Whether the City is an "Employer"
The City seeks dismissal on the alternative ground that the complaint fails to state a sufficient claim for relief because the City was not plaintiffs' "employer" within the meaning of 42 U.S.C. § 2000e(b), a provision that offers little guidance as to the meaning of this term.
Courts have used numerous formulations in assessing whether a defendant is an "employer" within the meaning of Title VII and other employment discrimination statutes. They all have in common a focus on one factor at issue here: the amount of control or supervision a defendant exerts.
In one approach, the Second Circuit, drawing on the Supreme Court's decision in Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318, 112 S. Ct. 1344, 117 L. Ed. 2d 581 (1992), held that where a statute fails adequately to define the term "employee," the common law agency test should be applied to distinguish between independent contractors, which are not protected under the statute, and employees who are covered. Frankel v. Bally, Inc., 987 F.2d 86, 90 (2d Cir. 1993). In such cases, particular emphasis should be placed on a defendant's right to control the "manner and means" by which work is accomplished. 987 F.2d at 90. Labels or the corporate form under which a plaintiff does business are not dispositive. Consequently, in Frankel, a contract characterizing persons in plaintiff's position as "independent contractors" was not sufficient to warrant dismissal. Id. at 88, 90.
Another approach examines similar factors to assess whether two entities may be treated as "joint employers." See, e.g., NLRB v. Solid Waste Services, Inc., 38 F.3d 93 (2d Cir. 1994). A joint employer relationship may be found where there is sufficient evidence that a defendant had immediate control over another company's employees. Relevant factors include the commonality of hiring, firing, discipline pay insurance records, and supervision. 38 F.3d at 94.
Yet another approach asks whether two entities are so interrelated that they may be treated as a "single employer" for the purpose of Title VII. Brower-Coad v. Fundamental Brokers, Inc., 856 F. Supp. 147, 150 (S.D.N.Y. 1993); Bridges v. Eastman Kodak Co., 800 F. Supp. 1172, 1178 (S.D.N.Y. 1993). Under this test the Court looks for evidence of: (1) interrelated operations, (2) common management, (3) centralized control of labor relations, and (4) common ownership. E.g., Brower-Coad, 856 F. Supp. at 150. Not every factor need be present, and no particular factor is controlling. The test ultimately depends on whether "all the circumstances of the case" tend to show the absence of an arm's length relationship between two entities. Lihili Fashions Corp., Inc. v. NLRB, 32 F.3d 373, slip. op. at 2293 (2d Cir. 1996).
Here, the complaint alleges that the City contracts with and monitors PRHAS and holds itself out as responsible to the public for the wrongdoing of the managing employees of PRHAS. (Am. Cpt. P 7; Cpt. P 7) Consequently, plaintiffs' allegations would permit proof of control sufficient to bring the City within the definition of "employer" under the common law agency principles or that would warrant treating the City and PRHAS as joint employers or a single employer. As it is well established a motion to dismiss should not be granted unless there plaintiffs can prove no set of facts under their allegations which may entitle them to relief,
the motion must be denied.
The contract between PRHAS and the City put in evidence by the City on this motion does not change this result. It does no more than convert the Rule 12(b)(6) motion to dismiss into a motion for summary judgment
and leave a material dispute over the amount of the City's supervision and control over PRHAS. As exemplified by each party's emphasis on different portions of the contract, the contract actually cuts in both directions. Although on balance the contract seems to delegate more control than it retains, it contains enough indicia of control by the City over the manner of employment and the provision of services by PRHAS that, interpreted in the light most favorable to the plaintiff, and in the absence of further evidence to the contrary, leaves a genuine issue of disputed fact.
Accordingly, resolution of the status of the employment relationship between the City and individuals workers at PRHAS is inappropriate at this stage. See Bridges, 800 F. Supp. at 1177; see generally State University College at Geneseo, 535 F.2d at 754.
For the foregoing reasons, the City's motion to dismiss on the grounds that the City was not named in the EEOC charge and that it is not an "employer" within the meaning of Title VII is denied.
Dated: April 25, 1996
Lewis A. Kaplan
United States District Judge