E.E.O.C. v. Omni Hotels Management Corp.
| Decision Date | 26 September 2007 |
| Docket Number | Civil Action No. 3:04-CV-1778-BF(K). |
| Citation | 516 F.Supp.2d 678 |
| Parties | EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, and Mohamed S. Elmougy, Intervenor v. OMNI HOTELS MANAGEMENT CORPORATION, Omni Hotels Corporation and Omni Hotels of Texas, Inc., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
Toby W. Costas, Robert A Canino, Jr., Dallas, TX, for Plaintiff.
Bryant S. McFall, Jana S. Baker, Lisa A. Dreishmire, Ogletree, Deakins, Nash, Smoak & Stewart, Dallas, TX, R. Clay Hoblit, Gonzales Hoblit & Ferguson, Corpus Christi, TX, for Defendants.
Steven B. Thorpe, Carla Smith Hatcher, Thorpe Hatcher & Washington, Dallas, TX, for Intervenor.
This is a consent case before the United States Magistrate Judge. Plaintiff, Equal Employment Opportunity Commission ("EEOC"), brought this case on behalf of Mohamed Elmougy ("Elmougy"), the Charging Party and Intervenor. Defendants are Omni Hotels Management Corporation, Omni Hotels Corporation, and Omni Hotels of Texas Inc. (referred to collectively as "Omni" or "Defendant"). Elmougy was the former General Manager of Defendant's Omni Mandalay Hotel in Las Colinas, Texas. Plaintiff alleged that Omni constructively discharged Elmougy based on his national origin and his religion. Plaintiff also alleged that Omni's constructive discharge of Elmougy was in retaliation for opposing what Elmougy reasonably believed to be Omni's discrimination against minority employees.
The Court conducted a bench trial, commencing on September 4, 2007. For the reasons that follow, the Court finds that Defendant is entitled to judgment on Plaintiff's and the Intervenor's claims and that Plaintiff and Intervenor shall take nothing by way of their cause of action.
The parties have stipulated to the following facts:1
1. Elmougy is a Muslim and an Arab, who is Egyptian by birth.
2. Omni Hotel Management Corporation and Omni Hotels Corporation are located in Irving, Texas.
3. At all times relevant to this lawsuit, Omni was an employer as defined by Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-2(A)(1).
4. Omni employed Elmougy from 1986 until his separation on January 11, 2002. Over his years with Omni, Elmougy worked at hotels in five (5) different cities.
5. In February 1996, TRT Holdings, Inc. purchased Omni from former owners.
6. On or about November 13, 2000, while working as General Manager of the Omni Park West in Farmers Branch, Texas, Omni announced Elmougy was being promoted to become General Manager of the Omni Mandalay in Las Colinas, Texas.
7. Elmougy reported to Todd Scartozzi ("Scartozzi"), Senior Vice President of Operations.
8. Not all Omni hotels are equal in quality, size, revenue, number of rooms, amenities, profitability, meeting space, or banquet facilities, and the hotels compete in different markets which vary in terms of leisure/resort or corporate business market, available corporate business, transient business, hotel space, and competitors.
9. On March 27, 2002, Elmougy filed a Charge of Discrimination with the EEOC, Number 310A201415.
Omni Hotels Management Corporation ("Omni") is a corporation that maintains its corporate offices in Irving, Texas. Omni operates hotels and resorts throughout the United States, Canada, and Mexico, including flagship, or Tier 1, hotel properties like the Omni Mandalay at Las Colinas ("the Mandalay") and the Omni Shoreham in Washington, D.C. ("the Shoreham"). The corporate offices for Omni are located less than a mile from the Mandalay ("Corporate"), the only Omni flagship hotel in North Texas. In 2001, other Tier 1 properties included, for example, the Omni Berkshire, Omni Chicago, Omni Houston, Omni Interlocken, and Omni Parker House.
In February 1996, TRT Holdings, Inc. purchased the Omni hotel chain. Thereafter, Omni Hotels Management Corporation became the employer at most Omni hotels, including the Mandalay. At all times relevant to this lawsuit, Omni Hotels Management Corporation employed Elmougy. That entity paid Elmougy's salary, provided his benefits, withheld, reported and paid taxes on his behalf, and employed his superiors, who controlled the terms and conditions of his employment.
Defendant Omni Hotels of Texas, Inc. does not exist as a jural entity, that is, an entity which may sue and be sued. It has no indicia of incorporation or legal status of any kind, is not registered to do and does not do any business, does not have any assets, inventory or capital, and does not have any employees or officers. Omni Hotels of Texas, Inc. did not employ Elmougy.
