EEOC v. Wooster Brush Co., Civ. A. No. C80-1678A.

• Decision Date: 08 October 1981
• Docket Number: Civ. A. No. C80-1678A.
• Citation: 523 F. Supp. 1256
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. The WOOSTER BRUSH COMPANY, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

523 F. Supp. 1256

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. The WOOSTER BRUSH COMPANY, et al., Defendants.

Civ. A. No. C80-1678A.

United States District Court, N. D. Ohio, E. D.

October 8, 1981.

Bruce B. Elfvin, Robert S. Bauders, Anne L. Meyers, EEOC, Cleveland District Office, Cleveland, Ohio, Leroy D. Clark, James N. Finney, EEOC, Washington, D. C., for plaintiff.

Ronald E. Holtman, Lincoln Oviatt, Wooster, Ohio, Evan Jay Cutting, Baker & Hostetler, Cleveland, Ohio, for defendants.

MEMORANDUM OPINION AND ORDER

CONTIE, District Judge.

Invoking the Court's jurisdiction under 28 U.S.C. §§ 451, 1343, and 1345, plaintiff Equal Employment Opportunity Commission (EEOC) initiated this action under section 706(f)(1) & (3) of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-5(f)(1) & (3), for monetary and injunctive relief to redress alleged discrimination by defendants the Wooster Brush Company (Company) and the Wooster Brush Company Employees Relief Association (Association) against female employees because of their sex. The following, in accordance with Rule 52, Federal Rules of Civil Procedure, shall constitute the Court's findings of fact and conclusions of law as determined after a full trial on the merits, at which trial the Court duly heard testimony and received exhibits.

I. FACTS

The Company is a manufacturer of paint brushes, rollers, sprayers, and other associated items. It is a corporation operated by a board of directors and officers. The Company employs both male and female employees, who, as employees, are entitled to certain company benefits as explained to them upon joining the Company and as listed in the employee handbook. One of the benefits listed in the employee handbook is the opportunity for membership in the Association.

Defendant Association is an unincorporated association formed for the purpose of providing disability benefits to its members who are unable to work because of illness. It is operated by its board of directors and officers. The Association members elect the board of directors to carry on the day-to-day functions of the Association, although as a practical matter, one of the Company employees who is also an Association member processes routine claims pending final approval by the board.

The Association was formed in 1935 at the initiative of Company employees. Before that time, it had been customary to "pass the hat" to collect money for a fellow employee whenever an employee became ill and was therefore unable to work. Upon proposing the Association, the employees elected a founding board of directors that in turn investigated and drafted a constitution. The Association constitution was adopted by Association membership and to date, with amendments, the constitution remains in effect.

Under the constitution, the Association is run by a five-member board of directors, each member having an equal vote. Four of the directors are elected from and by Association membership, and the fifth director is the Company secretary/treasurer or his designee.

From 1949 through 1959 Woodrow G. Zook had been elected to the board. In 1959 the Association membership amended the constitution to provide for the Company's secretary/treasurer or his designee to sit on the board. Zook, the secretary/treasurer in 1959, has retained his appointed seat on the Association board although his positions with the Company now include treasurer, president, chief executive officer, and member of the Company board of directors.

Association membership is voluntary. To become an Association member, one must 1) be an employee of the Company, 2) submit a recent physical examination report, 3) be approved for membership by a majority of the Association board of directors, and 4) pay monthly dues into the Association fund.

Association membership is available only to employees at the Wooster, Ohio; Elyria, Ohio; and Reno, Nevada plants. Employees of the Acme Brush Corporation, the Company's wholly-owned subsidiary, are ineligible to join the Association.

At the end of approximately two (2) months of employment, new employees are informed in a meeting with the person in charge of the Company's hourly personnel that they will become eligible for Company insurance benefits at the end of three (3) months. Employees are also informed at the same meeting that they may apply for membership in the Association.

