Martin v. United Way of Erie County

• Decision Date: 18 May 1987
• Docket Number: No. 86-3756,86-3756
• Citation: 829 F.2d 445
• Parties: 44 Fair Empl.Prac.Cas. 1593, 44 Empl. Prac. Dec. P 37,472, 56 USLW 2181 Margaret J. MARTIN, Appellant, v. UNITED WAY OF ERIE COUNTY. . Submitted Under Third Circuit Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 445

829 F.2d 445

44 Fair Empl.Prac.Cas. 1593,

44 Empl. Prac. Dec. P 37,472, 56 USLW 2181

Margaret J. MARTIN, Appellant, v. UNITED WAY OF ERIE COUNTY.

No. 86-3756.

United States Court of Appeals Third Circuit.

Submitted Under Third Circuit Rule 12(6)

May 18, 1987.

Decided Sept. 23, 1987.

Richard T. Ruth, Erie, Pa., for appellant.

Richard W. Perhacs, Elderkin, Martin, Kelly, Messina & Zamboldi, Erie, Pa., for appellee.

Before SLOVITER, BECKER and GARTH, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

In her amended complaint, appellant Margaret J. Martin alleges that her employer United Way of Erie County (United Way) discriminated against her on the basis of her age and her sex in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Sec. 621-634 (1985), and Title VII of the 1964 Civil Rights Act, as amended, 42 U.S.C. Sec. 2000e to 2000e-17 (1981). The district court granted summary judgment to United Way on the ADEA and Title VII claims on the ground that United Way was not engaged in an "industry affecting commerce" and on the ADEA claim on the additional ground that United Way was not an "employer" under the ADEA because it did not employ twenty or more employees for twenty or more weeks during the relevant years. Because we conclude that there exist genuine issues of material fact as to both grounds for the district court's grant of summary judgment, we reverse and remand for further proceedings.

I. FACTS

Margaret J. Martin was employed part-time by United Way of Erie County, a non-profit corporation incorporated under the laws of Pennsylvania, from June 1981 through April 19, 1985. From May 1982 through April 19, 1985, Martin worked three-quarter time as an Assistant Communications Director for United Way. Martin was born February 2, 1935, and at all times material to the present litigation was between 40 and 70 years of age. Her performance at United Way was admittedly adequate. On April 19, 1985, Martin resigned from United Way.

Martin alleges that in early January 1985 she learned that the position of Communications Director would be open; United Way advertised the opening in local papers and Martin submitted an application for the position on January 31, 1985. Martin was never given an interview for the position, but on February 13, 1985 she was called into the office of A. Gene Beer, United Way's Executive Director, who told her that the advertised position would not be filled due to a reorganization of United Way, and that in any event she did not fit the young and pretty image required for the position she sought. Beer stated that two new individuals would be hired for the Campaign and Communications Department, Stephen Babbitt as Campaign/Communications Executive Director for a period of one year only, and James Martin as Campaign and Communications Director with responsibilities equivalent to the Communications Director position Margaret Martin had originally sought. James Martin was younger than Margaret Martin and Margaret Martin alleges that both James Martin and Stephen Babbitt had inferior qualifications to hers. Beer later told Margaret Martin that no full-time work would be available to her, and, based upon this representation, Martin resigned from United Way. One week after Martin resigned, a young, slim woman was hired full-time for the position of Communicator. Martin also alleges that United Way discriminated against women in wages, hiring and promotion.

United Way moved to dismiss for lack of subject matter jurisdiction as well as failure to state a claim on the grounds, inter alia, that United Way was not engaged in an "industry affecting commerce" under the ADEA, 29 U.S.C. Sec. 630(h), or under Title VII, 42 U.S.C. Sec. 2000e(h), and that United Way was not an "employer" because it did not employ twenty employees for twenty weeks during the relevant years as required by the ADEA, 29 U.S.C. Sec. 630(b). The district court conducted an evidentiary hearing at which evidence was presented on the questions of whether United Way was engaged in an "industry affecting commerce" and whether United Way had the requisite number of employees. Thereafter, United Way, at the district court's direction, filed a motion for summary judgment.

The district court, in granting United Way's motion for summary judgment, took judicial notice of the fact that "there are literally hundreds of organizations such as defendant operating throughout the United States as charitable organizations soliciting funds for charity and disbursing funds but with no industry or profit motive involved." App. at 285-86. The district court concluded that "trade in commerce as generally understood is controlling" but that "non-tax-paying, non-profit charitable corporations with but a single situs such as defendant were not embraced in these two statutes." App. at 286. As an additional ground for granting summary judgment to United Way on the ADEA count, the district court concluded that United Way did not employ the requisite number of employees. Martin appeals.

