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CARLTON v. ERNST & YOUNG

May 3, 2001

CARLTON L. SHELTON, PLAINTIFF,
v.
ERNST & YOUNG, LLP, A LIMITED PARTNERSHIP, SYLVIA POZARNSKY, INDIVIDUALLY AND IN HER CAPACITY AS A PARTNER OF ERNST & YOUNG, LLP.



The opinion of the court was delivered by: Arlander Keys, Magistrate Judge

    MEMORANDUM OPINION AND ORDER

Before the Court is Defendants' Motion to Dismiss Plaintiff's First Amended Complaint, pursuant to Federal Rules of Civil Procedure ("FRCP") 12(b)(1) and 12(b)(6), and Motion for Sanctions, pursuant to FRCP 11. For the following reasons, Defendants' Motion to Dismiss and Motion for Sanctions are granted.

BACKGROUND

In his First Amended Complaint ("Amended Complaint"), Plaintiff Carlton L. Shelton asserts various claims relating to the termination of his employment with Defendant Ernst & Young, LLP ("Ernst & Young") : (1) sex and race*fn1 discrimination under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq. ("Title VII") (West 2000) and/or the Illinois Human Rights Act, 775 ILCS 5/1-101, et seq. ("IHRA") (West 2001), against Defendants Ernst & Young and Sylvia Pozarnsky; and (2) breach of an oral employment contract against Defendant Ernst & Young.

Plaintiff is an African-American male who was hired by Ernst & Young in its Personal Financial Counseling ("PFC") practice in July of 1998. Ms. Pozarnsky managed Ernst & Young's PFC practice, and terminated Plaintiff's employment on April 30, 1999. According to Plaintiff, however, he was not taken off Ernst & Young's payroll until June 15, 1999. On March 22, 2000, three hundred and twenty-seven (327) days after his discharge (on April 30, 1999), Plaintiff filed a charge with the EEOC, alleging race and gender discrimination. The EEOC issued a "Right to Sue" letter on June 5, 2000, and Plaintiff filed his original Complaint in federal court on September 5, 2000. (There is no evidence that Plaintiff filed a charge with the Illinois Human Rights Commission pursuant to the IHRA.)

On October 16, 2000, Defendants' counsel sent Plaintiff's counsel a letter, explaining in depth (and citing the relevant cases and statutes) that many — if not all — of Plaintiff's claims were groundless, and likely in violation of Rule 11 of the FRCP. On November 7, 2000, Plaintiff's counsel responded by letter, stating that he would file a motion to voluntarily dismiss the appropriate claims (although he did not specify which ones) by November 13, 2000. Nonetheless, by November 13, 2000, Plaintiff's counsel had not moved to dismiss any of the claims. However, on December 29, 2000, Plaintiff filed a Motion for Leave to Amend Plaintiff's Complaint and Jury Demand. In that Motion, Plaintiff's counsel stated that, based on discussions with Defendants' counsel, he agreed that some of the allegations were either time-barred, inapplicable, or that requiring Defendants to respond to them in their current form would be unfair to Defendants, and could detract from Plaintiff's meritorious allegations. By Order dated January 3, 2001, the Court granted Plaintiff's Motion to Amend the Complaint by January 16, 2001. On January 16, 2001, Plaintiff filed his Amended Complaint, which still contained many of the claims that were in the original Complaint — claims that had been specifically addressed by Defendants' counsel in his October 16th letter. On February 8, 2001, Defendants filed their present Motion to Dismiss and for Sanctions.*fn2

MOTION TO DISMISS STANDARD

As for the Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the purpose of the rule is to test the sufficiency of the complaint and not to decide the merits of the case. Id. In ruling on a motion to dismiss, the court must construe the complaint's allegations in the light most favorable to the plaintiff, and all well-pled facts and allegations in the plaintiff's complaint must be taken as true. Id. The allegations of a complaint should not be dismissed for failure to state a claim "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Sherwin Manor Nursing Center, Inc. v. McAuliffe, 37 F.3d 1216, 1219 (7th Cir. 1994)).

DISCUSSION

I. Plaintiff's Title VII Claims Are Time-Barred and, Therefore, Dismissed Under FRCP 12(b)(1).

Compliance with the limitations period under Title VII for filing a charge with the EEOC is jurisdictional. Lowell v. Glidden-Durkee, Division of SCM Corp., 529 F. Supp. 17, 18 (N.D. Ill. 1981). In order to pursue a Title VII claim, a plaintiff must file an EEOC charge within 300 days of the occurrence of the event that forms the basis of the complaint.*fn3 42 U.S.C. § 2000e-5(e); Doe v. R.R. Donnelley & Sons Co., 42 F.3d 439, 445 (7th Cir. 1994). Significantly, "[f]ailure to do so bars litigation over those claims." Speer v. Rand McNally & Co., 123 F.3d 658, 662 (7th Cir. 1997).

Here, despite Plaintiff's assertion to the contrary, the event that forms the basis of his discrimination claims is his termination from Ernst & Young on April 30, 1999. Plaintiff filed his charge of discrimination with the EEOC on March 22, 2000 — 327 days after his termination. Nonetheless, Plaintiff asserts in his Response to Defendants' Motion to Dismiss ("Response") that he was not officially taken off Ernst & Young's payroll until June 15, 1999, and that, consequently, he timely filed his charge within the 300 day requirement. However, as the abundant case law undeniably shows, when Plaintiff was taken off Ernst & Young's payroll is totally irrelevant. The critical date — that starts the 300 day clock ticking — is when Plaintiff learned about the adverse decision, and not when the financial consequences (such as being taken off the payroll) are felt, or when the termination becomes effective. See, e.g., Librizzi v. Children's Memorial Medical Center, 134 F.3d 1302, 1306 (7th Cir. 1998) ("An adverse decision whose effect is deferred gives rise to a claim when the decision is made, not when the effect is felt. This is commonplace in the law of employment discrimination."); Kuemmerlein v. Bd. of Educ. of Madison Metro. School Dist., 894 F.2d 257, 259-60 (7th Cir. 1990) (finding that the cause of action began to accrue on the day that plaintiffs received the layoff decision, and not on the date of the actual termination).

Nonetheless, Plaintiff attempts to circumvent the prevailing case law by making several erroneous and frivolous arguments.*fn4 First, Plaintiff argues, in his Response, that he first had knowledge of Ernst & Young's adverse employment decision on June 15, 1999 — when he was officially taken off the payroll — and that he felt the effects of this discrimination on June 30, 1999, the last pay date. He then cites Delaware State College v. Ricks, 449 U.S. 250 (1980) for this proposition. However, Plaintiff's counsel misunderstands and misapplies the relevant case law. Ricks*fn5 and its progeny clearly hold that the statute of limitation begins to run when the plaintiff first learns of the adverse employment action. See, e.g., Davidson v. Board of Governors of State Colleges and Univs., 920 F.2d 441, 443 (7th Cir. 1990) (citing Ricks for the proposition that "[t]he Supreme Court has held that the time for attacking a discriminatory practice begins to run when the practice is first applied to you, not when the application blossoms into a full-blown injury."). Significantly, in Plaintiff's Amended Complaint, he states, in paragraphs 11 and 16, that he was discharged on April 30, 1999. He also states, in his EEOC charge, that he was terminated on April 30, 1999. ...


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