Key point 8-08. Title VII of the Civil Rights Act of 1964 prohibits employers engaged in commerce and having at least 15 employees from discriminating in any employment decision on the basis of race, color, national origin, gender, or religion.
* A federal court in New York ruled that a local church and denominational agency could be sued for the sexual harassment of a church employee by two pastors. A woman (Jane) was hired by a church to operate the parish office. Her responsibilities included maintaining finances, accounting of incoming money, banking deposits, managing financial reports, cutting payroll checks, paying monthly bills, scheduling church and community functions at the parish hall, addressing parishioners telephone inquiries, and preparing bulletins. In addition to these responsibilities, she worked closely with parishioners and their families for baptisms, funerals, weddings, and other services.
A few years after Jane was hired, the church’s senior pastor handed her a “floppy disk” and instructed her to print a letter that was contained on the disk. When she opened the disk she discovered that it contained pornographic images. When she asked the pastor why he gave her a disk with pornographic images, he allegedly responded, “What do you think?” Jane told him that his behavior was unacceptable. Following this incident, Jane claimed that the pastor increased his supervision over her, ridiculed her in front of others, accused her of incompetence for incorrect financial statements and the loss of a $25,000 donation check. Jane also claimed that the church’s associate pastor sexually harassed her. She alleged that on several occasions when she was away from her office she returned to find the associate pastor in her office looking at pictures of nude men on her computer.
Jane reported the actions of both pastors to the church’s business administrator, who recommended that Jane contact a denominational office (regional church) for assistance. A denominational official went to great lengths to resolve her complaints, but was unsuccessful in doing so. As a result, Jane sued her employing church and the regional church for sexual harassment and sex discrimination in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits employers having at least 15 employees and engaged in interstate commerce from discriminating in employment decisions on the basis of race, color, national origin, sex, or religion. The law defines “sex” to include sexual harassment.
The employing church
The church argued that the court lacked jurisdiction over Jane’s Title VII sexual harassment claim and so the case had to be dismissed. It pointed out that Title VII only applies to employers having at least 15 employees, and since it had less than 15 employees it was not an “employer” subject to Title VII.
The court rejected this argument, based on a recent United States Supreme Court decision holding that the 15 employee requirement under Title VII was not a matter of jurisdiction, but rather an element of a plaintiff’s claim. This means that an employer cannot have a Title VII lawsuit against it dismissed by a court on the basis of a lack of jurisdiction, even though the employer has fewer than 15 employees and therefore is not an “employer” subject to Title VII. See Arbaugh v. Y&H Corporation, 126 S.Ct. 1235 (2006) (discussed in the recent developments section of this newsletter under the topic “Employment practices”). Employers with fewer than 15 employees who are sued under Title VII must raise the “fewer than 15 employees” defense in their response to a plaintiff’s lawsuit. It is not a jurisdictional defect that can be challenged by the employer at any time, even after a case is resolved.
The regional church
The regional church argued that it was not an employer under Title VII and that Jane was not its employee, and therefore her Title VII sexual harassment claim against it had to be dismissed. In support, the regional church relied solely on Jane’s admission that it did not hire her or provide her with a salary, retirement benefits, health insurance benefits, life insurance benefits, disability benefits, or premiums for any such programs.
The court noted that Title VII defines a covered employer as “a person 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 preceding calendar year, and any agent of such a person.” Title VII defines an “employee” as “an individual employed by an employer.” The court noted that “the question of whether someone is or is not an employee under Title VII usually turns on whether he or she has received direct or indirect remuneration from the alleged employer. The remuneration may be in the form of a salary or consist of substantial benefits not merely incidental to the activity performed.”
Jane argued that the regional church could be liable, even if it did not directly hire or employ her, under the so-called “joint employer” doctrine if she could prove that it “controlled certain aspects of her employment with the church, including her compensation, privileges, terms, and conditions.” The court concluded:
There is well-established authority under this theory that, in appropriate circumstances, an employee, who is technically employed on the books of one entity, which is deemed to be part of a larger “single-employer” entity, may impose liability for certain violations of employment law not only on the nominal employer but also on another entity comprising part of the single integrated employer. Under the “single-employer” doctrine, also known as the “joint employer” theory, an employee, formally employed by one entity, who has been assigned to work in circumstances that justify the conclusion that the employee is at the same time constructively employed by another entity, may impose liability for violations of employment law on the constructive employer, on the theory that this other entity is the employee’s joint employer.
In assessing whether a joint employer relationship exists, courts generally look for evidence of (1) interrelation of operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership or financial control.
The court noted that the regional church had offered no evidence disproving the elements of the single-employer theory. On the other hand, Jane testified that she was directed to perform duties by the regional church; that she attended training offered by the regional church; that she participated in the regional church’s group plan health insurance; and that the regional church controlled aspects of her compensation, hours, and job duties. These allegations were sufficient, with no contrary evidence from the regional church, to raise questions regarding common ownership and control between the employing church and regional church. As a result, the court declined the regional church’s request to dismiss Jane’s claims against it. Krasner v. Diocese, 431 F.Supp.2d 320 (E.D.N.Y. 2006).