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Douglas v. Dreamdealers USA, LLC

United States District Court, D. Nevada

September 24, 2019




         Plaintiff Edward Douglas was the chief financial officer (CFO) for defendant Dreamdealers USA, LLC. Douglas applied for and Dreamdealers granted him intermittent leave under the Family Medical Leave Act (FMLA) so he could care for his ailing wife. About a year later, Dreamdealers advised Douglas that it was removing him from the CFO position. The parties dispute whether Dreamdealers thereafter offered Douglas an equivalent position at the company. Douglas has never returned to work at Dreamdealers, although the company still considers him an employee. Douglas claims Dreamdealers and two of its chief executive officers (CEOs), defendants Romain Thieven and David Perisset, interfered with his FMLA rights and retaliated against him for complaining about their unlawful conduct. The parties each move for summary judgment.

         I grant the defendants’ motion as to Douglas’s claim that that the defendants violated the FMLA by failing to respond to his request for recertification of his FMLA leave. I deny the remainder of the defendants’ motion and the entirety of Douglas’s motion because genuine disputes remain as to whether the defendants interfered with Douglas’s FMLA rights and retaliated against him for engaging in protected activity.

         I. BACKGROUND

         As Dreamdealers’ CFO, Douglas was responsible for accounting, taxes, ensuring the company’s books and records were in order, and other similar duties. ECF No. 31-2 at 7-8; ECF No. 31-5 at 8. Perisset and Thieven are Dreamdealers’ co-CEOs. ECF Nos. 1 at 2; 5 at 2; 31-2 at 6. Perisset testified that he believed Douglas was doing a good job until sometime in approximately 2014, when Perisset noticed that Douglas communicated with him less frequently and was absent from the office more often. ECF No. 31-2 at 9, 14. Perisset never disciplined Douglas or brought performance issues to his attention, however. Id. at 7, 19; ECF No. 31-5 at 8.

         In 2015, Ashley Leach, Dreamdealers’ human resources manager, suggested Douglas apply for intermittent FMLA leave so he could attend to his wife who was having medical problems. ECF Nos. 31-1 at 2; 31-5 at 24-25. Douglas formally requested FMLA leave on August 19, 2015. ECF No. 31-8.

         Leach issued to Douglas a Notice of Eligibility and Rights & Responsibilities form, which stated that he was eligible for FMLA leave. Id. The form also stated that due to Douglas’s status within the company, he was designated as a “key employee, ” meaning the company could refuse to restore Douglas to his employment following FMLA leave “on the grounds that such restoration will cause substantial and grievous economic harm” to the company. Id. at 3. Dreamdealers marked the form to indicate it had determined that restoring Douglas to employment at the conclusion of FMLA leave would cause substantial and grievous harm to the company. Id. (“We _√_ have/__have not determined that restoring you to employment at the conclusion of FMLA leave will cause substantial and grievous economic harm to us.”). Perisset testified that he had not done an analysis in August 2015 that would have supported this determination. ECF No. 32-2 at 9-10. Dreamdealers subsequently approved Douglas’s FMLA leave request. ECF No. 31-11.

         In October 2015, the State of Nevada Department of Taxation (Department) contacted Douglas to advise him that it intended to conduct a sales and use tax audit on Las Vegas Supercars, a company related to Dreamdealers. ECF No. 31-6 at 2, 10. According to Perisset, Douglas had not informed him about the audit and he found out about it when he noticed a calendar entry for a meeting with a consultant that Douglas had hired. ECF No. 31-2 at 9-10. Perisset subsequently learned that Douglas had stopped paying the sales tax on the company’s vehicles. Id. at 10-11.

         On February 26, 2016, the Department provided the results of its audit and issued a deficiency notice. ECF No. 31-6 at 9-12. The audit found that the “books of record were in disarray, ” and that an outside consultant was “contracted to compile auditable records when the Department issued notice of audit.” Id. at 10. The audit concluded that Las Vegas Supercars “did not collect sales tax or remit use tax on either the purchase price of the vehicles or on any form of any revenue streams after 1/1/2014 except for the second and third quarters of 2015, for which no detail could be found.” Id. As a result, Las Vegas Supercars had to pay the Department $70, 047.08. Id. at 8-10.

         In the weeks after the Department issued its decision, Douglas started applying for jobs at other companies. ECF No. 31-5 at 18-21. Douglas claims the timing was coincidental. Id. at 21.

