Opinion
Case Number 01-10376-BC
January 7, 2003
OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND REMANDING CASE TO STATE COURT
The defendant's motion for partial summary judgment, now before the Court, presents the question whether the plaintiff is an eligible employee and the defendant is a covered employer under the Family and Medical Leave Act (FMLA) based upon the number of workers the defendant employed at the time the plaintiff requested leave. The Court finds that the defendant employed less than 50 employees within a 75-mile radius during the relevant time period, and the plaintiff was therefore not eligible to claim FMLA leave. Consequently, her claim alleging retaliation for requesting FMLA leave must fail and will be dismissed. Her related state-law claim based on discrimination due to her pregnancy will be remanded to state court, from whence it was removed.
I.
Fiesta Salons, Inc., the defendant in this case, is an Ohio corporation which operates a chain of hair care salons throughout the midwest. Each salon in run by a local manager who supervises approximately a dozen or fewer hair stylists who provide grooming services and sell the defendant's products.
The parties do not dispute that the defendant hired the plaintiff, Robin Grimsley, at its salon in Essexville, Michigan in 1992. The plaintiff is currently employed at the Essexville salon as a stylist. The defendant alleges that on three separate occasions the defendant promoted the plaintiff to the position of assistant manager of the Essexville salon and that each time the plaintiff stepped down, citing disagreements with the manager or the plaintiffs ability to earn more money as a stylist than she did as an assistant manager. The defendant also alleges that Fiesta Salon Division Manager Nora Morehouse offered the plaintiff the position of manager at the Saginaw salon, but the plaintiff rejected the opportunity.
In the fall of 1999, the Essexville salon manager, Jean Udell, was going to retire. Morehouse met with Udell to ask for a recommendation to replace her as salon manager. Udell recommended Kathi Carson, a new stylist at the salon, for the position. The defendant alleges that Morehouse did not consider the plaintiff for the management position because the plaintiff "had previously stepped down (on at least three occasions) from an assistant manager's position and had rejected an opportunity to become manager of the Saginaw salon," and because the plaintiff had "an overwhelmingly negative attitude regarding Fiesta." Aff. of Nora Morehouse, ¶ 5. In January 2000, Morehouse promoted Carson to the manager position at the Bay City Salon.
In September 1999, the plaintiff became pregnant. The defendant contends that Morehouse learned of the plaintiffs pregnancy either in October 1999, when Morehouse met with Udell, or in January 2000, when Morehouse promoted Carson to the manager position. In any event, the plaintiff claims to have submitted a formal request for leave under the FMLA "a few weeks before" she commenced her pregnancy leave on June 6, 2000. Dep. of Pl. at 49. The defendant denies having received the request. However, in January 2000, shortly after Morehouse made Carson the manager of the Essexville salon, the plaintiff approached Morehouse to inquire why she did not gain the position. According to the plaintiff, Morehouse responded that Carson was promoted because Grimsley would be taking leave due to her pregnancy. Id. at 64.
The plaintiff took a leave of absence and returned to work as a stylist after she delivered her baby. She filed a complaint in the Bay County, Michigan Circuit Court on November 1, 2001 alleging that the defendant did not promote her to a management position because she requested time off from work for her pregnancy, and that this failure to promote constitutes improper retaliation for asserting her rights under the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601, et seq. (FMLA). The complaint further alleged that the adverse employment action was based on gender discrimination prohibited by the Michigan Elliot-Larsen Civil Rights Act, Mich. Comp. Laws § 37.2102, et seq.
On December 6, 2001, the defendant removed the case to this Court pursuant to 28 U.S.C. § 1331 based on the Court's federal question jurisdiction. On September 24, 2002, the defendant filed a motion for partial summary judgment, alleging that Fiesta Salons, Inc., which operates five salons in the mid-Michigan area, did not employ the requisite number of employees within the geographic area prescribed by the FMLA and Department of Labor regulations, and therefore, the plaintiff was not eligible to claim any rights under the FMLA. The defendant's motion was based in large part on the affidavit of M. Scott Frank, the defendant's director of human resources. The plaintiff responded to the defendant's motion with a request to continue the hearing under Federal Rule of Civil Procedure 56(f) so that she could depose Mr. Frank. That request was granted, and the deposition has now been filed.
It is undisputed that the defendant operates five salons within seventy-five miles of the Essexville salon where the plaintiff works. The salons are located in Alma, Bad Axe, Durand, Mount Pleasant and Saginaw. According to Mr. Frank, from October 3, 1999 through the week of April 16, 2000, Fiesta employed a total of 48 or fewer employees at these locations. After that time, the number rose to 49 employees, but never exceeded 50 through the week of June 10, 2000 when the plaintiff began her leave of absence.
