Lusk v. FoxMeyer Health Corp ( 1997 )

  •                  United States Court of Appeals,
                                   Fifth Circuit.
                                   No. 96-11278.
                    Roger W. LUSK, et al., Plaintiffs,
    Roger W. Lusk; Robert P. Griffith; Herbert Barton, Jr.; Joseph
    Sanderson;   Clinton B. Maddox, II;    Joe J. Wilkie;  Darrell
    Schwonke; Michael J. Kearney, Plaintiffs-Appellants,
         FOXMEYER HEALTH CORPORATION, formerly known as National
    Intergroup, Inc., et al., Defendants,
         Foxmeyer Health Corporation, formerly known as National
    Intergroup, Inc., Defendant-Appellee.
                                   Dec. 4, 1997.
    Appeal from the United States District Court for the Northern
    District of Texas.
    Before JOLLY, SMITH and DENNIS, Circuit Judges.
         E. GRADY JOLLY, Circuit Judge:
         In this appeal, we are presented the question whether a parent
    corporation may be held liable for the allegedly discriminatory
    conduct of its subsidiary.       Eight former employees of the FoxMeyer
    Drug Company ("FoxMeyer Drug") were terminated as a result of a
    reduction-in-force.     They     brought    this   action   alleging   age
    discrimination under the Age Discrimination in Employment Act of
    1967 ("ADEA"), 29 U.S.C. §§ 621-34. They also sued FoxMeyer Drug's
    parent   corporation,    the     FoxMeyer   Corporation,    and   FoxMeyer
    Corporation's parent, National Intergroup, Inc. ("NII").1              NII
             In October 1994, NII changed its name from National
    Intergroup, Incorporated to FoxMeyer Health Corporation, and in
    January 1997, changed its name again to Avatex Corporation.
    Because NII was operating under the National Intergroup name during
    the relevant time period of this suit, it will be referred to as
    NII throughout this opinion.
    moved for summary judgment contending that it did not qualify as an
    "employer" in the matters relating to this case and, therefore, was
    not subject to suit under the ADEA. The district court granted
    NII's motion and dismissed the action against NII. On appeal, the
    plaintiffs-appellants      argue    that     the    district      court   erred      in
    finding no genuine issue of material fact as to whether FoxMeyer
    Drug, FoxMeyer Corporation, and NII constituted a "single employer"
    under the ADEA. We affirm.
         All of the appellants were employed as sales consultants in
    FoxMeyer Drug's various regional offices.                FoxMeyer Drug purchases
    health   care   products     directly       from   manufacturers.             It   then
    distributes     health     care    products        and    services       to    retail
    establishments such as pharmacies and drug store chains, as well as
    to other health care providers such as hospitals and university
    medical centers. FoxMeyer Drug is a wholly-owned subsidiary of the
    FoxMeyer Corporation, a holding company with no employees, but
    which shares    the   same    board    of    directors      and   same    executive
    officers with FoxMeyer Drug.
         The   FoxMeyer      Corporation        is,    in    turn,    a   wholly-owned
    subsidiary of the appellee, NII. NII, also a holding company,
    employs approximately fifteen people and is affiliated as a parent
    or subsidiary with nearly forty other corporations. NII shares its
    corporate headquarters with FoxMeyer Drug and FoxMeyer Corporation
    (collectively, the "FoxMeyer subsidiaries") in Carrollton, Texas.
