Opinions of the United
1996 Decisions States Court of Appeals
for the Third Circuit
7-31-1996
Marzano v. Computer Science
Precedential or Non-Precedential:
Docket 95-5629
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 95-5629
__________
CATHERINE A. MARZANO,
Appellant
v.
COMPUTER SCIENCE CORP. INC.;
CSC PARTNERS INC.
__________
On Appeal from the United States District Court
For the District of New Jersey
(D.C. Civil No. 94-3102)
__________
Argued May 23, 1996
Before: SLOVITER, Chief Judge,
SAROKIN and OAKES, Circuit Judges
__________
(Opinion filed July 31, 1996)
Mark Falk (Argued)
Madeline E. Cox
Carmen J. DiMaria
Barry & McMoran
One Newark Center
Newark, New Jersey 07102
Attorneys for Appellant
Theresa Donahoe Egler (Argued)
Rosalie J. Shoeman
Pitney, Hardin, Kipp & Szuch
P.O. Box 1945
Morristown, New Jersey 07962
Attorneys for Appellees
__________
OPINION OF THE COURT
__________
SAROKIN, Circuit Judge:
We are asked to consider once again the proper allocation of
burdens in cases involving allegations of discriminatory
employment actions. Cases of this nature inevitably raise thorny
issues because they typically require the plaintiff to establish
proof of the employer's intent not through direct evidence, which
is rarely available, but through complex inferential schemes.
The issue in the specific matter before us concerns the
elements of a prima facie case under the familiar McDonnell
Douglas scheme in a case in which the plaintiff-employee was
terminated, allegedly as the result of a reduction in the
employer's workforce. The case raises as well issues involving
the scope of the exceptions to the New Jersey Family & Medical
Leave Act, the enforceability of communications by an employer as
an implied contract, and the extent of liability of a parent
corporation for its subsidiary's employment decisions.
I. Facts and procedural posture
Even by the standards of the acrimonious world of
litigation, there is little in this case about which the parties
agree. They agree that appellant, Catherine Marzano, was hired
by one of the appellees, Computer Science Corp., in September
1990; that she went on maternity leave in July 1993; that she
gave birth to her son the next month; and that she was laid off
on October 5, 1993. Beyond this bare-bones chronology, however,
much is in dispute: who Ms. Marzano's employer was at any one
time; how well that employer, whoever it was, was doing
financially, and how we should determine this; what Ms. Marzano's
job entailed; what the jobs of people hired after she was laid
off entailed, and what qualifications were required to perform
those respective jobs; why she was laid off; and who needs to
establish the reason and what is necessary to do so.
Of one thing we are certain: on September 5, 1990, Ms.
Marzano was hired by Computer Science Corporation ("CSC") as a
"junior technical recruiter." Her contract indicates that she
was hired as an at-will employee. She was assigned to work in a
division of CSC named CSD in Piscataway, New Jersey.
At some later point, CSD was merged with CSC Partners, a
wholly owned subsidiary of CSC. It is not entirely clear when
the merger occurred. Defendants state that CSD and CSC Partners
were "functionally merged" in April 1991, Appellees' Brief at 4;
see App. at DAS 74; DAS 178-79, and that after the merger, all
CSD employees became employees of CSC Partners.
According to testimony by officials of CSC Partners, at the
time of the merger Partners was comprised of twelve separate
business units. Defendants describe a business unit as "a
revenue generation and profit and loss center for delivering
consulting systems, integration and development work to its
client base." App. at DAS 138. Most of the units are organized
around a region. App. at DAS 183. There are, for instance,
Chicago, Minneapolis, and NY Metro units. One unit, however, was
allegedly "devoted exclusively to servicing AT&T on a national
basis." Appellees' Brief at 5; see App. at DAS 184-85. That
unit was known as the AT&T National Business Unit.
According to Ms. Marzano's affidavit, the merger had little
effect on her day-to-day worklife, to the point where she states
that she "continued to consider herself a CSC employee."
Appellant's Brief at 5. More significantly, she allegedly
continued to collect paychecks from CSC for some time after the
merger allegedly occurred. App. at A225.
Ms. Marzano's performance seems to have been satisfactory or
better throughout her tenure at CSC and CSC Partners. After
seven months of employment, she received a twenty-percent salary
increase and a "good" performance review by her supervisor, App.
at A227, and she received other positive feedback from the
company. See, e.g., App. at A252.
In June 1991, Ms. Marzano was assigned to a new position.
She contends that she was promoted to account executive for the
Sales Division, App. at A227. Defendants, on the other hand,
state that "her duties were modified to an administrative support
role for the Bell Labs account" following a reduction of
personnel at CSC Partners. App. at DA3. In any case, Ms.
Marzano states that she received a "very good" evaluation at the
end of that year. App. at A228.
In April 1992, she became marketing administrator for the
AT&T National Account; she received a ten-percent salary increase
and an "above-average" rating in her evaluation at the end of
that year. App. at A228, A231.
Mr. Marzi stated in a deposition that he was hired as
business unit manager of the AT&T Unit in September 1992. App.
at DAS 134. After reviewing the Unit's marketing plan and
finding it ineffective, he discontinued it and reassigned the
marketing personnel. App. at DAS 142-47. As a result of the
changes, Ms. Marzano's duties were allegedly reassigned to
provide administrative support to Mr. Marzi. App. at DAS 147-49.
In January 1993, Ms. Marzano informed Mr. Marzi that she
would be going on maternity leave in July. According to her
affidavit, shortly before going on leave Mr. Marzi told her that
she would receive additional responsibilities when she returned,
and gave no indication that her position might be in jeopardy.
App. at A231. She further asserts that when she left on
maternity leave, she had a conversation with Mr. Marzi in which
he spoke to her "as if [she] wasn't coming back." App. at A232.
Ms. Marzano allegedly reassured Mr. Marzi that she intended to
return immediately after maternity leave. Id.
According to Mr. Marzi's deposition, the AT&T Unit started
experiencing "significant losses" beginning in the spring of 1993
as a result of AT&T's own financial difficulties, which led the
telephone company to curtail its spending on consulting work.
App. at DAS 136-37. As a result, the AT&T Unit allegedly started
considering the need for staff reductions. According to
Defendants, Ms. Marzano's position was particularly vulnerable
because her salary was "non-billable" and non-revenue-generating,
and her position "non-essential." Appellees' Brief at 9.
Defendants allege that Mr. Marzi initially tried to "identify a
more essential role for plaintiff following her leave," id., but
after financial conditions worsened, decided to eliminate her
position altogether along with nine others out of some fifty
positions in the AT&T Unit in New Jersey. Id. at 10. (According
to Defendants, the AT&T Unit was eventually merged into the NY
Metro Business Unit in March 1994. App. at DAS 139.)
