Hayden v. La-Z-Boy Chair Co., LA-Z-BOY

• Decision Date: 03 November 1993
• Docket Number: LA-Z-BOY,No. 92-3863,92-3863
• Citation: 9 F.3d 617
• Parties: 63 Fair Empl.Prac.Cas. (BNA) 273, 63 Empl. Prac. Dec. P 42,664, 62 USLW 2299 J. William HAYDEN, Plaintiff-Appellant, v.CHAIR COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 617

9 F.3d 617

63 Fair Empl.Prac.Cas. (BNA) 273,

63 Empl. Prac. Dec. P 42,664, 62 USLW 2299

J. William HAYDEN, Plaintiff-Appellant, v. LA-Z-BOY CHAIR COMPANY, Defendant-Appellee.

No. 92-3863.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 9, 1993.

Decided Nov. 3, 1993.

Merl O. Barns, San Francisco, CA (argued), for plaintiff-appellant.

Richard P. Steele, Richard E. Steinbronn, Barnes & Thornburg, Fort Wayne, IN, Richard J. Seryak, Larry J. Saylor (argued), Rocque E. Lipford, Miller, Canfield, Paddock & Stone, Detroit, MI, for defendant-appellee.

Before CUMMINGS, COFFEY, and ROVNER, Circuit Judges.

COFFEY, Circuit Judge.

J. William Hayden ("Hayden"), 61 years of age, was an independent sales representative for La-Z-Boy Chair Company ("La-Z-Boy") for twenty-two years. In December 1990 La-Z-Boy decided not to renew Hayden's contract and replaced him with a 44-year-old independent sales representative. Hayden filed suit, alleging that La-Z-Boy's decision not to renew his contract violated the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. Sec. 621 et seq. The district court granted summary judgment for La-Z-Boy on the grounds that Hayden was not covered by the ADEA.

We affirm.

I. BACKGROUND

La-Z-Boy is a furniture manufacturer that contracts with independent sales representatives to sell its products to retailers on a straight commission basis. The rights and duties of these sales representatives are spelled out in the one-year "Independent Sales Representative's Agreement" that the sales representatives sign. Pursuant to this written contract, the parties agreed that 1) Hayden would be responsible for calling on retail furniture stores in certain counties in northern Indiana, Ohio, and Michigan to service established accounts and to establish new accounts; 2) that Hayden was "not an agent or employee" of La-Z-Boy; 3) that either party could terminate the agreement at any time without cause by giving the other party thirty days written notice; and 4) that Hayden could request La-Z-Boy's permission to carry other manufacturers' noncompeting lines of merchandise.

In 1984, Hayden incorporated himself as the sole shareholder and only full-time employee of "J. William Hayden, Inc." Thereafter, La-Z-Boy made Hayden's commission payable to J. William Hayden, Inc., which in turn paid Hayden a salary. In December 1990 La-Z-Boy informed Hayden that it would not be renewing his December 1989 Independent Sales Representative Agreement. The company named Frank Stultz, its 44-year-old West Virginia independent sales representative, to take over Hayden's territory, and Hayden filed this suit under the ADEA.

After the completion of discovery, La-Z-Boy moved the court for summary judgment. The company argued that Hayden was an independent contractor, not an employee, and therefore fell outside the protection of the ADEA, and further argued in the alternative that even if Hayden was covered by the statute, he had failed to create a genuine issue of material fact on the question of whether La-Z-Boy's articulated reasons for refusing to renew his contract were merely a pretext for age discrimination. ¹ The trial court granted summary judgment on alternative grounds.

II. ISSUES

Hayden argues that the trial court erred in finding that he was not covered by the ADEA and in finding that he had failed to present sufficient evidence to create a genuine issue of material fact. Because we agree with the district court that the plaintiff is not covered by the ADEA, we need not address whether the plaintiff could have demonstrated the existence of a genuine issue of material fact.

III. DISCUSSION

We review summary judgment orders de novo, viewing the record and all reasonable inferences drawn from it in the light most favorable to the party opposing the motion. Anderson v. Stauffer Chemical Co., 965 F.2d 397, 400 (7th Cir.1992) (citing Karazanos v. Navistar Int'l Transp. Corp., 948 F.2d 332, 335 (7th Cir.1991)). Summary judgment is appropriate only when the materials before the court demonstrate "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In other words, the record must reveal that "no reasonable jury could find for the non-moving party." Anderson, 965 F.2d at 400 (quoting Karazanos, 948 F.2d at 335).

