IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CASE NO. 18-CV-885

KEVIN DOYLE and HASHIM

WARREN,

Plaintiffs,
REPLY BRIEF OF DEFENDANT
v.
ADVANCED FRAUD SOLUTIONS,
LLC IN SUPPORT OF ITS MOTION
ADVANCED FRAUD SOLUTIONS, LLC
TO DISMISS
and THOMAS LAWRENCE REAVES,
JR.,

Defendants.

Defendant Advanced Fraud Solutions, LLC (“AFS”) submits

this Reply Brief in support of its Motion to Dismiss.

ARGUMENT AND CITATIONS OF AUTHORITY

Plaintiffs’ Response Brief continues the approach of the

Complaint: artful pleading of conclusory statements that

superficially sound like a cause of action. Clearly,

Plaintiffs’ counsel knows what is required to plead a cause

of action for retaliation under Title VII, and clearly they

have used magic words. But if one sifts apart the allegations

of facts from the allegations that are characterizations and

legal conclusions, it becomes apparent that no plausible

claims exist against AFS.

Case 1:18-cv-00885-WO-JLW Document 18 Filed 01/18/19 Page 1 of 16

 Under Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) and

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), factual

allegations in the complaint are taken as true, but “legal

conclusions couched as factual allegations,” are afforded no

such deference. Twombly, 550 U.S. at 555. “Threadbare

recitals of the elements of a cause of action, supported by

mere conclusory statements, do not suffice” and do not “unlock

the doors of discovery for a plaintiff armed with nothing

more than conclusions.” Iqbal, 556 U.S. at 678-79. What

matters are the actual factual allegations included in a

complaint, not what a lawyer can say about those factual

allegations.

Here, what happened (allegedly) is that a superior had

an affair with a subordinate and showed her favoritism/gave

her preferential treatment that he did not extend to the

Plaintiffs, and they complained to management about it.

Notably, in Plaintiffs’ Response Brief the terms “favoritism”

and “preferential treatment” do not appear, despite appearing

in numerous instances in the Complaint. And when the

conclusory statements are stripped away, Plaintiffs’ attempt

Case 1:18-cv-00885-WO-JLW Document 18 Filed 01/18/19 Page 2 of 16

to create a Title VII action out of a paramour preference set

of facts fails.

I. Paramour preference is not a Title VII violation,

and Plaintiffs have not sufficiently alleged a Title
VII retaliation claim.

Plaintiffs must show that they: (i) “opposed any practice

made an unlawful employment practice by this subchapter [42

U.S.C. § 2000e-3(a)]” or (ii) “made a charge, testified,

assisted, or participated in any manner in an investigation,

proceeding, or hearing under this subchapter.” (Doc. 17 at

5).1

Plaintiffs thus must overcome a problem: all of the

conduct that they allege they knew of and complained about is

conduct that courts have consistently declared not to fall

within Title VII’s reach. Plaintiffs hardly contest the

existence of this problem.2 Rather, they argue that their

1 Plaintiffs recognize that Plaintiff Doyle has no possible

claim under the second prong, as they make no argument that
he made a charge, testified, assisted or participated as
required.
2 Plaintiffs only address the underlying point – that
paramour/favoritism allegations do not implicate a practice
“made...unlawful...by this subchapter” – by arguing that the
Fourth Circuit case AFS cited in its long list of authority
on that point, Becerra v. Dalton, 94 F.3d 145 (4th Cir. 1996),
is distinguishable. Becerra hardly helps Plaintiffs. The
court there drew a clear line that consensual relationships
3

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belief to the contrary was reasonable because, after all,

they are not required to be legal experts or know the limits

of when bad behavior becomes unlawful discrimination and an

incorrect belief can still be reasonable. Those points are

an accurate summary of law. Applied here, however, they fall

apart because of the facts alleged.

First, the Fourth Circuit in EEOC v. Navy Federal Credit

Union, 424 F.3d 397, 406 (4th Cir. 2005), and consistently

elsewhere, has made clear that the reasonableness of a

plaintiff’s belief must be judged objectively not

subjectively. It is not enough that the Plaintiffs thought

they were reporting discrimination or that if other facts on

which they were speculating at the time had been true they

are not the subject of Title VII, and in doing so relied on

the holding in DeCinto v. Westchester County Medical Center,
807 F.2d 304 (2d Cir. 1986), where that court stated, “an
employer who promotes his lover or paramour, or otherwise
accords the lover or paramour preferential treatment, is not
liable for sexual harassment under Title VII.” Id. at 149.
Other Fourth Circuit courts have relied on Becerra as adopting
the line of case law from other jurisdictions that the
preferential treatment of a paramour does not amount to gender
discrimination, including this Court. See, e.g., Ahern v.
Omnicare ESC LLC, 2009 WL 2591320, at *5 (E.D.N.C Aug. 19,
2009); Murray v. City of Winston-Salem, North Carolina, 283
F.Supp.2d 493, 501-02 (M.D.N.C. 2002).
4

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might have been reporting discrimination. There must be facts

that make their belief objectively reasonable at the time.

