By Victoria Moran, J.D.
The fundamental unfairness of Solera and its CEO sustaining reputation damage while the employee “stands behind the cloak of anonymity” causes prejudice to the defendants, said the court.
A domestic violence victim cannot proceed anonymously in her lawsuit against Solera Capital alleging employment discrimination, hostile work environment, retaliation, and failure to pay overtime. After weighing the 10 Sealed Plaintiff factors, a federal court in New York found her fear of risk of physical and mental harm, and the fact that her identify has remained anonymous, did not outweigh the public interest in disclosure or prejudice to the employer. The court also granted the employee’s motion to dismiss the employer’s counterclaims and the employer’s cross-motion to amend its pleadings, finding that Solera failed to state a claim for breach of fiduciary duty under the faithless servant doctrine since it could not satisfy either applicable standard to warrant forfeiture under the doctrine. The company also failed to state claims for conversion and unjust enrichment related to the employee’s alleged misuse of a company credit card (Doe v. Solera Capital LLC, March 31, 2019, Ramos, E.).
Domestic violence victim. Prior to her employment as an executive assistant for Solera Capital, the employee was a victim of domestic violence by her former husband, held in captivity, and severely injured until she was rescued by an organization that assists domestic violence victims. Relocated to two different safe houses to escape her husband, she claimed that he continued to search for her even after she legally changed her name in 2015, and that he made death threats against her family in 2018 in an attempt to pressure them to disclose information about her. The employee claimed she suffers from PTSD and is afraid her former husband will find her.
Discriminatory treatment. During her employment with Solera, she alleged that she was subjected to disparate treatment because of her race and humiliated by the CEO’s treatment of her as the “token” black woman. She claimed the CEO touched her hair, played offensive music, and forced her to sing and dance. The employee also alleged that she worked more than 80 hours per week without overtime pay. She was terminated in December 2015. According to Solera, the employee abused access to work and personal files of executives and forwarded sensitive information to her personal email address on two occasions. She also allegedly made two purchases for personal items on a company credit card totaling approximately $225.
The employee filed suit alleging employment discrimination, hostile work environment, retaliation, and failure to pay overtime and Solera filed counterclaims alleging breach of the fiduciary duty under the faithless servant doctrine and conversion. The employee moved to dismiss the counterclaims, and Solera moved to amend and add a claim for unjust enrichment. In addition to considering the two motions, the court also reviewed the employee’s motion for a protective order to continue to proceed anonymously.
Employee cannot proceed anonymously. In analyzing the employee’s motion to proceed anonymously, the court relied on 10 non-exhaustive factors identified by the Second Circuit in Sealed Plaintiff v. Sealed Defendant. It found that only two factors weighed in favor of anonymity and, therefore, the employee could not proceed under a pseudonym because her interest in anonymity did not outweigh the public interest in disclosure or prejudice to the employer.
Risk of harm. Under factor two, risk of psychological injury stemming from identification, the court found that there was an apparent risk to the employee’s physical safety and mental health if she could not continue using the pseudonym. It recognized that a victim’s assessment of risk is a good predictor of any threats and the employee’s fear of harm from her former husband was a basis for proceeding anonymously. The employee sought to avoid actual physical and mental harm, not embarrassment, social stigmatization, or economic injury. Moreover, she was rescued by an organization and relocated to two different safe houses, and her former husband’s attempts to find her have continued despite her name change and have included death threats against her family members. Thus this factor weighed in favor on anonymity.
Knowledge of identity. The seventh factor—whether the plaintiff’s identity has thus far been kept confidential—also weighed in favor of anonymity. While Solera was aware of her true identity, the threat of retaliation was not from Solera but from a third party (her former husband) who did not know her true identity, the court observed, noting that knowledge of her identity did not disrupt the fact her anonymity to the public has been preserved to date.
Factors against proceeding anonymously. The remaining factors, however, weighed against continued anonymity, said the court, noting that the lawsuit involved employment-related claims that were not of a highly sensitive or personal nature (factor one) and the employee was not pursuing the claims to prevent an injury that would result from disclosure of her identity (factor three). Analysis of factor four involves consideration of the plaintiff’s age, and here, because the employee was not a child, this factor weighed against anonymity. As to factor five, the employee was challenging the actions of a private party and not the government, so this factor weighed against anonymity.
Prejudice. Considering prejudice to the employer under factor six, the court noted that in determining whether a defendant will be prejudiced, courts look at the damage to a defendant’s reputation caused by the anonymous proceedings, difficulties in conducting discovery, and the fundamental fairness of proceeding in this manner. While there was no prejudice to Solera’s ability to conduct discovery and the claims were the same regardless of whether the employee’s identity was disclosed, “the fundamental unfairness of Solera and [the CEO] sustaining reputation damage while Doe stands behind the cloak of anonymity causes prejudice to Defendants.”
Public interest. Weighing factors eight and nine, which consider the public interest, the court found that there was not an atypical weak public purpose since the lawsuit involved the wrongdoing of a private party. Moreover, Solera prides itself on being a diverse company and the public would be interested in the facts of the case. Finally, factor 10—whether there are any alternative mechanisms for protecting the confidentiality of the plaintiff—weighed against proceeding anonymously. The lawsuit would be under the employee’s new name, not her original name, and any documents referencing her original name or information that could be used to locate her could be sealed and redacted.
Counterclaims. As to Solera’s counterclaims, the court granted both the employee’s motion to dismiss and Solera’s motion to amend. Solera alleged the employee breached her fiduciary duty under the faithless servant doctrine, but there simply was no evidence the employee unfairly competed with Solera. Although the alleged misconduct was improper, there was insufficient evidence that it consisted of a “persistent pattern of disloyalty” necessary to bring conduct within the confines of the doctrine. Nor did the alleged conduct (improper credit card use and treatment of sensitive information) rise to the required level of substantial disloyalty.
The conversion claim also failed. While Solera mentioned two alleged credit card charges, the assertion of stolen funds as it presently stands is not “specifically identifiable, said the court.
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