Engelhardt v . SP Richards et a l . CV-04-120-PB 12/29/05
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Leeanne Engelhardt
v. Case N o . 04-cv-120-PB Opinion N o . 2005 DNH 171 S.P. Richards Company, Inc. and Genuine Parts Company
MEMORANDUM AND ORDER
Leeanne Engelhardt alleges that S.P. Richards Company, Inc.
(“SPR”) and its parent corporation, Genuine Parts Company
(“GPC”), violated the Family and Medical Leave Act (“FMLA”) by
terminating her employment after she missed work to care for her
daughter. Because the SPR facility where Engelhardt worked has
fewer than 50 employees, Engelhardt is not eligible for
protection under the FMLA unless her employer employs at least 50
employees within 75 miles of her worksite. Engelhardt seeks to
satisfy this requirement by counting employees of GPC. Whether
she is entitled to do so depends upon whether SPR and GPC qualify
as an “integrated employer.” The parties have raised the issue
in cross-motions for summary judgment. -2- I. BACKGROUND
A. Corporate Structure
GPC is a publicly-traded corporation based in Atlanta,
Georgia. It is the parent corporation for several subsidiaries,
including SPR. It also operates an auto parts business under the
name NAPA Auto Parts (“NAPA”). SPR is based in Symerna, Georgia.
It is a wholesaler and distributor of office supply products.
GPC and SPR have separate officers, registered agents, managers,
and employees. They have separate boards of directors, with only
two overlapping members. They also maintain separate books and
records. Each company has its own Human Resources department and
is solely responsible for its own hiring and firing decisions.
GPC administers several employee benefit plans, including
group health insurance, life insurance, 401(k) and pension plans.
SPR’s employees are eligible to participate in these plans and
SPR periodically reimburses GPC for the costs of any benefits
that its employees receive.
SPR has its own payroll department but its employees are
paid from a GPC payroll account. SPR reimburses GPC for all
funds paid to SPR’s employees. GPC also charges SPR an
administrative fee to cover its processing costs.
-3- SPR has adopted GPC’s policies on attendance, sexual
harassment, substance abuse, corporate conduct and network
security. SPR decided on its own to adopt these policies.
SPR employs fewer than 50 employees at its Nashua, New
Hampshire distribution facility. GPC employs more than 50
employees at facilities located within 75 miles of SPR’s Nashua
facility.
B. Engelhardt’s Employment
SPR hired Engelhardt as a customer service representative at
its Nashua distribution facility in February 2000. On January
1 7 , 2000, Engelhardt signed a “Genuine Parts Company Applicant
Acknowledgment of Substance Abuse Policy.” On October 8 , 2001,
she signed an acknowledgment that she had received and agreed to
abide by the “Genuine Parts Company Code of Corporate Conduct.”
On March 2 6 , 2002, she signed an acknowledgment bearing the “S.P.
Richards Co.” name and stating that she had received and agreed
to abide by the “Genuine Parts Company Employee Attendance
Policy.”
SPR terminated Engelhardt’s employment on December 1 7 , 2002,
after she missed work the previous day to care for her daughter.
The decision to terminate Engelhardt was made exclusively by
-4- employees of SPR.
II. STANDARD OF REVIEW
Summary judgment is appropriate only “if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” Fed. R. Civ. P.
56(c). A genuine issue is one “that properly can be resolved
only by a finder of fact because [it] may reasonably be resolved
in favor of either party.” Anderson v . Liberty Lobby, Inc., 477
U.S. 2 4 2 , 250 (1986). A material fact is one “that might affect
the outcome of the suit.” Id. at 248. When considering a
defendant’s motion for summary judgment, “[t]he mere existence of
a scintilla of evidence in support of the plaintiff’s position
[is] insufficient; there must be evidence on which the jury could
reasonably find for the plaintiff.” Id. at 252.
III. ANALYSIS
To be eligible for protection under the FMLA, an employee
must work for an employer that employs at least 50 workers within
-5- 75 miles of the employee’s worksite. 29 U.S.C. § 2611(2)(B)(ii).
In most circumstances, “the legal entity which employs the
employee is the employer under FMLA.” 29 C.F.R. § 825.104(c).
An exception exists, however, if a parent and a subsidiary
qualify as an “integrated employer.” Id. § 825.104(c)(1).
To determine whether separate corporate entities are an
integrated employer, the court must review the entities’
relationship in its totality. Id. § 825.104(c)(2). The
following factors are considered: “(i) Common management; (ii)
Interrelation between operations; (iii) Centralized control of
labor relations; and (iv) Degree of common ownership/financial
control.” Id. The First Circuit has followed a flexible
approach when using this test in which all four factors are
considered but control of labor relations is the primary
consideration. Romano v . U-Haul Int’l, 233 F.3d 655, 666 (1st
Cir. 2000).
