Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-7_13-cv-01075/USCOURTS-alnd-7_13-cv-01075-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 29:626 Job Discrimination (Age)

---

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

WESTERN DIVISION

ROGER HOLLOWAY, )

)

Plaintiff, )

)

vs. ) 7:13-CV-1075-LSC

)

WATER WORKS AND )

SEWER BOARD OF THE )

TOWN OF VERNON, )

)

Defendant. )

MEMORANDUM OF OPINION

Before the Court is a motion for summary judgment filed by Defendant Water

Works and Sewer Board ofthe Town ofVernon (“TheBoard”). (Doc. 14). TheBoard 

has been sued by itsformer employee, Plaintiff Roger Holloway (“Holloway”) under

the Age Discrimination in Employment Act (“ADEA”). 29 U.S.C. § 621 et seq. The

Board has moved for Summary Judgement based on its belief that it does not qualify

as an “employer” under the act. Because the Board does so qualify, the motion for

summary judgment is due to be DENIED.

I. Factual Background

Thepartieshave stipulated to a single set of undisputed facts. TheBoard,which

was incorporated on January 13, 1956, is administered by a Board of Directors

Page 1 of 11

FILED

 2014 May-15 AM 09:08

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 1 of 11
consisting of five members who are elected to staggered terms by the governing body

of the Town of Vernon (“Vernon”). The Certificate of Incorporation and by-laws

state that members of the Board of Directors cannot be officers of Vernon, and the

Vernon City Council can only remove Board members when the member’s term

expires, or in the case of an ethics violation.

The Board operates the water and sewer systems of Vernon. Although the

parties cite different code sections under which the Board could be incorporated, the

two sections are virtually identical. See Ala. Code §§ 11-50-231 and 11-50-311. The

Board of Directors maintains by-lawsthat govern its activities. Under the by-laws,the

Board hasthe power to “acquire, construct, operate, and maintain a water and sewer

system.” (Doc. 15 at 5). The Chairman of the Board is the executive officer of the

Board and presides at all meetings.

The by-laws give the Board the power to appoint employees, “who hold their

positions, exercise such powers and perform such duties asdeterminedby the Board.”

(Id.) The Board sets the salaries, work schedules, and assignments of all Board

employees without the approval of Vernon. It also evaluatesits employeesseparately

from Vernon, and has its own building, bank accounts, financial records, and tax

existence. TheBoard paysthe employeesfrom its own funds; Vernon doesnot pay the

salaries of the Board’s employees.

Page 2 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 2 of 11
Theday-to-day operationsofthe Board are supervisedby the General Manager,

who reports directly to the Board of Directors. Holloway served as General Manager

ofthe Board until hewasterminated on July 15,2012. TheBoard terminated Holloway

without the input or approval of the Town of Vernon. Also, the Board’s payroll

records show that the Board had no more than twelve employees during the year

preceding Holloway’s termination.

II. Standard of Review

Summary judgment is appropriate “if the movant showsthat there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of

law.” Fed. R. Civ. P. 56(a). The party moving for summary judgment “always bears

the initial responsibility of informing the district court of the basis for its motion, and

identifying those portions of[the evidence]which it believes demonstrate the absence

of genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

The movant can meet this burden by presenting evidence showing that no genuine

dispute of material fact exists, or by showing that the nonmoving party has failed to

present substantial evidence of an element of its case on which it bears the ultimate

burden of proof. Id. at 322-23. In evaluating the arguments of the movant, the court

must view the evidence in the light most favorable to the nonmoving party. Mize v.

Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996).

Page 3 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 3 of 11
Once the movant hasmet its burden,Rule 56(e)“requiresthe nonmoving party

to go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers

to interrogatories, and admissionson file,’ designate ‘specific facts showing that there

is a genuine issue for trial.’” Celotex, 477 U.S. at 324 (quoting Fed. R. Civ. P. 56(e)). 

“Where the non-movant presents direct evidence that, if believed by the jury, would

be sufficient to win at trial, summary judgment is not appropriate even where the

movant presents conflicting evidence. It is not the court’s role to weigh conflicting

evidence or to make credibility determination . . . .” Mize, 93 F.3d at 742. But when

the non-movant’s evidence cannot stand on its own, summary judgment is

appropriate: “A factual dispute is genuine only if a ‘reasonable jury could return a

verdict for the nonmoving party.’” Info. Sys. & Networks Corp. v. City of Atlanta, 281

F.3d 1220, 1224 (11th Cir. 2002)(quoting UnitedStates v. Four Parcels of Real Property,

941 F.2d 1428, 1437 (11th Cir. 1991)).

III. Discussion

The controlling question before the Court is whether the Board qualifies as an

employer under the ADEA. The ADEA defines employer as follows: 

The term “employer” means a person engaged in an industry

affecting commerce who has twenty or more employees for each

Page 4 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 4 of 11
working day in each of twenty or more calendar weeksin the current

or preceding calendar year: Provided, That prior to June 30, 1968,

employers having fewer than fifty employees shall not be considered

employers. The term also means (1) any agent of such a person, and

(2) a State or political subdivision of a State and any agency or

instrumentality of a State or a political subdivision of a State, and any

interstate agency, but such term does not include the United States,

or a corporation wholly owned by the Government of the United

States.

29. U.S.C. § 630(b). The parties agree that the Board has fewer than twenty

employees. Therefore, in order to be an employer for purposes of the statute, it must

be an“agency or instrumentality of a State or a political subdivision of a State.” Id. To

answer this question,the Court must first ask whether the Vernon is,in fact, a political

subdivision of the State of Alabama.

A. Is Vernon a political subdivision of the State of Alabama?

TheEleventh Circuit has not directly addressed the question ofwhether a town

or city is a political subdivision of a state for purposes of the ADEA.In other contexts,

municipalities are treated differently from armsofthe state. For example,the Supreme

Court has held that where state immunity applies, it does not extend “to units of local

governments,such as cities and counties.” Bd. of Trustees of Univ.of Ala. v.Garrett, 531

U.S. 356, 368-69 (2001) (noting that local governments “are subject to private claims

for damages under the ADA,” while States are not). Counties and municipalities

likely also do not possess Eleventh Amendment immunity under the ADEA. Van

Page 5 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 5 of 11
Voorhis v. Hillsborough Cnty. Bd. of Cnty. Comm’rs, 512 F.3d 1296, 1301 (11th Cir.

2008). 

Congress amended the “employer” definition in the ADEA to include the

language concerning states and their political subdivisions in 1974. Kimel v. Fla. Bd.

of Regents, 528 U.S. 62, 78 (2000). The Supreme Court described these amendments

as an extension of the law. Johnson v. Mayor & City Council of Baltimore, 472 U.S. 353,

356 (1985) (“in 1974 Congress extended coverage to Federal, State, and local

governments”). Although these cases did not hold that municipalities are covered by

the ADEA’sdefinition of employer,they do suggest it. The Third Circuittook a much

more direct approach,stating that “the ADEAcould not be more explicit in imposing

liability for age discrimination against municipalities.” Potence v.HazletonArea School

Dist., 357 3d 366, 373 (3rd Cir. 2004).

Although it has not made the kind of absolute statement found in Potence, the

Eleventh Circuit has noted that state and local governments were originally excluded

from the definition of employer under the ADEA but this exception wasremoved by

the 1974 amendments. Knight v. State of Ga., 992 F.2d 1541, 1543 (11th Cir. 1993). In

addition it hasheld that anADEAclaim against a county survived summary judgment,

without addressing whether the county was a political subdivision of a state or had

twenty employees. Van Voorhis, 512 F.3d at 1301 (11th Cir. 2008). Furthermore, in

Page 6 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 6 of 11
three recent unpublished decisions, the Eleventh Circuit has addressed the merits of

ADEA claims against cities, without questioning whether the statutory definition of

employer was met. Lerman v. City of Fort Lauderdale, Fla, 346 Fed. App’x. 500 (11th

Cir. 2009) (describing the City, in the style of the case, as “a political subdivision of

the State of Florida”); Morrison v. City of Bainbridge, Ga., 432 Fed. App’x. 877 (11th

Cir. 2011); Mitchell v. City of LaFayette, 504 Fed. App’x. 867 (11th Cir. 2013). In

contrast, this Court found no authority for the proposition that a city was not a

political subdivision of a state under the ADEA. Therefore, the Court finds that

Vernon is a political subdivision of the State of Alabama for the purposes of the

statute.

B. Is the Board an agency or instrumentality of Vernon?

Holloway, of course, works not for Vernon itself but for the Board. The Board

is an employer for ADEA purposes if it is an “agency or instrumentality” of Vernon.

The Board correctly notes that casesinterpreting Title VII of the Civil Rights Act are

instructive on questions surrounding the ADEA. Garcia v. Copenhaver, Bell &

Associates,M.D.’s, P.A., 104F.3d 1256, 1263-64 (11th Cir. 1997). None ofthe casesthe

Board cites,however,pose the question at issue here. See Calderon v. Martin Cnty, 639

Page 7 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 7 of 11
F. 2d 271, 272-73 (5th Cir. Unit B 1981) (determining whether a deputy sheriff was an 1

“employee” under Title VII); Lyes v. City of Riviera Beach, 166 F.3d 1332, 1345 (11th

Cir. 1999) (addressing whether to aggregate employees of different public entities to

reach the threshold number of employees).

The question before the Court concerns not whether Vernon is Holloway’s

employer, but whether the Board is an agency or instrumentality of Vernon. Asimilar

question has been addressed in the context of determining whether an entity is an arm

of the state for Eleventh Amendment purposes. See, e.g., Harden v. Adams, 760 F.2d

1158, 1163-64 (11th Cir. 1985). In this context, both the Supreme Court and the

Eleventh Circuit have turned to state law to determine whether a particular entity is

an agency or instrumentality of the state. Mt. Healthy City School Dist. Bd. of Educ. v.

Doyle, 429 U.S. 274, 280 (1977)(“the answer depends, at least in part, upon the nature

of the entity created by state law”); Harden, 760 F. 2d at 1163-64 (citing findings by

the Alabama Supreme Court that a University board of trustees was an arm of the

state). By analogy, this Court findsit proper to consider Alabama law in determining

whether the Board is an agency or instrumentality of Vernon.

In Bonner v. City of Prichard, the Eleventh Circuit adopted as binding precedent all

1

decisions of the former Fifth Circuit handed down prior to October 1, 1981. 661 F.2d 1206,1209

(11 th Cir. 1981). Calderon was published on March 13, 1981, and is thus binding precedent. Id.,

see also 639 F.2d at 271.

Page 8 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 8 of 11
The Board is a public corporation organized according to Alabama law. The 2

Alabama Code requiresthat not lessthan three natural persons apply to the governing

body of a municipality for authority to incorporate a public corporation such as a water

and sewer board. Ala. Code §§ 11-50-231; 11-50-311. The governing body of the

municipality must then adopt a resolution in order for the public corporation to begin

operating.Id. Thus,Vernon playeda necessary role in the creation ofthe Board,which

counsels in favor of finding the Board to be an agency or instrumentality of Vernon.

In addition to this statutory law, the Alabama Supreme Court has held that a public

corporation of this type is an agency of the city that created it. State ex rel Richardson

v. Morrow, 162 So. 480, 388-89 (Ala. 1964). See alsoCity of Montgomery v.Water Works

and Sanitary Sewer Bd. of Montgomery, 660 So. 2d 588, 593 (Ala. 1995) (determining

that water board, a public corporation set up by the city, is an instrumentality of the

city). Thus, the Board is an agency or instrumentality of Vernon. 

C. Does the twenty-employee threshold apply to public employers?

Having concluded that the Board is in fact an agency or instrumentality of

Vernon, the only question remaining is whether the twenty-employee requirement in

the first sentence of the ADEA’s definition of “employer” applies to the public

As noted in the facts section, the Board is incorporated under either Ala. Code § 11-50- 2

231 or § 11-50-311, both of which require the same procedure in forming the public corporation.

Page 9 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 9 of 11
agencies or instrumentalities mentioned in the second sentence. 29 U.S.C. § 630(b).

The Eleventh Circuit has not addressed whether the twenty-employee requirement

applies to public agencieslike the Board. The Eleventh Circuit has made it clear that 3

courts should “begin our construction where courts should always begin the process

of legislative interpretation, and where they often should end it as well, which is with

the words of the statutory provision.” Harris v. Garner, 216 F.3d 970, 972 (11th Cir.

2000) (en banc). When a clear meaning of the statute exists, there is no need to

examine the legislative history, and courts should never use this history to undermine

a clear meaning. CBS Inc. v. Prime Time 24 Joint Venture, 245 F.3d 1217, 1222 (11th

Cir. 2001) (citing inter alia Ratzlaf v. United States, 510 U.S. 135, 147 (1994)). In

addition, a remedial statute such as the ADEA or Title VII should be construed

liberally in favor of redressing the wrong for which Congress wrote the statute. Coke

v. General Adjustment Bureau, 640 F.2d 584, 594-95 (5th Cir. Mar. 1981); EEOC v.

Total System Servs., 240 F.3d 898, 899-900 (11th Cir. 2001).

Considering the statutory language in light of these rules of construction, the

The Board urges the Court to follow the three circuits who have ruled on this issue, all

3

of which chose to apply the twenty-employee threshold. See Kelly v. Wauconda Park Dist., 801

F.2d 269, 273 (7th Cir. 1986) (cert. denied, 480 U.S. 940 (1987)); EEOC v. Monclova Twp., 920

F. 2d 360, 363 (6 th Cir. 1990); Palmer v. Ark. Council on Econ. Educ., 154 F.3d 892, 896-97

(8th Cir. 1998). Because the Court finds that the statute is not ambiguous, it need not address the

legislative history of the statute discussed by these cases. CBS, 245 F.3d at 1222.

Page 10 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 10 of 11
Court findsthat there is only one reasonable meaning of Section 630 (b). The second

sentence means that, in addition to those employers who meet the definition in the

first sentence, “a State or political subdivision of a State and any agency or

instrumentality of a state or a political subdivision of a state” are also employers,

regardless of how many employees they have. This language is clear, and there is no

indication in the statute that Congress intended to import the twenty-employee

requirement from the first definition of employer into the second definition.

Therefore, no recourse to the legislative history is necessary or proper. The Board, as

aninstrumentality of a political subdivision of a state,need not have twenty employees

to meet the plain meaning of the ADEA’s definition of employer.

IV. Conclusion

Vernon is a political subdivision of the state ofAlabama. TheBoard is anagency

or instrumentality of the town. The twenty employee requirement does not apply to

public agencies. Because the Board’s motion for summary judgment rests solely on

this argument, it is due to be DENIED.

Page 11 of 11

Case 7:13-cv-01075-LSC Document 18 Filed 05/15/14 Page 11 of 11