Plaintiffs cite no case in which a court has held that

reporting the existence of favoritism to a paramour is

underlying protected opposition activity. Further, they have

cited no case in which a court has concluded that such a

report was protected activity simply because a plaintiff,

whether reasonably or not, believed it was. On the other

hand, AFS has cited numerous cases in which such reports were

not found to be a foundation for a retaliation claim. (Doc.

No. 14 at p. 12), which means the plaintiffs in those cases

had no objectively reasonable belief that they were opposing

practices made unlawful by Title VII. In response, Plaintiffs

rely merely on other general “good faith” or “reasonable”

belief cases, such as Boyer-Liberto v. Fountainbleau Corp.,

786 F.3d 264, 304 (4th Cir. 2015), which simply instructs

that the employee “must have an objectively reasonable belief

in light of all circumstances that a Title VII violation has

happened or is in progress.”

Courts have considered the following factors in analyzing

whether an employee has an objectively reasonable belief that

Case 1:18-cv-00885-WO-JLW Document 18 Filed 01/18/19 Page 5 of 16

he is reporting unlawful Title VII activity when he reports

paramour preference: (1) whether the relevant case law

supports the plaintiff’s belief; 3 (2) the substance of the

complaint, not the terminology used;4 and (3) whether the

employer understood, or should have understood, that the

plaintiff was opposing discriminatory conduct. 5

3 See e.g., Watkins v. Fairfield Nursing and Rehab. Cntr.,

LLC, 2012 WL 1566228, at *5 (N.D. Ala. Apr. 26, 2012) (“In
determining the reasonableness of plaintiff’s belief of
unlawful conduct, the court must consider preexisting case
law. Moreover, the plaintiff is charged with knowledge of
the substantive law.”); Sherk v. Adesa Atlanta, LLC, 432
F.Supp.2d 1358, 1370 (N.D. Ga. 2006) (“[T]he unanimity with
which the courts have declared favoritism of a paramour to be
gender-neutral belies the reasonableness of Plaintiff’s
belief that such favoritism created a hostile work
environment.”); O’Patka v. Menasha Corp., 878 F.Supp. 1202,
1208 (E.D. Wisc. 1995) (“In determining the reasonableness of
[the plaintiff’s] belief that he was being discriminated
against, the court must look to preexisting caselaw.”).
4 Kelly v. Howard I. Shapiro & Assocs. Consulting Eng’rs,

P.C., 2012 WL 3241402, at *13 (E.D.N.Y. Aug. 13, 2012) (“A

complaint is not protected simply because it alleges
discrimination or the Plaintiff has a good faith belief that
she is being discriminated against.“).
5 “Our cases hold that an employee’s complaint constitutes

protected activity when an employer understood, or should

have understood, that the plaintiff was opposing
discriminatory conduct.” Burgess v. Bowen, 466 Fed. Appx.
272, 282 (4th Cir. 2012); Tucker v. Shineski, 2013 WL 5309143,
at *2 (D.S.C. Sept. 18, 2013) (“Even assuming [the plaintiff]
reasonably believed that he was complaining of unlawful
discrimination, [the employer] would not have been aware that
[the plaintiff] had engaged in a protected activity because
[the employer] cannot be expected to have understood that
6

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 Without further belaboring the point, AFS asks the Court

to recognize, consistent with Twombly and Iqbal, that (a) the

real allegations here are that Plaintiffs reported a

supervisor-subordinate relationship and complained about the

attendant favoritism, and (b) the remainder of the Complaint

amounts to their speculation as to what else might have been

going on that could have made the conduct of Reaves unlawful,

none of which they allege, or can allege, actually occurred.

Finally, Plaintiffs argue they alleged a retaliation

claim under the participation prong of Title VII based on

Warren’s April 2017 EEOC Charge. To state a retaliation

claim, Plaintiff must allege a causal relationship between

the filing of the EEOC charge and the alleged retaliatory

conduct. See, e.g., Wilkes v. Argueta, 2017 WL 1215749, at

*4-5 (M.D.N.C. Mar. 31, 2017) (noting that there must be

proximity between the adverse employment action and the

protected activity); Gray v. Wal-Mart Stores, Inc., 2011 WL

4368415, at *5 (“Plaintiff alleges absolutely no facts to

[the plaintiff] was complaining about conduct prohibited by

Title VII.”).
7

Case 1:18-cv-00885-WO-JLW Document 18 Filed 01/18/19 Page 7 of 16

show that a causal nexus exists between her EEOC charge and

Walmart’s alleged conduct.”) Plaintiffs do not do that here.

