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Sletten v. Liquidhub, Inc.

United States District Court, S.D. New York

July 11, 2014

CHAD SLETTEN, Plaintiff,
LIQUIDHUB, INC., and JAMES McDERMOTT, individually, Defendants.



Plaintiff Chad Sletten ("plaintiff" or "Sletten") brings this action against defendants LiquidHub, Inc. ("LiquidHub") and James McDermott ("McDermott") (collectively "defendants") alleging unlawful treatment on account of his gender and sexual orientation in violation of the New York State Human Rights Law, N.Y. Exec. Law. § 290 et seq. (the "NYSHRL"), and the New York City Human Rights Law, N.Y. City Admin. Code § 8-101 et seq. (the "NYCHRL"). Pending before the Court is defendants' motion to dismiss the amended complaint in its entirety for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6), and to dismiss all counts against McDermott based on lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). For the reasons stated herein, defendants' motion is granted in part and denied in part.


LiquidHub is a corporation organized under Delaware law with a primary place of business in Pennsylvania. Am. Compl. ¶¶ 4, 7. On or about February 13, 2012, plaintiff, a resident of New Jersey, began his employment with LiquidHub as a Principal Client Manager. Id . ¶¶ 3, 12. Although LiquidHub's headquarters are located in Pennsylvania, plaintiff worked for the company out of its office in New York, New York. Id . ¶¶ 2, 5-6. At all times material, individual defendant McDermott was employed at LiquidHub as a Director/Manager. Id . ¶¶ 8, 16. He is a resident of Pennsylvania and primarily works from LiquidHub's office in Wayne, Pennsylvania. McDermott Aff. ¶¶ 2, 4, 11. However, McDermott does communicate with the New York office of LiquidHub on a daily basis and visit there about once per week. Pl.'s Aff. ¶¶ 4-7.

I. The Alleged Workplace Conduct

Sletten claims that shortly after commencing his employment at LiquidHub, McDermott began to make comments about plaintiff's sexual orientation. Am. Compl. ¶¶ 16-17. His alleged statements include, but are not limited to: "[Plaintiff] dresses too good for a straight guy"; "I don't mind gay people but others in the firm don't like fags"; "Wow, I can't believe [Plaintiff] is gay, they don't like that in Philadelphia"; "[T]hings are going to change now that they know [Plaintiff] is gay back in Pennsylvania"; and "I wonder what [Plaintiff's] sexual role is." Id . ¶ 17. There is nothing in the amended complaint, however, to suggest that these statements were ever made to plaintiff directly; rather, it appears that plaintiff learned of these statements secondhand.

Plaintiff's first allegation of a direct comment occurred in February or March 2012, when three LiquidHub employees asked plaintiff whether he was married. Id . ¶ 15. The second direct interaction occurred in March 2012, when plaintiff went to lunch with McDermott, LiquidHub's CEO and plaintiff's then-supervisor Jonathan Brassington ("Brassington"), and the company's CFO David Murray ("Murray"). While at lunch, they asked Sletten about his dating life, inquiring as to whether he had a girlfriend. Id . ¶ 18. When plaintiff said that he did not but that he was going on a dinner date with a female friend that evening, the three other men responded by saying "Oh, it's a big date tonight, huh?... Your [sic] friends with a girl?" Id . The third and final statement that plaintiff actually heard was uttered in May 2012. After a meeting, Brassington asked Sletten, "What does D&G stand for?" in reference to plaintiff's belt buckle. Id . ¶ 24. After plaintiff responded by telling him it was the designer Dolce & Gabbana, Brassington quipped, "Well you are a fancy guy, aren't you?" Id . This comment, along with the two aforementioned exchanges concerning plaintiff's romantic life, are the only direct statements that plaintiff contends were improper.

But Sletten further maintains that around the same time as these incidents, there was significant discussion of his sexual orientation behind his back. In addition to McDermott's comments, Scott Rompala ("Rompala"), a partner at LiquidHub, also began to speak negatively about plaintiff's sexual orientation, and this conduct continued through July 2012. Id . ¶¶ 20, 29. Rompala's comments included referring to Sletten as a "faggot" and stating that "Brassington is going to just love knowing he hired a faggot." Id . In April 2012, Connie Lam ("Lam"), a senior recruiter at LiquidHub, told plaintiff that she did not want to "embarrass" him, but that Brassington and McDermott, among others, had been talking about his sexual orientation. Id . ¶ 21. A few months later, in July 2012, Lam told plaintiff again "that his sexual orientation was being discussed negatively" at the New York office. Id . ¶ 28. However, plaintiff decided "not [to] complain because of a reasonable fear of retaliation and/or termination." Id . ¶ 30.