Applying the flexible approach mandated by the First Circuit
to the undisputed facts, it is apparent that SPR and GPC are not
an integrated employer. First, although Engelhardt argues that
GPC should be treated as her employer because SPR adopted several
of GPC’s employment policies, I agree with the Tenth Circuit that
-6- “[a] parent’s broad general policy statements regarding
employment matters are not enough to satisfy [the control over
labor relations factor].” Frank v . U.S. West, Inc., 3 F.3d 1357,
1363 (10th Cir. 1993). Instead, the facts that are determinative
here are that: (1) GPC and SPR each have their own Human
Resources departments; (2) each company is solely responsible for
its hiring and firing decisions; (3) SPR manages day-to-day
operations at the Nashua facility where Engelhardt worked; and
(5) SPR’s employees made the decision to terminate Engelhardt
without consulting anyone at GPC. Taken together, these facts
convincingly demonstrate that SPR was responsible for its own
labor relations.
A second factor that favors the defendants is the absence of
common management. As I have noted, GPC and SPR each have their
own officers, managers and employees. Only two directors sit on
both companies’ boards of directors. Each company has its own
headquarters. Further, Engelhardt has produced no evidence that
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Engelhardt v . SP Richards et a l . CV-04-120-PB 12/29/05
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Leeanne Engelhardt
v. Case N o . 04-cv-120-PB Opinion N o . 2005 DNH 171 S.P. Richards Company, Inc. and Genuine Parts Company
MEMORANDUM AND ORDER
Leeanne Engelhardt alleges that S.P. Richards Company, Inc.
(“SPR”) and its parent corporation, Genuine Parts Company
(“GPC”), violated the Family and Medical Leave Act (“FMLA”) by
terminating her employment after she missed work to care for her
daughter. Because the SPR facility where Engelhardt worked has
fewer than 50 employees, Engelhardt is not eligible for
protection under the FMLA unless her employer employs at least 50
employees within 75 miles of her worksite. Engelhardt seeks to
satisfy this requirement by counting employees of GPC. Whether
she is entitled to do so depends upon whether SPR and GPC qualify
as an “integrated employer.” The parties have raised the issue
in cross-motions for summary judgment. -2- I. BACKGROUND
A. Corporate Structure
GPC is a publicly-traded corporation based in Atlanta,
Georgia. It is the parent corporation for several subsidiaries,
including SPR. It also operates an auto parts business under the
name NAPA Auto Parts (“NAPA”). SPR is based in Symerna, Georgia.
It is a wholesaler and distributor of office supply products.
GPC and SPR have separate officers, registered agents, managers,
and employees. They have separate boards of directors, with only
two overlapping members. They also maintain separate books and
records. Each company has its own Human Resources department and
is solely responsible for its own hiring and firing decisions.
GPC administers several employee benefit plans, including
group health insurance, life insurance, 401(k) and pension plans.
SPR’s employees are eligible to participate in these plans and
SPR periodically reimburses GPC for the costs of any benefits
that its employees receive.
SPR has its own payroll department but its employees are
paid from a GPC payroll account. SPR reimburses GPC for all
funds paid to SPR’s employees. GPC also charges SPR an
administrative fee to cover its processing costs.
-3- SPR has adopted GPC’s policies on attendance, sexual
harassment, substance abuse, corporate conduct and network
security. SPR decided on its own to adopt these policies.
SPR employs fewer than 50 employees at its Nashua, New
Hampshire distribution facility. GPC employs more than 50
employees at facilities located within 75 miles of SPR’s Nashua
facility.
B. Engelhardt’s Employment
SPR hired Engelhardt as a customer service representative at
its Nashua distribution facility in February 2000. On January
1 7 , 2000, Engelhardt signed a “Genuine Parts Company Applicant
Acknowledgment of Substance Abuse Policy.” On October 8 , 2001,
she signed an acknowledgment that she had received and agreed to
abide by the “Genuine Parts Company Code of Corporate Conduct.”
On March 2 6 , 2002, she signed an acknowledgment bearing the “S.P.
Richards Co.” name and stating that she had received and agreed
to abide by the “Genuine Parts Company Employee Attendance
Policy.”
SPR terminated Engelhardt’s employment on December 1 7 , 2002,
after she missed work the previous day to care for her daughter.
The decision to terminate Engelhardt was made exclusively by
-4- employees of SPR.
II. STANDARD OF REVIEW
Summary judgment is appropriate only “if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” Fed. R. Civ. P.
56(c). A genuine issue is one “that properly can be resolved
only by a finder of fact because [it] may reasonably be resolved
in favor of either party.” Anderson v . Liberty Lobby, Inc., 477
U.S. 2 4 2 , 250 (1986). A material fact is one “that might affect
the outcome of the suit.” Id. at 248. When considering a
defendant’s motion for summary judgment, “[t]he mere existence of
a scintilla of evidence in support of the plaintiff’s position
[is] insufficient; there must be evidence on which the jury could
reasonably find for the plaintiff.” Id. at 252.
