Seeman v. PJMP LLC.
Filing
95
ENTER MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 8/3/2017:Mailed notice(wp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
WILLIAM R. SEEMAN,
Plaintiff,
Case No. 16 C 8817
v.
Judge Harry D. Leinenweber
PJMP, LLC and RENDEL’S INC.,
Defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff
(“PJMP”)
and
William
R.
Rendel’s
Seeman
Inc.
sued
Defendants
(“Rendel’s”)
for
PJMP,
LLC
disability
discrimination, alleging that they violated the Americans with
Disabilities Act (the “ADA”), 42 U.S.C. § 12101 et seq., by
firing
him
moved
for
because
summary
of
his
depression.
judgment,
arguing
Both
that
Defendants
they
are
have
not
“employers” within the meaning of 42 U.S.C. § 12111(5) and thus
cannot be held liable.
For the reasons to follow, the Court
grants Defendant PJMP’s Motion for Summary Judgment [ECF No. 46]
but denies Defendant Rendel’s Motion for Summary Judgment [ECF
No. 42].
I.
The
noted.
following
facts
BACKGROUND
are
undisputed
except
as
otherwise
(Although Defendants have filed separate statements of
undisputed fact, they are identical except for one additional
paragraph in PJMP’s.
For convenience, the Court will cite to
this more inclusive set of materials and attribute it to both
Defendants.)
Rendel’s is a vehicle dealership that also provides repair
and
body
shop
services
out
of
two
locations:
119
Republic
Avenue and 40 Mills Road, both in Joliet, Illinois. (ECF No. 48
(“Defs.’ SUF”) ¶ 4; accord, ECF No. 58 (“Pl.’s Resp.”) ¶ 4.)
Rendel’s filed its articles of incorporation with the Illinois
Secretary of State on May 28, 1965. (Id. ¶ 9.)
For many years,
Rendel’s included a towing operation, but it was informed in
2012
that
it
could
no
longer
secure
workers’
compensation
insurance while still operating a towing and recovery business.
(Id. ¶ 5.)
liability
company,
operation.
PJMP,
to
house
its
towing
and
recovery
(Id. ¶ 6; see also, ECF Nos. 84, 85 (“Defs.’ Resp.”)
¶¶ 1-2.)
the
Rendel’s solution was to form a separate limited
In May 2012, PJMP filed Articles of Organization with
Illinois
agreement.
Secretary
of
State
and
executed
an
operating
(Defs.’ SUF ¶ 7; accord, Pl.’s Resp. ¶ 7.)
PJMP conducts its business out of Rendel’s 40 Mills Road
location, and it pays monthly rent to Rendel’s to the tune of
$5,000.
¶
11.)
(Defs.’ SUF ¶¶ 3, 11; accord, Pl.’s Resp. ¶ 3; cf., id.
PJMP
has
separate cashier.
a
separate
office
on
the
premises
with
a
(See, Defs.’ SUF at Ex. D (“Mazor Tr.”) at
- 2 -
30:18-34:9.)
Both
companies
have
separate
(Defs.’ SUF ¶ 10; accord, Pl.’s Resp. ¶ 10.)
bank
accounts.
All the vehicles
PJMP uses for towing and recovery services are Rendel’s trucks,
and it leases these vehicles from Rendel’s for $40,000 a month.
(Id. ¶¶ 13-14.)
expenses
to
PJMP “internally allocate[s]” certain of its
Rendel’s
but
it
is
unclear
accordingly transferred between accounts.
There
is
Rendel’s
a
and
collective
Teamsters
classifications
of
bargaining
Local
workers
as
No.
money
is
(Pl.’s Resp. ¶ 12.)
agreement
Union
such
whether
in
179,
tow
place
and
truck
it
between
includes
drivers.
(ECF
No. 56 (“Pl.’s SAUF”) ¶ 36; Defs.’ Resp. ¶ 36.)
PJMP
Towing.”
does
business
under
the
assumed
name
“Rendel’s
(Pl.’s Resp. at Ex. 10; Defs.’ Resp. ¶¶ 25-31.)
The
two entities are presented as one to the public on the Rendel’s
website, on the trucks PJMP operates, and on the uniforms its
tow truck drivers wear – all of which include only the Rendel’s
name and logo.
(See, Pl.’s SAUF ¶¶ 23-27, 40; accord, Defs.’
Resp. ¶¶ 23-27, 40.)
Rendel’s has one phone number for all
services, including towing and recovery; PJMP does not have a
separate phone book listing; and customers seeking either repair
or towing services call the Rendel’s number, are thanked for
calling
“Rendel’s,”
and
are
transferred
to
the
PJMP
tow
dispatcher if they need towing or recovery services. (Id. ¶¶ 28- 3 -
29.)
PJMP uses “Rendel’s”-inscribed letterhead and, although
PJMP
issues
invoices
bearing
the
PJMP
name
to
customers
who
receive only towing or recovery services, customers who also
receive
repair
services
are
generally
invoiced
on
one
form
bearing the Rendel’s name (unless the customer requests separate
invoices). (Id. ¶ 31.)