    During the period relevant to this lawsuit, two individuals—Melvyn
    Estrin and Abbey Butler—served as both Co-Chairmen and Co-CEOs of
    all three corporations.   In addition, evidence indicated that a
    third individual, Thomas Anderson, held positions of President and
    Chief Operating Officer with all three corporations.2
         In October 1993, Mike Webster, Senior Vice President of Sales
    and Marketing of FoxMeyer Drug and FoxMeyer Corporation, had
    discussions with Estrin and Butler about FoxMeyer Drug's financial
    performance and its ability to serve its customers more efficiently
    and productively.    As a result of these discussions, Webster
    ordered senior executive officers of FoxMeyer Drug and FoxMeyer
    Corporation to form a planning team (the "Planning Team") to
    reengineer FoxMeyer Drug's sales force and determine criteria for
    selecting employees for discharge.    The Planning Team formed a
    reduction-in-force plan (the "RIF plan"), which was approved by
    Estrin, Butler, and Anderson, presented to retail sales supervisors
    for FoxMeyer Drug, and then executed at the local level in January
         The appellants—all FoxMeyer Drug sales consultants terminated
    as a result of the RIF plan—filed suit on August 26, 1994, against
    FoxMeyer Drug, FoxMeyer Corporation, and NII. They alleged that the
    three corporations engaged in unlawful discrimination under the
             The parties hotly contest whether Anderson held these
    positions during the relevant time periods, each pointing to
    evidence (including, on NII's part, some evidence not part of the
    summary judgment record) supporting their respective positions.
    When reviewing decisions on summary judgment, however, we do not
    assess the probative value of evidence or resolve factual disputes.
    Stine v. Marathon Oil Co., 
    976 F.2d 254
    , 265 (5th Cir.1992). For
    purposes of this appeal, we assume that Anderson held positions
    with NII as well as FoxMeyer Drug and FoxMeyer Corporation
    throughout the relevant time periods. See Martin v. John W. Stone
    Oil Distrib., Inc., 
    819 F.2d 547
    , 548 (5th Cir.1987) (reasonable
    doubts about facts are resolved in favor of nonmovant on summary
    ADEA by directing lower level managers to consider age as a factor
    in determining which employees to discharge.                 On June 7, 1996,
    after extensive discovery, NII moved for summary judgment on the
    grounds that   it    did   not   directly    employ    the    appellants   and,
    therefore, did not qualify under the ADEA as a "single employer"
    with its FoxMeyer subsidiaries.        Less than two months later, and
    six days before trial, FoxMeyer Drug and FoxMeyer Corporation filed
    for bankruptcy in Delaware.          Consequently, the district court
    stayed further proceedings against those two defendants.
         Thereafter, on September 9, 1996, the district court granted
    NII's motion for summary judgment.          Examining the evidence in the
    light of the four-factor test enunciated in Trevino v. Celanese
    701 F.2d 397
     (5th Cir.1983), the court held that NII and its
    FoxMeyer subsidiaries did not constitute a single employer.                 In
    particular, the district court determined that, although the three
    corporations had common ownership and some common management, there
    was no evidence demonstrating NII's involvement in the daily
    operations or labor relations of its FoxMeyer subsidiaries.                The
    court grounded this determination on the absence of evidence
    showing that Estrin, Butler, and Anderson had responsibility in
    planning and implementing the details of the RIF plan.                Thus, the
    court   concluded,   the   appellants       failed    to   identify   evidence
    sufficient to permit a finding that NII was a final decision-maker
    in their termination and, consequently, that NII and its FoxMeyer
    subsidiaries could be regarded as a single, integrated enterprise
    for purposes of this case.
         This appeal presents the sole issue of whether the summary
    judgment evidence would permit a finding that NII and its FoxMeyer
    subsidiaries qualify as a single employer under the ADEA.
         We review the district court's grant of summary judgment de
    novo.   Exxon Corp. v. Baton Rouge Oil, 
    77 F.3d 850
    , 853 (5th
    Cir.1996).   The court will not weigh the evidence or evaluate the
    credibility of witnesses; further, all justifiable inferences will
    be made in the nonmoving party's favor. Anderson v. Liberty Lobby,
    477 U.S. 242
    , 255, 
    106 S. Ct. 2505
    , 2513-14, 
    91 L. Ed. 2d 202
    (1986). 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.   Lavespere v. Niagara Mach. & Tool Works,
    910 F.2d 167
    , 178 (5th Cir.1990).
         Once the moving party presents the district court with a
    properly supported summary judgment motion, the burden shifts to
    the nonmoving party to show that summary judgment is inappropriate.
