Rabo v. Health

Background

Sylvia Rabo worked as a cardiovascular perfusionist for Essentia Health at its Heart and Vascular Center in Fargo, North Dakota, beginning in October 2023. Her direct supervisor was Carl Moser, the chief perfusionist, until his unexpected death on June 14, 2024. After Moser's death, Duane Neugebauer became Rabo's direct supervisor, and Rabo accepted the chief perfusionist position on June 25, 2024.

Rabo alleges that shortly after she became chief perfusionist, Neugebauer began discriminating against her based on her race, sex, and national origin—ignoring her scheduling requests, calling her "lazy," paying her less than male PRN perfusionists for on-call work, and threatening termination when she raised concerns. Rabo reported these issues to Essentia's human resources department on September 30, 2024. Essentia investigated but did not substantiate her claims.

Subsequently, Neugebauer placed Rabo on a Performance Improvement Plan (PIP) in February 2025, requiring her to check in with him daily. Rabo alleges that between February 28 and May 27, 2025, Neugebauer made sexually suggestive comments and gestures during these mandatory check-ins, commented on her anatomy, used racial epithets, and touched his genitals in her presence. Rabo took FMLA (Family and Medical Leave Act) leave twice during this period due to the emotional impact of this conduct. Rabo reported discrimination, harassment, and retaliation to Essentia's human resources in May 2025, but her complaints did not explicitly describe the sexual harassment incidents in detail. On May 27, 2025, Neugebauer told Rabo they were "safe here to do whatever we want," to which Rabo replied "No thank you." Three days later her system access was blocked, and on June 4, 2025, she was terminated. Neugebauer's daughter was then placed in the chief perfusionist role.

Rabo originally filed this case in Minnesota state court. Essentia removed it to federal court based on diversity of citizenship jurisdiction (meaning the parties are citizens of different states and the amount in dispute exceeds $75,000). The court noted a procedural wrinkle—Essentia is a Minnesota corporation, which would normally bar it from removing a case filed in Minnesota state court under the "forum-defendant rule." However, because Rabo did not file a timely motion to challenge removal, that issue was waived.

The Six Claims

Rabo's Amended Complaint asserts six counts, all under North Dakota law:

- Count I: Discrimination based on race, gender, sex, and/or national origin under the North Dakota Human Rights Act (NDHRA) - Count II: Sex discrimination based on sexual harassment, including hostile work environment and quid-pro-quo termination, under the NDHRA - Count III: Retaliation under the NDHRA's whistleblower-protection provision - Count IV: Common-law negligent supervision and retention - Count V: Common-law wrongful termination in violation of public policy - Count VI: Common-law intentional infliction of emotional distress

Essentia moved to dismiss Counts II, IV, V, and VI under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint fails to state a legally sufficient claim. Counts I and III were not challenged.

Count II: Sexual Harassment — Hostile Work Environment vs. Quid Pro Quo

Hostile Work Environment (Dismissed Without Prejudice)

Under the NDHRA, an employer is liable for hostile-work-environment sexual harassment only when it "knows or should know of the existence of the harassment and fails to take timely and appropriate action." N.D. Cent. Code § 14-02.4-02(6)(c). The North Dakota Supreme Court requires proving five elements, including that the employer knew or should have known of the harassment.

The court found that Rabo's complaints to Essentia's HR department did not specifically mention sexual harassment. Her September 30, 2024, complaint addressed scheduling, workload, and general race and sex discrimination. Her December 18, 2024, complaint addressed scheduling and pay. Her January 2025 complaints addressed Bellefeuille's conduct and general "discrimination and harassment." Her May 20, 2025, email mentioned bullying, racial slurs, and uncomfortable check-ins, but did not describe the sexual harassment incidents alleged in the Amended Complaint. Her May 28, 2025, email used language like "victim" and "abuser" but also did not specifically describe sexual harassment.

