Opinion ID: 792084
Heading Depth: 2
Heading Rank: 1

Heading: Aggregation under the Single Employer and Joint Employer Doctrines

Text: 12 The plaintiff's argument for aggregating the employees of On-Site and Crystal Hills builds on recognized doctrines that enable an employee in certain circumstances to assert employer liability against an entity that is not formally his or her employer. These doctrines are sometimes called the single employer (or single integrated employer) and the joint employer doctrines. The labeling can be deceptive because the terms are used in numerous contexts, such as union representation, responsibility for violations of the Fair Labor Standards Act, and, as here, Title VII liability. Notwithstanding the same label and some core similarities between those contexts, the doctrines might differ significantly in different contexts. 13 In Clinton's Ditch Cooperative Co. v. NLRB, 778 F.2d 132 (2d Cir.1985), a suit alleging that a bottling company, which subcontracted with a trucking company, was a joint employer of the trucking company's drivers and was therefore obligated to bargain collectively with the drivers' union, this Court discussed differences between the single employer and joint employer doctrines. 6 A `single employer' situation exists `where two nominally separate entities are actually part of a single integrated enterprise ....' Id. at 137 (citing NLRB v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1122 (3d Cir.1982)). In such circumstances, of which examples may be parent and wholly-owned subsidiary corporations, or separate corporations under common ownership and management, the nominally distinct entities can be deemed to constitute a single enterprise. See Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235, 1240-41 (2d Cir.1995). There is well-established authority under this theory that, in appropriate circumstances, an employee, who is technically employed on the books of one entity, which is deemed to be part of a larger single-employer entity, may impose liability for certain violations of employment law not only on the nominal employer but also on another entity comprising part of the single integrated employer. Id. 14 In a joint employer relationship, in contrast, there is no single integrated enterprise. A conclusion that employers are `joint' assumes that they are separate legal entities, but that they ... handle certain aspects of their employer-employee relationship jointly. Clinton's Ditch, 778 F.2d at 137 (citing Browning-Ferris, 691 F.2d at 1122). Where this doctrine is operative, an employee, formally employed by one entity, who has been assigned to work in circumstances that justify the conclusion that the employee is at the same time constructively employed by another entity, may impose liability for violations of employment law on the constructive employer, on the theory that this other entity is the employee's joint employer. See Clinton's Ditch, 778 F.2d at 137; see also Laurin, 2004 U.S. Dist. LEXIS 4066, 2004 WL 513999, at . 15 This Court has never discussed the somewhat different, but related, question whether employees of different entities may be aggregated under either the single employer or the joint employer doctrines to satisfy Title VII's fifteen-employee threshold. District court opinions in this Circuit have allowed aggregation of all employees of multiple entities under the single employer doctrine, based upon a finding that those nominally distinct entities should be deemed a single integrated employer for purposes of Title VII. See Westphal v. Catch Ball Products Corp., 953 F.Supp. 475, 478 (S.D.N.Y.1997) (Assuming that Orange Point, Gallup and Catch Ball properly were considered a single employer, the three companies together had 20 employees in 1996 at the time plaintiff was terminated.); Fernot v. Crafts Inn, Inc., 895 F.Supp. 668, 685 (D.Vt.1995) (Two [ ] entities may be given single employer status such that their combined number of employees will be determinative of whether they are subject to Title VII requirements.) (quoting Armbruster v. Quinn, 711 F.2d 1332, 1338 (6th Cir.1983) (internal quotation marks omitted)). Arculeo has not suggested that On-Site and Crystal Hills are part of a single integrated enterprise, and therefore has not argued for aggregation of their employees pursuant to the single employer doctrine. 16 Some authorities have also adopted a rule permitting aggregation so as to satisfy the fifteen-employee requirement on the ground that distinct entities have acted jointly with respect to employment. See Virgo v. Riviera Beach Assocs., Ltd., 30 F.3d 1350, 1359-61 (11th Cir.1994); EEOC Compliance Manual § 2-III(B)(1)(a)(iii)(b) (May 12, 2000). Arculeo claims the benefit of this doctrine. She contends that On-Site and Crystal Hills are her joint employers. She argues for the aggregation of all their employees to determine whether the fifteen-employee threshold is satisfied. But the plaintiff misunderstands the doctrine. Arculeo urges us to follow the EEOC Compliance Manual, which supports aggregation in joint employer circumstances, but she misunderstands its terms. 