    Id. In doing so, the nonmoving party may not rest upon the mere
    allegations or denials of its pleadings, and unsubstantiated or
    conclusory assertions that a fact issue exists will not suffice.
    Anderson, 477 U.S. at 256, 106 S.Ct. at 2514.         Rather, the
    nonmoving party must set forth specific facts showing the existence
    of a "genuine" issue concerning every essential component of its
    case. Thomas v. Price, 
    975 F.2d 231
    , 235 (5th Cir.1992).    That is,
    the nonmoving party must adduce evidence sufficient to support a
    jury verdict.    Anderson, 477 U.S. at 248, 106 S.Ct. at 2510.           With
    these standards in mind, we turn to the merits of this appeal.
           Under the ADEA, a corporation like NII cannot be held liable
    for discriminatory employment actions unless it qualifies as an
    "employer" under the statute.         See 29 U.S.C. § 623.           The ADEA
    defines an employer only as "a person engaged in industry affecting
    commerce who has twenty or more employees for each working day in
    each of twenty or more calendar weeks in the current or preceding
    calendar year."     29 U.S.C. § 630(b).       This statutory definition
    provides little assistance in resolving the question before us. It
    plainly contains no basis for disregarding the venerable corporate
    law principle of limited liability or for otherwise extending
    liability to a parent corporation for the discriminatory acts of
    its subsidiary.    We, and other courts, however, have construed the
    term "employer" broadly to include superficially distinct entities
    that    are   sufficiently   interrelated     to   constitute    a    single,
    integrated     enterprise.     See,   e.g.,    Schweitzer   v.       Advanced
    Telemarketing Corp., 
    104 F.3d 761
    , 764 (5th Cir.1997);            Rogers v.
    Sugar Tree Products, Inc., 
    7 F.3d 577
    , 582 (7th Cir.1993);            Johnson
    v. Flowers Indus., Inc., 
    814 F.2d 978
    , 981 (4th Cir.1987);            York v.
    Tennessee Crushed Stone Ass'n, 
    684 F.2d 360
    , 362 (6th Cir.1982).
           To determine whether a parent corporation and its subsidiary
    may be regarded as a "single employer" under the ADEA, we apply the
    four-part analysis originally adopted by the Supreme Court in the
    context of labor disputes, see Radio Union v. Broadcast Serv., 
    380 U.S. 255
    , 257, 
    85 S. Ct. 876
    , 877, 
    13 L. Ed. 2d 789
     (1965), and
    extended to civil rights actions by this court in Trevino v.
    Celanese Corp., 
    701 F.2d 397
     (5th Cir.1983).      The four factors to
    consider include: (1) interrelation of operations, (2) centralized
    control of labor or employment decisions, (3) common management,
    and (4) common ownership or financial control.         701 F.2d at 404.
    This analysis ultimately focuses on the question whether the parent
    corporation was a final decision-maker in connection with the
    employment matters underlying the litigation, id.;         Chaiffetz v.
    Robertson Research Holding, Ltd., 
    798 F.2d 731
    , 735 (5th Cir.1986),
    and all four factors are examined only as they bear on this precise
    issue, see Schweitzer, 104 F.3d at 765.3
         Although the appellants produced evidence establishing common
    management and ownership between NII and its FoxMeyer subsidiaries,
    these factors alone are insufficient to establish single employer
    status.   The   doctrine   of   limited   liability   creates   a   strong
           Courts adopting a broad definition of the term "employer"
    have done so based on the significant remedial public policy
    underlying the anti-discrimination laws.      See, e.g., Baker v.
    Stuart Broadcasting Co., 
    560 F.2d 389
    , 391 (8th Cir.1977). While
    we support this reasoning, we also are mindful that "the doctrine
    of limited liability was originally formulated ... to implement
    both economic and democratic goals" and that approaches to piercing
    the corporate veil which fail to recognize these important public
    policy considerations underlying the doctrine "are deficient."
