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ARCULEO v. ON-SITE SALES & MARKETING

June 16, 2004.

JENNIFER ARCULEO, Plaintiff,
v.
ON-SITE SALES & MARKETING, LLC, and SANFORD PANKIN, d/b/a CRYSTAL HILLS, Defendants.



The opinion of the court was delivered by: WILLIAM CONNER, Senior District Judge

OPINION AND ORDER

Plaintiff Jennifer Arculeo brings this action for compensatory and punitive damages against defendants On-Site Sales & Marketing, LLC ("On-Site") and Sanford Pankin d/b/a Crystal Hills, LLC ("Crystal Hills"), alleging numerous violations of Title VII of the Civil Rights Act of 1964 ("Title VII") and the New York Human Rights Law ("NYHRL"), N.Y. EXEC. LAW §§ 296-97.*fn1 (Am. Complt. ¶¶ 25-26, 28-29.) Defendants argue that neither On-Site nor Crystal Hills may be held liable under Title VII because they are not "employers" as defined by the statute because both businesses have less than the requisite fifteen employees. They move for summary judgment pursuant to FED. R. CIV. P. 56 dismissing plaintiff's Title VII claims.*fn2 Defendant Pankin also moves to dismiss plaintiff's Title VII claims against him personally. For the reasons set forth herein, defendants' motion for summary judgment is granted with respect to plaintiff's Title VII claims in their entirety. Plaintiff's NYHRL claims are dismissed without prejudice.

  BACKGROUND

  Unless otherwise noted, the following facts are undisputed. Plaintiff commenced employment as a sales assistant at On-Site, a marketing and sales services firm, in June 2001. (Def. On-Site Rule 56.1 Stmt. ¶ 1; Am. Complt. ¶ 8; Leeds Reply Aff. ¶ 5.) On-Site had a contract with Crystal Hills, a separate single-housing construction and development company, to perform on-site sales and marketing services in connection with a Crystal Hills development under construction in Middletown, New York. (Am. Complt. ¶ 8; De Maio Aff. ¶ 3; Leeds Reply Aff. ¶ 5.) On-Site assigned plaintiff administrative work at Crystal Hills. (Am. Complt. ¶ 8.) Thereafter, plaintiff commenced maternity leave in June 2002, and was no longer employed by On-Site as of September 2002. (Def. On-Site Rule 56.1 Stmt. ¶ 2.)

  Although plaintiff was employed by On-Site, she worked very closely with Crystal Hills personnel, including defendant Pankin. Pankin shared office space with On-Site at the Crystal Hills development project, and was there every working day, usually from 7:00 a.m. until 2:00 or 3:00 p.m. (Arculeo Decl. ¶ 3.) Pankin was the builder of Crystal Hills and was in charge of construction; he would instruct On-Site supervisors Allan Leeds and Thomas Atkin about sales strategies. (Id. ¶ 4.) Pankin was present at regularly-held meetings on Monday mornings wherein construction progress and sales were discussed. (Id.) Pankin also had a role in On-Site's hiring process and other personnel decisions; plaintiff heard Pankin tell On-Site supervisors that they could not hire a man or an older woman for a vacant position, which led to the hiring of a younger woman named Carol. (Id. ¶ 6; De Maio Aff. ¶ 3.) Plaintiff considered Pankin to be her supervisor; she ran errands for him and assisted him with paperwork for matters such as purchase orders and bank loans.*fn3 (Arculeo Decl. ¶ 5.) Pankin also paid Michelle Morgan, an On-Site employee, to do work for him on her day off from On-Site. (Pl. Rule 56.1 Stmt. ¶ 4.) In her Complaint, plaintiff alleges a hostile work environment occasioned by numerous incidents of sexual harassment by defendant Pankin such as, inter alia, sexually explicit comments and unwanted touching that included being forced to perform and receive unwanted oral sexual acts. (Am. Complt. ¶¶ 11-26.) Plaintiff alleges that she complained about the harassment to Allan Leeds, On-Site's manager, and that he changed her schedule in an attempt to keep her away from Pankin. (Pl. Rule 56.1 Stmt. ¶ 4.) Within a week, however, Pankin caused that arrangement to end and plaintiff again had to work with and be harassed by him. (Id.) Plaintiff further alleges that when she called Leeds about returning from maternity leave, he informed her that he had no position for her at Crystal Hills because she could not work with Pankin, and that he did not offer her an alternative placement. (Id.)

