On March 9, 2016, the 7th Circuit affirmed an order of summary judgment in a lawsuit in which the plaintiff alleged that he was fired from his job because of his age in violation of the Age Discrimination in Employment Act (“ADEA”). Bridge v. New Holland Logansport, Inc., No. 15-1935 (7th Cir., 3/9/2016). The ADEA prohibits employers from discharging employees because of their age. The statute defines an “employer” as someone who has 20 or more employees for each working day, in each of 20 or more calendar weeks, in the calendar year of (or in the year preceding) the discriminatory acts. The district court entered summary judgment after concluding that the defendant company did not have 20 or more employees. A company with fewer than 20 employees is not an “employer” under and therefore is not subject to the ADEA.
This case involved the issue of whether the plaintiff could count some of the employees of an affiliated company to meet the ADEA jurisdictional requirement of 20 employees. The two companies had common ownership, shared the same website, and had overlap in personnel. Workers at both companies were subject to the same personnel policy. The plaintiff argued that three of the affiliate’s employees also maintained employment relationships with the defendant (which had 17-19 employees in the years in question) and should be counted together with the defendant’s employees. Thus, the question on appeal was whether the defendant maintained an employment relationship with the three individuals for 20 or more weeks in the relevant years. The answer turned on the five-factor “economic realities” test: (1) the defendant’s control and supervision over the individuals; (2) type of occupation and skill required; (3) the defendant’s responsibility for the costs of the operation; (4) the method and form of payment and benefits; and (5) the length of the job commitment. The 7th Circuit ruled that the defendant did not exercise enough control over the three individuals to support a conclusion that they were employees of the defendant.
Even if the three individuals were not the defendant’s employees, all of the employees of both companies could be aggregated if: (1) they have purposely divided into smaller corporations to avoid the anti-discrimination laws; (2) a creditor of one company could pierce the corporate veil to sue the affiliate; or (3) the affiliate directed the discriminatory act or practice. The plaintiff argued that it was the affiliate, and not the defendant, that discharged the plaintiff. Employees of affiliated corporations may be counted together if the affiliate directed the discriminatory act. However, the individual who ordered the plaintiff’s discharge was an owner and director of both companies and, therefore, was acting for the defendant, not the affiliate, when he fired the plaintiff.
The third issue, and probably the most significant, is whether the “integrated enterprise” test under the National Labor Relations Act, which determines when separate entities may be treated as a single employer (by virtue of the interrelationship of their business operations) applies in an ADEA case. The 7th Circuit stated that it does not.