Lyes v. City of Riviera Beach

KRAVITCH, Senior Circuit Judge,

concurring in part and dissenting in part:

I concur in Part I of the majority opinion, which reinstates that portion of the panel opinion remanding the case to the district court for reconsideration of the section 1983 claim because Lyes’s pleadings were sufficient to provide the district court and the appellees with notice that she alleged a violation of the Equal Protection Clause of the Fourteenth Amendment. I also concur in Part II of the majority opinion, in which this court joins every other circuit that directly has decided the issue in holding that 42 U.S.C. § 1985 (3) prohibits sex-based conspiracies, at least where they involve state action. With respect to Part III, however, I dissent in part.

I. The New Public Single Employer Test

In Part III, the majority formulates a new test for determining whether two ostensibly independent state or local government entities should be considered a “single employer” for Title VII purposes. It then finds that the district court properly granted summary judgment in favor of the appellees on Lyes’s Title VII claim because Lyes did not produce evidence sufficient for a reasonable factfinder to conclude that the City of Riviera Beach Community Redevelopment Agency (the “CRA”) and the City should be aggregated under this new public single employer test.

Before articulating the new standard for deciding whether governmental entities should be consolidated under Title VII, the majority considers but rejects the four-factor test that the National Labor Relations Board (“NLRB”) applies to decide whether to aggregate ostensibly separate private employers. 1 I would have preferred that this court adopt the NLRB test regardless of whether the entities in question are public or private. Although the NLRB originally adopted this four-factor test in the context of deciding which private employers it would subject to its jurisdiction in labor relations disputes, see Radio & Television Broad. Technicians Local Union 1264 v. Broadcast Serv. of Mobile, Inc., 380 U.S. 255, 256 , 85 S.Ct. 876, 877 , 13 L.Ed.2d 789 (1965), in McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930 (11th Cir.1987), we joined the majority of circuits in applying this test in the Title VII context in cases involving private entities. 2 For the reasons described below, I would *1357 have extended the application of the NLRB test to Title VII suits against government employers, as well.

As the majority recognizes, the Supreme Court specifically has held that Title VII principles and standards apply with equal force to private and public employers. See Majority Op. at 1342. Federal courts have been using the NLRB test in Title VII cases involving private entities for more than 20 years, 3 and therefore have developed continuity and expertise in applying it. Creating a different test for deciding whether to consolidate public employers, who must abide by the same Title VII rules as private employers, requires the courts to start again, evolving and shaping a new standard. Given the flexibility of the existing single employer test, this approach is unnecessary. The NLRB test is not a strict formula, but instead embodies factors commonly recognized to characterize coordinated enterprises. It acknowledges that no two operations are exactly alike; therefore, as the majority points out, “[cjourts applying the NLRB ‘single employer’ test to private entities in Title VII cases have held that not every factor need be present, and no single factor is controlling.” Majority Op. at 1341-42 n. 5 (citing three cases recognizing this proposition).

A number of courts already have demonstrated that the NLRB test can be applied to government employers with little difficulty. See Riley v. County of Pike, 761 F.Supp. 74, 76-77 (N.D.Ind.1991) (holding, in age discrimination case under ADEA, that “same considerations are pertinent” when deciding single employer issue for public entities as for private entities and applying NLRB test to resolve the question; noting that where government entities are concerned, court also must keep constitutional separation of powers issues in mind); Vandermeer v. Douglas County, 15 F.Supp.2d 970, 975-79 (D.Nev.1998) (conducting extensive analysis, using NLRB four-factor test, to decide whether Fire and Paramedic Districts and County should be aggregated for Title VII purposes; noting that fact that state might consider the entities to be separate was relevant but not controlling). In my view, all of these advantages outweigh the slight awkwardness created in the public employer context by the labeling of the fourth factor of the NLRB test — -common Ownership, or financial control — which admittedly is more helpful in our analysis of the relationship between parent and subsidiary corporations than governmental bodies. 4

The majority also contends that the third factor of the NLRB single employer test— common management — is an inappropriate consideration in the government entity aggregation context. I disagree. The majority explains its rejection of the third factor by stating that “[wjhile [the common management factor] may be an appropriate yardstick in some instances, in others two public entities may share managers or other employees while remaining politically separate and distinct.” Majority Op. at 1344. This reasoning is circular: the fact that the sharing of personnel may not justify, in some situations, aggregation under Title VII does not mean that courts should simply ignore the common management factor in every case. Again, under the NLRB test, no one factor controls the outcome of the “single employer” analysis in a given case.

