Spina v. Management Recruiters of O'Hare, 86 C 10299.

• Decision Date: 24 May 1991
• Docket Number: No. 86 C 10299.,86 C 10299.
• Citation: 764 F. Supp. 519
• Parties: Vicki L. SPINA, Plaintiff, v. MANAGEMENT RECRUITERS OF O'HARE d/b/a Office Mates-5, Defendant.
• Court: U.S. District Court — Northern District of Illinois

764 F. Supp. 519

Vicki L. SPINA, Plaintiff, v. MANAGEMENT RECRUITERS OF O'HARE d/b/a Office Mates-5, Defendant.

No. 86 C 10299.

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

May 24, 1991.

Claudia Oney, Chicago, Ill., for plaintiff.

Irving Geslewitz, Steven A. Kanner, Much, Shelist, Freed, Deneberg, Ament & Eiger, Chicago, Ill., for defendant.

MEMORANDUM DECISION AND ORDER

ALESIA, District Judge.

This sex and/or pregnancy discrimination case is before the Court for a decision on the merits following a bench trial on the issue of liability only. After hearing testimony, reviewing exhibits, and examining the credible evidence of record, the Court enters judgment in favor of the defendant, Management Recruiters of O'Hare ("MRO"), d/b/a Office Mates-5 ("OM5") (collectively, "the Company"), and against the plaintiff, Vicki L. Spina ("Spina"). Pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, the Court sets forth its findings of fact and conclusions of law.

FINDINGS OF FACT

As is common in discrimination cases, the parties presented conflicting versions of the relevant facts. We therefore set forth the facts as we find them to be.

The Parties

1. Spina is a female who resides in Des Plaines, Illinois.

2. MRO is an Illinois corporation with its principal place of business in Des Plaines, Illinois. MRO is engaged in the business of placing professionals and executives with salaries of $30,000 or more. OM5 is a wholly-owned subsidiary and division of MRO and is engaged in the business of placing secretarial, clerical, and office support personnel with salaries of $20,000 or less.

3. Richard Kurz founded MRO in 1975 when he purchased a franchise from Management Recruiters International. Within a year or two of purchasing the franchise, Richard Kurz established OM5 as an unincorporated division of the business. Shortly thereafter, he married Anita Smilari Kurz, whom he placed in charge of the OM5 division as general manager in 1977.

4. Spina was employed by MRO in its OM5 division as an account executive from October, 1979 to May, 1982, when she voluntarily left the employ of OM5 to give birth to her first child. Spina was reemployed by the OM5 division in March, 1983 and worked there continuously until November 20, 1985.

5. When initially hired in 1979, Spina signed an employment agreement governing certain of her terms and conditions of employment. When hired, all account executives of MRO and OM5 sign identical employment agreements containing, among other terms, the same restrictive covenant language and the same commission structure.

Differences Between MRO and OM5

6. Both MRO and OM5 are located in an office suite in Des Plaines, Illinois. The physical layout of the suite is configured such that MRO and OM5 are physically separated offices, sharing only a main entrance staffed by a receptionist. A walled training room separates the OM5 division from the entrance area, and in order to proceed from the entrance area to the OM5 area, one has to pass through two doors. As a result, employees working within the OM5 and MRO offices have no visual access to each other while working in their respective offices.

7. MRO and OM5 are physically separated for legal, as well as operational reasons. Under the Illinois Private Employment Agencies Act, private employment agencies and their recruiters must be licensed and must abide by certain statutory strictures. See Ill.Rev.Stat. ch. 111, ¶¶ 901-915. The statutory definition of "private employment agency," however, does not include executive placement operations such as MRO. See Ill.Rev.Stat. ch. 111, ¶ 914.

8. The nature of the placement services offered by MRO and OM5 and the qualifications of their respective employees are also different. On the one hand, MRO places executives earning $30,000 or more on a local and nationwide basis. The majority of the candidates seeking placement by MRO hold advanced degrees. As a result, MRO generally hires account executives who hold advanced degrees and have a specialty background, such as accounting, banking, law, etc. Most MRO employees have executive experience. These MRO employees, in turn, use their specialty backgrounds to place candidates in their particular specialty industry. On the average, an MRO account executive requires between six to seven weeks and two months to make a placement, with an average placement fee being over $11,000. Because of their different specialty areas, MRO account executives seldom work with one another to match a candidate with an account.

