Fike v. Gold Kist, Inc., Civ. A. No. 80-G-0545-NW

• Decision Date: 27 February 1981
• Docket Number: 80-G-0546-NW.,Civ. A. No. 80-G-0545-NW
• Citation: 514 F. Supp. 722
• Parties: Barbara FIKE, Individually and on behalf of all others similarly situated, Plaintiff, v. GOLD KIST, INC.; Farmers Mutual Exchange of Russellville, Alabama, Inc., Defendants. Doris L. K. PRINCE, Plaintiff, v. GOLD KIST, INC.; Farmers Mutual Exchange of Russellville, Alabama, Inc., Defendants.
• Court: U.S. District Court — Northern District of Alabama

514 F. Supp. 722

Barbara FIKE, Individually and on behalf of all others similarly situated, Plaintiff, v. GOLD KIST, INC.; Farmers Mutual Exchange of Russellville, Alabama, Inc., Defendants.

Doris L. K. PRINCE, Plaintiff, v. GOLD KIST, INC.; Farmers Mutual Exchange of Russellville, Alabama, Inc., Defendants.

Civ. A. Nos. 80-G-0545-NW, 80-G-0546-NW.

United States District Court, N. D. Alabama, S. D.

February 27, 1981.

Michael L. Weathers, Patterson & Weathers, Florence, Ala., for plaintiff.

William F. Gardner and William K. Thomas, Cabaniss, Johnston, Gardner, Dumas & O'Neal, Birmingham, Ala., for defendants.

MEMORANDUM OPINION

GUIN, District Judge.

These actions are before the court on defendants' motions to dismiss based on lack of subject matter jurisdiction. The cases have been consolidated because common questions of fact and law predominate. For the purposes of the motions to dismiss, those common questions are dispositive of both cases.

These actions were brought under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e, et seq. (hereinafter "Title VII"), and 42 U.S.C. § 1983, alleging that plaintiffs' employment was terminated because of pregnancy. Both actions named as defendants Gold Kist, Inc. (hereinafter "Gold Kist") and Farmers Mutual Exchange of Russellville, Alabama, Inc. (hereinafter "Farmers Mutual").

The grounds of the motions to dismiss are as follows: First, there is no subject matter jurisdiction as to Farmers Mutual because it does not meet the statutory requirement of 15 or more employees for each working day in each of 20 weeks. Second, Farmers Mutual and Gold Kist cannot be consolidated as a single employer. Third, there is no subject matter jurisdiction with respect to plaintiff Fike's complaint against Gold Kist for the additional reason that she did not name Gold Kist in the charge she filed with the Equal Employment Opportunity Commission (hereinafter "EEOC"). Fourth, neither complaint alleges the "state action" necessary to state a cause of action under 42 U.S.C. § 1983.

The parties are in agreement that the affidavits, interrogatories and answers thereto, requests for admissions and responses thereto, and many hundreds of pages of deposition testimony taken to date are sufficient to enable the court to determine all factual issues. The court is of the opinion that the following findings of fact compel dismissal, to-wit:

1. With the exception of one week during 1978, Farmers Mutual has never employed 15 or more employees. Affidavit of Bobby S. Malone at 7-9.

2. Farmers Mutual and Gold Kist are separate corporate legal entities. Farmers Mutual is a cooperative association organized under Alabama law. Malone Affidavit at 1. Gold Kist is a corporation organized under the Georgia Cooperative Marketing Act.¹ Affidavit of James M. Dannielly, Jr. at 1.

3. There is no common ownership between Farmers Mutual and Gold Kist, nor are there any common directors, officers, or employees. Malone Affidavit at 1-3.

4. Farmers Mutual and Gold Kist maintain separate bank accounts, separate operating and financial statements, and separate telephone listings; they file separate tax returns and are separately licensed or permitted pursuant to the various laws governing operations of their businesses. Malone Affidavit at 607, 11, 16-17.

5. Farmers Mutual is located in Russellville, Alabama, where plaintiffs were employed. The facility consists of a farm supply store and grain receiving facility. The property is owned by Farmers Mutual. Gold Kist owns no interest in it. The farm supply facility was purchased by Farmers Mutual from Gold Kist in 1977, and the grain receiving facility was constructed by Farmers Mutual in the same year. Malone Affidavit at 1. Gold Kist has no employees at the Farmers Mutual location. Affidavit of James Gaston at 6.

6. Employees at Farmers Mutual are interviewed and hired by its general manager. Malone Affidavit at 4. Employees are evaluated and their wage rates set by the Farmers Mutual general manager, who was elected by the Farmers Mutual board of directors at its first meeting. Malone Affidavit at 4-5.

7. Farmers Mutual operates with its own funds raised from investments made by its members. There is no commingling of funds between Farmers Mutual and Gold Kist, and Gold Kist receives no portion of any profit made from Farmers Mutual's operations. Malone Affidavit at 607. Farmers Mutual has never borrowed funds from Gold Kist. Malone Deposition at 236.

