1

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 11-3148

_____________

ROBERT A. MARIOTTI, SR.,

 Appellant

v.

MARIOTTI BUILDING PRODUCTS, INC.

_____________

 

On Appeal from the United States District Court

for the Middle District of Pennsylvania

District Court No. 3-11-cv-00737

District Judge: The Honorable A. Richard Caputo

Submitted Pursuant to Third Circuit L.A.R. 34.1(a)

March 18, 2013

Before: SMITH, GREENAWAY, JR., and VAN

ANTWERPEN,

Circuit Judges

(Filed: April 29, 2013)
2

Clifford B. Cohn

Suite 925

620 Chestnut Street

Public Ledger Building

Philadelphia, PA 19106

Jeffrey J. Malak

Chariton, Schwager & Malak

138 South Main Street

P.O. Box 910

Wilkes-Barre, PA 18703

Thomas H. Roberts

Thomas H. Roberts & Associates

105 South First Street

Richmond, VA 23219

Counsel for Appellant

Daniel T. Brier

Donna A. Walsh

Myers, Brier & Kelly

425 Spruce Street

Suite 200

Scranton, PA 18503

Counsel for Appellee

_____________________

OPINION

_____________________

SMITH, Circuit Judge.
3

In Clackamas Gastroenterology Associates, P.C. v. 

Wells, 538 U.S. 440 (2003), the Supreme Court set out a test 

for determining whether a shareholder-director of a 

professional corporation is an “employee” for purposes of the 

Americans with Disabilities Act (ADA). Id. at 449-50. This 

appeal allows us to consider whether that test applies to

business entities that are not professional corporations in a 

Title VII employment action. We hold that it does. 

I.

Mariotti Building Products, Inc., is a “closely held 

family business.” Louis S. “Babe” Mariotti started the family 

business in 1947, operating “a small lumber yard.” In the 

1960s, Babe‟s sons, Plaintiff Robert A. Mariotti, Sr.

(Plaintiff), and his two brothers, Eugene L. Mariotti, Sr. and 

Louis C. Mariotti “joined the business.” Babe and his sons 

continued to develop the business, eventually incorporating it 

as Mariotti Building Products, Inc. (MBP). The business 

“experienced substantial growth” over the years with “annual 

sales skyrocketing from less than $250,000 to over $60 

Million.” MBP, according to the amended complaint, is 

“recognized as the area‟s best source for building 

materials[.]” Plaintiff averred that he was “responsible for 

developing and growing a number of areas” of MBP‟s 

business, “principally manag[ing] the manufactured housing 

sales division of the company together with customer credit, 

bill paying, and purchasing and inbound transportation of 

product lines[.]” Plaintiff further averred that the divisions he 

managed “earned profit” of more than $15 million in the six 

years preceding termination of his employment, and that that 
4

amount exceeded the profit of the divisions managed by his

brother Eugene. 

As “one of the founders of MBP,” Plaintiff was an 

officer of the corporation, serving as both vice-president and 

secretary. He also served as a member of the board of 

directors, and was a shareholder pursuant to a written 

agreement executed by the parties on July 23, 2007. Plaintiff

averred that he and his brothers “were not at-will employees” 

of MBP because they were employed pursuant to an 

agreement that provided for termination “only for cause.” 

Plaintiff alleged that he had a “spiritual awakening” in 

1995. His newfound spirituality, he claimed, resulted in “a 

systematic pattern of antagonism” toward him. It took the 

form of “negative, hostile and/or humiliating statements” 

about him and his religious affiliation. MBP‟s officers,

directors, and some employees were the source of this 

harassment. In 2005, the harassment increased. 

Babe Mariotti, the family patriarch, died either at the 

end of 2008 or in the first days of January 2009. On January 

4, 2009, while the family was making arrangements for the 

funeral, Eugene Mariotti, derided Plaintiff and his faith. At 

the funeral on January 6, Plaintiff delivered a eulogy, which 

included comments about his own faith, and his “father‟s 

good example.” The eulogy upset members of the family. 