Such customers usually pay with one
check or one credit card payment; the funds get deposited into a
Rendel’s account and “a ticket for the tow amount is posted to
PJMP’s account so that an adjustment can be made on the books at
the end of the year.” (Id. ¶ 32.)
PJMP tow truck drivers do not
have a separate health insurance plan but instead are members of
Rendel’s group plan, and they also fill out vacation requisition
forms bearing Rendel’s logo.
(Id. ¶¶ 37-38.)
Members of the Polcyn family own and operate Rendel’s and
PJMP.
Patrick J. Polcyn (“PJ”) owns and is President of both
entities.
(Defs.’ SUF ¶¶ 17-18; accord, Pl.’s Resp. ¶¶ 17-18.)
PJ was not paid a salary or wages by PJMP during the relevant
timeframe but did earn commissions and bonuses from PJMP.
Pl.’s SAUF ¶ 12; accord, Defs.’ Resp. ¶ 12.)
(See,
Patrick R. Polcyn
(“PR”) was Rendel’s body shop manager in 2015 and 2016 but at
that
time
(Id. ¶ 11.)
PR
hourly
“began
getting
involved
in
the
towing
operation.”
From January 1 through August 21, 2015, PJMP paid
wages
approximately
every
- 4 -
fourth
pay
period
on
a
“straight time” basis; from August 21, 2015 through the end of
2016, PJMP paid PR overtime hourly wages approximately three out
of four pay periods. (Id. ¶¶ 13-14.)
During 2015 and 2016,
Michael Polcyn (“Michael”) served as the general manager for
each of PJMP, Rendel’s, and H&J Truck Leasing, Inc., all of
which operated out of the 40 Mills Road location.
PJMP
paid
Michael
minimal
hourly
wages
on
a
(Id. ¶ 10.)
“straight
time”
basis during approximately the first half of 2015; however, PJMP
paid
Michael
“overtime”
significantly
basis
more
approximately
hourly
every
compensation
other
pay
on
an
period
from
June 6, 2015 through the end of 2016. (Id. ¶¶ 15-16.)
The
hourly compensation PJMP paid PR and Michael related to their
work
incident
to
after-hours
towing
and
recovery
(Compare, Pl.’s SAUF ¶ 21; with, Defs.’ Resp. ¶ 21.)
jobs.
Rendel’s
paid all the Polcyns’ weekly salaries throughout 2015 and 2016.
(Pl.’s SAUF ¶¶ 17-19; accord, Defs.’ Resp. ¶¶ 17-19.)
To the
extent they performed work for PJMP (or, in Michael’s case, for
H&J Trucking), their salaries were proportionally allocated to
the
pertinent
(Id. ¶ 22.)
business
in
end-of-year
accounting
adjustments.
However, their W-2 forms did not reflect this
adjustment, and it is unclear whether money was transferred on a
routine or consistent basis between Rendel’s and PJMP’s bank
accounts.
(See, Pl.’s SAUF at Ex. 2; Defs.’ Resp. ¶ 22.)
- 5 -
Another player in the drama is Tammy Mazor (“Mazor”), who
is currently the office manager of Rendel’s and PJMP.
She is in
charge of payroll, accounts receivable, and accounts payable for
both companies.
(Pl’s SAUF ¶ 6; Defs.’ Resp. ¶ 6.)
In 2015,
she was the “tow manager,” performed scheduling and dispatching
for PJMP tow truck drivers, and had supervisory control over
PJMP employees. (Ibid.)
Mazor’s salary was paid by Rendel’s
but, as with the Polcyns’, was allocated between Rendel’s and
PJMP in proportion to the time she spent performing work for
each. (Id. ¶ 7.)
In January 2014, the Polcyns hired Plaintiff William R.
Seeman (“Seeman”) as a tow truck operator.
(See, Defs.’ SUF
¶ 20;
Mazor
Pl.’s
Resp.
¶
20.)
The
Polcyns
and
supervised
Seeman, providing him with day-to-day towing assignments. (Id.
¶¶ 21-22.)
¶ 24.)
Each of Seeman’s paychecks was issued by PJMP. (Id.
All Seeman’s duties involved towing and recovery, with
the exception that about once every other week he was asked to
pick
up
auto
parts
from
various
services and parts department.
¶ 33.)
stores
for
Rendel’s
repair
(Pl.’s SAUF ¶ 33; Defs.’ Resp.
On these occasions, Seeman claims that he was often
provided with a PJMP check to pay for the parts; Mazor disputes
this, submitting documentary evidence showing checks that PJMP
issued to parts suppliers and averring that these were strictly
- 6 -
for PJMP necessities.
Resp.
¶
34.)
(Compare, Pl.’s SAUF ¶ 34; with, Defs.’
Occasionally,
Seeman
would
have
out-of-pocket
expenses, such as fuel costs; while he avers that reimbursement
often took the form of a Rendel’s check, Mazor swears that he
was reimbursed with petty cash allocated to PJMP.
