Court Opinion

ID: 7375529
Source: CourtListenerOpinion
Date Created: 2022-07-28 23:18:54.7547+00
Date Added: 2024-06-11T16:21:10.697830
License: Public Domain

USCA4 Appeal: 21-1044      Doc: 36             Filed: 05/18/2022   Pg: 1 of 10

                                                UNPUBLISHED

                               UNITED STATES COURT OF APPEALS
                                   FOR THE FOURTH CIRCUIT

                                                  No. 21-1044

        DANIEL BITTLE-LINDSEY,

                      Plaintiff - Appellant,

        v.

        SEEGARS FENCE COMPANY, INC.; SEEGARS FENCE COMPANY, INC. OF
        NEWPORT,

                      Defendants - Appellees.

        Appeal from the United States District Court for the Eastern District of North Carolina, at
        Greenville. Terrence W. Boyle, District Judge. (4:19-cv-00040-BO)

        Argued: March 10, 2022                                              Decided: May 18, 2022

        Before WYNN, HARRIS, and RICHARDSON, Circuit Judges.

        Affirmed by unpublished opinion. Judge Wynn wrote the opinion, in which Judge Harris
        and Judge Richardson joined.

        ARGUED: Craig Patrick Hensel, HENSEL LAW, PLLC, Greensboro, North Carolina,
        for Appellant. Katie Weaver Hartzog, HARTZOG LAW GROUP LLP, Raleigh, North
        Carolina, for Appellees. ON BRIEF: Katherine M. Barber-Jones, HARTZOG LAW
USCA4 Appeal: 21-1044      Doc: 36         Filed: 05/18/2022    Pg: 2 of 10

        GROUP LLP, Raleigh, North Carolina, for Appellees.

        Unpublished opinions are not binding precedent in this circuit.

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        WYNN, Circuit Judge:

              Plaintiff Daniel Bittle-Lindsey sued Defendants Seegars Fence Company, Inc. of

        Newport (“Newport”) and Seegars Fence Company, Inc. (“Seegars”) for violations of the

        Americans with Disabilities Act (“ADA”). The district court granted Defendants’ motion

        for summary judgment, finding that Bittle-Lindsey could not satisfy the ADA’s numerosity

        requirement. We affirm.

                                                   I.

              Bittle-Lindsey worked as a fence installer for Newport from April to August 2015.

        Newport is a small North Carolina corporation that offers fence-installation services to

        residential and commercial customers in Newport, North Carolina, and the surrounding

        region. Bittle-Lindsey alleges that during his employment with Newport, he was subject to

        disparate treatment and retaliation because of his HIV-positive status, leading to his

        demotion and ultimate termination. In March 2019, he brought claims against Newport

        under the ADA. See 42 U.S.C. §§ 12101–12213 (as amended).

              Plaintiffs pursuing an ADA claim must be able to show that their employer is a

        person or entity “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.” Id. § 12111(5)(A). This fifteen-employee numerosity

        requirement is a threshold element of an ADA claim. See Reynolds v. Am. Nat’l Red Cross,

        701 F.3d 143, 155 (4th Cir. 2012) (holding the ADA’s employee threshold is “an element

        of the claim itself” (citing Arbaugh v. Y & H Corp., 546 U.S. 500, 516 (2006) (Title VII

        case))). That requirement presented an obstacle for Bittle-Lindsey’s ADA claim because

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        Newport employed fewer than fifteen people during his employment. See J.A. 683–95 1

        (quarterly tax and wage reports listing fewer than fifteen employees at Newport between

        April and August 2015).

               To overcome that obstacle, Bittle-Lindsey also sued Newport’s affiliated entity,

        Seegars. Seegars is a family-run business with ownership and management shared by

        members of the Seegars family—Neal Weston Seegars; his children Benjamin, John, and

        Sallie; and the family of Sallie’s husband, Robert Batchelor. Members of the Seegars

        family created independently owned corporations (the “Seegars-affiliated entities” or

        “entities”) in each local market where they provided fence-installation services. Seegars

        has 40 employees, and combined, Seegars and the entities collectively have approximately

        276 employees.

