Bruce v. S & H Riggers and Erectors, Inc.

• Decision Date: 23 February 1990
• Docket Number: No. 1:88-cv-2803-RHH.,1:88-cv-2803-RHH.
• Parties: Dorothy C. BRUCE, Plaintiff, v. S & H RIGGERS AND ERECTORS, INC. and Contractors Diversified, Inc., Defendants.
• Court: U.S. District Court — Northern District of Georgia

732 F. Supp. 1172

Dorothy C. BRUCE, Plaintiff, v. S & H RIGGERS AND ERECTORS, INC. and Contractors Diversified, Inc., Defendants.

No. 1:88-cv-2803-RHH.

United States District Court, N.D. Georgia, Atlanta Division.

February 23, 1990.

Curtis Arthur Thurston, Jr., Lela L. Smith, Lawson & Davis, Atlanta, Ga., for plaintiff.

Jesse P. Schaudies, Jr., Michael W. Lord, Troutman, Sanders, Lockerman & Ashmore, Atlanta, Ga., for defendants.

ORDER

ROBERT H. HALL, District Judge.

Plaintiff brings this action pursuant to the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., as amended ("ADEA"), the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq. ("ERISA") and O.C.G.A. § 34-1-2. Currently before the court is defendants' motion for summary judgment. For the reasons stated below, the court PARTIALLY GRANTS and PARTIALLY DENIES defendants' motion for summary judgment. FACTS

Plaintiff Dorothy C. Bruce ("Bruce") was terminated from her employment as a bookkeeper and secretary on August 7, 1987. At the time of her termination, Mrs. Bruce was fifty-seven years old. Mrs. Bruce believed that she had been employed by S & H Riggers and Erectors, Inc. ("S & H"). On S & H stationary, Mr. Smith, President of S & H, wrote a letter of recommendation for Mrs. Bruce to prospective new employers. The letter stated that Bruce had been terminated to allow "younger family members" to begin work at S & H.

Mrs. Bruce filed an EEOC charge against S & H, claiming that S & H discharged her because of her age and sex. S & H, through its President, Mr. William J. Smith, denied that it had ever employed plaintiff. S & H contended that Mrs. Bruce had, in fact, been employed by Contractors Diversified, Inc. ("CDI").

By order dated May 5, 1989, the court granted plaintiff's motion to add CDI as a party defendant. Mr. Smith is also the President and owner of CDI. Mr. Smith is the 100% shareholder of CDI; CDI is the 100% shareholder of S & H.

After Mrs. Bruce was terminated, defendants re-hired a former employee, Ms. Mabel Zerblis, to perform plaintiff's duties. Ms. Zerblis was fifty-seven years of age at the time she was re-hired. Soon thereafter, defendants hired a Ms. Gayle Gann, who was under forty years of age. When Ms. Gann began work, Ms. Zerblis dropped down to part-time status.

Plaintiff filed her Complaint in this forum on December 13, 1988. Defendants now move for summary judgment on all three counts of the Complaint as amended by plaintiff on June 9, 1989.

DISCUSSION

I. Standard of Review

The court will grant summary judgment when "there is no genuine issue as to any material fact ... and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party must demonstrate that the nonmoving party lacks evidence to support an essential element of her or his claim. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The movant's burden is "discharged by showing—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Once the movant has met this burden, the opposing party must present evidence establishing a material issue of fact. Id. The nonmoving party must go "beyond the pleadings" and present evidence designating "specific facts showing that there is a genuine issue for trial." Id. at 324, 106 S.Ct. at 2553.

While all evidence and factual inferences should be viewed in a light most favorable to the nonmoving party, Rollins v. Tech-South, Inc., 833 F.2d 1525, 1529 (11th Cir. 1987); Everett v. Napper, 833 F.2d 1507, 1510 (11th Cir.1987), "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (emphasis in the original). An issue is not genuine if unsupported by evidence or created by evidence that is "merely colorable" or "not significantly probative." Id. at 250, 106 S.Ct. at 2511. Similarly, an act is not material unless it is identified by the controlling substantive law as an essential element of the nonmoving party's case. Id. at 248, 106 S.Ct. at 2510. Thus, to survive a motion for summary judgment, the nonmoving party must come forward with specific evidence of every element essential to his or her case so as to create a genuine issue for trial. Celotex Corp., 477 U.S. at 323, 106 S.Ct. at 2552; Rollins, 833 F.2d at 1528.

II. Application

A. Single Employer Theory

The first issue the court must address is whether Contractors Diversified, Inc. ("CDI") is an employer within the meaning of the ADEA. The ADEA describes an employer as a:

... person engaged in industry affecting commerce who has twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year....

