Holloway v. Water Works and Sewer Board of the Town of Vernon
MEMORANDUM OPINION. Signed by Judge L Scott Coogler on 5/15/2014. (KAM, )
2014 May-15 AM 09:08
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WATER WORKS AND
SEWER BOARD OF THE
TOWN OF VERNON,
MEMORANDUM OF OPINION
Before the Court is a motion for summary judgment filed by Defendant Water
Works and Sewer Board of the Town of Vernon (“The Board”). (Doc. 14). The Board
has been sued by its former employee, Plaintiff Roger Holloway (“Holloway”) under
the Age Discrimination in Employment Act (“ADEA”). 29 U.S.C. § 621 et seq. The
Board has moved for Summary Judgement based on its belief that it does not qualify
as an “employer” under the act. Because the Board does so qualify, the motion for
summary judgment is due to be DENIED.
I. Factual Background
The parties have stipulated to a single set of undisputed facts. The Board, which
was incorporated on January 13, 1956, is administered by a Board of Directors
Page 1 of 11
consisting of five members who are elected to staggered terms by the governing body
of the Town of Vernon (“Vernon”). The Certificate of Incorporation and by-laws
state that members of the Board of Directors cannot be officers of Vernon, and the
Vernon City Council can only remove Board members when the member’s term
expires, or in the case of an ethics violation.
The Board operates the water and sewer systems of Vernon. Although the
parties cite different code sections under which the Board could be incorporated, the
two sections are virtually identical. See Ala. Code §§ 11-50-231 and 11-50-311. The
Board of Directors maintains by-laws that govern its activities. Under the by-laws, the
Board has the power to “acquire, construct, operate, and maintain a water and sewer
system.” (Doc. 15 at 5). The Chairman of the Board is the executive officer of the
Board and presides at all meetings.
The by-laws give the Board the power to appoint employees, “who hold their
positions, exercise such powers and perform such duties as determined by the Board.”
(Id.) The Board sets the salaries, work schedules, and assignments of all Board
employees without the approval of Vernon. It also evaluates its employees separately
from Vernon, and has its own building, bank accounts, financial records, and tax
existence. The Board pays the employees from its own funds; Vernon does not pay the
salaries of the Board’s employees.
Page 2 of 11
The day-to-day operations of the Board are supervised by the General Manager,
who reports directly to the Board of Directors. Holloway served as General Manager
of the Board until he was terminated on July 15, 2012. The Board terminated Holloway
without the input or approval of the Town of Vernon. Also, the Board’s payroll
records show that the Board had no more than twelve employees during the year
preceding Holloway’s termination.
II. Standard of Review
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). The party moving for summary judgment “always bears
the initial responsibility of informing the district court of the basis for its motion, and
identifying those portions of [the evidence] which it believes demonstrate the absence
of genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
The movant can meet this burden by presenting evidence showing that no genuine
dispute of material fact exists, or by showing that the nonmoving party has failed to
present substantial evidence of an element of its case on which it bears the ultimate
burden of proof. Id. at 322-23. In evaluating the arguments of the movant, the court
must view the evidence in the light most favorable to the nonmoving party. Mize v.
Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996).
Page 3 of 11
Once the movant has met its burden, Rule 56(e) “requires the nonmoving party
to go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers
to interrogatories, and admissions on file,’ designate ‘specific facts showing that there
is a genuine issue for trial.’” Celotex, 477 U.S. at 324 (quoting Fed. R. Civ. P. 56(e)).
“Where the non-movant presents direct evidence that, if believed by the jury, would
be sufficient to win at trial, summary judgment is not appropriate even where the
movant presents conflicting evidence. It is not the court’s role to weigh conflicting
evidence or to make credibility determination . . . .” Mize, 93 F.3d at 742. But when
the non-movant’s evidence cannot stand on its own, summary judgment is
appropriate: “A factual dispute is genuine only if a ‘reasonable jury could return a
verdict for the nonmoving party.’” Info. Sys. & Networks Corp. v. City of Atlanta, 281
F.3d 1220, 1224 (11th Cir. 2002) (quoting United States v. Four Parcels of Real Property,
941 F.2d 1428, 1437 (11th Cir. 1991)).
The controlling question before the Court is whether the Board qualifies as an
employer under the ADEA. The ADEA defines employer as follows:
The term “employer” means a person engaged in an industry
affecting commerce who has twenty or more employees for each
Page 4 of 11
working day in each of twenty or more calendar weeks in the current
or preceding calendar year: Provided, That prior to June 30, 1968,
employers having fewer than fifty employees shall not be considered
employers. The term also means (1) any agent of such a person, and
(2) a State or political subdivision of a State and any agency or
instrumentality of a State or a political subdivision of a State, and any
interstate agency, but such term does not include the United States,
or a corporation wholly owned by the Government of the United
29. U.S.C. § 630(b). The parties agree that the Board has fewer than twenty
employees. Therefore, in order to be an employer for purposes of the statute, it must
be an “agency or instrumentality of a State or a political subdivision of a State.” Id. To
answer this question, the Court must first ask whether the Vernon is, in fact, a political
subdivision of the State of Alabama.