On January 8, the shareholders of the closely held family 

business convened a meeting in Plaintiff‟s absence and 

decided to terminate his employment. 
5

Two days later on January 10, 2009, Plaintiff received 

written notice of the termination of his employment. The 

notice recited that the shareholders had met to discuss his 

future status as an employee and that the vote to terminate his 

employment had been unanimous and was effective 

immediately. The letter explained that various benefits would 

cease, including the use of a company car, health insurance

coverage, a cellular telephone, access to company credit 

cards, and the availability of an office. Finally, the letter 

explained that “[y]our share of any draws from the 

corporation or other entities will continue to be distributed to 

you.”1 

Despite his termination in January of 2009, Plaintiff

continued to serve as a member of MBP‟s board of directors 

“until August 6, 2009, when the shareholders did not re-elect 

him as a director” of the closely held family corporation. On 

October 22, 2009, Plaintiff filed a timely charge of religious 

discrimination in violation of Title VII of the Civil Rights Act

of 1964, as amended. 42 U.S.C. § 2000e-2(a)(1). Thereafter, 

Plaintiff filed suit against MBP, asserting Title VII claims of 

religious discrimination and a hostile work environment. He 

also asserted several state law claims. MBP moved to dismiss 

the complaint under Federal Rule of Civil Procedure 12(b)(6), 

arguing that Plaintiff was not an “employee” for purposes of 

Title VII and could not invoke its protections. An amended 

 

1

In a closely held corporation, a “draw” is a withdrawal of 

money from the business to the business owner. The 

American Heritage Dictionary of Business Terms (2010), 

available at http://business.yourdictionary.com/draw.
6

complaint followed, and was met with a second motion to 

dismiss asserting the same argument.

In a Memorandum dated July 8, 2011, the District 

Court granted the motion to dismiss the Title VII claims and 

declined to exercise supplemental jurisdiction over the state 

law claims. The Court concluded that Plaintiff was “not an 

„employee‟ under Title VII.” Mariotti v. Mariotti Bldg. 

Prods., Inc., No. 3:11-CV-737, 2011 WL 2670570, at *4

(M.D. Pa. July 8, 2011). Alternatively, the Court determined

that “[e]ven if [Plaintiff] was an employee under Title VII, he 

has failed to state a hostile work environment claim.” Id. A 

timely notice of appeal followed.2

II.

Under Rule 12(b)(6), a motion to dismiss may be 

granted only if, accepting all well-pleaded allegations in the 

complaint as true and viewing them in the light most 

favorable to the plaintiff, a court concludes that “the 

allegations in a complaint, however true, could not raise a 

claim of entitlement to relief[.]” Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 558 (2007). We exercise plenary review over 

an order granting a Rule 12(b)(6) motion. W. Penn Allegheny 

Health Sys., Inc. v. UPMC, 627 F.3d 85, 97 (3d Cir. 2010). 

Whether the District Court applied the correct legal standard 

in deciding that Plaintiff was not an employee for purposes of 

Title VII presents a legal question. Accordingly, we exercise 

 

2

The District Court exercised jurisdiction under 28 U.S.C. 

§§ 1331, 1367. We have appellate jurisdiction under 28 

U.S.C. § 1291.
7

plenary review. Lanning v. Se. Pa. Transp. Auth., 181 F.3d 

478, 484-85 (3d Cir. 1999). 

III.

In Clackamas, the Supreme Court considered whether 

the shareholder-directors of a professional corporation should 

be counted as employees in determining whether the business 

entity met the threshold number of employees, and thereby 

qualified as an employer under the ADA. 538 U.S. at 442. 

Noting that the ADA purported to define the term 

“employee,” the Court began its analysis by declaring that the 

statute “simply states that an „employee‟ is „an individual 

employed by an employer.‟” Id. at 444 (quoting 42 U.S.C. 

§ 12111(4)). This definition, in the Court‟s view, “surely 

qualifies as a mere „nominal definition‟ that is „completely 

circular and explains nothing.‟”3 Id. (quoting Nationwide 

Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 (1992)).

Consistent with precedent, the Supreme Court looked to the 

“„conventional master-servant relationship as understood by 

common-law agency doctrine‟” in deciding what Congress 

intended the term “employee” to mean. Id. at 445 (quoting 

Darden, 503 U.S. at 322-23).

The Court observed that “the common law‟s definition 

of the master-servant relationship,” focusing as it does on the 

“master‟s control over the servant,” provided “helpful 

guidance.” Id. at 448. It concluded that “the common-law 

element of control is the principal guidepost that should be 

followed” in deciding whether an individual is an employee. 

