VOLUME II Chapter 22 Title VII of the Civil Rights Act
| Jurisdiction | South Carolina |
I. Coverage
The Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), and Title VII of the Civil Rights Act of 1964 are all very similarly written and based on the same principles. Collectively, these laws require employers to provide equal treatment for all persons in the workplace, regardless of race, color, religion, sex, national origin, protected disability, or age. The South Carolina Human Affairs Commission was established to prevent discrimination based on these same protected categories. Accordingly, South Carolina statutes enforced by the Commission mirror the federal discrimination statutes.1
A. Employers
1. Definition
The Civil Rights Act of 1964 and the ADA define an "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."2 The ADEA has virtually the same definition, except the employer must have 20 or more employees in each of the 20 weeks.3
2. Identification
For purposes of Title VII and the ADA, an employer with 15 or more employees is prohibited from discriminating against employees based on the proscribed categories enumerated in these statutes. Under the ADEA, an employer is not subject to the statute until he has 20 or more employees. This group of employees is not limited to the actual physical location where the alleged discrimination occurred. The covered employees are defined by the relevant employment unit as determined by the courts. The unit usually consists of all of the employees of a traditional singular employer. However, under the single employer and joint employer theories, two or more facilities or employers can be combined to determine liability and the number of employees of an employer for purposes of coverage under state and federal employment discrimination statutes.
a. Single Employer Theory
The single employer theory allows the combination of two separate legal entities that are so integrated in operations that they are equivalent to one employer for purposes of coverage. If the court determines that the entities should be combined, the number of employees of each employer are added together to determine if the charged employer has the requisite amount of employees to fall within the coverage of the appropriate statute.
In determining whether the separate entities should be combined, the court focuses on whether the two employers have a common or centralized labor relations policy.4 The court also weighs factors such as whether there is: (1) an integrated economic relationship between the two entities, (2) common ownership, and (3) unified control.5 The most common example of a "single employer" occurs between a parent and its subsidiary when the requisite factors are present.
b. Joint Employer Theory
Under the joint employer theory, one employer who is unrelated to another employer has enough control over employment conditions of the latter to be considered a co-employer. To determine whether control is sufficient, courts weigh whether the charged employer has: (1) control over hiring, discipline, or discharge; (2) control over work schedule and assignments; and (3) an obligation to pay or train the employees.6 This relationship occurs most frequently in the alliance between an employer and its temporary personnel agency.7
c. Directors, Shareholders, and Partners
In addition to the single and joint employer theories, the Supreme Court has since recognized that director-shareholders may be counted as employees for establishing "employer" status under the ADA.8 In Clackamas Gastroenterology Associates v. Wells, the Court adopted a six-factor inquiry advanced by EEOC to decide whether director-shareholders of a professional corporation should be counted as employees towards the 15-employee threshold for covered employers under the ADA.9 The inquiry included factors such as: (1) whether the organization can hire or fire the individual or set the rules and regulations of the individual's work; (2) whether and, if so, to what extent the organization supervises the individual's work; (3) whether the individual reports to someone higher in the organization; (4) whether and, if so, to what extent the individual is able to influence the organization; (5) whether the parties intended that the individual be an employee, as expressed in written agreements or contracts; (6) whether the individual shares in the profits, losses, and liabilities of the organization.10 The Court also recognized that whether a director-shareholder is an employee "depends on all of the incidents of the relationship . . . with no one factor being decisive."11
The Court indicated that this analysis was "not confined to the particulars of the ADA."12 The framework utilized by the Court extends to all Title VII cases and is not limited to director-shareholders.13 The six-factor inquiry is also relevant to whether "partners, officers, members of the board of directors, and major shareholders qualify as employees."14
d. Element of Federal Claim
The Supreme Court addressed the issue of whether the employee numerosity requirement of Title VII was a limitation on federal subject-matter jurisdiction or an element of a plaintiff's federal claim for relief.15 The Court, in Arbaugh v. Y & H Corp., acknowledged the ambiguity in the jurisprudence regarding the distinction between limitations on federal subject-matter jurisdiction and elements of a federal claim.16 To avoid future confusion among courts, the Court established "a readily administrable bright line" holding that "when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character."17 It reasoned that "[i]f the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue."18 In applying the readily administrable bright line to Arbaugh, the Court held that the threshold number of employees for application of Title VII is an element of the plaintiff's federal claim for relief and not a jurisdictional issue.
3. Counting Employees
Once the relevant employment unit is established, the requisite number of employees must have an employment relationship with the employer "for each working day in each of twenty or more calendar weeks in the current or preceding calendar year."19
a. "For Each Working Day"
The United States Supreme Court recently clarified the method for determining what qualifies as a "working day" for purposes of coverage under the federal discrimination statutes. The Court approved the "payroll method." This method counts every working day of an employment relationship between the employer and employee as evidenced by the individual's inclusion on the payroll. The employee is counted for every working day from the start of the employment relationship to its end. The count includes unpaid work days.20
b. "In Each of Twenty or More Calendar Weeks"
The employer must maintain 15 or more employees (or 20 or more for the ADEA) for a period of 20 weeks within either the calendar year a violation is alleged or within the following year. The weeks do not have to be consecutive, but they must fall within a single calendar year.21
4. Scope of Liability
a. Parent and Subsidiary Corporations
The parent/subsidiary relationship is the most common example of combining two separate entities whose operations are sufficiently integrated for purposes of determining coverage under the federal discrimination statutes. A mere parent/subsidiary relationship does not establish a single employer unit for liability or coverage purposes.22 Other factors must be considered.23 However, if single employer status is established, a charge of discrimination against one entity is equivalent to a charge against all employers in the unit.24
b. Supervisors and Other Agents
Under the federal discrimination statutes, liability extends to any "agent" of an employer. An agent is determined by applying the traditional principles of agency law.25Whether the liability falls on the shoulders of the employer or the individual who committed the act of discrimination is still questionable. The employer is liable if the agent was acting in the course and scope of the agency relationship. For example, an employer would be liable if the discriminatory act was performed at work by a supervisor with significant control over the plaintiff's hiring, firing and conditions of employment.26
The Supreme Court has held that employers should be held vicariously liable for the unlawful actions of supervisory employees in Title VII hostile environment sexual harassment cases.27 The Court in Burlington Industries v. Ellerth determined that an employer would be strictly liable under the "aided-in-the-agency-relation" standard when a supervisor subjects a subordinate to a "tangible employment action."28 The aided-in-the-agency-relation standard applies when the employees are aided in accomplishing their tortious objective by the existence of the agency relation.29
Many courts still question whether supervisory employers can be held individually liable under Title VII. In the past, the Fourth Circuit has imputed liability to the individual employee/defendant "[i]f the fact finder concludes that [the defendant] exercised sufficient supervisory authority over [the plaintiff] to qualify as an employer under Title VII."30 The factual test to be applied to this standard is whether the defendant asserted supervisory control over the plaintiff. If the company acquiesces to the exercise of control, even if the assertion of the control was not legitimate, the defendant is an employer for Title VII purposes and can be held liable.31 However, the...
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