Court Opinion

ID: 9353525
Source: CourtListenerOpinion
Date Created: 2023-01-12 01:00:23.826458+00
Date Added: 2024-06-11T17:08:03.611022
License: Public Domain

Case: 22-20267        Document: 00516607159             Page: 1      Date Filed: 01/11/2023

             United States Court of Appeals
                  for the Fifth Circuit                                         United States Court of Appeals
                                                                                         Fifth Circuit

                                                                                       FILED
                                                                                January 11, 2023
                                      No. 22-20267                                   Lyle W. Cayce
                                    Summary Calendar                                      Clerk

   Joseph Z. Morkos,

                                                                   Plaintiff—Appellant,

                                            versus

   DNV GL USA, Incorporated,

                                                                   Defendant—Appellee.

                     Appeal from the United States District Court
                         for the Southern District of Texas
                              USDC No. 4:18-CV-2037

   Before King, Higginson, and Willett, Circuit Judges.
   Per Curiam:*
         Joseph Morkos appeals the dismissal of his former employer’s parent
   company from his employment discrimination suit. For the following
   reasons, we AFFIRM.

         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-20267      Document: 00516607159           Page: 2   Date Filed: 01/11/2023

                                     No. 22-20267

                                              I.
          On June 19, 2018, Plaintiff-Appellant Joseph Morkos filed an
   employment discrimination suit against his former employer, Defendant-
   Appellee DNV GL USA, Inc. (“DNV USA”), following his termination
   from DNV USA on February 2, 2018. On June 11, 2019, Morkos filed a
   supplement to his complaint, in which he added DNV USA’s parent
   company, DNV GL Group AS (“DNV Group”), as a party to the action. On
   March 20, 2020, DNV USA and DNV Group moved for summary judgment
   on all of Morkos’s claims. Relevant to this appeal, DNV USA and DNV
   Group argued that DNV Group should be dismissed from the action because
   Morkos could not establish that DNV Group was his employer, a necessary
   element for his pending claims. On December 3, 2020, the magistrate judge
   overseeing this case granted partial summary judgment for DNV USA and
   DNV Group and dismissed DNV Group from the action. Specifically, the
   magistrate judge held that there was “no summary judgment evidence”
   demonstrating that (1) DNV USA and DNV Group interacted beyond their
   admitted parent-subsidiary relationship or that (2) DNV Group was “party
   to, or responsible for, any action taken by DNV USA about which Morkos
   complains in this case.” The magistrate judge also granted summary
   judgment for DNV USA on Morkos’s claims for discrimination under Title
   VII of the Civil Rights Act of 1964 and 42 U.S.C. § 1981 and his claim for
   intentional infliction of emotional distress. Morkos twice moved for
   reconsideration of DNV Group’s dismissal, and both motions were denied.
   After a trial, a jury issued a take-nothing verdict on Morkos’s remaining
   claims. On appeal, Morkos challenges the dismissal of DNV Group from this
   action. Morkos also argues that he was deprived of a fair trial because DNV
   Group’s absence from the remaining proceedings was “seriously prejudicial
   to [his] ability to present his claims.”

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                                    No. 22-20267

                                        II.
          “We review a district court’s grant of summary judgment de novo,
   applying the same standard on appeal as that applied below.” Rogers v.
   Bromac Title Servs., L.L.C., 755 F.3d 347, 350 (5th Cir. 2014). Summary
   judgment is proper “if the movant shows that 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). “A genuine dispute as to a material fact exists
   ‘if the evidence is such that a reasonable jury could return a verdict for the
   nonmoving party.’” Rogers, 755 F.3d at 350 (quoting Anderson v. Liberty
   Lobby, Inc., 477 U.S. 242, 248 (1986)). Accordingly, “all justifiable
   inferences” are made in the nonmoving party’s favor. Morris v. Covan World
   Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998).
          If, as here, the nonmoving party bears the burden of proof at
          trial, the moving party may demonstrate that it is entitled to
          summary judgment by submitting affidavits or other similar
          evidence negating the nonmoving party’s claim, or by pointing
          out to the district court the absence of evidence necessary to
          support the nonmoving party’s case.
   Id. If the moving party meets its burden, the nonmoving party is then required
   to “go beyond the pleadings,” either by “her own affidavits, or by the
   ‘depositions, answers to interrogatories, and admissions on file,’” so as to
   “designate ‘specific facts showing that there is a genuine [dispute] for
   trial.’” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting Fed. R.
   Civ. P. 56(e)). “[M]ere conclusory allegations are not competent summary
   judgment evidence.” Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996);
   Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).
          We examine four factors in determining whether a parent corporation
   and its subsidiary may be regarded as a single employer: “(1) interrelation of
   operations, (2) centralized control of labor or employment decisions, (3)