In any case, Ms. Marzano went on maternity leave on July 27,
1993 and gave birth to her son on August 14, 1993. App. at A232.
Mr. Marzi allegedly called her a few weeks later to tell her that
her position was being "eliminated" and that she was fired. Id.
On October 5, 1993, CSC Partners sent Ms. Marzano a letter of
termination confirming the bad news and attributing the decision
to a reduction in force in the AT&T Business Unit caused by
financial difficulties. App. at DA47. Ms. Marzano asserts in
her affidavit that she went to speak with Mr. Marzi shortly after
her termination, and that he told her "how his wife had collected
unemployment so [that] she could stay home with their kids and
how [Ms. Marzano] might be 'better off' if [she] could stay home
with [her] son and collect unemployment." App. at 233.
On November 1, 1993, Mr. Marzi circulated a memorandum to
the "AT&T National Business Unit" and the "NY Metro Business
Unit" announcing the consolidation of certain "services and
functions" of the two units, and advertising three positions:
administrative manager and marketing manager, both to be filled
immediately, and "general consulting practice manager" for NY
Metro. Ms. Marzano was, according to her affidavit, never
advised of or considered for these positions. App. at A234-35.
Barbara Zelasko, a person from outside CSC and CSC Partners, was
hired as marketing manager in March 1994.
Ms. Marzano asserts in her affidavit that pregnancy was
referred to as the "kiss of death" at CSC because numerous female
employees (at least seven, she states) had been terminated after
taking maternity leave. App. at A236.
Ms. Marzano instituted the instant action in response to her
termination on May 18, 1994 by filing suit in the Superior Court
of New Jersey against Computer Science Corporation and CSC
Partners, Inc. ("Defendants"). In her complaint, Ms. Marzano
alleged unlawful discrimination by Defendants on the basis of her
pregnancy in violation of the New Jersey Law Against
Discrimination, N.J.S.A. 10:5-12(a); unlawful interference with
her rights under the New Jersey Family Leave Act, N.J.S.A.
34:11B-9; and breach of an implied-in-fact employment contract
based on Defendants' written policy. The case was removed to the
United States District Court for the District of New Jersey based
on diversity of citizenship, 28 U.S.C. 1332.
Defendants responded to Ms. Marzano's complaint with a
motion for summary judgment on all counts, pursuant to Fed. R.
Civ. P. 56(c). The district court granted the motion on August
17, 1995, bringing the proceedings before that court to an end.
Ms. Marzano filed the instant appeal on August 28, 1995.
II. Jurisdiction
This is a civil action between the citizens of different
states, and the matter in controversy exceeds the sum of $50,000.
Therefore, the district court had original jurisdiction pursuant
to 28 U.S.C. 1332(a)(1).
The district court issued an order granting Defendants'
motion for summary judgment on August 17, 1995. We have
jurisdiction over an appeal from this final order pursuant to 28
U.S.C. 1291.
III. Standard of review
We exercise plenary review over a grant of summary judgment
by the district court, Armbruster v. Unisys Corp., 32 F.3d 768,
777 (3d Cir. 1994), and apply the same test that the district
court should have applied. Id.
Summary judgment should be granted if "there is no genuine
issue as to any material fact" and "the moving party is entitled
to a judgment as a matter of law." Fed. R. Civ. P. 56(c); seealso
Armbruster, 32 F.3d at 777. In making its determination,
the court should view the facts in the light most favorable to
the nonmoving party and draw all inferences in that party's
favor. Armbruster, 32 F.3d at 777.
In an employment discrimination case,
the burden of persuasion on summary judgment remains
unalterably with [the employer] as movant. The
employer must persuade the court that even if all of
the inferences which could reasonably be drawn from the
evidentiary materials of record were viewed in the
light most favorable to [the plaintiff], no reasonable
jury could find in [the plaintiff's] favor.
Sorba v. Pennsylvania Drilling Co., Inc., 821 F.2d 200, 201-02
(3d Cir. 1987), cert. denied, 484 U.S. 1019 (1988).
IV. The employment discrimination claim
Ms. Marzano first claims that by terminating her employment,
the defendants unlawfully discriminated against her on the basis
of her pregnancy, in violation of the New Jersey Law Against
Discrimination, N.J.S.A. 10:5-12(a).
The district court analyzed Ms. Marzano's allegation as a
claim of discrimination in a force-reduction setting. District
Opinion, typescript at 4 (citing Massarsky v. General Motors
Corp., 706 F.2d 111, 118 (3d Cir.), cert. denied, 464 U.S. 937
(1983)). We have held that in order to establish a prima faciecase of
this sort, "the plaintiff must show he was in the
protected class, he was qualified, he was laid off and other
unprotected workers were retained." Armbruster v. Unisys Corp.,
32 F.3d 768, 777 (3d Cir. 1994). The district court, by its own
admission, rejected the "literal language of the retention
requirement," District Opinion at 5, and held instead that
to establish a prima facie case in the context of a
work-force reduction, a plaintiff must do more than
merely show that unprotected employees were retained in
their positions; the plaintiff must produce some
additional evidence that he was singled out for
discharge because of his protected status.
Id. at 5-6.
Based upon this novel standard, the district court found
that "plaintiff has merely asserted that while she was
terminated, other employees were retained," id. at 6, and that
she had "failed to adduce any evidence of a nexus between her
pregnancy and her discharge" and "to demonstrate that other,
nonpregnant workers were treated more favorably." Id. As a
result, the court concluded that Ms. Marzano had failed to
establish a prima facie case of discrimination, and that the
defendants were entitled to summary judgment on this claim. Id.
Ms. Marzano challenges the district court's conclusion on a
number of grounds. She argues, first of all, that no workforce
reduction occurred, that accordingly the district court applied
the wrong legal standard to her claim, and that under the proper
legal standard she has established a prima facie case of
discrimination. Appellant's Brief at 27. Second, Ms. Marzano
argues that even if a workforce reduction did occur, the court
did not apply the correct standard, id. at 30-34, and that, under
the correct standard, Ms. Marzano has easily made a prima faciecase of
discrimination. Id. at 29. Third, Ms. Marzano argues
that even if the court did apply the right test, she did produce
"additional evidence" of the defendants' discriminatory intent
sufficient to meet her prima facie burden. Finally, Ms. Marzano
argues that she has produced sufficient evidence to allow a jury
to conclude that any reason proffered by the defendants for her
layoff is pretextual. Id. at 38.
A. The McDonnell Douglas burden-shifting scheme
The Supreme Court of New Jersey has adopted the methodology
governing federal employment discrimination law for state claims
of a similar nature. See Clowes v. Terminix International, Inc.,
538 A.2d 794, 805 (N.J. 1988); Andersen v. Exxon Co., U.S.A., 446
A.2d 486, 490-91 (N.J. 1982).
