Equal Employment Opportunity Commission v. Vinca Enterprises, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF MISSOURI

CENTRAL DIVISION

EQUAL EMPLOYMENT OPPORTUNITY

COMMISSION,

Plaintiff,

Case No. 2:20-cv-04021-NKL

v.

VINCA ENTERPRISES, INC. and PURI

GROUP OF ENTERPRISES, INC.,

Defendants.

ORDER

This dispute involves a room inspector employed by the Defendants who allegedly engaged

in unwelcome, offensive, sexual comments and conduct toward Kathryn Palmer, also employed

by the Defendants. Plaintiff, the Equal Employment Opportunity Commission, contends that

Defendants have violated Section 703(a)(1) of Title VII, 42 U.S.C. § 2000e-2(a)(1), by creating a

hostile work environment for Palmer based on her sex. Doc. 1. Defendant Puri Group of

Enterprises, Inc. now moves to dismiss the Complaint arguing that Palmer did not administratively

exhaust her claim against Puri Group. Doc. 11.

Because the Court finds that Vinca and Puri Group are a single integrated entity, the motion

to dismiss is denied.

I. Background

In June 2015, Palmer filed a charge with the Commission alleging that Vinca violated

various provisions of Title VII. In September 2019, after the Commission investigated Palmer’s

charge, the Commission issued a Letter of Determination finding reasonable cause to believe that

Vinca violated Title VII. Because the Commission was unable to secure an acceptable conciliation

agreement with Vinca, it issued a Notice of Failure of Conciliation. Plaintiff then brought suit

here in February 2020.

II. Standard

To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint

“must contain sufficient factual matter, accepted as true, ‘to state a claim to relief that is plausible

on its face.’” Zink v. Lombardi, 783 F.3d 1089, 1098 (8th Cir. 2015) (quoting Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009)). A claim has facial plausibility when its allegations rise above the

“speculative” or “conceivable,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007), and

where “the plaintiff pleads factual content that allows the court to draw the reasonable inference

that the defendant is liable for the misconduct alleged,” Iqbal, 556 U.S. at 678. On a motion to

dismiss, the Court must construe the factual allegations in the complaint in the light most favorable

to the plaintiff. Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir. 2008). However, “the tenet

that a court must accept as true all of the allegations contained in a complaint is inapplicable to

legal conclusions.” Iqbal, 556 U.S. at 678.

III. Discussion

Puri Group argues that Plaintiff has not exhausted her administrative remedies as to Puri

Group because Puri Group was not named in Plaintiff’s administrative charge. Further, Plaintiff’s

complaint fails to plead sufficient facts to plausibly allege that Puri Group was Palmer’s employer.

Doc. 12, at 4. Plaintiff argues that its complaint alleges facts that satisfy the single-employer

exception to Title VII’s charge-filing requirement, and therefore Puri Group’s attempt to dismiss

the claims against it on the ground of failure-to-exhaust administrative remedies fails. Doc. 17, at

10.

A plaintiff must file a charge against a defendant with the EEOC before she can sue under

Title VII. Sedlacek v. Hach, 752 F.2d 333, 336 (8th Cir. 1985). However, the Eighth Circuit has

recognized an exception to Title VII’s charge-filing requirement when the entity named in the

charge and the unnamed entity constitute a “single employer.” Greenwood v. Ross, 778 F.2d 448,

451 (8th Cir. 1985); Kizer v. Curators of University of Missouri, 816 F. Supp. 548, 551 (E.D. Mo.

1993). The factors to be considered in determining whether separate entities should be treated as

a single employer include (1) the degree of interrelation between the operations; (2) the degree to

which the entities share common management; (3) centralized control of labor relations; and (4)

the degree of common ownership or financial control. EEOC Compliance Manual, Section 2:

Threshold Issues, No. 915.003, at 44-45; Baker v. Stuart Broad. Co., 560 F.2d 389, 391 (8th Cir.

1977). However, a plaintiff need not make a showing on all four factors of the single employer

test. See, e.g., Smith v. Grifols USA, LLC, 2016 WL 880420, at *9 (finding the plaintiff’s

allegations that the defendants were affiliates, related entities, subsidiaries, and owned or operated

by the same entity and in the same line of business sufficient to survive a motion to dismiss).