  Defendants On-Site and Crystal Hills have submitted payroll tax forms reflecting the number of employees each had on the payroll during the times relevant to this case. During 2000, defendant On-Site had at most six employees on the payroll. (Def. On-Site Rule 56.1 Stmt. ¶ 5; Leeds Aff., Exs. A-D.) During 2001, it had at most eleven employees, (Def. On-Site Rule 56.1 Stmt. ¶ 6; Leeds Aff., Exs. E-H) and had at most fourteen employees in 2002. (Def. On-Site Rule 56.1 Stmt. ¶ 7; Leeds Aff., Exs. I-L.) Crystal Hills had at most eight on the payroll in 2001, and at most seven in 2002. (Pankin Aff., Ex. C.) Crystal Hills did not submit payroll figures for 2000, and did not pay any employees in 2003.*fn4 (Pankin Aff. ¶ 5.) DISCUSSION

  I. Standard of Review

  Under FED. R. CIV. P. 56, summary judgment may be granted where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(c). The burden rests on the movant to demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine factual issue exists if there is sufficient evidence favoring the nonmovant for a reasonable jury to return a verdict in his favor. Anderson, 477 U.S. at 248. In deciding whether summary judgment is appropriate, the court resolves all ambiguities and draws all permissible factual inferences against the movant. See id. at 255. To defeat summary judgment, the nonmovant must go beyond the pleadings and "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The court's role at this stage of the litigation is not to decide issues of material fact, but to discern whether any exist. See Gallo v. Prudential Residential Servs., L.P., 22 F.3d 1219, 1224 (2d Cir. 1994).

  II. Whether Defendants Are "Employers" Subject to Title VII

  Defendants contend that they are entitled to summary judgment dismissing plaintiff's Title VII claims because at all relevant times, each of them had less than fifteen employees and was therefore not an "employer" subject to liability under that statute. (Def. Pankin Mem. Supp. Summ. J. at 4-5; Def. On-Site Mem. Supp. Summ. J. at 3-4.) Plaintiff argues in response that defendants meet the fifteen-employee threshold because they functioned as her "joint employers" and combined to employ fifteen or more persons at all relevant times. (Pl. Mem. Opp. Summ. J. at 7-8.) It is undisputed that aggregation of defendants' employees would meet the fifteen-employee threshold.

  "Employer" is a defined term under Title VII, which provides in relevant part that "[t]he 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, and any agent of such a person. . . ." 42 U.S.C. § 2000e(b) (emphasis added); see also Walters v. Metro. Educ. Enters., Inc., 519 U.S. 202, 212 (1997) (holding that "the ultimate touchstone under § 2000e(b) is whether an employer has employment relationships with 15 or more individuals for each working day in 20 or more weeks during the year in question"). With respect to calculating the actual number of employees, "all one needs to know about a given employee for a given year is whether the employee started or ended employment during that year and, if so, when. He is counted as an employee for each working day after arrival and before departure." Id. at 211. In the Second Circuit, proof that an employer-defendant has fifteen or more employees is an essential element of the merits of a plaintiff's Title VII case, and not a jurisdictional issue; accordingly, we have subject matter jurisdiction over the Title VII claims so long as the plaintiff asserts a "non-frivolous claim that the defendant is a covered employer."*fn5 Da Silva v. Kinsho Int'l Corp., 229 F.3d 358, 366 (2d Cir. 2000).

