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Burns v. Transdigm Group, Inc.

United States District Court, D. Kansas

May 4, 2015

EDWARD BURNS, Plaintiff,
v.
TRANSDIGM GROUP, INC. d/b/a ELECTRMECH TECHNOLOGIES, and WESTERN SKY INDUSTRIES, LLC d/b/a ELECTROMECH TECHNOLOGIES, Defendants.

MEMORANDUM AND ORDER

RICHARD D. ROGERS, District Judge.

In this action, plaintiff contends that he was terminated from his employment with Electromech Technologies on January 2, 2013 because of his age. Plaintiff asserts a claim under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq. This matter is presently before the court upon defendants' motion for summary judgment.

I.

Plaintiff was born on August 16, 1948. He is currently 66 years old. Plaintiff was hired on March 19, 2005 by Electromech Technologies as its Director of Supply Chain. In 2007, he was moved to the position of Director of Costing and Contracting. On February 11, 2011, plaintiff was promoted to the position of Director of Finance. He reported to Doris Harms, President of Electromech. As Director of Finance, plaintiff was responsible for the financial well-being of Electromech, protecting its assets, reporting information on a timely basis to finance and ensuring the financial stability of the company. Plaintiff was also responsible for the work of nine people who reported directly to him. On January 2, 2013, plaintiff was terminated from his position as Director of Finance. Plaintiff was replaced by Jeffrey Keller, who is in his thirties.

In their motion for summary judgment, the defendants raise three arguments: (1) plaintiff's claim against TransDigm Group, Inc. (TDG) d/b/a Electromech Technologies must fail because it was not plaintiff's employer and it was not an employer under the ADEA; (2) plaintiff's claim against Western Sky Industries, LLC d/b/a Electromech Technologies is time-barred; and (3) plaintiff has failed to establish that he was terminated from his employment because of his age.

II.

Summary judgment is appropriate if the moving party demonstrates "that there is no genuine dispute as to any material fact" and that it is Aentitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. City of Herriman v. Bell, 590 F.3d 1176, 1181 (10th Cir. 2010). AThere is no genuine issue of material fact unless the evidence, construed in the light most favorable to the non-moving party, is such that a reasonable jury could return a verdict for the non-moving party." Bones v. Honeywell Int'l, Inc., 366 F.3d 869, 875 (10th Cir. 2004)(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 255 (1986)). A fact is Amaterial@ if, under the applicable substantive law, it is Aessential to the proper disposition of the claim." Wright ex rel. Trust Co. of Kan. v. Abbott Labs., Inc., 259 F.3d 1226, 1231B32 (10th Cir. 2001)(citing Adler v. WalBMart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998)). An issue of fact is Agenuine@ if "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Adler, 144 F.3d at 670 (citing Anderson, 477 U.S. at 248).

The moving party initially must show the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Spaulding v. United Transp. Union, 279 F.3d 901, 904 (10th Cir. 2002), cert. denied, 537 U.S. 816 (2002)(citing Celotex Corp. v. Catrett, 477 U.S. 317, 322B23 (1986)). In attempting to meet this standard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the non-movant's claim; rather, the movant need simply point out to the court a lack of evidence for the nonmovant on an essential element of the nonmovant's claim. Adams v. Am. Guar. & Liab. Ins. Co., 233 F.3d 1242, 1246 (10th Cir. 2000)(citing Adler, 144 F.3d at 671); see also Kannady v. City of Kiowa, 590 F.3d 1161, 1169 (10th Cir. 2010).

Once the movant has met the initial burden of showing the absence of a genuine issue of material fact, the burden shifts to the nonmoving party to Aset forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256; Celotex, 477 U.S. at 324; Spaulding, 279 F.3d at 904 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). The nonmoving party may not simply rest upon its pleadings to satisfy its burden. Anderson, 477 U.S. at 256; accord Eck v. Parke, Davis & Co., 256 F.3d 1013, 1017 (10th Cir. 2001). Rather, the nonmoving party must Aset forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant." Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1197B98 (10th Cir. 2000)(quoting Adler, 144 F.3d at 670B71); see Kannady, 590 F.3d at 1169.

A defendant has the burden of proof on an affirmative defense, and thus in moving for summary judgment on the affirmative defense, A[t]he defendant... must demonstrate that no disputed material fact exists regarding the affirmative defense asserted." Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir. 1997). Once the defendant makes this initial showing, Athe plaintiff must then demonstrate with specificity the existence of a disputed material fact." Id. If after the evidence is viewed in the light most favorable to the plaintiff, the plaintiff cannot meet this burden, Athe affirmative defense bars his claim, and the defendant is then entitled to summary judgment as a matter of law." Id.

Finally, summary judgment is not a Adisfavored procedural shortcut@; on the contrary, it is an important procedure Adesigned to secure the just, speedy and inexpensive determination of every action." Celotex, 477 U.S. at 327 (quoting Fed.R.Civ.P. 1). In responding to a motion for summary judgment, Aa party cannot rest on ignorance of facts, on speculation, or on suspicion and may not escape summary judgment in the mere hope that something will turn up at trial." Conaway v. Smith, 853 F.2d 789, 794 (10th Cir. 1988). When examining the underlying facts of the case, the court is cognizant that it may not make credibility determinations or weigh the evidence. Matsushita, 475 U.S. at 587.

III.

