United States District Court, District of Columbia
July 7, 1999
JAMES R. SHEPPARD, PLAINTIFF,
DICKSTEIN, SHAPIRO, MORIN & OSHINSKY, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Lamberth, District Judge.
This matter comes before the court on defendants' motion to
dismiss Counts II and III of the complaint filed by plaintiff
James R. Sheppard. Specifically, defendants move to dismiss Count
II, based on 42 U.S.C. § 1981, and Count III, which is based on
tortious interference with contractual relations. Upon
consideration of the written submissions of the parties, and the
relevant law, defendants' motion to dismiss the claim under
42 U.S.C. § 1981 is denied. Defendants' motion to dismiss the claim
based on tortious interference with contractual relations is
Plaintiff, an African-American male, brings this action to
recover damages for injuries he suffered as a result of
discriminatory employment practices by defendants Dickstein,
Shapiro, Morin & Oshinsky ("Dickstein"); Ms. Sharon O'Meara
("O'Meara"); Tyanna Ertter ("Ertter"); and Natalie Bernstein
("Bernstein"). Dickstein is the law firm where plaintiff worked,
while the remaining defendants were plaintiff's supervisors.
Plaintiff alleges that defendant Dickstein has violated Title VII
through its actions. Dickstein has not moved to dismiss that
claim. Further, plaintiff alleges that all defendants violated
his rights under 42 U.S.C. § 1981, and that defendants O'Meara,
Ertter, and Bernstein tortiously interfered with his employment
relationship and economic advantage with Dickstein. Defendants
oppose both these claims in their motion to dismiss.
B. Employment Position With Dickstein
Plaintiff was employed as a Records Manager at Dickstein from
July 1996 until July 9, 1997. Plaintiff was an at-will employee,
whose employment could be terminated at any time by either party.
Dickstein offered plaintiff employment when his previous
employer, Anderson Kill Olick Oshinsky ("Anderson Kill") merged
with Dickstein. Plaintiff began his employment with Anderson Kill
in 1993, and was promoted to Records Manager in June 1995.
Throughout his employment at Anderson Kill, plaintiff's
performance was considered excellent.
After the merger, plaintiff's position at Dickstein entailed
the same duties as he performed at Anderson Kill. Plaintiff was
primarily responsible for maintaining a database of all active
and inactive client records. Plaintiff continued to work with
many of the same support staff and attorneys that he worked with
at Anderson Kill. However, plaintiff was no longer managed by the
same immediate supervisor.
After the merger, Dickstein renovated its offices. During this
period, only plaintiff and two other managers, who were white
females, were constantly moved and shuffled between several
different office spaces. Of the three, plaintiff was the only
manager assigned a small, windowless room for training.
Conversely, the other two managers were given window offices. The
other support staff managers were not moved during the renovation
and were assigned window offices.
C. Allegations of Racial Statements By Supervisors
Plaintiff alleges that his supervisors made several racially
biased statements during his employment. Specifically, plaintiff
recalls suggesting where defendant Ertter, his supervisor, asked
plaintiff to interview a part-time Dickstein employee who was
interested in a full-time position. Defendant Ertter allegedly
attacked the intelligence of the employee, an African-American,
and asked plaintiff to determine if the employee was "trainable."
Further, plaintiff asserts that defendant Ertter made other
allegedly racially biased remarks. Specifically, plaintiff
recalls an incident where he suggested that the storage
supervisor, an African-American male, learn the computer software
system to facilitate data entry of files in storage. Ertter
responded that the employee was incapable of performing simple
tasks, and that "we should take it one day at a time. It took him
a year to learn how to log-in." See Pl.Comp. at 5.
Plaintiff contends that racially biased statements were also
made by defendant O'Meara, his other supervisor. During a job
search for a relief receptionist, O'Meara was approached by a
Dickstein employee to consider an internal, African-American
candidate who worked part-time in the firm's supply department.
Plaintiff asserts that O'Meara would not consider the candidate,
stating that he was "too black" for the job. See Pl.Comp. at 6.
D. Salary Increase
In January 1997, plaintiff received an annual increase in
salary of approximately four percent. Plaintiff submits evidence
that four percent was the maximum pay increase Dickstein
employees received that year. In June 1997, plaintiff was offered
another position with a law firm at a substantial increase in
salary. Upon learning this, plaintiff asserts that many of the
attorneys with whom he worked with at Anderson Kill actively
sought to keep him employed at Dickstein. Plaintiff requested a
raise and other employment concessions to remain at Dickstein.
