Wright v. Kosciusko Medical Clinic, Inc.

• Decision Date: 27 April 1992
• Docket Number: No. S91-326M.,S91-326M.
• Citation: 791 F. Supp. 1327
• Parties: Marjorie WRIGHT, Plaintiff, v. KOSCIUSKO MEDICAL CLINIC, INC., Defendant.
• Court: U.S. District Court — Northern District of Indiana

791 F. Supp. 1327

Marjorie WRIGHT, Plaintiff, v. KOSCIUSKO MEDICAL CLINIC, INC., Defendant.

No. S91-326M.

United States District Court, N.D. Indiana, South Bend Division.

March 3, 1992.

Opinion on Motion to Modify April 27, 1992.

Richard E. Bonewitz, South Bend, Ind., for plaintiff.

John B. Ford, John W. VanLaere, South Bend, Ind., for defendant.

MEMORANDUM AND ORDER

MILLER, District Judge.

Marjorie Wright brings this action under the Age Discrimination in Employment Act, 29 U.S.C. §§ 623 & 626 (1988) (the "ADEA"), and under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e (1988) ("Title VII"). The defendant seeks summary judgment on the ground that the plaintiff's claims fail to satisfy a necessary jurisdictional prerequisite. Specifically, the defendant contends that it had too few employees to be subject to the ADEA and Title VII. For the reasons that follow, the court grants the summary judgment motion in part. Applying the law of the circuit, the court concludes that the ADEA does not apply, but, resolving an issue not squarely addressed by any authority cited by the parties, the court concludes that Title VII applies to the defendant.

I.

The defendant, Kosciusko Medical Clinic, Inc. ("the Clinic"), operates a medical facility in Warsaw, Indiana. Ms. Wright worked as the Clinic's Officer Manager for seventeen years. In September 1989, the Clinic notified Ms. Wright, then 60 years old, of its intention to terminate her employment. She remained in the defendant's employ for about two more months, during which time she helped to assist and train Mr. Lynn Reynolds, a 29-year-old male, who was designated as the replacement Office Manager.¹

After Ms. Wright received the notice of termination, the parties and their counsel entered into negotiations that resulted in an offer by the Clinic to pay Ms. Wright her base salary, plus certain benefits, for a two year period. A December 6, 1989 letter containing the offer stated that "this offer will expire on December 31, 1989, or upon the filing of a discrimination claim by Mrs. Wright, whichever occurs first." Ms. Wright filed a discrimination claim with the Equal Employment Opportunity Commission ("EEOC") on December 12, 1989, and settlement negotiations apparently ceased; the Clinic has made no further payments to Ms. Wright.

In 1991, after obtaining the necessary Notice of Right to Sue letter from the EEOC, Ms. Wright brought this action, asserting two theories. First, she alleges that the Clinic violated the ADEA² by firing her and replacing her with a younger person. Second, she alleges that the Clinic's failure to honor its conditional settlement offer amounted to retaliation for her filing an age discrimination claim, which constituted a violation of Title VII.³

The answer to the complaint raised a number of affirmative defenses, among which was the assertion that the court lacked subject matter jurisdiction, "in that defendant is not an employer, as defined in 42 U.S.C. § 2000e(b) or 29 U.S.C. § 630(b)." The Clinic renewed this defense in a motion for summary judgment, supported by a brief and supporting affidavits. Both parties have had the opportunity to file additional memoranda and affidavits, and the motion is ripe for review.

II.

The ADEA and Title VII each erect jurisdictional hurdles to their application. One such requirement relates to the size of the operation; these statutes do not bring comparatively small employers within their coverage. Although the two statutes contain different thresholds, they take a similar approach. The definitional portion of Title VII provides that:

The term "employer" means a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.

42 U.S.C. § 2000e(b) (1988).⁴ The ADEA's definitional provision is identical, except that it requires twenty or more employees, rather than fifteen. 29 U.S.C. § 630(b). Although these statutes might appear to require a court simply to count the number of employees, this case presents a number of complications.

A.

The parties do not seem to dispute that the defendant is a "person", 29 U.S.C. § 630(a); 42 U.S.C. § 2000e(a), engaged in an "industry affecting commerce," 29 U.S.C. § 630(h); 42 U.S.C. § 2000e(h). The parties apparently agree that since the five physicians who maintain their medical practices at the Clinic are shareholders in the corporation, they are not to be counted as "employees."⁵ For purposes of this motion, the defendant concedes that Ms. Wright, her replacement Mr. Reynolds, and assistant Office Manager Nancy Fletcher all may be counted as "employees". Finally, since Ms. Wright's termination occurred in late 1989, the relevant time period for determining the number of employees in the "current or preceding calendar year" is 1988 and 1989. See Norman v. Levy, 756 F.Supp. 1060, 1062 n. 3 (N.D.Ill.1990).