A. Is Vernon a political subdivision of the State of Alabama?
The Eleventh Circuit has not directly addressed the question of whether a town
or city is a political subdivision of a state for purposes of the ADEA. In other contexts,
municipalities are treated differently from arms of the state. For example, the Supreme
Court has held that where state immunity applies, it does not extend “to units of local
governments, such as cities and counties.” Bd. of Trustees of Univ. of Ala. v. Garrett, 531
U.S. 356, 368-69 (2001) (noting that local governments “are subject to private claims
for damages under the ADA,” while States are not). Counties and municipalities
likely also do not possess Eleventh Amendment immunity under the ADEA. Van
Page 5 of 11
Voorhis v. Hillsborough Cnty. Bd. of Cnty. Comm’rs, 512 F.3d 1296, 1301 (11th Cir.
Congress amended the “employer” definition in the ADEA to include the
language concerning states and their political subdivisions in 1974. Kimel v. Fla. Bd.
of Regents, 528 U.S. 62, 78 (2000). The Supreme Court described these amendments
as an extension of the law. Johnson v. Mayor & City Council of Baltimore, 472 U.S. 353,
356 (1985) (“in 1974 Congress extended coverage to Federal, State, and local
governments”). Although these cases did not hold that municipalities are covered by
the ADEA’s definition of employer, they do suggest it. The Third Circuit took a much
more direct approach, stating that “the ADEA could not be more explicit in imposing
liability for age discrimination against municipalities.” Potence v. Hazleton Area School
Dist., 357 3d 366, 373 (3rd Cir. 2004).
Although it has not made the kind of absolute statement found in Potence, the
Eleventh Circuit has noted that state and local governments were originally excluded
from the definition of employer under the ADEA but this exception was removed by
the 1974 amendments. Knight v. State of Ga., 992 F.2d 1541, 1543 (11th Cir. 1993). In
addition it has held that an ADEA claim against a county survived summary judgment,
without addressing whether the county was a political subdivision of a state or had
twenty employees. Van Voorhis, 512 F.3d at 1301 (11th Cir. 2008). Furthermore, in
Page 6 of 11
three recent unpublished decisions, the Eleventh Circuit has addressed the merits of
ADEA claims against cities, without questioning whether the statutory definition of
employer was met. Lerman v. City of Fort Lauderdale, Fla, 346 Fed. App’x. 500 (11th
Cir. 2009) (describing the City, in the style of the case, as “a political subdivision of
the State of Florida”); Morrison v. City of Bainbridge, Ga., 432 Fed. App’x. 877 (11th
Cir. 2011); Mitchell v. City of LaFayette, 504 Fed. App’x. 867 (11th Cir. 2013). In
contrast, this Court found no authority for the proposition that a city was not a
political subdivision of a state under the ADEA. Therefore, the Court finds that
Vernon is a political subdivision of the State of Alabama for the purposes of the
B. Is the Board an agency or instrumentality of Vernon?
Holloway, of course, works not for Vernon itself but for the Board. The Board
is an employer for ADEA purposes if it is an “agency or instrumentality” of Vernon.
The Board correctly notes that cases interpreting Title VII of the Civil Rights Act are
instructive on questions surrounding the ADEA. Garcia v. Copenhaver, Bell &
Associates, M.D.’s, P.A., 104 F.3d 1256, 1263-64 (11th Cir. 1997). None of the cases the
Board cites, however, pose the question at issue here. See Calderon v. Martin Cnty, 639
Page 7 of 11
F. 2d 271, 272-73 (5th Cir. Unit B 1981)1 (determining whether a deputy sheriff was an
“employee” under Title VII); Lyes v. City of Riviera Beach, 166 F.3d 1332, 1345 (11th
Cir. 1999) (addressing whether to aggregate employees of different public entities to
reach the threshold number of employees).
The question before the Court concerns not whether Vernon is Holloway’s
employer, but whether the Board is an agency or instrumentality of Vernon. A similar
question has been addressed in the context of determining whether an entity is an arm
of the state for Eleventh Amendment purposes. See, e.g., Harden v. Adams, 760 F.2d
1158, 1163-64 (11th Cir. 1985). In this context, both the Supreme Court and the
Eleventh Circuit have turned to state law to determine whether a particular entity is
an agency or instrumentality of the state. Mt. Healthy City School Dist. Bd. of Educ. v.