 

3 We would go so far as to characterize it as tautological.
8

Id. After considering the guidelines of the Equal 

Employment Opportunity Commission (EEOC) applicable to

determining whether “partners, officers, members of boards 

of directors, and major shareholders qualify as employees[,]” 

id., the Court declared that six factors in the EEOC guidelines 

were “relevant to the inquiry whether a shareholder-director 

is an employee,” id. at 449. The six EEOC factors identified 

by the Court were:

[1.] Whether the organization can hire or fire 

the individual or set the rules and regulations of 

the individual‟s work

[2.] Whether and, if so, to what extent the 

organization supervises the individual‟s work

[3.] Whether the individual reports to 

someone higher in the organization

[4.] Whether and, if so, to what extent the 

individual is able to influence the organization

[5.] Whether the parties intended that the 

individual be an employee, as expressed in 

written agreements or contracts

[6.] Whether the individual shares in the 

profits, losses, and liabilities of the 

organization.
9

Id. at 449-50 (quoting EEOC Compl. Man. § 605:0009

(2000)). 

The Supreme Court instructed that “[a]s the EEOC‟s 

standard reflects, an employer is the person, or group of 

persons, who owns and manages the enterprise.” Id. at 450. 

The Court cautioned against using an individual‟s title as the 

determinative factor and noted that the mere existence of an 

employment agreement is likewise not dispositive. Id. 

Rather, “the answer to whether a shareholder-director is an 

employee depends on all the incidents of the relationship . . . 

with no one factor being decisive.” Id. at 451 (internal 

quotation marks and citations omitted).

Plaintiff contends that Clackamas should not be 

applied in this case. He is correct that there are several 

differences between Clackamas and this case. None of those 

differences, however, provides a sound basis for disregarding 

the Supreme Court‟s guidance in Clackamas. 

First, Plaintiff argues Clackamas concerned the ADA, 

not Title VII. This distinction is without significance. The 

Supreme Court granted certiorari in Clackamas to address the 

conflict among the courts in determining whether an 

individual qualifies as an employee under the ADA, as well 

as under other antidiscrimination statutes, including Title VII 

and the Age Discrimination in Employment Act (ADEA). 

538 U.S. at 444 n.3. Because Title VII‟s definition of 

employee is the same as the ADA‟s definition, see 42 U.S.C. 

§§ 2000e(f), 12111(4), and because the EEOC‟s guidelines, 

on which the Clackamas Court relied, apply to coverage 

under Title VII, the ADEA, the ADA, and the Equal Pay Act, 
10

see Clackamas, 538 U.S. at 449 n.7, we conclude that the

analysis set out in Clackamas applies to Title VII as well. See 

De Jesus v. LTT Card Servs., Inc., 474 F.3d 16, 24 (1st Cir. 

2007). 

Second, we recognize that Clackamas concerned 

whether an individual was an employee for purposes of 

determining if the employee threshold had been met, thereby 

subjecting the business entity to the ADA‟s prohibitions

against discrimination. 538 U.S. at 442. As Plaintiff

correctly notes, there is no dispute in this case that MBP, 

which has more than 15 employees, qualifies as an employer 

covered by Title VII. Nonetheless, Clackamas remains 

applicable here because neither the ADA nor Title VII define 

the term “employee” solely for purposes of deciding which 

business entities may be subject to the proscriptions against 

employment discrimination.

4

 Rather, the definitions in the 

ADA and Title VII also apply to the statutory provisions 

establishing enforcement mechanisms that may be exercised 

by the EEOC or the aggrieved employee. 42 U.S.C. 

§§ 2000e-5, 12117. Thus, the definitions of “employer” and 

“employee” set forth in both the ADA and Title VII are 

relevant in resolving (1) whether an entity qualifies as an 

“employer” under Title VII, and (2) whether an individual is 

 

4

See 42 U.S.C. § 2000e (providing that the definitions are for 

the purposes of “this subchapter,” which is Subchapter VI, 

regarding equal employment opportunities); see also 42 

U.S.C. § 12111 (specifying that its definitions are for 

purposes of Subchapter I of the ADA pertaining to 

employment).
11

an “employee” who “may invoke [Title VII‟s] . . . protections 

against discrimination[.]” Clackamas, 538 U.S. at 446 n.6. 