Frank's tally did not include Nora Morehouse, who was Fiesta's Region 8 manager during this time. Morehouse worked from her home in Williamston, Michigan, but reported to company headquarters in Dublin, Ohio, from where her orders and instructions originated. Fiesta does not dispute that it employed greater than 50 employees nationwide during this time period.
II.
A motion for summary judgment under Fed.R.Civ.P. 56 presumes the absence of a genuine issue of material fact for trial. The Court must view the evidence and draw all reasonable inferences in favor of the non-moving party, and determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). The "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (internal quotes omitted).
A fact is "material" if its resolution affects the outcome of the lawsuit. Lenning v. Commercial Union Ins. Co., 260 F.3d 574, 581 (6th Cir. 2001). "Materiality" is determined by the substantive law claim. Boyd v. Baeppler, 215 F.3d 594, 599 (6th Cir. 2000). An issue is "genuine" if a "reasonable jury could return a verdict for the nonmoving party." Henson v. Nat'l Aeronautics Space Admin., 14 F.3d 1143, 1148 (6th Cir. 1994) (quoting Anderson, 477 U.S. at 248). Irrelevant or unnecessary factual disputes do not create genuine issues of material fact. St. Francis Health Care Centre v. Shalala, 205 F.3d 937, 943 (6th Cir. 2000). When the "record taken as a whole could not lead a rational trier of fact to find for the nonmoving party," there is no genuine issue of material fact. Simmons-Harris v. Zelman, 234 F.3d 945, 951 (6th Cir. 2000). Thus a factual dispute which "is merely colorable or is not significantly probative" will not defeat a motion for summary judgment which is properly supported. Kraft v. United States, 991 F.2d 292, 296 (6th Cir. 1993); see also Int'l Union, United Auto., Aerospace and Agric. Implement Workers of Am. v. BVR Liquidating, Inc., 190 F.3d 768, 772 (6th Cir. 1999).
The party bringing the summary judgment motion has the initial burden of informing the district court of the basis for its motion and identifying portions of the record which demonstrate the absence of a genuine dispute over material facts. Mt. Lebanon Personal Care Home, Inc. v. Hoover Univ., Inc., 276 F.3d 845, 848 (6th Cir. 2002). The party opposing the motion then may not "rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact" but must make an affirmative showing with proper evidence in order to defeat the motion. Street v. J. C. Bradford Co., 886 F.2d 1472, 1479 (6th Cir. 1989). A party opposing a motion for summary judgment must designate specific facts in affidavits, depositions, or other factual material showing "evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252. If the non-moving party, after sufficient opportunity for discovery, is unable to meet his or her burden of proof, summary judgment is clearly proper. Celotex Corp., 477 U.S. at 322-23.
The party who bears the burden of proof must present a jury question as to each element of the claim. Davis v. McCourt, 226 F.3d 506, 511 (6th Cir. 2000). Failure to prove an essential element of a claim renders all other facts immaterial for summary judgment purposes. Elvis Presley Enters., Inc. v. Elvisly Yours, Inc., 936 F.2d 889, 895 (6th Cir. 1991).
The purpose of the FMLA is to balance the demands of the workplace with the needs of employees to take leave from work because of medical conditions or compelling family needs, such as the birth of or care for a child. See 29 U.S.C. § 2601 (b). Thus, the Act allows eligible employees to take up to twelve weeks of unpaid leave for qualifying reasons, and ensures that they will be restored to their former positions upon return to work. See 29 U.S.C. § 2612 (1)(1), 2614(a)(1). The FMLA creates a right of action allowing employees to recover damages and equitable relief from employers who violate the Act. See 29 U.S.C. § 2617 (a)(1). The Act also protects employees from retaliation for exercising their rights under the FMLA. See Chandler v. Specialty Tires of Am. (Tennessee), Inc., 283 F.3d 818, 825 (6th Cir. 2002) (citing 29 U.S.C. § 2615 (a)(1)).
In considering the employer's side of the balance, Congress has limited the effect of the Act on small businesses, and larger employers with smaller remote locations, perhaps due to "Congress' desire not to burden small businesses by requiring them to operate without employees for an extended period of time or their determination that the effect upon commerce from the small companies is de minimis." Douglas v. E.G. Baldwin Associates, Inc., 150 F.3d 604, 608 (6th Cir. 1998). Thus, there are strict numerical requirements set forth in the Act's definitions of covered employers and qualified employees. "The term `employer' . . . means any person engaged in commerce or in any industry or activity affecting commerce who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year." 29 U.S.C. § 2611 (4)(A)(i). An "eligible employee" is one who has worked for a covered employer for at least twelve months and at least 1,250 hours during the previous twelve months; but the Act excludes "any employee of an employer who is employed at a worksite at which such employer employs less than 50 employees if the total number of employees employed by that employer within 75 miles of that worksite is less than 50." 29 U.S.C. § 2611 (2)(B)(ii).
