Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—D.N.J.: Avis franchisee’s racial discrimination, retaliation claims tossed, (Mar 24, 2015)

By Greg Hammond, J.D.

An independent operator of an Avis Rent A Car agency could not move forward with claims of discrimination and retaliation under 42 U.S.C. §1981. In granting Avis Rent A Car System, Inc.’s motion for summary judgment, the federal district court in Newark, New Jersey, determined that the operator failed to raise any triable issue of fact as to either discrimination or retaliation (McClain v. Avis Rent A Car System, Inc., March 23, 2015, Walls, W.).

Background. L&M Agency, owned by Lakeisha McClain, entered into an independent operator agreement with Avis in 2003. Throughout the life of the agreement, McClain and her husband, an African-American couple, operated the Avis car rental location. The McClains and L&M Agency filed suit against Avis, alleging racial discrimination and retaliation in violation of the Civil Rights Act of 1866, 42 U.S.C. § 1981, and the New Jersey Law Against Discrimination. The McClain’s individual claims under § 1981 were dismissed because they were not parties to L&M’s contract with Avis. The New Jersey state law claims were also dismissed because the case lacked necessary contacts with New Jersey. Avis moved for summary judgment on the remaining L&M § 1981 claim.

Prima facie race discrimination. First, the court determined that L&M stated a prima facie case for race discrimination, because it alleged: (1) L&M is owned entirely by an African-American woman and staffed by her African-American husband, demonstrating a protected class; (2) L&M’s satisfactory performance over the eight years of the agreement clearly established Mr. McClain’s qualifications for the job; (3) Avis terminated the contract; and (4) statistical evidence that six out of 29 Avis locations in a designated area were terminated, four of which were operated by African-Americans, along with evidence that plaintiffs were replaced with a white operator.

Non-discriminatory reasons for termination. Because L&M established a prima facie case for race discrimination, the burden shifted to Avis to articulate a legitimate, nondiscriminatory reason for terminating the agreement. Avis offered 11 reasons, including: failure to keep the location in a neat and business-like manner; poor revenue performance; failure to abide by company standards and policies; failure to meet goals for counter sales; lack of sufficient sales skills; plaintiff’s employees behaved in a hostile and unprofessional manner toward Avis; and others.

Reasonable factfinder. The final question, according to the court, was whether L&M could point to some evidence from which a factfinder could reasonably either: (1) disbelieve Avis’ articulated legitimate reason; or (2) believe that an invidious discriminatory reason was more likely than not a motivating or determinative cause of L&M’s action.

The court first concluded that Avis’ rationale—that a combination of uncleanliness at the location, missed financial goals, and personality conflict warranted termination of L&M’s agreement—was not so implausible or inconsistent an explanation that a reasonable factfinder would find it unworthy of credibility. Further, L&M failed to provide any evidence to substantiate its allegations of racial discrimination.

Retaliation. In support of its retaliation claim, L&M alleged two comments as protected activity: (1) an announcement that Mr. McClain’s lawyer was “on the way” after an altercation with an Avis employee; and (2) his statement to the employee’s former supervisor that, “here we go again with Carol. It’s crazy, the way how she just acted.” The court concluded that neither argument constitutes protected activity because neither argument alleged illegal discriminatory treatment. The first allegation of race discrimination came nearly a month after Avis terminated the agreement. A 2007 complaint of racial discrimination also failed to serve as a basis for the retaliation claim because the four year period of time in between the complaint and termination without supplemental evidence rendered causation implausible. No reasonable factfinder could therefore view McClain’s comments as protected activity, or would find a causal relationship between his complaints and the agreement’s termination, the court concluded. The motion for summary judgment was consequently granted.

The case number is 12-5151 (WHW) (CLW).

Attorneys: James M. Duttera (Console Law Offices, LLC) for Lakeisha McClain and L&M Agency. Paul J. Halasz (Day Pitney LLP) for Avis Rent A Car System, Inc.

Companies: Avis Rent A Car System, Inc.; L&M Agency

Cases: FranchisingDistribution NewJerseyNews