was told that Plaintiff did not make any changes to his payroll deductions or the loan amounts he owed. (Pl.'s Aff., Ex. K, Dombrowski Aff.) Subsequently, on December 2, 2003, Plaintiff was warned in writing, this time for conducting personal business during company time. (Defs.' Stmt. ¶ 56; Pl.'s Aff., Ex. H.) Plaintiff, in response, contends that he was only checking his 401K balance, and that such conduct is commonplace amongst ISI employees and not personal business. (Pl.'s R. 56.1 Counter-Statement ("Pl.'s Stmt.") ¶ 56.)

In April 2004, Plaintiff ceased making interest payments on loans that he had received from ISI by altering the loan repayment schedule. (Defs.' Stmt. ¶¶ 57-58; Spencer Dep. 69-74; Affidavit of Egbert Morales ¶ 7.) Plaintiff, in response, contends that Dombrowski found that Spencer did not, in fact, make any changes to his loan payments. (Dombrowski Aff.) Plaintiff, was then suspended without pay for three days for improperly changing the terms of his loan repayment schedule. (Defs.' Stmt. ¶ 61.) Thereafter, Egbert Morales ("Morales"), ISI's Comptroller, now would personally prepare Plaintiff's paycheck. (Id. ¶ 62.) Finally, on April 27, 2004, Plaintiff was given a "last chance" warning at a meeting with Morales and Stephen Greenbaum, ISI's Chief Executive Officer ("Greenbaum"). (Defs.' Stmt. ¶ 24.) At this meeting, Morales and Greenbaum explained to Plaintiff that any further violations of ISI policy would result in his termination. (Spencer Dep. 87-88.)

On May 27, 2004, Plaintiff intentionally did not deliver the checks for ISI's payroll on Thursday because he was angry that Morales had to personally prepare his check. (Spencer Dep. 107-108.) In response, Plaintiff argues that there was no company policy in place requiring delivery of the checks on Thursdays rather than on Fridays. (Pl.'s Stmt. ¶ 26.) Furthermore, Plaintiff contends that (1) Morales was in the practice of delivering Spencer's paycheck on Fridays (Pl.'s Aff., Ex. G, Morales Dep.), (2) Spencer needed his check to balance payroll (Spencer Dep. 104-105), and (3) the paychecks were dated for Friday. Defendants respond that there was a policy in place for Spencer to deliver the checks on Thursday to Anthony Petrucci so that he could then distribute the checks to employees, some of whom do not work on Fridays. (Defs.' Reply Mem. Supp. Summ. J. ("Reply") 8) and that Plaintiff, as a salaried employee, did not need his actual check in hand to balance the payroll (Defs' Mem. Supp. Summ. J. 13). Furthermore, Plaintiff, in a recorded statement to the New York State Department of Labor, stated "The only thing I did differently on Thursday 5/27/04, was wait until 3:00 p.m. to give the paychecks to Tony. My usual habit in the past had been to give out the checks to the warehouse employees and the office employees early on Thursday." (Defs.' Aff., Ex I.)

The next day, May 28, 2004, Plaintiff was advised at a meeting with Greenbaum and Morales that holding back employee paychecks was a violation of the law. (Defs.' Stmt. ¶ 28.) Subsequently, on June 1, 2004, Plaintiff's employment was terminated for violating the "last chance" warning. (Defs.' Stmt. ¶ 29.)

B. The Alleged Discrimination

Spencer brings claims of age-based and race-based discrimination, as well as retaliation against ISI and Halpern. In support of his discrimination claims, Spencer, for the most part, points to a few alleged events of disparate treatment. Plaintiff argues that he was treated differently in response to the "phantom employee" scheme, as opposed to two other ISI employees. (Pl.'s Opp'n to Defs.' Mem. Supp. Summ. J. ("Opp'n") 2.) While the two alleged perpetrators of the scheme, both Caucasian, received a written warning for their participation like Spencer, the content of the warnings differ. The perpetrators' written warning was titled "Personnel Matters", whereas Spencer's warning was titled "Disciplinary Notice and Second Warning". (Defs.' Aff., Exs. V, W.) In addition, while Spencer allegedly reported the scheme after he had notice, rather than actively participate in the scheme like the two other ISI employees, he was told that his actions jeopardized his position in the company. (Defs.' Aff. Ex. V.)

