Equal Employment Opportunity Commission v. Tennessee Healthcare Management, Inc.

IN THE UNITED STATES DISTRICT COURT FOR THE

MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION

EQUAL EMPLOYMENT )

OPPORTUNITY COMMISSION, )

)

Plaintiff, )

) NO. 3:23-cv-00777

v. )

) JUDGE CAMPBELL

TENNESSEE HEALTHCARE ) MAGISTRATE JUDGE NEWBERN

MANAGEMENT, INC. and )

HCA HEALTHCARE, INC., )

)

Defendants. )

MEMORANDUM AND ORDER

Pending before the Court is Defendant HCA Healthcare, Inc.’s (“HCA”) motion to dismiss

(Doc. No. 25),1 brought under Federal Rule of Civil Procedure 12(b)(6), which is fully briefed.

(Doc. Nos. 28, 29). For the reasons discussed below, the motion (Doc. No. 25) is DENIED.

This is a civil rights case brought by Plaintiff Equal Employment Opportunity Commission

(“Commission”) in response to allegedly unlawful employment practices based on age, race, and

national origin, and to provide appropriate relief to Dr. Dong David Xu, who was allegedly

adversely affected by such practices. (See complaint, Doc. No. 1). The complaint alleges

Defendants operated as a single employer or integrated enterprise and violated Title VII of the

Civil Rights Act of 1964 (“Title VII”) and the Age Discrimination and Employment Act of 1967

(“ADEA”) by denying Dr. Xu a promotion to GME Division Director of Research because of his

race, national origin, and age, and by retaliating against him for complaining about discriminatory

mistreatment. (Id.).

1 Defendant GME Overhead filed the present motion with Defendant HCA Healthcare, Inc., but has

since been dismissed from this action. (See Doc. No. 35).

As pertinent to the pending motion, the complaint alleges that, at all relevant times, HCA

has continuously been doing business in the State of Tennessee and City of Nashville and has

continuously had at least 20 employees. (Doc. No. 1 ¶ 6). The complaint also alleges that HCA

and Tennessee Healthcare Management Inc. have operated as a single employer or integrated

enterprise, or both and that they: share the same employees, share in the hiring of employees,

alternate compensating employees, use the same personnel policies and procedures, share

letterheads and signatures in correspondence, and share the same address listed at 2000 Health

Park Drive, Brentwood, Tennessee. (Id. ¶ 10).

In reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief

can be granted, the Court construes the complaint in the light most favorable to the plaintiff,

accepts its allegations as true, and draws all reasonable inferences in favor of the plaintiff. Ashcroft

v. Iqbal, 556 U.S. 662 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); Directv, Inc.

v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). To survive such a motion, “‘a complaint must contain

sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.’”

Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility when

the plaintiff pleads facts that allow the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged. Id.2

HCA filed a declaration in support of its pending motion to dismiss. (See Doc. No. 27).

However, a court may only consider exhibits attached to a defendant’s motion to dismiss under

2 The Court notes that a Title IX and/or ADEA plaintiff does not need to establish a prima facie case

to survive a motion to dismiss. See Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002) (explaining that

a prima facie case is not a pleading standard but instead relates to the plaintiff’s burden of presenting

evidence). Rather, Plaintiffs need only allege facts that “plausibly suggest an entitlement to relief.” Iqbal,

556 U.S. at 681. “[D]etailed factual allegations” are not necessary; a plaintiff need only “allege sufficient

‘factual content’ from which a court, informed by its ‘judicial experience and common sense,’ could ‘draw

the reasonable inference’” that a defendant violated the statute. Keys v. Humana, Inc., 684 F.3d 605, 610

(6th Cir. 2012) (quoting Iqbal, 556 U.S. at 678-79).

Rule 12(b)(6) when “they are referred to in the Complaint and are central to the claims contained

therein.” Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008). Further, Rule

12(d) states that if, “on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are

presented to and not excluded by the court, the motion must be treated as one for summary

judgment under Rule 56.” Luis v. Zang, 833 F.3d 619, 632 (6th Cir. 2016). Here, the Court will

analyze HCA’s motion under Rule 12(b)(6) and will not convert it to a motion for summary

judgment. The declaration upon which HCA relies was not attached as an exhibit to its motion or

referenced in the complaint, and, as a result, the Court cannot and will not consider it.

Through its pending motion, HCA seeks dismissal under Rule 12(b)(6) on the grounds that

it did not employ Xu. In support, HCA challenges the sufficiency of the complaint’s factual

allegations that it employed Xu as a joint employer or as part of an integrated enterprise.