III. ANALYSIS
To be eligible for protection under the FMLA, an employee
must work for an employer that employs at least 50 workers within
-5- 75 miles of the employee’s worksite. 29 U.S.C. § 2611(2)(B)(ii).
In most circumstances, “the legal entity which employs the
employee is the employer under FMLA.” 29 C.F.R. § 825.104(c).
An exception exists, however, if a parent and a subsidiary
qualify as an “integrated employer.” Id. § 825.104(c)(1).
To determine whether separate corporate entities are an
integrated employer, the court must review the entities’
relationship in its totality. Id. § 825.104(c)(2). The
following factors are considered: “(i) Common management; (ii)
Interrelation between operations; (iii) Centralized control of
labor relations; and (iv) Degree of common ownership/financial
control.” Id. The First Circuit has followed a flexible
approach when using this test in which all four factors are
considered but control of labor relations is the primary
consideration. Romano v . U-Haul Int’l, 233 F.3d 655, 666 (1st
Cir. 2000).
Applying the flexible approach mandated by the First Circuit
to the undisputed facts, it is apparent that SPR and GPC are not
an integrated employer. First, although Engelhardt argues that
GPC should be treated as her employer because SPR adopted several
of GPC’s employment policies, I agree with the Tenth Circuit that
-6- “[a] parent’s broad general policy statements regarding
employment matters are not enough to satisfy [the control over
labor relations factor].” Frank v . U.S. West, Inc., 3 F.3d 1357,
1363 (10th Cir. 1993). Instead, the facts that are determinative
here are that: (1) GPC and SPR each have their own Human
Resources departments; (2) each company is solely responsible for
its hiring and firing decisions; (3) SPR manages day-to-day
operations at the Nashua facility where Engelhardt worked; and
(5) SPR’s employees made the decision to terminate Engelhardt
without consulting anyone at GPC. Taken together, these facts
convincingly demonstrate that SPR was responsible for its own
labor relations.
A second factor that favors the defendants is the absence of
common management. As I have noted, GPC and SPR each have their
own officers, managers and employees. Only two directors sit on
both companies’ boards of directors. Each company has its own
headquarters. Further, Engelhardt has produced no evidence that
any employee of GPC has ever exercised management control over
SPR. Under these circumstances, the common management factor
weighs heavily in the defendants’ favor.
-7- Engelhardt argues that the interrelation of operations
factor favors her because SPR’s employees are permitted to
participate in GPC’s employee benefit programs and SPR’s
employees are paid from a GPC payroll account. While I agree
that GPC has assumed some of the administrative burdens
associated with the provision of salary and benefits to SPR’s
employees, it is significant that SPR remains financially
responsible for all of its employees’ benefits. Given the
lengths to which both companies have gone to maintain separate
identities, this limited evidence of interrelated operations is
not sufficient to qualify GPC and SPR as an integrated employer.1
Considering all of the factors discussed above, the evidence
presented by Engelhardt is insufficient for a jury to find that
GSP and SPR are an integrated employer.2 Other than SPR’s use of
1 I have not separately addressed the common ownership/ financial control factor because it does not favor either party. 2 The fact that SPR may have granted FMLA leave to other employees at the Nashua facility does not, in itself, bring that facility within the ambit of the FMLA. See Douglas v . E.G. Baldwin & Assocs., Inc., 150 F.3d 6 0 4 , 608 (6th Cir. 1998) (holding that subject matter jurisdiction was lacking over employee’s FMLA claim because employer did not have the requisite number of employees even though the parties contracted to incorporate FMLA’s terms and responsibilities into their employment relationship).
-8- GPC’s personnel forms, benefits programs and payroll services,
there is no evidence that SPR’s operations or management were
integrated with GPC. Most importantly, there is no evidence that
GPC either exercised control over the day-to-day operations and
employment decisions of SPR’s Nashua facility or participated in
the decision to terminate Engelhardt. As a result, employees at
GPC’s other facilities cannot be counted in determining whether
Engelhardt’s employer had the requisite number of employees to
entitle her to protection under the FMLA.
IV. CONCLUSION
Defendants’ Motion for Summary Judgment (Doc. N o . 18) is
granted and Engelhardt’s Motion for Summary Judgment (Doc. N o .
17) is denied. The clerk is instructed to enter judgment
accordingly.
SO ORDERED.
/s/Paul Barbadoro Paul Barbadoro United States District Judge December 2 9 , 2005
cc: James W . Donchess, Esq. Debra Weiss Ford, Esq. Lisa M . Szafranic, Esq. Patricia E . Simon, Esq.
-9-