8. Farmers Mutual employees work under the supervision of its general manager, and no Gold Kist employee has any supervisory authority over any Farmers Mutual employee. Job assignments and promotions are made exclusively by the general manager without consultation with anyone from Gold Kist. Malone Affidavit at 4-6.

9. The general manager determines the hours of operation, number of employees, products sold, and prices charged. Malone Affidavit at 6, 11-12.

10. Farmers Mutual and Gold Kist were parties to a Cooperative Service Agreement under which Gold Kist undertook to provide certain accounting and related services to Farmers Mutual. This relationship is fully described at pages 9-14 of Mr. Malone's Affidavit. By way of summary, the services provided included bookkeeping and preparation of monthly financial statements, preparation of patron statements, and preparation of tax returns. In connection with these services, Gold Kist prepared and issued payroll checks to the four to six employees on Farmers Mutual's salaried payroll. The full cost of these salaries, including all related taxes, was then billed directly to and paid by Farmers Mutual. The majority of Farmers Mutual employees were paid on an hourly basis and these employees were paid directly by Farmers Mutual by checks prepared and issued for Farmers Mutual by Ms. Fike or, in her absence, by Ms. Prince. Also in conjunction with these services, Farmers Mutual obtained through Gold Kist group insurance and pension benefits. The full cost of these benefits was invoiced by Gold Kist directly to Farmers Mutual. Malone Affidavit at 10-13.

11. The plaintiffs in this lawsuit refer to being employed by "Farmers Mutual-Gold Kist," but before they came to court, they referred to their employer as Farmers Mutual. Thus, in applying for unemployment compensation, both plaintiffs listed Farmers Mutual as their employer. Exhibits "1-A" and "2-A" to Deposition of Betty Smith. Likewise, Ms. Fike listed Farmers Mutual, not Gold Kist, as her employer on insurance claim forms. Exhibit "20-A" to Malone Affidavit. Similarly, Ms. Prince listed Farmers Mutual as her employer on her tax returns (see Exhibit "1" to the continued Prince Deposition), and Ms. Fike listed Farmers Mutual as employer in filling out bonding applications for Ms. Prince and other Farmers Mutual employees. Exhibit 34 to Malone Affidavit.

12. The charges filed by both plaintiffs with the EEOC were dismissed for lack of jurisdiction by EEOC on the basis of the determination that Farmers Mutual did not have 15 or more employees and that Farmers Mutual and Gold Kist were separate. Fike Deposition at 205; Exhibit "B" to Fike Complaint and Exhibit "B" to Prince Complaint.

It is clear that no action has been stated under 42 U.S.C. § 1983, nor have any facts been shown the court which would establish "state action." Consequently, the § 1983 aspect of the complaint is clearly to be dismissed. It has not, in fact, seriously been asserted.

As to the Title VII aspect of the claim, the plaintiff bears the burden of proving that jurisdiction in fact exists. EEOC v. Southwestern Group Financial, Inc., 21 FEP Cases 38, 21 EPD ¶ 30,361 (S.D.Tex.1979).² Thus, plaintiffs here must establish (1) that Farmers Mutual was an "employer" as that term is defined by Title VII, or (2) that the separate corporate existence of Farmers Mutual and Gold Kist should be disregarded so as to consider them as a single employer. The court will not reach the issue whether Gold Kist was named in the charges filed with the EEOC, or otherwise came within any exception to the rule that normally requires the filing of a charge against a defendant, since the court reaches the conclusion that it has no jurisdiction as to either defendant in any event. The court's discussion, therefore, will be limited to the first and second grounds of the motions.

The facts clearly show that Farmers Mutual did not employ 15 or more employees for each working day in 20 or more weeks and thus did not meet the Title VII definition of an employer. Plaintiffs, in fact, appear to concede this fact, and place their reliance on the theory that the separate corporate existence of Farmers Mutual and Gold Kist was a sham and that the court should treat the two corporations as a single employer for purposes of Title VII. Plaintiffs also argue that Gold Kist can be reached as an employer on the theory that the acts complained of were done by Farmers Mutual as the agent of Gold Kist.

This is the so-called "single employer theory." The theory is usually put forward in a case involving a parent corporation and its subsidiary. These two corporations do not stand in that relationship. In any event, the cases have held that two corporations can be treated as a single entity for the purpose of determining subject matter jurisdiction only when the facts show that the separate existence of the two corporations was a sham. Mas Marques v. Digital Equipment Corp., 24 FEP 1286 (1st Cir. 1980); Hassell v. Harmon Foods, Inc., 336 F.Supp. 432 (W.D.Tenn.1971), aff'd, 454 F.2d 199 (6th Cir. 1972); Lottice v. Ingersoll-Rand Co., 14 FEP 708, 709 (N.D.Cal. 1977); Armbruster v. Quinn, 23 FEP 1801 (E.D.Mich.1980).

In Armbruster the court emphasized as the most important factor in its analysis "centralized control of labor relations." It is clear in this case that Gold Kist had no role in hiring or firing Farmers Mutual employees or in fixing its employment...