The United States Supreme Court, in McDonnell Douglas Corp.
v. Green, 411 U.S. 792 (1973), articulated the analytical
framework for federal claims of employment discrimination in
which the plaintiff seeks to make his or her case through
circumstantial evidence. McDonnell Douglas set forth the basic
allocation of burdens among employer and employee and order of
presentation of proof:
First, the plaintiff has the burden of proving by the
preponderance of the evidence a prima facie case of
discrimination. Second, if the plaintiff succeeds in
proving the prima facie case, the burden shifts to the
defendant "to articulate some legitimate,
nondiscriminatory reason for the employee's rejection."
Third, should the defendant carry this burden, the
plaintiff must then have an opportunity to prove by a
preponderance of the evidence that the legitimate
reasons offered by the defendant were not its true
reasons, but were a pretext for discrimination.
Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 252-53
(1981) (citations omitted).
While the burden of production may shift, "[t]he ultimate
burden of persuading the trier of fact that the defendant
intentionally discriminated against the plaintiff remains at all
times with the plaintiff." Id. at 253.
In McDonnell Douglas, the Court explained that the plaintiff
could meet his or her prima facie burden
by showing (i) that he belongs to a racial minority;
(ii) that he applied and was qualified for a job for
which the employer was seeking applicants; (iii) that,
despite his qualifications, he was rejected; and (iv)
that, after his rejection, the position remained open
and the employer continued to seek applicants from
persons of complainant's qualifications.
McDonnell Douglas, 411 U.S. at 802.
At the same time as it was articulating the elements of a
prima facie case, the McDonnell Douglas Court explained in no
uncertain terms that these elements might vary in "differing
factual situations." Id. at 802 n.13. Similarly, we have often
remarked that "'the nature of the required showing' to establish
a prima facie case of disparate treatment by indirect evidence
'depends on the circumstances of the case.'" Torre v. Casio,
Inc., 42 F.3d 825, 830 (3d Cir. 1994) (citing Massarsky v.
General Motors Corp., 706 F.2d 111, 118 n.13 (3d Cir.), cert.denied, 464
U.S. 937 (1983)). In the context of a claim of
discriminatory termination of employment, for instance, we have
held that the plaintiff must "prov[e] by a preponderance of the
evidence that (1) he belongs to a protected class; (2) he was
qualified for the position; (3) he was dismissed despite being
qualified; and (4) he ultimately was replaced by a person
[outside the protected class]." Chipollini v. Spencer Gifts,
Inc., 814 F.2d 893, 897 (3d Cir.), cert. dismissed, 438 U.S. 1052
(1987); see also Sempier v. Johnson & Higgins, 45 F.3d 724, 728
(3d Cir.) (same), cert. denied, 115 S. Ct. 2611 (1995); Torre, 42
F.3d at 830 (same).
In a further effort to fine-tune our jurisprudence on the
subject, we have held that the fourth prong of the prima facie
case should be "relaxed" when the employee's layoff occurred in
the context of a reduction in force. Torre, 42 F.3d at 831. In
such a situation, "it obviously is unnecessary for the plaintiff
to . . . show that he was actually replaced by" someone outside
the protected class. Massarsky, 706 F.2d at 118 n.13; see alsoDuffy v.
Wheeling Pittsburgh Steel Corp., 738 F.2d 1393, 1395 n.3
(3d Cir.) (same), cert. denied, 469 U.S. 1087 (1984). Rather,
"it is sufficient to show that he was discharged, while the
[employer] retained someone [outside the protected class]."
Healy v. New York Life Insurance Co., 860 F.2d 1209, 1214 n.1 (3d
Cir. 1988), cert. denied, 490 U.S. 1098 (1989); see also DiBiase
v. SmithKline Beecham Corp., 48 F.3d 719, 723 n.2 (3d Cir.),
cert. denied, 116 S. Ct. 306 (1995); Torre, 42 F.3d at 831;
Armbruster, 32 F.3d at 777; Billet v. CIGNA Corp., 940 F.2d 812,
816 n.3 (3d Cir. 1991); Duffy, 738 F.2d at 1395 n.2; Massarsky,
706 F.2d at 118.
B. Reduction in workforce
We turn, first, to the threshold question of whether Ms.
Marzano's employment was terminated as part of a reduction in
workforce caused by financial distress, as Defendants claim. It
is worth noting that this question bears not only on what legal
standard governs Ms. Marzano's discrimination claim, but on her
two other claims as well.
The two parties disagree as to what is the appropriate work
unit for us to consider in answering this question. Ms. Marzano
argues that her employer at the time of her layoff was CSC
Partners. She offers substantial evidence of CSC Partners's
stellar financial performance in the years preceding and
following her termination, including receipt of an Eagle Award
for financial success in 1993 by the AT&T Business Unit. App. at
A194-96; see Appellant's Brief at 9-12. In addition, she offers
substantial evidence that CSC was also extremely profitable
during the relevant time-period. Id. at 8-9. As a result, she
suggests that Defendants' contention that she was laid off as the
result of a reduction in workforce caused by financial distress
is "not credible." Id. at 36.
Defendants do not challenge Ms. Marzano's rosy account of
their financial picture, and do not claim that Ms. Marzano was
laid off as part of a workforce reduction in either CSC as a
whole or CSC Partners as a whole caused by either firm's
financial situation. Appellees' Brief at 39. Rather, they note
that from the time of her termination, Ms. Marzano was
consistently told that her layoff was caused by the deteriorating
financial situation of the division of CSC Partners for which she
worked, the AT&T National Business Unit [the "AT&T Unit" or the
"Unit"], as a result of which a workforce reduction was taking
place within that unit. In her termination letter dated October
5, 1993, Ms. Marzano was specifically told:
[R]evenues generated by the AT&T Business Unit have not
materialized as anticipated. Over the past several
months, our efforts to develop new business
opportunities within AT&T have been largely
unsuccessful. . . . [T]he CSC Consulting/AT&T Business
Unit is forced to reduce the number of administrative
personnel supporting the practice.
Letter from Marzi to Marzano of 10/5/93.
According to Defendants, "[b]etween October 1993 and April
1994, ten positions, including plaintiff's, out of approximately
50 located in the AT&T National Business Unit in New Jersey, were
eliminated." Appellees' Brief at 10. Defendants also allege
that the Unit was ultimately merged into another Partners unit,
the NY Metro Business Unit. Id. at 13.
Ms. Marzano, however, argues that the Court should reject
any argument made by Defendants based on the AT&T Unit's
financial situation. She asserts that "[t]he purported AT&T
Business Unit is not an independent unit," but "simply part of
CSC Partners." Appellant's Brief at 14. Magistrate Judge
Hughes, who reviewed the financial documents of both CSC Partners
and the AT&T Unit in considering a discovery motion by Ms.