Dickstein agreed to these concessions, including a substantial
E. Explanation And Problems With RMS Software
Prior to plaintiff's employment with Dickstein, the firm
purchased a records management software program ("RMS") from MDY
Advanced Technologies, Inc. ("MDY"), a computer service company.
As Records Manager, plaintiff was assigned the task of
implementing the RMS software firm-wide to automate Dickstein's
client records and files. Plaintiff was trained on the RMS
software by an MDY representative. Plaintiff contends that he had
an excellent knowledge of the RMS software and was the only
employee at Dickstein to use the software on a daily basis.
Plaintiff also trained several employees to use the RMS software.
Dickstein encountered several problems with the RMS software.
For example, the Insurance Practice Group could not utilize the
software because the group utilized an extensive WordPerfect
index to organize their client files. Dickstein also encountered
problems involving the numbering of consecutive volumes of
pleadings files. Finally, Dickstein encountered "bugs" in the RMS
system, which would abruptly terminate the RMS system during data
entry into the database. Plaintiff contends that MDY either
delayed in solving these problems, or did not solve them at all.
Despite these deficiencies, plaintiff was able to successfully
automate the file records of the Civil Litigation Practice Group.
F. RMS Demonstration With MDY
In June 1997, Miriam Kramer ("Kramer"), an MDY representative,
called plaintiff and asked if they could give a demonstration of
the RMS software at Dickstein to the law firm of Arent Fox
Kintner Plotkin & Kahn ("Arent Fox") as a courtesy. Plaintiff
asserts that his job duties and responsibilities at Dickstein did
not require him to promote MDY's products or to demonstrate MDY's
services to rival law firms.
Plaintiff obtained approval from his supervisor, defendant
Ertter, and from Fran Durako, Director of Information Services at
Dickstein before he agreed to allow MDY to demonstrate their RMS
software. MDY scheduled the presentation for July 8, 1997. On
that day, both the MDY and
Arent Fox representatives arrived for the presentation and met in
plaintiffs office. At that point, the MDY representatives asked
plaintiff to give the presentation. Plaintiff states that he was
surprised by this request because he believed that MDY would
conduct the demonstration of its own RMS software.
Plaintiff contends that he agreed to give the demonstration
because he did not want to embarrass MDY and because he had
obtained approval for the demonstration from his supervisor,
defendant Ertter. At all times, plaintiff asserts that he gave
the demonstration in a neutral and competent manner, thoroughly
explaining the basics of the system and its capabilities as a
record management system for client files and documents.
Plaintiff states that none of the individuals in attendance
indicated any dissatisfaction with his presentation.
G. Termination Of Plaintiff
The next day, defendant O'Meara suggested a meeting with
plaintiff. Defendants Ertter and Bernstein were also present at
this meeting. O'Meara informed plaintiff that his employment at
Dickstein would be terminated, because the MDY representatives
allegedly reported to Dickstein that plaintiff did not have the
"skills to perform rudimentary operations on the system" and that
he lacked "knowledge of the system." See Pl.Comp. at 9.
Further, defendants claim that they terminated plaintiff because
MDY was concerned about a "conflict of interest" arising from
plaintiff's part-time employment with Accutrac, a computer
However, plaintiff submits evidence that there were no business
connections between MDY and Dickstein other than providing
computer software and service, and that Dickstein was not privy
to any confidential information regarding MDY's business
practices. Further, plaintiff submits evidence that he told
O'Meara about his part-time employment in May 1997, and that
O'Meara did not express any concern about plaintiff's position
In fact, plaintiff submits evidence that Dickstein allowed
defendant O'Meara to engage in activities that created a
conflict-of-interest and did not similarly discipline defendant.
Specifically, Dickstein selected Capital Legal Copies ("CLC") as
a vendor of the firm even though Dickstein was aware that David
Tallant, O'Meara's husband, was also the manager of Corporate
Services for CLC.
II. Defendants' Motion To Dismiss 42 U.S.C. § 1981 Claim
Defendants bring this motion to dismiss plaintiff's claim under
42 U.S.C. § 1981 on two separate grounds. First, defendants
contend that the "make and enforce" clause of 42 U.S.C. § 1981
does not apply to plaintiff because he was an at-will employee.
