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holding that "because the `integrated enterprise' test involves a detailed fact driven analysis, prior to discovery, it would be inappropriate for the Court to evaluate whether [parent company] can be held liable as an employer under Title VII"
Summary of this case from Cruz v. Piccari PressOpinion
CIVIL ACTION NO. 99-4916 (JEI).
March 3, 2000
Gregg L. Zeff, Esq., FROST ZEFF, Marlton, N.J., Counsel for plaintiff.
Richard G. Rosenblatt, Esq., MORGAN, LEWIS BOCKIUS, Princeton, N.J., Counsel for defendants.
OPINION
Presently before the Court is defendant Total Composites, Inc.'s ("Total") motion to dismiss plaintiff George Johnson's employment discrimination claims under Title VII and the New Jersey Law Against Discrimination. Defendants Total and Cook Composites and Polymers, Inc. ("Cook") also move to dismiss plaintiff's Title VII claim for failure to properly exhaust it with the Equal Opportunity Commission. In addition, all defendants move to dismiss plaintiff's claim under 42 U.S.C. § 1982. For the reasons set forth below, defendants' motion to dismiss plaintiff's § 1982 claim is granted. In addition, both Total's motion to dismiss plaintiff's discrimination claims and Total and Cook's motion to dismiss plaintiff's Title VII claim for his alleged failure to exhaust it are denied.
I.
Plaintiff, an African-American, was hired by defendant Cook as a "helper" until he could be trained as a "chemical kettle operator." (Compl. at ¶ 14). According to plaintiff, before his training was completed, two of the company's chemical kettle operators left Cook and he was assigned their duties. (Id. at ¶¶ 15-16).
Plaintiff alleges that while at Cook, his co-workers referred to him as "chicken George," "Toby" and "stupid nigger." (Id. at 18). Plaintiff claims that he complained about these alleged remarks to his supervisors, defendants James Leonard and Glen Cruz. (Id. at ¶ 19). Plaintiff states that on one occasion, a co-worker was required to apologize to him for his racist comments but on many other occasions, his supervisors did nothing. (Id. at ¶ 20). In addition to these alleged racist remarks, plaintiff also asserts that he was subjected to employees "doing the NAZI salute in his presence." (Id. at 21). Plaintiff claims that he complained to defendant Leonard about the saluting but Leonard took no action. (Id. at ¶¶ 22-23). He also asserts that his co-workers complained about him to management and ostracized him because of his race. (Id. at ¶ 24).
Plaintiff alleges that despite the racist work environment, he performed his job responsibilities in "a workmanlike manner with satisfactory results." (Id. at ¶ 25). At the beginning of 1999, plaintiff contends that he heard rumors that "they were going to get the nigger fired" and that defendant Cruz told him "the best day of my life will be when I get rid of you." (Id. at ¶¶ 26-27). On March 22, 1999, plaintiff was terminated from his job for leaving a burner on in the plant. (Id. at ¶¶ 28-29). Plaintiff not only denies leaving the burner on, but alleges that non-black employees who have left burners on in the past have not been terminated. (Id. at ¶¶ 30, 33). Specifically, he cites to an incident where an explosion occurred injuring a worker. This explosion was caused by a white employee who left a burner on in the plant. According to plaintiff, the white employee responsible for this explosion was only suspended, not terminated. (Id. at ¶¶ 34-35).
On July 14, 1999, plaintiff filed a Charge of Discrimination with the Equal Employment Opportunity Commission ("EEOC"). (Pl. ex. A). On September 9, 1999, at plaintiff's request, the EEOC issued a Notice of Right to Sue. This right to sue notice terminated the processing of his charge and stated that "Less than 180 days have passed since the filing of this charge, but I have determined that it is unlikely that the EEOC will be able to complete its administrative proceeding within 180 days from the filing of the charge." (Id.)
