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CALDWELL v. KFC CORP.

March 25, 1997

OLIN JARDU CALDWELL, SR., Plaintiff,
v.
KFC CORPORATION, TERRY WORLEY, and LOUIS SEPE, Defendants.



The opinion of the court was delivered by: IRENAS

 IRENAS, District Judge:

 Plaintiff instituted this action against his former employer and supervisors seeking damages for sexual harassment, retaliation, wrongful termination, and battery. Defendants now move this Court to dismiss plaintiff's complaint for failure to state a claim upon which relief can be granted or, in the alternative, to compel arbitration. Because portions of plaintiff's complaint state claims upon which relief can be granted, this Court will grant in part and deny in part defendants' motion to dismiss. Because plaintiff's claims fall outside the substantive scope of the arbitration agreement, the Court will deny defendants' alternative motion to compel arbitration.

 I. BACKGROUND

 On April 28, 1994, plaintiff applied for a job as a fry cook with defendant KFC Corporation ("KFC") at its Somers Point, New Jersey fast-food restaurant. He signed an employment application which included an arbitration agreement:

 
If I am offered employment and accept, KFC and I agree to submit to binding arbitration any claims concerning the termination of my employment. I also agree, before this arbitration process is used: (i) first, to present any such claims in written detail to the KFC Human Resources Department; (ii) next, to pursue to completion any KFC internal review process; and (iii) finally to file and pursue to completion any external administrative remedy (such as with the Equal Opportunity Employment Commission). In any such arbitration, the then prevailing rules of the American Arbitration Association (and, to the extent not inconsistent, the then prevailing rules of the Federal Arbitration Act) shall apply.

 Plaintiff's Ex. B. KFC hired plaintiff for the position of fry cook that same day, and he soon began employment under the supervision of defendant Terry Worley, plaintiff's shift manager, and defendant Louis Sepe, the manager of the Somers Point KFC restaurant.

 According to plaintiff's complaint, Mr. Worley, an admitted homosexual, sexually harassed him on the job over the next few months. On May 29, 1994, Mr. Worley reportedly made sexually explicit remarks, within plaintiff's earshot, to the effect that he wished to have sexual relations with plaintiff. See Complaint P 11. Mr. Worley also reportedly made remarks degrading plaintiff's masculinity. See id. On June 17, 1994, Mr. Worley allegedly made a sexual advance towards plaintiff, offensively touching plaintiff's buttocks. See id. P 12. Plaintiff consistently rejected Mr. Worley's advances and informed him that he wished that this behavior stop. See id. P 13. The next day, plaintiff reportedly complained of Mr. Worley's behavior to Mr. Sepe. See id. P 14.

 The following week, plaintiff alleges that Mr. Worley became openly hostile towards him. On one occasion, Mr. Worley allegedly prevented plaintiff from clocking in and working at his designated starting time. See id. P 15. Plaintiff alleges that he reported this incident to Mr. Sepe and sought to be switched to a different shift or in the alternative transferred to a different KFC location. See id. P 16. Mr. Sepe pursued neither remedy at that time.

 On July 9, 1994, Mr. Worley reportedly reprimanded plaintiff for poor work performance without justification. See id. P 17. Plaintiff asserts that the true motivation underlying this reprimand was Mr. Worley's anger and bitterness towards plaintiff for rejecting his sexual advances and complaining to Mr. Sepe about his behavior. See id. Mr. Worley then allegedly threatened plaintiff that he would be fired if he made any more allegations of sexual harassment. See id. P 18. Plaintiff reportedly then informed Mr. Worley that he had already complained to the New Jersey Division of Civil Rights. See id. P 18. Mr. Worley then fired allegedly telling him to "get the f*** out of" the store and invoking racial slurs. See id.

 Plaintiff entered a verbal complaint with the New Jersey Division of Civil Rights on June 25, 1994, and formalized it in writing on July 18, 1994. See id. P 23. On July 29, 1996, the Equal Employment Opportunity Commission ("EEOC") issued plaintiff a "right to sue" letter, terminating its process with respect to plaintiff's complaint. See Defendants' Reply Ex. A. Twenty days earlier, *fn1" plaintiff instituted this action in federal court asserting claims under Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. §§ 2000e to 2000e-17, the New Jersey Law Against Discrimination ("N.J.L.A.D."), N.J.S.A. §§ 10-5:1 to 10-5:42, and common-law wrongful termination and battery. Plaintiff now seeks to amend his complaint to add a civil rights claim under the New Jersey Constitution, see N.J. Const. art. I, P 5 (state equal protection clause), and to correct KFC's corporate name.