The court begins with the very puzzling issue of who employed the plaintiff and whether plaintiff has sued the correct defendant. The defendants initially contend that plaintiff's claim against TDG must fail because it is not plaintiff's employer and it is not an employer under the ADEA. The defendants suggest that TDG employs no employees since it is a holding company and Electromech's indirect parent. The defendants point out that plaintiff was hired by Electromech, paid by Electromech, reported to Electromech's President, and was eventually terminated by Electromech's President. Finally, the defendants argue that TDG is not liable for acts of its subsidiary under the Aintegrated enterprise test" established by the Tenth Circuit.

The defendants next contend that plaintiff's claim against Western Sky Industries is barred because plaintiff did not timely assert his claim against it. The defendants also argue that equitable tolling does not save plaintiff's claim against Western Sky Industries. Finally, the defendants suggest that the plaintiff's addition of Western Sky Industries in an amended complaint does not relate back to the time of plaintiff's initial complaint.

The facts as provided by the parties on these issues are as follows: In December 2010, TDG's subsidiary, TransDigm, Inc., acquired McKechnie Aerospace Holdings, Inc. One of McKechnie's indirect subsidiaries was Western Sky Industries, LLC, which had several operating units including Electromech Technologies. On February 6, 2013, plaintiff filed a complaint of discrimination with the Kansas Human Rights Commission against Electromech Technologies. He later received a right-to-sue letter. He filed his complaint against TDG d/b/a Electromech Technologies in this court on October 1, 2013. In his complaint, he asserted the following:

The defendant Transdigm Group, Inc is a corporation, duly authorized and existing under the laws of the state of Delaware. It is doing business in Kansas through a wholly owned subsidiary, Electromech Technologies.

In its answer, TDG claimed that it was not plaintiff's employer. TDG further alleged that Western Sky Industries was doing business as Electromech Technologies. It admitted that plaintiff's employment with Western Sky Industries, LLC d/b/a Electromech Technologies ended on January 2, 2013.

Based upon the responses of TDG, plaintiff sought to amend his complaint to add Western Sky Industries d/b/a Electromech Technologies as a defendant. TDG argued in response that the motion should be denied because it was futile. TDG contended plaintiff's claim was time-barred because he had failed to sue Western Sky Industries within ninety days of receiving his right-to-sue letter. Magistrate Sebelius granted the motion to amend, finding that TDG had failed Ato come forward with any evidence regarding the nature and extent of Western Sky Industries' knowledge or lack of knowledge regarding this action."

A.

The court begins with TDG's contention that it is neither plaintiff's employer nor an employee under the ADEA. In roughly three pages of argument, TDG suggests that it was not plaintiff's employer because plaintiff was hired by Electromech, paid by Electromech, reported to Electromech's President, and was terminated by Electromech's President. TDG then suggests that it cannot be held liable under the Aintegrated enterprise test" because (1) the mere fact that Electromech's President reported to Pete Palmer, TDG's Executive Vice-President, is insufficient to show an interrelation of operation; (2) plaintiff cannot demonstrate any centralized control of labor relations between TDG and Electromech; (3) TDG and Electromech share no common directors or operational managers; and (4) the mere existence of a parent-subsidiary relationship is not enough to impose liability on it.

The ADEA makes it unlawful for an employer to discharge or otherwise discriminate because of age against an individual at least forty years of age with respect to compensation, terms, conditions, or privileges of employment. See 29 U.S.C. §§ 623(a)(1), 631(a). Liability under the ADEA is limited to Aemployers." See Garcia v. Copenhaver, Bell & Associates, M.D.'s, P.A., 104 F.3d 1256, 1263 (11th Cir. 1997). A defendant must have A20 or more employees" to qualify as an "employer" covered by the ADEA. 29 U.S.C. § 630(b). The employee numerosity threshold for establishing "employer" status under the ADEA is not jurisdictional; rather, it is merely an element of a claim for relief. See Hackworth v. Progressive Cas. Ins. Co., 468 F.3d 722, 726 n. 4 (10th Cir. 2006)

The Tenth Circuit has referred to two tests that are applicable when determining which of two entities is a plaintiff's employer: the joint-employer test and the single-employer test. Bristol v. Bd. of County Com'rs of County of Clear Creek, 312 F.3d 1213, 1218 (10th Cir. 2002) Under the single-employer doctrine, a plaintiff who is the employee of one entity may seek to hold another entity liable by arguing that the two entities effectively constitute a single employer. Id. In applying the single-employer test, a court weighs four factors: interrelations of operation; (2) common management; (3) centralized control of labor relations; and (4) common ownership and financial control. Id. at 1220(quotation omitted). The third factor-centralized control of labor relations-is the most important. Id. Under the joint-employer test, a plaintiff who is the employee of one entity may seek to hold another entity liable by claiming that the two entities are joint employers. Id. In applying this test, courts examine if the entities Ashare or co-determine those matters governing the essential terms and conditions of employment." Id. (quotation omitted). "In other words, courts look to whether both entities exercise significant control over the same employees.'" Id. (quotation omitted). "As a general rule, determining whether an entity qualifies as an employer is a fact issue for the jury. Id. at 1221.

TDG focused on the single-employer theory of liability, arguing that TDG and Electromech are not a single employer. TDG relies upon evidence that plaintiff has not demonstrated any centralized control of labor relations between the two entities. TDG further argues that TDG and Electromech share no common directors or operational managers. Finally, TDG contends that even though Electromech is Aan indirect, wholly-owned subsidiary of [TDG], " this factor alone does not establish parent liability.

Plaintiff, on the other hand, has suggested that either theory of liability-the single-employer or the joint employer-Bcould apply here. Nevertheless, plaintiff has limited its argument to the single-employer test. Plaintiff points out there is evidence that TDG was involved in both the decision to promote him to Director of Finance and the determination to ...


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