Berkowitz v. Allied Stores of Penn-Ohio, Inc.

541 F. Supp. 1209, 31 Fair Empl. Prac. Cas. (BNA) 337, 1982 U.S. Dist. LEXIS 13098, 31 Empl. Prac. Dec. (CCH) 33,589
CourtDistrict Court, E.D. Pennsylvania
DecidedJune 16, 1982
DocketCiv. A. 79-980
StatusPublished
Cited by17 cases

This text of 541 F. Supp. 1209 (Berkowitz v. Allied Stores of Penn-Ohio, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berkowitz v. Allied Stores of Penn-Ohio, Inc., 541 F. Supp. 1209, 31 Fair Empl. Prac. Cas. (BNA) 337, 1982 U.S. Dist. LEXIS 13098, 31 Empl. Prac. Dec. (CCH) 33,589 (E.D. Pa. 1982).

Opinion

MEMORANDUM

RAYMOND J. BRODERICK, District Judge.

This is an age discrimination action in which the plaintiff, Howard Berkowitz (“Berkowitz”) contends that the defendants, his former employers, discharged him because of his age in violation of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621 et seq. Trial was held before this Court, sitting without a jury on May 11, 12, 13, 14 and 17, 1982. For the reasons hereinafter set forth, the Court finds that the age of Mr. Berkowitz was not a determinative factor in the decision of the defendants to discharge him.

*1213 The Court has jurisdiction in this matter pursuant to 28 U.S.C. § 1331(a) since plaintiff has alleged a violation of a federal statute, the ADEA. Defendant Allied Stores Corporation (“Allied Stores”) has filed a motion, pursuant to Fed.R.Civ.P. 41(b) to be dismissed as a defendant in this litigation. Specifically, Allied Stores contends (1) that it is not an “employer” of Mr. Berkowitz within the meaning of the ADEA and (2) that it is not subject to the personal jurisdiction of this Court because Allied Stores lacks sufficient minimum contact with Pennsylvania, the forum state. For the reasons hereinafter set forth, the Court will deny Allied Stores’ motion to be dismissed as a defendant.

The ADEA defines an “employer” 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. . . . The term also means (1) any agent of such a person.... ” 29 U.S.C. § 630(b) (1974). The evidence presented at trial and contained in the record indicates that Allied Stores is a substantial business enterprise, the parent company of several subsidiaries who operate many retail stores in many states throughout the nation. Allied Stores has employed more than twenty persons throughout the 1970s to the present time. However, Allied contends that it was not plaintiff’s employer but that Mr. Berkowitz was employed only by Allied Stores of Penn-Ohio, Inc. t/a Pomeroy’s (“Allied of Penn-Ohio”), the wholly owned subsidiary of Allied Stores which operates the Pomeroy’s stores as well as other retail outlets. As heretofore noted, defendant further contends that Allied Stores lacks minimum contact with Pennsylvania and that this Court may therefore not exercise personal jurisdiction over Allied.

The parties have stipulated that Pomeroy’s employed Mr. Berkowitz at the time of his discharge in 1978. At that time, and throughout the 1970s, Allied Stores was the parent corporation of Allied of Penn-Ohio, a wholly-owned subsidiary corporation. Were Allied only a parent corporation that took no active role in the business decisions of its subsidiary, it would, as a corporate entity distinct from Allied of Penn-Ohio, not be considered an employer of the plaintiff. See Publicker Industries v. Roman Ceramics, 603 F.2d 1065, 1069 (3rd Cir. 1979); Zubik v. Zubik, 384 F.2d 267, 272 (3rd Cir. 1967), cert. denied, 390 U.S. 988, 88 S.Ct. 1183, 19 L.Ed.2d 1291 (1968); Fanfan v. Berwind Corporation, 362 F.Supp. 793 (E.D.Pa.1973).

Here, however, Allied Stores was more than a passive parent. Allied Stores, acting through its agents, was regularly and intimately involved with the business decisions of Allied of Penn-Ohio, especially decisions concerning managing personnel. Mr. Joseph Lesser, a vice-president of Allied Stores and a senior vice-president of Allied of Penn-Ohio visited Pennsylvania on an average of once per month to supervise the Pomeroy’s operation and to hold business meetings with Pomeroy’s executives. He was, pursuant to Allied Stores’ policy, consulted by the managing director of Pomeroy’s before any Pomeroy’s executive was discharged. Mr. Lesser’s approval was also required to appoint and to discharge the managing director of Pomeroy’s. Mr. Lesser frequently consulted with Pomeroy’s managing director by telephone concerning all major policy decisions.

Defendant Allied Stores contends that Mr. Lesser’s activities did not provide the minimum contacts necessary to confer personal jurisdiction over Allied Stores. Allied Stores contends that Mr. Lesser conducted his activities in his capacity as senior vice-president of Allied of Penn-Ohio, not in his capacity as vice-president of Allied Stores. However, Mr. Lesser testified that, at the time plaintiff was employed by Pomeroy’s, and for some time thereafter, he had not been informed as to who was the chief executive officer of Allied of Penn-Ohio. Neither did he know the membership of the board of directors of Allied of Penn-Ohio, though Mr. Lesser was and is himself a member of that Board. Mr. Lesser further testified that he has never visited the corpo *1214 rate headquarters of Allied Penn-Ohio in Harrisburg, Pennsylvania, though he has frequently been to Harrisburg to supervise a member store of the Allied Penn-Ohio chain.

The Court finds that Mr. Lesser’s activities concerning the operation and personnel policies of Pomeroy’s were conducted in his capacity as a vice-president of Allied Stores, not as an executive for Allied of Penn-Ohio. The record in this case indicates that Allied of Penn-Ohio existed only on the organization charts and ledgers of the two companies. In actuality, Allied Stores, the parent company, directly supervised and controlled the major decisions concerning the operation of the Pomeroy’s stores.

Under such circumstances, an active parent company supervising and controlling the operation of the stores of a wholly owned subsidiary must be considered an “employer” within the meaning of the ADEA, 29 U.S.C. § 630(b), according to any of the accepted tests for parent corporation responsibility. In determining whether a parent corporation should be considered amenable to suit, Courts have generally applied one of three tests: (1) the “integrated enterprise” test; (2) the “alter ego” test or the (3) “mere instrumentality” test.

The integrated enterprise test, which has been specifically applied to ADEA cases, states that “the appropriate standard for determining whether nominally separate corporations are to be considered a single employer is whether they comprise an integrated enterprise.” Marshall v. Arlene Knitwear, Inc., 454 F.Supp. 715 (E.D.N.Y.1978) . Accord, Linskey v. Heidelberg Eastern, Inc., 470 F.Supp. 1181, 1184 (E.D.N.Y.1979) ; Woodford v. Kinney Shoe Corporation, 369 F.Supp. 911 (N.D.Ga.1973). The “integrated enterprise” test for determining whether a parent corporation is an employer was first developed in labor relations cases. See Radio & Television Broadcast Technicians Local Union 1264 v.

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541 F. Supp. 1209, 31 Fair Empl. Prac. Cas. (BNA) 337, 1982 U.S. Dist. LEXIS 13098, 31 Empl. Prac. Dec. (CCH) 33,589, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berkowitz-v-allied-stores-of-penn-ohio-inc-paed-1982.