         In August 2016, Perisset determined that reinstating Douglas to his position as CFO would injure the company because of Douglas’s poor job performance relating to the failure to pay the sales and use taxes and failing to keep the books in order. ECF No. 32-2 at 17, 24. Perisset also stated that injuries would result due to Douglas’s absences. Id. at 25. In making this determination, Perisset did not distinguish between absences taken under the FMLA and other absences. ECF No. 31-2 at 25-26. According to Perisset, Douglas had essentially abandoned his job for the prior two years, had ceased communicating with him, and “was not showing up at work a lot.” ECF No. 32-2 at 19, 22.

         Perisset testified that he was going to have a conversation with Douglas about his performance issues in the months leading up to August 2016, but Douglas was rarely in the office so he could not have that meeting. Id. at 20. Perisset also testified that Douglas’s absences started long before he applied for FMLA leave and Perisset denied he had any issue with Douglas taking FMLA leave. ECF Nos. 31-2 at 26-27; 32-2 at 26. But he testified he had an issue with non-FMLA absences because he did not “have a CFO on site” so communication was lacking. ECF No. 32-2 at 27. He also stated that the “absences were almost all the time at that point towards the end, FMLA or not, ” but what triggered the decision not to reinstate Douglas was the financial irregularities. Id. at 29.

         On August 11, 2016, Leach advised Douglas that his FMLA leave was going to expire on August 16 and that she had put forms to recertify on his desk. ECF Nos. 31-13; 32-8. Leach also told Douglas that he had used 140 hours of FMLA leave during the prior year. ECF No. 31-9. Douglas signed the recertification forms the same day, obtained a certification from a healthcare provider the next day, and returned the forms to Dreamdealers. ECF Nos. 31-14; 31-15; 32-3 at 12; 32-11.

         On August 12, Leach wrote to Douglas advising him that Dreamdealers would be removing him from the CFO position. ECF No. 31-12 (the “removal letter”). The removal letter stated that:

Since August 2015, you have continued to receive full pay and benefits, despite the fact that you have been consistently absent, have failed to notify us when we can expect your presence in the office, and have failed to account for time spent or tasks accomplished while ‘working from home.’ As a result, the responsibilities of CFO have been distributed to, and handled by, a number of different employees and departments within the company.
As of August 16, 2016, the conclusion of your leave period under the FMLA, the company will have a position open for you, with similar responsibilities to that of CFO. However, the company has determined that full reinstatement of your position as CFO would cause substantial and grievous economic injury to our operations. Your continued absences and inability to dedicate your full-time efforts to the company would be too great an injury for the company to bear, both from a financial and an operational standpoint.

Id. The removal letter does not refer to the audit or the failure to keep the books and records in order. Id.

         Douglas responded the next day by asking what the new position’s duties would be, who he would report to, and whether he would be allowed to work remotely. ECF No. 32-14. Leach replied that the company would prefer to discuss those issues in person and she proposed a meeting for the following Monday. Id. Douglas requested they discuss the new position via email. Id. He also stated that he noticed that his access to the company’s computer system had been restricted, which would affect his ability to perform his job. Id.

         On August 19, Perisset sent an email to Douglas stating that Douglas was still employed by the company but that Perisset had “not seen [Douglas] at the office for months, nor had any meetings with [him], the CFO of the company.” Id. at 2-3. Perisset requested a meeting with Douglas and told him to bring along his company laptop and hard drive. Id.

         Douglas met with Perisset and Leach on August 22 to discuss the fact that he was not going to be retained as CFO and to “explore . . . another position for him.” ECF Nos. 31-2 at 39; 31-4 at 28; 32-3 at 16. Perisset had some ideas for the position but “nothing had been defined yet.” ECF No. 31-2 at 34. Perisset testified that he contemplated paying Douglas an equivalent salary, although he stated he did not have “a specific amount in mind.” ECF Nos. 31-2 at 35; 32- 2 at 41. Leach likewise testified that the pay would not have changed, but she did not know whether that was communicated to Douglas. ECF No. 31-4 at 23-24. Douglas was asked for his input about what the new job would entail. Id. at 29. The meeting ended with Douglas stating he was going to go home and think things over. Id. at 28; ECF No. 31-5 at 37.

         No further discussions took place and no decisions were made about the replacement job’s pay, responsibilities, or title, because Douglas hired an attorney. ECF Nos. 31-5 at 39; 32-2 at 40-41. Douglas testified that he did not contact the company again because he was told he could no longer work from home and they could not determine a job for him until he guaranteed that he could work at the office for 40 hours per week. ECF No. 38-19 at 5.

         Douglas is still employed by the company even though he has not worked there since August 2016. ECF No. 31-4 at 12. The company has treated him as being on a personal leave of absence. ECF No. 31-5 at 41.

         II. ...

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