By Phillip H. Movaghar & Jeff Birren, Senior Writer
Plaintiff outrage is no substitute for facts. Recently the New York Supreme Court for New York County dismissed claims filed against Major League Soccer (“MLS”) by a former employee of the Professional Referee Organization (“PRO”). PRO and MLS have a significant relationship, but that was not enough to make MLS legally responsible for PRO’s treatment of its employees. PRO remains in the case, but as to the claims against MLS, it can take more than assertions and suppositions to prevail in court when such conclusory allegations are challenged.
Background
Paul Rejer was born in Dudley England in May 1954. His career began in 1986 as an assistant soccer referee. Six years later he was promoted to the Premier League’s list of assistants. He also made the list of FIFA’s linesmen. During his career in England he was linesman in the 1992 UEFA Cup Final as well as three World Cup qualifying games. He retired as a referee in 2003 and in 2004 began a new career as referee coach. He remained active in England until 2012, working for Professional Game March Officials, Ltd. as an assistant referee manager (Rejer v. PRO & MLS, SupremeCourt of New York, New York County, Judge Kathryn E. Freed, 2020 N.Y. Misc LEXIS 880; NY Slip Op. 30507(U), (2-24-20) at 2).
In 2012 MLS and US Soccer created PRO to help train professional soccer referees in the U.S. (Id.). Rejer, who still lived in the United Kingdom, was offered the position of Training and Development Manager at PRO in New York. He accepted and moved to New York (Id.). By the end of 2015 changes were taking place within PRO and Rejer’s position shifted. PRO’s general manager announced his pending retirement and Rejer was invited to apply for the position. He interviewed for the job but was not offered it. Instead, Howard Webb came on board and took over some of Rejer’s tasks and later it was announced that in 2018 Webb would replace Walton as general manager (Id.).
In July 2017 Rejer was promoted to “Director of Training and Education, but a mere three months later, he was told that “his work was not ‘up to level’” (Id.). Moreover, there were “serious doubts that he could keep up with the technical direction of PRO due to his age” (Id.). He then received a letter that warned him “that he would be terminated if his work did not improve significantly before the end of the season, which was due to end in three weeks” (Id.).
In December more changes were announced and Rejer’s position was changed to Director of Senior Referees. He was invited to apply for that job but was told by another employee that he would not be considered due to his age. Rejer then entered into a six-month consulting contract (Id. 3). After that period ended Rejer and PRO had a disagreement about an alleged loan for a house deposit and the final payment for his consulting. Consequently, Rejer sued PRO and MLS in March 2019 (Id. at 4).
MLS Responds
PRO served an answer, but MLS filed a motion to dismiss. It challenged the discrimination and labor law claims “because the complaint fails to allege an employment relationship between Rejer and MLS” (Id.). It also asserted that there was no reference in the complaint to any “unlawful conduct by, or at the direction of MLS” and that the breach of contract claim had to be dismissed “because there was no agreement between MSL and Rejer” (Id.).
MLS attached an affidavit by Webb that stated that MLS had no authority to hire any of PRO’s employees and had not made any decisions concerning Rejer’s employment at PRO. Webb’s affidavit attached several documents, including Rejer’s consulting contract that “reflects that the contract was solely between PRO and Rejer” (Id.).
Rejer opposed the motion by insisting that “there is substantial evidence to suggest that PRO and MLS are integrated and/or joint employers and that, since these questions are fact intensive, the motions to dismiss the pleadings must be denied” (Id.). In his attached affidavit, Rejer stated that PRO’s offices are located within the MLS offices, that they share resources, information, human resources and Information Technology departments, that MLS provides PRO with 80 percent of its funding, that MLS was involved in the selection of PRO’s general manager, that MLS negotiated and approved the Collective Bargaining Agreement between PRO and the referee’s union, and that MLS participates in weekly meetings with PRO “to discuss and evaluate referee performance and to provide input into referee assignments” as well as other such factual assertions (Id.). The Court held oral argument before ruling (Id. at 3).
