Cynthia Morgan v. Safeway Stores, Inc., and Safeway Arizona Federal Credit Union

884 F.2d 1211, 1989 U.S. App. LEXIS 13482, 51 Empl. Prac. Dec. (CCH) 39,314, 50 Fair Empl. Prac. Cas. (BNA) 1339, 1989 WL 101567
Court of Appeals for the Ninth Circuit·Decided September 6, 1989·No. 88-1785·Published·Cited by 36 cases

Opinions

GOODWIN, Chief Circuit Judge:

Cynthia Morgan appeals a summary judgment in favor of her employer, Safeway Stores, Inc. (“Safeway”) and her credit union, Safeway Arizona Federal Credit Union (“SAFCU”). She sued both defendants under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-2 (1982), for the discriminatory denial of credit disability benefits.

I. Background

Safeway is an employer for title VII purposes. It provides its employees traditional compensation and fringe benefits, such as medical insurance and disability programs. In addition, it offers its employees the opportunity to join SAFCU.

SAFCU is a federal credit union organized under 12 U.S.C. §§ 1751-95 (1982 & Supp. IV 1986). To assure that members share a “common bond of occupation or association” or reside in a “well-defined neighborhood, community, or rural district,” id. § 1759, an application for a federal credit union charter must contain a proposed “field of membership,” id. § 1753. SAFCU listed Safeway and its affiliates as its field of membership. Throughout the period relevant to this action, SAFCU’s field of membership consisted only of employees and their families of Safeway and SAFCU. By law, SAFCU’s board of directors controls its affairs and, more specifically, establishes its lending policies. See id. § 1761b.

Morgan works for Safeway, and through her employment, is a member of SAFCU. In 1976, Morgan secured a SAFCU loan, and opted for SAFCU’s credit disability policy. This policy excludes disability resulting from pregnancy or childbirth. Morgan became pregnant twice, and, pursuant to this policy, twice was denied credit disability benefits, once on May 25, 1979, and then again in April of 1982. Having filed timely charges with the EEOC, and having received a right-to-sue letter from the EEOC, Morgan commenced this title VII action.

Morgan moved for partial summary judgment on three issues: (1) both defen[1213] dants were “employers” under title VII, (2) the availability of the credit disability insurance policies at issue was a form of “compensation” or a “term, condition or privilege” of employment, and (3) the exclusions in those policies were discriminatory under title VII. Safeway and SAFCU cross-moved for summary judgment. The district court denied Morgan’s motion for partial summary judgment and granted defendants’ cross-motion for summary judgment on the ground that Safeway had no control over SAFCU’s management or personnel decisions generally, or over SAF-CU’s disability credit insurance policy in particular. This appeal followed.

II. Supplementation of the Record

Preliminarily, we dispose of a procedural question. Prior to argument, Morgan moved to supplement the record with newly discovered evidence, namely a Safeway employee magazine distributed in December of 1988. She claims the magazine contains evidence that Safeway provided substantial office support services to SAF-CU and an admission by Safeway that SAFCU membership is an employee benefit. We deny the motion for two reasons. First, Morgan has made no showing that the evidence concerning support services is in fact newly discovered. The fact such evidence is contained in a newly discovered publication does not explain why Morgan could not have obtained the same kind of evidence at an earlier date. Second, evidence that Safeway recently described SAFCU membership as an employee benefit is not probative of the degree of Safeway’s control or influence over the SAFCU program challenged here. In any case, the purported new evidence does not add to the record. The original papers established that Safeway described SAFCU membership in its handbook as an employee benefit.

III. Title VII Claim

In 1978, Congress amended title VII “to prohibit sex discrimination on the basis of pregnancy.” Pub.L. 95-555, 92 Stat. 2076 (codified at 42 U.S.C. § 2000e(k)). Thus an employer who treats pregnancy-related conditions less favorably than other medical conditions for purposes of employment benefits violates title VII. Newport News Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S. 669, 684, 103 S.Ct. 2622, 2631, 77 L.Ed.2d 89 (1983). Congress, however, has added no similar provision to the Equal Credit Opportunity Act, 15 U.S.C. § 1691 (1982), the act prohibiting discrimination by creditors. Thus Morgan believes her only avenue of relief is title VII. Unfortunately, that title provides no relief here.

Title VII makes it unlawful for an “employer” or an “employment agency” to “discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s ... sex.” 42 U.S.C. §§ 2000e-2(a) & (b). In this case, the discriminatory policy was offered not by Morgan’s employer, Safeway, but by a third party, SAFCU. Standing alone, SAFCU is not an “employer” within the meaning of title VII because it employs fewer than fifteen persons. See 42 U.S.C. § 2000e(b). Morgan contends, however, that the entity that discriminated against her was an “employer” within the meaning of title VII, consisting either of (1) the single employing entity composed of Safeway and SAFCU or (2) SAFCU alone which acted as the agent or instrumentality of Safeway.

A. Consolidation

This court follows the predominant trend for determining whether businesses should be treated as a single employer for title VII purposes, and applies the four-part test promulgated by the National Labor Relations Board. See Childs v. Local 18, Int’l Brotherhood of Electrical Workers, 719 F.2d 1379, 1382 (9th Cir.1983); see also Baker v. Stuart Broadcasting Co., 560 F.2d 389, 392 (8th Cir.1977). Thus this court treats two entities as one if they have (1) interrelated operations, (2) common management, (3) centralized control of labor relations, and (4) common ownership or financial control. Childs, 719 F.2d at 1382.

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Cynthia Morgan v. Safeway Stores, Inc., and Safeway Arizona Federal Credit Union, 884 F.2d 1211, 1989 U.S. App. LEXIS 13482, 51 Empl. Prac. Dec. (CCH) 39,314, 50 Fair Empl. Prac. Cas. (BNA) 1339, 1989 WL 101567 (9th Cir. 1989).

884 F.2d 1211 (Cynthia Morgan v. Safeway Stores, Inc., and Safeway Arizona Federal Credit Union) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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