Curran v. Morrissette, et al. CV-97-547-M 07/01/99 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Jennifer Curran, Plaintiff

v. Civil No. 97-547-M

Peter E. Morrissette d/b/a Joyce Janitorial Services and Lakes Region Party & Paper Supply, Defendants

O R D E R

Plaintiff, Jennifer Curran, brings this Title VII action

against her former employer Peter Morrissette, alleging that

Morrissette sexually harassed her throughout the course of her

employment. See 42 U.S.C. § 2000e. She also brings claims under

New Hampshire common law for negligent and intentional infliction

of emotional distress.

Morrissette is the owner of Lakes Region Party and Paper

Supply Store ("LRPP") and Joyce Janitorial Services, both of

which are sole proprietorships, as to which he holds lawfully

registered trade names. He has moved for summary judgment,

asserting that LRPP, rather than he, was plaintiff's employer.

And, he claims that LRPP is not subject to liability under Title

VII because it does not employ "15 or more employees for each

working day in each of the 20 or more calendar weeks in the

current of preceding year." 42 U.S.C. § 2000e(b). Accordingly, he asserts that the court lacks subject matter jurisdiction over

plaintiff's claims. Plaintiff objects.

Rather than focus on Morrissette as her employer, plaintiff

has followed defendant's lead and has directed her efforts toward

establishing that LRPP meets the statutory definition of

employer. While she concedes that LRPP employs fewer than the

requisite number of employees to be liable under Title VII,

Curran claims that Morrissette operated LRPP and Joyce Janitorial

Services as a single enterprise and, therefore, the number of

employees of both entities should be aggregated to determine

whether the requisite number of employees is met for Title VII

coverage.

Standard of Review

There is some disagreement as to whether the "15 employees"

requirement set forth in Title VII is a prerequisite to the

court's exercise of subject matter jurisdiction over a

plaintiff's claims or whether it is simply an essential element

of the cause of action. See generally E.E.O.C. v. St. Francis

Xavier Parochial School,

(D.C. Cir. 1997)

(discussing the split in the circuits over this issue). The

majority of courts which have addressed the issue appear to agree

that it is a jurisdictional prerequisite to the maintenance of a

Title VII claim. See, e.g.. Lyes v. City of Riviera Beach,

Florida,

(11th Cir. 1999) ("Because we have

2 treated the question of whether a defendant meets the statutory

definition of ''employer' as a threshold jurisdictional matter

under Title VII, a plaintiff must show that her 'employer' had

fifteen or more employees for the requisite period under the

statute before her claims can be reached.") (citations omitted).

This court shares the view that plaintiff bears the burden

of establishinq that defendant employs the statutorily prescribed

minimum number of employees before the court may properly

exercise jurisdiction over his or her Title VII claims. See Hoar

v. Prescott Park Arts Festival, Inc.,

(D.N.H. 1997) ("Thus, the jurisdictional question presented by

defendant's motion to dismiss is whether plaintiff can show that

defendant had the statutorily required number of employees in the

pertinent years."). Consequently, althouqh it is presented as a

motion for summary judqment, defendant's motion is perhaps more

correctly viewed as a motion to dismiss for lack of subject

matter jurisdiction. See Fed. R. Civ. P. 12(b) (1). As discussed

above, absent evidence that a Title VII defendant employs the

statutorily prescribed number of employees, the court lacks

subject matter jurisdiction over plaintiff's claims.

Accordinqly, as the party assertinq jurisdiction, plaintiff bears

the burden of demonstratinq that it exists.

3 Background

Morrissette employed plaintiff as the manager of LRPP from

February 15, 1996 until October 26, 1996, during which time fewer

than 15 employees worked in the LRPP store. Curran's duties

included ordering merchandise for LRPP, making daily deposits on

behalf of LRPP, acting as the business's cashier, and handling

inguiries from customers. Although Morrissette denies this

point, Curran also claims (as part of her thesis that LRPP and

Joyce Janitorial Services should be viewed as a "single

employer") that she performed a few, relatively modest tasks for

Joyce Janitorial Services, such as fielding phone calls from

employees when they were calling to let Morrissette know that

they would be unable to make it to work, or taking personal

messages for employees at Joyce Janitorial Services.

Morrissette owns and operates both LRPP Joyce Janitorial

Services, where he employs approximately 40 full-time and 40

part-time employees. Joyce Janitorial Services is a commercial

cleaning business. Its largest customers appear to be Shop N'

Save (five stores) and Ames Department Stores (17 stores). Joyce

Janitorial Services maintains its headguarters in the same

building as LRPP, but in a separate office. The building is

owned by defendant's mother, Silvia Morrissette.

In support of his claim that LRPP and Joyce Janitorial

Services are legally distinct entities (and, therefore, should

4 not be viewed as a "single employer" for Title VII purposes),

Morrissette points out that they: (1) maintain separate checking

accounts in different banks; (2) advertise under separate yellow-

page headings; (3) utilize separate business cards; (4) do not

intermingle funds between bank accounts; and (5) maintain

separate worker's compensation policies. Additionally, separate

individuals are employed to manage LRPP and Joyce Janitorial

Services.

