Opinion ID: 11163
Heading Depth: 2
Heading Rank: 2

Heading: The Single Employer Test

Text: In civil rights actions, superficially distinct entities may be exposed to liability upon a finding they represent a single, integrated enterprise: a single employer. Trevino v. Celanese Corp., 701 F.2d 397, 404 (5th Cir.1983). Trevino set out a four part formula to determine when a parent corporation should be considered the employer of a subsidiary's employee. The formula focuses on actual control of employees by the parent company. The Trevino test has been used repeatedly in both this circuit and 4 others to ascertain when distinct entities may be considered integrated as a single employer. Garcia v. Elf Atochem North America, 28 F.3d 446, 450 (5th Cir.1994); Chaiffetz v. Robertson Research Holding, Ltd., 798 F.2d 731, 735 (5th Cir.1986). Trevino 's four part test considers (1) interrelation of operations; (2) centralized control of labor relations; (3) common management; and (4) common ownership or financial control. Trevino, 701 F.2d at 404. The second of these factors has traditionally been most important, with courts refining their analysis to the single question, What entity made the final decisions regarding employment matters related to the person claiming discrimination? Id., quoting Odriozola v. Superior Cosmetic Distribs., Inc., 531 F.Supp. 1070, 1076 (D.P.R.1982); Chaiffetz, 798 F.2d at 735. Other Fifth Circuit cases have utilized a hybrid economic realities/common law control test to resolve when companies will be considered single employers in ADEA suits. Barrow v. New Orleans S.S. Ass'n, 10 F.3d 292, 296 (5th Cir.1994), Deal v. State Farm County Mut. Ins. Co. of Texas, 5 F.3d 117, 118 (5th Cir.1993). The hybrid test was first used in the context of determining if a worker employed as an independent contractor should be considered the employee of an entity for the purposes of Title VII. Mares v. Marsh, 777 F.2d 1066 (5th Cir.1985). It was then extended to ADEA cases in Fields v. Hallsville Independent School District, 906 F.2d 1017 (5th Cir.1990). While the hybrid test has been used to resolve single employer 5 disputes in ADEA cases, Trevino was the original test used in this circuit to determine if separate, related business entities could together be considered the employer of a civil rights plaintiff. The hybrid test developed as a means of determining when plaintiffs could be considered employees of business entities, not to ascertain if different entities were so integrated as to constitute a single employer of that plaintiff. Trevino and the hybrid test are very similar, since under the hybrid test, the right to control an employee's conduct is the most important component....1 Deal, 5 F.3d at 118. However, we hold that while the Trevino and hybrid tests are similar, and will frequently yield the same results, the tests should not be used interchangeably. Rather, the hybrid test should be used as an initial inquiry to resolve, if need be, whether a plaintiff is an employee of the defendant (or one of the defendants, in a multi defendant case) for the purposes of Title VII.2 If the plaintiff is found to be an employee of one of the defendants under the 1 The Deal court gave the details of the hybrid test: When examining the control component, we have focused on whether the alleged employer has the right to hire and fire the employee, the right to supervise the employee, and the right to set the employee's work schedule. The economic realities component of out test has focused on whether the alleged employer paid the employee's salary, withheld taxes, provided benefits, and set the terms and conditions of employment. Deal, 5 F.3d at 119 (citations omitted). 2 Such an inquiry would be necessary, for example, to determine whether an independent contractor has a sufficiently close relationship to a defendant that the defendant should be liable to the contractor for its conduct. 6 hybrid test, but questions remain whether a second (or additional) defendant is sufficiently connected to the employer-defendant so as to be considered a single employer, a Trevino analysis should be conducted. The Trevino analysis will establish if the second or additional defendant is also an employer of the plaintiff. Since neither ATC nor NRP disputed that Ms. Schweitzer was an employee of ATC for the purposes of the ADEA, there was no need for the district court to instruct on the hybrid test. In this case, the Trevino test was the proper analysis to determine if ATC and NRP were a single employer.