               To date, there are approximately fourteen entities, including Newport. Seegars

        refers to them as “branches,” and most of their names begin with the phrase “Seegars Fence

        Company” followed by the name of the city (e.g., “Seegars Fence Company, Inc. of

        Newport”). Ownership interest in each entity is shared by one or more members of the

        Seegars family as well as various other individuals. 2 But no entity has precisely the same

        ownership structure as any other entity. Further, Seegars provides business development

        and operational support to Newport and the other Seegars-affiliated entities, 3 but this

               1
                Citations to the “J.A.” refer to the Joint Appendix filed by the parties in this appeal.
               2
                Benjamin Seegars, John Seegars, and Robert Batchelor together own fifty percent
        of Newport’s shares. Another individual, Clinton Rouse, owns the other fifty percent.
              3
                These services include: (1) searching for public-bid opportunities; (2) streamlining
        and minimizing the costs of marketing (including hosting a website and “888” phone

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        arrangement is not designed to generate profits for Seegars or make any money beyond

        covering their overhead costs. 4

               Nevertheless, Bittle-Lindsey claimed Newport was a “mere instrumentality” of

        Seegars and/or its common shareholders. J.A. 13. Accordingly, he asked the court to

        disregard Newport’s corporate form and pierce the corporate veil, thereby allowing him to

        proceed against both Newport and Seegars as his employers. If permitted, this veil piercing

        would allow Bittle-Lindsey to meet the numerosity requirement.

               Following the completion of the first phase of discovery, 5 Defendants moved for

        summary judgment on the veil-piercing claim. After a hearing, the district court granted

        the motion. See Bittle-Lindsey v. Seegars Fence                 Co.,     No. 4:19-cv-40-BO,

        2020 WL 7265367, at *1–4 (E.D.N.C. Dec. 10, 2020). Bittle-Lindsey timely appealed.

                                                      II.

               We review the district court’s summary judgment ruling de novo, “applying the

        same standard applied by the district court.” Reynolds, 701 F.3d at 149. Summary judgment

        number, as well as providing brochures); (3) advertising job openings (but not screening,
        interviewing, or hiring prospective employees); (4) providing business analytics;
        (5) wholesale buying and fabricating installation materials (such as fences and finished
        items); (6) providing information-technology services; (7) providing financial, insurance,
        and safety-officer services; and (8) providing specialized equipment that an entity can rent.
        Seegars also provides a number of model templates that the entities may choose to use and
        customize (e.g., template handbook forms, contract proposal forms, and letterhead).
                4
                  The entities pay Seegars for services either by paying a markup for materials
        Seegars provides to the entity, or by splitting shared costs among all the entities for certain
        services shared by all (e.g., website design).
                5
                  Discovery was separated into two phases. Phase I was for “pre-merits discovery”
        to resolve the question of whether Newport or Seegars, or both, were an “employer” under
        the ADA, and Phase II was for “merits discovery.” J.A. 616.

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        is appropriate when there is no genuine dispute as to any material fact, and the moving

        party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); see also Celotex

        Corp. v. Catrett, 477 U.S. 317, 322–23 (1986); In re Apex Express Corp.,190 F.3d 624, 633

        (4th Cir. 1999). A “genuine” issue of material fact exists “if the evidence is such that a

        reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty

        Lobby, Inc., 477 U.S. 242, 248 (1986). In considering a motion for summary judgment, we

        are required to view the facts and draw reasonable inferences in the light most favorable to

        the nonmoving party. Reynolds, 701 F.3d at 149.

                                                      III.

               Bittle-Lindsey contends that the district court erred in not piercing the corporate veil

        to hold Seegars to be his employer for ADA purposes. 6 We disagree.