    Stephen B. Presser, Piercing the Corporate Veil § 1.01, at 4, §
    1.06, at 71-72 (1997) (emphasis in original). Accordingly, before
    piercing the corporate veil in the employment discrimination
    context, we and other courts have focused on the core activities
    regulated by the anti-discrimination laws and, therefore, on
    whether the parent corporation was so involved in the daily
    employment decisions of the subsidiary as to justify treating the
    two corporations as a single employer. See, e.g., Schweitzer, 104
    F.3d at 765; Cook v. Arrowsmith Shelburne, Inc., 
    69 F.3d 1235
    1241 (2d Cir.1995); Evans v. McDonald's Corp., 
    936 F.2d 1087
    , 1090
    (10th Cir.1991); Sheeran v. American Commercial Lines, Inc., 
    683 F.2d 970
    , 978 (6th Cir.1982); Mochelle v. J. Walter, Inc., 
    823 F. Supp. 1302
    , 1306 (M.D.La.1993), aff'd, 
    15 F.3d 1079
    presumption that a parent corporation is not the employer of its
    subsidiary's employees.          Frank v. U.S. West, Inc., 
    3 F.3d 1357
    1362 (10th Cir.1993) (citing Johnson, 814 F.2d at 980);                 see also
    Krivo Indus. Supply Co. v. National Distillers & Chem. Corp., 
    483 F.2d 1098
    , 1102 (5th Cir.1973) (corporate form is not disregarded
    lightly since the law created corporations primarily to allow
    limited    liability).         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, see Johnson, 814 F.2d at 981, and to permit an
    inference that the parent corporation was a final decision-maker in
    its subsidiary's employment decisions.
             Common management and ownership are ordinary aspects of a
    parent-subsidiary relationship.            A parent corporation's possession
    of a controlling interest in its subsidiary entitles the parent to
    the normal incidents of stock ownership, such as the right to
    select directors and set general policies, without forfeiting the
    protection of limited liability. Baker v. Raymond Int'l, Inc., 
    656 F.2d 173
    , 180-81 (5th Cir.1981). Thus, courts have recognized that
    the mere existence of common management and ownership are not
    sufficient      to   justify    treating    a   parent    corporation    and   its
    subsidiary as a single employer.           See, e.g., Frank, 3 F.3d at 1364;
    Rogers, 7 F.3d at 583;         Johnson, 814 F.2d at 980-82.         Some nexus to
    the subsidiary's daily employment decisions must be shown.                     See
    Schweitzer, 104 F.3d at 765.
             The appellants argue that they established this nexus with
    evidence of interrelated operations and NII's involvement in the
    RIF plan.     The interrelation of operations element of the single
    employer test ultimately focuses on whether the parent corporation
    excessively influenced or interfered with the business operations
    of its subsidiary, that is, whether the parent actually exercised
    a   degree    of     control   beyond      that   found      in   the     typical
    parent-subsidiary relationship.           Johnson, 814 F.2d at 981-82;          see
    also Herman v. United Bhd. of Carpenters & Joiners of Am., Local
    Union No. 971, 
    60 F.3d 1375
    , 1383-84 (9th Cir.1995);                    Rogers, 7
    F.3d at 582;         Armbruster v. Quinn, 
    711 F.2d 1332
    , 1338 (6th
    Cir.1983).    Thus, for example, the fact that NII (like any other
    parent corporation) ultimately benefitted from the activities of
    its subsidiaries, including the restructuring of FoxMeyer Drug's
    sales    force,    is   irrelevant   to    whether   their    operations       were
    interrelated.       See Frank, 3 F.3d at 1362;          Rittmeyer v. Advance
    Bancorp, Inc., 
    868 F. Supp. 1017
    , 1022 (N.D.Ill.1994).               "Attention
    to detail," not general oversight, is the hallmark of interrelated
    operations.       See Johnson, 814 F.2d at 982.
            Along these lines, relevant factors suggesting the existence
    of interrelated operations include evidence that the parent:                    (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.4                   See, e.g., Cook v. Arrowsmith
    Shelburne, Inc., 
    69 F.3d 1235
    , 1241 (2d Cir.1995);                         Johnson, 814
    F.2d at 981-82;              Armbruster, 711 F.2d at 1338;            Harris v. Palmetto
    Tile,       Inc.,      
    835 F. Supp. 263
    ,     268    (D.S.C.1993);          Greason    v.