(Id. ¶ 35.)
Michael disciplined Seeman on April 28, 2015 and June 16,
2015.
(Defs.’ SUF ¶ 27; accord, Pl.’s Resp. ¶ 27.)
In 2016,
Seeman’s employment ended after he took some time off work for a
few
days
and
was
then
incident at work.
rushed
to
the
hospital
following
(See, ECF No. 37 (“PJMP’s Ans.”) ¶¶ 16-18.)
The parties dispute whether he resigned or was fired.
Defs.’
SUF
¶
letterhead,
28;
the
with,
Pl.’s
“Rendel’s
Resp.
II.
VII
¶
28.)
(Compare,
On
Rendel’s
acknowledged
Management”
“resignation on January 14th, 2016.”
Title
an
Seeman’s
(Pl.’s Resp. at Ex. 9.)
DISCUSSION
prohibits
unlawful
employment
practices,
including discrimination “against a qualified individual on the
basis of disability in regard to job application procedures, the
hiring,
advancement,
compensation,
job
discharge
training,
privileges
of
employers,
however,
Title VII
or
and
employment.”
defines
an
are
of
other
42
exempt
“employer”
- 7 -
employees,
terms,
U.S.C.
from
as
a
§
Title
“person
employee
conditions,
12112(a).
VII
and
Some
liability.
engaged
in
an
industry affecting commerce who has fifteen or more employees
for each working day in each of twenty or more calendar weeks in
the current or proceeding calendar year.”
42 U.S.C. § 2000e(b).
The posture of the case does not implicate the merits of
Seeman’s ADA claim.
There is no dispute that, whereas Rendel’s
had approximately 40 employees in 2015, the most individuals
PJMP ever employed during the relevant timeframe for any twoweek period was “five or six.”
(See, e.g., Defs.’ SUF ¶ 15;
accord, Pl.’s Resp. ¶ 15; Defs.’ Resp. ¶¶ 8-9.)
sub
judice
are
therefore,
first,
whether
The sole issues
grounds
exist
to
aggregate Rendel’s employees with PJMP’s such that Title VII
liability can attach to PJMP and, second, whether Rendel’s had
an employment relationship with Seeman such that it is a proper
defendant in this case.
Under Rule 56(c), summary judgment may be granted only if
there are no genuine issues of material fact.
Catrett,
477
U.S.
317,
322
(1986).
An
Celotex Corp. v.
issue
is
considered
“genuine” if a reasonable trier of fact could find in favor of
the non-moving party, and “[t]he mere existence of a scintilla
of
evidence
in
insufficient.”
248,
252
material
support
the
plaintiff’s
position
will
be
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
(1986).
fact
of
To
exists,
determine
the
Court
- 8 -
whether
views
a
the
genuine
facts
in
issue
a
of
light
favorable to Seeman, the non-moving party in this case, drawing
all inferences in his favor.
A.
Celotex, 477 U.S. at 322.
Should Rendel’s Employees Be Aggregated with PJMP’s?
Seeman
first
argues
that
PJMP
should
be
deemed
within
Title VII’s orbit because it was one of “an affiliated group of
corporations that has in the aggregate the minimum number of
employees.”
Papa v. Katy Indus., Inc., 166 F.3d 937, 939 (7th
Cir. 1999).
In Papa, the Seventh Circuit held that affiliated
employers could be regarded as a single employer under Title VII
in three situations:
(1) where traditional concerns motivating
veil piercing are present; (2) where an enterprise splits itself
up
into
a
number
of
corporations,
each
with
fewer
than
the
statutory minimum number of employees, for the express purpose
of
avoiding
liability
under
antidiscrimination
laws;
and
(3)
where a parent corporation directed the discriminatory act or
policy of which the employee of its subsidiary is complaining.
See, id. at 941-42.
In each of these three scenarios, the key
inquiry is whether the affiliate was the real decision maker.
Id. at 941.
Seeman only argues for application of the first scenario –
veil piercing.
Indeed, the second and third seem not to apply.
It is undisputed that PJMP was formed not to evade Title VII
responsibilities (but to enable continued provision of workers’
- 9 -
compensation
insurance).
allege,
persons
owned
the
Rendel’s
or
And
even
responsible
served
as
if,
for
as
his
Seeman
seems
to
termination
employees,
Rendel’s
alleged
aggregation
under the third Papa prong is inappropriate absent evidence that
they were acting outside their PJMP roles in (allegedly) firing
him.
See, Bridge v. New Holland Logansport, Inc., 815 F.3d 356,
365-66 (7th Cir. 2016) (“There are no facts from which it may
reasonably be inferred that, when Straeter told Stephenson to
fire
Bridge,
Straeter
was
wearing
anything
but
a
Logansport
hat.”).
In the words of the Seventh Circuit, affiliated entities
may be considered together as a single employer under Title VII
“where, the traditional conditions being present for ‘piercing
the veil’ to allow a creditor . . . to sue a parent or other
affiliate, the parent or affiliates of the plaintiff’s employer
would be liable for the employer’s debts.”
