Burnett v. American Federation of Government Employees, 102 F. Supp. 3d 183

Background

Plaintiff Larry Burnett (African American) owns Status Controls, Inc. (Status), a contractor that performed electrical and renovation work at AFGE’s Washington, D.C. offices under time-and-materials and later independent-contractor agreements.
Beginning in Aug–Dec 2012, AFGE employees allegedly made repeated racist comments about Burnett and Status’ workers, required Status to work at night, and otherwise treated Burnett/Status disparately.
AFGE terminated Status’ contract in January 2013, refused to pay for work and materials, and allegedly retained Status’ tools and equipment.
AFGE also filed an insurance claim blaming Status for an explosion caused by another contractor; Status alleges this was part of a campaign to shift blame motivated by race.
Plaintiffs sued asserting (inter alia) Section 1981 claims (disparate treatment and hostile work environment), conversion, breach of contract, tortious interference, and Burnett’s individual claim for intentional infliction of emotional distress.
AFGE moved to dismiss all counts under Rule 12(b)(6). The court denied dismissal as to all claims except the two § 1981 claims asserted individually by Burnett, which were dismissed with prejudice (because the contract was between AFGE and Status, not Burnett personally).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Burnett has a personal § 1981 claim	Burnett pleads racial hostility and contract-related harms tied to his role	AFGE: contract was with Status, not Burnett, so Burnett lacks § 1981 standing	Dismissed with prejudice as to Burnett — no personal § 1981 claim (contract was with Status)
Whether Status states a § 1981 hostile-work-environment claim	Status alleges racial slurs, discriminatory treatment, and business harm separate from Burnett’s emotional harm	AFGE: Status pleads only Burnett’s emotional harm, not separate corporate injury	Denied — Status alleged separate, cognizable corporate injury and plausible hostile-work-environment claim
Whether Burnett states IIED under D.C. law	Burnett alleges pervasive racist comments, punitive acts, and resulting severe distress	AFGE: remarks (including two utterances of the n-word) are offensive but not "extreme and outrageous" workplace conduct; claim subsumed by § 1981	Denied — court finds alleged pattern of repeated discriminatory conduct sufficiently outrageous to state IIED at pleading stage
Whether Status states conversion	Status alleges AFGE refused to return tools/equipment after termination	AFGE: allegations are bare recitation of elements	Denied — allegations suffice to infer wrongful retention and a demand/refusal theory of conversion
Whether Status states breach of contract	Status alleges existence of time-and-materials and independent-contractor agreements and unpaid work/materials	AFGE: complaint is vague as to which contract and which breach	Denied — pleadings sufficiently identify contract(s), general terms, and failure to pay to survive Rule 12(b)(6)
Whether Status states tortious interference	Status alleges AFGE knowingly blamed Status in insurance claim and interfered with Status’ insurer relations motivated by race	AFGE: filing an insurance claim is privileged conduct to protect economic interests	Denied — taking plaintiffs’ allegations as true, claim alleges the claim filing was a non-privileged, racially-motivated campaign to harm Status

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading requires plausible factual allegations)
Ashcroft v. Iqbal, 556 U.S. 662 (complaint must contain sufficient factual matter to state a plausible claim)
Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470 (§ 1981 claims must identify an impaired contractual relationship)
Gersman v. Group Health Ass’n, 931 F.2d 1565 (D.C. Cir. 1991) (corporation may sue under § 1981 for injury to its contractual relations caused by racial animus)
Howard Univ. v. Best, 484 A.2d 958 (D.C. 1984) (repeated workplace harassment can support an IIED claim)