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Dukes v. ADS Alliance Data Systems

November 20, 2006


The opinion of the court was delivered by: George C. Smith, Judge United States District Court


Magistrate Judge Abel


Plaintiff Kathleen Dukes ("Plaintiff" or "Ms. Dukes") brings this action against Defendant ADS Alliance Data Systems, Inc. ("Defendant" or "ADS"). Plaintiff asserts claims of age and gender discrimination under the Age Discrimination in Employment Act, 29 U.S.C. § 621, Ohio Revised Code Chapter 4112 and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e). Additionally, Plaintiff alleges violations of federal and state wiretap laws under The Federal Electronic Communications Privacy Act, otherwise commonly known as Title III of the Omnibus Crime Control Act under 18 U.S.C. §§ 2510-2522 ("Title III") and O.R.C. § 2933.52(A). Finally, she asserts Ohio common law causes of actions for breach of express contract, breach of implied contract, promissory estoppel and violation of public policy. Defendant ADS has moved for summary judgment with respect to all claims (Doc. 51). For the reasons that follow, the Court GRANTS in part and DENIES in partthe Defendant ADS's Motion for Summary Judgment.


Plaintiff, Kathleen S. Dukes, began her employment as a Recovery Specialist at Limited Credit Services in 1988 at its Broad Street location. In 1997, there was a merger between Limited Credit Services and ADS. Following this merger, Plaintiff transferred to ADS's Westerville, Ohio location.

Ms. Dukes, throughout her employment with ADS, worked as a Recovery Specialist in the Audit and Investigations Department. As a Recovery Specialist, Ms. Dukes's main job duty was to call debtors in order to seek payment in delinquent accounts. More specifically, on any given work day, Ms. Dukes spent at least 60% of her time calling debtors and the remaining time doing paperwork or "skip tracing" (which included pulling a copy of the debtor's credit report to find out information such as address, contact information, etc.).

Following the 1997 merger, Ms. Dukes' supervisors included Chris Judge ("Judge"), Director, and J.K. (James) Smith ("Smith"), Audit and Investigations Manager. In February, 1999, Susie Mackanos ("Mackanos"), Audit and Investigations Department Manager, was Ms. Dukes' immediate supervisor and continued in this role until October, 2001, when Jim Fortier ("Fortier") became the Audit and Investigation Department Manager and Ms. Dukes' immediate supervisor. In August, 2000, Jody Spriggs became the Audit and Investigations nighttime supervisor. Erick Carter was the ADS Manager of Human Resources at ADS's Westerville location.

A. Alleged Age and Gender Discrimination

In 1998, shortly after ADS took over Limited Credit Services, Ms. Dukes alleges that during a one-on-one meeting between herself and Mr. Judge, that Mr. Judge said "the Limited was no longer the mom and pop organization that you used to work for, so you old-timers have to get used to that idea" and "you old-timers are from the old school and things are going to change." Ms. Dukes admits, however, that Judge made no reference to her age in particular; and, at the time Judge allegedly made the comment, Ms. Dukes had been with Limited Credit Services for ten years. Ms. Dukes does not attribute any other age or gender-related remarks to Judge or any of her other managers throughout the entire course of her employment.

From 1997 through 2000, Ms. Dukes claims that she consistently received favorable reviews with no negative comments and received merit raises.

On May 9, 2001, Plaintiff placed a call to a debtor Lupita Rangel at her place of employment in Texas, seeking to collect on an overdue credit card account. Ms. Rangel worked for the Texas Sheriff's Department as a dispatcher. The Sheriff's office recorded all incoming calls, including the May 9, 2001 call from Ms. Dukes to Ms. Rangel.

On January 8, 2002, ADS received a demand letter for $10,000 from Ms. Rangel's attorney based upon Ms. Dukes' statements during the May 9, 2001 call with Ms. Rangel. The demand letter asserted, in part, that Plaint iff had engaged in "harassing" behavior, was "abusive" and "unreasonable" toward Ms. Rangel, and that the call to Ms. Rangel was designed to "embarrass and harass Ms. Rangel at work" in a manner that violated the law. ADS began to investigate these allegations.

On January 18, 2002, Ms. Dukes was called into an office with Mr. Smith and Mr. Carter. Mr. Smith proceeded to read a certified copy of a transcript of a tape recorded telephone conversation that Ms. Dukes admits she had with a customer on May 9, 2001. After reading the transcript, Mr. Smith told Ms. Dukes that she was being placed on Unacceptable Performance Notice ("UPN") for a violation of the Fair Debt Collection Practices Act ("FDCPA") which occurred during the at-issue May 9, 2001, telephone conversation and also for unacceptable work habits. The UPN stated that Ms. Dukes' performance will be reviewed again on an "ongoing" basis. Ms. Dukes' requests to listen to the tape recording were denied. This UPN resulted in a suspension of Ms. Dukes' incentive pay for 90 days, a postponement of her merit pay increase and a reduction of her merit pay increase by 1%.