               The “ambiguity of the term employer in . . . civil rights statutes” like the ADA “has

        driven courts to fashion a variety of tests” to determine whether an entity “that does not

               6
                   Bittle-Lindsey initially also claimed that there was a genuine dispute as to whether
        Newport alone met the numerosity requirement. See Opp’n to Defs.’ Mot. for Summ. J. at
        3, Bittle-Lindsey v. Seegars Fence Co., No. 4:19-cv-00040-BO (E.D.N.C. July 27, 2020)
        (arguing against summary judgment because “a reasonable jury could find
        that . . . Newport employed at least fifteen employees”); Opening Br. at 19 (arguing that
        Newport’s number of employees is a disputed fact). However, because Bittle-Lindsey
        abandoned this argument at the hearing before the district court and oral argument before
        this Court, we focus solely on the issue of whether Seegars is an ADA employer if we
        pierce Newport’s corporate veil. See Bittle-Lindsey, 2020 WL 7265367, at *2 (“[D]uring
        the hearing, [P]laintiff . . . admitted that the only way to receive relief in this action is for
        the Court to decide to pierce the corporate veil and proceed against both [D]efendants
        jointly.”); Oral Argument at 00:41–01:12, Bittle-Lindsey v. Seegars Fence Co. (No. 21-
        1044), https://www.ca4.uscourts.gov/OAarchive/mp3/21-1044-20220310.mp3 (Bittle-
        Lindsey’s counsel confirming that he was abandoning the claim against Newport as sole
        employer and focusing on the claim against Seegars, together with Newport, as an ADA
        employer).

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        directly employ the plaintiff may still be considered an employer under” the statute. Hukill

        v. Auto Care, Inc., 192 F.3d 437, 442 (4th Cir. 1999) (Family and Medical Leave Act case),

        abrogated on other grounds by Arbaugh, 546 U.S. 500. One such test is the “‘integrated

        employer’ test.” Id. While we have declined to adopt that “mechanical” test “in every

        instance,” we have noted that its “factors all point to the ultimate inquiry

        of . . . domination” by one entity over another entity. Id. at 442 n.7 (quoting Johnson v.

        Flowers Indus., 814 F.2d 978, 981 n.* (4th Cir. 1987) (Age Discrimination in Employment

        Act case)). Further, we have never explicitly rejected it for labor and employment cases.

        See id.; cf. Butler v. Drive Auto. Indus. of Am., Inc., 793 F.3d 404, 408 n.3 (4th Cir. 2015)

        (suggesting the ongoing viability of the “integrated employer” test in a Title VII case).

        Here, we believe the integrated employer test provides useful guidance to determine

        whether Seegars “controls [Newport’s] employment decisions or so completely dominates

        [Newport] that the two corporations are the same entity.” 7 Johnson, 814 F.2d at 980.

               For our consideration, the “integrated employer” test sets forth four factors:

        “(1) common management; (2) interrelation between operations; (3) centralized control of

        labor relations; and (4) degree of common ownership/financial control.” Hukill, 192 F.3d

        at 442. Although “no single factor [of the “integrated employer” test] is conclusive,” the

               7
                The district court did not use the “integrated employer” test, opting instead to apply
        “basic veil-piercing principles” under federal common law and North Carolina law. Bittle-
        Lindsey, 2020 WL 7265367, at *2–4 (holding that Bittle-Lindsey failed to show that
        Seegars “used control [over Newport] to affect a fraud or wrong or that such control and
        breach proximately caused [his] harm,” and therefore rejecting Bittle-Lindsey’s argument
        to pierce the corporate veil). We do not hold that this was error. See Johnson,
        814 F.2d at 981 n.* (“We need not adopt such a mechanical [‘integrated employer’] test in
        every instance . . . .”).

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        third—centralized control of labor operations—is “the most critical.” Id. And in the case

        before us, “there is no overlap in personnel between the defendants, as . . . Newport’s

        employees have never directly or indirectly worked for” Seegars. Bittle-Lindsey,

        2020 WL 7265367, at *4. Further, Seegars “has no involvement in the management,

        control, or oversight of Newport’s employees.” Id. In fact, Newport’s largest shareholder,

        Clinton Rouse, “exercises unilateral control of [Newport’s] day-to-day operations.” Id.