9. OM5, on the other hand, places secretarial, clerical, and office support personnel earning $20,000 or less strictly on a local basis. In contrast to MRO, the majority of candidates seeking placement by OM5 do not hold advanced degrees. As a result, OM5 generally hires individuals who have a high school education and a secretarial or clerical background. Unlike the MRO account executives, the OM5 account executives have no specialized background, so most of the OM5 placements are made on a split-fee basis, with the account executive who furnishes the candidate earning 50% of the commission and the account executive who obtains the placement order from the client earning the remaining 50%. At OM5, the average elapsed time from the taking of an order to the actual placement of the candidate is less than one week, with the average placement fee (based on a fee schedule different from that used by MRO) being approximately $3,000. Whereas MRO is considered a "search firm," OM5 is registered as a licensed employment agency.

10. As a result of these operational differences and their physical separation, the MRO and OM5 account executives do not share common supervision. Richard Kurz generally supervises the MRO account executives on a day-to-day basis, while Anita Kurz generally supervises the OM5 account executives on a day-to-day basis. Anita Kurz has never supervised MRO personnel nor participated in personnel or policymaking decisions at MRO. In the event Richard Kurz is absent from the office, he appoints a senior MRO account executive to management operations in his stead. Similarly, except for a period in 1981-82 when Anita Kurz left to give birth to the Kurzes' two children, Richard Kurz has not involved himself in the direct day-to-day supervision or operational management of OM5. All personnel decisions and policymaking at OM5 are made by Anita Kurz.

11. The MRO and OM5 account executives have never worked together on accounts. No MRO account executive has ever transferred, either permanently or temporarily, to the OM5 division. Conversely, no OM5 account executive has ever transferred, either permanently or temporarily, to the MRO division. Nor has there ever been any line of progression between the OM5 and MRO positions.

12. As a result of these operational differences, MRO and OM5 each use different stationery and have different telephone numbers. The MRO and OM5 employees also use different business cards, different stationery, different job orders and different send-out forms.

13. MRO and OM5 also are operated as separate profit centers. Each division has a separate budget and advertising outlay. Nevertheless, because the total MRO payroll is relatively small (at all relevant times, the total staff at MRO and OM5, including Richard and Anita Kurz, numbered from twelve to seventeen), Richard Kurz has maintained a single payroll, bank account and profit sharing and health insurance plan for both divisions. Richard Kurz testified that he does so for reasons of administrative convenience and cost savings.

14. Notably, all of Spina's non-party witnesses who were former employees of either MRO and OM5 testified to their perception that the MRO and OM5 divisions are operated as separate divisions.

15. During the periods of Spina's employment with the OM5 division, all OM5 account executives were female, and they numbered between four and eight employees at any given time. On the other hand, MRO account executives were male and female, and they numbered between five and nine employees at any given time. During the course of Spina's employment, MRO employed a total of seven female account executives in the MRO division. All male and female MRO account executives share identical working conditions. The same differences in terms of employment that exist between male MRO account executives and OM5 account executives also exist between female MRO account executives and OM5 account executives.

16. Generally, all employees of MRO and OM5 work a full-time schedule consisting of a 37½ hour, five-day week.

17. All MRO and OM5 employees are paid a minimum draw, which is an advance against future commissions. If commissions earned exceed the minimum draw, an employee receives a check for commissions because he or she does not need a draw. Thus, an employee who performs very well does not receive a draw, but, instead, receives commissions earned.

Spina's Initial Employment with OM5

18. In October 1979, Anita Kurz, as manager of OM5, hired Spina as a full-time account executive. Shortly after starting at OM5, Spina became a successful producer. It is undisputed that during most of her tenure at OM5, Spina performed her job excellently, received several awards and plaques for her sales performance, was the top producer in OM5's Des Plaines office, and was one of the top producers nationally.

19. At the end of 1979, Anita Kurz became pregnant with the Kurzes' first child. During the latter stages of her pregnancy, Anita Kurz began experiencing pregnancyrelated health problems and she stopped working in August, 1980. At the time Anita Kurz left, she intended not to come back to work, but to stay at home and raise her child.

20. Before leaving, Anita Kurz chose Spina to act as manager at OM5 in Anita Kurz's absence. Spina continued to act as manager of OM5 on a full-time basis until May, 1982, when Spina voluntarily left OM5's...