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Newell v. Bailey & Oliver P.A.

United States District Court, W.D. Arkansas, Fayetteville Division

June 22, 2017




         Now pending before the Court are a Motion to Dismiss (Doc. 19) and Brief in Support (Doc. 20), filed collectively by Defendants Bailey & Oliver P.A., d/b/a Bailey & Oliver Law Firm ("Bailey & Oliver"), and attorney Sach Oliver. Plaintiff Hannah Newell filed a Response in Opposition to the Motion (Doc. 24), and on May 5, 2017, the Court held a hearing in order to allow the parties to present oral argument. At the close of the hearing, the Court took the matter under advisement. For the reasons described below, the Motion to Dismiss will be GRANTED IN PART AND DENIED IN PART.

         I. BACKGROUND

         The 76-page Amended Complaint ("Complaint"), filed on March 8, 2017, describes the working environment at Bailey & Oliver and details a number of events that allegedly took place over the course of Ms. Newell's three-year tenure as an employee of the law firm, under the direct supervision of owner and manager Sach Oliver. Though the facts are exhaustively detailed, it remains unclear exactly which ones are stated for the purpose of supporting the causes of action pleaded, and which are mentioned merely for context or for some other purpose.

         In any event, Ms. Newell worked for Bailey & Oliver from July 1, 2013, through July 1, 2016, and was originally hired as a paralegal. She refers to herself multiple times in the Complaint as a lawyer, but admits that she was not educated in the United States, was never licensed to practice law in any of the states, and is ineligible to sit for the bar examination in Arkansas.[1] Instead, she is a licensed solicitor of the senior courts of England and Wales, and she was educated exclusively in England. She was only licensed as a solicitor in March of 2013, approximately four months prior to beginning work as a paralegal at Bailey & Oliver, but she maintains that after about three months of working at the firm, "she met with Oliver and asked to be given responsibilities as a lawyer, with corresponding compensation." (Doc. 13, p. 5). According to Newell, Oliver "agreed to recognize [her] as having responsibilities of an associate attorney, together with an adjustment of her compensation consistent with the same, " id., and from that point onward, Oliver referred to Newell "as a lawyer, " and noted the change on the firm's website and on Newell's business cards. Where previously the firm had recognized her as "Paralegal, " her title was revised to "Solicitor of the Senior Courts of England and Wales." Id. Newell also maintains that her paralegal duties were shifted to two other employees, and she began performing "duties typically performed by an attorney." Id.

         Throughout the Complaint, she describes a number of interactions she had with Oliver that she characterizes as not "appropriate, " and that caused her to experience embarrassment and discomfort. See, e.g., Id. at 8. The Court will not set forth each such comment or interaction here, but suffice it to say that Newell felt that she was at times objectified by Oliver and treated in an unprofessional manner-in a way that male attorneys at the firm were not treated. She has not asserted a cause of action for hostile work environment or harassment, however-something the Court specifically discussed at length with Newell's attorney during the Motion hearing and confirmed on the record.[2]Newell contends that, even though she was not licensed to practice law in Arkansas or anywhere else in the United States, Oliver reassured her "that for all practical purposes, [she] would be considered a lawyer for the firm, in that she would have the same responsibilities and would have the same compensation arrangement as the other employee lawyers of the firm." Id. at 7. She claims that she and another Bailey & Oliver attorney, Ryan Scott, possessed the same levels of experience and skill, worked on the same litigation team and on the same cases, and performed work on behalf of the same clients, but that Ryan was paid substantially more for his services than Newell-not in the form of base salary, which was comparable to Newell's, but in the form of bonuses. She contends, for example, that in 2014, Scott was paid in excess of $500, 000.00, and Newell was paid less than $56, 000.00, with the difference in the two amounts attributable to bonuses that were paid by Bailey & Oliver out of attorney's fee awards.

         To illustrate how comparable Newell's job duties were to Scott's, she lists in the Complaint the following tasks that they both allegedly performed: (1) directing and training other employees, including attorneys, in assisting with projects; (2) attending and participating in litigation strategy meetings and decisions; (3) providing input into decisions regarding potential cases; (4) taking responsibility "for expert evidence"; (5) taking responsibility for "aspects of discovery"; (6) providing input into the draft work product of other attorneys and employees; (7) drafting pleadings; (8) performing legal research and writing; and (9) attending and participating in court proceedings and trials "as part of the trial team." Id. at 16.