As a consequence, even though Clackamas considered the 

question of whether certain individuals were employees of a 

covered entity, its test informs our determination as to 

whether Plaintiff is entitled to invoke Title VII‟s protections. 

Third, we consider Plaintiff‟s contention that the 

Clackamas test applies only to professional corporations. 

Because MBP is not a professional corporation, Plaintiff

asserts that the District Court erred by applying the 

Clackamas test.

We are not persuaded. As the First Circuit noted in De

Jesus, the EEOC Compliance Manual, on which the 

Clackamas Court relied, did “not restrict itself to professional 

corporations; indeed, it explicitly covers major shareholders.” 

474 F.3d at 24. For that reason, the First Circuit concluded 

that Clackamas “applies to close corporations as well as to 

professional corporations.” Id. Similarly, in Smith v. 

Castaways Family Diner, 453 F.3d 971 (7th Cir. 2006), the 

Seventh Circuit reiterated “that the Clackamas test is not 

confined to shareholder-directors” of a professional 

corporation, but “may be applied” to other business entities as 

envisioned by the EEOC manual that the Court embraced. Id.

at 977 (citing Solon v. Kaplan, 398 F.3d 629, 633 (7th Cir. 

2005)). The Court proceeded to apply Clackamas in deciding 

whether the sole proprietor‟s mother and husband, both of 

whom managed the business, qualified as employees, thereby 

subjecting the diner to Title VII coverage.
12

We agree with our sister Courts of Appeals that 

Clackamas‟s application is not limited to professional 

corporations. The EEOC Manual on which the Court relied 

in Clackamas considered multiple business enterprises. 538 

U.S at 449. Furthermore, the Supreme Court‟s analysis 

pointed out that the form of the business entity was not the 

key element, emphasizing that the determination of one‟s 

status cannot be decided simply on the basis of titles, such as

an individual‟s status as a partner, director, or officer, or the 

existence of documentary evidence. Id. at 449-450. “Rather, 

. . . the answer to whether [an individual] is an employee 

depends on all of the incidents of the relationship with no one 

factor being decisive.” Id. at 451 (internal quotation marks, 

ellipsis and citations omitted). We therefore conclude that the 

nature of the business entity is simply an attribute of the 

employment relationship that must be considered in applying 

the Clackamas test to determine whether an individual is an 

employee or an employer. For that reason, MBP‟s status as a 

closely held family business informs our analysis. 

Consistent with Clackamas, our analysis focuses on 

the element of control and the six factors discussed in that 

precedent. 538 U.S. at 448-50. As the Seventh Circuit 

explained in Castaways Family Diner, the six factors address 

not only the extent of an individual‟s control, but also “the 

source of an individual‟s authority” to control. 453 F.3d at 

983. Castaways Family Diner recognized that in Clackamas

the Supreme Court did not mention the source of an 

individual‟s authority as a factor in the analysis. Id. at 984. 

Nonetheless, the Seventh Circuit believed that the Supreme 

Court “hinted” as much “in at least one of the test‟s six 

factors,” i.e. the factor regarding “„[w]hether the organization 
13

can hire or fire the individual or set the rules and regulations 

of the individual‟s work.‟” Id. (quoting Clackamas, 538 U.S. 

at 449 (emphasis added)). It further noted that the 

significance of the source of an individual‟s 

authority is implicit in the framing of the test as 

one for partners, major shareholders, directors, 

and the like. . . . [as] those are the types of 

individuals whose status within an enterprise 

potentially gives them authority that is not 

dependent on the acquiescence of others. 

Clackamas itself speaks not only of the control 

that an employer exercises but his right to exert 

such control.

Id. at 984-85 (citing Clackamas, 538 U.S. at 448). We agree 

with the Seventh Circuit. As additional support for our view, 

we note that the fourth factor set forth in Clackamas, which 

scrutinizes the individual‟s ability to “influence the 

organization,” implicitly examines the source of the 

individual‟s authority. Clackamas, 538 U.S. at 450.

Accordingly, we adopt the approach of the Seventh 

Circuit in Castaways Family Diner. In determining whether 

Plaintiff‟s amended complaint states a claim for relief under 

Title VII, we “must take into account not only the authority 

[he] wields within the enterprise but also the source of that 

authority.” Castaways Family Diner, 453 F.3d at 984. 