Beyond the comments, both direct and secondhand, plaintiff alleges that he endured a series of adverse employment actions. First, in April 2012, Brassington, to whom Sletten initially reported upon joining LiquidHub, allegedly stopped returning plaintiff's calls and emails. Id . ¶¶ 14, 23. By the next month, plaintiff was reassigned to report to a different partner. Id . ¶¶ 23, 25. At the time of his reassignment, plaintiff met with Murray, the CFO, and was told that Brassington had become "fixated" on cutting Sletten's pay and that there were "serious cash flow issues" at the company. Id . ¶¶ 26-27. Then in July 2012, plaintiff learned that two of LiquidHub's resourcing managers had reduced the priority level of plaintiff's accounts; plaintiff asserts this action meant that he would lose the potential to "close those potential clients, " which would in turn reduce his income. Id . ¶¶ 31-32. After that, for the months of August and September 2012, plaintiff claims his pay was short by $3, 333.33 and that for the month of September, his annualized monthly draw payment of $2, 083.34 was omitted. Id . ¶¶ 33-34. Although he complained to a LiquidHub partner, plaintiff never received these funds. Id . Finally, on September 17, 2012, plaintiff was terminated from his employment at LiquidHub. Id . ¶ 38. During the conversation, Sletten was told that "he was not being fired for cause." Id . ¶ 39. Plaintiff asserts that each of these actions, from the reassignment to his ultimate termination, was improperly motivated by his sexual orientation.

II. The Alleged Farmhouse Incident

On September 15, 2012, two days before his termination from LiquidHub, plaintiff was at his farmhouse in Pennsylvania when McDermott and his friend Michael Sneider ("Sneider") arrived unannounced. Id . ¶ 36. One or both of them were carrying guns, and they told plaintiff that they were in town for a wedding and asked to scout his property for hunting. Id . Plaintiff alleges that McDermott intended by his visit "to coerce and intimidate Plaintiff to quit his job." Id . ¶ 37. Then on September 23, 2012, Sneider and another unidentified individual showed up to plaintiff's farmhouse again, and one or both of them were armed. Id . ¶ 42. Sneider allegedly laughed and said, "Jimmy told me about you getting canned. That sucks." Id . Nearly two weeks later, on October 5, 2012, plaintiff noticed an unidentified vehicle parked on the edge of his property all day; Sletten "felt terrorized" and called the police. Id . ¶ 43. Later that night, plaintiff claims that he saw Sneider emerge from the woods on his property, get in the unidentified vehicle, and drive away. Id . Sletten maintains that this incident "was intended by [LiquidHub and McDermott] to intimidate Plaintiff and/or interfere with his ability to exercise his protected right to bring a legal claim and/or seek legal representation." Id . ¶ 44.

III. Procedural Posture

Plaintiff filed his initial complaint on February 20, 2013, naming only LiquidHub as a defendant, and LiquidHub answered on May 7, 2013. After an unsuccessful mediation, the parties appeared before this Court on September 9, 2013 for an initial conference. Following the conference, on September 23, 2013, plaintiff filed an amended complaint naming both LiquidHub and McDermott as defendants. The amended complaint contains six counts: (1) retaliation under the NYSHRL; (2) retaliation under the NYCHRL; (3) interference with protected rights under the NYCHRL; (4) "supervisor liability" under the NYCHRL; (5) sexual orientation-based discrimination under the NYSHRL; and (6) sexual orientation-based and gender-based discrimination under the NYCHRL. Defendants moved to dismiss on October 28, 2013, and the motion was fully briefed by December 23, 2013.


I. Legal Standard

When deciding a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the Court will accept all factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Kassner v. 2nd Ave. Delicatessen, Inc. , 496 F.3d 229, 237 (2d Cir. 2007). Nevertheless, a plaintiff's factual allegations "must be enough to raise a right of relief above the speculative level." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007). If he has not "nudged [his] claims across the line from conceivable to plausible, [the plaintiff's] complaint must be ...

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