    Southeastern R.R. Assoc. Bureaus, 
    650 F. Supp. 1
    , 4 (N.D.Ga.1986),
    813 F.2d 410
     (11th Cir.1987);                    Fike v. Gold Kist, Inc., 
    514 F. Supp. 722
    ,    726-27     (N.D.Ala.),         aff'd,   
    664 F.2d 295
         There        is    no     such   evidence    in     this   case.      Although      the
    appellants allege that all FoxMeyer entities shared the same human
    resources department and employment grade system, their record cite
    fails to support these assertions.5                     The deposition of Derek Van
    Keuren, Director of Human Resources, refers to his department as an
    arm of FoxMeyer Drug, not NII or FoxMeyer Corporation.                         He makes no
    reference to services performed for NII or its employees.                                 In
    short, his deposition fails to support an inference that NII and
    its FoxMeyer subsidiaries were functionally integrated.6
          This is not to say, of course, that the existence of any of
    these factors is alone dispositive of single employer status or
    even a finding of interrelated operations.
            This unsupported citation is not an isolated incident.
    Because this case involves corporate entities all using the term
    "FoxMeyer" in their names at some point, see supra note 1, loose
    references to "FoxMeyer" in the record make context particularly
    important.   Numerous passages in the record and district court
    opinion, if taken out of context, create ambiguity as to which
    entity they refer.    On more than one occasion, the appellants
    appear to rely on such vagaries to implicate NII in various aspects
    of this case. Such citations do little to boost credibility or
    arguments before this court.
          The portion of the record cited by the appellants does not
    even support an inference that Van Keuren's department had any
    significant connection to FoxMeyer Corporation, much less NII. It
    suggests that recordkeeping and nearly all personnel decisions were
           Similarly, the appellants' reliance on the fact that letters
    of termination and other RIF-related memoranda bore the "FoxMeyer"
    letterhead and uniformly listed the address shared by the corporate
    headquarters of NII and its FoxMeyer subsidiaries is misplaced.
    Although      NII     in   fact    operated    under      the     "FoxMeyer      Health
    Corporation" title at one time, it did not assume this title until
    over   nine    months      after    the   events       relevant    to    this    lawsuit
    occurred.        Instead,     NII    was    operating       under       the   "National
    Intergroup Incorporated" name at the time the appellants were
    terminated.     Thus, RIF materials bearing the "FoxMeyer" letterhead
    say nothing of NII's involvement in the RIF or the operations of
    its FoxMeyer subsidiaries.
           The appellants' principal argument, however, is that the
    explicit and knowing approval of the RIF plan by Anderson, Butler,
    and    Estrin       necessarily      creates       a     fact     issue       concerning
    interrelation of operations between NII and its subsidiaries.                         The
    appellants maintain that because these three individuals held
    positions at the highest level of NII's corporate structure, their
    involvement in the RIF plan may be imputed to NII. This argument
    must be considered in the light of the well established principle
    that directors and officers holding positions with a parent and its
    subsidiary      can    and   do     "change    hats"      to    represent       the   two
    corporations separately, despite their common ownership.                          United
    States v. Jon-T-Chem., Inc., 
    768 F.2d 686
    , 691 (5th Cir.1985),
    cert. denied, 
    475 U.S. 1014
    106 S. Ct. 1194
    89 L. Ed. 2d 309
    made at FoxMeyer Drug's local human resources offices, not by Van
    Keuren's department.
    Thus, the appellants must point to evidence that, when Anderson,
    Butler, and Estrin approved the RIF plan, they were acting in their
    capacity as officers of NII. See Greason, 650 F.Supp. at 5 (failure
    to adduce evidence of which entity the common decision-maker
    represented required summary judgment on single employer issue),
    813 F.2d 410
     (11th Cir.1987).
