United States District Court, S.D. New York
KEVIN P. DOWNEY, Plaintiff,
ADLOOX INC., et al., Defendants.
OPINION AND ORDER
M. FURMAN United States District Judge
September 2015, Plaintiff Kevin Downey was hired by Defendant
Adloox Inc. - an advertising technology company - as Vice
President of Sales in its newly opened New York City office.
Adloox Inc. (“Adloox U.S.”) is the United
States-based, wholly owned subsidiary of Adloox
(“Adloox France”), a French corporation
(collectively, “Defendants”). Less than two
months after hiring Downey, Adloox U.S. terminated his
employment. Downey, who was fifty-one at the time of his
termination, now sues Adloox U.S. and Adloox France, alleging
age discrimination under the Age Discrimination in Employment
Act (“ADEA”), 29 U.S.C. § 621 et
seq.; the New York State Human Rights Law
(“NYSHRL”), NY. Exec. Law § 296; and the New
York City Human Rights Law (“NYCHRL”), N.Y.C.
Admin. Code § 8-107. He also brings claims under New
York law for fraudulent inducement and unjust enrichment.
Defendants now move, pursuant to Rule 12 of the Federal Rules
of Civil Procedure, to dismiss the Second Amended Complaint
(the “Complaint”) in its entirety. (Docket No.
For the reasons that follow, Defendants' motion to
dismiss is GRANTED in part and DENIED in part.
relevant facts, taken from the Complaint and assumed to be
true for purposes of this motion, can be stated briefly.
See, e.g., Gonzalez v. Hasty, 651 F.3d 318,
321 (2d Cir. 2011). Downey, now fifty-two years old, has
worked as a sales professional in the advertising technology
industry since 1996. (Docket No. 26 (“Sec.
Compl.”) ¶¶ 11-12, 26). In July 2015,
executives from Adloox France (who, at some point, became
executives of Adloox U.S. as well) traveled from Paris,
France, to New York City to interview Downey for the position
of Vice President of Sales North America. (Id.
¶¶ 16, 21, 27). At the time, Adloox France had no
subsidiaries or representatives in the United States, but it
was looking to establish a presence. (Id.
¶¶ 16, 21). As part of the hiring process, Adloox
France asked Downey to prepare a presentation on how the
company could enter the United States market and achieve a
certain level of sales. (Id. ¶ 27). On July 29,
2015, Downey received a preliminary offer of employment.
(Id. ¶ 28). As a condition of employment,
however, Adloox executives advised Downey that he would first
need to free himself from a non-compete agreement with his
former employer. (Id. ¶¶ 29-30). Downey
brought suit in New York State Supreme Court against his
former employer, which resulted in the non-compete
restrictions being declared unlawful. (Id. ¶
31). He expended $40, 000 of his own money in doing so.
the non-compete issue was resolved, Downey began working for
Adloox U.S. pursuant to an executed employment agreement.
(Id. ¶ 32). Starting on September 7, 2015, he
spent a few days training in Adloox's London office and
then returned to the Adloox U.S. office in New York City,
where his work included networking with industry contacts,
selling Adloox services to potential customers, and
interviewing potential sales associates for the New York
office. (Id. ¶¶ 32-33). Downey reported
directly to supervisors from Adloox France, as he was the
sole Adloox U.S. employee at the time and Adloox U.S. and
Adloox France were both managed by the same people acting as
Chief Executive Officer, Chief Financial Officer, and Chief
Operating Officer. (Id. ¶¶ 22-23). In late
October 2015, Downey spent time preparing the company for a
major marketing exhibition in New York. (Id. ¶
38). On October 29, 2015, Downey turned over his list of
business contacts at the request of the CEO (id.
¶ 39); the next day, Downey was fired via an email sent
from the CFO in Paris. (Id. ¶ 40).
alleges that, during the course of his employment, his
supervisors repeatedly referred to him as the “old
timer.” (Id. ¶ 34). Additionally, while
Downey was interviewing potential sales staff for Adloox
U.S., company executives sent emails indicating a desire to
employ only “young sharks” and instructing the
company's recruiter to “target candidates aged
ideally around 30 (35 big max).” (Id.
¶¶ 35-36). At one point, Downey recommended a
candidate over the age of thirty-five, but an Adloox
executive responded: “Too old/senior. We're looking
for young sharks.” (Id. ¶ 37). After
Downey was terminated, his position was filled by a
thirty-one year old. (Id. ¶ 42). On March 4,
2016, Downey filed the instant action. (Docket No. 1).
survive a motion to dismiss under Rule 12(b)(6) of the
Federal Rules of Civil Procedure, “a plaintiff
asserting an employment discrimination complaint under the
ADEA must plausibly allege that adverse action was taken
against her by her employer, and that her age was the
‘but-for' cause of the adverse action.”
Marcus v. Leviton Mfg. Co., Inc., 661 F. App'x
29, 31-32 (2d Cir. 2016) (summary order) (citing Vega v.
