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HATCHER v. AUGUSTUS

March 1, 1997

PHILIP HATCHER, Plaintiff, against WARNER AUGUSTUS, d/b/a 7-ELEVEN and SOUTHLAND CORPORATION, Defendants.


The opinion of the court was delivered by: SPATT

 SPATT, District Judge.

 This motion addresses the liability of a franchisor in a Title VII case. The plaintiff, Philip Hatcher, ("Hatcher" or the "plaintiff"), a member of a Protestant Church, initiated this action, pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et. seq., for the alleged wrongful termination of his employment as a manager of a 7-Eleven convenience store located in Wantagh, New York, based on his religion. The plaintiff seeks a declaratory judgment that the defendants violated his constitutional rights and to hold the defendant Warner Augustus, ("Augustus"), the franchisee of the 7-Eleven where the plaintiff worked, and the defendant Southland Corporation, ("Southland" or the "defendant"), the franchisor, jointly and severally liable for damages.

 Southland moves to dismiss all claims against it pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which the court can grant relief, or in the alternative, for an order granting summary judgment pursuant to Fed.R.Civ.P. 56 dismissing the Complaint.

 I. BACKGROUND

 Southland is the owner of the 7-Eleven trademark and is a franchisor of numerous 7-Eleven stores in New York and other states, including the location at issue in Wantagh. Augustus is the franchisee of the 7-Eleven store where the plaintiff worked as a manager. Southland asserts that each franchised store is independently owned and operated by its franchisee. A written store franchise agreement ("Agreement") governs Southland's relationship with each franchisee, including the Wantagh store. As part of the Agreement, Southland provides the franchisee with a license to use the 7-Eleven system and the trade-name and service mark; Southland also leases the premises and equipment to the franchisee. In return, the franchisee pays Southland an initial franchise fee and an ongoing royalty, calculated as a percentage of the store's gross profits. In addition, the franchisee is required to comply with standards in order to protect Southland trademark, image and reputation. According to the defendant, pursuant to the Agreement, each franchisee operates his or her own business and makes independent decisions regarding labor relations and day-to-day operations.

 On or about April 1, 1989, the plaintiff became employed as a clerk by the 7-Eleven store owned by Augustus. On June 6, 1989, Augustus entered into a Store Franchise Agreement with Southland. According to the plaintiff, in or about 1991, he was promoted to the position of manager and his immediate supervisor was the defendant Augustus. The plaintiff states that Augustus was responsible for making out the weekly work schedules for the managers and clerks at the 7-Eleven store at issue.

 The plaintiff contends that prior to May 19, 1995, Augustus did not require the plaintiff to work on Sunday mornings so that he could attend the services at his Protestant church. The plaintiff alleges that on May 19, 1995, Augustus scheduled Hatcher to work on the next Sunday morning. The plaintiff claims that he asked Augustus to exchange his hours with another manager so the he could attend his religious services, but Augustus refused. On May 22, 1995, the plaintiff called Augustus and advised him that he was required to attend church on Sunday and therefore could not work on that particular day. The plaintiff asserts that Augustus informed him that if he did not work on Sunday morning he would be terminated. According to the plaintiff, he was discharged on May 22, 1995. The plaintiff maintains that prior to the termination of his employment, he performed his responsibilities as manager in a satisfactory manner.

 Southland moves for an order dismissing the Complaint as against it pursuant to Fed.R.Civ.P. 12(b)(6) or in the alternative, for an order granting summary judgment in its favor under Fed.R.Civ.P. 56, on the ground that it is not the employer of the plaintiff within the context of a Title VII claim.

 Based on sufficient notice to all the parties, the Court elects to treat this motion as one for summary judgment.

 II. DISCUSSION

 A. Standard of review as to Southland's motion for summary judgment

 A court may grant summary judgment only if the evidence, viewed in the light most favorable to the party opposing the motion, presents no genuine issue of material fact, Samuels v. Mockry, 77 F.3d 34, 35 (2d Cir. 1996), and the movant is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); see also Fed. R. Civ. P. 56(c) (setting forth summary judgment standard). The Court must, however, resolve all ambiguities and draw all reasonable inferences in the light most favorable to the party opposing the motion. See Quaratino v. Tiffany & Co., 71 F.3d 58, 64 (2d Cir. 1995); Twin Laboratories, Inc. v. Weider Health & Fitness, 900 F.2d 566, 568 (2d Cir. 1990); W.A. Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11-12 (2d Cir. 1986), cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 (1987).

 According to the Second Circuit, "summary judgment is a tool to winnow out from the trial calendar those cases whose facts predestine them to result in a directed verdict." United Nat'l Ins. Co. v. Tunnel, Inc., 988 F.2d 351, 355 (2d Cir. 1993). Once a party moves for summary judgment, the non-movant must come forward with specific facts showing that a genuine issue exists to avoid the motion being granted. West-Fair Elec. Contractors v. Aetna Cas. & Sur. Co., 78 F.3d 61, 63 (2d Cir. 1996); see also Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990) (quoting Fed.R.Civ.P. 56(e)). A genuine issue of material fact exists if "a reasonable jury could return a verdict for the nonmoving party." Liberty Lobby, 477 U.S. at 248; see Vann v. City of New York, 72 F.3d 1040, 1049 (2d Cir. 1995).

 However, mere conclusory allegations, speculation or conjecture will not avail a party resisting summary judgment. See Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996). If there is evidence in the record as to any material fact from which an inference could be drawn in favor of the non-movant, summary judgment is unavailable. See Holt v. KMI-Continental, Inc., 95 F.3d 123, 129 (2d Cir. 1996); Rattner v. Netburn, 930 F.2d 204, 209 (2d Cir. 1991). Finally, the Court is charged with the function of "issue-finding," not "issue-resolution." Gallo v. Prudential Residential Servs., Ltd. Partnership, 22 F.3d 1219, 1224 (2d Cir. 1994).

 It is within this framework that the Court addresses the grounds for the present motion for summary judgment.

 B. The plaintiff's Title VII religious discrimination claim

 Title VII of the Civil Rights Act of 1964 prohibits discriminatory employment practices. 42 U.S.C. § 2000e-2(a) states, in pertinent part:

 
It shall be unlawful employment practice for an employer --
 
(1) to fail or refuse to hire or to discharge any individual, or otherwise 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; . . . .

 In order to recover under Title VII, the plaintiff must establish that the defendant is his "employer." Under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, subsection (b) an employer is defined as follows:

 
a person engaged in an industry affecting commerce who has 15 or more employees for each working day in each of twenty or more calendar weeks in the current or preceding ...

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