29 U.S.C. § 630(b).

Defendants maintain that plaintiff was employed solely by CDI and that CDI does not fall within the ADEA's definition of an employer. CDI employs approximately three individuals; CDI has never employed twenty employees at one time. Thus, CDI does not fall within the ADEA's express definition of employer. Nonetheless, plaintiff urges the court to view CDI and S & H Riggers and Erectors, Inc. ("S & H") as a single employer for the purposes of the ADEA. S & H is a wholly owned subsidiary of CDI.

As a general rule, a parent company will be considered a separate corporate entity from its wholly owned subsidiary. Baker v. Raymond International, Inc., 656 F.2d 173 (5th Cir. Unit A, 1981). However, where a parent company exercises such control over a subsidiary that the two corporations are essentially the same entity, a parent corporation will be considered the employer of its subsidiary's personnel. See Woodford v. Kinney Shoe Corp., 369 F.Supp. 911 (N.D.Ga.1973) (Smith, C.J.).

To determine whether a parent and subsidiary are so interrelated that they should be considered one employer for ADEA purposes, the court applies the "integrated enterprise" test. See McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930 (11th Cir.1987). This test had its genesis in labor law. The National Labor Relations Board first applied the integrated enterprise test to determine whether a consolidation of separate corporate entities was warranted. The quadripartite test entails proof of the following:

(1) an interrelation of operations

(2) common management

(3) centralized control of labor relations, and

(4) common ownership or financial control.

See Radio & Television Broadcast Technicians, Local Union 1264, International Brotherhood of Electrical Workers, AFL-CIO v. Broadcast Service of Mobile, Inc., 380 U.S. 255, 85 S.Ct. 876, 13 L.Ed.2d 789 (1965).

The integrated enterprise test was soon applied to Title VII litigation to determine whether an active parent corporation, supervising and controlling the operations of its subsidiary, would be considered the employer of the subsidiary's personnel for purposes of the Act. See, e.g., Williams v. New Orleans Steamship Association, 341 F.Supp. 613, 615 (E.D.La.1972); Baker v. Stuart Broadcasting Co., 560 F.2d 389 (8th Cir.1977). The integrated enterprise test is "well suited" to Title VII cases because it allows courts to read the term "employer" in a manner consistent with the purposes of the Act. See Carter v. Shop Rite Foods, Inc., 470 F.Supp. 1150, 1160 (N.D.Tex.1979). The test is similarly applicable to ADEA cases. Oscar Mayer & Company v. Evans, 441 U.S. 750, 756, 99 S.Ct. 2066, 2071, 60 L.Ed.2d 609 (1979) (holding that interpretation of the ADEA should follow Title VII construction, given the common language and purposes of the two acts); see also Berkowitz v. Allied Stores of Penn-Ohio, Inc., 541 F.Supp. 1209 (E.D.Pa.1982).

By applying the four prongs of the integrated enterprise test, an ADEA plaintiff may demonstrate that two superficially separate corporations are essentially a single employer. See Nation v. Winn-Dixie Stores, Inc., 567 F.Supp. 997, 1010, aff'd on reconsideration, 570 F.Supp. 1473 (N.D.Ga.1983) (Evans, J.); Greason v. Southeastern Railroad Associated Bureaus, 650 F.Supp. 1, 4 (N.D.Ga.1986) (Ward, J.); EEOC v. Upjohn Corp., 445 F.Supp. 635 (N.D.Ga.1977) (Murphy, J.).¹ Applying this integrated enterprise test to the facts of this case, the court finds that a genuine issue of material fact remains concerning whether CDI and S & H should be treated as a single entity.

(1) Interrelation of Operations

In determining whether CDI and S & H operations were substantially interrelated, the court may consider the following factors: Combined accounting records, bank accounts, lines of credit, payroll preparation, switchboards, telephone numbers, or offices. See Fike v. Gold Kist, Inc., 514 F.Supp. 722, 726 (N.D.Ala.1981) aff'd, 664 F.2d 295 (11th Cir.1981) (quoting Western Union Corp., 224 N.L.R.B. 274 (1976) aff'd, 571 F.2d 665 (D.C. Cir.1978).

In the case at hand, CDI and S & H shared offices. Plaintiff answered the telephone for both companies. Plaintiff was responsible for the payroll of both companies. In addition, she filed tax reports for both companies. While the fact that the same employee prepared payroll and tax forms does not of itself demonstrate that the two companies are one employer, it certainly raises an inference that of considerably interrelated operations. In addition, William J. Smith, President and Owner of S & H and CDI wrote a letter of recommendation for Mrs. Bruce stating, "this letter of reference of sic Mrs. Dorothy Bruce is given because of her outstanding service to S & H Riggers and Erectors, Inc. these past 3½ years." Plaintiff's Exhibit 1 to the Deposition of William J. Smith. The letter goes on to discuss Mrs. Bruce's duties at S & H:

She did all the company bookkeeping, typing,

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