Court Opinion

ID: 2966637
Source: CourtListenerOpinion
Date Created: 2015-09-22 00:55:14.043748+00
Date Added: 2024-06-11T11:43:10.353012
License: Public Domain

Filed:   May 5, 1997

                  UNITED STATES COURT OF APPEALS

                       FOR THE FOURTH CIRCUIT

                             No. 96-1348
                           (CA-95-1604-A)

Abb W. Mangram,

                                               Plaintiff - Appellant,

         versus

General Motors Corporation,

                                                Defendant - Appellee.

                              O R D E R

    The Court amends its opinion filed March 6, 1997, and cited at

108 F.3d 61 as follows:
    On page 2, section 1, line 3 -- the attorney information for

Appellee is corrected to read: "J. Bradley Bennett, Ellen Fels

Berkman, MILLER, CASSIDY, LARROCA & LEWIN, L.L.P., Washington,

D.C., for Appellee."

                                      For the Court - By Direction

                                            /s/ Patricia S. Connor
                                                     Clerk
PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ABB W. MANGRAM,
Plaintiff-Appellant,

v.

GENERAL MOTORS CORPORATION,
Defendant-Appellee,                                          No. 96-1348

        and

LEE M. MCDANIEL; KEN
WASHINGTON,
Defendants.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Leonie M. Brinkema, District Judge.
(CA-95-1604-A)

Argued: January 27, 1997

Decided: March 6, 1997

Before WILKINSON, Chief Judge, and HAMILTON and
WILLIAMS, Circuit Judges.

_________________________________________________________________

Affirmed by published opinion. Chief Judge Wilkinson wrote the
opinion, in which Judge Hamilton and Judge Williams joined.

_________________________________________________________________

COUNSEL

ARGUED: Clinton A. Jackson, C. A. JACKSON & ASSOCIATES,
Washington, D.C., for Appellant. Joe R. Caldwell, Jr., MILLER,
CASSIDY, LARROCA & LEWIN, L.L.P., Washington, D.C., for
Appellee. ON BRIEF: David A. Branch, C. A. JACKSON & ASSO-
CIATES, Washington, D.C., for Appellant. J. Bradley Bennett,
Ellen Fels Berkman, MILLER, CASSIDY, LARROCA & LEWIN,
L.L.P., Washington, D.C., for Appellee.

_________________________________________________________________

OPINION

WILKINSON, Chief Judge:

Abb Mangram appeals the district court's dismissal of his Age Dis-
crimination in Employment Act ("ADEA") claim against General
Motors Corporation. Mangram argues that the district court wrongly
determined that he was not an employee and therefore not covered
under the ADEA. We disagree. At no time during or after Mangram's
training to become an automobile dealer did he enter an employment
relationship with General Motors. Accordingly, we affirm the judg-
ment of the district court.

I.

In October 1989, Abb Mangram joined General Motors' Minority
Dealership Development Program. This twelve-month program,
which provides dealership opportunities to minority entrepreneurs,
includes classroom and on-site dealership training. On October 11,
1989, Mangram formalized his entry into the Program by signing a
written Memorandum of Understanding ("MOU"). The MOU
described the Program and set forth the terms and conditions of Man-
gram's participation. The MOU included General Motors' agreement
to pay Mangram a monthly stipend of $3,000 during his enrollment.
At the conclusion of the Program in September 1990, General Motors
agreed to extend Mangram's stipend for an additional twelve months.

The MOU made clear, however, that "[a]s a participant in the
Academy program, you [Mangram] will not be an employee of Gen-
eral Motors Corporation." Furthermore, Mangram stipulated that he
was not entitled to a number of benefits that are normally associated
with an employment relationship including annual leave, retirement

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benefits, and the payment of social security taxes. The agreement also
stated, "In no event, however, shall your participation in the program
continue beyond 12 months."

The MOU further stipulated that a trainee's participation in the
Program carried no guarantee of a dealership. To the contrary, the
MOU provided that nothing in the agreement was intended to be con-
strued as "constituting any assurance or promise by General Motors"
that trainees would be offered a dealership upon completion of the
Program.

After September 1991, Mangram ceased to draw any form of com-
pensation from General Motors. Furthermore, after the training pro-
gram ended in September 1990, he provided no further services to
General Motors. During this post-trainee period, Mangram's com-
plaint alleges only that General Motors "required" him to maintain
$100,000 in liquid assets and forego "alternate business activities," if
he wished to accept a dealership should one become available.

Nearly four years after Mangram completed the Program, he
alleges that General Motors discriminated against him on account of
his age. According to Mangram's complaint, a representative of the
company told him on June 20, 1994, "Let's face it, nobody is going
to offer you a Dealership, none of the Divisions will take a chance on
you because you are too old; there are younger candidates with more
money." Mangram's EEOC Charge of Discrimination makes clear
that this alleged event is the sole basis for his claim. In the box
marked "Date Discrimination Took Place," Mangram identified
"6/20/94" as both the earliest and latest date on which the discrimina-
tion allegedly occurred.

On November 17, 1995, Mangram filed suit against General
Motors alleging discrimination in violation of the ADEA and several
state law causes of action. In response, General Motors filed a motion
to dismiss under Fed. R. Civ. P. 12(b)(6), arguing that Mangram was
not covered by the ADEA because he was never a General Motors
employee. After a hearing, the district court granted General Motors'
motion, dismissing the ADEA claim with prejudice and Mangram's
remaining state law claims without prejudice. Mangram now appeals.

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II.

