Age Discrimination Sufficiently Alleged Against Ad Company Adloox, Inc.

In Downey v. Adloox Inc., No. 16-CV-1689 (JMF), 2017 WL 816141 (S.D.N.Y. Feb. 28, 2017) (J. Furman), the court held that plaintiff – who was directly employed by a wholly-owned domestic subsidiary of a foreign company – sufficiently stated claims of age discrimination under the Age Discrimination in Employment Act and the New York State and City Human Rights Laws. It dismissed plaintiff’s fraudulent inducement and unjust enrichment claims.

The court summarized plaintiff’s allegations (in part) as follows:

[Plaintiff] alleges that, during the course of his employment, his supervisors repeatedly referred to him as the “old timer.” 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).” 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.” After Downey was terminated, his position was filled by a thirty-one year old.

Defendants – “wisely”, per the court – did not dispute that plaintiff’s allegations were sufficient to raise an inference of age discrimination. Rather, they argued that plaintiff’s ADEA claims were barred by ADEA (29 U.S.C.) § 623(h)(2) (which provides that the ADEA “shall not apply where the employer is a foreign person not controlled by an American employer”) and that it was not an “employer” 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” as required by ADEA §  630(b).

As to defendant’s first argument, the court determined that this case was not governed by ADEA § 623(h)(2), but rather by “whether Adloox France can be treated as his employer pursuant to the single-employer doctrine.” This determination “depends on a fact-intensive inquiry into whether there is evidence of (1) interrelation of operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership or financial control.” To survive a motion to dismiss, a plaintiff need only allege facts “sufficient to put [the defendant] on notice of the theory of employer liability upon which her claims are based.” The court found that plaintiff did so here, noting that defendant’s arguments to the contrary “turn on facts outside the Complaint.”

The court likewise rejected defendant’s argument that it was not an “employer” because it did not have enough employees, finding that plaintiff satisfied his pleading burden by alleging that defendant had at least twenty employees.

In dismissing plaintiff’s fraudulent inducement claim, the court explained:

As a general matter, an at-will employee—which is what Downey was—may not evade the bar against suing for wrongful termination by suing in tort. Under very limited circumstances, however, at-will employees can recover for fraudulent statements that induce them into accepting positions of employment by showing: (1) a material false representation; (2) scienter; (3) reasonable reliance; (4) damages; and … (5) that the fraudulent misrepresentation was collateral or extraneous to the employment agreement. To be cognizable, though, the false representation must be one of present fact rather than a future promise, not only because breach of a future promise sounds in contract, but also because reliance on a future promise of employment by an at-will employee is unreasonable as a matter of law.

Applying the law, the court explained:

Applying those standards here, Downey’s claim must be dismissed. Downey alleges that he relied on Adloox U.S.’s promise of employment, but there is no suggestion that promise was false, let alone false when it was made, given that Adloox U.S. did subsequently employ Downey. Downey does not allege, and certainly does not allege with the particularity required by Rule 9(b), any false representation by Adloox U.S. with respect to the duration or nature of his employment. … In any event, any such promise would not be actionable because claims of fraudulent inducement based on future promises of continued employment in an at-will employment context are not cognizable under New York law. Moreover, any reliance by Downey on such a promise was unreasonable as a matter of law.(Emphasis in original.)

The court also dismissed plaintiff’s unjust enrichment claim, noting that there was no “dispute as to whether a relevant contract exists or covers the disputed issue” and that plaintiff “indisputably had an at-will employment contract with Adloox U.S., and he makes no claim that it was invalid.”

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