Employment Law Daily European parent company that urged firing of older ‘unattractive’ female CFO was joint employer
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Wednesday, October 3, 2018

European parent company that urged firing of older ‘unattractive’ female CFO was joint employer

By Lorene D. Park, J.D.

Refusing to dismiss age and sex discrimination claims against a U.S. employer and its European parent company, a federal court in New York found that a female CFO who was allegedly viewed as unattractive and heavyset by owners of the European parent company plausibly alleged a joint employment relationship based on centralized labor control, common management, and other factors. She also plausibly alleged that the corporate parent participated in the discriminatory actions intended to “break her” and make her quit. Her aiding and abetting claim also proceeded against the parent company, but her allegations were not sufficient to state a claim against another subsidiary (White v. Best Cheese Corp., September 27, 2018, Roman, N.).

In 2001, the employee started working for Best Cheese, a wholly-owned subsidiary of Uniekaas International, a company organized under the laws of the Netherlands and with its principal place of business there. In 2008, she became the chief financial officer (CFO) at Best Cheese.

Regarded by new owners as unattractive. According to the employee, who is 67 years old, two individual owners who acquired a majority interest in the parent company in 2012 began telling the president of Best Cheese that he and the other owners wanted the employee fired and replaced with a younger man because they regarded her as unattractive and heavyset. The company president refused but one of the owners, Willem Rote kept urging him to fire her or “break her” so she would quit. In 2015, the employee told a different owner of the parent company she planned to work through 2020 and he assured her that her future was secure.

Overworked and mistreated. Nonetheless in June 2015 the president of Best Cheese left and was replaced by a new company president who, at the direction and approval of Rote and the parent company, allegedly began a course of discrimination against the employee. She was given additional duties to the point where she had trouble getting things done and her attempts to hire help were rejected. She was badgered into a golf outing though she did not play golf and was “not physically up to it” and when she needed to go to the bathroom was told to go in the woods like the men. She begrudgingly did so and fell on her way back. In August 2016 she was demoted and replaced by a younger male. She hired an attorney, who wrote complaining of discrimination, and the employee was scolded for getting a lawyer.

Fired and accused of misfeasance. On August 2016 she was placed on paid administrative leave. She remained on leave until December 6, when she received a termination letter on letterhead for Uniekaas International and Best Cheese. The letter, which said she was terminated for “significant misfeasance,” was not signed but closed with “Regards, the Best Cheese Company and Uniekaas Nederland B.V.” She applied for unemployment benefits and soon after, the president of Best Cheese filed a criminal complaint against her for embezzling. The state labor department denied unemployment based on this and she asserted that Best Cheese was alleging her misconduct because it knew she was preparing to file EEOC charges. A hearing was scheduled, but after the employee’s attorney indicated they would call the former company president to testify on her behalf, Best Cheese withdrew its appeal.

Joint employer status. In the employee’s subsequent suit under Title VII, the ADEA, and state law claiming discrimination based on age and gender, the defendants moved to dismiss, claiming first that Uniekaas International and Uniekaas USA were not “employers” under those laws. Denying the motion as to parent company Uniekaas International, the court explained that the critical question was “what entity made the final decisions regarding employment matters related to the plaintiff?” Courts also focus on the parent’s involvement in the circumstances giving rise to the suit. Under the joint employer doctrine, liability can be imposed on two legally separate entities if they handle certain aspects of the employer-employee relationship jointly, taking into account “commonality of hiring, firing, discipline, pay, insurance, records, and supervision.”

Here, there was evidence of centralized control of labor relations. The parent company or one of its owners allegedly directed and approved the president of Best Cheese to begin a persistent course of discriminatory conduct against the employee. There was also common ownership and management, since Best Cheese was a wholly-owned subsidiary of Uniekaas International, and the Best Cheese president traveled between New York and the Netherlands for various meetings. In addition, there were interrelations of operations, including websites. For these reasons, the employee sufficiently alleged Uniekaas International was her joint employer.

The same was no true of Uniekaas USA, which was a subsidiary jointly owned by Uniekaas International and Best Cheese. The mere fact of ownership and that the employee prepared annual financial statements for Uniekaas USA was not enough to establish joint employer status, nor was it enough to state a plausible aiding and abetting claim against the subsidiary.

Aiding and abetting by corporate parent. The court also found that the employee sufficiently alleged that Uniekaas International aided and abetted a violation of the NYHRL. She claimed that the parent company arranged for the new president of Best Cheese to be hired and she claimed the increase in job responsibilities and denials of her attempts to hire help were tactics used to “break her,” as the corporate parent’s owner had been trying to do for years. That was enough to make her claim plausible.

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