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                                    No. 22-20267

   common management, and (4) common ownership or financial control.”
   Lusk v. Foxmeyer Health Corp., 129 F.3d 773, 777 (5th Cir. 1997) (citing
   Trevino v. Celanese Corp., 701 F.2d 397, 404 (5th Cir. 1983)). “The doctrine
   of limited liability creates a strong presumption that a parent corporation is
   not the employer of its subsidiary’s employees.” Id. at 778.
           Only evidence of control suggesting a significant departure
           from the ordinary relationship between a parent and its
           subsidiary—domination similar to that which justifies piercing
           the corporate veil—is sufficient to rebut this presumption and
           to permit an inference that the parent corporation was a final
           decision-maker in its subsidiary’s employment decisions.
   Id. (citation omitted).
           As at summary judgment, DNV USA again avers that DNV Group
   was not Morkos’s employer, arguing that Morkos cannot point to any
   evidence that would negate the “strong presumption that a parent
   corporation is not the employer of its subsidiary’s employees.” See id. at 778.
   We agree—Morkos’s evidence is paltry by comparison to what he must
   show.
           In support of the first factor for the single-employer test—
   interrelation of operations—a plaintiff may point to evidence that a parent
   corporation:
           (1) was involved directly in the subsidiary’s daily decisions
           relating to production, distribution, marketing, and
           advertising; (2) shared employees, services, records, and
           equipment with the subsidiary; (3) commingled bank accounts,
           accounts receivable, inventories, and credit lines; (4)
           maintained the subsidiary’s books; (5) issued the subsidiary’s
           paychecks; or (6) prepared and filed the subsidiary’s tax
           returns.

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   Id. Morkos, however, can point to no evidence resembling the above and
   instead directs us to deposition testimony concerning a recruiting
   advertisement that reads, “Whether you work in Oslo, Singapore, Houston
   or Hamburg you will be a part of an international team and work with
   colleagues and customers from different countries and cultures.” But in that
   same deposition, counsel for Morkos acknowledges that this quoted
   document includes a notation stating that DNV Group “has no employees.”
   Morkos also points to testimony quantifying the “number of collective
   employees” across all of DNV Group’s legal entities. None of this evidence,
   though, goes beyond the “ordinary relationship” that exists between a parent
   corporation and its subsidiary. Id. Morkos also cites conclusory statements
   from his own affidavit that “[a]t all times, my job assignments, salary, annual
   performance ratings, annual salary adjustments and any awards or personal
   recognitions were subject to approval of officials of [DNV Group],” with no
   corroborating evidence. This is not “competent summary judgment
   evidence.” See Eason, 73 F.3d at 1325; Ragas, 136 F.3d at 458.
          With respect to the second factor—centralized control of labor or
   employment decisions—Morkos points to the events surrounding his
   termination. Specifically, Morkos cites an email between his direct
   supervisor employed by DNV GL Limited, Anita Kovacs, and Michael
   McCaffrey, a human resources manager for DNV USA employed by Group
   Global Shared Services, an organization that provides human resources and
   corporate governance services to DNV Group and its subsidiaries. In that
   email, Kovacs asks if there is “any option to terminate Joe Morkos’s
   employment.” McCaffrey later testified that he told Kovacs that they could
   not terminate Morkos at that time because he was on “protected leave.”
   Morkos also argues that Hege Espedal, the finance director for digital
   solutions at DNV GL AS, was ultimately responsible for his termination and
   the hiring of his replacement. But this evidence demonstrates that

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   employment decisions were not centralized. All three of these individuals
   were employed by different entities at the time of Morkos’s termination—
   McCaffrey by Group Global Shared Services, Kovacs by DNV GL Limited,
   and Espedal by DNV GL AS—none of which was DNV Group.
   Furthermore, Morkos does not show that these three individuals coordinated
   his termination. Morkos again cites his affidavit for the proposition that his
   “job assignments, salary, annual performance ratings, annual salary
   adjustments and any awards or personal recognition were subject to approval
   by [DNV Group],” but we need not rely on mere conclusory allegations at
   summary judgment. See Eason, 73 F.3d at 1325; Ragas, 136 F.3d at 458.
          For the third factor—common management—Morkos similarly
   presents unconvincing evidence. First, he cites the DNV USA website,
   which reads, “DNV GL comprises about 300 sites in more than 100
   countries, and has revenues of about EUR 2,500 million per year. Our 16,000
   professionals around the world are dedicated to helping our customers make
   the world safer, smarter and greener.” Morkos contends that this statement
   shows that “DNV USA promotes and seeks advantage from its being
   considered as part of [DNV Group].” Second, Morkos refers us to various
   organizational charts which show DNV Group as the parent to numerous
   subsidiaries, with Group Global Shared Services sitting below the
   subsidiaries as well. Above one such chart, DNV Group is referred to as the
   “group management company of the DNV GL group of companies.” Third,
   Morkos argues that DNV Group has a code of conduct that is applicable to
   all its subsidiaries’ employees. Fourth, he directs us to a letter he received
   from an employee of DNV GL AS informing him of a salary increase. But all
   of this is also typical of a parent-subsidiary relationship. None of this
   demonstrates that DNV Group was involved in or responsible for making
   DNV USA’s employment decisions.

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                                    No. 22-20267

          Morkos’s     arguments    regarding      the   fourth     factor—common
   ownership or financial control—are likewise unavailing. He argues, and
   DNV USA does not contest, that DNV Group controls the entire interest in
   each of its subsidiaries. But again, a controlling interest alone is not enough
   to overcome the strong presumption that a parent corporation is not the
   employer of a subsidiary’s employees. Lusk, 129 F.3d at 778.
          Overall, Morkos does not demonstrate that the relationship between
   DNV USA and DNV Group was out of the ordinary. There is no evidence
   that DNV Group dominated DNV USA to a degree that would lead us to
   believe that DNV Group was directly involved in the employment decisions
   for Morkos or any other employee of DNV USA. Therefore, Morkos cannot
   overcome the presumption that DNV USA and DNV Group acted as a single
   employer, and the magistrate judge was correct in dismissing DNV Group
   from this action. Accordingly, because the dismissal of DNV Group was
   proper, Morkos could not have suffered prejudice from its absence during the
   remainder of this litigation.
                                        III.
          Therefore, for the foregoing reasons, we AFFIRM.

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