Doyle, 429 U.S. 274, 280 (1977) (“the answer depends, at least in part, upon the nature
of the entity created by state law”); Harden, 760 F. 2d at 1163-64 (citing findings by
the Alabama Supreme Court that a University board of trustees was an arm of the
state). By analogy, this Court finds it proper to consider Alabama law in determining
whether the Board is an agency or instrumentality of Vernon.
In Bonner v. City of Prichard, the Eleventh Circuit adopted as binding precedent all
decisions of the former Fifth Circuit handed down prior to October 1, 1981. 661 F.2d 1206,1209
(11 th Cir. 1981). Calderon was published on March 13, 1981, and is thus binding precedent. Id.,
see also 639 F.2d at 271.
Page 8 of 11
The Board is a public corporation organized according to Alabama law.2 The
Alabama Code requires that not less than three natural persons apply to the governing
body of a municipality for authority to incorporate a public corporation such as a water
and sewer board. Ala. Code §§ 11-50-231; 11-50-311. The governing body of the
municipality must then adopt a resolution in order for the public corporation to begin
operating. Id. Thus, Vernon played a necessary role in the creation of the Board, which
counsels in favor of finding the Board to be an agency or instrumentality of Vernon.
In addition to this statutory law, the Alabama Supreme Court has held that a public
corporation of this type is an agency of the city that created it. State ex rel Richardson
v. Morrow, 162 So. 480, 388-89 (Ala. 1964). See also City of Montgomery v. Water Works
and Sanitary Sewer Bd. of Montgomery, 660 So. 2d 588, 593 (Ala. 1995) (determining
that water board, a public corporation set up by the city, is an instrumentality of the
city). Thus, the Board is an agency or instrumentality of Vernon.
C. Does the twenty-employee threshold apply to public employers?
Having concluded that the Board is in fact an agency or instrumentality of
Vernon, the only question remaining is whether the twenty-employee requirement in
the first sentence of the ADEA’s definition of “employer” applies to the public
As noted in the facts section, the Board is incorporated under either Ala. Code § 11-50231 or § 11-50-311, both of which require the same procedure in forming the public corporation.
Page 9 of 11
agencies or instrumentalities mentioned in the second sentence. 29 U.S.C. § 630(b).
The Eleventh Circuit has not addressed whether the twenty-employee requirement
applies to public agencies like the Board.3 The Eleventh Circuit has made it clear that
courts should “begin our construction where courts should always begin the process
of legislative interpretation, and where they often should end it as well, which is with
the words of the statutory provision.” Harris v. Garner, 216 F.3d 970, 972 (11th Cir.
2000) (en banc). When a clear meaning of the statute exists, there is no need to
examine the legislative history, and courts should never use this history to undermine
a clear meaning. CBS Inc. v. Prime Time 24 Joint Venture, 245 F.3d 1217, 1222 (11th
Cir. 2001) (citing inter alia Ratzlaf v. United States, 510 U.S. 135, 147 (1994)). In
addition, a remedial statute such as the ADEA or Title VII should be construed
liberally in favor of redressing the wrong for which Congress wrote the statute. Coke
v. General Adjustment Bureau, 640 F.2d 584, 594-95 (5th Cir. Mar. 1981); EEOC v.
Total System Servs., 240 F.3d 898, 899-900 (11th Cir. 2001).
Considering the statutory language in light of these rules of construction, the
The Board urges the Court to follow the three circuits who have ruled on this issue, all
of which chose to apply the twenty-employee threshold. See Kelly v. Wauconda Park Dist., 801
F.2d 269, 273 (7th Cir. 1986) (cert. denied, 480 U.S. 940 (1987)); EEOC v. Monclova Twp., 920
F. 2d 360, 363 (6 th Cir. 1990); Palmer v. Ark. Council on Econ. Educ., 154 F.3d 892, 896-97
(8th Cir. 1998). Because the Court finds that the statute is not ambiguous, it need not address the
legislative history of the statute discussed by these cases. CBS, 245 F.3d at 1222.
Page 10 of 11
Court finds that there is only one reasonable meaning of Section 630 (b). The second
sentence means that, in addition to those employers who meet the definition in the
first sentence, “a State or political subdivision of a State and any agency or
instrumentality of a state or a political subdivision of a state” are also employers,
regardless of how many employees they have. This language is clear, and there is no
indication in the statute that Congress intended to import the twenty-employee
requirement from the first definition of employer into the second definition.
Therefore, no recourse to the legislative history is necessary or proper. The Board, as
an instrumentality of a political subdivision of a state, need not have twenty employees
to meet the plain meaning of the ADEA’s definition of employer.
Vernon is a political subdivision of the state of Alabama. The Board is an agency
or instrumentality of the town. The twenty employee requirement does not apply to
public agencies. Because the Board’s motion for summary judgment rests solely on
this argument, it is due to be DENIED.
Page 11 of 11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?