On October 19, 1999, plaintiff filed the instant action against his employer, Cook, its parent corporation, Total, and his supervisors, James Leonard and Glen Cruz ("defendants"). In counts one and two, plaintiff alleges that Cook and Total violated 42 U.S.C. § 2000(e), et seq. ("Title VII"); in count three, he alleges that all of the defendants violated the New Jersey Law Against Discrimination, N.J.S.A. 10:5-12(a),et seq. ("NJLAD"); and in count four, plaintiff alleges that all defendants violated 42 U.S.C. § 1981 and 1982.
II.
Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In considering a Rule 12(b)(6) motion, the court will accept the allegations of the complaint as true. Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996). Dismissal of claims under Rule 12(b)(6) should be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Although the court must assume as true all facts alleged, "[i]t is not . . . proper to assume that the [plaintiff] can prove any facts that it has not alleged." Associated General Contractors of Calif., Inc., v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). Finally, when "[c]onfronted with [a 12(b)(6)] motion, the court must review the allegations of fact contained in the complaint; for this purpose the court does not consider conclusory recitations of law." Commonwealth of Pennsylvania v. Pepsico, Inc., 836 F.2d 173, 179 (3d Cir. 1988) (emphasis added).
III.
Defendants ask this Court to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(6) because: (1) plaintiff has failed to allege sufficient facts to show that Total, Cook's parent corporation, can be held liable; (2) plaintiff prematurely terminated the requisite administrative procedures before the Equal Opportunity Commission; and (3) plaintiff's § 1982 claim does not apply to employment disputes. In his brief, plaintiff disputes defendant's first two arguments but concedes that he erroneously filed a claim under 42 U.S.C. § 1982. Accordingly, the Court dismisses plaintiff's § 1982 claim.
A.
Defendant argues that pursuant to the Third Circuit's decision inMarzano v. Computer Science Corp., Inc., 91 F.3d 497 (3d Cir. 1996), as a parent corporation, it cannot be held liable under Title VII and the NJLAD. In Marzano, the Court found that for the parent corporation to be accountable as an "employer" under the NJLAD, the relationship between the parent and the subsidiary must be one where the subsidiary is the "alter ego" of the parent, or a "mere instrumentality of the parent corporation." Id. at 513. In response, plaintiff maintains that along with the "alter ego" test discussed in Marzano, courts have also applied the "agency" test, the "instrumentality" test and the "integrated enterprise" test to determine whether a parent corporation can be held liable for the acts of its subsidiary under Title VII. Plaintiff further explains that a majority of circuits and courts in this Circuit have applied the "integrated enterprise" test, and thus, argues that this Court should apply it to this case.
Title VII of the Civil Rights Act of 1964 makes it unlawful for an employer "to discriminate against an individual with respect to his [or her] compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin." 42 U.S.C. § 2000e-2(a)(1). In Title VII and NJLAD cases, the relevant issue is "whether the defendant is the plaintiff's employer under the statute. If the defendant is an employer, as defined by the statute, he or she may be sued under Title VII." Doe v. William Shapiro, Esq. P.C., 852 F. Supp. 1246, 1253 (E.D.Pa. 1994). Title VII authorizes a cause of action only against employers, employment agencies, labor organizations, and training programs, see 42 U.S.C. § 2000e-2.
As plaintiff indicates, although the Third Circuit has not specifically adopted the "integrated enterprise" test as the test to be used in employment discrimination suits, it is the test used by the other circuits who have addressed the issue. See e.g., Swallows v. Barnes Noble Book Stores, Inc., 128 F.3d 990, 994 (6th Cir. 1997); Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235,1241 (2d Cir. 1995); Frank v. U.S. West, Inc., 3 F.3d 1357 (10th Cir. 1993). It is also the test used by the district courts within this Circuit. See e.g., McNeal v. Maritank Philadelphia, Inc., No. 97-0890, 1999 WL 80268, at *7 (E.D.Pa. Jan. 29, 1999); Brown v. Vitelcom, Inc., 47 F. Supp.2d 595, 600 (D.V.I. 1999). However, as noted above, defendant Total urges the Court to apply an "alter ego" test instead. The Court finds Total's argument and its reliance on Marzano unpersuasive.
