Rowland v. Franklin Career Services, LLC, CIV.A. 02-2324KHV.

• Decision Date: 17 July 2003
• Docket Number: No. CIV.A. 02-2324KHV.,CIV.A. 02-2324KHV.
• Citation: 272 F.Supp.2d 1188
• Parties: Larry Dean ROWLAND, Jr. Plaintiff, v. FRANKLIN CAREER SERVICES, LLC and Mid-America Training Center, LLC, Defendants.
• Court: U.S. District Court — District of Kansas

272 F.Supp.2d 1188

Larry Dean ROWLAND, Jr. Plaintiff, v. FRANKLIN CAREER SERVICES, LLC and Mid-America Training Center, LLC, Defendants.

No. CIV.A. 02-2324KHV.

United States District Court, D. Kansas.

July 17, 2003.

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Michele Henry, C. Laurence Woods, III, Frost, Brown, Todd, LLC, Louisville, KY, Timothy F. Marks, Mary Jo Shaney, White, Goss, Bowers, March, Schulte & Weisenfels, Kansas City, MO, for defendant.

Charlotte Renee Parsons, William S. Robbins, Jr., Shughart Thomson & Kilroy, PC, Kansas City, MO, for plaintiff.

MEMORANDUM AND ORDER

VRATIL, District Judge.

Larry Dean Rowland, Jr. brings suit against Franklin Career Services, LLC ("Franklin") and Mid-America Training Center, LLC ("Mid-America") for retaliation and discrimination on account of race, in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. §§ 2000e-2(a)(1) and 2000e-3(a), 42 U.S.C. § 1981, and Kansas whistleblowing law. The matter is before the Court on Defendant Franklin Career Services, LLC Motion For Summary Judgment (Doc. # 43) and Defendants' Franklin Career Services, LLC And Mid America Training Center, LLC Motion For Summary Judgment (Doc. # 53), both filed April 11, 2003. For reasons stated below, the Court overrules the motion by Franklin and sustains in part the motion by Franklin and Mid-America.

Summary Judgment Standards

Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Vitkus v. Beatrice Co., 11 F.3d 1535, 1538-39 (10th Cir.1993). A factual dispute is "material" only if it "might affect the outcome of the suit under the governing law." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A "genuine" factual dispute requires more than a mere scintilla of evidence. Id. at 252, 106 S.Ct. 2505.

The moving party bears the initial burden of showing the absence of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Hicks v. City of Watonga, Okla., 942 F.2d 737, 743 (10th Cir.1991). Once the moving party meets its burden, the burden shifts to the nonmoving party to demonstrate that genuine issues remain for trial "as to those dispositive matters for which it carries the burden of proof." Applied Genetics Int'l, Inc. v. First Affiliated Secs., Inc., 912 F.2d 1238, 1241 (10th Cir.1990); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991). The non-moving party may not rest on the pleadings but must set forth specific facts. Applied Genetics, 912 F.2d at 1241.

The Court must view the record in a light most favorable to the party opposing summary judgment. See Deepwater Invs., Ltd. v. Jackson Hole Ski Corp., 938 F.2d 1105, 1110 (10th Cir.1991). Summary judgment may be granted if the non-moving party's evidence is merely colorable or is not significantly probative. See Anderson, 477 U.S. at 250-51, 106 S.Ct. 2505. "In a response to a motion for summary judgment, a party cannot rely on ignorance of facts, on speculation, or on suspicion, and may not escape summary judgment in the mere hope that something will turn up at trial." Conaway v. Smith, 853 F.2d 789, 794 (10th Cir.1988). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52, 106 S.Ct. 2505.

Factual Background

The following facts are either undisputed or, where disputed, construed in the light most favorable to plaintiff.

I. Franklin Career Services, LLC

Franklin Career Services, LLC ("Franklin") is a limited liability corporation organized under the laws of Kentucky, with several subsidiaries which operate truck driving schools located throughout the country. In Kansas, Franklin registered as a foreign limited liability company for the purpose of operating a truck driving school. Gerald Woodcox is the sole member of Franklin. The Kentucky Secretary of State lists Gerald Woodcox and his son, Jeffrey Woodcox, as managers of Franklin who are vested with management of Franklin's truck driving school operations in Kansas. On March 28, 2002, Steven Diamond became president/chief executive officer and Mark Vogt became vice-president of Franklin.

