USEEOC v. CATHOLIC KNIGHTS INS. SOCIETY, 94 C 5744.

• Decision Date: 16 February 1996
• Docket Number: No. 94 C 5744.,94 C 5744.
• Citation: 915 F. Supp. 25
• Parties: UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION and Adetunji Adebayo, Plaintiffs, v. CATHOLIC KNIGHTS INSURANCE SOCIETY, Defendant.
• Court: U.S. District Court — Northern District of Illinois

915 F. Supp. 25

UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION and Adetunji Adebayo, Plaintiffs, v. CATHOLIC KNIGHTS INSURANCE SOCIETY, Defendant.

No. 94 C 5744.

United States District Court, N.D. Illinois, Eastern Division.

February 16, 1996.

Jean Powers Kamp, John C. Hendrickson, United States Equal Employment Opportunity Commission, Chicago, IL, June Wallace Carson, Equal Employment Opportunity Commission, Chicago, IL, for United States Equal Employment Opportunity Commission.

Howard P. Kamin, Randall B. Gold, Lawrence, Kamin, Saunders & Uhlenhop, Chicago, IL, for Adetunji A. Adebayo.

Barry A. Hartstein, Sidney I. Schenkier, Douglas Alan Graham, Laura A. Kaster, Jenner & Block, Chicago, IL, for Catholic Knights Insurance Society.

OPINION AND ORDER

NORGLE, District Judge:

Are insurance agents independent contractors? The parties ask the court to answer this question for them, in the form of a motion for summary judgment. Although filed pursuant to Federal Rule of Civil Procedure 56, the answer raises the specter of Federal Rule of Civil Procedure 12(b)(1) and speaks to the existence of subject matter jurisdiction. Once questioned, it is a plaintiff's burden to establish that all jurisdictional requirements have been satisfied. Kontos v. United States Dept. of Labor, 826 F.2d 573, 576 (7th Cir.1987). The court responds to the question below and grants Defendant's motion for summary judgment for the reasons that follow.

I.

Adetunji Adebayo applied to Defendant Catholic Knights Insurance Society ("Catholic Knights") to become an insurance agent. In August 1992, Catholic Knights rejected Adebayo. Plaintiff Equal Employment Opportunity Commission and Adebayo, who has intervened as Plaintiff (collectively "Plaintiffs"), contend that Catholic Knights did not hire Adebayo because of his religion in violation of Title VII of the 1964 Civil Rights Act. 42 U.S.C. §§ 2000e to 2000e-17. Catholic Knights answers that both Complaints are insufficient as a matter of law. Catholic Knights argues that the insurance agents who deal with it are not employees but independent contractors; therefore, Title VII does not apply. Plaintiffs respond that Catholic Knights demonstrated enough control over its agents so that they must be considered employees, not independent contractors.

II.

As a point of clarification, the court first addresses the pertinent time periods. In responding to the motion for summary judgment, Plaintiffs begin that there are three relevant time periods: (1) the period prior to August 1992 when Catholic Knights rejected unidentified peoples because of religion; (2) the period during August 1992 when Catholic Knights rejected Adebayo because of religion; and (3) the period following August 1992 when Catholic Knights might have altered employment practices. However, the EEOC Complaint fails to plead the first period of time. The Complaint's only reference to time reads, "Since at least August 1992, Defendant has intentionally engaged in unlawful employment practices in violation of Title VII." (Compl. ¶ 7.) Even under the liberal federal notice pleading standards, that statement is too vague to allow this suit to reach all times before August 1992. Therefore, the only relevant time periods are August 1992 and thereafter.

The second preliminary issue concerns the testimony of Stephen Sheedy, former vice president of agencies for Catholic Knights. Catholic Knights contends that his testimony is inadmissible because he was fired from the Illinois office in October 1991, well before Adebayo applied. As such, it argues, Sheedy cannot speak to the relevant period of time, viz. August 1992 and thereafter.

Federal Rule of Evidence 602 allows a witness to testify although that witness may not have knowledge in the literal sense. Fed.R.Evid. 602 advisory committee's note; 27 Charles A. Wright & Victor J. Gold, Federal Practice and Procedure § 6023 (1990). Sheedy's testimony is admissible because he held a position in which he would be expected to know the amount of control Catholic Knights exhibited over the insurance agents. That Sheedy was fired and that Sheedy did not occupy the position for almost a year before the relevant time are factors that go to the weight of the evidence, not its sufficiency. Because it is not a judge's function to weigh evidence in deciding motions for summary judgement but to determine whether there is a genuine issue of fact, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-51, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986), the testimony will not be excluded.