         When pressed at oral argument to identify evidence in the
    record from which we could reasonably infer that Anderson, Butler,
    and Estrin were acting on NII's behalf in approving the RIF plan,
    the appellants made two basic arguments.   First, they urged us to
    draw the inference from the sheer magnitude of the employment
    decision involved; that it is reasonable to expect such a decision
    to be made at the highest level of the corporate family.   Second,
    the appellants argued that the inference is justified on the basis
    of NII's shared use of a single building and phone number for its
    corporate headquarters and those of its FoxMeyer subsidiaries.
         Although we examine the record in the light most favorable to
    the appellants, we do not do so in bits and pieces, but as a whole.
    On summary judgment, we consider the totality of the facts and make
    only reasonable, justifiable inferences from that evidence. Knight
    v. Sharif, 
    875 F.2d 516
    , 523 (5th Cir.1989) (citing Matsushita
    Elec. Indus. Co. v. Zenith Radio Corp., 
    475 U.S. 574
    106 S. Ct. 1348
    89 L. Ed. 2d 538
     (1986)).    The factual context of a party's
    claim may render it implausible for purposes of creating a genuine
    dispute of fact.   Id.;   see also First Nat'l Bank of Arizona v.
    Cities Serv. Co., 
    391 U.S. 253
    , 280, 
    88 S. Ct. 1575
    , 1588, 
    20 L. Ed. 2d 569
         Circumstances surrounding the development and execution of the
    RIF plan show nothing more than that Anderson, Butler, and Estrin
    were acting as officers of FoxMeyer Drug and FoxMeyer Corporation.
    Based on the appellants' rendition of the facts, it appears that on
    every occasion in which these three individuals took any action in
    connection with the RIF plan, they were acting in concert only with
    other FoxMeyer Drug or FoxMeyer Corporation officials.                   In fact,
    the record is replete with examples of how executives from FoxMeyer
    Drug and FoxMeyer Corporation, most of whom shared positions with
    both companies, devised and implemented every aspect of the RIF
    plan.   The plan affected only FoxMeyer Drug employees.7               It is true
    that Anderson, Butler, and Estrin approved the plan, but that
    unadorned fact tells us nothing more than that they were acting as
    the three highest ranking executives at FoxMeyer Drug.
            On the other hand, evidence of NII's involvement in the RIF
    plan is scant.    Presumably, Anderson, Butler, and Estrin were not
    NII's only officers or directors, yet the appellants point us to no
    evidence that    these     three   ever    sought   approval      from    or   even
    consulted anyone else in the NII organization.           As a matter of law,
    whether as officers or directors of NII, Anderson, Butler, and
    Estrin had no power to act on NII's behalf unless acting within the
    scope of their authority, or as part of a legally convened board of
    directors.     See Kiepfer v. Beller, 
    944 F.2d 1213
    , 1218 (5th
    Cir.1991) ("a director exercises his office only through the
    collective   action   of    the    board   of   which   he   is    a     member");
         None of the individuals affected by the RIF were employed by
    FoxMeyer Corporation, much less NII.
    Vicksburg Furniture Mfg., Ltd. v. Aetna Cas. & Sur. Co., 
    625 F.2d 1167
    , 1170 (5th Cir. Unit A 1980) (officer's acts not authorized by
    shareholders will not be charged to the corporation);               2 Fletcher,
    Cyclopedia of the Law of Private Corporations §§ 392, 434, at 261,
    339-40 (1990).     The record, however, is silent on these issues.
          Furthermore, the record demonstrates, without contradiction,
    that NII is only a holding company with no involvement in or
    control over the daily wholesale drug operations or labor relations
    of FoxMeyer Drug or FoxMeyer Corporation.            NII is affiliated as a
    parent or subsidiary with nearly forty other corporations.                   Its
    only employees, numbering no more than fifteen, are responsible
    solely for servicing, maintaining, and flying NII's corporate
    airplane. Thus, the record supports only the inference that, while
    involved in the RIF plan, Anderson, Butler, and Estrin were acting
    in their capacities as directors and officers of the FoxMeyer
    subsidiaries, not NII.