Upon rejecting the NLRB test as an inappropriate standard for deciding when government entities should be aggregated for Title VII purposes, the majority formulates a new test for making this determination. In large *1358 part, this test mirrors the NLRB standard. After holding that comity and federalism considerations require us to defer to Florida’s delineation between the CRA and the City in this and other cases in which a state has designated the relevant political bodies as separate entities, 5 the majority recognizes that courts still may find that purportedly independent government bodies should be considered a single employer under Title VII. A plaintiff can show that aggregation of public entities is appropriate either by proving that the state created the “separate” units to evade federal law or by demonstrating “other factors” “plainly indicating] integration” of the entities. Majority Op. at 1345.

In deciding what factors courts should assess under this new public single employer test, the majority looks to “the factors courts have considered in Title VII cases involving-private employers” — primarily the NLRB factors. Majority Op. at 1345. The majority focuses upon “centralized control of labor relations” (NLRB factor 2) as the dominant consideration of the public single employer test; 6 it also cites “interrelation of operations” (NLRB factor 1) as an important component of this analysis. Id. The majority concludes by observing that the factors it mentions are not exhaustive. Id. Thus, despite my preference for extending the NLRB test to govern the aggregation analysis for public as well as private employers, because the standard that the majority has developed significantly parallels the NLRB test, I do not dissent from its adoption.

II. Applying the New Test

Applying the majority’s public single employer analysis, and accepting the presumption that test creates that the CRA and the City should not be aggregated for Title VII purposes, 7 I dissent from the majority’s conclusion that summary judgment was proper in this case. Looking first at the two NLRB factors still viable under the new test, the record shows that Lyes presented significant evidence that the City and CRA had interrelated operations and that the City controlled decisions regarding the CRA’s employees. As the panel opinion pointed out, the record contains several pieces of evidence from different sources indicating that the City treated the CRA merely as one of its departments. These items include the CRA bylaws, which, at least until one month before Lyes’s termination, obligated the CRA Executive Director to report to and coordinate the CRA agenda with the City Manager; 8 a widely published advertisement for the City Manager position seeking applicants with experience directing departments of a full service municipality and CRA; and a written performance review of Lyes by Tony Smith, the City Manager/CRA Executive Director, appearing on a City form and listing the CRA as a department of the City. 9

*1359 Multiple indicia of City control over CRA employment decisions also appear in the record. As mentioned above, Smith’s evaluation of Lyes’s performance on a City form and possibly in his capacity as City Manager, 10 and the CRA bylaws’ requirement that the CRA Executive Director report to the City Manager, raise questions about whether the CRA independently managed its staff during Lyes’s period of employment. Additionally, the Executive Director’s request that the City personnel director review his decision to discipline Lyes and the City attorney’s participation in the CRA Board’s hearing considering Lyes’s petition for reinstatement could support Lyes’s position on the single employer issue. 11 With respect to the majority’s observation that which entity had the obligation to pay the charging party’s salary could affect this analysis, the factfinder also could take into account the CRA’s budget, two-thirds of which the City supplies.

Finally, the majority acknowledges that the public single employer test requires us to consider the totality of the circumstances. Although the NLRB common management factor is not an element of our analysis under this test, I see no reason for the court to ignore the reality of the situation presented in this case by refusing to acknowledge the identical composition of the respective poli-cymaking bodies of these entities — the City Council and the CRA Board — and, for eighteen months, the role of Tony Smith as both City Manager and CRA Executive Director. The Florida statute’s designation of the CRA as a legal entity separate and independent from the City may have presumptive weight under our new public single employer test, but the fact that the state statute permits the City Council and the CRA Board to have the same members does not exempt that arrangement from review. At the very least, a factfinder should scrutinize this system to evaluate the degree to which these officials were able to keep their two roles separate.

Unquestionably, some information in the record points to the conclusion that the City and the CRA were sufficiently distinct that we should not aggregate them for purposes of Title VII. Because the majority opinion catalogs this evidence, see Majority Op. at 1349-50, I see no need to discuss it again here. Considering all of the evidence — and all reasonable inferences that can be drawn from it — in the light most favorable to Lyes, as we must for summary judgment purposes, however, a reasonable factfinder could determine that Lyes clearly overcame the presumption in favor of appellees on the single employer issue, thus making summary judgment inappropriate. As to the majority’s conclusion to the contrary, I therefore respectfully dissent.