There is, however, substantial overlap between the two

businesses. Perhaps the most obvious link between the companies

is that defendant is the sole owner of both entities.

Additionally, Joyce Janitorial Services employs a bookkeeper who

prepares and oversees the payroll for both companies and issues

payroll checks to employees of both companies. And, while he

disclaims any supervisory responsibility over the hiring and

firing of employees of LRPP as well as its day-to-day operations,

Morrissette is, at a minimum, responsible for hiring the store's

manager. He makes all final decisions concerning employee pay

raises, and he signs all employee's checks.1

1 In his deposition, defendant testified that he exercised management and supervisory authority over all LRPP employees and made all hiring and firing decisions for LRPP, suggesting that he had a significant role in the daily decision­ making and operations of LRPP. See Morrissette deposition at 11- 12. In support of his motion for summary judgment, however, defendant has submitted an affidavit in which he attempts to limit those responses. In that affidavit, defendant asserts: "It is the manager's responsibility to hire and fire employees at the Lakes Region Paper & Party Supply. In my deposition, I was asked on page 12 if I managed and supervised all employees of Lakes

5 Discussion

Title VII defines "employer" in broad terms: "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). The statute

defines "person" in egually broad terms, providing that it

includes:

one or more individuals, governments, governmental agencies, political subdivisions, labor unions, partnerships, associations, corporations, legal representatives, mutual companies, joint-stock companies, trusts, unincorporated organizations, trustees, trustees in cases under Title 11, or receivers.

42 U.S.C. § 2000e(a) (emphasis supplied). Thus, it is clear from

the plain language of the statute (as well as the legislative

intent underlying it) that an individual doing business as a

"sole proprietor" may be an "employer" under Title VII. See

E.E.O.C. v. Oak Lawn Ltd. II,

(N.D. 111.

1997) ("if the individual is a sole proprietor, with 15 or more

employees, the sole proprietor is liable under Title VII.").

Region Paper & Party Supply. I answered that that was correct. When I answered this guestion, I assumed that I was being asked about Jennifer Curran who was the plaintiff in this case, who was the manager of the store. Once I have hired the manager of the store, it is up to the manager of the store to hire and fire employees." Morrissette affidavit at para. 13.

6 Here, it is undisputed that Morrissette operates his various

ventures as a sole proprietor. Thus, notwithstanding the fact

that he has registered distinct trade names for those ventures,

it may be unnecessary to look beyond the fact that he employs, in

total, more than 15 employees to assist him in carrying out those

ventures.

Stated somewhat differently, it is undisputed that

Morrissette employed plaintiff and that he also employed more

than the jurisdictional minimum number of employees. Unlike the

more common situation, in which a Title VII plaintiff is employed

by a corporation, plaintiff in this case was employed by an

individual, who has chosen to conduct business as an

unincorporated, sole proprietor. Conseguently, one might

reasonably argue that the court's jurisdictional inguiry may end

there, with the finding that Morrissette employed more than 15

employees for the reguisite period of time and, therefore, is an

"employer" under Title VII. That defendant chooses to call his

various ventures by different names and entertains the fiction

that his employees are actually "employed by" LRPP or Joyce

Janitorial Services may be irrelevant insofar as those ventures

are not operated by legally distinct entities; rather, they are

owned and operated by Morrissette and it is he who employs more

than 15 individuals.2

2 The "sole proprietor" is, perhaps, the most common means by which business is conducted, at least for small ventures. One legal commentator has described it at follows:

7 Nevertheless, the parties appear to agree that the court

should: (1) entertain the fiction that plaintiff was employed by

LRPP (rather than defendant); and (2) treat LRPP and Joyce

Janitorial Services as legal entities distinct from defendant.

And, because LRPP has fewer than 15 employees, Curran urges the

court to consider whether, when determining if LRPP employs the

jurisdictionally mandated minimum number of employees, it is

appropriate to aggregate the number of employees working at Joyce

Janitorial Services with those working at the LRPP store. In

support of that position, Curran claims that LRPP and Joyce

Janitorial Services should be viewed as a "single employer." See

Plaintiff's memorandum in opposition to summary judgment

(document no. 9) at 4.

In this area of labor relations, there are two related but

distinct concepts which may apply when a court is presented with

the task of determining whether a defendant employs the

The individual proprietorship or sole proprietorship - the two terms being interchangeable - is the oldest, simplest, and most prevalent form of business enterprise. . . . In short, the individual proprietor is the "boss", personally employing others as employees or agents. The business contracts - those made personally or by agents within their actual or apparent authority, or when made beyond the agency power, ratified - are the proprietor's contracts. As to torts, the proprietor is responsible directly for those personally committed and vicariously (respondeat superior) for those committed by employees within the scope of their employment. The proprietor's personal liability, therefore, is unlimited, subject to possible protection by contractual stipulation or insurance.

Harry Henn & John Alexander, Law of Corporations, 57-58 (3d ed. 1983) (emphasis supplied). jurisdictionally mandated minimum number of employees: the

"single employer" doctrine and the "joint employer" doctrine. As

the Court of Appeals for the First Circuit has observed, "The

courts, in the Title VII context, have inappropriately used the

terms 'single employer' and 'joint employer' interchangeably,

which in fact refer to two distinct concepts." Rivas v.