The April 2017 EEOC charge was filed by Warren only and

withdrawn a short time later. There is no specific factual

allegation that Reaves, the only person alleged to have

retaliated, ever knew Warren filed an EEOC Charge. In fact,

the only allegation in the Complaint as to the source of any

knowledge by Reaves of any actions by either Plaintiff is the

allegation that Reaves knew of the internal human resources

investigation into his relationship on April 4, 2017 and must

have learned on April 17, 2017 of the Plaintiffs’ involvement

therein, because the reprimand he received that day stated

that he would no longer supervise them. (Doc. 1 ⁋ 36.) There

is no allegation that any investigation occurred because of

the EEOC charge.

Plaintiffs generally allege in the first claim for relief

that the EEOC charge was a protected activity and Reaves

“engaged in a campaign of retaliation” following his

knowledge of the protected activities. (Id. ¶¶ 62-64.) These

conclusory allegations merit attention in light of the

limitations created by Twombly and Iqbal. The conclusory

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allegation that Reaves was aware of “Plaintiffs’ protected

activities” is vague and unclear. “Plaintiffs” did not file

an EEOC Charge before the alleged retaliation, only Warren

did, which makes it appear Plaintiffs are not referring to

that charge. Furthermore, Plaintiffs appear to be summarizing

the knowledge of Reaves they had alleged in their recitation

of alleged facts, from paragraphs 10 through 56, which

included no allegation that Reaves knew of Warren’s EEOC

charge. Having not alleged any facts that show Reaves knew of

the Warren charge, Plaintiffs have failed to state a claim on

his behalf for participation activity.

II. PLAINTIFFS HAVE NOT SUFFICIENTLY PLED A WRONGFUL

DISCHARGE CLAIM.

The recognized public policy exceptions to the at-will

employment doctrine are narrowly construed and “have been

grounded in considerations of public policy designed either

to prohibit status-based discrimination or to insure the

integrity of the judicial process or the enforcement of the

law.” Kurtzman v. Applied Analytical Indus., Inc., 347 N.C.

329, 333-34, 493 S.E.2d 420, 423 (1997). Plaintiffs’

attempted claim does not fit within these recognized public

policy exceptions and, therefore, should be dismissed.

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 A. Alleged Embezzlement6

Plaintiffs rely on Combs v. City Elec. Supply Co., 203

N.C. App. 75, 690 S.E.2d 719 (2010) to argue that a claim for

wrongful discharge applies to an employee discharged for

reporting to its management that the employer had engaged in

illegal activity. (Doc. 17 p. 19.). Combs involved a report

by an employee to City Electric’s management that the company

as a whole was violating two criminal statutes.

When contrasted with Plaintiffs’ alleged facts here,

Combs shows why Plaintiffs’ attempted claim fails, not why it

should survive a motion to dismiss. As AFS explained in its

Brief in Support, the wrongful discharge tort is available

where the employee is discharged (1) for refusing to violate

the law at the employer’s request, (2) for engaging in a

6 Plaintiffs attempt to add N.C. Gen. Stat. §55-8-42

addressing breaches of fiduciary duties in their Response
Brief, but no such allegations are included in the Complaint.
Therefore, any discussion of a statutory violation for an
alleged breach of fiduciary duties should be ignored. (Adding
another statute that expresses a policy they believe Reaves
violated would not, of course, change the analysis that
reporting on another employee’s alleged activity contravening
public policy does not position the reporting employee for a
state law wrongful discharge claim if later fired. See, e.g.,
Griggs v. Casual Corner Grp., Inc., 2005 WL 1983888 (W.D.N.C.
Aug. 10, 1995).
10

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legally protected activity, or (3) based on some activity by

the employer contrary to law or policy. Combs is scenario

(3); indeed, at the procedural posture in Combs there was

record evidence that the employer had committed crimes

against its customers, confirming that the plaintiff had

earlier engaged in the act of reporting her employer’s scheme

to steal from those customers.

Plaintiffs here allege that their employer, AFS, was the

victim, not the person or entity that violated a public

policy. Rather, they claim that a management employee was

taking actions contrary to the interests of the employer – in

effect stealing from the employer. That claim is decidedly

not covered by the Combs case. Unlike the activity Ms. Combs

engaged in, reporting City Electric’s scheme to steal,

Plaintiffs’ activity never involved reporting that their

employer was engaged in wrongdoing. Instead, they merely

reported that another employee was.