        This includes making all employment decisions, such as hiring, supervising, and firing

        Bittle-Lindsey. Accordingly, “there is little evidence, if any, that the control of [Newport’s]

        labor operations was centralized” with Seegars. Hukill, 192 F.3d at 444.

               The other factors of the “integrated employer” test weigh heavily against veil

        piercing as well. Regarding common management, Newport operates with complete

        autonomy as to all operations, with no oversight from Seegars—Seegars does not set any

        rules or standards for Newport or the other entities. In fact, “Newport is free to market,

        brand, advertise, and otherwise promote its services without coordinating with or seeking

        or receiving any authorization from” Seegars. Bittle-Lindsey, 2020 WL 7265367, at *4.

        Rouse is the only manager of Newport and there is no evidence of common management

        between Newport and Seegars.

               As for the interrelation of operations, “[D]efendants do not share office space”;

        rather, Newport “rent[s] its own space from an entity unaffiliated with” Seegars. Id.

        Although the Seegars-affiliated entities “hold themselves out collectively for marketing

        purposes,” they are not required to pool their resources with, or accept any support from,

        Seegars, and those that do can opt out anytime. J.A. 44. Seegars provides the entities with

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        information and services, and the entities have discretion whether to use the information or

        not—Seegars provides guidance, not oversight or direction. Moreover, “Newport pays

        relatively minimal fees to . . . Seegars for its services,” Bittle-Lindsey, 2020 WL 7265367,

        at *4, which “is not unusual in today’s business climate and is of no consequence,” Hukill,

        192 F.3d at 443. The “evidence indicat[es] that each company operates separately and

        distinctly.” Id.

               Finally, regarding common ownership and financial control, Newport and Seegars

        have “common, though not identical, ownership,” as members of the Seegars family have

        overlapping interests in both companies. Id. at 444; see also J.A. 431–32 (ownership and

        management chart of Seegars and the Seegars-affiliated entities showing that different

        members of the Seegars family hold varied ownership and management interests in the

        entities). However, this is “not enough” to establish that the entities are an “integrated

        employer.” Hukill, 192 F.3d at 444 (rejecting an integrated-employer claim even though

        one individual was the majority shareholder of all eight of the affiliated companies at

        issue); cf. Johnson, 814 F.2d at 982 (“One-hundred percent ownership and identity of

        directors and officers are, even together, an insufficient basis for applying the alter ego

        theory to pierce the corporate veil.” (quoting United States v. Jon-T Chems., Inc.,

        768 F.2d 686, 691 (5th Cir. 1985))). Further, “Newport is fully capitalized as an

        independent business that generates a healthy profit,” and “Newport pays dividends to its

        owners, which are distributed proportionately based on ownership shares.” Bittle-Lindsey,

        2020 WL 7265367, at *4. “[T]here is no intermingling of funds” between Defendants or

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        among other Seegars-affiliated entities, and “only . . . Rouse can authorize expenditures

        for . . . Newport.” Id.

               In sum, “applying the ‘integrated employer’ test in this case does not yield the

        conclusion that [Newport] was part of a larger integrated employer that included

        [Seegars].” Hukill, 192 F.3d at 443. Ultimately, the test “instructs a court to determine

        ‘what entity made the final decisions regarding employment matters related to the person

        claiming discrimination.’” Id. at 444 (alterations omitted) (quoting Trevino v. Celanese

        Corp., 701 F.2d 397, 404 (5th Cir. 1983)). Here, we hold that “no entity other than

        [Newport] made the final decision regarding [Bittle-Lindsey’s] employment status.” Id.

                                                   IV.

               For the reasons set forth, we affirm the judgment of the district court declining to

        pierce the corporate veil and concluding that Bittle-Lindsey cannot satisfy the numerosity

        requirement in order to move forward with his ADA claims.

                                                                                      AFFIRMED

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