17 Aggregation of employees under the joint employer doctrine would function quite differently from aggregation of employees under the single employer doctrine. In the single employer context, the court draws the conclusion that, although nominally and technically distinct, several entities are properly seen as a single integrated entity. Accordingly all the employees of the constituent entities are employees of the overarching integrated entity, and all of those employees may be aggregated to determine whether it employs fifteen employees. In contrast, when the circumstances of one employee's employment justify the conclusion that she is being employed jointly by two distinct employers, it does not follow that all the employees of both employers are part of an integrated entity encompassing both. A joint undertaking by two entities with respect to employment may furnish justification for adding to the employees of one employer those employees of another who are jointly employed by the first, but such joint undertaking does not furnish logical justification for adding together all the employees of both employers, unless the circumstances justify the conclusion that all the employees of one are jointly employed by the other. 18 Imagine a company in the clothing business and a temporary agency, which rents office workers on its payroll to business entities. Assume that each company has fewer than fifteen employees on its books. The clothing seller contracts with the temporary agency to have three office workers on the agency's payroll assigned to work at the clothing seller, under circumstances that might justify the conclusion that all three loaned office workers are jointly employed by their formal employer, the temporary agency, and the clothing seller, which supervises them. Such facts might justify adding the three borrowed employees to the employees directly employed by the clothing seller to determine the number of the clothing seller's employees for Title VII purposes. But these facts would furnish no logical justification for adding the other office temps on the staff of the temporary agency (assigned to work for other companies) to the number of employees of the clothing company. Neither would those circumstances justify adding the employees of the clothing company to those of the temporary agency to determine the number of the temporary agency's employees. 19 As noted, our Circuit has as yet taken no position on whether aggregation is appropriate in either the single employer or the joint employer context for purposes of determining whether the Title VII threshold is met. 7 Even assuming that our Circuit would allow aggregation in the joint employment context to meet the fifteen-employee requirement, Arculeo has not shown circumstances that would justify a finding that either On-Site or Crystal Hills should be deemed to have fifteen employees. Arculeo's claim therefore must fail regardless what position this Circuit will ultimately take on the propriety of aggregation in a joint employer situation. 8 20 Arculeo argues that, under joint employment principles, we should aggregate in accordance with the rules described in the EEOC Compliance Manual. The Manual, however, does not endorse simply adding together all the employees of entities found to be joint employers, as may be appropriate where aggregation occurs under the single employer theory. It rather requires a detailed analysis of the number of employees attributable to each employer, either because they are formally employed or jointly employed by that employer. For example, the Manual explains, To determine whether a respondent is covered, count the number of individuals employed by the respondent alone and the employees jointly employed by the respondent and other entities. EEOC Compliance Manual § 2-III(B)(1)(a)(iii)(b). It goes on to give the following example, which has considerable pertinence to our case: 21 CP files a charge against ABC Corp alleging that she was subjected to religious harassment. ABC Corp. has 13 regular employees and five employees assigned by a temporary agency. ABC is covered under Title VII because it has 18 employees. 22 Id., Example 1. It is clear in this example that, if the Manual is followed, the employees of a joint employer who can be counted for aggregation purposes are only those employees either directly or constructively employed by it. ABC has 18 employees because it has 13 employees formally employed by it and five employees attributable to it on a joint employment theory because their employer has assigned them to work at ABC. The analysis is not affected by the number of other persons employed by the temporary agency who are not assigned to work at ABC. Needless to say, the fact that the number of ABC's employees is increased by the five temporary employees furnished by the temporary agency would not provide a basis for increasing the number of employees employed at the temporary agency by adding ABC's 13 regular employees, who are not employed by the temporary agency on any rational theory. 23 We proceed to examine the facts of this case according to the Manual's procedure for aggregation on the basis of joint employment. 9 Because we find that even under the Manual's aggregation procedure, Arculeo has shown no basis for determining that either On-Site or Crystal Hills had fifteen employers, we need not reach the question whether aggregation is ever possible under the joint employer doctrine.