Unless an employee can establish the definitional requirements under the Act, a federal court may not entertain an action based on the FMLA. See Douglas, 150 F.3d at 607-09 (holding that "[o]nce the District Court determined that the asserted foundation for jurisdiction, here the FMLA, did not apply because Defendant only employed 29 employees [within 75 miles of the plaintiffs workplace], it should have dismissed the case in its entirety"). In this case, the defendant does not dispute that it is a covered employer inasmuch as its national workforce exceeds 50 workers. However, the defendant asserts that it did not employ 50 or more people within 75 miles of its Essexville salon where Grimsley is employed.
In response, the plaintiff offers three arguments: First, Grimsley contends that the Court ought not to focus on the time period when the plaintiff gives notice of the need for leave, as stated by 29 C.F.R. § 825.110 (f), but rather it should count the number of separate employees who worked for the employer "for each working day during each of the 20 or more calender workweeks in the current or preceding year," as set forth in the statutory definition of "employer." 29 U.S.C. § 2611 (4)(A)(i). Second, the plaintiff argues that Nora Morehouse should be included within the tally because her territory included the Essexville salon. Finally, the plaintiff asserts that the defendant should have counted both paid and unpaid employees in determining the number of workers within 75 miles of Essexville.
The plaintiffs first argument finds no support in the statutory language or the regulations. There is no basis for applying the criteria for defining a covered "employer" under 29 U.S.C. § 2611(4)(A)(i) to determine whether the plaintiff is an eligible employee under 29 U.S.C. § 2611(2)(B)(ii). Rather, 29 C.F.R. § 825.110 (f) specifically states: "Whether 50 employees are employed within 75 miles to ascertain an employee's eligibility for FMLA benefits is determined when the employee gives notice of the need for leave." (emphasis added). The purpose of this rule, as evident from the language of the regulation, is to fix the date for determination of an employee's eligibility for FMLA benefits, and to protect employees who qualify for leave when the request is made from losing eligibility if there is a reduction in the workforce thereafter. See id. In the this case, the time when the plaintiff gave notice of the need for leave is in dispute. The plaintiff informed the defendant that she was pregnant as early as October 1999. The plaintiff alleges that she requested FMLA leave a "few weeks" before commencing her pregnancy leave on June 6, 2000. Grimsley Dep. at 49. The events giving rise to the plaintiffs suit occurred sometime in January 2000, when the plaintiff approached Morehouse and Morehouse allegedly told the plaintiff that she promoted Carson because the plaintiff was pregnant and would soon be taking time off. Id. at 64. Thus, for the plaintiff to be an eligible employee under the FMLA, the defendant must have employed 50 or more workers within 75 miles of the Essexville salon between October 1999 and late May 2000.
Human resources director Frank's affidavit and deposition testimony indicate that Fiesta employed 49 total employees during the weeks of April 23, 30, May 14, 21, and 28, 2000, and fewer employees in the preceding weeks. It is undisputed that this calculation was made by "using tax records and individual payroll audit reports to generate a list of employees who ever worked at the identified salons and received pay during the period in question." Aff. of M. Scott Franks, ¶ 5. Mr. Franks did not count Nora Morehouse in that total because she is not stationed at any of the five salons. Id. ¶ 6. The plaintiff claims that omitting Morehouse from the count is incorrect, but once again, the plaintiffs argument is contradicted by specific language in the regulations. Title 29, C.F.R. § 825.111(a)(2) prescribes rules for determining whether an employer employs more than 50 workers within a 75-mile radius. It states:
(a) Generally, a worksite can refer to either a single location or a group of contiguous locations. . . . An employee's worksite under FMLA will ordinarily be the site the employee reports to or, if none, from which the employee's work is assigned.
. . .
(2) For employees with no fixed worksite, e.g., construction workers, transportation workers (e.g., truck drivers, seamen, pilots), salespersons, etc., the "worksite" is the site to which they are assigned as their home base, from which their work is assigned, or to which they report. . . . An employee's personal residence is not a worksite in the case of employees such as salespersons who travel a sales territory and who generally leave to work and return from work to their personal residence, or employees who work at home, as under the new concept of flexiplace. Rather, their worksite is the office to which they report and from which assignments are made.