         Newell favorably compares her levels of skill, effort, and responsibility in working at Bailey & Oliver to Scott's, and argues that she suffered gender-based discrimination due to the fact that she was not compensated in the same manner as Scott for substantially the same work. She notes in the Complaint that "[o]n or around October 1, 2013, in Oliver's office at Bailey & Oliver Law firm, Oliver told Newell she would have responsibilities as an associate attorney, and that she would receive compensation based upon the same plan of compensation which was applicable to Scott and other associate attorneys." Id. at 20. Oliver had given her the "choice to be paid a higher salary with relatively lower bonuses-which would be 'low risk and lower income per year' or a 'low salary' and relatively higher bonuses-which would be higher risk but with a higher income potential per year." Id. at 21 (emphasis in original). According to Newell, she "accept[ed] this arrangement" offered by Oliver, understanding that she had elected the same compensation plan as Scott, involving working "for a low salary that only covered their monthly expenses, with bonuses which made up the majority of their income, so they could make more money over time." Id.

         At some point, it appears that the relationship between Newell and Oliver soured, at least in part due to Newell's dissatisfaction with her compensation. She recounts in her Complaint that as cases she was working on began to settle for tens of millions of dollars, and the law firm received millions of dollars in attorney's fees, "Oliver began to represent to Plaintiff reasons outside of their agreed criteria as to why the bonus compensation would be lower than expected or might not be paid." Id. at 25. She was concerned about how much she was being paid, but claims she felt "unable to complain ... because she feared she would be terminated." Id. at 53. It was around this time-early to mid-2016-that Oliver began berating her more often, accusing her of having mental health issues, and dismissing or ignoring her complaints about "sexually discriminatory acts of conduct or statements ...." Id. at 50-52. Newell felt she was being shut out of discussions on cases to which she had devoted significant time. Id. at 53-54. As the formerly close working relationship between Newell and Oliver began to cool, and he communicated with her less often, Newell began to fear he "had plans to terminate her employment." Id. at 54-55. She resigned on June 14, 2016, although she characterizes her resignation as a constructive discharge. Id. at 55. Oliver then met with Newell, apologized to her, and persuaded her to return to work on June 18, 2016.

         During the following week, Newell and Oliver disagreed about the handling of expert witnesses and other matters in a particular case, and as a result, Newell began to believe that Oliver's litigation choices amounted to "dishonest behavior." Id. at 57. The way she was treated by Oliver made her convinced that he "did not respect her or care about her career...." Id. She resigned for a second time on June 27, 2016, offering as justification her belief that Oliver "did not respect and value her and that she could no longer trust him." Id. She sent an email to Oliver on June 28, 2016, inquiring about how she would be paid for her work on several unresolved cases. In Newell's view, if the cases settled, or if the law firm's clients prevailed at trial, she would be entitled to bonus compensation based on the work and value she contributed to these cases.

         Newell did not receive a satisfactory response to her email, and she returned to the office on June 29, 2016. While there, she discovered proof about her salary and compensation, as compared to Scott's. "[H]er suspicions were confirmed that Oliver had been giving her untrue statements and misrepresentations ... regarding her position and the bonus scheme and that he had simply chosen to pay Plaintiff significantly less than what Oliver's representations to her required." Id. at 27. It became clear to Newell that she and Scott had been compensated based on different criteria. Newell accuses Defendants of concealing from her the fact that they never intended to pay her as an associate attorney from the very beginning, and they "considered the bonus compensation as 'discretionary.'" Id. at 32.

         The Complaint sets forth multiple causes of action, including sex discrimination under Title VII of the Civil Rights Act and the Arkansas Civil Rights Act ("ACRA"), based on Newell's "compensation and the on the job treatment by Sach Oliver, " (Doc. 13, p. 66); violations of the Equal Pay Act ("EPA"); violations of the Arkansas Deceptive Trade Practices Act ("ADTPA"); fraud; unjust enrichment; and promissory estoppel. As relief, she requests compensatory and punitive damages, costs and attorney's fees, and an injunction with respect to fees received in cases in which Newell participated and billed time. Defendants have moved to dismiss the Complaint, arguing that Newell has failed to state plausible claims as to each of these causes of action.


         To survive a motion to dismiss, a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The purpose of this requirement is to "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Court must accept all of a complaint's factual allegations as true, and construe them in the light most favorable to the plaintiff, drawing all reasonable inferences in the plaintiffs favor. See Ashley Cnty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).

         However, the complaint "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. In other words, while "the pleading standard that Rule 8 announces does not require 'detailed factual allegations, '... it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Id.


         A. Title VIl/ACRA ...

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