In order to hold a defendant liable under Title VII or the ADEA, a plaintiff must ultimately

show that a defendant was their “employer” within the meaning of the respective statute. See

Swallows v. Barnes & Noble Book Stores, Inc., 128 F.3d 990, 992 (6th Cir. 1997).3 However, the

Sixth Circuit has “held that some entities that do not directly employ a plaintiff may qualify as a

statutory ‘employer.’” Post v. Trinity Health-Michigan, 44 F.4th 572, 579 (6th Cir. 2022) (citing

Swallows, 128 F.3d at 993 and Christopher v. Stouder Mem'l Hosp., 936 F.2d 870, 874 (6th Cir.

1991)). For example, entities may qualify as a statutory “employer” under the “joint employer

theory” or the “single employer” or “integrated enterprise” doctrine. See Nethery v. Quality Care

Invs., L.P., 814 F. App'x 97, 103 (6th Cir. 2020); Swallows, 128 F.3d at 993–94.

In determining whether to treat two entities as a single employer or “integrated enterprise,”

courts examine the following four factors: (1) interrelation of operations, i.e., common offices,

3 “Because Title VII, the ADEA, and the ADA define ‘employer’ essentially the same way, we rely

on case law developed under all three statutes.” Id. at 993 n.2 (internal quotations omitted).

common record keeping, shared bank accounts and equipment; (2) common management,

common directors and boards; (3) centralized control of labor relations and personnel; and (4)

common ownership and financial control. See Swallows, 128 F.3d at 993–94. “None of these

factors is conclusive, and all four need not be met in every case.” See id. Similarly, entities are

joint employers if they “share or co-determine those matters governing essential terms and

conditions of employment.” E.E.O.C. v. Skanska USA Bldg., Inc., 550 F. App'x 253, 256 (6th Cir.

2013) (quoting Carrier Corp. v. NLRB, 768 F.2d 778, 781 (6th Cir. 1985)). In determining whether

an entity is the plaintiff's joint employer, the major factors include the “entity's ability to hire, fire

or discipline employees, affect their compensation and benefits, and direct and supervise their

performance.” Id.

The Commission points to several factual allegations in the complaint to support the theory

that HCA and Tennessee Healthcare Management Inc. served as either Xu’s joint employer or

acted as an integrated enterprise such that HCA could be liable under Title VII or the ADEA. (See

Complaint, Doc. No. 1 ¶ 10). HCA asserts that the Commission’s allegations on those issues are

mere threadbare, conclusory allegations. In response, the Commission argues: (1) the allegations

are sufficient to satisfy its pleading burden; (2) there was a factual basis from records in the

Commission’s custody to plead HCA as an employer in good faith;4 and (3) if the pleadings are

not sufficient, it be allowed to amend the complaint.

While the Commission’s allegations to support claims against HCA are thin and somewhat

confusing – Tennessee Healthcare Management Inc. is defined as the “Employer” or the

4 While the Court doesn’t consider these facts as they are outside the pleadings, it understands that

the Commission articulated them to show a good faith basis for its allegations.

“Defendant Employers,” as is HCA, then both are referred to as the “Defendant Employers” — at

this stage, the Court finds that the Commission has satisfied its pleading obligations against HCA.”

While the Commission’s claims against HCA survive the Rule 12(b)(6) motion, the

Commission concedes that discovery may impact the viability of those claims. Should discovery

demonstrate that HCA’s arguments concerning its role in employing Xu and its operations are

accurate and unrebutted, the Court strongly encourages the Commission to reconsider the viability

of the claims against HCA and take into account judicial economy in determining whether to

continue its litigation against that entity.

It is so ORDERED. Ve ,

WILLIAM L. CAMPBELL, J.

CHIEF UNITED STATES DISTRICT JUDGE

HCA’s reliance on Judge Haynes’ opinion in Gonzalez v. HCA, 2011 WL 3793651 (M.D. Tenn.

August 25, 2011) is not persuasive in the present case brought under Title VII and the ADEA. The plaintiffs

in Gonzalez sued two of HCA’s out-of-state subsidiaries for wrongful denial of compensation under the Fair

Labor Standard Act (“FLSA”). As addressed by the Commission in its response, determining who is an

employer under the FLSA is not the same as under Title VII and ADEA claims. (See Doc. No. 28 at PageID

# 109-110). HCA filed a reply but did not respond to the Commission’s argument that Gonzalez is not

applicable to the present case. (See Doc. No. 29).