Marzano, reached a similar conclusion. Marzano v. Computer
Science Corporation, Inc., Civil No. 94-3102 (CSF) (D.N.J. June
22, 1995) (mem.) (Hughes, M.J.) [hereinafter Hughes Opinion].
Judge Hughes found, first of all, "evidence of other
projects where AT&T worked in conjunction with several other
units" of CSC Partners. Id., typescript at 5. The expenses and
profits from these joint projects were credited to the AT&T
account, but "the other units were allowed to get 'shadow credit'
for their efforts on this project." Id. As Judge Hughes
explained, "[t]his is not indicative of what one would expect
from an independent unit. Rather, it is more indicative of many
aspects of a corporation coming together in order to benefit the
collective body of the Partners organization." Id.
Judge Hughes also discussed evidence that the AT&T Unit's
financial records incorporate the revenue of other supposedly
independent units. Id. at 5. Judge Hughes found it
"inexplicable how these profit and loss units can portray the
revenues of other units as their own, while at the same time
Defendants maintain the position that they are independent of
each other." Id. at 5-6.
Finally, Judge Hughes expressed concern over testimony by
employees of the defendants that suggests that profits from one
unit, the "El Segundo" pseudo unit, were allocated to that unit,
while expenses were allocated to some other unit, so that both
units' financial pictures would offer a distorted picture of
their profitability. Id. at 6.
Summarizing his findings, Judge Hughes explained that the
AT&T Unit "has cooperated on projects with other units of
Partners, it has been involved with the transfer of expenses and
revenues between units, and it has had one of its more lucrative
sections removed at a very convenient time." Id. at 7. Based on
all this evidence, he reached the following conclusion:
The AT&T unit does not reach the level of independence
achieved by [separate, self-sufficient, independent
portions of a corporation]. The AT&T unit was one of
many symbiotic units, working, sharing and transferring
their resources to each other, for the benefit of the
whole. . . . All in all, it appears the AT&T unit is
independent in name only.
Id.
While the defendants do not challenge the Magistrate Judge's
various findings, they reject Ms. Marzano's conclusion and argue
that the existence of the AT&T Unit "is simply beyond cavil."
Appellees' Brief at 37. There is, indeed, ample evidence that
CSC Partners contained a division that operated by that name.
What is in dispute is whether the division was independent enough
from the rest of CSC Partners to constitute an autonomous "unit,"
whose personnel actions and financial performance should or even
could be considered separately from the rest of the firm. As to
this issue, Judge Hughes certainly recognized that there is a
question of fact regarding whether the AT&T Unit was an
independent profit-and-loss center within the firm.
The defendants argue that their "sworn testimony which
described the severe financial pressures facing the AT&T National
Business Unit stands unrebutted." Id. at 36-37. Interestingly
enough, the testimony to which they refer is that of Robert
Marzi, whose deposition took place on April 25, 1995. App. at
DAS 170. It is clear that the Magistrate Judge, for one, did not
find Mr. Marzi's testimony "unrebutted," since nearly two months
later he issued his opinion in which he concluded that "it
appears the AT&T unit is independent in name only." And while it
is literally true, as the defendants claim, that "Judge Hughes
did not find that the reduction-in-force was based on anything
other than the financial statements of the AT&T National Business
Unit," Appellees' Brief at 40, we are hard-pressed to find any
significance to this fact, since the Magistrate Judge did not
address this question in any way. Rather, the question before
the Judge was whether the AT&T Unit "was a separate revenue
generating profit and loss unit," Hughes Opinion, typescript at
2-3, and he expressed considerable doubt on the subject.
By casting doubt on the validity of the AT&T Unit's
financial statements, Judge Hughes did in fact implicitly leave
open the possibility that the reduction in force might have been
based on something other than the financial statements, that
there might not have been an independent AT&T Unit, that
accordingly the Unit could not be in financial distress while the
rest of CSC Partners was flourishing, and that therefore no
reduction in force could occur as a result of the alleged unit's
alleged financial distress. As Judge Hughes's opinion
demonstrates, there is ample evidence in the record on the basis
of which a finder of fact could conclude that the AT&T Unit's
financial statements are of no value, and that the so-called AT&T
Unit was merely a part of "the collective body of the Partners
organization." Id. at 5. Based on this conclusion, a factfinder
could further conclude that no valid and true reduction in force
occurred in the unit since the unit had no independent existence
of its own.
Because the district court conducted its analysis under the
legal standard applicable to discrimination in a force-reduction
setting, we presume that it concluded, as a matter of law, that a
reduction of force did occur in the AT&T Unit. For the reasons
just articulated, we conclude that the issue of whether the AT&T
Unit was the appropriate work unit and whether a reduction in
force did occur was a question of fact that should have been
presented to the jury and which, on summary judgment, should be
resolved in favor of the non-moving party, i.e., Ms. Marzano. We
hold that the district court committed legal error when it failed
to do so.
C. Prima facie analysis
Because the district court could not conclude as a matter of
law that a reduction in force (RIF) did occur, the court could
only grant summary judgment for the defendants if it found that
Ms. Marzano could not make a prima facie case of discrimination
under either applicable legal setting -- i.e., reduction in force
or no reduction in force. However, the court did not analyze Ms.
Marzano's allegations in the context of a "straight" layoff (as
opposed to a layoff which takes place in a RIF context). In
addition, while the court did find that Ms. Marzano could not
meet her prima facie burden in the RIF context, it committed
legal error in reaching its conclusion.
1.
The district court concluded that Ms. Marzano could not make
a prima facie case in the context of a reduction in force. The
court correctly articulated the standard governing such
situations in the Third Circuit: "to demonstrate a prima faciecase '[i]n
RIF cases, the plaintiff must show he was in the
protected class, he was qualified, he was laid off and other
unprotected workers were retained.'" DiBiase, 48 F.3d at 723 n.2
(citing Armbruster, 32 F.3d at 777); see also Torre, 42 F.3d at
831; Seman v. Coplay Cement Co., 26 F.3d 428, 431 (3d Cir. 1994);
Billet, 940 F.2d at 816 n.3.
The only dispute between the parties concerns the fourth
prong of the requirement. As the district court explained,
Defendants argue that plaintiff cannot establish a
prima facie case of pregnancy discrimination because
she cannot demonstrate that her employer afforded more
favorable treatment to nonpregnant employees. Indeed,
several nonpregnant employees were terminated in
conjunction with the reduction in force of the AT&T
National Business Unit, seemingly refuting plaintiff's
claim that she was singled out because of her
pregnancy.
