Summary
refusing to find employer's holding company liable for alleged employment discrimination by employer
Summary of this case from McNealy v. BecnelOpinion
Civil Action No: 01-2748, Section: "M"(1)
June 4, 2002
MINUTE ENTRY
On September 7, 2001, Becky T. Wilkerson ("Wilkerson"), the plaintiff, filed a complaint for damages and named USI Gulf Coast, Inc. ("Gulf Coast") as the only defendant. Rec. doc. 1. Wilkerson alleged that she was employed by Gulf Coast in Houma, Louisiana as the executive secretary for Don Callais ("Callais"). Wilkerson alleged that Callais had supervisory capacity over her and possessed the power to hire and fire employees in the Houma office. In September 1999, Callais allegedly began sexually harassing Wilkerson, who was terminated in September 2000. Wilkerson alleged that she was terminated for not acquiescing in Callais' social and sexual demands and asserted causes of action against Gulf Coast for violation of the Louisiana Anti Discrimination Statute (La. Rev. Stat. Ann. § 23:322) and Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000). Wilkerson contended that Gulf Coast was strictly liable for the alleged employment discrimination because there was no policy or procedure for reporting employment discrimination. Rec. doc. 1.
The parties consented to trial before a United States Magistrate Judge. Rec. doc. 4. The trial with a jury was set for October 21, 2002. Rec. doc. 7. Callais' motion for leave to intervene was denied. Rec. doc. 7. On March 11, 2002, there was a settlement conference but the parties were unable to negotiate a settlement. Rec. doc. 9. Wilkerson was instructed to file a motion regarding affiliate liability and the corresponding cap on damages by no later than May 1, 2002. Rec. doc. 9. On May 8, 2002, Wilkerson filed a motion for leave to file a supplemental and amending complaint for damages and designation of employer for purposes of Title VII. Rec. doc. 14.
In the proposed supplemental and amending complaint Wilkerson seeks to add as defendants ANCO Insurance Services of Houston, Inc. ("ANCO") and USI Insurance Services Company ("USI"). Wilkerson alleges that USI "is a national entity and USI Gulf Coast, Inc. is a holding company" of USI. Attachment to Rec. doc. 14. There is no allegation in the proposed supplemental and amending complaint linking ANCO to either USI or Gulf Coast.
In her motion, Wilkerson shows Gulf Coast employs less than 100 persons, but USI has over 500 employees. Wilkerson contends that Gulf Coast and USI operate as a single entity and is her joint employer for purposes of Title VII. In addition to seeking leave to amend, Wilkerson also seeks a declaration that USI was Wilkerson's employer and that the applicable cap for her claim for general and punitive damages is $300,000. Rec. doc. 14. Gulf Coast contends that Wilkerson has shown no basis for establishing that either ANCO or USI was her employer under Title VII or Louisiana law and that Wilkerson's motion for leave to amend should be denied. Alternatively, Gulf Coast, ANCO and USI seek partial summary judgment dismissing all claims against ANCO and USI. In effect Gulf Coast seeks a determination that the applicable cap is $50,000. Rec. doc. 15. The parties have submitted depositions, documents and an affidavit in support of their positions.
Pursuant to 42 U.S.C. § 1981a(b)(3)(A), the cap for compensatory and punitive damages for employers with fewer than one hundred employees is $50,000. Where there are more than one hundred employees the cap goes up to $300,000. 42 U.S.C. § 1981a(b)(3)(D).
Whether leave to amend should be granted is entrusted to the sound discretion of the district court, and that court's ruling is reversible only for an abuse of discretion. Quintanilla v. Texas Television Inc., 139 F.3d 494, 499 (5th Cir. 1998). When an amendment would be futile, it is appropriate to deny it. Avatar Exploration, Inc. v. Chevron, U.S.A., Inc., 933 F.2d 314, 321 (5th Cir. 1991). Whether Wilkerson's amendment is futile turns on whether either ANCO or USI are Wilkerson's employer under Title VII or Louisiana law.
In Trevino v. Celanese Corp., 710 F.2d 397 (5th Cir. 1983), the Fifth Circuit held that in determining whether a corporation related to an employer may be liable under Title VII as a joint employer four factors are to be considered: (1) interrelation of operations; (2) centralized control of labor relations; (3) common management; and (4) common ownership or financial control. Id. at 404. In Skidmore v. Precision Printing and Packaging, Inc., 188 F.3d 606 (5th Cir. 1999), the Fifth Circuit said:
Traditionally, the second of these four factors has been considered the most important, such that courts have focused almost exclusively on one question: which entity made the final decisions regarding employment matters relating to the person claiming discrimination?Id. at 617.
