Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Wash.: Terminated cashier fails to state Washington state law claims against Target over post-employment actions, (Jul 12, 2013)

By Tobias J. Gillett, J.D., LL.M.

A former Target Corporation cashier failed to state Washington Consumer Protection Act (CPA) conspiracy to restrain trade and deceptive practices claims against Target over actions the retail store chain allegedly took following her termination, the federal district court in Spokane, Washington, has ruled (Alvarez v. Target Corp., July 10, 2013, Rice, T.).

According to the complaint, the employee worked for Target as a cashier. Target allegedly terminated her following an investigation that determined that she had been hitting incorrect keys on her register, resulting in about $5,000 of unpaid merchandise leaving the store. Although she was initially “terminated for fraud,” she later received a telephone call from Target’s legal department stating that she was “terminated for negligent conduct,” and that Target would not “fight unemployment.”

The employee later applied for unemployment benefits, giving as her reason for termination that she was “wrongfully accused of fraud after failing to follow sales and credit card procedures.” TALX Corporation, an agent of Target, sent the Washington Employment Security Department (ESD) a letter stating that the employee “was discharged due to gross misconduct.” The letter defined “gross misconduct” as including a variety of actions, but had the portion labeled “theft” circled. TALX failed to respond to a letter requesting additional information, and instead sent an identical copy of its first letter. ESD found the employee to be entitled to unemployment benefits, which she received until she began attending community college.

The employee filed suit, alleging a variety of claims including violations of the Washington Consumer Protection Act (CPA). Target filed a motion to dismiss.

Conspiracy to restrain trade. The court explained that the CPA bars “every contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce,” and that its interpretation is “guided by federal interpretation of the” Sherman Act. The employee alleged that “the acts and practices of [Target] and TALX complained of herein are a contract, combination, or conspiracy in restraint of trade,” and that the employee was “in the business and trade of competing with other persons in the State of Washington for the sale of her skills, labor, time, and talent to prospective employers, contractors, vendors, or customers.”

The court found these “threadbare recitals” failed to state a plausible CPA claim. The employee did not allege, and the court could not find, any “’contract, combination, or conspiracy’ that would plausibly give rise to an antitrust claim in this case.” Moreover, the employee provided only a “formulaic recital” of the element of a restraint of trade claim requiring that the alleged agreement unreasonably restrained trade. Although she alleged a relevant market of “competing with other individuals for the sale of her labor to prospective employers,” she did not “make any allegation as to any significant anti-competitive impairment by [Target] in that market.” Finally, the court noted that the employee had not alleged that she was seeking employment, but rather that she was pursuing an education. The court was “unable to identify any injury to [the employee’s] business or property resulting from the alleged illegal conduct.”

Unfair and deceptive acts or practices. To state a claim for an unfair or deceptive act or practice under the CPA, “a plaintiff must establish five elements, including: ‘(1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her business or property; and (5) causation.’”

The court concluded that the employee failed to adequately plead an injury to her “business or property.” The court noted that the employee received unemployment benefits despite the letter from Target to ESD. Moreover, the employee did not allege that she was denied any employment opportunities as a result of Target’s alleged acts, nor did she allege that Target had supplied information about her termination to anyone other than ESD. The employee’s claims only related to Target’s alleged post-termination actions, and she did not claim wrongful termination. Since “mere speculation” was not “sufficient to properly allege the fourth element of a CPA claim,” the court found the employee had failed to state a deceptive practices claim under the CPA.

The case is No. 13-CV-0150-TOR.

Attorneys: Michael James Casey for Diane Alvarez. Farron Danelle Curry (Schwabe Williamson & Wyatt PC) for Target Corp.

Companies: Target Corp.

Cases: Antitrust StateUnfairTradePractices WashingtonNews