Plaintiff argues, however, that the relevant
inquiry is not whether other persons outside the
protected class were terminated, but whether persons
not in the protected class were retained.
District Opinion, typescript at 5.
The district court acknowledged that our opinions on the
subject have enunciated the standard in "the precise language
articulated by plaintiff." Id. However, the court rejected a
"literal interpretation" of our language on the ground that under
such a test, "every plaintiff in a protected group would be
allowed a trial simply because he was discharged during a
reduction in force." Id. Presumably to protect the judiciary
from a flurry of frivolous discrimination lawsuits by disgruntled
laid-off employees, the court adopted a different requirement
from that which our explicit language called for:
[T]o establish a prima facie case in the context of a
work-force reduction, a plaintiff must do more than
merely show that unprotected employees were retained in
their positions; the plaintiff must produce some
additional evidence that he was singled out for
discharge because of his protected status.
Id., typescript at 5-6.
Finding that "plaintiff has merely asserted that while she
was terminated, other employees were retained," id., typescript
at 6, the court concluded that Ms. Marzano had failed to
establish a prima facie case of discrimination, and that as a
result the defendants were entitled to summary judgment on this
claim.
Because it departs from the law of this Circuit and because
it subverts the analytical framework designed by the U.S. Supreme
Court in McDonnell Douglas, we reject the requirement of
"additional evidence" imposed by the district court on Ms.
Marzano, and hold that the court erroneously concluded that Ms.
Marzano had failed to meet her prima facie burden in the
reduction-in-force context.
2.
As an initial matter, the district court was not free to
depart from "the precise language" articulated by this court or
to "decline[] to adopt the literal interpretation" of our
jurisprudence unless, of course, a more recent Supreme Court case
requires such a departure or our own precedent in other cases
suggests a modification in certain circumstances. Defendants
argue that the "additional evidence" requirement is consistent
with Third Circuit precedent, and point for support to certain
portions of our opinion in Hook v. Ernst & Young, 28 F.3d 366 (3d
Cir. 1994). See Appellees' Brief at 28. However, the discussion
in Hook to which they direct our attention concerns the elements
required to show employment discrimination in a so-called "mixed-
motives" case, and in no way bears on the elements of a primafacie case in
the type of discrimination case that is before us,
which is known as a "pretext" case. See Hooks, 28 F.3d at 375.
In other words, Hooks is of no relevance to the instant case.
3.
We reject the "additional evidence" requirement not solely
on hierarchical grounds, however, but also because it subverts
the entire analytical framework constructed by the U.S. Supreme
Court, this Court and other circuits for the consideration of
summary judgment motions in employment discrimination cases.
(a)
What makes an employer's personnel action unlawful
discrimination is the intent behind that action. See U.S. Postal
Service Board of Governors v. Aikens, 460 U.S. 711, 715 (1983)
("The 'factual inquiry' . . . is '[whether] the defendant
intentionally discriminated against the plaintiff.'") (citation
omitted). For obvious reasons, it is extremely difficult -- not
to say impossible -- to establish directly the motivation of
one's employer, or that of any third party. See id. at 716 ("All
courts have recognized that the question facing triers of fact in
discrimination cases is both sensitive and difficult. . . .
There will seldom be 'eyewitness testimony as to the employer's
mental processes."). There are exceptions, of course, such as
when a plaintiff can produce the proverbial "smoking gun" -- for
instance, an internal memorandum instructing the personnel
director not to hire persons belonging to a certain protected
class. But our legal scheme against discrimination would be
little more than a toothless tiger if the courts were to require
such direct evidence of discrimination. As we explained in
Chipollini, "we do not require direct proof of . . .
discrimination because it is often unavailable or difficult to
find. . . . 'Even an employer who knowingly discriminates on the
basis of [protected status] may leave no written records
revealing the forbidden motive and may communicate it orally to
no one.'" 814 F.2d at 899 (citing LaMontagne v. American
Convenience Products, Inc., 750 F.2d 1405, 1410 (7th Cir. 1984)).
As a result, most employment discrimination lawsuits seek to
prove intent through inference. In the typical case, the
plaintiff attempts to establish the employer's motivation by a
process of elimination. In other words, because plaintiffs
generally cannot present evidence affirmatively pointing to their
employer's actual reason for taking certain action against them,
they must instead try to show that no reason other than
discrimination is plausible, and that accordingly discrimination
must have been the reason. To enable a jury to reach this
conclusion, plaintiffs must establish three elements: (1) that
their employer took an adverse employment action against them;
(2) that the facts of the case are compatible with discrimination
being the reason; (3) that the employer is unable to provide an
alternative nondiscriminatory reason for the action, or that its
stated reason is false. Since there must be some reason for the
employer's action and since no reason other than discrimination
has been shown to be plausible, this scheme allows a jury to
infer that discrimination must be the reason.
The burden-shifting analysis enunciated by the Supreme Court
in McDonnell Douglas and developed and refined in subsequent
judicial forays into the subject is designed to ensure that
plaintiff has enough evidence to construct the chain of
inferences described in the previous paragraph, and therefore get
to trial. In the first instance, the plaintiff must establish a
prima facie case. The evidentiary burden at this stage is rather
modest: it is to demonstrate to the court that plaintiff's
factual scenario is compatible with discriminatory intent --
i.e., that discrimination could be a reason for the employer's
action. As we have held on numerous occasions, this initial
burden "is not intended to be onerous." Sempier, 45 F.3d at 728
(citing Burdine, 450 U.S. at 253); see also Torre, 42 F.3d at 829
(describing prima facie case as "relatively simple"); McKenna v.
Pacific Rail Service, 32 F.3d 820, 825 (3d Cir. 1994) (same);
Massarsky, 706 F.2d at 118 (describing prima facie case as
"easily made out").
Jumping over this first hurdle, however, has important
consequences. By meeting his or her prima facie burden, the
plaintiff earns the right, as in a poker game, to require the
employer to show its hand -- that is, to offer an explanation
other than discrimination why the employee suffered an adverse
employment action. It is as if plaintiff told the employer, "I
cannot get into your mind to prove with certainty that you acted
against me based on a discriminatory motive. You, on the other
hand, know the reason why you acted against me. I have done the
best I can, which is to show that discrimination could have been
the motive. Therefore, it is your turn to prove me wrong by
articulating the non-discriminatory reason for your action." If
the employer is unable to proffer a nondiscriminatory reason,
plaintiff is entitled to summary judgment or judgment as a matter
of law, as the case may be; if the employer proffers a reason and
the plaintiff can produce enough evidence to enable a reasonable
factfinder to conclude that the proffered reason is false,
plaintiff has earned the right to present his or her case to the
jury.