Wilkerson points to the following evidence to show that ANCO and USI were her employers for purposes of Title VII:
1. Gulf Coast reported to John Cullado of USI/ANCO and he oversaw Callais and Anthony Bianca;
2. USI owned Gulf Coast;
3. Gulf Coast consulted with USI's human resources office in Houston regarding employment issues and that office provided and signed documentation concerning Wilkerson's termination;
4. USI's human resources office provided quality control for the general operations of Gulf Coast;
5. The health insurance, disability and retirement plants of Gulf South's employees were administered and provided by USI;
6. Gulf Coast's tax returns showed a California corporate address;
7. USI provided insurance policies for Gulf Coast for workers' compensation, general liability, professional liability and errors and omissions;
8. USI was paid by Gulf Coast from its gross revenues;
9. There was a merger agreement by and among the following: U.S.I. Holdings Corporation; USI Insurance Services Corp.; Coastal Insurance Services Incorporated; Acqcis, Inc.; the shareholders of Coastal Insurance Services Incorporated; and Donald P. Callais as noteholder representative, dated December 3, 1996;
10. Wilkerson's paychecks originated from USI Insurance Affiliates in California;
11. Wilkerson received from USI Administrators a certificate evidencing prior health coverage that referred to her employer as USI Insurance; and
12. On September 27, 1999, a memorandum was sent to all USI employees, including Wilkerson, reporting that USI Insurance Services Corp. was the sixth largest insurance broker in the world.
See Rec. doc. 14 at pp. 3-4. None of these items of evidence address the controlling question described in Skidmore: which entity made the final decisions regarding employment matters relating to Wilkerson? Wilkerson does not attempt to show that Cullado or any one else outside of Gulf Coast made the final decisions on her employment. Wilkerson only shows that Cullado supervised Callais and Bianca. This is insufficient. The remainder of Wilkerson's evidence shows the type of centralized human resources and payroll administration functions typical of affiliated companies. In Skidmore these were insufficient to establish that the parent corporation was the employer for Title VII purposes. 188 F.3d at 617. See also Bass v. Lifecare Holdings, Inc., 2000 WL 377815 at *5-6 (E.D.La) (Wilkinson, Magistrate J.).
In order to satisfy the definition of employer under Louisiana's employment discrimination law Wilkerson must shows that ANSCO/USI received services from Wilkerson and in return gave compensation to her. La. Rev. Stat. Ann. § 23:302(2). See also Seal v. Gateway Companies Inc. of Delaware, 2002 U.S.Dist. LEXIS 279 (E.D.La. January 3, 2002) (Engelhardt, J.). There is no allegation or evidence that Wilkerson provided any services to ANSCO or USI. Wilkerson alleges that she was hired as the executive secretary for Callais at Gulf Coast. Rec. doc. 1 at p. 2. As to Wilkerson's allegation that her paychecks originated from USI Insurance Affiliates in California, Gulf Coast submitted the affidavit of Bethany Loving, an ANSCO employee, who reported that in connection with the centralization of payroll administration functions during Wilkerson's employment: (1) Gulf Coast forwarded payroll information to her for processing; (2) she forwarded the information to an independent company that administered the payroll for all of USI's affiliated companies, including Gulf Coast; (3) the checks, including Wilkerson's, were issued showing "USI Insurance Affiliates" as payor; and (4) the source of all funds for the Gulf Coast payroll, including Wilkerson's checks, was Gulf Coast's own bank account. Exhibit D to Rec. doc. 15. This centralization of the payroll function among the affiliate companies fails to show that Wilkerson's compensation came from ANSCO or USI. The source of Wilkerson's compensation was Gulf Coast.
"Tami Seal v. Gateway Companies, Inc. of Delaware, et al," CA 01-1322"N"(3), Rec. doc. 35 at p. 8.
The undisputed facts show that neither ANCO nor USI were Wilkerson's employer under Title VII or Louisiana law. Wilkerson's amended and supplemental complaint seeking to add ANSCO and USI is futile.
IT IS ORDERED that Wilkerson's motion for leave to file supplemental and amending complaint for damages and designation of employer for purposes of Title VII (Rec. doc. 14) is DENIED. Accordingly, USI Gulf Coast, Inc. is deemed to be plaintiff's sole employer and plaintiff is limited to the cap of $50,000 for employees of companies with fewer than 100 employees, pursuant to 42 U.S.C. § 1981 a(b)(3)(A), and IT IS FURTHER ORDERED that defendant's motion for partial summary judgment (Rec. doc. 15) is GRANTED.