Defendant Omni Hotels Corporation is a legal entity, but it has no employees or office space and did not employ Elmougy. Omni Hotels Corporation is a holding company for various Omni-related entities, and it does not issue paychecks or provide benefits. Because it has no employees, it does not and cannot evaluate employees or exercise influence or control over any employment decisions, including transfers and promotions. It has never drafted nor implemented a comprehensive employment policy or regimented rules regarding employment practices for use by Omni Hotels Management Corporation. Because Omni Hotels Corporation has no employees to make decisions, it is not directly involved in Omni Hotels Management Corporation's daily decisions related to production, distribution, marketing, and/or advertising. The entities do not share services, records, and/or equipment. Omni Hotels Corporation does not purchase any materials or supplies from Omni Hotel Management Corporation, because the latter has no materials or supplies.
As Elmougy's employer, Omni Hotels Management Company is the only proper defendant in this case. To the extent the EEOC has attempted to prove that Omni Hotels Corporation, Omni Hotels Management Company, and Omni Hotels of Texas Inc. constitute an integrated enterprise, the EEOC's proof fails.
Omni assigns a General Manager ("GM") to a specific hotel. The GM has onsite responsibility for that hotel, with support from an Executive Operating Committee ("EC"). The GM acts as a conduit between the corporate office and the hotel, oversees hotel operations in all departments, and represents the hotel in its interactions with customers. Omni judges the performance of a GM by successful management of three distinct components, called "the trilogy." A GM must satisfy (a) owners (hotel revenues and profitability); (b) employees (also referred to as associates and the EC), and (c) guests. No two Omni hotels are alike; each one has its own distinct challenges.
The economic or "owner" performance of each Omni hotel is judged by revenue, profitability ("EBITDA" or earnings before interest, taxes, depreciation, and amortization), and sales (including presales, or bookings). With regard to sales, Omni compares a hotel's performance to the performance of a small number of competitors in its geographic market, referred to as the "competitive set." Omni analyzes individual hotel performance against the competitive set based on three factors: (a) average room rate, (b) occupancy, and (c) revenue per available room ("RevPar"). RevPar represents the revenue per available room the hotel is receiving, computed by multiplying the average room rate by the percentage of occupancy. To analyze how a hotel is performing in these areas compared to the competitive set, Omni purchases the STAR report from Smith Travel Research. The STAR report is a monthly analysis which provides comparative data.
Omni also tracks pre-sales of future room nights, or "bookings," in monthly Booking Pace Reports. The Booking Pace Reports compare bookings to the current budget and to the same point in the prior year. Omni uses this report to project revenue production over six, twelve, and eighteen month periods. This report allows Omni to compare a hotel's performance to all hotels in the chain, rather than those in the competitive set. Omni considers one of the best indicators of a hotel's performance to be a comparison of a hotel's current booking pace to the hotel's last year's booking pace.
The economic performance of each Omni hotel is also judged individually by profit and loss performance, as reflected by EBITDA. Profit and loss is reflected on various reports, including the monthly profit and loss statement for each hotel. Profit and loss reflects how a GM is performing with regard to revenues and the GM's management of expenses. Similarly to Omni's comparison of booking pace, Omni considers one of the best indicators of a hotel's profitability performance to be a comparison of its current profitability to the last year's profitability.
Omni employed Elmougy from 1986 until his separation on January 11, 2002. Elmougy was an at-will employee, meaning he could quit or be discharged at any time and for any reason. Over his 15-plus years with Omni, Elmougy worked at Omni hotels in five different cities. On or about November 13, 2000, while working as GM of the Omni Park West in Farmers Branch, Texas, Omni promoted Elmougy to the position of GM of the Mandalay. The Mandalay, as one of Omni's flagship hotels, is". a larger, more prestigious hotel than the Park West. The Mandalay appeals to a wider range of guests. When Elmougy took over the Mandalay, an experienced management team was already in place there.
The decision to promote Elmougy to GM of the Mandalay was made and/or approved by Scartozzi (Senior Vice President of Operations); Jim Caldwell ("Caldwell"), President; Mike Dietemeyer ("Dietemeyer"), Chief Operating Officer; Joy Rothschild ("Rothchild"), Senior Vice President of Human Resources; and Bob Rowling ("Rowling"), Owner and Chairman...
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