941-42.
Papa, 166 F.3d at
Those concerns manifest when there is “‘such unity of
interest and ownership that the separate personalities . . . no
longer
exist’”
corporate
and
existence
injustice.’”
“‘adherence
would
to
the
sanction
a
fiction
of
separate
fraud
or
promote
Worth v. Tyer, 276 F.3d 249, 259-60 (7th Cir.
2001) (quoting Van Dorn Co. v. Future Chem. & Oil Corp., 753
F.2d 565, 569-70 (7th Cir. 1985)).
- 10 -
1.
As
a
sufficient
adequate
matter
unity
of
of
corporate
Unity of Interest
Illinois
interest
records
law,
if
corporations
(1)
they
or
to
share
maintain
fail
comply
to
with
a
corporate
formalities, (2) commingle funds or assets, (3) undercapitalize,
or (4) treat the assets of another as their own.
Smith v.
Fusion Medical Spa, S.C./Synergy Inst., 836 F.Supp.2d 773, 77677 (N.D. Ill. 2011) (citing Macrito v. Events Exposition Servs.
Inc., No. 09 C 7371, 2011 WL 5101712, at *4 (N.D. Ill. Oct. 21,
2011)) (citation omitted).
The
facts,
even
when
interpreted
in
the
light
most
favorable to Seeman, do not rise to the level of a unity of
interest.
First, there is no question that Rendel’s and PJMP
were separately incorporated and/or organized, and Seeman does
not contend that either entity failed to keep adequate records
or otherwise comply with corporate formalities.
Indeed, PJMP
formally indicated to the Illinois Secretary of State that it
operates
under
ostensibly
the
faults
assumed
name
Defendants
“Rendel’s
for
not
Towing.”
producing
(Seeman
a
rental
agreement during discovery, but it is hornbook law that monthto-month rental arrangements need not be in writing to be valid.
See, e.g., Kachigian v. Minn, 320 N.E.2d 173, 175 (Ill. App.
1974) (“Pursuant to the oral agreement between the litigants,
- 11 -
Kachigian, the tenant, paid rent on a monthly basis.
Therefore,
we hold, affirming the trial court, that Kachigian was a monthto-month tenant and, as such, is liable for rent for the period
he occupied the office suite.”).)
argue
–
nor
do
the
facts
What is more, Seeman does not
suggest
–
that
either
entity
was
undercapitalized at any relevant time.
Instead, Seeman’s primary arguments for a unity of interest
are, first, that Rendel’s and PJMP are so intimately integrated
that they must share a unity of interest and, second, that the
manner in which the two entities allocate salaries and expenses
between
them
amounts
to
improper
commingling
of
funds.
The
Court takes these in turn.
Seeman’s
first
contention
focuses
on
the
extent
of
entities’ integration, but that doesn’t advance the ball.
the
“The
corporate veil is pierced, when it is pierced, not because the
corporate group is integrated, but (in the most common case)
because it has neglected forms intended to protect creditors
from being confused about whom they can look to for payment of
their claims.”
Papa, 166 F.3d at 943 (citations and internal
citation omitted).
The Papa court enumerated several ways in
which corporations may integrate, while nevertheless preserving
the
ability
payment,
and
of
creditors
thus
still
to
look
fall
- 12 -
to
the
within
proper
the
entity
for
small-employer
exemption:
by
sharing
accounting
and
employee benefits, and common ownership.
payroll,
pooling
of
See, id. at 942.
Most of the facets of PJMP’s integration with Rendel’s –
for
example,
shared
telephone
lines,
letterhead,
health
insurance, employees such as Mazor and the Polcyns, ownership, a
consumer-facing business name, and premises (although PJMP in
fact had its own separate tow office and cashier) – are legally
insufficient for a “unity of interest” finding under Papa.
e.g.,
Bridge,
corporate
815
form”
corporations
F.3d
at
364-65
sufficient
shared
services,
personnel
website);
Fusion
for
similar
manuals,
Med.
Spa,
(finding
“misuse
veil-piercing
names,
F.Supp.2d
at
of
where
directors,
health-insurance
836
no
See,
two
employees’
benefits,
777
and
(finding
a
no
unity of interest where “Wise was president and part-owner of
Fusion
and
president
and
sole
owner
of
Synergy,
plaintiff’s
health insurance was provided through a Synergy policy, part of
plaintiff’s job responsibilities included cross-selling Synergy
services,
and
the
two
corporations
shared
physical
space,
telephone lines, letterhead, accountants and some employees”);
Macrito, 2011 WL 5101712, at *4 (refusing to aggregate employees
under Papa where two corporations shared president and payroll
coordinator,
operated
and
received
phone
calls
out
of
same
address, worked on same projects together, and held themselves
- 13 -
out as “sister” companies); Walker v. Macra Const. Inc., No. 02
C 3285, 2003 WL 297529, at *4 (N.D. Ill. Feb. 11, 2003) (finding
no Title VII aggregation where two companies operated out of
same
building,
were
owned
by
same
family,
shared
business
telephone number, and employed same person to answer calls and
prepare payroll and quarterly reports); Wilson v. Comtrust LLC,
249 F.Supp.2d 993, 998 (N.D. Ill. 2003) (refusing to aggregate
employees
shared
among
three
letterhead,
entities
office
created
building,
by
same
employees,
person
and
that
accounting
firm); Atkins v. JAD Hosiery, Inc., No. 99 C 4055, 2000 WL
988534, at *3 (N.D. Ill. July 17, 2000) (finding aggregation
under Title VII inappropriate where entities “were interrelated
in
that
they
all
sold
and
marketed
same
product,
shared
a
corporate logo, shared directors and offices, and conducted some
inter-office business”).