The third preliminary matter involves the pertinent documents. Plaintiffs suggest that the court ought to consider three official documents of Catholic Knights: the Full-Time Career Agent's Contract ("Contract"); the Financing Commission Agreement ("FCA"); and the Understanding of Job Status of All CKIS Agents and Job Requirements for CKIS Financed Agents ("Understanding"). Catholic Knights argues that the Understanding was discontinued in 1991, before Adebayo applied for an agent position. Plaintiffs counter that although the Understanding was allegedly no longer authorized after 1991, it is possible that those hired before 1991 were not notified that the form was discontinued. As such, Plaintiffs continue, those agents might have believed that they remained subject to the control detailed in the Understanding.

The court finds that the Understanding may not be used as evidence to support Plaintiffs' position and factual assertions. Given that the court found supra the period before August 1992 is not at issue, the Understanding is not relevant. That some may have believed the Understanding was in effect after Catholic Knights discontinued the form in 1991 is speculation. Accordingly, the form is inadmissible as irrelevant, and Plaintiffs' factual assertions which used the Understanding as support are deemed improper.

The fourth preliminary matter involves arguments raised in a footnote. In its opening brief, Catholic Knights attempted to support its motion by referencing three statutory provisions in a footnote. The first involves the Religious Freedom Restoration Act of 1993, 42 U.S.C. § 2000bb, the second and third provisions involve exceptions to Title VII, 42 U.S.C. §§ 2000e-1(a) and 2000e-2(e)(1). Although the arguments might have later proved meritorious, mere citation to affirmative defenses is not sufficient legal reasoning, and the court will not develop the arguments for Defendant. Bakalis v. Golembeski, 35 F.3d 318, 326 n. 8 (7th Cir.1994) (deeming an argument waived which was made only in a footnote in an opening brief).

III.

The central issue before the court is whether an insurance agent for Catholic Knights is an independent contractor or an employee for purposes of Title VII. The parties agree that the common-law, multi-factored agency test governs independent contractor status. The analysis revolves around the principle of control. In December 1991, the Seventh Circuit Court of Appeals applied the economic realities test to a Title VII discrimination case. Knight v. United Farm Bureau Mut. Ins. Co., 950 F.2d 377, 378, 380 (7th Cir.1991). There, the court affirmed the district court's finding, which followed a bench trial, that the plaintiff insurance agent was an independent contractor. Id. at 377. Four months later, in Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-24, 112 S.Ct. 1344, 1348, 117 L.Ed.2d 581 (1992), the Supreme Court adopted the common-law agency test for defining "employee" in ERISA matters because that statute did not define it well. The Court quoted an earlier opinion, Community for Creative Non-Violence v. Reid, 490 U.S. 730, 749-53, 109 S.Ct. 2166, 2178-79, 104 L.Ed.2d 811 (1989), which summarized both legs of the multi-factored test:

In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.

Darden, 503 U.S. at 323-24, 112 S.Ct. at 1348 (footnotes omitted). Although all aspects of the relationship must be assessed with no one factor being decisive, Darden, 503 U.S. at 324-26, 112 S.Ct. at 1349, "Of several factors to be considered, the employer's right to control is the most important when determining whether an individual is an employee or an independent contractor." Knight, 950 F.2d at 378. The court continues, then, to discuss the factor of control.

Plaintiffs point to certain matters that they believe establish Catholic Knights' control over the agents. In their response to the motion for summary judgment, Plaintiffs argue that Catholic Knights controlled the agents by instituting the following: a dress code; mandatory meetings; specific branch and parish assignments; permission for vacations; a systemized parish marketing system; weekly sales reports of new agents; a requirement that the products of Catholic Knights could only be sold to Catholics and not to the general public, and when selling to Catholics the agents could not offer products from other companies; a minimum number of appointments, calls, referrals, and letters; the submission of call sheets by new agents; a quota of sales for Catholic Knights products; proper work habits; and a vice president once wrote that agents must give a...