Hempstead Union Free Sch. Dist., 801 F.3d 72, 87 (2d
Cir. 2015)). The plaintiff need not prove discrimination, or
even allege facts establishing every element of a prima
facie case of discrimination, but he “must plead
facts that give ‘plausible support to a minimal
inference' of the requisite discriminatory
causality.” Id. at 32 (quoting Littlejohn
v. City of New York, 795 F.3d 297, 310-11 (2d Cir.
2015)). More specifically, the plaintiff “must supply
sufficient factual material, and not just legal conclusions,
to push the misconduct alleged in the pleading beyond the
realm of the ‘conceivable' to the
‘plausible.'” Id. (citing
Vega, 801 F.3d at 84).
noted, Downey alleges age discrimination under the ADEA,
NYSHRL, and NYCHRL as well as state law claims for fraudulent
inducement and unjust enrichment. The Court will address the
ADEA claim first, then turn to the remaining claims.
The ADEA Claim
Defendants do not dispute that the allegations in the
Complaint are sufficient to raise an inference of age
discrimination. Given, among other things, evidence that
supervisors repeatedly called Downey the “old timer,
” that executives explicitly advocated for hiring
“young sharks” and rejected at least one
candidate as “[t]oo old/senior, ” and that Adloox
U.S. replaced Downey with a thirty-one year old, the
allegations are plainly sufficient to give
“‘plausible support to a minimal inference'
of the requisite discriminatory causality.”
Marcus, 661 F. App'x at 32 (quoting
Littlejohn, 795 F.3d at 310-11). Instead, Defendants
make two arguments for dismissal of Downey's ADEA claim.
First, they contend that Downey's claim is barred - at
least with respect to Adloox France - by Section 623(h)(2) of
the Act, which provides that the statute “shall not
apply where the employer is a foreign person not controlled
by an American employer.” 29 U.S.C. § 623(h)(2);
see also Id. § 630(a) (defining
“person” to include “corporations”
and similar entities). (Docket No. 28 (“Defs.'
Mem.”), at 10-11; Docket No. 36 (“Defs.'
Reply”), at 6-8). Second, they assert that Adloox U.S.
is not an “employer” under the ADEA because it
did not have “twenty or more employees” for each
working day in each of twenty or more calendar weeks in the
preceding or current calendar year.” 29 U.S.C. §
630(b). (Defs.' Mem. 6-10; Defs.' Reply 1-6). The
Court will address each argument in turn.
argument that Downey's ADEA claim is barred - at least
with respect to Adloox France - by Section 623(h)(2) is not
without force given the plain language of the statute and
Downey's own allegation that Adloox France
“completely controls the business of” Adloox
U.S., his direct employer. (Am. Compl. ¶ 19). The
problem with the argument, however, is that it runs contrary
to binding Second Circuit precedent. See Morelli v.
Cedel, 141 F.3d. 39 (2d Cir. 1998). In Morelli,
the plaintiff brought an ADEA claim against a Luxembourg
bank, which had hired her to work in its New York branch
office. See Id. at 41. The Court acknowledged that
“an absolutely literal reading of § [623(h)(2)]
might suggest that the ADEA . . . does not apply to the
domestic operations of foreign employers - unless
there is an American employer behind the scenes.”
Id. at 42. “But, ” the Court continued,
“the plain language of § [623(h)(2)] is not
necessarily decisive if it is inconsistent with Congress'
clearly expressed legislative purpose.” Id.
Based on a review of the legislative “context” in
which the statute was added, the Court concluded that
“Congress's purpose was not to exempt the domestic
workplaces of foreign employers from the ADEA's
prohibition of age discrimination. Instead, the purpose of
adding this exclusion was to limit the reach of an
extraterritorial amendment adopted as part of the same
Court explained, Section 623(h)(2) was not part of the
original ADEA. Id. Instead, it was added in 1984 in
response to several court of appeals decisions holding that
“the ADEA did not apply to ‘Americans employed
outside the United States by American employers.'”
Id. (quoting Cleary v. United States Lines,
Inc., 728 F.2d 607, 610 (3d Cir. 1984)). The 1984
amendments expanded the ADEA's definition of
“employee” to include “‘any
individual who is a citizen of the United States employed by
an employer in a workplace in a foreign country.'”
Id. (quoting Pub. L. No. 98-459, § 802(a)
(1984)). That revision, the Court explained, “was
intended ‘to assure that the provisions of the ADEA
would be applicable to any citizen of the United States who
is employed by an American employer in a workplace outside
the United States.'” Id. at 42-43 (quoting
S. Rep. 98-467 (“S. Rep.”), at 27 (1984),
reprinted in 1984 U.S.C.C.A.N. 2974, 3000).
“The other 1984 amendments, ” including the
addition of Section 623(h)(2), “conform the ADEA's
reach to ‘the well-established principle of
sovereignty, that no nation has the right to impose its labor
standards on another country.'” Id. at 43
(quoting S. Rep. at 27). “Thus, ” the Court
concluded, Section 623(h)(2) “of the ADEA merely limits
the scope of the amended definition of employee, ...