Jottings By An Employer's Lawyer

Tuesday, October 21, 2003

3rd Cir. Title VII's 15 Employee Limit Not Jurisdictional, Part of Plaintiff's Claim

Although it is not terribly important, except for those who guard carefully the principle that the federal courts are courts of limited jurisdiction, the 3rd Circuit joins those Circuits which hold that the 15 employee requirement of Title VII is not jurisdictional, but an element of the merits of the claim.Nesbit v. Gears Unlimited, Inc. (3rd Cir. 10/21/03). By the 3rd Circuit's count, there are three other circuits which now take that position, the 2nd, 7th and D.C. Circuits. By contrast, the 5th, 6th, 9th, 10th and 11th Circuits have said it is jurisdictional. Somehow, notwithstanding a large split in the circuits, I don't see the Supreme Court resolving this less than burning issue anytime soon.

On a more important issue, whether two companies should be joined together for purposes of meeting the 15 employee limit, the Court rejects the test used by the NLRB for determining joint employers. The two statutes have different goals, with Title VII being focused on sparing small employers the expense of having to comply with the nuances of Title VII. Instead, the Court adopts two of three tests used by the 7th Circuit, but differs on a 3rd standard. The first two cases when companies will be joined are: when a company has been purposefully split for the purposes of avoiding coverage under Title VII, and when the parent company directs the action that is being complained of as discriminatory. For the third way, the 3rd Circuit adopts the standard used to determine whether two entities should be consolidated in bankruptcy. It is an open ended equitable standard, but one which the court notes is very difficult to meet.

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