II. PROCEDURE

In an analogous situation, we cautioned the district court about pretermitting a ruling on the merits by an adverse ruling on jurisdiction that was intertwined with the merits. In Kulick v. Pocono Downs Racing Ass'n, Inc., 816 F.2d 895 (3d Cir.1987), we held that the issue of whether state action existed to support a civil rights claim under 42 U.S.C. Sec. 1983 was a matter to be resolved on the merits rather than as a matter of subject matter jurisdiction to be resolved under Fed.R.Civ.P. 12(b)(1). We stated that "[e]lements of a claim that are called jurisdictional because they relate to Congress's jurisdiction remain questions of the merits, and the Supreme Court has made clear that a court may resolve them only in the manner that the court may resolve all other questions of the merits." Id. at 898.

As we pointed out in Kulick,

the Supreme Court has permitted courts to dismiss a claim for lack of jurisdiction if the federal claim is "made solely for the purpose of obtaining jurisdiction" or if the claim is "wholly insubstantial and frivolous." Bell v. Hood, 327 U.S. at 682-83, 66 S.Ct. at 776, [90 L.Ed. 939 (1946) ]. These exceptions do not permit a court to prejudge the facts alleged in the complaint, however, for a court may dismiss for lack of jurisdiction only if claims are "insubstantial on their face." Hagans v. Lavine, 415 U.S. 528, 542 n. 10, 94 S.Ct. 1372, 1382 n. 10, 39 L.Ed.2d 577 (1974) (quoting Brotherhood of Locomotive Eng'rs v. Chicago, Rock Island & Pac. R.R. Co., 382 U.S. 423, 428, 86 S.Ct. 594, 596, 15 L.Ed.2d 501 (1966)).

Id. at 898-99.

Martin's claims in this case are not so insubstantial and frivolous that we can say they were made solely for the purpose of obtaining jurisdiction. Thus, unless the district court could properly find that no genuine issue of material fact existed with respect to the allegations that the activities of United Way "affected commerce" or that it was an "employer", the district court was obliged to deny summary judgment and to proceed to have the factfinder determine the merits of the controversy. It has, of course, been established that ADEA plaintiffs are entitled to a jury trial. See Lorillard v. Pons, 434 U.S. 575, 585, 98 S.Ct. 866, 872, 55 L.Ed.2d 40 (1978).

III. INDUSTRY AFFECTING COMMERCE

Although the district court's opinion is not pellucid, the court appears to have concluded that, as a matter of law, the term "industry affecting commerce" under the ADEA and Title VII excludes charitable, non-profit corporations. We consider that issue first. If the district court erred, we must then consider whether United Way's ties to interstate commerce are so tenuous that the court could properly conclude that there is no genuine issue of material fact as to United Way's coverage under Title VII and the ADEA.

A.

Under both Title VII and the ADEA, an "employer" must be "a person engaged in an industry affecting commerce." See 42 U.S.C. Sec. 2000e(b) (Title VII), 29 U.S.C. any activity, business, or industry in commerce or in which a labor dispute would hinder or obstruct commerce or the free flow of commerce and includes any activity or industry "affecting commerce" within the meaning of the Labor-Management Reporting and Disclosure Act of 1959, and further includes any governmental industry, business, or activity.

Sec. 630(b) (ADEA). Under Title VII, "industry affecting commerce" is defined as:

42 U.S.C. Sec. 2000e(h). There is a similar definition under the ADEA. ¹

The House Judiciary Committee Report on the Civil Rights Act of 1964 stated that the term "industry affecting commerce" was to be defined "in the manner common for Federal statutes." H.R.Rep. No. 914, 88th Cong., 1st Sess., reprinted in 1964 U.S.Code Cong. & Admin.News 2355, 2402. Congress was aware of the traditional interpretation given by the courts to the term "affecting commerce." See 110 Cong.Rec. 7212 (1964) (interpretive Senate memorandum); id. at 1528 (statement of Mr. Celler).

Thus, when Congress expressly incorporated into Title VII and the ADEA ² the definition of "affecting commerce" from the labor laws, ³ the term "affecting commerce" had been interpreted as vesting in the National Labor Relations Board "the fullest jurisdictional breadth constitutionally permissible under the Commerce Clause." NLRB v. Reliance Fuel Oil Corp., 371 U.S. 224, 226, 83 S.Ct. 312, 313, 9 L.Ed.2d 279 (1963). Moreover, in Polish National Alliance v. NLRB, 322 U.S. 643, 64 S.Ct. 1196, 88 L.Ed. 1509 (1944), the Court made clear that the term "affecting commerce" was to be interpreted generally as providing for the exercise of Congress' power to the full extent granted under the Commerce Clause. The Court stated that, "when [Congress] wants to bring aspects of commerce within the full sweep of its constitutional authority, it manifests its purpose by regulating not only 'commerce' but also...