Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-00563/USCOURTS-azd-2_11-cv-00563-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 28:1441 Petition for Removal - Employment Discrimination

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Jack Nevins, 

Plaintiff, 

vs. 

Upward Foundation, an Arizona non-profit 

corporation, 

Defendant.

No. CV-11-00563-PHX-NVW

ORDER 

Before the Court is Defendant’s Motion to Dismiss Complaint (Doc. 6) and 

Plaintiff’s Motion for Leave to Amend Complaint (Doc. 8). The Court will grant 

Defendant’s motion and deny Plaintiff’s motion as moot in light of the pending motion 

for leave to file a second amended complaint. 

I. MOTION TO DISMISS LEGAL STANDARD 

To state a claim for relief under Fed. R. Civ. P. 8(a), a plaintiff must make “‘a 

short and plain statement of the claim showing that the pleader is entitled to relief,’ in 

order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon 

which it rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations 

omitted). This “short and plain statement” must also be “plausible on its face.” Ashcroft 

v. Iqbal, 129 S. Ct. 1937, 1949 (2009). A claim is plausible if it contains sufficient 

factual matter to permit a reasonable inference that the defendant is liable for the conduct 

alleged. Id. “Determining whether a complaint states a plausible claim for relief . . . [is] 

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a context-specific task that requires the reviewing court to draw on its judicial experience 

and common sense.” Id. at 1950. 

A proper complaint needs no “formulaic recitation of the elements of a cause of 

action,” see Twombly, 550 U.S. at 555, but the plaintiff must at least “allege sufficient 

facts to state the elements of [the relevant] claim,” Johnson v. Riverside Healthcare Sys., 

LP, 534 F.3d 1116, 1122 (9th Cir. 2008). All of the plaintiff’s plausible factual 

allegations are accepted as true and the pleadings are construed in a light most favorable 

to the plaintiff. Knievel, 393 F.3d at 1072. 

II. BACKGROUND 

The following facts are accepted as true for purposes of Upward Foundation’s 

motion to dismiss. 

Defendant Upward Foundation is an Arizona nonprofit corporation that receives 

federal financial assistance. On August 14, 2001, Defendant Upward Foundation hired 

Plaintiff Jack Nevins to be Upward Foundation’s executive director. At that time, 

someone at Upward Foundation told Nevins that he would receive deferred 

compensation, just as previous executive directors had received deferred compensation. 

Upward Foundation’s Board of Directors approved such deferred compensation for 

Nevins before hiring him, amounting to $225,000 after five years of employment, and 

$337,500 after 10 years of employment. Nevins, however, never received a copy of that 

Board resolution, nor did he receive any other document memorializing the terms of 

deferred compensation, but he knew that such deferred compensation would be funded 

through a life insurance policy on his own life. Such a policy was indeed issued on 

December 13, 2002. 

In 2009, Nevins began discussing the deferred compensation plan with Upward 

Foundation representatives. The plan had not been fully funded, and Nevins wanted to 

reduce the deferred compensation arrangement to writing. Upward Foundation agreed to 

negotiate with Nevins on this issue. 

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Around the same time, Nevins began to experience problems with one of his eyes, 

requiring multiple surgeries and eventually resulting in legal blindness. These medical 

issues lasted through February 2010, during which time very little progress was made on 

Nevins’s deferred compensation agreement. 

Despite these medical challenges, Nevins missed little time at work. In fact, 

throughout Nevins’s time at Upward Foundation, he had never received a negative 

performance review, written warning, or disciplinary action of any type. However, 

according to minutes from Upward Foundation’s board meeting on January 18, 2010, the 

president of Upward Foundation’s board of directors, Alan Havir, moved to terminate 

Nevins as soon as possible. The board approved the motion and directed Havir to inform 

Nevins of the termination as soon as possible. 

Nevins was not aware of the board’s resolution at the time the board made it, and 

Havir did immediately say anything to Nevins. In mid-February 2010, Havir visited 

Nevins at the office and asked about Nevins’s health but did not mention the board 

resolution. About a week later, Havir terminated Nevins without explanation. Nevins 

was offered a severance package, but that package was withdrawn when Nevins 

informally asserted legal claims against Upward Foundation. To this date, Nevins has 

not received any severance or deferred compensation, although the life insurance policy 

that was supposed to fund his deferred compensation is currently worth about $200,000. 

III. PROCEDURAL HISTORY 

Nevins believes that Upward Foundation fired him either because of his medical 

conditions, his insistence on reducing the deferred compensation agreement to writing 

and making sure it was funded, or both. To that end, he alludes to a discrimination 

charge filed with the EEOC (Doc. 1-1 ¶ 49), and he eventually filed suit in Maricopa 

County Superior Court, alleging three causes of action: (1) violation of the Rehabilitation 

Act, 29 U.S.C. § 794; (2) violation of the Arizona Wage Act, A.R.S. § 23-350 to -362; 

and violation of the Arizona Employment Protection Act, A.R.S. § 23-1501. Upward 

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Foundation removed to this Court based on federal question jurisdiction and has now 

moved to dismiss. 