Seeman
Defendants’
points
the
integrated
finger
business,
at
but
additional
they
microcosms of his failure to grasp the point.
the
collective
Local 179
bargaining
includes
agreement
classifications
for
immaterial to the veil-piercing inquiry.
only
of
serve
as
For example, that
between
tow
facets
Rendel’s
truck
drivers
and
is
As the court in Papa
noted, “a focus on integration makes sense” when the National
Labor Relations Board seeks to determine “what the appropriate
- 14 -
bargaining unit is.”
166 F.3d at 942.
“If the work forces of
two affiliated corporations are integrated, there is an argument
for a single bargaining unit covering both of them, and also an
argument
that
they
should
be
combined
for
purposes
of
determining whether the effect on commerce is substantial enough
to justify the Board in asserting jurisdiction.
argument
for
making
on
affiliate
liable
But there is no
for
the
other’s
independent decision to discriminate.” Id. at 943.
As such, PJMP has not forfeited its right to be treated as
a separate entity merely by integrating with Rendel’s to enjoy
economies of scale or assuming its name to preserve whatever
goodwill in the towing industry had inured to Rendel’s by virtue
of its decades of prior experience.
Seeman’s final argument for aggregating employees relies on
what he characterizes as commingling of funds:
of
salaries
and
other
accounting purposes.
expenses
from
Rendel’s
the allocation
to
PJMP
for
Seeman claims there is a material dispute
as to whether physical funds transfers consistently occurred and
cries foul at the failure of Mazor’s and the Polcyns’ W-2s to
reflect their allocated salaries.
(Note that all of Seeman’s
compensation – other than the disputed issue of out-of-pocket
reimbursements for fuel costs and the like – was paid by PJMP
directly,
and
Rendel’s
allocated
- 15 -
such
out-of-pocket
reimbursements to PJMP.
¶ 3.))
(Defs.’ Resp. at Ex. 3 (“Mazor Aff.”)
Neither party has furnished authority relevant to the
sort of salary and overhead allocations Defendants engaged in,
but the Court views their arrangement as merely one in which
“accounting
records
entity
another,”
to
always
intermingling funds.”
Proceedings,
approval,
675
which
“is
the
not
indebtedness
one
equivalent
the
of
of
In re Acushnet River & New Bedford Harbor
F.Supp.
Judson
reflect
22,
Atkinson
34
(D.
Mass.
Candies,
Inc.
1987),
v.
cited
with
Latini-Hohberger
Dhimantec, 529 F.3d 371, 380 (7th Cir. 2008) (“[Plaintiff] has
not
cited
any
evidence
to
counter
CIC’s
assertions
that
it
maintained a strict accounting of each subsidiary’s balance.”).
Seeman
neither
alleges
nor
adduces
evidence
that
Defendants’
accounting records were inaccurate, and so it seems immaterial
whether funds corresponding to the allocations were transferred
between the two accounts on some routinized basis or, as in
Acushnet,
the
sister
companies
consolidated accounts.
made
periodic
deposits
See, 675 F.Supp. at 34.
into
Sporadic or
irregular funds transfers between affiliates may be problematic
from a commingling standpoint if evidence suggests that they
were
necessary
to
meet
the
recipient’s
See, Van Dorn, 753 F.2d at 571-72.
case here.
current
obligations.
However, such is not the
As there is no indication “that funds collected by
- 16 -
one entity were . . . deposited into the other’s (separate) bank
account”
without
a
documented
corresponding
offset
to
that
entity’s liabilities, Bridge, 815 F.3d at 365 n.4, there is no
triable question whether Rendel’s and PJMP commingled funds.
The
Court
finds
instructive
Jackowski
v.
Seoco,
Inc.
Northern, No. 98 C 50337, 2001 WL 709485 (N.D. Ill. June 22,
2001).
There, substantial questions of fact precluded summary
judgment on the issue of whether two corporate entities, Seoco
and
Seoco
Northern,
maintained
separate
existences.
With
respect to commingling of funds, the court first noted that “a
centralized
cash
management
system
where
accounting
records
track the indebtedness of each entity is not the equivalent of
intermingling funds.” Id. at *2.
