Opinion
Case Nos. 1:02-cv-01895-DFH-TAB, 1:03-cv-0574-DFH-TAB.
February 24, 2005
Philip C. Eckert, for Plaintiff.
ENTRY ON MOTIONS FOR SUMMARY JUDGMENT
These two closely-related sexual harassment cases present some tangled questions concerning who employed whom. The specific issue presented for decision is whether a temporary employment agency that placed a nursing home administrator with a nursing home can be held liable under Title VII of the Civil Rights Act of 1964 to employees of the nursing home who were harassed by the administrator. The parties have briefed the issue in terms of whether the administrator was an employee of the temporary agency or whether he was instead an independent contractor. In the court's view, that analysis misses the essential question, which is whether the temporary employment agency could somehow be considered an employer of the plaintiffs. Title VII focuses on the employment relationship between the plaintiff and the defendant. The answer to the court's question is clearly no, so the temporary employment agency is entitled to summary judgment on the federal claims against it.
Procedural Background
Plaintiffs Michelle Koester and Loretta Kirsch worked as nurse's aides at the Walnut Creek of Delmar Nursing Home, Metro Health Foundation, Inc. ("Metro Health") facility in Indianapolis. Both Koester and Kirsch allege that they were subjected to sexual harassment by defendant Edward Hastings, the Interim Administrator at the nursing home, and that they were fired after they complained to Hastings and threatened to report him. Both plaintiffs also allege that, although Metro Health subsequently rehired them, they were constructively discharged because they were put back into the same hostile working environment.
Plaintiffs originally sued their employer, Metro Health, under Title VII. They also sued Hastings. Although Hastings could not be liable as an individual for a Title VII violation, see Williams v. Banning, 72 F.3d 552, 555 (7th Cir. 1995), plaintiffs invoked the court's supplemental jurisdiction to pursue state law claims against Hastings for assault, battery, and intentional infliction of emotional distress. So far, so good.
Metro Health, the owner of the nursing home itself, however, has gone into bankruptcy and has been liquidated. Plaintiffs Kirsch and Koester have dismissed their claims against it, which were discharged in bankruptcy. Plaintiffs have also added as a defendant The Hastings Group, Inc., of which Hastings is apparently the principal. The docket indicates that Hastings informally advised the court that he or his company had gone into bankruptcy, but there is no indication of a formal notice to that effect. Also, since that time, Hastings has filed answers to the operative versions of the complaints and has not raised again the issue of a bankruptcy stay. At this point, the record thus does not reflect that any bankruptcy proceeding imposes any automatic stay on this action.
The Claims Against Living Legacy
As part of the operative versions of their complaints (the third amended complaint in each case), plaintiffs have added claims against Living Legacy Associates, Inc., which is a temporary employment agency that arranged for Hastings to work as interim administrator of the Metro Health nursing home where plaintiffs were employed. Plaintiffs allege that Hastings was an employee of Living Legacy. They allege that Living Legacy is liable to them under Title VII and under state law for Hastings' torts against them, and that Living Legacy was negligent in hiring Hastings and in placing him at the nursing home.
Living Legacy has moved for summary judgment in both cases, arguing that Hastings was only an independent contractor for it. Plaintiffs contend that a reasonable trier of fact could find that Hastings was an employee of Living Legacy. The parties have addressed the Supreme Court's decision in Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318, 322-24 (1992), applying common law principles of agency to distinguish between employees and independent contractors. The court has also noted cases involving Title VII claims against temporary employment agencies in which the issue was whether the plaintiffs were employees of the agencies or were only independent contractors. E.g., Watson v. Adecco Employment Services, Inc., 252 F. Supp. 2d 1347, 1356 (M.D. Fla. 2003); Williams v. Caruso, 966 F. Supp. 287, 296 (D. Del. 1997); Kellam v. Snelling Personnel Services, 866 F. Supp. 812, 815 (D. Del. 1994), aff'd mem., 65 F.3d 162 (3d Cir. 1995). The parties have presented evidence concerning Hastings' relationship with Living Legacy, such as the extent of day-to-day control over his work, his compensation arrangements, skill level, and other factors relevant in distinguishing between an employee and an independent contractor.