A. Mid-America

Until May 31, 2002, Mid-America Training Center, LLC ("Mid-America"), a subsidiary of Franklin, operated a truck driving school in Elwood, Kansas. It was a limited liability corporation organized under the laws of Kansas. Gerald Woodcox, the sole member of Franklin, was also the sole member of Mid-America. Gerald Woodcox and his son Jeffrey Woodcox were the only members of the board of directors for Mid-America.

B. Relationship Between Franklin And Mid-America

Franklin provided centralized labor relations management for its subsidiaries. It provided centralized training and orientation to new school directors and, on a quarterly basis, centralized training to current school directors. It published expense guidelines which applied to all of its truck driving schools. David Paine, Franklin's chief operating officer, or his predecessor Mark Creel, generally approved pay increases, payroll advances, changes from hourly to salaried status and promotions requested by Mid-America and other subsidiary schools.

In late 2001 and early 2002, Franklin and Mid-America did not have in-house human resources departments.¹ Instead Franklin contracted with HR Affiliates, which handled all of the human resource needs of Franklin and its subsidiaries. HR Affiliates assigned Michael Wade as lead consultant for its Franklin account. Wade handled employment issues for Franklin and its subsidiaries and one other client. Wade maintained an office at Franklin's corporate headquarters and at the location of the other client.

HR Affiliates maintained a variety of records for Franklin and its subsidiaries, including Mid-America. For example, Mid-America was required to send disciplinary action notices, payroll information and fringe benefit enrollment forms to HR Affiliates and it maintained backup personnel files for all Mid-America employees. HR Affiliates maintained separate databases for Franklin and its subsidiary schools, but every paycheck, W-2 form and COBRA election form for a Mid-America employee identified "Franklin Career Services, LLC" as the employer. Franklin also maintained group health and life insurance policies which covered Mid-America employees, and each school had the same fringe benefit program.

HR Affiliates disseminated to school directors certain human resource management guides which contained Franklin's policies and procedures regarding disciplinary actions and terminations. The guides also provided information directories which identified individuals at HR Affiliates for directors to contact on certain topics. For example, Patti Walker was the contact person for "Policy and Procedure Questions or Interpretations" and for "Sexual Harassment, Allegation of Discrimination." Exhibit H to Plaintiff's Memorandum In Opposition To Defendant Franklin Career Services, LLC's Motion For Summary Judgment ("Plaintiff's Memorandum") (Doc. # 59) filed May 9, 2003.

In addition to human resource management guides, Franklin maintained an employee handbook which covered Franklin and all of its affiliated companies, including Mid-America.² The employee handbook provided that employment was at will "unless otherwise specified in a written employment agreement signed with a duly authorized officer (Chief Executive Officer)."³ Employee Handbook at 8, Exhibit G to Plaintiff's Memorandum (Doc. # 59). The employee handbook also stated that the company had an "open-door policy" which encouraged employees to discuss work-related problems with their supervisors, personnel representatives or higher management.

Generally, employees reported allegations of harassment to the director of the particular school, and the director referred the complaint to Wade or another consultant at HR Affiliates. Wade was responsible for investigating claims of harassment and discrimination and recommending responses to the executive staff of Franklin. The Franklin executive who was responsible for the department or operation involved in the discrimination claim, together with the director (unless that director was involved in the claim), had input into the action to be taken in response to the discrimination claim.

1. Subsidiary Employees

Several employees who worked for subsidiary truck driving schools of Franklin transferred from one school to another. For example, while Franklin hired Tracy Dayton as director of a school in Decatur, Alabama, he later became director at Mid-America. Dayton directed Mid-America until May 31, 2002, when it closed. Franklin then transferred him to oversee the closings of other schools. Greg Blanton, who was director of training at Mid-America became director of the facility at Atchison, Kansas during its start-up phase. On July 15, 2001, Franklin transferred Pat Brushwood, an employee at Mid-America, to the phone room at Franklin corporate headquarters in Louisville, Kentucky. Two weeks later, on July 30, 2001 it transferred him to a school in Dothan, Georgia, where he worked as sales manager. On October 8, 2001, Franklin transferred Brushwood back to Mid-America, where he was a recruiter. Employees who transferred maintained their original hire dates for purposes of benefit eligibility.

2. Mid-America...