It is undisputed that Morehouse worked from her home in Williamston, Michigan, but supervised all the salons in Michigan and received her assignments from the home office in Dublin, Ohio. Thus, the Ohio location is considered Morehouse's workplace under the regulations. Since it is not within 75 miles of the plaintiffs place of employment, it was not improper to exclude Morehouse from the tally.
The plaintiff points to two regulations in support of her third argument that unpaid workers should also be included in the calculation of the total number of employees: 29 C.F.R. § 825.105 (c) and § 825.111(c). Section 825.105(c) has no direct application, however, because by its terms it deals with the manner of determining a covered employer, that is, counting the number of workers employed "each working day during each of 20 or more calendar workweeks" under 29 U.S.C. § 2611 (4)(A)(i). Section 825.111(c) provides:
The determination of how many employees are employed within 75 miles of the worksite of an employee is based on the number of employees maintained on the payroll. Employees of educational institutions who are employed permanently or who are under contract are "maintained on the payroll" during any portion of the year when school is not in session. See § 825.105(c).
The plaintiff argues that an employee can be "maintained on the payroll" even if that employee does not receive pay during a particular week. For example, if an employee took an unpaid leave of absence and later returned to service, that employee, according to the plaintiff, was still "on the payroll" during the leave period.
The plaintiffs argument has merit, especially considering the last sentence of the regulation referring to educational employees who may not be paid during periods when school is not in session. However, there is no evidence in this case that any of the employees who left Fiesta at the five locations under consideration ever returned after a period of absence. Mr. Franks testified that he went through employee files manually to verify that an employee who was not on the payroll list was also not taking an unpaid leave of absence and would later return to work. Franks Dep. at 13, 20, 32. Once the employees quit, they never returned, so when they received their last pay check, they were no longer "on the payroll." The plaintiff argues, however, that the Court should again borrow from 29 U.S.C. § 2611 (4)(A)(i) and include in the tally all employees who worked twenty or more full work weeks in the current preceding year. This argument, however, confounds the definition of "employer" and "eligible employee," and ignores the requirement of 29 C.F.R. § 825.110 (f) to ascertain an employee's eligibility for benefits at the time FMLA leave is requested. Even if an employee is on the payroll "for each working day during each of 20 or more calendar workweeks," 29 U.S.C. § 2611 (4)(A)(i), if the employee no longer works for the employer at the time the plaintiff requests FMLA benefits, that employee should not be included in the tally.
To be eligible, an employee must be among a workforce of sufficient size to claim the benefits of the FMLA. Congress has set the lower limit at 50. Because the undisputed facts demonstrate that the number of employees within a 75-mile radius was less than that number, the plaintiff is not able to prove an essential element of her claim under the FMLA and the Court must dismiss the claim. Douglas, 150 F.3d at 607-09.
III.
The defendant removed the case to this Court on the basis of this Court's federal question jurisdiction. See 28 U.S.C. § 1331, 1441(b). Up to this point, the Court has entertained the state law claim under its supplemental jurisdiction, since the claim was "so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. § 1367 (a). However, the provisions of 28 U.S.C. § 1367 (c) state in relevant part:
The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if —
. . .
(2) the district court has or dismissed all claims over which it has original jurisdiction. . . .
Pursuant to this statute, this Court has the discretion to decline to exercise supplemental jurisdiction over state law claims in the circumstances of this case, particularly when the federal claim has been dismissed. Weeks v. Portage County Executive Offices, 235 F.3d 275, 279 (6th Cir. 2000). In this case, the claim which remains before this Court arises solely under a Michigan statute.
Where a case containing both federal and state law claims has been removed to this Court pursuant to the court's federal question jurisdiction under 28 U.S.C. § 1331 and 1441, and the federal claim has been dismissed, this Court has discretion to either dismiss the remaining state law claim or to remand it. Long v. Bando Mfg. of Am., Inc., 201 F.3d 754, 761 (6th Cir. 2000). In exercising that discretion, the court may consider the convenience of the parties and expeditiousness in resolving the case. Ibid. The plaintiff in this case originally filed the action in the Bay County Circuit Court, her forum of choice. The Court believes that it is more appropriate to remand the state law claim to the plaintiffs original forum of choice rather than dismiss it.
IV.
The plaintiff has not come forward with evidence creating an issue of material fact on an essential element of her FMLA claim: that she is an eligible employee under the terms of the Act. The Court therefore is without jurisdiction to hear a claim based on the FMLA.
Accordingly, it is ORDERED that the defendant's motion for partial summary judgment [dkt #31] is GRANTED and the plaintiffs claim arising under the FMLA is DISMISSED WITH PREJUDICE.
It is further ORDERED that the remaining claim is REMANDED to the Bay County, Michigan Circuit Court.