Second, defendants contend that the "equal benefits" clause of
42 U.S.C. § 1981 does not apply because it requires state action,
which is lacking here. To succeed on their motion to dismiss,
defendants must prove that neither theory under 42 U.S.C. § 1981
applies to plaintiff's claims. Defendants' motion to dismiss on
the ground that the "make and enforce" clause of 42 U.S.C. § 1981
does not apply to at-will employees be denied. Consequently, it
is unnecessary for this Court to rule on the defendants' second
ground, i.e,. whether the equal benefits clause requires state
B. Motion To Dismiss
Dismissal is appropriate "only if `it is clear that no relief
can be granted under
any set of facts that could be proven consistent with the
allegations.'" See Conley v. Gibson, 355 U.S. 41, 45-46, 78
S.Ct. 99, 2 L.Ed.2d 80 (1957); Martin v. Ezeagu, 816 F. Supp. 20,
23 (D.D.C. 1993). In evaluating a motion to dismiss, the
court must construe the complaint in the light most favorable to
plaintiff and give plaintiff "the benefit of all inferences that
can be derived from the facts alleged." See Schuler v. United
States, 617 F.2d 605, 608 (D.C.Cir. 1979).
C. At-Will Employees Are Covered Under The "Make and Enforce"
1. Supreme Court and Congressional Treatment
42 U.S.C. § 1981(a) contains two major clauses the contracts
clause (the right to "make and enforce contracts") and the equal
benefits clause (the right to "full and equal benefits of all
laws"). 42 U.S.C. § 1981(a) reads as follows:
"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
benefits 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."
Before 1991, the Supreme Court had held that the "make and
enforce" clause was not triggered unless there was an actual
contract between the respective parties. See Patterson v.
McLean, 491 U.S. 164, 176-77, 109 S.Ct. 2363, 105 L.Ed.2d 132
(1989); Runyon v. McCrary, 427 U.S. 160, 175, 96 S.Ct. 2586, 49
L.Ed.2d 415 (1976); Johnson v. Railway Express Agency, Inc.,
421 U.S. 454, 460, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975). However,
Congress overruled that part of Patterson when it enacted the
Civil Rights Act of 1991. See H.R.Rep No. 102-40(I), at 18 and
89, reprinted in 1991 U.S.C.C.A.N. 549, 556, 627. The
amendments by Congress were intended to make the scope of Section
1981 coextensive with that of Title VII. Specifically, Congress
added a new subsection (b) to Section 1981 that states:
"For the purposes of this section, the term "make and
enforce contracts" includes the making, performance,
modification, and termination of contracts, and the
enjoyment of all benefits, privileges, terms, and
conditions of the contractual relationship".
42 U.S.C. § 1981(b).
2. Circuit Cases Discussing At-Will Employees Coverage Under
Whether an at-will employee can maintain an action under
42 U.S.C. § 1981 is a matter of first impression in this
jurisdiction. Further, this issue has not been widely addressed
by the circuits. See Jones v. Becker Group of O'Fallon Div.,
38 F. Supp.2d 793, 796 (E.D.Mo. 1999). Those that have addressed it
are split. See Fadeyi v. Planned Parenthood Assoc. of Lubbock,
Inc., 160 F.3d 1048
(5th Cir. 1998) (at-will employee has a
"contractual relationship" sufficient to maintain an action under
§ 1981); Byers v. The Dallas Morning News, 1999 WL 20953
(N.D.Tex. 1999) (under Texas law, at-will employee has a
contractual relationship). But see Gonzalez v. Ingersoll Milling
Mach. Co., 133 F.3d 1025 (7th Cir. 1998) (noting, but not
specifically holding, that under Illinois law an at-will employee
fails to have contractual rights necessary to maintain a claim
under § 1981); Moorer v. Grumman Aerospace Corp., 964 F. Supp. 665,
(E.D.N.Y. 1997) (at-will employee cannot establish
contractual relationship necessary to support a § 1981 cause of
action), aff'd, 162 F.3d 1148 (2d. Cir. 1998) (unpublished).
The Fourth Circuit has recently held that at-will employees can
maintain an action under 42 U.S.C. § 1981. See Spriggs v.
Diamond Auto Glass, 165 F.3d 1015
(4th Cir. 1999)*fn2. In so holding, the court focused primarily
on the fact that Maryland courts recognize at-will employment
relationships as contracts. See id. at 1017. Therefore, the
plaintiff's relationship, though terminable at will, was
contractual. See id. at 1018. Further, the Court held, after
reviewing Patterson and the text and legislative history of the
1991 Civil Rights Act, that Congress could not have meant to
exclude at-will workers from the reach of section 1981. See id.
(quoting Fadeyi v. Planned Parenthood, 160 F.3d 1048, 1052 (5th
3. District Of Columbia Recognizes At-Will Agreements As
It is well settled that the District of Columbia views at-will
employment as a species of contract. See Rinck v. Association of
Reserve City Bankers, 676 A.2d 12
, 15 (D.C.App. 1996) ("There is
a presumption that a hiring not accompanied by an expression of a
specific term of duration creates an employment relationship
terminable at will by either party at any time."); Minihan v.