. These four factors are (1) interrelation of operations; (2) centralized control of labor relations; (3) common management; and (4) common ownership or financial control. See, e.g., Radio & Television Broad. Technicians Local Union 1264 v. Broadcast Serv. of Mobile, Inc., 380 U.S. 255, 256 , 85 S.Ct. 876, 877 , 13 L.Ed.2d 789 (1965).

. The Second, Fifth, Sixth, Eighth, Ninth, and Eleventh Circuits all employ the NLRB test to determine whether private entities should be aggregated for Title VII purposes. See Majority Op. at 1342. The Tenth Circuit "ha[s] yet to adopt the [NLRB] single employer test, having found it unnecessary in several cases to resolve the issue definitively,” but it has not rejected the test. Lockard v. Pizza Hut, Inc., 162 F.3d 1062, 1070 (10th Cir.1998). The remaining circuits apparently have not addressed this issue.

. The Eighth Circuit was the first court to use this test to decide whether two employers should be aggregated under Title VII. Baker v. Stuart Broad. Co., 560 F.2d 389 (8th Cir.1977).

. This minor obstacle, however, has not hindered district courts that have employed this test where aggregation of government entities was at issue. For example, in Vandenneer, the court applied ' this element of the test by considering sub-factors such as ability to raise revenue, division of funds, independence of property ownership, separation of accounting records; and payment of bills and debts. 15 F.Supp.2d at 978 . This approach is not unlike that taken by the panel in this case, which, in analyzing the fourth factor, recognized the extensive intermingling of CRA and City funds, including the facts that the CRA received two-thirds of its budget, and, on one occasion, an interest-free loan, from the City. See Lyes v. City of Riviera Beach, 126 F.3d 1380 , 1387 (1997), opinion vacated and reh’g en hanc granted, 136 F.3d 1295 (11th Cir.1998).

. The majority summarizes the first step in the new standard it promulgates as follows: "we begin with the presumption that governmental subdivisions denominated as separate and distinct under state law should not be aggregated for purposes of Title VII.” Majority Op. at 1345 (emphasis added). This formulation echoes the concerns the majority repeatedly expresses regarding the implications of federalism and comity where the state legislature has delineated government entities as separate from one another. As I read the majority opinion, therefore, this presumption only applies in a situation, such as the one before us in this case, in which the state legislature created the entities in question as "independent legal bodies.” Majority Op. at 1346.

. Courts frequently have observed that under the NLRB test as applied in the Title VII context, this factor should receive the most weight. See Barbara Lindemann & Paul Grossman, Employment Discrimination Law 1310 (Paul W. Cane, et al., eds., 3d ed.1996).

. See supra note 5 and accompanying text.

. The parties introduced two different versions of the CRA bylaws. Lyes's version contained this language, but the appellees' version, marked “Revised 11/17/93,” did not.

. The majority finds this last piece of evidence to be of little or no significance given Smith’s dual role at the time. In downplaying the importance of this incident, the majority ignores the fact that Smith listed the CRA as a "department” of the City on the form, a detail with broader implications in terms of the level of CRA/City integration than a simple error in choosing the wrong sheet of paper to complete an evaluation. The majority also improperly weighs this evidence: it is up to the factfinder — not this court — to decide the *1359 significance of Smith’s commingling of City and CRA activities. Although it is possible to infer from the written performance review that Smith mistakenly picked up a City form, or perhaps that he had run out of CRA stationery, and incorrectly listed “CRA” as a “department” without realizing the potential consequences of that act, it is also quite plausible that Smith himself was confused about the division of his duties as City Manager and Executive Director of the CRA. The latter scenario strengthens Lyes’s argument that the City and CRA were one integrated organization for Title VII purposes.

. See supra note 9 and accompanying text.

. Again, the majority inappropriately weighs this evidence when it concludes that “there was no indication that this review had any binding effect. Instead, it appears to have been an effort to seek the opinion of a third party as to whether [the Executive Director] had acted fairly in disciplining Lyes. In this sense, [it] was not unlike seeking advice from an expert in employment relations.” Majority Op. at 1350 (emphasis added). This reasoning is highly speculative. No evidence regarding the impact of this review appears in the record, and therefore its effect on the aggregation question is an issue for the fact-finder. Nor does the record indicate the reason . the Executive Director asked for the review; thus, the purpose for which he sought the personnel director’s opinion also was a matter for the factfinder to decide. There simply is no basis in the record from which unequivocally to conclude that when the city personnel director reviewed Lyes’s discipline, he provided nothing more than non-binding, independent expert advice to the Executive Director.