           In sum, the appellants are left with evidence only that NII
    and   its     FoxMeyer   subsidiaries     shared      the    same     corporate
    headquarters, which used a common primary phone number. Such facts
    are indeed evidence of interrelated operations.             See Mochelle, 823
    F.Supp. at 1305, aff'd, 
    15 F.3d 1079
     (5th Cir.1994);                   but see
    Walker   v.    Toolpushers   Supply     Co.,   
    955 F. Supp. 1377
    ,   1382
    (D.Wyo.1997) (sharing common location, alone, is not sufficient
    evidence of interrelated operations).           Common headquarters and
    telephone number are not, however, the type of evidence from which
    a reasonable jury could infer that Anderson, Butler, and Estrin
    were acting for NII when they approved the RIF plan.
            As for evidence of NII's control or influence over the labor
    or   employment     decisions      of     its   FoxMeyer   subsidiaries,      the
    appellants advance the same argument they tendered on the issue of
    interrelated operations.8 The appellants contend that we may infer
    NII's control of labor and employment decisions from the fact that
    Anderson, Butler, and Estrin approved the RIF plan.             We reject this
    argument     for   the   same    reason    we   rejected   it   earlier.      The
    appellants simply have pointed us to no evidence from which we may
    reasonably infer that these individuals were acting on NII's behalf
    when involved in the RIF plan.
         The appellants argue that our decision in Trevino necessitates
    a finding of centralized labor and employment decisions in this
    case.    We disagree.      In Trevino, the court reversed a grant of
    summary judgment, finding a genuine fact issue concerning whether
    a parent corporation and its subsidiary exhibited centralized
    employment decisions.           See 701 F.2d at 404.        The basis of the
    court's decision was the existence of over a hundred documents,
    signed by the parent's managers, authorizing lay-offs, recalls,
    promotions, and transfers of the subsidiary's employees.                   Id. No
    such evidence exists here.
         Moreover, Trevino did not involve a situation where the
    individuals making the employment decisions held positions with
    both the parent and subsidiary.            The decision-makers clearly were
    the managers and supervisors of the parent corporation and not the
            Suitable evidence of centralized labor and employment
    decisions includes parental control of hiring, firing, promoting,
    paying, transferring, or supervising employees of the subsidiary.
    Johnson, 814 F.2d at 982.
    subsidiary.   See id. at 400.   Thus, in Trevino, there was never any
    question whether the decision-makers were acting on behalf of the
    parent or its subsidiary.9      In contrast, the absence of evidence
    from which we may reasonably infer that Anderson, Butler, and
    Estrin were acting on NII's behalf dooms the appellants' argument
    for single employer status in this case.
         In conclusion, we hold that the appellants failed to produce
    evidence sufficient to withstand summary judgment in this case.
    The evidence of common management and ownership between NII and its
    FoxMeyer subsidiaries, taken together with their shared use of a
    common headquarters building and main telephone number, does not
    permit an inference that NII is responsible for the decision to
    terminate employees of FoxMeyer Drug. This conclusion is supported
    by uncontradicted evidence that NII was nothing more than a holding
    company with no involvement in or control over the daily operations
    or employment decisions of its FoxMeyer subsidiaries. Accordingly,
    the judgment of the district court is
         For the same reasons, Cook v. Arrowsmith Shelburne, Inc., 
    69 F.3d 1235
     (2d Cir.1995), fails to address the issues presented by
    this case.   In Cook, the court never considered whether common
    managers, if any, were acting on behalf of the parent or the
    subsidiary. Its holding was based specifically on findings that
    management from the parent ran its subsidiary's operations in a
    "direct, hands-on fashion," that all personnel status reports were
    approved by the parent, and that applications for employment with
    the subsidiary went through the parent.       Id. at 1241.     The
    appellants have introduced no such evidence is this case.

Document Info

DocketNumber: 96-11278

Filed Date: 12/11/1997

Precedential Status: Precedential

Modified Date: 12/21/2014

Authorities (31)

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