American Pharmaceutical Ass'n, 812 F.2d 726, 727 (D.C.Cir. 1987)
("It is well settled District of Columbia law that in the absence
of clearly expressed contrary intent, `the assumption will be
that even though [the parties] speak in terms of "permanent"
employment — the parties have in mind merely the ordinary
business contract for a continuing employment, terminable at
the will of either party.'" (emphasis added)); Carl v.
Children's Hosp., 702 A.2d 159
, 162 (D.C.App. 1997) ("This court
has long and consistently adhered to the rule that employment is
presumed to be at will, unless the contract of employment
expressly provides otherwise." (emphasis added)).
From this line of cases, one can see that District of Columbia
law does treat at-will agreements as contracts. Consequently,
this Court adopts the line of reasoning in Spriggs. Whether
specific state law treats at-will agreements as contracts seems
to be a controlling factor in deciding whether these agreements
are covered under § 1981. For instance, in holding that at-will
employees are not covered under § 1981, the Jones court focused
exclusively on the fact that the "Missouri Supreme Court has made
it clear that a statement of duration is an essential element to
an employment contract." Jones, 38 F. Supp.2d at 796 (quoting
Luethans v. Washington Univ., 894 S.W.2d 169, 172 (Mo. 1995)).
That is not the case here. District of Columbia law states that
there is a presumption of at-will employment and states nothing
about duration as an essential element to an employment contract.
The defendants' motion to dismiss the 42 U.S.C. § 1981 on the
ground that at-will employees are not covered is DENIED. The
controlling factor in the Circuit decisions appears to be whether
state law treats at-will employment agreements as contracts.
Through the aforementioned line of cases, District of Columbia
law treats at-will agreements as contracts, and therefore an
at-will employee can maintain a cause of action under the "make
and enforce" clause of 42 U.S.C. § 1981.
III. Individual Defendants Can Be Sued Under 42 U.S.C. § 1981
In their reply brief, defendants contend that plaintiff cannot
sustain a § 1981 claim against individually named defendants
O'Meara, Ertter, and Bernstein. In his surreply, plaintiff
contends that defendants are estopped from raising this argument
at this late juncture. See, e.g., Cronin v. Federal Aviation
Admin., 73 F.3d 1126 (D.C.Cir. 1996) ("This court will not
entertain arguments raised for the first time in a party's reply
brief."). Plaintiff's contention here is incorrect, as Cronin
dealt only with arguments raised at the appellate level, and
did not address whether these arguments would be impermissible at
the trial level, particularly when adequate opportunity exists
(and is freely given) for filing a surreply. Therefore, this
Court will address the merits of defendant's contention.
B. Individual Supervisors Can Be Sued Directly Under
42 U.S.C. § 1981
1. Discussion Of Applicable Law
There appears to be a conflict in this jurisdiction as to
whether individual supervisors can be sued directly under
42 U.S.C. § 1981. To support their contention, defendants rely
specifically on case law stating that, although a supervisory
employee may be joined as a party defendant in a § 1981 action,
that employee is sued in his capacity as an agent of the
employer, not in his individual capacity. See Hunter v. Ark
Restaurants, 3 F. Supp.2d 9, 15 (D.D.C. 1998). In that holding,
the Hunter court followed the lead of Title VII cases that have
treated individual supervisor liability in the same manner. See
Gary v. Long, 59 F.3d 1391, 1398-99 (D.C.Cir. 1995);
Nelson-Cole v. Borg-Warner Security Corp., 881 F. Supp. 71, 73
Conversely, plaintiff cites to case law holding that officers,
directors, and employees of a corporation may become personally
liable when they intentionally cause an infringement of the
rights secured by § 1981, regardless of whether the corporation
may be held liable. See Weaver v. Gross, 605 F. Supp. 210, 212
(D.D.C. 1985); Richard v. Bell Atlantic Corp., 946 F. Supp. 54,
74 (D.D.C. 1996). Further, plaintiff contends that the holding in
Hunter is incorrect, as it relied specifically on Title VII
cases to conclude that individual supervisors are not liable
under § 1981.
The court here adopts the plaintiff's contention. First, the
Hunter court did rely solely on the Title VII holdings in
holding that individual supervisors were not liable under § 1981.