In the context of a reduction in force, we have held that to
demonstrate a prima facie case, "the plaintiff must show he was
in the protected class, he was qualified, he was laid off and
other unprotected workers were retained." DiBiase, 48 F.3d at
723 n.2; Armbruster, 32 F.3d at 777. The third element, that
plaintiff was laid off, establishes that he or she suffered an
adverse employment action. The second and fourth elements, that
plaintiff was qualified and that other unprotected workers were
retained, establishes that plaintiff was treated differently from
his or her colleagues, and introduces a question: Why? In other
words, it raises the question of what is distinctive about
plaintiff that caused the employer to treat him or her
differently from his or her colleagues. The first element, that
she was in the protected class, identifies one possible answer,
one condition in which she differs from her colleagues who were
retained: her protected status. It does not necessarily
demonstrate that her protected status is the reason why she was
treated differently; but it makes it a plausible explanation, one
that is compatible with the facts of the case.
At that point, the burden switches to the employer, who must
proffer an alternative explanation for treating the plaintiff
differently from those unprotected employees who were retained.
Chief Justice (then Justice) Rehnquist explained the reason for
placing that burden on the employer as follows:
A prima facie case under McDonnell Douglas raises an
inference of discrimination only because we presume
these acts, if otherwise unexplained, are more likely
than not based on the consideration of impermissible
factors. And we are willing to presume this largely
because we know from our experience that more often
than not people do not act in a totally arbitrary
manner, without any underlying reasons, especially in a
business setting. Thus, when all legitimate reasons
for rejecting an applicant have been eliminated as
possible reasons for the employer's actions, it is more
likely than not the employer, who we generally assume
acts only with some reason, based his decision on an
impermissible consideration such as race.
Furnco Construction Corp. v. Waters, 438 U.S. 567, 577 (1978);
see also Chipollini, 814 F.2d at 897.
When the employer proffers a reason for treating the
plaintiff differently from his or her colleagues that the
factfinder rejects, McDonnell Douglas and its progeny allow the
factfinder to conclude that since the employer was unable to give
any satisfactory reason for its action, the discriminatory reason
suggested by the plaintiff must be the one.
As noted earlier, the district court rejected the primafacie test
that we articulated in Armbruster on the ground that
"every plaintiff in a protected group would be allowed a trial
simply because he was discharged during a reduction in force,"
District Opinion at 5, and therefore held that Ms. Marzano needed
to produce "additional evidence" to meet her prima facie burden.
Id. at 6. In so concluding, the court committed reversible legal
error.
(b)
First of all, the court is simply wrong when it suggests
that our test would open the judicial floodgates and let every
plaintiff in a protected group who is discharged go to trial and
defeat summary judgment. Rather, the effect of our rule is that
in every case where an employee in a protected class is laid off
as part of a reduction in force while unprotected colleagues are
retained, the employer may be compelled to state the
nondiscriminatory reason -- assuming there is one -- for the
action.
It is true that if plaintiff can then produce evidence to
cast doubt on the employer's stated reason, the case should go to
trial. But such is the nature of the evidentiary beast.
Employment discrimination cases center around a single question:
why did the employer take an adverse employment action against
plaintiff? Because this "is clearly a factual question,"
Chipollini, 814 F.2d at 899, summary judgment is in fact rarely
appropriate in this type of case. Simply "by pointing to
evidence which calls into question the defendant's intent, the
plaintiff raises an issue of material fact which, if genuine, is
sufficient to preclude summary judgment." Id. See Sempier, 45
F.3d at 732-33 (cases in which plaintiff attacks employer's
stated reasons for adverse employment action "must be resolved by
a jury and cannot be resolved on summary judgment").
To require plaintiff to produce "additional evidence" of
discrimination at the prima facie stage, as the district court
did in this instance, would be a cure worse than the disease. It
would topple the complex evidentiary edifice constructed by the
Supreme Court, and impose on plaintiff the very burden that
McDonnell Douglas sought to avoid -- that of uncovering a smoking
gun.
The defendants contend that the standard articulated by the
court "does not require, as plaintiff suggests, a 'smoking gun.'"
Appellees' Brief at 29. As to what other type of evidence might
satisfy the "additional evidence" requirement that the district
court enunciated, however, the Defendants do not say; instead,
they cite several cases from other circuits with no comment.
None of these cases, however, comes close to offering an answer.
See, e.g., Bialas v. Greyhound Lines, Inc., 59 F.3d 759, 763 (8th
Cir. 1995) (requiring plaintiff to "come forward with additional
evidence that age was a factor in his termination," without
specifying what form this "other evidence" might take).
The Eighth Circuit, in an earlier case, did suggest that
[s]uch showing could be made . . . by statistical
evidence (as, for example, where a pattern of forced
early retirement or failure to promote older employees
can be shown) or circumstantial evidence (such as a
demonstration of a preference for younger employees in
the business organization.
Holley v. Sanyo Manufacturing, Inc., 771 F.2d 1161, 1166 (8th
Cir. 1985).
However, we find this answer unsatisfactory in the present
context. First, except in the largest organizations it might be
more difficult to compile meaningful statistics regarding
pregnant women than for older employees. Second, we find the
imposition of such a requirement overly onerous at the prima
facie stage. For this reason, we predict that New Jersey would
decline to follow the lead of those federal circuits that have
adopted the "additional evidence" requirement.
(c)
Defendants argue that the district court properly required
"additional evidence," but offer, inter alia, a more nuanced
argument than that articulated by the court. They argue that the
fourth element of the prima facie case "encompasses the
requirement that plaintiff show that similarly situatedunprotected
employees were retained." Appellees' Brief at 26
(citing Torre, 42 F.3d at 831), and that there were no such
similarly situated employees in the AT&T Unit. Appellees' Brief
at 27. The implication, the defendants argue, is that
because of her unique role, plaintiff cannot establish,
as she must, that other similarly situated, unprotected
employees were retained.
Because plaintiff was unable to show that other
similarly situated, unprotected employees were treated
more favorably, the District Court correctly ruled that
plaintiff must make some "additional showing" of
discrimination . . . .
Id. at 27-28.
We reject Defendants' argument. First of all, Torre did not
create any legal requirement such as the one that Defendants
attempt to impose on Ms. Marzano. The Court in that case simply
remarked that "when Torre was terminated in the reduction in
force, other, similarly-situated [sic] but younger employees were
retained by Casio." Torre, 42 F.3d at 831. The fact that
similarly situated employees were retained certainly strengthens
the plaintiff's case, and makes more urgent the employer's task
of providing a reason other than discrimination for its different
treatment of plaintiff. But the Court did not create a new legal
requirement in the process, and Defendants can cite no case in
this Circuit, nor do we know of any, where it was described as a
requirement.
Moreover, we reject Defendants' argument because it would
seriously undermine legal protections against discrimination.
