Opinion ID: 675245
Heading Depth: 2
Heading Rank: 2

Heading: Jurisdiction Under Title VII

Text: 35 Title VII of the Civil Rights Act of 1964 prohibits many different forms of discrimination including discrimination on the basis of sex. 42 U.S.C. Sec. 2000e-2. Before a district court may entertain a sexual harassment Title VII claim, the harassing actor must be an employer which the Act defines as an individual or firm that is 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. Sec. 2000e(b). Consistent with the purposes of the Act we interpret the term employer liberally. McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930, 933 (11th Cir.1987). In connection with the district court's decision that Riviera Beach is subject to Title VII liability, Riviera Beach contends that the district court erred by (1) finding that Riviera Beach and Sterling Group should be treated as joint employers for Title VII; and (2) finding that Riviera Beach and Sterling Group jointly employed fifteen or more employees. These threshold issues bear on the court's jurisdiction to decide count I. McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930, 932 (11th Cir.1987).
36 The district court held that Riviera Beach and Sterling Group jointly employed all of the employees working at the Sheraton Ocean Inn. In reaching this decision, the district court focused on the test stated in National Labor Relations Board v. Browning-Ferris Industries, 691 F.2d 1117 (3d Cir.1982): 6 The basis of the finding is simply that one employer while contracting in good faith with an otherwise independent company, has retained for itself sufficient control of the terms and conditions of employment of the employees who are employed by the other employer. Thus the joint employer concept recognizes that the business entities involved are in fact separate but that they share or co-determine those matters governing the essential terms and conditions of employment. 37 Id. at 1122 (citation omitted). Whether Riviera Beach retained sufficient control is essentially a factual question and we find the district court's conclusion to be supported by substantial evidence in the record. See Boire v. Greyhound Corp., 376 U.S. 473, 481, 84 S.Ct. 894, 899, 11 L.Ed.2d 849 (1964); Clinton's Ditch, 778 F.2d at 136. 38 Even though Riviera Beach contracted with Sterling Group to run the hotel, it retained significant authority to control matters at the hotel. Many clauses of the Management Agreement 7 indicate that Riviera Beach retained significant control over Sterling Group and the operation of the Sheraton Ocean Inn. Article 4 grants Sterling Group the power to run the hotel and make the day-to-day decision, but reserved for Riviera Beach the right to pay all costs of operations including the compensation of employees. Article 5 of the Management Agreement begins all employees, including the Resident Manager, are in the employ of owner. Specifically Article 5 states: 39 Manager shall determine the salaries of all employees, including the Resident Manager subject to owner's approval. Manager is in no way liable to said personnel for their wages, compensation or other benefits, and owner shall indemnify and hold manager harmless from liability.... Owner shall not interfere with or give orders or instructions to personnel employed on the premises; however, Manager shall consult with Owner regarding the number and categories of supervisory and executive employees to be appointed, and the terms and conditions of such appointment. Where work permits or employment passes may be required, no application shall be made for such permits ... without prior consent of the owner, and where necessary ... or considered advisable, any such applications shall be made by the owner. 40 Article 5 also gives Riviera Beach final authority and responsibility over any labor negotiations respecting employees at the hotel. Virgo's unrefuted testimony established that Riviera Beach paid her wages, social security taxes, and insurance. Riviera Beach also paid all operation expenses including repairs, advertising, and accountant's fees. Rivas v. Federacion de Asociaciones Pencuarias, 929 F.2d 814, 821 (1st Cir.1991); Clinton's Ditch, 778 F.2d at 138-39; Ref-Chem Co. v. National Labor Relations Bd., 418 F.2d 127, 129 (5th Cir.1969). In sum, the language in the Management Agreement, and Virgo's testimony, in the absence of any contrary evidence, support the district court's finding of joint ownership. See EEOC Decision No. 71-1537, 3 FEP Cases 766, 767 (March 31, 1971) (finding owner of hotel and management company to be joint employers where owner contracted with management company, but retained approval power over the manager's hiring and discharge decisions, paid employee, and employee considered herself employed by owner.) 41 Citing Massey v. Emergency Assistance, Inc., 580 F.Supp. 937 (W.D.Mo.1983), Appellants raise two challenges against the district court's conclusion. First Appellants argue that the only relationship between them and Sterling Group was contractual. They fail to explain, however, how the nature of this connection affects Riviera Beach's ability and authority to control Sterling Group's employees. Second, they argue that the right to control and participate in management decisions such as labor negotiations and hiring and firing, is not the same as actually doing so, and absent proof of actual control Riviera Beach and Sterling Group cannot be found to be joint employers. They cite no authority in support of this argument. We find that actual control is a factor to be considered when deciding the joint employer issue, but the authority or power to control is also highly relevant. The district court found that Riviera Beach paid all costs and expenses related to all hotel employees and paid all expenses of operation. This actual exercise of authority and the retained authority described above, are a sufficient basis upon which to find Sterling Group and Riviera Beach to be joint employers.
42 According to the findings of facts stated by the district court, Riviera Beach and Sterling Group employed the statutorily required fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year. The district court found it obvious that Riviera Beach and Sterling Group, as joint employers, satisfied this statutory requirement. Appellants contend that Virgo failed to introduce evidence demonstrating this fact. We review this factual finding for clear error. Insurance Co. of North America v. M/V Ocean Lynx, 901 F.2d 934, 939 (11th Cir.1990), cert. denied, 498 U.S. 1025, 111 S.Ct. 675, 112 L.Ed.2d 667 (1991). 43 Clear error does not exist here. According to the citations to the record provided to us by Virgo, as joint employers Riviera Beach and Sterling Group employed more than fifteen employees to operate the hotel. Nine employees are specifically identified in the record, and many other positions are described including the restaurant staff, maintenance staff, housekeeper, and lounge staff. Though the text of these citations does not elaborately set forth the number of hours and days worked in 1991 or 1992, in the absence of any proof to the contrary, the district court was not wrong to assume that persons employed in these types of jobs would at a minimum satisfy the statutory requirements. The record contains an adequate and reasonable basis for the district court's finding.