That seems problematic, considering the differences between the
two statutes. Specifically, section 1981 "has been recognized to
prohibit racial discrimination in the making and enforcement of
purely private contracts as a valid exercise of Congress' power
under the Thirteenth Amendment to eradicate the badges and
incidents of slavery." Weaver, 605 F. Supp. at 211. In contrast,
Title VII was created to address discriminatory conduct in the
workplace only. Further, the statutory language of Title VII
makes it clear that only "employers" are liable for
discriminatory acts. See 42 U.S.C. § 2000e(b). In contrast,
42 U.S.C. § 1981 makes no such distinction.
For the foregoing reasons, and based on the case law cited by
plaintiff, the Court holds that individual supervisors can be
sued under 42 U.S.C. § 1981. Consequently, the individual
defendants will not be dismissed from the plaintiff's claim under
IV. Defendants' Motion To Dismiss Tortious Interference With
Economic Advantage Claim
Plaintiff asserts that defendants O'Meara, Ertter, and
Bernstein knowingly, intentionally, and maliciously interfered
with plaintiff's employment at Dickstein. Consequently, plaintiff
asserts that defendants tortiously interfered with his reasonable
expectation of continued employment and financial remuneration
B. Standards For Tortious Interference With Prospective Advantage
And Economic Relationship
The Court of Appeals has held that, in order to establish a
claim for tortious
interference with economic advantage, a plaintiff must show: (1)
the existence of a valid business relationship or expectancy, (2)
knowledge of the relationship or expectancy on the part of the
interferer, (3) intentional interference inducing or causing a
breach of termination of the relationship or expectancy, and (4)
resultant damage. See Bennett Enters. v. Domino's Pizza, Inc.,
45 F.3d 493, 498 (D.C.Cir. 1995).
To survive a motion to dismiss for intentional interference
with prospective economic advantage, "a plaintiff must allege
`business expectancies, not grounded in present contractual
relationships, but which are commercially reasonable to expect.'"
See Democratic State Comm. of the District of Columbia v.
Bebchick, 706 A.2d 569, 572 (D.C. 1998) (quoting Carr v.
Brown, 395 A.2d 79, 84 (D.C. 1978)). In Carr, the court
defined the term "expectancies": "For the most pan the
`expectancies' thus protected have been those of future
contractual relations, such as the prospect of obtaining
employment or employees, or the opportunity to obtain customers."
Carr, 395 A.2d at 84 (citation omitted).
A general intent to interfere or knowledge that the conduct
will injure the plaintiff's business dealings is insufficient to
impose liability. See Bennett Enters., 45 F.3d at 499 (quoting
Genetic Sys. Corp., v. Abbott Labs., 691 F. Supp. 407, 423
(D.D.C. 1988)). Plaintiff cannot demonstrate liability without "a
strong showing of intent to disrupt ongoing business relations."
Id. "Motive or purpose to disrupt ongoing business
relationships is of central concern in a tortious interference
case. . . . [C]onduct must be more egregious, for example, it
must involve libel, slander, physical coercion, fraud,
misrepresentation, or disparagement." Genetic Sys., 691 F. Supp.
Defendants' motion to dismiss this claim will be granted for
the following reasons. First, plaintiff has failed to identify
any facts demonstrating any future business relations or
"expectancies" that defendants affected. Plaintiff has only
presented evidence that defendants may have interfered with
business expectations associated with his current employment
relationship, and plaintiff has not presented evidence of a
specific, future relationship with Dickstein.
Even assuming that plaintiff could demonstrate that future
business expectancies were affected by defendants, plaintiff
cannot demonstrate the requisite intent required for tortious
interference with economic advantage. Under Genetic Systems,
the requisite intent is met if behavior involves egregious
conduct, such as libel, slander, physical coercion, and fraud.
Here, plaintiff's complaint is silent as to defendants' intent to
interfere with plaintiff's future business relations or to any
statements that constitute slander, libel, or misrepresentations
or that disparage plaintiff in his search for new employment.
Therefore, plaintiff cannot sustain a claim that defendants
terminated him with the specific intent to interfere with "future
contractual relations" or the "prospect of obtaining employment."
Defendants O'Meara, Ertter, and Bernstein's motion to dismiss
on this ground will be GRANTED*fn3. First, plaintiff has offered
no evidence of a future business relationship with Dickstein.
Second, even assuming that plaintiff could demonstrate a future
expectancy, he has offered no evidence of the requisite intent
satisfy the test for tortious interference with economic
For these reasons, the court will deny defendants' motion to
dismiss the 42 U.S.C. § 1981 claim brought by James R. Sheppard.
The court will grant defendants O'Meara, Ertter, and Bernstein's
motion to dismiss the claim based on tortious interference with