Specifically, we must consider whether Plaintiff “exercises 

the authority by right, or whether he exercises it by delegation 

at the pleasure of others who ultimately do possess the right 

to control the enterprise.” Id.
14

Our review of the allegations of Plaintiff‟s amended 

complaint confirms that Plaintiff‟s status as a shareholder, a 

director, and a corporate officer gave him both substantial 

authority at MBP and the right to control the enterprise. He 

was entitled to participate in the management, development,

and governance of MBP. By sitting on the board of directors

and serving as a corporate officer, Plaintiff had the ability to 

participate in the fundamental decisions of the business. We 

cannot ignore Plaintiff‟s allegation, which we must accept as 

true, that after his termination in January of 2009, he 

continued to serve as a director of the closely held family 

corporation until August 6, 2009. Furthermore, the 

termination letter he received did not mention the cessation of 

any salary. Instead, it stated that “[y]our shares of any draws 

from the corporation or other entities will continue to be 

distributed to you.” We conclude that Plaintiff‟s amended 

complaint fails to allege that he is “the kind of person that the 

common law would consider” an employee. Clackamas, 538 

U.S. at 445 n.5. He has not alleged a claim that entitles him 

to relief.5

 

5

The Clackamas test is a fact intensive one; therefore, cases 

requiring application of the test may generally require 

resolution at the summary judgment stage, rather than at the 

motion to dismiss stage. See Decotiis v. Whittemore, 635 

F.3d 22, 35 n.15 (1st Cir. 2011) (noting in other context that 

courts hesitate to dispose of fact-intensive inquiry at motion 

to dismiss stage); Todd v. Exxon Corp., 275 F.3d 191, 199-

200 (2d Cir. 2001) (same). Similarly, we note that most of 

the decisions of our sister Courts of Appeals, in applying the 

Clackamas factors, dealt with motions for summary 
15

We recognize that Plaintiff‟s amended complaint 

alleges that he did not have exclusive control of MBP. 

Exclusive control, however, is merely one attribute of the 

employment relationship. Its absence does not compel a 

conclusion that an individual who lacks it is an employee 

entitled to invoke Title VII‟s protections. Such a conclusion 

would ignore that the EEOC guidelines, which the Court 

embraced in Clackamas, pertained to business entities that do 

not vest exclusive control in any one individual. Id. at 448 

(noting the guidelines applied to “partners, officers, members

of boards of directors, and major shareholders” (emphasis 

added)) 

The allegations in the amended complaint make plain 

that Plaintiff was entitled to participate in the development 

 

judgment, rather than motions to dismiss. E.g., Fichman v. 

Media Ctr., 512 F.3d 1157, 1158 (9th Cir. 2008); De Jesus v. 

LTT Card Servs., Inc., 474 F.3d 16, 18 (1st Cir. 2007); Smith 

v. Castaways Family Diner, 453 F.3d 971, 972 (7th Cir. 

2006); Solon v. Kaplan, 398 F.3d 629, 630 (7th Cir. 2005). 

Clackamas itself was an appeal from a grant of summary 

judgment. 538 U.S. at 442. 

The fact that we are affirming the District Court‟s 

dismissal of the complaint based on application of the 

Clackamas test does not alter the fact-intensive nature of the 

analysis nor does it indicate that the motion to dismiss stage 

will usually be the appropriate juncture for application of the 

test. Rather, on the clear facts and circumstances of this 

specific case, we find that the District Court‟s determination 

was the proper one. 
16

and governance of the business His averment that he 

continued to serve after his termination on January 9, 2009 as 

a member of the board of directors confirms that he remained 

entitled by virtue of his position “to a say in the fundamental 

decisions” of the closely held family corporation for months 

after his termination. Castaways Family Diner, 453 F.3d at 

983. For that reason, we conclude that the District Court did 

not err in its determination that the allegations in Plaintiff‟s 

complaint did not establish that he was an employee under

Title VII. He is not entitled, therefore, to invoke its 

protections.

We will affirm the judgment of the District Court.6 

 

6 Because we conclude that Plaintiff is not entitled to invoke 

the protections of Title VII, there is no need to consider 

whether his amended complaint sufficiently alleged a hostile 

environment claim.