In Marzano, 91 F.3d 497, a pregnant employee brought suit against her former employer and its parent corporation alleging that they discriminated against her in violation of the NJLAD. While addressing the extent of a parent corporation's responsibility to defend the business practices of its subsidiary, the Third Circuit examined New Jersey corporate law and framed the issue as whether the corporations's veil could be pierced. The Circuit held that a court must find that "a subsidiary was a mere instrumentality of the parent corporation . . . [that] the parent so dominated the subsidiary that it had no separate existence but was merely a conduit for the parent." Id. at 513. However, in reaching the conclusion that the parent corporation could not be held liable for employment discrimination by its subsidiary, the Marzano Court examined and applied three of the four factors present in the "integrated enterprise" test: integration of operations, labor relations and management. Id. at 514.
"[B]ecause the court discusses veil piercing, the Third Circuit's analysis in Marzano resembles an application of the `alter ego' test . . . However, . . . the factors in Marzano are essentially the same as those used in the `integrated enterprise' analysis." Martin v. Safeguard Scientifics, Inc . , 17 F. Supp.2d 357, 363 n. 3 (E.D.Pa. 1998).
Based on the Third Circuit's decision in Marzano and the strong support shown in the other circuits for applying the "integrated enterprise" test, the Court concludes that the four-factor "integrated enterprise" test is the most appropriate test to determine whether a parent corporation is an "employer" in the employment discrimination context.See McNeal, 1999 WL 80268, at *7 (holding that the "integrated enterprise" test should be applied in employment discrimination cases);Brown, 47 F. Supp.2d at 600 (same); Martin v. Safeguard Scientifics, Inc., 17 F. Supp. d 357, 363 (E.D.Pa. 1998) (same); see also Wood v. Southern Bell Tel. Tel. Co., 725 F. Supp. 1244, 1248 (N.D.Ga. 1989) (holding that the "integrated enterprise" test "is well suited to Title VII cases because it allows courts to read the term `employer' in a [liberal] manner consistent with the purposes of the [Civil Rights] Act."). Accordingly, to determine whether Cook's parent corporation, Total, is a proper defendant in plaintiff's discrimination case, the Court will apply the "integrated enterprise" test. This test considers the: "(1) inter-relation of operations; (2) common management; (3) centralized control of labor relations; and (4) common ownership or financial controls." McNeal, 1999 WL 80268, at *7. These factors should not "be applied mechanically, but rather are to be viewed within the totality of the circumstances in the specific case." Daliesso v. Deputy, Inc., No. 96-5295, 1998 WL 24330, at *3 (E.D.Pa. Jan. 23, 1998) (internal quotations omitted).
However, because the "integrated enterprise" test involves a detailed fact driven analysis, prior to discovery, it would be inappropriate for the Court to evaluate whether Total can be held liable as an employer under Title VII and the NJLAD. See e.g., Dunn v. Tutera Group, 181 F.R.D. 653, 660 (D.Kan. 1998); Nielson v. Colorado Time Sys., Inc., No. 96-1096, 1996 WL 739016, at *2 (D.Colo. Dec. 24, 1996). Thus, defendant Total's motion to dismiss plaintiff's discrimination claims is denied.
B.
Defendants Total and Cook argue that plaintiff's Title VII claim should be dismissed because he has failed to properly exhaust his administrative remedies with the EEOC. Specifically, defendants assert that despite the EEOC regulation to the contrary, it is improper for the EEOC to issue a right to sue notice until they have had at least the full 180 days to address the claim. In this case, plaintiff filed his claim with the EEOC on July 14, 1999. At plaintiff's request, on September 9, 1999, 123 days before the required 180 day period had elapsed, the EEOC sent plaintiff a right to sue notice. Based on this, defendants argue that plaintiff attempted to "deliberately bypass" the congressionally mandated administrative procedures and thus, his Title VII claims should be dismissed. Plaintiff argues that defendant Cook and Total's argument not only lacks merit, but, only seeks to delay these proceedings.