According to Puri Group, the only allegations relevant to the single employer test in the

complaint are that Puri Group “manages Vinca, Puri Group and Vinca share common ownership

and an address, and that Vivek Puri oversaw the operations and employees of both Defendants

and the hotels operated by Defendants.” Doc. 12, at 6. However, Plaintiff additionally alleges

that Defendants share overlapping board members and officers (all Puri family members), that

there is common oversight and management of both Defendants, and that both Defendants are

engaged in the hotel business and specifically engaged with the same hotel, the DoubleTree, and

share the same address. Doc. 1, ¶¶ 6-11.

Viewing the factual allegations in the light most favorable to Plaintiff, Eckert, 514 F.3d at

806, the Court finds that Plaintiff has alleged sufficient facts to satisfy a showing on three of the

four factors that courts consider in determining whether entities should be treated as a single

employer. The first factor, the degree of interrelation between the operations, requires

assessment of whether the entities share services of managers and personnel, share office space,

and operate as a single unit. EEOC Compliance Manual, at 44-45. Plaintiff alleges Defendants

share their manager, Vivek Puri, other personnel, and address, which demonstrates interrelation

between Defendants’ operations. Doc. 1, ¶¶ 6-10. The second factor in the single employer test,

the degree to which the entities share common management, requires consideration of whether

the same individuals manage or supervise the two entities or whether the entities have common

officers and boards of directors. Id. See also Sandoval v. American Bldg. Maintenance

Industries, Inc., 578 F.3d 787, 796 (8th Cir. 2009) (applying the four-factor test and finding

common management between two entities that shared the same leadership personnel, including

the CEO and other executives). For example, in Baker, the Eighth Circuit upheld the district

court’s finding of a single employer relationship because one entity “provide[d] management

services” for another entity, satisfying the second factor. Baker, 560 F.2d at 392. Here, Plaintiff

alleges both Defendants are managed by Vivek Puri, and that the DoubleTree Hotel is operated

by Vinca and managed by Puri Group. Doc. 1, ¶¶ 6-9. This alleged common management

satisfies the second factor. For the fourth factor, common ownership or financial control, the

Court asks whether one company owns the majority or all shares of the other, and if the entities

share common officers or directors. EEOC Compliance Manual, at 44-45; Sandoval, 578 F.3d at

793 (applying the four-factor test). Plaintiff alleges Vivek Puri and his family members own

both Defendant entities, and that they served as the officers and directors of both Defendants

during the relevant period, satisfying the fourth factor. Doc. 1, ¶ 9 Plaintiff’s showing on these

three factors support a finding that Defendants should be consolidated under the single employer

test. Baker, 560 F.2d at 392; Sandoval, 578 F.3d at 793-96; Smith, WL 880420, at *9.

Puri Group argues, however, that although Puri Group and Vinca are both managed by

Vivek Puri, this lone common employee fails to establish common management for the purposes

of a single-employer theory, citing Davis v. Ricketts, 765 F.3d 823 (8th Cir. 2014). Doc. 12, at 7.

In Davis, the Eighth Circuit held on a motion for summary judgment that an individual

defendant’s joint participation on each of the defendant companies’ respective boards of

directors failed to satisfy the single-employer theory because the entities’ labor relations were

largely separate. Davis, 765 F.3d at 828. However, the record in Davis was devoid of evidence

that the two defendant companies shared the same personnel and managers; in fact, the record

showed that each entity had separate employees, functions, and purposes and that the entities

operated in different states. Id. at 827. The record further showed that each company made

independent day-to-day business decisions, creating their own budgets and purchasing supplies

independently. Id. Defendants have not pointed to any similar facts here. Davis thus is

distinguishable based on the current record.

The purpose of the requirement that an administrative charge be filed is to give notice to

the employer and to give the employer an opportunity to voluntarily comply with Title VII.

Greenwood, 778 F.2d at 450 (citing Liberels v. Cook County, 709 F.2d 1122, 1126 (7th Cir.

1983). Plaintiff has alleged that Vivek Puri received notice of Palmer’s charge, and Vivek Puri

responded to the charge and participated in the EEOC’s investigation and conciliation

proceedings on behalf of the hotel that is owned, operated, and managed by both Defendants.

Doc. 1, at 2-3. Thus, Plaintiff thus has plausibly alleged that Puri Group had notice of Palmer’s

charge and had an opportunity to attempt reconciliation. Sedlacek, 752 F.2d at 336 (finding that

an unnamed defendant was sufficiently apprised of an EEOC charge because it was a single

employer with the named defendant).

IV. Conclusion

For the foregoing reasons, Puri Group’s motion to dismiss, Doc. 11, is denied.

s/ Nanette K. Laughrey

NANETTE K. LAUGHREY

United States District Judge

Dated: July 2, 2020

Jefferson City, Missouri