Under their scheme, any employee whose employer can for some
reason or other classify him or her as "unique" would no longer
be allowed to demonstrate discrimination inferentially, but would
be in the oft-impossible situation of having to offer direct
proof of discrimination. We see no value in, and no mandate in
our jurisprudence for, such a requirement.
This is not to say that the "uniqueness" of an employee is
irrelevant to the ultimate outcome. Consider, for instance, the
situation of an employee who performs tasks in the firm that no
one else performs, and whose functions become obsolete. In that
case, the employee's "uniqueness" may explain why he or she, and
not an unprotected colleague, was terminated. Such a scenario,
however, goes to the employer's reason for its action, and may be
presented to the judge after the plaintiff has made his or her
prima facie case, when the burden switches to the employer to
proffer a nondiscriminatory reason for its action.
All employees can be characterized as unique in some ways
and as sharing common ground with "similarly situated employees"
in some other ways, depending on the attributes on which one
focusses, and the degree of specificity with which one considers
that employee's qualifications, skills, tasks and level of
performance. The relevant issue for our purposes is not whether
there is some way in which an employee can be classified as
unique but, rather, whether the employee can be classified as
unique in some way relevant to his or her layoff. This question,
in turn, cannot be considered independently from the reasons
proffered for the employee's termination. Therefore, arguments
as to the employee's uniqueness should be considered in
conjunction with, and as part of, the employer's rebuttal -- not
at the prima facie stage. See Healy, 860 F.2d at 1214 n.1
(noting that "because the prima facie case is easily made out,
the prima facie case is rarely the focus of the ultimate
disagreement. Rather, 'the exigencies of a reduction-in-force
can best be analyzed at the stage where the employer puts on
evidence of a non-discriminatory reason for the [discharge].")
(citing Coburn v. Pan American World Airways, Inc., 711 F.2d 339,
343 (D.C. Cir.), cert. denied, 464 U.S. 994 (1983)).
(d)
Because we conclude that the test that this Court has
articulated in the past to establish a prima facie case of
employment discrimination in a reduction-in-force context
properly advances the evidentiary scheme devised by the Supreme
Court, and because we find that this test satisfactorily protects
the interests of employer and employee, we believe that New
Jersey would adopt the test articulated by this Court in DiBiaseand
Armbruster, and find that the district court erred when it
rejected established Third Circuit law.
4.
Furthermore, because we find that the district court
improperly concluded that Ms. Marzano could not meet her primafacie burden
in the RIF context, and because the court did not
consider whether she could meet her burden in a non-RIF context,
we hold that the district court erroneously granted Defendants'
summary judgment on the discrimination ground and remand for
further consideration.
V. The Family & Medical Leave Act claim
Ms. Marzano's second claim is that the defendants violated
her right, under the New Jersey Family Leave Act, "to family
leave . . . [and] to be restored by [the defendants] to [her
previous position] or to an equivalent position of like
seniority, status, employment benefits, pay, and other terms and
conditions of employment." N.J.S.A. 34:11B-7. While the Act
does contain an exception when "the employer experiences a
reduction in force or layoff and the employee would have lost his
position had the employee not been on leave," id., Ms. Marzano
argues that the exception does not apply because the defendants'
claim of financial distress, which was the stated reason for the
alleged force reduction, is false.
The district court rejected Ms. Marzano's argument that a
genuine issue of material fact existed on the ground that she
could not defeat the motion for summary judgment
simply by challenging the employer's motivation for
reducing its work force. Regardless of whether it was
financially induced or whether it was motivated by some
other legitimate business reason, there is no dispute
that Partners experienced a reduction in force during
the time plaintiff was out on maternity leave.
Op. at 7-8. The district court concluded that the force-
reduction provision of the Family & Medical Leave Act applied,
and that summary judgment was warranted. Id.
As we discussed at length supra in Part IV, there is a
genuine question of fact regarding whether or not Ms. Marzano's
employer experienced a reduction in force. Therefore, we cannot
conclude on this record that the statutory exception applies to
Ms. Marzano's termination.
VI. The breach-of-contract claim
Ms. Marzano's final allegation is that her layoff was in
breach of an implied contract whereby "an employee is entitled to
be restored to the same or equivalent position after taking
maternity leave."
The district court granted summary judgment on this claim on
two grounds. First, the court found that "plaintiff has failed
to identify a written policy wherein her employer impliedly
promised that any employee taking a family leave of absence would
be restored to the position held prior to commencing the leave
period." District Opinion at 9. Second, the court concluded
that "a breach of implied contract claim . . . is not cognizable
in the context of a work force reduction." Id. at 9.
Ms. Marzano grounds her claim in New Jersey common law,
under which
when an employer of a substantial number of employees
circulates a manual that, when fairly read, provides
that certain benefits are an incident of employment
(including, especially, job security provisions), the
judiciary, instead of "grudgingly" conceding the
enforceability of those provisions, should construe
them in accordance with the reasonable expectations of
the employees.
Woolley v. Hoffmann-La Roche, Inc., 491 A.2d 1257, 1264 (N.J.
1985).
She argues that the court erroneously granted summary
judgment on this count because, inter alia, a memorandum
circulated on August 16, 1993 by CSC Partners management to all
employees "expressly states that an employee is entitled to be
restored to the same or equivalent position after taking family
leave," Appellant's brief at 49, and "[b]ased on that policy,
[she] reasonably expected to be returned to her job after taking
family leave." Id.
There is no categorical test to determine whether an
employment manual could give rise to reasonable expectations of
employees that it confers enforceable obligations. Witkowski v.
Thomas J. Lipton, Inc., 643 A.2d 546, 550 (N.J. 1994). Among the
important factors that the court should consider, however, are
"the definiteness and comprehensiveness of the [policy] and the
context of the manual's preparation and distribution." Id.
In this instance, the document to which Ms. Marzano directs
our attention is not an employment manual but a two-page
memorandum, a far less formal document. In addition, while the
memorandum does state, inter alia, that "[a]n employee returning
from FMLA leave is entitled to be restored to the same position
held prior to taking FMLA leave, or to an equivalent position,
with the same pay and benefits," App. at A267, it is very clear
from the text of the memorandum that this sentence merely
notifies employees of a provision contained in the Family and
Medical Leave Act. In other words, the context of the memorandum
was to apprise CSC Partners employees of their rights under New
Jersey law, not to inform them of any new "benefits" that the
company decided to grant its employees.
For this reason, we conclude that the district court
properly granted summary judgment on this count.
VII. CSC's liability
Defendants argue on appeal that Ms. Marzano improperly named
Computer Science Corp. as a defendant and that the claims against
CSC must be dismissed as a result. Appellees' Brief at 46-47.
