employed and does not employ any of the named plaintiffs in this action. On November 25, 1996, Judge Richey denied BAC's motion, without prejudice to BAC's right to renew said motion. Richard v. Bell Atlantic Corp., 946 F. Supp. 54 (D.D.C. 1996) ("November 25 Memorandum Opinion"). The Court afforded BAC the right to renew its motion (under either Rule 12, Rule 56, or both), after a sixty day period during which the plaintiffs would have the opportunity to conduct discovery on BAC's status as an "employer" under Title VII and § 1981. Id.
The limited discovery period has ended, the plaintiffs have filed an amended complaint, and BAC (and the other defendants) have filed an answer. BAC has renewed its motion in the form of a summary judgment motion, again arguing that it is not, and has never been, an "employer" of the plaintiffs pursuant to Title VII and § 1981. As in its original motion, BAC argues that all of the plaintiffs are or were employed by its subsidiaries, not by BAC, and therefore BAC should be dismissed from this lawsuit.
In his November 25 Memorandum Opinion, Judge Richey adopted the "integrated enterprise" test in order to determine whether there is a genuine issue regarding BAC's status as an employer of the plaintiffs. See Richard v. Bell Atlantic Corp., 946 F. Supp. 54, 62 (D.D.C. 1996).
A court must consider four factors when applying the "integrated enterprise" test, including (1) interrelation of operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership or financial control. Id. at 61.
Judge Richey further ruled that evidence tending to show "centralized control of labor relations" should be the focus of the Court's analysis. 946 F. Supp. at 62. Therefore, the central question on summary judgment is whether there is a genuine issue that the parent controls the day-to-day employment decisions of the subsidiaries that employ or employed the plaintiffs. Id.
The evidence submitted by the plaintiffs in opposition to BAC's summary judgment motion is, for the most part, disorganized, confusing and unauthenticated. As discussed below, plaintiffs have not submitted significantly probative evidence showing that the operations of BAC and its subsidiaries are interrelated. However, they have pointed to several facts suggesting that BAC has directly impacted material aspects of the plaintiffs' employment with their respective subsidiaries, such as in the areas of performance evaluations, promotions, and transfers.
There also is evidence of common ownership and common management in the human resources area. Because the plaintiffs appear to have raised a genuine issue as to three out of the four factors of the integrated enterprise test, particularly with regard to the most important factor (centralized control of labor relations), BAC's summary judgment motion must be denied.
1. Interrelation of Operations
The plaintiffs failed to submit evidence demonstrating that BAC's operations are interrelated with those of its subsidiaries. While there is ample evidence in the record indicating that the subsidiaries' operations are interrelated (and that BAC made them interrelated), such evidence is "irrelevant to the interrelation of operations inquiry." Frank v. U.S. West, Inc., 3 F.3d 1357, 1362 (10th Cir. 1993). This factor weighs in BAC's favor.
2. Centralized Control of Labor Relations
The centralized control of labor relations factor is the most important one in the integrated enterprise test. Based on the evidence in the record, the court concludes that this factor weighs in the plaintiffs' favor for four reasons: (1) BAC directly participates in the evaluation of its subsidiary employee's performance; (2) BAC drafted and implemented a comprehensive employment policy used by its subsidiaries; (3) BAC development and implement alleged discriminatory testing procedures used by its subsidiaries; and (4) BAC has influence and/or control over the transfer or promotion opportunities of its subsidiaries' employees.
a. BAC's Direct Participation in the Evaluation of its Subsidiary Employees' Performance
There remains a genuine issue as to whether BAC is directly involved in the evaluation of its subsidiaries' employees' performance. While BAC argues that "the undisputed record evidence shows that BAC has no involvement in preparing performance evaluations of subsidiaries' employees (other than for a few high-level managers, which the law permits),"
plaintiff Iris Richard has submitted a copy of a written performance evaluation she received in 1992. See Exhibit 10 to Amended Complaint. That performance evaluation is captioned, "Bell Atlantic Corporation Internal Auditing Department," suggesting that BAC was directly involved in the evaluation of her work. Id. (emphasis added). BAC has made no attempt to contest the authenticity or significance of Exhibit 10.
Additionally, BAC concedes that its Human Resources Department has "consultative involvement" with respect to all decisions concerning the hiring, discipline, promotion, evaluation, work assignments, training, and discharge of non-union employees of the subsidiaries,
thereby undermining BAC's argument that it has "no involvement in preparing performance evaluations of subsidiaries' employees." The Court concludes that there is a genuine dispute over BAC's involvement in the evaluation of its subsidiaries' employees.
b. BAC's Drafting and Implementation of Comprehensive, Mandatory Employment Policies Used by Its Subsidiaries.
BAC acknowledges that its Human Resources Department has drafted the "Bell Atlantic Associate Appraisal and Development Plan" ("The Plan") that is applicable to all "bargaining-unit employees" of BAC subsidiaries. See Exhibit 16 to Amended Complaint; BAC's Reply to Material Facts at 4, P 5; Pennington Dec. at P 16; Answer at P 16. The Plan states that its objective "is to provide organizations throughout Bell Atlantic with a consistent means of evaluating associate performance relative to corporate and functional requirements." Exh. 16.
The Plan is comprehensive, spanning fifteen, single-spaced pages touching on virtually every criterion by which an employee can be evaluated. Supervisors are required to evaluate employees on their integrity and ethics compliance, equal employment opportunity/diversity, safety compliance, attendance, punctuality, job performance, and customer satisfaction. Through so-called "decision criteria," the Plan details the precise manner in which supervisors are to determine whether their employees are complying with each of these requirements. Supervisors appraise compliance by indicating on an evaluation form, with respect to each criterion, whether the associate "Exceeds Requirements," "Meets All Requirements," "Meets Some, But Not All Requirements," or "Does Not Meet Requirements."