A Title VII plaintiff is required to file a charge of discrimination with the EEOC and receive a right to sue notice before bringing a Title VII claim in federal court. 42 U.S.C. § 2000e-5(f)(1). "Section 706(f)(1) of 42 U.S.C. § 2000e-5(f)(1) directs the EEOC to issue a right to sue notice if: (1) it dismisses the charge, or (2) 180 days have elapsed and the EEOC has not entered into a conciliation agreement or filed a civil action." Seybert v. West Chester University, No. 99-3860, 2000 WL 197448, at *1 (E.D.Pa. Feb. 11, 2000) (citing 42 U.S.C. § 2000e-5(f)(1)). The employee then has 90 days from date of the right to sue notice to institute a suit against his employer. 42 U.S.C. § 2000e-5(f)(1).
Plaintiff filed this suit on October 19, 1999, well within the 90 day filing period.
The EEOC has the power to promulgate regulations in order to "carry out the provision of [Title VII]." 42 U.S.C. § 2000(e)(1)(a). One such regulation, issued in 1977, provides that a notice of the right to sue may be issued before the 180 day period has expired. See 29 C.F.R. § 1601.28(a)(2). Section 1601.28(a)(2) allows the EEOC to issue an "early" right to sue notice at "any time prior to the expiration of 180 days from the date of filing the Charge" as long as the Commission certifies that "it is probable that the Commission will be unable to complete its administrative processing of the Charge within 180 days from the filing of the Charge." 29 C.F.R. § 1601.28(a)(2).
As the district court for the Eastern District of Pennsylvania recently explained, the purpose behind the EEOC issuing § 1601.28(a)(2) was to respond to the a Supreme Court decision calling the 180 day waiting period "mandatory," Occidental Life Ins. v. EEOC, 432 U.S. 355, 361 (1977), and the backlog of discrimination suits. Seybert, 2000 WL 197448, at *1. "The rationale behind § 1601.28(a)(2) is `the legal principle that a party is not required to perform a useless act, i.e., wait for the passage of 180 days when the passage of such time will not accomplish any purpose.'" Id. (quoting Pearce v. Barry Sable Diamonds, 912 F. Supp. 149, 154 (E.D.Pa. 1996) (citing to 42 Fed.Reg. 47, 828, 47, 831(1977)).
The parties in this case, have accurately described the "hotly debated" conflict regarding the regulation's validity within this district and among the circuits. See e.g., Martini v. Fed. Nat'l Mortgage Assoc., 178 F.3d 1336 (D.C. Cir. 1999) (holding that regulation is contrary to Title VII's waiting period provision); Lemke v. Int'l Total Servs., Inc., 56 F. Supp.2d 472, 478 (D.N.J. 1999) (holding that the EEOC exceeded its authority is issuing § 1601.28(a)(2)). But see e.g.,Sims v. Trus Joist MacMillan, 22 F.3d 1059, 1061-62 (11th Cir. 1994) (holding that § 160.28(a)(2) is reasonable and deference to the EEOC's interpretation is entitled to deference); Brown v. Puget Sound Elec., 732 F.2d 726, 729 (9th Cir. 1984), cert. denied, 469 U.S. 1108 (1985) (same); Palumbo v. Lufthansa German Airlines, No. 98-5005, 1999 WL 540446, at *1-2 (S.D.N.Y. July 26, 1999) (same). The parties also correctly note that the Third Circuit has not made a definitive ruling on the issue. See Waiters v. Parsons, 729 F.2d 233, 237 (3d Cir. 1984) (implying that failure to abide by the 180 waiting period would not automatically bar plaintiff's claim); Moteles v. Univ. of Pa., 730 F.2d 913, 917 (3d Cir. 1984) (characterized an "early" right to sue notice as a "deliberate by-pass of administrative remedies.").