The North Carolina Supreme Court in Kurtzman, 347 N.C.

at 334, 493 S.E.2d at 423, counseled, “Additional exceptions

thus demand careful consideration and should be adopted only

with substantial justification grounded in compelling

11

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considerations of public policy.” If Plaintiffs are found to

have stated a claim here based on the idea of embezzlement,

then employees need only report suspected criminal conduct by

another employee to be legally protected from job

termination. This case, in this court, is not the place to

make such new law.

B. Alleged Discriminatory Practices

The state law on which Plaintiffs rely to express the

public policy they say AFS violated is N.C. Gen. Stat.

§143.422.2. AFS disagrees with Plaintiffs’ analysis that

Leach v. N. Telecom, Inc., 141 F.R.D. 420 (E.D.N.C. 1991), is

no longer good law for the point that N.C. Gen. Stat.

§143.422.2 does not express a public policy concerning

retaliation for opposition to discriminatory practices. See

also Wilkes v. Argueta, 2017 WL 1215749, at *9 (M.D.N.C. Mar.

31, 2017); Efird v. Riley, 342 F. Supp.2d 413, 428-29

(M.D.N.C. 2004); Curran v. First Union Mortg. Corp., 1997 WL

907909, at *1 (E.D.N.C. Mar. 24, 1997).

Plaintiffs attack Leach based on Bigelow v. Town of

Chapel Hill, 227 N.C. App. 1, 745 S.E.2d 316 (2013). However,

Bigelow involves a host of state law policies not at issue

12

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here, and does not involve the one statute Plaintiffs have

relied on as an expression of public policy here, N.C. Gen

Stat. §143-422.2. More specifically, the plaintiffs in

Bigelow grounded their race discrimination policy in the

state OSHA statute (N.C. Gen. Stat. § 95-151), tied back to

North Carolina’s Retaliatory Employment Discrimination Act

(“REDA”) and its specific, express prohibitions on violating

the OSHA statute. When the Bigelow court speaks to

discrimination and retaliation complaints as raising issues

of public policy, it is doing so in the context of public

policy grounded in REDA and OSHA statutes, not N.C. Gen Stat.

§143-422.2. In fact, nowhere in Bigelow does the court

address the issue addressed in Leach, which is that N.C. Gen.

Stat. §143-422.2, the statute Plaintiffs rely on here, does

not provide a public policy for retaliation for opposition to

discriminatory practices. Leach remains a decision grounded

in good law. Plaintiffs have failed to sufficiently allege

any conduct on the part of AFS that would constitute a

wrongful discharge claim in violation of public policy.

13

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 CONCLUSION

For the reasons in this Reply Brief and in its initial

Brief in Support of its Motion to Dismiss, Defendant Advanced

Fraud Solutions, LLC requests that the claims in the Complaint

against it be dismissed with prejudice.

Respectfully submitted this 18th day of January 2019.

/s/ Patrick M. Kane

Patrick M. Kane
N.C. State Bar No. 36861
Alex Maultsby
N.C. State Bar No. 18317
Lisa W. Arthur
N.C. State Bar No. 44184
FOX ROTHSCHILD LLP
300 North Greene Street, Suite
1400
Post Office Box 21927
Greensboro, North Carolina 27420
Telephone: (336) 378-5352
Facsimile: (336) 378-5400
pkane@foxrothschild.com
amaultsby@foxrothschild.com
larthur@foxrothschild.com

Attorneys for Defendant Advanced

Fraud Solutions, LLC

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 CERTIFICATE OF WORD COUNT

I HEREBY CERTIFY that the foregoing document complies

with the type-volume limitations of L.R. 7.3(d) excluding

those portions exempted by the rule.

This the 18th day of January, 2019.

/s/Patrick M. Kane
Patrick M. Kane
Attorney for Defendant Advanced
Fraud Solutions, LLC

15

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 CERTIFICATE OF SERVICE

This is to certify that the foregoing REPLY BRIEF OF

DEFENDANT ADVANCED FRAUD SOLUTIONS, LLC IN SUPPORT OF ITS

MOTION TO DISMISS has been filed electronically with the Clerk

of the Court using the CM/ECF system, providing notification

to the following:

Kyle J. Nutt
575 Military Cutoff Road, Suite 106
Wilmington, NC 28405
Attorney for Plaintiffs

This the 18th day of January, 2019.

/s/Patrick M. Kane
Patrick M. Kane
Attorney for Defendant Advanced
Fraud Solutions, LLC

16

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