On or about April 4, 2002, ADS received a tape recording of the May 9, 2001, telephone conversation from Ms. Rangel's attorney. On or about April 10, 2002, ADS agreed to pay $12,500 to Ms. Rangel in settlement of her claims. On or about April 16, 2002, ADS issued a check in the amount of $12,500 payable to Mr. Crosely, Ms. Rangel's counsel.

Ten days later, on April 26, 2002, Ms. Dukes was terminated. Mr. Smith called Ms. Dukes into an office and Mr. Smith told Ms. Dukes she was terminated for the FDCPA violation occurring during the May 9, 2001 telephone call. Again, Ms. Dukes' requests to listen to the tape recording of the May 9, 2001 call were denied. On May 6, 2002, Ms. Dukes' Recovery Specialist position was filled by Michael Christian, age 27.

Ms. Dukes claims that Ed Baisden, Rashad Barksdale and Mark Reichley, all Recovery Specialists with the same supervisors as Ms. Dukes, violated the FDCPA and/or the Code of Ethics and were treated more favorably that she was. All of these individuals were male and under the age of 40.

On March 25, 2002, Mr. Baisden was placed on Unacceptable Performance Notice for violating the FDCPA and Code of Ethics by "telling customers that lawsuits were filed against them." In 2001, Mr. Baisden had been counseled for using the phrase "pending lawsuits." Mr. Baisden's UPN stated that performance would be reviewed again 90 days from the date of the UPN. Mr. Baisden's Annual Performance Appraisal did not reference his prior UPNs and there was no percentage deduction in his Annual Merit Increase due to the 2002 UPN. On July 28, 2004, Mr. Baisden was fired for multiple violations of the FDCPA.

On March 12, 2002, Mr. Barksdale was placed on Unacceptable Performance Notice for "Code of Ethics violation - 2 lawsuits in two months." Throughout Mr. Barksdale's employment with ADS as a Recovery Specialist, he had been counseled and/or disciplined at least seven times for infractions of the FDCPA and Code of Ethics. According to Ms. Watts, ADS Vice President and Counsel, Mr. Barksdale "received a UPN for minor violations of Alliance's Code of Ethics, after Alliance received two complaints regarding his collection efforts. Specifically, Alliance received two demand letters threatening lawsuits and claiming Barksdale had harassed customers" and "[h]ad Barksdale committed further infractions of the FDCPA, he would have been subject to discharge." Mr. Barksdale's UPN stated that performance would be reviewed again 90 days from the date of the UPN. Prior to receipt of this UPN, Mr. Barksdale had been placed on Unacceptable Performance Notice on June 17, 1998, due to "escalated supervisor calls." Ms. Dukes was unable to ascertain whether or not this UPN affected Mr. Barksdale's compensation due to the lack of documentation she received from ADS. Mr. Barksdale was not fired for his violations of the FDCPA. On July 29, 2002, Mr. Barksdale was promoted to Westerville Collection Specialist.

On October 11, 2001, Mr. Reichley was placed on Unacceptable Performance Notice for making "13 calls in a row (8 to the customer's ex-wife). This is a violation of the FDCPA and COE." Mr. Reichley's violations resulted in ADS' receipt of a demand letter from the ex-wife's attorney and payment by ADS for settlement and release of the ex-wife's claims. According to Ms. Watt's, "Reichley received a UPN after a customer complained of repeated phone calls from him. Reichley used poor judgment in conducting his duties; however, the incident was not such a severe violation of the FDCPA that the actions warranted termination of his employment." Mr. Reichley's UPN stated that performance would be reviewed again 90 days from the date of the UPN. Mr. Reichley's May 15, 2002, Annual Performance Appraisal did reference the October 11, 2001 UPN, but this UPN did not result in a percentage deduction to his Annual Merit Increase. Mr. Reichley was not fired for his violations of the FDCPA.

C. Alleged Harassment

Ms. Dukes claims that ADS associate, John Taylor continually made "loud, vulgar, lewd and inappropriate jokes and comments" and also that he would "stare at women's breasts while they were speaking to him." (Pl's Memo. in Opp. at 72). Ms. Dukes testified that she did not make any written complaints regarding Mr. Taylor because she was afraid to, but that she did verbally complain to Ms. Mackanos. Ms. Mackanos told Ms. Dukes "they were looking into it." (Dukes Depo. at 91-94). Ms. Dukes does not allege that she suffered any repercussions from reporting the conduct, but nonetheless alleges that her fear of repercussions prevented her from using ADS' "open door" policy to report the continued harassment by Mr. Taylor to managers. (Pl's Memo. in Opp. at 72).