 II. LEAVE TO AMEND

 In his opposition papers to defendants' 12(b)(6) motion, plaintiff expresses a desire to amend his complaint pursuant to Federal Rule of Civil Procedure 15(a) to add a civil rights claim under the New Jersey Constitution, and to correct KFC's corporate name. As plaintiff's time to amend his pleading as a matter of course has expired, he seeks to amend by leave of court. See Fed. R. Civ. P. 15(a).

 Rule 15(a) states that leave to amend "shall be freely given" and, while a court has discretion to deny leave, that discretion is circumscribed by the liberal amendment philosophy behind the rule. Fed. R. Civ. P. 15(a); see also Snyder v. Baumecker, 708 F. Supp. 1451, 1456 (D.N.J. 1989). Indeed, a plaintiff seeking to amend ought to be afforded an opportunity to test his claim on the merits, if the underlying facts and circumstances may be a proper subject for relief. See Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962); see also 6 Charles Alan Wright et al., Federal Practice and Procedure § 1484 (2d ed. 1990). Accordingly, leave to amend ought be denied only in exceptional circumstances, for example, where a movant has unduly delayed matters, where a movant has acted in bad faith or with a dilatory motive, where the amendment would unduly prejudice other parties to an action, or where the amendment would prove futile. See Foman, 371 U.S. at 182 (listing reasons to deny leave); Riley v. Taylor, 62 F.3d 86, 90 (3d Cir. 1995); 6 Wright, supra, § 1487.

 Under the New Jersey Constitution, as under the federal constitution, a plaintiff may only assert an equal protection violation against a state actor. See Robinson v. Cahill, 62 N.J. 473, 491-92, 303 A.2d 273, 282 (1973); see also State v. Schmid, 84 N.J. 535, 559-60, 423 A.2d 615, 628 (1980) (noting that the New Jersey Constitution has a different standard for state action than does the federal Constitution). KFC, a private purveyor of fried and roasted chicken, fails to qualify as a state actor under either the state or the federal standard. See Schmid, 84 N.J. at 562-63, 423 A.2d at 629-30; see also Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 156, 56 L. Ed. 2d 185, 98 S. Ct. 1729 (1978). Thus, plaintiff's proposed state civil-rights amendment would be futile under New Jersey law. Accordingly, the Court will deny him leave to amend his complaint to add a state constitutional claim. See Foman, 371 U.S. at 182; Riley, 62 F.3d at 90; Oquendo v. Bettcher Indus., Inc., 939 F. Supp. 357, 360 (D.N.J. 1996). The Court will, however, grant plaintiff leave to amend his complaint to correct KFC's corporate name and to reflect that he has, since the filing of his original complaint, received a right to sue letter. See supra note 1.

 III. MOTION TO DISMISS

 A. Applicable Standard

 Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In considering a Rule 12(b)(6) motion, a court will accept the allegations of the complaint as true. See Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). Dismissal of claims under Rule 12(b)(6) should be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). Although the court must assume as true all facts alleged, "it is not . . . proper to assume that the [plaintiff] can prove any facts that it has not alleged." Associated General Contractors of Calif., Inc., v. California State Council of Carpenters, 459 U.S. 519, 526, 74 L. Ed. 2d 723, 103 S. Ct. 897 (1983). Finally, when "confronted with [a 12(b)(6)] motion, the court must review the allegations of fact contained in the complaint; for this purpose the court does not consider conclusory recitations of law." Pennsylvania ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 179 (3d Cir. 1988) (emphasis added).

 B. Employer Liability

 1. Title VII

 Plaintiff's complaint sets forth two causes of action under Title VII: one for same-sex sexual harassment, and one for retaliation. Defendants seek to dismiss the first of these for failure to state a claim upon which relief can be granted, arguing that same-sex sexual harassment is not cognizable under Title VII. Because defendants make no argument to dismiss plaintiff's retaliation claim, and because that claim is viable under this District's caselaw, see Weiss v. Parker Hannifan Corp., 747 F. Supp. 1118, 1128-29 (D.N.J. 1990) (setting forth the ...


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