The court rejected Rabo's argument that pre-February 2025 complaints put Essentia on notice, since the Amended Complaint does not allege sexual harassment occurred before February 28, 2025. The court also rejected Rabo's argument that Neugebauer's status as a supervisor automatically imputed knowledge of the harassment to Essentia. The court distinguished the NDHRA from Title VII and the Minnesota Human Rights Act, both of which use different knowledge-imputation frameworks that do not apply under North Dakota law. The hostile-work-environment portion of Count II was dismissed without prejudice.

Quid-Pro-Quo Termination (Not Dismissed)

Rabo separately alleged that she was terminated because she rejected Neugebauer's sexual advances, which is actionable under NDHRA § 14-02.4-02(6)(b). This subsection—which applies when rejection of sexual conduct is used as a factor in an employment decision—contains no employer-knowledge requirement, making it distinct from the hostile-environment theory.

The court found this claim plausible. Neugebauer said "we're safe here to do whatever we want" on May 27, 2025; Rabo responded "No thank you"; her system access was blocked three days later; and she was terminated a week after that. The court rejected Essentia's arguments that: (1) the claim should be analyzed under the hostile-environment framework; (2) Rabo did not plead she viewed the comment as sexual; and (3) the comment was made in the context of a breastfeeding discussion (finding those two conversations occurred on different dates). This portion of Count II survives.

Count IV: Negligent Supervision and Retention (Dismissed Without Prejudice)

Under North Dakota law, negligent supervision arises when an employer fails to exercise ordinary care to prevent foreseeable employee misconduct from harming others. Foreseeability is a required element. An employer can be liable when it knows an employee habitually misconducts himself in a dangerous manner.

The court found the Amended Complaint did not plausibly allege that Essentia had notice of Neugebauer's sexually harassing conduct, and that nothing about Neugebauer's role made sexual harassment of Rabo inherently foreseeable. The court distinguished cases where foreseeability was established through employer notice or by the nature of the relationship between the abuser and victim (such as a counselor and child-client). The court also noted—without needing to decide—that there may be a separate problem: some North Dakota authority suggests no independent negligent supervision claim exists in employment cases absent physical injury, and Rabo cited only Minnesota authority for a sexual harassment exception to that rule.

Count V: Wrongful Termination in Violation of Public Policy (Dismissed Without Prejudice)

North Dakota recognizes a limited exception to at-will employment (meaning employment that can normally be ended by either party for any reason) when an employee is fired for complying with a "clear public policy" evidenced by a constitutional or statutory provision.

Rabo alleged she was terminated for complaining about long working hours and patient safety, but the sources she cited did not qualify. The AmSECT guidelines are promulgated by a private professional organization and are expressly non-mandatory. Rabo also cited the Fair Labor Standards Act and OSHA regulations in general terms but did not identify any specific provision that was violated. The court also noted that Rabo waived her argument that the public-policy claim rested on reporting unlawful discrimination, by failing to address Essentia's argument that the NDHRA's statutory remedies preclude a common-law claim on that same basis.

Count VI: Intentional Infliction of Emotional Distress (Dismissed Without Prejudice)

Rabo sought to hold Essentia vicariously liable (meaning liable for the acts of its employee) for Neugebauer's racial slurs and sexual harassment. Under North Dakota law, an employer is liable for employee torts committed within the scope of employment. However, the general rule is that sexual harassment by a supervisor is not within the scope of employment.

The court found that the general rule barred the claim. Rabo cited Minnesota cases applying broader vicarious liability, but the court noted that Minnesota law differs from North Dakota law on this issue. Rabo also cited an unpublished District of North Dakota decision, but that case addressed a different legal question and did not support her theory.

Rabo attempted to argue that Neugebauer's full course of conduct—including scheduling manipulation, calling her lazy, imposing the PIP—should be weighed in determining whether his sexual harassment fell within his employment scope. The court declined to consider this theory because it was not pled in the Amended Complaint and a party cannot amend a complaint through arguments in a brief. The court also observed that these "routine employment management functions" generally do not rise to intentional infliction of emotional distress as a matter of North Dakota law.

Disposition

Judge Tostrud granted in part and denied in part Essentia's Partial Motion to Dismiss Amended Complaint: