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United States District Court, S.D. New York

March 18, 2004.


The opinion of the court was delivered by: THOMAS GRIESA, Senior District Judge


This is an action by plaintiff Steven A. Ennis against his former employer alleging discrimination on the basis of age and religion, and retaliatory termination, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq., and state and city civil rights laws. There are three defendants: Tyco International Ltd., Sonitrol Management Corporation, and Mid-Atlantic Security, Inc.

Now before the Court is a motion by Tyco. to dismiss the complaint for failure to state a cause of action against Tyco. Tyco's position is that it was not Ennis's employer, and that its personnel had nothing to do with the alleged wrongdoing. It is conceded for purposes of this motion that Sonitrol and Mid-Atlantic are closely enough related for both to be considered employers of Ennis. Page 2

  For the reasons set forth below, the motion is granted.


  In the course of briefing on this motion to dismiss, the parties submitted, and had the opportunity to respond to, matters outside the pleadings. Because these matters were not excluded by the Court, the motion shall be treated as one for summary judgment. Fed.R.Civ.P. 12(b). Therefore, the facts are taken from the pleadings and the affidavits submitted on the motion.

  Ennis is a 57-year-old man of the Jewish faith. The complaint states that Ennis began working for Sonitrol, a provider of security products, on March 8, 1990, and was terminated from Sonitrol's employment on January 29, 2002. Although it is not entirely clear, it appears from the complaint that Ennis was employed at Sonitrol's New York City office, located in Manhattan.

  The complaint states that on September 5, 2001 Sonitrol hired Jim Wright as General Manager for the Metro New York area, which included the New York and New Jersey offices. Wright mainly worked out of the New Jersey office. Wright was reportedly a minister, and was referred to as "Father Jim."

  The complaint alleges that over the course of the approximately eighteen months between Wright's arrival and Ennis's termination, numerous events occurred to create a hosfile work environment. In about October of 2001 the first of these Page 3 events occurred, when Wright allegedly left two voice messages for Ennis "screaming that he had an attitude problem" after Ennis accidently hung up on Wright during a cell phone conversation. The complaint alleges that when Ennis relayed this incident to a co-worker, the co-worker stated, "Jim hates Jews."

  The complaint alleges that, over time, Wright created a "cult-like working environment" by hiring young "followers from his church," who were unqualified for their positions at Sonitrol and lived with Wright in his home in New Jersey. Wright and the young employees allegedly made various displays of religion in Ennis's presence, including praying and singing hymns. Wright is also alleged to have made derogatory remarks about Jewish holidays.

  The complaint alleges that Ennis communicated with Sonitrol management regarding his problems with Wright on November 11, 2001. On this date Ennis wrote to John Rausch, Director of Sales for Sonitrol, informing him that a telephone conversation between Ennis and Wright had occurred, in which Wright had verbally abused Ennis. Ennis stated in the letter that he found the behavior intolerable and desired some action on the part of Rausch.

  The complaint further alleges that on January 15, 2002 Ennis wrote to Phil Adams, Director of Human Resources at Sonitrol, stating that Ennis felt that Wright was discriminating against Page 4 him because Ennis was Jewish. The letter also stated that Wright had hired primarily young workers and had displayed hostility toward older workers, and that this constituted age discrimination. According to the complaint, on January 17 Ennis made a follow-up phone call to Rausch and informed him of the complaint Ennis had sent to Adams. Ennis also told Rausch in that conversation that Wright "had a problem with" Ennis because Ennis was Jewish.

  Ennis was absent from work between January 21 and January 28, 2002 due to the death of his mother. The complaint alleges that on January 29 Ennis discovered that his cell phone had been disconnected by Sonitrol. When Ennis arrived at his office that day, he discovered that Wright, a co-worker, and a locksmith had entered the office, removed the documents, and changed the lock on the door. When Ennis was able to enter his office later that day, he found a letter from Rausch stating, "Effective immediately, your employment with Sonitrol of Metro New York is terminated." The letter cited Ennis's ongoing conflict with Wright as the reason for the termination.

  The complaint states that Tyco, Sonitrol, and Mid-Atlantic "are a single employer, with interrelated corporations, centralized control of labor relations common management and common ownership." The complaint also alleges, in each of its five counts, that "each of the defendants was an `employer'" Page 5 within the meaning of the relevant statute. These statements are the only allegations that the complaint makes with specific reference to Tyco. or Mid-Atlantic.

  Both Tyco. and Ennis have submitted employee manuals allegedly received by Ennis. Tyco. submitted a manual titled "Employee's Policy Guide and Benefits Program," bearing the name of Sonitrol and Mid-Atlantic Security, Inc. The first page of the manual indicates that it is provided to all new and existing employees of Mid-Atlantic Security, Inc., Sonitrol of Atlanta, Sonitrol of Baltimore, and Sonitrol of New York, Ennis submitted an employee manual published by Tyco, titled, "Standards of Conduct." According to a form dated April 9, 2001, Ennis received the Tyco. manual and agreed to abide by the standards "as a condition of my employment and continued employment at Tyco." The form also stated that if Ennis had questions regarding the standards, he should consult with his immediate supervisor, local human resources representative, the general manager of his unit, or any other member of senior management. Alternatively, the document stated that Ennis could contact Tyco's toll-free "ConcerLine," or Tyco's Corporate Human Resources Department or Legal Department.

  Ennis has submitted an affidavit stating that during his employment he considered himself to be a Tyco. employee, that he was covered by a Tyco medical plan and Tyco. 401(k) plan, and that Page 6 he participated in a Tyco. stock purchase plan, all administered by Tyco's human resources department in Texas. Ennis's affidavit also states that his business card denoted that he worked for a Tyco. company, that during sales pitches for Sonitrol products employees were encouraged to mention Sonitrol's relationship with Tyco, and that during his employment he received various Tyco-related publications and promotions.

  Ennis has provided two e-mail classified advertisements for employment at Tyco, and print-outs from Tyco's website, all stating that Tyco employs more than 200,000 employees worldwide. It is assumed for purposes of this motion that this number refers to employees of all Tyco subsidiaries, including Sonitrol and Mid-Atlantic.

  Tyco. has submitted the declaration of Wesley L. France, Vice President and Chief Operating Officer of Sonitrol Management Corporation. France states that Tyco. International, Ltd. is a Bermuda-based holding company with fewer than fifteen employees, none of whom resides in the United States or is engaged in the day-to-day management of Sonitrol. France also states that Tyco. does not control the labor functions of Sonitrol and that Ennis was not an employee of Tyco.

  Also in the record are submissions from Tyco. of correspondence from Ennis, Rausch, and Adams on the Sonitrol letterhead. Rausch and Adams both, in their signature lines, Page 7 identify themselves as Mid-Atlantic employees. Also printed on the stationery, at the bottom of the cover page, is a statement that Sonitrol is "a Tyco. company." The deposition testimony of Rausch similarly states that Rausch and Ennis were employees of Mid-Atlantic, a subsidiary of Sonitrol, which is in turn a subsidiary of Sonitrol, Inc., which is itself in turn either a subsidiary of or in another way related to ADT Inc., and that Tyco. was somewhere higher "in the food chain." It should be noted that Tyco. has not offered a more specific or technical description of Tyco's precise relationship to Sonitrol or Mid-Atlantic.

  Additionally, Tyco. submitted copies of Ennis's 1999, 2000, 2001, and 2002 W-2 forms, which list "Mid-Atlantic Security, Inc." as Ennis's employer. Finally, a copy of Ennis's resume, also submitted by Tyco, lists Ennis's employer as "Sonitrol of Metro New York (a subsidiary of ADT)


  As a general matter, the law treats the employees of a corporate entity as the employees of a related entity only under extraordinary circumstances. See Murray v. Miner, 74 F.3d 402, 404 (2d Cir. 1996). The Second Circuit has enunciated a four-part test for determining when two entities are sufficiently interrelated for an employee to hold both liable as a "single employer" under Title VII. There must be evidence of centralized Page 8 control of labor relations, interrelation of operations between the two entities, common management, and common ownership or financial control. See Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235, 1240 (2d Cir. 1995). The most important is the first factor, with the critical question being what entity made the final decisions regarding employment matters related to the plaintiff. See id. at 1240; Herman v. Blockbuster Entertainment Group, 18 F. Supp.2d 304, 309 (S.D.N.Y. 1998).

  As to the first factor, it is undisputed that the only individuals involved in the circumstances leading up to Ennis's termination were Wright, Rausch, and Adams. Wright is alleged to have been hired by Sonitrol to serve as General Manager for the New York metro area. Rausch is identified in the complaint as being Director of Sales for Sonitrol, and Adams is identified as Director of Human Resources for Sonitrol. No allegations of wrongdoing have been made by Ennis against Tyco personnel. Moreover, Ennis was at all times dealing exclusively with management and human resources personnel from Sonitrol and/or Mid-Atlantic.

  Also with regard to the question of centralized control of labor relations, Ennis alleges that the employee benefit plans in which he participated were all Tyco-administered. This fact, however, is not probative of the level of day-to-day control over employment matters required by single employer doctrine. Page 9 Numerous other courts have similarly noted that administration by a parent of a subsidiary's benefit plans is neither uncommon nor probative of the employment control factor. See, e.g., Duffy v. Drake Beam Morin, 96 Civ. 5606, 1998 WL 252063, at *5 (S.D.N.Y. May 19, 1998); Kellett v. Glaxo Enterprises, Inc., 91 Civ. 6237, 1994 WL 669975, at *5 (S.D.N.Y. Nov. 30, 1994).

  It is true that Tyco. had an employee manual and that Ennis signed a form agreeing to abide by the manual's guidelines as a condition of employment. However, Mid-Atlantic also issued an employment manual from its own human resources department. Cf. Darden v. Daimler Chrysler North America Holding Corp., 191 F. Supp.2d 382, 396 (S.D.N.Y. 2002); Schade v. Coty, Inc., No. 00 Civ. 1568, 2001 WL 709258 at *8 (S.D.N.Y. Jun. 25, 2001); Herman, 18 F. Supp.2d at 310. The mere fact that Ennis agreed to be bound by certain standards of conduct set forth by Tyco. does not indicate that Tyco. exercised control over or made final decisions regarding the employment of Ennis or anyone else at Sonitrol or Mid-Atlantic. Moreover, the fact that Tyco advertised itself as an employer of more than 200,000 people worldwide, presumably including Sonitrol and Mid-Atlantic employees, does not, in and of itself, show Tyco's control over the employees of the subsidiary.

  With respect to interrelation of operations — the second factor — courts consider whether the parent was involved directly Page 10 in the subsidiary's daily business decisions; whether the two entities shared employees, services, records, or equipment; and whether the entities commingled assets or finances to any extent. Herman, 18 F. Supp.2d at 309. In this regard Ennis points to the fact that his business cards and the Sonitrol letterhead indicated that Sonitrol was a Tyco. company, and the fact that Ennis was encouraged to mention Sonitrol's Tyco. affiliation in the course of sales pitches. These circumstances do not demonstrate a significant level of interrelation among Tyco, Sonitrol, and Mid-Atlantic. There is nothing rising to the level of control over regular business decisions contemplated by the single employer doctrine.

  The final two factors are considerations of the degree of common management and common ownership. These are considered less important in determining single employer status, owing to the fact that "they represent ordinary aspects of the parent-subsidiary relationship." Meng, 73 F. Supp.2d at 403. Thus, in the absence of a meaningful showing of control by the parent over employment decisions of the subsidiary or the existence of interrelation of operations, a demonstration of common management or ownership between the two entities will not tip the scale. See Schade, 2001 WL 709258 at *9. It is true that Sonitrol and Mid-Atlantic were subsidiaries of Tyco, however attenuated the relationship may have been. However, there is no evidence that Page 11 Tyco. shared common management or, as already described, that there was any control over or interrelationship with Sonitrol and Mid-Atlantic.

  The Court concludes, in light of the evidence presented on the motion regarding the relevant factors, that Tyco. was not an employer of Ennis. This has been shown beyond any triable issue of fact.


  Treating Tyco's motion to dismiss as one for summary judgment the motion is granted and the action is dismissed as to Tyco.



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