Ms. Marzano argues, however, that there is a "genuine issue of
material fact regarding the interrelationship of CSC and CSC
Partners," Appellant's Reply Brief at 24, and that accordingly
CSC was properly named as a defendant. Id. at 22.
It is a "fundamental proposition[]" of New Jersey corporate
law that a corporation is a separate entity from its
shareholders, State of New Jersey v. Ventron Corp., 468 A.2d 150,
164 (N.J. 1983) (citing Lyon v. Barrett, 89 N.J. 294, 300
(1982)), and that shareholders are insulated from the liabilities
of the corporate enterprise. Ventron Corp., 468 A.2d at 164.
"Even in the case of a parent corporation and its wholly-owned
subsidiary, limited liability normally will not be abrogated."
Id. (citing Muller v. Seaboard Commercial Corp., 5 N.J. 28, 34
(1950)).
A court may not depart from this principle and pierce the
corporate veil unless it finds that "a subsidiary was 'a mere
instrumentality of the parent corporation.'" Ventron Corp., 468
A.2d at 164 (citing Mueller, 5 N.J. at 34-35). The requisite
finding is that "the parent so dominated the subsidiary that it
had no separate existence but was merely a conduit for the
parent." Ventron Corp., 468 A.2d at 164.
We are aware of no case in New Jersey or the Third Circuit
on the subject of piercing the corporate veil in the context of
an employment discrimination lawsuit. Other courts, however,
have considered the issue. Closest to home, a Pennsylvania
federal district court held that "[w]here separate corporate
entities are so interrelated and integrated in their activities,
labor relations, and management, it is clear that for Title VII
jurisdictional purposes they may be treated as a single
employer." Ratcliffe v. Insurance Co. of North America, 482 F.
Supp. 759, 764 (E.D. Pa. 1980).
Other courts have addressed similar questions and conducted
similar types of analysis. In Johnson v. Flowers Industries,
Inc., 814 F.2d 978 (4th Cir. 1987), the plaintiffs brought an age
discrimination lawsuit against the company that employed them,
West Virginia Baking Company (WVBC), as well as WVBC's parent-
company, Flowers Industries, and another Flowers subsidiary. The
court, after noting that "when a subsidiary hires employees,
there is a strong presumption that the subsidiary, not the parent
company, is the employer," id. at 980, noted that the presumption
could be overcome if the parent-company "exercises excessive
control in one of two ways." Id. at 981.
First, the parent could control the employment
practices and decisions of the subsidiary. If the
parent company hired and fired the subsidiary
employees, routinely shifted them between the two
companies, and supervised their daily operations, it
would be hard to find that the parent was not their
employer. Second, the parent might so dominate the
subsidiary's operations that the parent and the
subsidiary are one entity and thus one employer. For
example, the subsidiary may be highly integrated with
the parent's business operations, as evidenced by the
commingling of funds and assets, the use of the same
work force and business offices for both corporations,
and the severe undercapitalization of the subsidiary.
The parent might also fail to observe such basic
corporate formalities as keeping separate books and
holding separate shareholder and board meetings.
Id. The court concluded that "the courts have found parent
corporations to be employers only in extraordinary
circumstances." Id.; see also Frank v. U.S. West, Inc., 3 F.3d
1357, 1363 (10th Cir. 1993) (same).
In Daniels v. Kerr McGee Corp., 841 F. Supp. 1133 (D. Wyo.
1993), the plaintiff sought to pierce the corporate veil against
his employer's parent-company in his wrongful discharge action
based on several facts demonstrating interrelatedness:
interlocking directorates between the two corporate entities;
reference in the parent's annual report to the operations of the
subsidiary, and inclusion of the revenues generated by the
subsidiary; management by the parent of the benefit plan for the
subsidiary's employees; use of the same corporate logo; shared
corporate headquarters; medical examination of the plaintiff by a
doctor employed by the parent. Id. at 1136-37. The court, while
acknowledging that "there is some degree of interdependence
between these two corporations," concluded that the facts cited
by plaintiff could not "overcome the strong presumption of
liability." Id. at 1137. The court noted that plaintiff
conceded that he was an employee of the subsidiary only, that the
subsidiary was adequately capitalized and had sufficient assets
to satisfy any potential judgment against it, and that "the
decision to terminate the plaintiff was made by the management of
the subsidiary and that the parent had no role in that decision."
Id.
By contrast, the Court of Appeals for the Second Circuit did
pierce the corporate veil in a lawsuit alleging improper
termination on the grounds that the parent-company "dominated"
its subsidiary and "effectuated [the plaintiffs'] discharges,"
and that the employees were terminated as the result of personnel
actions ordered by the CEO and the Board of the parent-company.
Gorrill v. Icelandair/Flugleidir, 761 F.2d 847, 853 (2d Cir.
1985).
In the instant case, it is undisputed that at the time of
her layoff, Ms. Marzano was an employee of CSC Partners, and CSC
Partners only. While she suggests that there is a question of
fact regarding the interrelatedness of the two companies that
should go to the jury, Appellant's Reply Brief at 23, she points
only to the following evidence to support her position: first,
that she was initially hired by CSC, and "continued to believe
she was a CSC employee until the day she was fired," id.; second,
that while Defendants claim that her division merged with CSC
Partners sometime between 1991 and 1992, "from the employee's
perspective, there was no notice of any changes or explanation of
what [the merger] meant, if anything," id. at 24; third, that she
continued to receive paychecks from CSC as late as May 1992, and
continued to belong to the CSC pension plan, id.; fourth, that
"CSC Partners['s] maternity leave policy was based on information
provided by CSC Corporate on the FMLA," id.; and, finally, that
she continued to have regular involvement with CSC corporate as
part of her job responsibilities." Id.
Even if we accept all of Ms. Marzano's statements as true,
we conclude that these facts, taken together, do not demonstrate
that CSC and CSC Partners were "so interrelated and integrated in
their activities, labor relations and management" that we should
pierce the corporate veil. Her only direct involvement with CSC
at the time of her layoff was her participation in CSC's pension
plan. In addition, she offers no evidence that CSC was in any
way, shape or form involved in CSC Partners' management or
personnel decisions. For this reason, we conclude that the
charges against CSC should be dismissed.
VIII. Conclusion
For the reasons expressed above, we reach the following
conclusions. First, we will affirm the grant of summary judgment
for CSC Partners on the breach-of-contract count. Second, we
will vacate the grant of summary judgment for CSC Partners on the
discrimination count, and remand to the district court for
further action consistent with this opinion. Third, we will
reverse the grant of summary judgment for CSC Partners on the
FMLA count, and remand to the district court to proceed to trial
on this issue. Finally, we will remand and instruct the district
court to enter an order dismissing all the claims against CSC.