The court respectfully believes that these arguments have lost sight of the basic structure of Title VII. At its core, the statute prohibits acts of discrimination and retaliation by a covered employer against its own employees. Section 703 of the Civil Rights Act of 1964 provides in relevant part: "It shall be an unlawful employment practice for an employer . . . to discriminate against any individual with respect to his 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). Section 704 makes it an unlawful employment practice "for an employer . . . to discriminate against any individual . . . because he has opposed any practice made an unlawful employment practice by this subchapter. . . ." 42 U.S.C. § 2000e-3(a). A plaintiff can seek relief from the party who committed the unlawful employment practice, which is typically the plaintiff's employer. See 42 U.S.C. § 2000e-5(f) (authorizing private civil suits against respondent on an EEOC charge). This same point is implicit in the Seventh Circuit decisions holding that a plaintiff may not hold an individual supervisor liable for a Title VII violation because the supervisor is not the employer. E.g., Williams v. Banning, 72 F.3d at 555; EEOC v. AIC Security Investigations, Ltd., 55 F.3d 1276, 1281 (7th Cir. 1995).
Under this legal framework, the court assumes for purposes of the pending motions that plaintiffs Koester and Kirsch have valid claims under Title VII based on the actions of their employer, the nursing home, whose agent Hastings subjected them to hostile working conditions because of their sex and retaliated against them for complaining about sex discrimination. On that assumption, Koester and Kirsch would be entitled to relief from their employer, the nursing home, but for the nursing home's discharge in bankruptcy.
There is no suggestion here that Koester and Kirsch were employees of Living Legacy, in addition to being employees of the bankrupt nursing home. They did not know Living Legacy existed until they took discovery in this case about Hastings and his relationship with the nursing home. Plaintiffs have not cited, and the court has not found, any case holding a party liable under Title VII to persons who were not its employees under any circumstances at all comparable to these. Because plaintiffs were not employees of Living Legacy, that company did not violate plaintiffs' rights under Title VII.
There is a line of cases under Title VII dealing with indirect employment relationships, discussed in Shrock v. Altru Nurses Registry, 810 F.2d 658, 610 (7th Cir. 1987), and Vakharia v. Swedish Covenant Hospital, 765 F. Supp. 461, 463-65 (N.D. Ill. 1991), among other cases. Plaintiffs have not suggested that they might somehow have been indirect employees of Living Legacy. Also, plaintiffs have not tried to develop a claim against Living Legacy for violating the Title VII provisions that govern employment agencies, for they never had any dealings with Living Legacy. See 42 U.S.C. § 2000e-2(b) (identifying prohibited practices of employment agencies).
Plaintiffs have tried to develop a factual basis for holding Living Legacy liable for any wrongs committed by Hastings, under both federal and state law. On the federal claims, Hastings also was not plaintiffs' employer for purposes of Title VII. Williams v. Banning, supra, 72 F.3d at 555. Accordingly, there is no basis for pursuing a vicarious liability theory against Living Legacy under Title VII, regardless of whether Hastings was an employee or independent contractor of Living Legacy.
State law is another question, but it does not appear to be a question for this court. Living Legacy is entitled to summary judgment on the Title VII claims against it. That decision resolves all of the federal claims before this court, and there is no other basis for federal jurisdiction over the cases. The remaining claims are both plaintiffs' claims under state law against both Hastings and Living Legacy for battery, assault, and intentional infliction of emotional distress, as well as their claims against Living Legacy for negligent hiring and placement of Hastings with the nursing home.
As a general rule, when all federal claims are dismissed before trial, the supplemental state law claims should be left to the state courts. See 28 U.S.C. § 1367(c)(3); Wright v. Associated Insurance Companies, Inc., 29 F.3d 1244, 1252 (7th Cir. 1994). There are exceptions, such as where retaining jurisdiction would serve purposes of judicial economy, convenience, fairness, or comity. See, e.g., Korzen v. Local Union 705, International B'hood of Teamsters, 75 F.3d 285, 289 (7th Cir. 1996) (affirming dismissal of plaintiff's state law claim on the merits). The court is inclined not to retain supplemental jurisdiction in this case. The controlling issues are issues of state law, and the factual record on the relationship between Hastings and Living Legacy is limited. Also, the issues under state law call for careful balancing of competing policies under tort and employment law. Those issues of state law appear to be better suited for the state courts to resolve. Under the court's view, the proper resolution of these cases is now a final judgment dismissing the federal claims with prejudice and dismissing all state law claims without prejudice so that they may be filed in a state court. However, because the court is resolving the pending motions for summary judgment on reasoning that the parties might not have anticipated, the court will not enter final judgment immediately. No later than March 15, 2005, the parties may file, if they wish, an objection or statement concerning the appropriate disposition of these cases at this point.
For the foregoing reasons, defendant Living Legacy's motions for summary judgment in these cases are both hereby granted, and the Title VII claims against Living Legacy will be dismissed with prejudice.
So ordered.