IV. ANALYSIS 

A. Rehabilitation Act Claim 

The Rehabilitation Act provides: “No otherwise qualified individual with a 

disability in the United States . . . shall, solely by reason of her or his disability, be 

excluded from the participation in, be denied the benefits of, or be subjected to 

discrimination under any program or activity receiving Federal financial assistance . . . .” 

29 U.S.C. § 794(a). Nevins claims that his blindness makes him an “individual with a 

disability,” and that Upward Foundation terminated him “[m]otivated in part by 

Plaintiff’s disability, and Defendant’s perception of Plaintiff being disabled.” (Doc. 1-1 

¶ 37.) 

As alleged, Nevins cannot sustain a Rehabilitation Act claim because he claims 

that Upward Foundation was “[m]otivated in part by [his] disability,” rather than 

motivated “solely” by his disability, as the Rehabilitation Act requires. As pleaded, then, 

the claim must be dismissed. 

B. Wage Act Claim 

1. Deferred Compensation as “Wages” 

Under the Wage Act, “if an employer . . . fails to pay wages due any employee, the 

employee may recover in a civil action against an employer or former employer an 

amount that is treble the amount of the unpaid wages.” A.R.S. § 23-355(A). The Wage 

Act defines “wages” as 

nondiscretionary compensation due an employee in return for labor or services rendered by an employee for which the 

employee has a reasonable expectation to be paid whether 

determined by a time, task, piece, commission or other 

method of calculation. Wages include sick pay, vacation pay, severance pay, commissions, bonuses and other amounts 

promised when the employer has a policy or a practice of making such payments. 

A.R.S. § 23-350(5). 

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Upward Foundation argues that deferred compensation is not “wages” for 

purposes of the Wage Act. No located authority answers the question of whether 

deferred compensation qualifies as “wages,” but the Wage Act as a whole demonstrates 

that “wages” refers primarily to regularly received compensation. See A.R.S. § 23-

351(C). Nevins’s alleged deferred compensation does not fall under this definition. 

Accordingly, the Wage Act claim will be dismissed for failure to state a claim. 

2. ERISA Preemption 

Upward Foundation also argues that the Employment Retirement Income Security 

Act (ERISA) preempts Nevins’s Wage Act claim. Specifically, Upward Foundation 

claims that the deferred compensation arrangement Nevins described in his complaint 

qualifies as a “plan . . . established or maintained by an employer . . . [that] results in a 

deferral of income by employees for periods extending to the termination of covered 

employment or beyond.” 29 U.S.C. § 1002(2)(A)(ii). Nevins’s alleged deferred 

compensation arrangement falls within this definition. Accordingly, Nevins’s Wage Act 

claim fails both because his deferred compensation is not “wages” under the Wage Act, 

and because ERISA preempts the claim. 

C. Employment Protection Act Claim 

1. The Employment Protection Act’s Applicability 

The Arizona Employment Protection Act allows employees to bring wrongful 

termination claims against employers under various circumstances, but none of those 

circumstances apply to Nevins’s allegation that Upward Foundation terminated him 

because he had complained about the absence of a written deferred compensation 

agreement. Nevins’s claim that he was fired because of his legal blindness does fit within 

the Employment Protection Act’s deference to bringing wrongful termination claims 

when “[t]he employer has terminated the employment relationship of an employee in 

violation of a statute of this state . . . including . . . the civil rights act prescribed in title 

41, chapter 9.” A.R.S. § 23-1501(3)(b)(i). However, because the Civil Rights Act 

“provides a remedy to an employee,” that Act’s statutory remedies “are the exclusive 

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remedies” available to Nevins. A.R.S. § 23-1501(3)(b). He cannot sure under the 

Employment Protection Act. Hence, Nevins’s third cause of action does not state a claim 

for relief. 

2. ERISA Preemption 

Upward Foundation claims that, like Nevins’s Wage Act claim, ERISA preempts 

Nevins’s Employment Protection Act claim. Upward Foundation is correct, and 

therefore Nevins’s Employment Protection Act claim also founders on ERISA. 

D. Leave to Amend 

At the same time Nevins filed his response to Upward Foundation’s motion to 

dismiss, he filed a motion to amend his complaint. Nevins has since filed a motion for 

leave to file a second amended complaint. The first motion for leave is therefore moot, 

and the Court will await full briefing on the second motion. 

IT IS THEREFORE ORDERED that Upward Foundation’s Motion to Dismiss 

Complaint (Doc. 6) is GRANTED. 

IT IS FURTHER ORDERED that Nevins’s Motion for Leave to Amend 

Complaint (Doc. 8) is DENIED as moot. 

Dated this 30th day of June, 2011. 

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