ADS' harassment policy was set forth in the March, 2001, Associate Handbook as follows:

Alliance is committed to taking all steps necessary to maintain a productive work environment free of harassment and intimidation of any type, including on the basis of sex, race, color, national origin, age, sexual orientation, religion, disability, veteran status, marital status or any other status which may be protected by the law.

Harassment of any kind os not condoned by Alliance and will not be tolerated in the workplace.

The policy required all ADS associates to "immediately report to any management officials any incident of harassing conduct in violation of [the] policy."

C. Phone Monitoring

ADS' telephone monitoring policy was set forth in the March, 2001, Associate Handbook, Section 515. The monitoring policy provides, "[w]e periodically monitor and tape phone calls with our customers to improve our associates' telephone skills and job performance." ADS promises to "[c]learly indicate which telephones are monitored and provide associates with access to alternative telephones for private conversations." The Associate Handbook, further stated that ADS would provide its associates with the "opportunity to review information obtained by electronic monitoring when such information is used as the basis for any employment decision." Additionally, Ms. Dukes was required to and did annually sign a the ADS's Audit and Investigations Department's "Taping and Monitoring" consent forms which stated "[t]o enhance and provide adequate feedback Alliance Data Systems (ADS) will periodically tape record and monitor conversations between associates and customers. Recovery Specialists were permitted to utilize their phones for personal use, but were asked to keep such calls to a minimum. Pay phones were available to ADS employees. Cell phone usage was not prohibited by ADS, but Ms. Dukes did not own a cell phone.

On two separate occasions, ADS management listened in on her personal calls.

On March 1, 2001, Ms. Mackanos, Audit and Investigation Department Manager, listened in on a call Ms. Dukes made to her husband. Ms. Dukes learned of this occurrence on or about July 10, 2002, when she received copies of documents that ADS provided to the State of Ohio Department of Jobs and Family Services, one of which was a memorandum, dated March 2, 2001, signed by Ms. Mackanos stating in part: "I heard the incoming call in the background since I was talking to Jody at the time. I was not going to listen since I knew the call was from her husband, however, when she started off with the chair story, I began to listen." This particular call lasted 30 minutes. Ms. Dukes alleges that Ms. Mackanos utilized the contents of this conversation to discipline Ms. Dukes for her "work habits" on the January 18, 2002 Unacceptable Performance Notice. Because Ms. Dukes did not learn of this situation prior to her termination, she was unable to report it to higher management. On September 13, 2001, Jody Spriggs, ADS manager, listened in on a call Ms. Dukes made to her husband. On this particular call, Ms. Dukes relayed a story regarding an incident at work that made her feel physically threatened by another co-worker. While Ms. Dukes' husband was advising her as to how he though she should respond to the situation, Ms. Spriggs broke into the telephone call and scolded Ms. Dukes for "not handling the situation in a mature manner." Ms. Dukes did not report this incident to higher management because she did not want to risk being fired.


The standard governing summary judgment is set forth in Fed. R. Civ. P. 56(c), which provides:

The judgment sought shall be rendered forthwith if the pleadings, Depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

Summary judgment will not lie if the dispute about a material fact is genuine; "that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is appropriate, however, if the opposing party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986).

When reviewing a summary judgment motion, the Court must draw all reasonable inferences in favor of the nonmoving party, and must refrain from making credibility determinations or weighing the evidence. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51 (2000).*fn1 The Court disregards all evidence favorable to the moving party that the jury would not be required to believe. Id. Stated otherwise, the Court must credit evidence favoring the nonmoving party as well as evidence favorable to the moving party that is uncontroverted or unimpeached, if it comes from disinterested witnesses. Id.

The Sixth Circuit Court of Appeals has recognized that Liberty Lobby, Celotex, and Matsushita have effected "a decided change in summary judgment practice," ushering in a "new era" in summary judgments. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1476 (6th Cir. 1989). The court in Street identified a number of important principles applicable in new era summary judgment practice. For example, complex cases and cases involving state of mind issues are not necessarily inappropriate for summary judgment. Id. at 1479.

Additionally, in responding to a summary judgment motion, the nonmoving party "cannot rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, but must 'present affirmative evidence in order to defeat a properly supported motion for summary judgment.'" Id., quoting Liberty Lobby, 477 U.S. at 257. The nonmoving party must adduce more than a scintilla of evidence to overcome the summary judgment motion. Id. It is not sufficient for the nonmoving party ...

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