  We begin by noting that the United States Court of Appeals for the Second Circuit has not yet passed on the question of whether and in what circumstances a plaintiff may satisfy Title VII's fifteen-employee threshold via the aggregation of the employment rolls of separate defendants. The parties' memoranda and the Court's independent research have revealed, however, two related, but distinct lines of cases from courts within and outside the Second Circuit addressing this issue through the application of two similar, but analytically distinct principles: the single employer doctrine and the joint employer doctrine. The joint employer doctrine is applicable when the separate businesses at issue have become associated with one another via a contractual relationship. See, e.g., Virgo v. Riviera Beach Assocs., Ltd., 30 F.3d 1350, 1360-61 (11th Cir. 1994) (concluding that the defendants, a hotel and the property management agency with whom it contracted, were the plaintiff's joint employers). In light of the business relationship between defendants in the present case, the parties have framed the issue as whether the employees of joint employers may be aggregated to meet the fifteen-employee threshold.*fn6 (Pl. Mem. Opp. Summ. J. at 7-8; Def. On-Site Reply Mem. Supp. Summ. J. at 5-6; Def. Pankin Reply Mem. Supp. Summ. J. at 2-4.) The joint employer doctrine "assumes . . . separate legal entities . . . [that have] . . . chosen to handle certain aspects of their employer-employee relationships jointly." Clinton's Ditch Coop., 778 F.2d at 137. The joint employer doctrine is, however, analytically similar to the single employer doctrine, see supra note 6, as "[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." Rivera v. Puerto Rican Home Attendants Servs., Inc., 922 F. Supp. 943, 949 (S.D.N.Y. 1996) (discussing the contractual relationship between New York City and a home health care agency).

  Plaintiff acknowledges that courts in the Southern District of New York, including Judge Scheindlin in Serrano v. 900 5th Ave. Corp., 4 F. Supp.2d 315 (S.D.N.Y. 1998), and this Court in Prunella v. Carlshire Tenants, Inc., 94 F. Supp.2d 512 (S.D.N.Y. 2000) (Conner, J.), have declined to permit the aggregation of employees in the joint employer context.*fn7 (Pl. Mem. Opp. Summ. J. at 7-8.) Citing cases from numerous district and appeals courts outside the Second Circuit, and noting the lack of a Second Circuit ruling on the issue, she argues that we should revisit that conclusion as contrary to the remedial purpose of Title VII. (Id. at 3-4, 7-8.) Defendants argue otherwise. Given the lack of definitive guidance from the Second Circuit on this question, and the maxim that the decisions of district courts, even those located within the same district, are not binding on other district courts, In re Oxford Health Plans, Inc., 191 F.R.D. 369, 377 (S.D.N.Y. 2000), we accept plaintiff's invitation to revisit this issue, although we will accord "great weight" to our own prior decision in Prunella. McGinley v. Houston, 361 F.3d 1328, 1331 (11th Cir. 2004).*fn8

  We begin with a review of the Southern District decisions on the joint employer aggregation issue. In Serrano, the plaintiff, a worker at a residential property, brought a Title VII action for employment discrimination against the building and the property management company who had arranged for the plaintiff's employment there. 4 F. Supp.2d at 316. Judge Scheindlin determined that both the management company and the building had supervisory authority over the plaintiff, and concluded that the management company could be held liable under Title VII as the plaintiff's joint employer. Id. at 317. The building then argued for dismissal on the ground that it had less than fifteen employees and was not subject to Title VII. Id. at 318. Judge Scheindlin noted that this was a case of first impression in the Second Circuit, but rejected the plaintiff's argument that the building's employment roll should be aggregated with that of the property management company because they were joint employers, and dismissed the complaint against the building. Id. In so holding, she discussed the fifteen-employee rule's legislative purpose of mitigating litigation costs and the burdens of Title VII compliance on small businesses, and distinguished aggregation for "single employers" because "joint employers are not part of a unitary, integrated enterprise, but retain separate identities." Id. (citing Clinton's Ditch Coop., 778 F.2d at 137). Judge Scheindlin also relied on out-of-Circuit decisions, including Burdi v. Uniglobe Cihak Travel, Inc., 932 F. Supp. 1044, 1047 (N.D. Ill. 1996), and adopted what she perceived as the majority view, which is "that the question of whether two entities are joint employers is to be decided after it is determined that both meet the fifteen-employee minimum." ...


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