In any event, the Court finds persuasive the decisions that have upheld the regulation as non-mandatory and reasonable pursuant to Chevron, USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) persuasive. Seybert, 2000 WL 197448, at 2-4; Maple v. Publications Int'l, Ltd., No. 99-6936, 2000 WL 85951, at *2 (N.D.Ill. Jan. 19, 2000); Berry v. Delta Air Lines, Inc., 75 F. Supp.2d 890, 892-93 (N.D.Ill. 1999);Figueira v. Black Entertainment Television, Inc., 944 F. Supp. 299, 305 (S.D.N.Y. 1996); Montoya v. Valencia County, 872 F. Supp. 904, 905 (D.N.M. 1994). Pursuant to Chevron, 467 U.S. at 842, if "Congress' intent is unclear or ambiguous, deference should be given to the agency's interpretation so long as its reasonable." Seybert, 2000 WL 197448, at *3.
First, on its face, the language of § 2000e-5(f)(1) does not make the 180-day waiting period mandatory. See Sims, 22 F.3d 1059, 1062;Figueira, 944 F. Supp. at 304. The statute only states that the EEOC must issue a right to sue notice if it dismisses the charge or if 180 days has passed without the Commission filing a civil action or a conciliation agreement. 42 U.S.C. § 2000e-5(f)(1). Neither of these events precludes the EEOC from issuing a right to sue letter before the 180-day waiting period has elapsed. See Berry, 75 F. Supp.2d at 892 (the statute "does not expressly make agency inaction for six months a condition precedent to the issuance of all right-to-sue letters.").
In addition, this Court does not agree with the District of Columbia Circuit's suggestion in Martini that 42 U.S.C. § 2000e-5(b) shows Congress' intent to investigate each claim filed with the agency for the full 180 days with no early expiration. 178 F.3d at 1346. Although section 2000e-5(b) states that the EEOC "shall make an investigation" of each charge filed with the EEOC, it does not say that the EEOC has to investigate each claim for at least 180 days.
Second, the legislative history supports this result. As the Eleventh Circuit stated in Sims:
The 180-day period was intended to afford victims of employment discrimination a private cause of action where the EEOC does not act, or does not act in a timely fashion. The EEOC's regulation simply recognizes that the caseload will sometimes be so heavy that it can be taken within 180 days and the issuance of an early right-to-sue letter is a reasonable implementation of the Act.22 F.3d at 1062 (internal quotations omitted). Furthermore, while the 180-day waiting period was enacted to lead the parties to conciliation of their disputes, Seybert, 2000 WL 197448, at *3 (citing 118 Cong. Rec. 1069 (1972)), it "allow[s] the person aggrieved to elect to pursue his or her own remedy under this title where there is agency inaction, dalliance or dismissal of the charge, or an unsatisfactory resolution.'" Id. (quoting H.R. Rep. No. 92-238 (1971), reprinted in 1972 U.S.C.A.N. 2137, 2148).
Accordingly, as noted above, because the legislation at issue here is not clear, this Court's job is to determine whether the EEOC's interpretation of § 2000e-5(1)(f) "is based on a permissible construction of the statute" or whether "its reasonable." Chevron, 467 U.S. at 842-43. Based on the above analysis, the Court holds that although the EEOC's participation in an employment dispute can be essential, when the agency determines that an "early" right to sue notice is appropriate under § 1601.28(a)(2), the Courts should defer to its judgment on the matter and "not force victims of discrimination to undergo further delay." Maple, 2000 WL 85951, at *2 (internal quotations omitted). Hence, in the case at hand, plaintiff's request and receipt of an "early" right to sue notice from the EEOC will neither bar nor delay his case. Plaintiff's Title VII claims are properly before this Court, thus, defendants' motion to dismiss plaintiff's Title VII claim is dismissed.
IV.
For the reasons set forth above, this Court grants defendants' motion to dismiss plaintiff's § 1982 claim. However, defendant Total's motion to dismiss plaintiff's claims under Title VII and the NJLAD is denied as is defendant Total and Cook's motion to dismiss plaintiff's Title VII claims for failure to properly exhaust it with the EEOC. The Court will enter the appropriate order.