The requirement that the prospective Association member must submit a physical examination report may be satisfied by submitting the report of the Company's preemployment physical. If the employee chooses not to submit the report of the Company's physical, the applicant must obtain a physical at his or her own expense.

Once the physical examination report has been submitted, it and the employee's application are presented to the Association's secretary/treasurer for the board of directors' consideration at the next board meeting. Applicants must meet minimum health requirements, and approval of one's health for purposes of working for the Company will not trigger automatic acceptance into the Association.

Finally, to maintain membership in the Association, the member must pay monthly dues, presently set at the amount of Two Dollars, Fifty Cents ($2.50). The dues of hourly and non-exempt salaried workers are deducted from their Company payroll checks.¹ Exempt salaried workers pay their dues in annual payments.

In addition to receiving dues from its members, the Association receives funds from the Company. The Company regularly contributes to a variety of charitable organizations. Charities listed on the Company's income tax returns include the Association, the United Way, the YMCA, the College of Wooster, and Goodwill Industries. About thirty-nine percent (39%) of the Company's total charitable contribution budget is donated to the Association. In addition to monetary contributions for which the Company takes charitable deductions, the Company makes monetary contributions for which it takes no charitable deductions. Other contributions are made, in kind, to what the Company believes are worthy organizations such as parent/teacher organizations, Boy Scouts, and churches that request company products for use in their respective cleaning and refurbishing projects.

When the Association was first formed, the Company contributed twenty-five percent (25%) of the Association's operating budget. Currently, the Company contributes dollar-for-dollar the amount of dues paid by Association members. When the Association fund reaches Fifty Thousand Dollars ($50,000.00), a moratorium is placed on dues payments and, consequently, no funds are received from the Company. No additional dues are collected until payment of disability benefits utilizes money in the fund, thereby reducing the fund and again necessitating the payment of more dues.

The Association pays One Hundred Dollars ($100.00) a week for up to thirty-nine (39) weeks in any one year or for any one disability to male and female members who are disabled due to injury or illness. The Association does not, however, pay benefits on claims related to disability arising from pregnancy.

The EEOC brings this action upon a determination that there was reasonable cause to believe that charges of unlawful employment practices by the Company and the Association in violation of Title VII were true and that conciliation attempts by the EEOC had failed. The basis of the complaint is an allegation that the Company, directly and by and/or through its agent, the Association, unlawfully discriminates against women because of their sex by providing disability benefits for temporary disabilities other than pregnancy but by failing to provide pregnancy-related disability benefits.

II. DISCUSSION AND CONCLUSIONS OF LAW

A. Synopsis of Arguments

Under the relevant portion of 42 U.S.C. § 2000e-2(a)(1), "it shall be an unlawful employment practice for an employer ... to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's ... sex." For purposes of Title VII,

the terms "because of sex" or "on the basis of sex" include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work.

42 U.S.C. § 2000e(k).

It is undisputed that the Company's female employees who are members of the Association do not receive pregnancy-related benefits. Moreover, under 42 U.S.C. §§ 2000e(k) and 2000e-2(a)(1), the failure of an employer to pay pregnancy-related disability benefits while paying benefits for disabilities that render one similarly unable to work constitutes unlawful discrimination. Therefore, if the Company and Association fall within the statutory definition of "employer", 42 U.S.C. § 2000e(b), defendants are liable for violation of Title VII.

Plaintiff asserts that the Company and the Association, as a single employer under subsection (b) of 42 U.S.C. § 2000e, are liable for violation of 42 U.S.C. § 2000e-2(a)(1). Plaintiff asserts in the alternative that both entities fall within subsection 2000e(b) by virtue of an agency relationship existing between the Company as principal and the Association as agent.

Defendant Company maintains that it does not discriminate against women in its employment practices. The Company observes that except for the EEOC's allegation of discrimination via the Association, the plaintiff alleges no other discrimination by the Company against its female employees. The Company relies on its belief that the facts support neither a finding that the Company and Association are joint employers nor a...