In granting summary judgment, the district court reasoned that even if an ADEA plaintiff did not have to show that he was an employee of the organization he was seeking recovery from, he at least had to establish the existence of some protected employment relationship with which the defendant had allegedly interfered. The only employment relationship Hayden sought to establish in district court was his relationship with his own corporation, of which he was the sole shareholder. The court found that the ADEA did not protect Hayden's employment relationship with his own corporation and that he had no other employment relationship with any third party. Therefore, the court concluded, Hayden could not recover under the Act as a matter of law.

The Age Discrimination in Employment Act provides:

"It shall be unlawful for an employer to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age."

29 U.S.C. Sec. 623(a)(1).

The statute thus prohibits an employer from discriminating against its employees on the basis of age, but does not cover independent contractors. See Garrett v. Phillips Mills, Inc., 721 F.2d 979, 980 (4th Cir.1983) ("plain reading of the ADEA indicates that an 'individual' only has a cause of action under this provision if he is an 'employee' at the time of his termination"). Although courts have uniformly required that a person seeking to recover under the ADEA be an employee of the same employer he is seeking to recover from, Hayden attempts to furrow new fields of legal theory and argues that a line of Title VII cases provides persuasive authority that the ADEA should be read as permitting an individual (Hayden) to recover for an employer's (La-Z-Boy) interference with the individual's employment relationship with his own corporation (J. William Hayden, Inc.). Here Hayden complains that La-Z-Boy's refusal to renew his Independent Sales Representative Agreement cut off the salary he received from J. William Hayden, Inc.

Hayden's theory that the ADEA protects his employment relationship with his own corporation finds no support from our research in either statute or case law. In EEOC v. Zippo Manufacturing Co., 713 F.2d 32 (3rd Cir.1983), for example, Zippo's district sales managers (some of whom had formed corporations in which they were the sole shareholder) worked as independent contractors before being terminated shortly after they turned sixty-five. The Third Circuit held that "if appellants were not Zippo employees, ADEA is not applicable to their cause and their allegation that Zippo violated ADEA in terminating them because they reached the age of 65 must be rejected." Id. at 35.

In Hickey v. Arkla Industries, Inc., 699 F.2d 748 (5th Cir.1983), the plaintiff was a former Arkla "manufacturer's sales representative" who had signed a Manufacturer's Sales Representative Agreement with Arkla that designated him as an independent contractor. The fact that Hickey had established Perry Hickey Enterprises as the corporate vehicle for his sales of Arkla products, and thus presumably could have been found to have had an "employment relationship" with his own corporation, was not enough to bring him within the ADEA. The Fifth Circuit affirmed the district court's order granting Arkla Industries' motion for a directed verdict, holding that "Hickey must be an employee of Arkla in order to have a cause of action under the ADEA." Id. at 753.

Hayden nevertheless argues that a broader reading of the ADEA is indicated by a line of cases interpreting the scope of Title VII of the Civil Rights Act of 1964. ² Title VII provides that:

"(a) It shall be an unlawful employment practice for an employer--

(1) To fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin."

42 U.S.C. Sec. 2000e-2(a)(1).

Because Title VII and the ADEA share "a similar purpose--to stamp-out discrimination in various forms--cases construing the definitional provisions of one [statute] are persuasive authority" when interpreting the provisions of the other. Hyland v. New Haven Radiology Associates, P.C., 794 F.2d 793, 796 (2nd Cir.1986), citing Lorillard v. Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 872, 55 L.Ed.2d 40 (1978) ("the prohibitions of the ADEA were derived in haec verba from Title VII"); see also Rogers v. Sugar Tree Products, Inc., 7 F.3d 577, 581 (7th Cir.1993) (the Title VII standard for determining whether a business relationship is one of employer-employee applies equally to a claim under the ADEA).

Hayden concedes in his brief that "he has never alleged that he was an employee of La-Z-Boy." But he points out that this court has recognized that Title VII applies where an employer "discriminatorily interfer[es] with an individual's employment opportunities with another employer." Doe on Behalf of Doe v. St. Joseph's Hospital, 788 F.2d 411, 422 (7th Cir.1986) (citing Sibley Memorial Hospital v. Wilson, 488 F.2d 1338 (D.C.Cir.1973)). And he cites a Ninth Circuit case, Gomez v. Alexian Brothers of San Jose, 698 F.2d 1019 (9th Cir.1983), for the further proposition that even an individual's "employment" relationship with his own corporation is sufficient to bring him within Title VII.

The plaintiff in Gomez was a Hispanic physician who practiced...