Federacion de Asociaciones Pecuarias,

, 820 n. 16

(1st Cir. 1991) .

The Court of Appeals for the Second Circuit has explained

the distinction between these two concepts as follows:

A "single employer" situation exists where two nominally separate entities are actually part of a single integrated enterprise so that, for all purposes, there is in fact only a "single employer." The single employer standard is relevant when separate corporations are not what they appear to be, that in truth they are but divisions or departments of a "single enterprise." In contrast, in a "joint employer" relationship, there is no single integrated enterprise. A conclusion that employers are "joint" assumes that they are separate legal entities, but that they have merely chosen to handle certain aspects of their employer-employee relationships jointly.

Clinton's Ditch Co-op. Co., Inc. v. NLRB,

(2d

Cir. 1985) (citations and internal guotation marks omitted).

In this case, it is clear that plaintiff relies exclusively

upon the "single employer" (or, as she calls it, the "single

enterprise") theory in support of her claim that LRPP employs a sufficient number of individuals to fall within the scope of

Title VII. See Plaintiff's memorandum at 4.

In Rivas, supra, the court of appeals explained the "single

employer" concept as follows:

The "single employer" inguiry . . . involves the guestion of whether two allegedly separate business enterprises should in fact be treated as a single entity. In Radio and Television Broadcast Technicians Local 1264 v. Broadcast Service of Mobile, Inc., 38 0 U.S. 255, 256 (1965), the Supreme Court recognized the validity of the National Labor Relations Board's approach in a labor dispute to determining whether various business entities constitute a "single employer" by considering whether they "comprise a single enterprise." Id. The Supreme Court set out the standard for the "single employer" inguiry as follows: "[I]n determining the relevant employer, the [National Labor Relations] Board considers several nominally separate business entities to be a single employer where they comprise an integrated enterprise . . . . The controlling criteria . . . are interrelation of operations, common management, centralized control of labor relations and common ownership." Radio & Television Broadcast Technicians, 380 U.S. at 256.

Rivas, 929 F.2d at 820 n.16. See also Swallows v. Barnes & Noble

Book Stores, Inc.,

(6th Cir. 1997). None of

these four factors is conclusive and all four need not

necessarily be present for the court to determine that two

entities are, in fact, a single employer for purposes of Title

VII. See

.

Here, the court is satisfied that, to the extent it is

appropriate to consider whether Joyce Janitorial Services and

LRPP are a "single employer," plaintiff has demonstrated that

10 they are. Among other things, the following factors support the

conclusion that LRPP and Joyce Janitorial Services are a "single

employer" under Title VII. First, and perhaps most importantly,

Morrissette operates those ventures as a sole proprietor - they

are not legally distinct entities unto themselves. Rather,

"Joyce Janitorial Services" and "LRPP" are simply different trade

names under which Morrissette employs workers, provides services

to the public, and otherwise conducts business. Additionally,

Joyce Janitorial Services and LRPP operate from the same

geographic location (although Morrissette does maintain separate

offices for them) and they share storage space in an adjacent

garage or warehouse; at a minimum, Morrissette makes all

management level hiring and firing decisions for both Joyce

Janitorial Services and LRPP; the payrolls for both are prepared

by the same person, all paychecks are drawn on the same account,

and Morrissette signs all paychecks; LRPP provides Joyce

Janitorial Services with paper and cleaning supplies; and,

finally, at least one person (Heidi Swanson) worked at both Joyce

Janitorial Services and LRPP and yet collected a single paycheck.

Conclusion

As the party asserting that the court has jurisdiction over

her claims, Curran must demonstrate that defendant, Peter

Morrissette, is an "employer" within the meaning of Title VII.

To do so, she must demonstrate that Morrissette employed at least

11 15 employees for each working day of twenty or more calendar

weeks. She has carried that burden.

If the court simply considers the total number of

Morrissette's employees, without regard to the fact that he

pursues his business ventures under two distinct trade names, it

is clear that he meets the statutory definition of "employer."

Alternatively, if the court must instead treat those business

ventures as distinct (notwithstanding the fact that they are

operated as sole proprietorships, rather than cognizable and

independent legal entities, such as partnerships or

corporations), the result is the same. There is sufficient

interrelation of operations, common management, centralized

control of labor management, and common ownership to warrant

treating LRPP and Joyce Janitorial Services as a "single

employer" under Title VII. Doing so, the court may then consider

the total number of employees working for both ventures in

determining whether LRPP employs the jurisdictionally mandated

minimum number of employees. That, in turn, yields the

conclusion that LRPP employs more than 15 employees.

For the foregoing reasons, the court concludes that

defendant, Peter Morrissette, is an "employer" under Title VII.

Accordingly, it has subject matter jurisdiction over plaintiff's

claims. Defendant's motion for summary judgment (document no. 8)

is, therefore, denied.

12 SO ORDERED.

Steven J. McAuliffe United States District Judge

July 1, 1999

cc: Steven M. Latici, Esq. Finis E. Williams, III, Esq.

13