It further recounted how “the
Secretary/Treasurer of both companies, states that expenses are
allocated to each company, as are deposits and assets.”
(emphases added).
Ibid.
However, what prevented summary judgment on
the commingling issue was how payroll expenses went unallocated:
It is not clear whether these [allocated] expenses
include payroll expenses.
For example, Ed Schmidt
states that he has not received a salary from Seoco
Northern.
He also states that, to the extent he has
dealt with Seoco Northern employees, he has done so in
his capacity as President of Seoco Northern.
The
record does not show whether, when acting in his role
as Seoco Northern President, Ed Schmidt was working
for free, or whether Seoco was footing the bill. The
latter scenario indicates funds were commingled and
- 17 -
lends support to the conclusion that each corporation
has failed to maintain a separate existence.
Ibid. (emphasis added).
In this case, however, it is undisputed
that the allocations did include payroll expenses.
Rendel’s
paid the Polcyns and Mazor their salaries subject to allocations
to PJMP corresponding to the time they spent performing work for
PJMP or supervising its employees.
PJ and Michael even received
hourly compensation directly from PJMP to the extent they had to
perform after-hours towing and recovery-related duties – that
is,
duties
that
it
would
be
reasonable
to
think
were
not
subsumed within the portion of their normal salary allocated to
PJMP.
Without
adducing
evidence
impugning
the
integrity
of
Defendants’ or Mazor’s administration of this allocation system,
Seeman
establishes
only
that
Rendel’s
and
PJMP
are
sister
companies sharing expenses and internally accounting for each
entity’s respective assets and liabilities.
Again failing to furnish the Court with relevant authority,
Seeman protests that end-of-year salary allocations should be
reflected on the Polcyns’ or Mazor’s W-2s.
PJMP
conduct
amount
Mazor.
of
their
taxable
The
Court
internal
income
accounting
that
genuflects
Rendel’s
to
the
Yet how Rendel’s and
does
pays
wisdom
not
the
of
change
the
Polcyns
and
the
Internal
Revenue Service as to the propriety of Defendants’ method of tax
- 18 -
reporting.
treating
It
the
suffices
manner
in
to
note
which
a
the
absence
party
of
reports
authority
payroll
tax
liabilities as an act of commingling funds.
In the same vein, that customers who obtain both towing
services
from
PJMP
and
repair
services
from
Rendel’s
may
at
times receive just one invoice from Rendel’s is irrelevant to
the
veil-piercing
Defendants
are
inquiry
creditors
here.
of
After
such
performing
customers,
services,
and
so
this
invoicing practice does not bear on the crucial veil-piercing
inquiry concerning whether creditors would be misled as to which
Defendant they could pursue for payment.
See, Macrito, 2011 WL
5101712, at *5 (“While Macrito states that Events would bill
clients for work performed by Events Electrical and that Events’
clients
had
no
knowledge
as
to
whether
Events
or
Events
Electrical employees were performing various tasks, such clientbased
assertions
confusion
or
are
not
fraud.”);
relevant
Atkins,
to
2000
the
WL
issue
988534,
of
at
creditor
*3
(“The
doctrine of veil piercing is intended to protect creditors, not
customer-debtors,
from
being
confused
about
which
entity
the
creditor may pursue for outstanding claims.”) (citing Papa, 166
F.3d at 943); see also, Fusion Med. Spa, 836 F.Supp.2d at 777
(“[Plaintiff’s]
affidavit
only
establishes
that
Synergy
and
Fusion shared a machine used in treating patients, and that when
- 19 -
the machine was used for weight loss treatments patients were
billed for a Fusion medical spa procedure even though they were
physically treated in the Synergy space.”).
In fact, Defendants
submitted dozens of pages of evidence showing the opposite with
respect to its usual creditors – namely, that parts suppliers
billed PJMP specifically and were paid with funds from PJMP’s
First Midwest Bank account.
(See, ECF No. 77 at Ex. 3 & 3-B.)
To the extent Seeman’s sworn statement – contrary to Mazor’s and
untethered
to
comparable
documentation
-
that
some
of
these
purchases were for parts to be used at Rendel’s implicates a
dispute
of
fact,
it
represents
at
best
a
mere
scintilla
of
evidence in favor of commingling, and is thus insufficient to
defeat summary judgment.
2.
Sanction a Fraud or Promote Injustice
Even if there were a sufficient unity of interest, the fact
remains that refusing to aggregate Defendants’ employees would
not condone a fraud or work an injustice – the required second
element of a successful veil-piercing claim under Illinois law.
See, e.g., Sea-Land Servs., Inc. v. Pepper Source, 941 F.2d 519,
520 (7th Cir. 1991) (quoting Van Dorn, 753 F.2d at 569-70).
injustice
must
be
more
judgment. Id. at 522.
than,
for
example,
an
The
unsatisfied
Instead, the plaintiff must show that a
party would be unjustly enriched; a corporation that caused a
- 20 -
subsidiary’s or affiliate’s liabilities and its inability to pay
for
them
scheme
would
to
escape
squirrel
those
assets
liabilities;
into
an
intentional
liability-free
a
or
corporation
while heaping liabilities upon an asset-free corporation would
succeed. Id. at 524.