The Court’s Ruling
The Court began its ruling by explaining the legal threshold required to succeed on a motion to dismiss. Quoting from Carlson v American Intl. Group, Inc. it stated “on a motion to dismiss for failure to state a cause of action, the complaint must be liberally construed, and courts must provide a plaintiff with every favorable inference. Carlson v American Intl. Group, Inc., 30 NY3d 288 (2017).” However, conclusory allegations – claims consisting of bare legal conclusions with no factual specificity — are insufficient to survive a motion to dismiss (Barnes v. Hodge, 118 A.D.3d 633 (App. Div. 1st Dept. 2014)).
The Court continued its analysis by quoting from additional case law stating that “if evidence is adduced in support of a CPLR 3211 (a) (7) motion, the court is required to decide whether the plaintiff has a cause of action, rather than whether if one has been stated. If that evidence disproves a requisite allegation of the claim, the claim must be dismissed despite the fact that the allegations, by themselves, are adequate to resist a motion to dismiss.
Dismissal in that circumstance is permitted only when the evidence establishes that the material fact alleged by plaintiff is not really a fact and no significant dispute exists regarding it” (Blumenfeld v. Stable 49, Ltd., 62 Misc. 3d 1208(A) (Sup. Ct. 2018)). With that said, a court may consider affidavits filed by a plaintiff to correct any defect in the complaint and the criterion is not whether the proponent of the pleading has stated a cause of action, but rather if he has a cause of action (Rejer at 5).
The Court next turned to the applicable labor statutes, New York Executive Law § 296 (“NYSHRL”) and New York City Administrative Code 5-502 (“NYCHRL”), to analyze whether Plaintiff had standing to bring an employment discrimination or labor claim against MLS. Quoting from Gerzog v. London God Corp., it explained: “An employee may have more than one employer under the [NYSHRL] and the [NYCHRL] where: (1) the proposed employer has the power of selection and engagement over the employee, (2) the proposed employer made the payment of salary or wages to the employee, (3) the proposed employer had the power of dismissal over the employee, and [(4)] the proposed employer had the power to control the employee’s conduct” (Gerzog v London Fog Corp., 907 F. Supp 590, 600 (EDNY 1995)).
However, the Court of Appeals has clarified that “the really essential element of the relationship is the right on control, that is, the right of one person, the master, to order and control another, the servant, in the performance of work by the latter” (Griffin v. Sirva, Inc., 29 N.Y.3d 174 (2017)).
The Court considered the precedent case law and ultimately ruled that MLS’ motion to dismiss the discrimination claims pursuant to NYSHRL and NYCHRL should be granted. The Court found that Rejer’s allegations with respect to MLS controlling PRO’s employees and how it had control over PRO’s practices was conclusory in nature and insufficient to withstand dismissal of the discrimination claims. Moreover, there are no allegations that MLS hired Rejer, terminated his employment, or had any involvement in his day-to-day operations. (Id.). Despite Rejer’s claims that the two entities (i.e. the MLS and PRO) are interrelated in that they share a common office and resources, including finances, this, standing on its own, is insufficient to establish MLS’s control over PRO’s employees (Id.). The Court also made note of how all factual allegations about any alleged discrimination pertain exclusively to PRO and its employees. (Id.).
The Court also ruled the breach of contract claims against the MLS should be dismissed as well (Id.). It found that the offer letter and consulting agreement conclusively established that Rejer was an employee of PRO, not the MLS (Id.). The MLS did not allege that it was a signatory to the employment contact between PRO and Rejer, and Rejer had “failed to present th[e] court with any authority finding that a claim for a breach of contract can be stated against a non-party to to an employment contract under a joint employer theory.” (Id.).
Finally, the Court also ruled that Rejer’s claim against MLS for the alleged withholding of wages, in violation of Labor Law §§ 191 (c) and 198, must also be dismissed because Rejer’s pleadings fail to allege that MLS was his employer and, as such, that the Labor Law applies (Id. at 6).
Conclusion
Rejer’s case will now continue, but against Rejer’s actual employer, the professional referee’s organization, PRO, and not the MLS. Thus, if Rejer has a valid case he will be able proceed past the summary judgment phase. In the meantime, the MLS can spend its time trying to figure out how it will proceed in the season of the Coronavirus.
Mr. Movaghar received his B.A. from UCLA and is a full time 3L student at Southwestern University School of Law in Los Angeles and is a member of the Biederman Institute’s Entertainment & the Arts Legal Clinic.
Birren is the former general counsel of the Oakland Raiders and is an adjunct professor of law at Southwestern.