The case presents two related questions: (1) Which persons are to be counted as "employees"? (2) Do the statutory definitions require that the threshold number of "employees" actually work on each "working day", including on days on which the facility is open for but a portion of the day, and on which diminished services may be offered? The nature of the Clinic's operation must be described to demonstrate the significance of these questions.

The Clinic is open six days a week. The posted business hours are from 8:30 a.m. to 9:00 p.m. on Monday through Thursday, from 8:30 a.m. to 5:00 p.m. on Friday, and from 9:00 a.m. to 2:00 p.m. on Saturday. Employees working during the morning, however, are expected to arrive at 8:00 a.m., and employees sometimes must stay until 10:00 p.m. or 11:00 p.m., at least on those four nights that the Clinic is open. Since the Clinic is staffed for more than seventy hours per week, it would appear that employees work in shifts. It also appears that there are greater numbers of employees on busier days than at other times.

The defendant's employee work records were furnished as exhibits to Lynn Reynolds' affidavit in support of the defendant's summary judgment motion. They constitute a listing of the days on which all of the Clinic's hourly employees were present for work. The records may be analyzed in any of three ways:

1. Total Number of Persons Employed. The records indicate that during at least twenty different "calendar weeks," in both 1988 and 1989, the Clinic had more than twenty full-time employees on its payroll, as well as a number of apparently part-time employees. The records do not indicate the number of hours per day that each employee worked, instead merely showing days at work. They also do not indicate sick leave, vacation days, or the like, which would increase the number of employees to be counted on each working day. With these limitations in mind, and using September 1989 (the month in which Ms. Wright received her termination notice) merely as an example, the records indicate that there were nineteen employees (in addition to Ms. Wright, Ms. Fletcher, and Mr. Reynolds) who worked at least ten days that month, and another six employees who worked eight days or less.

Viewed, as the statutes require, i.e., on a calendar week basis, there were twenty-two, twenty-three, twenty-three, and twenty-four different employees (again, in addition to the three salaried individuals) who worked for the Clinic in weeks 1, 2, 3 and 4, respectively, in September 1989. Under this approach, the records would indicate that there were at least twenty calendar weeks in 1989 during which at least twenty different persons worked for the defendant. If this method of calculating the number of employees were used, the jurisdictional prerequisites of both the ADEA and Title VII would be satisfied.

2. Number of Employees Working on Weekdays. A different method of reckoning the number of employees is possible. In at least twenty different calendar weeks in both 1988 and 1989, the Clinic had between fifteen and twenty employees (excluding Ms. Wright, Ms. Fletcher, and Mr. Reynolds) actually present and "at work" on every weekday (Monday through Friday).⁶ Under this approach, the requirements of Title VII would be satisfied, but the ADEA's somewhat higher threshold would not be met.

3. Number of Employees on all Days in which Clinic was Open. The Clinic argues for a third approach. Viewing Saturday as a "working day", albeit an abbreviated one, there was not even one single week during 1988 and 1989 in which the Clinic had the minimum number of employees actually present for work on every working day.⁷ Under this third alternative, neither statute's jurisdictional requirements would be satisfied.

As noted, the ADEA and Title VII provide that a person is an "employer" if it "has fifteen-ADEA twenty-Title VII or more employees for each working day". Any of the three approaches set forth above is a possible interpretation of these two provisions.

B.

Were this an open question, the court would opt for the first characterization of the Clinic's employment situation. It seems to the court that the far sounder interpretation of these statutes is that an employer "has" an employee not only if he or she works on a particular day, but rather if he or she is on the company's payroll. During all of 1988 and 1989, more than twenty persons, if asked for whom they worked, would have identified Kosciusko Medical Clinic as their "employer". More importantly, these were all persons who had a genuine "employment" relationship with the defendant. These twenty-plus individuals performed duties for the Clinic on a regular basis and were presumably paid on a regular schedule. Each owed certain duties to the Clinic, and each was entitled to certain financial benefits and to legal protections.

A recent Policy Statement by the Equal Employment Opportunity Commission supports this approach. EEOC Compliance Manual,...