Plainly, none of these circumstances obtain here.
In fact,
the only evidence in the record concerning a global “injustice”
cuts against piercing the veil.
It is undisputed that PJMP’s
raison d’être was to enable provision of workers’ compensation
insurance,
something
Rendel’s
apparently
could
not
do
if
it
continued offering towing and recovery services.
*
*
*
Because Rendel’s and PJMP do not enjoy a unity of interest
sufficient
judgment
is
to
justify
granted
aggregating
to
PJMP
on
their
the
employees,
grounds
that
it
summary
lacked
sufficient employees to constitute an “employer” under the ADA.
In the alternative, the Court grants summary judgment to PJMP on
the
basis
that
failing
to
pierce
the
veil
under
these
circumstances would not sanction a fraud or promote injustice.
B.
Did Rendel’s Have an Employment Relationship with Seeman?
Unlike
PJMP,
Rendel’s
employed
constitute a Title VII “employer.”
enough
individuals
to
However, Rendel’s argues
that it had no employment relationship with Seeman and so is an
- 21 -
improper defendant
in
his
lawsuit.
Thus,
the
central
issue
remaining in the case is whether Rendel’s, taking the undisputed
facts in the light most favorable to Seeman, qualified as his
“employer.”
Although Seeman at times characterizes his argument
for Rendel’s liability as a “joint employer” theory, his brief
focuses on arguing that Rendel’s had an employment relationship
with him under traditional principles of agency law.
(See, ECF
No. 55 (“Pl.’s Br.”) at 9-11.)
A few preliminaries are in order.
Strictly speaking, the
joint employer theory of liability “arises out of the temporary
employment context, where an employment agency or staffing firm
places
an
individual
worker
at
a
separate
and
unrelated
job
site.”
Fusion Med. Spa, 836 F.Supp.2d at 778 (refusing to apply
“the joint employer theory, or ‘economic realities test,’ to the
question of the small-employer exemption, particularly in the
absence
of
Whitaker,
a
772
temporary
F.3d
at
employment
811-12
relationship”);
(noting
that
EEOC
see
also,
guidance
“addressing joint employment relationships” was “[w]ritten for
the specific context of temporary employment agencies sending
employees to clients”).
As such, “joint employer” liability in
its pure sense is a poor fit for the employment context at issue
here.
However, it is well-established that a plaintiff may have
multiple employers for purposes of Title VII liability.
- 22 -
See,
e.g.,
Tamayo
2008).
v.
Blagojevich,
Similarly,
a
526
plaintiff
F.3d
may
1074,
bring
a
1088
(7th
claim
Cir.
against
a
defendant who is a “de facto or indirect employer” insofar as it
“controlled the plaintiff’s employment relationship.”
Illinois,
69
F.3d
167,
169
(7th
Cir.
1995).
The
EEOC v.
issue
of
Rendel’s propriety as a defendant in this case is thus best
understood not through the technical “joint employer” lens but
instead
purely
on
the
basis
of
whether
Rendel’s
exercised
sufficient control over Seeman’s employment to constitute (at
least) an indirect employer.
If there is a genuine dispute of
material fact as to whether it did, then summary judgment to
Rendel’s is improper.
The controlling test for determining whether a defendant
can be deemed an indirect employer is the “economic realities”
test, and Knight v. United Farm Bureau Mut. Ins. Co., 950 F.2d
377 (7th Cir. 1991), articulates a detailed iteration of this
test.
See, e.g., Love v. JP Cullen & Sons, Inc., 779 F.3d 697,
702 (7th Cir. 2015) (“[T]he five Knight factors are simply a
more
detailed
application
of
the
economic
and
control
considerations present in the ‘economic realities’ test.”).
Knight factors are:
The
(1) the extent of the putative employer’s
control and supervision over the putative employee; (2) the kind
of occupation and nature of skill required; (3) the putative
- 23 -
employer’s responsibility for operating costs; (4) the method
and form of payment and benefits; and (5) the length of the job
commitment.
Knight, 950 F.2d at 378-79.
The first factor – the
extent to which the putative employer controlled the alleged
employee – is the most important.
03.
job
See, Love, 779 F.3d at 702-
(Both parties agree that the fifth factor – length of the
commitment
–
bears
little
relevance
here
and
“is
more
applicable in the context of a case where the court is asked to
decide whether an individual is an employee or an independent
contractor of a company.” (Pl.’s Br. at 11.))
Here,
several
undisputed
facts
control and supervision of Seeman.
are
germane
to
Rendel’s
For example, approximately
once every other week, Seeman picked up auto parts from various
stores
for
Rendel’s
repair
services
and
parts
department.
Because Rendel’s maintains that it operates as a dealership and
repair
shop
only
–
in
contrast
to
PJMP,
which
handles
only
towing and recovery operations - Seeman appears to have been
receiving at least some semi-regular work assignments from the
Polcyns or Mazor in their capacity as Rendel’s personnel.