Section 4(a)(1) of the ADEA provides, in pertinent part:

         It shall be unlawful for an employer -- to fail or refuse
        to hire or to discharge any individual or otherwise discrimi-
        nate against any individual with respect to his compensa-
        tion, terms, conditions, or privileges of employment,
        because of such individual's age.

29 U.S.C. § 623(a)(1). As we have made clear, the ADEA does not
cover all individuals. Rather, "an `individual' only has a cause of
action under this provision if he is an `employee.'" Garrett v. Phillips
Mills, Inc., 721 F.2d 979, 980 (4th Cir. 1983) (citation omitted).

The ADEA defines an "employee" simply as "an individual
employed by any employer." 29 U.S.C. § 630(f). To elucidate this
definition, the circuit adopted a test which focuses on the control the
putative employer exercises over the alleged employee, and eleven
other factors:

        (1) the kind of occupation . . . (2) the skill required in the
        particular occupation; (3) whether the "employer" or the
        individual in question furnishes the equipment used and the
        place of work; (4) the length of time during which the indi-
        vidual has worked; (5) the method of payment . . . (6) the
        manner in which the work relationship is terminated . . . (7)
        whether annual leave is afforded; (8) whether the work is an
        integral part of the business of the "employer"; (9) whether
        the worker accumulates retirement benefits; (10) whether
        the "employer" pays social security taxes; and (11) the
        intention of the parties.

Garrett, 721 F.2d at 982 (citation omitted); cf. Nationwide Mutual
Insurance Co. v. Darden, 503 U.S. 318, 322-23 (1992) (applying
common law principles to define the term "employee" under ERISA);
Community for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40
(1989) (applying common law principles to define the term "em-
ployee" under the Copyright Act).

                    4
Mangram's claim must fail because he has not alleged facts which
would establish that he was an employee or that an employment rela-
tionship was ever contemplated during any phase of his relationship
with General Motors. The complaint establishes only that General
Motors exercised control over Mangram's schedule during the one
year that he was in the Program, and that General Motors furnished
the facilities for the Program. An examination of the other Garrett
factors reveals, however, that even while Mangram was a participant
in the Program, he was a student -- not a General Motors employee.

Most important with respect to the other Garrett factors, neither
party intended Mangram's participation in the Program to establish an
employment relationship. The MOU, which Mangram signed, specifi-
cally provided that he was not an employee. In Garrett, this court
relied on a similar agreement in determining that the plaintiff was not
an employee under the ADEA, emphasizing that "Phillips and Garrett,
in their written agreement, expressly provided that Garrett was not to
be an employee of Phillips." 721 F.2d at 982 (emphasis added). Other
circuits have also relied on written agreements in holding that a plain-
tiff was not an employee under the ADEA. See Oestman v. National
Farmers Union Ins. Co., 958 F.2d 303, 306 (10th Cir. 1992); Hayden
v. La-Z-Boy Chair Co., 9 F.3d 617, 622 (7th Cir. 1993).

The other Garrett factors cumulatively establish that there was no
employment relationship during Mangram's participation in the Pro-
gram. General Motors never paid social security taxes for Mangram
during the time he participated in the Dealership Program or at any
point thereafter, nor did General Motors make any withholdings or
deductions from the monthly training stipend he received. As Man-
gram concedes, his stipend was not a salary, and he was solely
responsible for satisfying all state, local, and federal tax requirements.
Mangram never accumulated retirement benefits or earned annual
leave. Moreover, the Dealership Program was not an essential or "in-
tegral part" of General Motors' business, but rather was designed to
provide "an alternate path to Dealership ownership for minority entre-
preneurs." Finally, Mangram's participation in the Program lasted for
only twelve months and ended by its own terms upon his graduation
in September 1990.

If Mangram was not an employee during his participation in the
Dealership Program, he certainly was not an employee on the date the

                     5
alleged discrimination took place. On June 20, 1994, Mangram was
neither being paid by nor providing any services to General Motors.
Furthermore, General Motors did not exercise significant control over
Mangram's activities. Mangram's complaint alleges only that General
Motors "required" him to maintain $100,000 in liquid assets and
forego "alternate business activities," if he wished to pursue and
accept dealership opportunities. As the district court noted, these
minor constraints are far more in the nature of a contractual relation-
ship than they are an employer-employee relationship. Any potential
contract claims Mangram might possess must be pursued in state
court.

Even if Mangram had succeeded in becoming a dealer for General
Motors, he still would not have been an employee. An individual who
shares in a firm's management or who exercises a significant amount
of independence from the firm is not considered an employee. See
Fountain v. Metcalf, Zima & Co., 925 F.2d 1398, 1401 (11th Cir.
1991); EEOC v. Dowd & Dowd, Ltd., 736 F.2d 1177, 1178 (7th Cir.
1984); Garrett, 721 F.2d at 982. As Mangram admits in his com-
plaint, dealerships are incorporated separately from General Motors
and are not subsidiaries of General Motors. Indeed, if Mangram had
become a dealer, he would have been the proprietor of a separate cor-
poration -- not a General Motors employee. See Moore v. Ford
Motor Co., 901 F. Supp. 1293, 1297 (N.D. Ill. 1995) ("[A] deal-
er/proprietor exercises too much independence to be considered an
employee of the automobile manufacturer.").

In sum, Mangram asks us to find that he held "employee" status as
a prospective dealer when he would not have held that status if he had
actually become a General Motors dealer. Mangram at best has dem-
onstrated that he was a trainee for a non-employment relationship. As
a prospective non-employee, Mangram simply cannot maintain an
employment discrimination claim.

III.

For the foregoing reasons, we affirm the judgment of the district
court.

AFFIRMED

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