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ADEA does not apply to company who fired 61-year-old employee

March 10, 2016

The 7th Circuit Court of Appeals affirmed summary judgment for New Holland Logansport in a wrongful termination suit after it found the company did not meet the definition of employer under the Age Discrimination in Employment Act.

William Bridge worked at New Holland Logansport from March 2000 to March 2011 before he was terminated at age 61. Bridge sued New Holland Logansport in June of 2012 under the ADEA, and the District Court granted summary judgment to New Holland Logansport, concluding the company did not have enough employees to qualify under the Act. Bridge appealed.

The case hinged on whether three employees for New Holland Rochester also had employment relationships with New Holland Logansport, since those three employees would push Logansport into a spot where it the ADEA would be applicable; and whether employees from Logansport and Rochester should be lumped together.

Bridge argued they were employees of both because they were not independent businesspeople. However, the 7th Circuit said that was not the issue, because everyone agreed they worked for New Holland companies. The question is whether they had relationships with both companies or just Rochester.

The 7th Circuit used a five-factor test from Knight v. United Farm Bureau Mut. Ins. Co., 950 F.2d 377, 378-79 (7th Cir. 1991). The first factor is the extent to which the employer controlled the alleged employee. It’s not clear whether the director of the plant would have had authority to fire the three employees nor dictated their duties, schedules or anything else.

The second and third factors concerned the type of occupation and nature of skills required for the job and responsibility for operating costs. There was no evidence any of the three employees got instruction from Logansport or that Logansport provided special equipment for their work.

The fourth factor considers whether the employer was responsible for providing payment or benefits. There was no evidence Logansport ever paid any of the three for their work and while they all had the same group health insurance plan, there was no indication Logansport provided any direct benefits.

The final factor addresses length of job commitment. While Logansport may have expected work from the three, there was no indication that there was any expectation of length of time. Other evidence also showed the three were not employees.

However, Logansport could still fall under the ADEA if all of the employees were aggregated together. That could be true if a creditor of one corporation sued its affiliate or the affiliate directed the discriminatory act. Bridge argued both were at play.

However, the 7th Circuit said veil piercing did not exist because there was no misuse of corporate form. The companies were separate in a number of ways, including paying separate taxes and being run by separate people.

Also, the 7th Circuit said the affiliate did not direct the discriminatory act because the leader of Rochester also worked as the leader of Logansport, and when he directed the termination, he could have been acting as a member of Logansport, not Rochester.

The case is William Bridge v New Holland Logansport, 15-1935.
 

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