The Plan also requires that supervisors, preferably with the input of their subordinates, establish performance objectives that "contribute to the achievement of organizational unit goals and the broader goals of Bell Atlantic during the performance year." The supervisors "should clearly describe the standards against which the associate's performance will be measured" and should "ensure reasonable consistency in the performance objectives for associates holding the same job title ..."
Most significantly, the Plan provides that "[all organizations must comply" with its provisions, except with respect to (1) incorporation of job title or department-specific performance standards, (2) language in the evaluation of associate performance contributions, and (3) customization of the sample associate appraisal form attached to the Plan. Exh. 16 (emphasis added). Thus, with few exceptions, BAC's subsidiaries are required to follow the comprehensive and specific performance evaluation criteria developed by BAC.
While it is true that a "parent's broad general policy statements regarding employment matters are not enough" to show centralized control of labor relations,
the Associate Appraisal and Development Plan purports to be far more than a "broad general policy statement." Rather, it is a comprehensive listing of regimented rules regarding the evaluation of employees that BAC's subsidiaries are required to follow. Under these circumstances, the Plan evidences an attempt by BAC to exercise day-to-day control over its subsidiaries' employment decisions. See Baker v. Stuart Broadcasting Co., 560 F.2d 389, 392 (8th Cir. 1977) (finding that the integrated enterprise test was satisfied where the parent corporation issued policy manuals that were regimented and were required to be followed); cf. Wood v. Southern Bell Tel. & Tel. Co., 725 F. Supp. 1244, 1249 (N.D. Ga. 1989) (finding no integrated enterprise where the subsidiary had discretion as to whether it was required to follow the parent's practices and procedures).
The "Employee Code of Business Conduct" further evidences BAC's attempt to exert day-to-day control over its subsidiaries' employment decisions, specifically, with regard to discipline and termination decisions. The Code addresses employee conduct "reflecting a lack of honesty or integrity," such as theft, alcohol and drug use, misuse of company vehicles, misusing customer records, dishonesty, activity that is "disruptive to the work environment," and the possession of firearms. See Exh. 17 to Amended Complaint. The Code warns that "[violations of the law, company policies and instructions governing day-to-day job performance can lead to discipline up to and including discharge and/or prosecution." BAC admits that its officers "have general oversight responsibility for and approve the Employee Code of Business Conduct when it is issued." Answer at P 24. BAC further admits that the Code "applies to all employees of Bell Atlantic Corporation and its subsidiaries." Id.
3. BAC's Development and Implementation of Allegedly Discriminatory Testing Procedures Used by Its Subsidiaries
There is a genuine issue in dispute as to whether BAC developed and implemented testing procedures that the plaintiffs claim have had an adverse impact on African-Americans. This allegation further evidences BAC's attempt to influence the day-to-day employment decisions of its subsidiaries. The plaintiffs allege the following:
BAC developed a number of standard tests for employees. These tests are used in all of the subsidiaries ... These tests have had an adverse affect of keeping African-American employees from advancing into supervisory and management positions.
Amended Complaint at P 15.
One of these alleged discriminatory tests is the Uniform Test Battery ("UTB"). In its answer, BAC admits "that the Human Resources organization of Bell Atlantic Corporation ... developed ... the Uniform Test Battery, which applies to associates in the Operating Companies ...." Answer at P 15.
BAC denies, however, that the UTB was "implemented in the subsidiaries by Bell Atlantic Corporation." Id. BAC further argues that "as with other general policies applicable throughout the Bell Atlantic family of companies, such policies are not probative on the critical question before the Court (i.e., whether BAC is so involved in the day-to-day employment decisions affecting the subsidiaries' employees that the parent and the subsidiaries may be deemed to be integrated)." BAC's Response to Material Facts at 4, P 7.
BAC's argument is wrong as a matter of law. Based on the fact that the UTB is, in fact, followed in all of the Operating Companies, a reasonable jury could infer that BAC requires its subsidiaries to use the UTB, and therefore, that BAC implemented the UTB through its subsidiaries. Even assuming that BAC did not explicitly require its subsidiaries to implement the UTB, its universal implementation by the Operating Companies could permit a reasonable fact-finder to infer that BAC strongly influenced its subsidiaries to implement it. Accordingly, BAC's involvement with the UTB tends to show that it is directly involved in an employment practice the plaintiffs claim is racially discriminatory.
Additionally, even if BAC technically lacked employer-employee relationships with employees of the subsidiaries, this fact would not immunize BAC from Title VII liability if (a) the UTB is found to be unlawfully discriminatory and (b) BAC was the moving force behind its implementation by the subsidiaries. Certainly if BAC were to test its own employees (whoever they may be) with the UTB, BAC would be subject to Title VII liability if the UTB had an unlawful adverse impact on Blacks.
So too if BAC subjects its subsidiaries' employees to the UTB should it be liable for any unlawful adverse impact on Black employees of its subsidiaries. As the D.C. Circuit held almost twenty-five years ago:
To permit a covered employer to exploit circumstances peculiarly affording it the capability of discriminatorily interfering with an individual's employment opportunities with another employer, while it could not do so with respect to employment in its own service, would be to condone continued use of the very criteria for employment that Congress has prohibited ...Both injunctive and back pay relief (in the sense of monetary damages for lost employment opportunities) may be available, in an appropriate case, against respondents who are neither actual nor potential direct employers of particular complainants,... but who control access to such employment and who deny such access by reference to invidious criteria.