Court Holds Companies Were a “Single Employer” For Purposes of Aggregating Employees in Sexual Harassment Case

In Mantione v. C. Berman Associates, 2016 NY Slip Op 30655(U) (NY Sup. Ct. March 4, 2016), the court discussed and applied the “single employer” rule.

Defendant moved to dismiss plaintiff’s hostile work environment/sexual harassment allegations under the New York State Human Rights Law, on the ground that the entities involved have less than four employees, and therefore fall outside the definition of an “employer” within the meaning of that statute. Here is plaintiff’s complaint.

The law:

The New York State Human Rights Law, (Executive Law §292[5]), has a numerosity requirement that precludes application of the statute to business entities with less than four (4) employees by exempting them from the definition of “employer.”

However, the “single employer” doctrine, applicable here, creates an exception to the numerosity requirement, in cases in which certain criteria are established. As originally promulgated by the NLRB, the single employer doctrine sets forth four criteria to determine whether two or more companies are sufficiently interrelated to constitute a single entity: (1) interrelation of operations; (2) centralized control of labor relations; (3) common management; and (4) common ownership or financial control of the entities in question. Of the four criteria, centralized control of labor relations is generally considered the most significant.

Separate companies are considered a single employer if they are part of a single integrated enterprise. The Supreme Court’s four-factor test in Radio & Television Broadcast Technicians Local Union 1264 v Broadcast Service of Mobile, Inc.[] examines the interrelation of operations, common management, centralized control of labor relations and common ownership. Also relevant are the use of common office facilities and equipment and family connections between or among the various enterprises. To demonstrate single employer status, not every factor need be present, and no particular factor is controlling. Ultimately, single employer status depends on all the circumstances of the case and is characterized by absence of an arm’s length relationship found among unintegrated companies.

Applying the law, the court held:

There is an overlap alleged, not only of management and purpose, but of the daily operations, in which the employees, while paid by one entity, identify themselves to clients and providers as representing the other company. The nature and scope of the two businesses is somewhat ambiguous. The plaintiff’s allegations that C. Berman and PRS Consulting are a “single employer”, whose business functions are functionally integrated, controlled and managed by defendant Schatzel as part of the same business enterprise, raise issues of fact that have not been utterly refuted by the defendants’ submissions. The scant two-page, nine paragraph affidavit by individual defendant Peter Schatzel, does not utterly refute the plaintiff’s allegations of commonality among the two business defendants as a matter of law, much less make any effort to even address the detailed and specific substantive allegations of wrongdoing in the plaintiff’s complaint. Thus, it is entirely proper to aggregate the employees of both entities in order to find that the plaintiff has established the employer requirement of the New York State Human Rights Law.

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