In
addition, both parties agree that Seeman took direction from PR,
Rendel’s body shop manager in 2015 and 2016 (although he was
transitioning to a PJMP role).
While the record is in equipoise
as to whether PJ’s, Michael’s, and Mazor’s supervision of Seeman
- 24 -
was incident to their Rendel’s or PJMP capacities, the Court
finds it reasonable to infer that PR in his Rendel’s capacity
supervised or controlled at least some of Seeman’s day-to-day
activities - particularly those earlier on in his tenure, which
began in January 2014 (well before PR is alleged to have begun
transitioning to a PJMP role).
Third, the letter to Seeman
providing instructions and listing permitted actions following
his
putative
consummated
resignation
his
management.”
–
the
termination
-
letter
was
that
Seeman
signed
by
claims
“Rendel’s
Whereas the Court does not find it significant
that this letter was written on Rendel’s letterhead, that it was
signed by Rendel’s management and not PJMP’s management bespeaks
the former’s authority to hire or fire Seeman (and potentially
to promulgate work rules, given the letter’s contents).
After
all, “[c]ontrol depends, to a significant degree, on the ability
to hire and fire.”
F.3d at 703).
these
Viewed in the light most favorable to Seeman,
undisputed
control
over
Bridge, 815 F.3d at 361 (citing Love, 779
his
facts
show
some
employment,
and
degree
thus
of
supervision
support
and
characterizing
Rendel’s as at least Seeman’s indirect employer.
In
addition,
the
parties
disagree
on
nearly
every
fact
issue pertaining to whether the Polcyns and Mazor were acting on
behalf
of
Rendel’s
or
PJMP
when
- 25 -
they
hired,
instructed,
supervised,
dispatched,
and
disciplined
Seeman
throughout
his
employment, as well as when they allegedly terminated him.
The
record is devoid of evidence that would permit a determination
of what individual was acting on which company’s authority and
when.
As such, at the very least there remain genuine disputes
of material fact as to whether Rendel’s exercised sufficient
control over the terms and conditions of Seeman’s employment to
constitute his Title VII “employer.”
The second Knight factor concerns the type of occupation
and nature of skills required for the job.
For example, if
important job skills were obtained in the putative employer’s
workplace, this suggests an employment relationship.
See, Love,
779 F.3d at 704 (citing Knight, 950 F.2d at 378).
Perhaps
predictably, whereas Seeman claims that the Polcyns trained him
in their Rendel’s capacity, Rendel’s asserts that any training
came from the Polcyns in their capacity as PJMP employees (and
in PJ’s case, as the owner of PJMP).
factual
dispute.
However,
viewed
This is a quintessential
objectively,
the
type
of
occupation and nature of the job – driving a tow truck, towing
cars,
assisting
parts
from
with
suppliers
automobile
recovery,
-
suggest
do
not
and
that
important job skills with Rendel’s imprimatur.
- 26 -
acquiring
Seeman
auto
obtained
As such, to the
extent it is ascertainable at this stage, this Knight factor
seems to weigh neutrally.
The
third
factor
concerning
finding of employer status.
larger
costs
Rendel’s,
of
its
paying
the
operating
costs
favors
a
Although PJMP bore some of the
operation
salaries
by
of
leasing
tow
its
truck
trucks
drivers
from
such
as
Seeman, and remitting $5,000 in monthly rent to Rendel’s, it did
not
pay
the
salaries
of
its
upper-level
employees
and
took
advantage of all the efficiency gains, cost synergies, economies
of scale, and overhead savings explored earlier in this Opinion
afforded
by
integration
with
Rendel’s.
Thus,
Rendel’s
shouldered significant operating costs with respect to Seeman’s
employment.
The
fourth
factor
-
whether
the
putative
employer
was
responsible for providing payment or benefits to the putative
employee – disfavors a finding of employer status because, with
the
disputed
exception
of
some
out-of-pocket
Rendel’s paid Seeman no compensation.
reimbursements,
And while employees from
both Rendel’s and PJMP “participated in the same group healthinsurance plan, there is no indication that [Rendel’s] provided
any direct benefits to” Seeman.
In
the
final
analysis,
Bridge, 815 F.3d at 362.
then,
the
most
important
Knight
factor favors a finding of employer status, the second factor is
- 27 -
neutral or otherwise indeterminate on the current record, the
third factor weighs in favor of a finding of employer status,
and the fourth factor disfavors such a finding.
As a result,
Rendel’s lacks entitlement to judgment as a matter of law that
it was not at least Seeman’s indirect employer under Title VII.
Summary judgment is accordingly denied to Rendel’s.
III. CONCLUSION
For the reasons stated herein, Defendant PJMP’s Motion for
Summary Judgment [ECF No. 46] is granted.
Defendant Rendel’s
Motion for Summary Judgment [ECF No. 42] is denied.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Dated: August 3, 2017
- 28 -
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