Plaintiff also contends that he was denied a pay raise in 2003 while the only other employee in his department, Balu, a Caucasian, was given a raise. (Opp'n 3.) Plaintiff alleges that he did not receive a pay raise, in part, because he uncovered the "phantom employee" scheme. (Spencer Decl. ¶ 14.) In response to not getting a raise, Plaintiff admits that he told Halpern at a meeting that he should report the tax fraud ("phantom employee" scheme). (Spencer Dep. 51-52.) Plaintiff also alleges that he was unfairly treated when he received the Payroll Accounting Irregularities Memorandum and was disciplined for activities that other employees participated in without recourse. (Opp'n 4; Pl.'s Aff., Ex. F. ) In support, Plaintiff argues that another employee, a Caucasian, altered her tax withholding, but was not disciplined. (Opp'n 4; Halpern Dep. 123-25.) In addition, Plaintiff alleges that he was discriminated against when he received a written warning for checking his 401k statement during company time when another employee was not disciplined for the same action. (Opp'n

5.) Spencer argues that, at least some of ISI's discriminatory actions on the basis of his age and race, were also acts of retaliation for disclosing the "phantom employee" scheme. (Spencer Dep. 54.)

In October of 2003, Plaintiff sent a memorandum to Halpern, Greenbaum, and Concetta Petrucci, ISI's former Director of Human Resources ("Petrucci"), that alleged he had been subjected to a hostile work environment at ISI. (Defs.' Stmt. ¶ 46.) ISI conducted an investigation regarding Plaintiff's allegations. (Id. ¶ 47.) Greenbaum and Petrucci met with Plaintiff regarding his allegations (Id. ¶ 49.) Plaintiff, however, did not cooperate at the meeting, and alleges that he refused to answer questions because (1) the meeting was conducted by Greenbaum, not Petrucci (Spencer Dep. 64-66), and (2) he was questioned in a hostile manner (Spencer Suppl. Decl. ¶ 15).

II. Procedural History

A. Prior Proceedings

On May 18, 2004, Spencer filed a complaint with the New York State Division of Human Rights ("DHR") for the alleged discrimination he faced at ISI. (Defs.' Aff., Ex. H.) On July 22, 2004, Spencer filed a supplemental complaint with the DHR alleging that ISI fired him in retaliation for the initial complaint he filed. (Defs.' Aff., Ex. K.)*fn1 Following an investigation, on January 31, 2006, the DHR issued a Determination and Order After Investigation, dismissing Spencer's complaint against ISI. (Defs.' Aff., Ex. F., DHR Order.) The DHR held that "After investigation and following opportunity for review of related information and evidence by the named parties, the Division of Human Rights has determined that there is NO PROBABLE CAUSE to believe that the respondent had engaged in or is engaging in the unlawful discriminatory practice complained of." (Id.) In support of this finding, according to the DHR, the record showed that "On May 27, 2004, the complainant violated the warning given by the respondent by intentionally and unlawfully holding back distribution of employee paychecks because he felt he might not be receiving his own paycheck on that day." (Id.)

On September 24, 2004, following a hearing at which testimony was taken, an Administrative Law Judge issued a decision that affirmed the Department of Labor's conclusion that Plaintiff was disqualified from receiving unemployment benefits due to misconduct. (Defs.' Aff., Ex. M.) Subsequently, on December 10, 2004, the Unemployment Insurance Appeal Board issued a decision that affirmed the Administrative Law Judge's decision. (Defs. Aff., Ex. G.) On October 27, 2005, the Appellate Division, Third Department of the Supreme Court of New York upheld the Unemployment Insurance Appeal Board's decision. In re Spencer, 22 A.D.3d 1010, 802 N.Y.S.2d 565 (App. Div. 2005). The New York Court of Appeals subsequently denied Plaintiff's further attempt to appeal. Spencer v. Commissioner of Labor, 7 N.Y.3d 701, 850 N.E.2d 1166, 818 N.Y.S.2d 191 (2006).

On May 26, 2006, Plaintiff commenced this action. On March 29, 2007, this Court dismissed portions of the Complaint, and permitted Plaintiff to amend his Complaint in accordance with the Court's direction. Then, on April 26, 2007, Plaintiff filed his Amended Complaint, asserting twelve claims: race-based discrimination in violation of Title VII and § 1981 against ISI and Halpern (respectively, the first, seventh, and eighth claims); age-based discrimination in violation of the ADEA (the second claim); retaliation in violation of Title VII, the NYHRL, and § 1981 ...


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