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U.S. Equal Employment Opportunity Commission v. Phase 2 Investments, Inc.

United States District Court, D. Maryland

April 17, 2018

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff
v.
PHASE 2 INVESTMENTS INC., et al., Defendants.

          MEMORANDUM

          James K. Bredar Chief Judge.

         The Equal Employment Opportunity Commission (“EEOC”) brought this Title VII action against two corporations, Defendant Phase 2 Investments Inc. (“Phase 2”), and Defendant CWP West Corp. t/a Mister Car Wash (“Mister”), alleging that a previous corporation, Maritime Autowash, Inc. (“Maritime”), subjected a class of Hispanic employees to a hostile work environment and that both Defendants are liable. Both Defendants have moved to dismiss or in the alternative for summary judgment. (See Phase 2 Mot. Summ. J., ECF No. 15; Mister Mot. Summ. J., ECF No. 23). The EEOC has responded in opposition to both motions (ECF Nos. 19, 25) and both Defendants have replied (ECF Nos. 22, 41).[1] Therefore, both motions are ripe for review. No. hearing is necessary to resolve either matter. See Local Rule 105.6 (D. Md. 2016). The Court construes both motions as, in part, motions to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) and as, in part, motions for summary judgment under Rule 56. For the reasons stated below the Court will deny Defendants' motions in their entirety.

         I. Background [2]

         a. The Charging Parties' employment, complaints of discrimination, and termination

         Maritime was a Maryland corporation that maintained two car washes, including one in Edgewater, Maryland. (Am. Compl. ¶¶ 4, 6, ECF No. 5; Decl. Elmer Escalante ¶ 5, ECF No. 19-1.) A number of Hispanic employees worked at the Maritime facility in Edgewater, including Elmer Escalante, Godofredo Esquivel Platero, Luis Serrano, Jose Luis Dominguez, [3] Gabriel Espinoza, Saul Herrera, Santos Villacorta, Eddy Cervantes, and Merced Espinosa Diaz (“the Charging Parties”). (Decls., ECF Nos. 19-1 through 19-9.) The Charging Parties were subjected to harassment and discrimination while working at Maritime. (See Charges of Discrimination, Decl. Rosemarie Rhodes Attachment C, ECF No. 19-10.) They were required to work longer hours with shorter breaks than their non-Hispanic counterparts. (Id.) They were denied proper equipment for their jobs and paid less than their non-Hispanic colleagues as well. (Id.)

         On April 23, 2013, agents from United States Immigration and Customs Enforcement (“ICE”) conducted an audit of Maritime. (Aff. David Podrog ¶ 4, ECF No. 15-3.) On May 7, 2013, ICE informed Maritime that thirty-nine of its employees were not authorized to work in the United States, including the nine Charging Parties. (Id. ¶¶ 5-6.) ICE further informed Maritime that, unless the thirty-nine employees could provide valid identification and employment eligibility documentation, Maritime would suffer civil, and perhaps even criminal, penalties if it continued to employ them. (Notice of Suspect Documents 2, ECF No. 15-4.) According to the Charging Parties, after being informed of the employees' status, Maritime General Manager Kyle Decker “held a meeting with the Hispanic employees and told [them] that he and Owner [David] Podrog had made a decision to give those employees without proper documentation $150 so that they could obtain new papers and be re-hired . . . under new names.” (E.g., Escalante Decl. ¶ 11; Decl. Godofredo Esquivel ¶ 5, ECF No. 19-2.)

         After being rehired, on July 27, 2013 the Charging parties and other Hispanic employees complained to David Podrog and Kyle Decker about the mistreatment they had been suffering. (E.g., Escalante Decl. ¶ 19; Decl. Luis Serrano ¶ 10, ECF No. 19-3.) Decker “indicated” that the employees would only get a thirty minute lunch break that day, and if they did not report back to work at 1:00 pm, they would be fired. (E.g., Escalante Decl. ¶ 19.) The Charging Parties and other Hispanic employees did not report back to work at 1:00 p.m., and Maritime fired them. (E.g., Escalante Decl. ¶¶ 19-20; Esquivel Decl. ¶¶ 11-12.) (According to David Podrog, Maritime only fired seven of the Charging Parties, as well as other employees identified by ICE, and only because they were unable to provide documentation proving that they were eligible to work. (Podrog Aff. ¶ 12.))

         b. EEOC's investigation

         On July 30, 2013 the Charging Parties submitted intake questionnaires to the EEOC. (Intake Questionnaires, Decl. Rosemarie Rhodes Attach. A, ECF No. 19-10.) On February 4, 2014, the Charging Parties signed formal Charges of Discrimination, and notice of these Charges was then sent to Maritime. (See, e.g., Escalante Charge of Discrimination, ECF No. 15-6 (signed February 4, 2014); Escalante Notice of Charge of Discrimination, Decl. Rosemarie Rhodes Attach. D, ECF No. 19-10 (dated February 25, 2014).) The Charging Parties began their employment at Maritime at different times, and thus their Charges of Discrimination allege different dates for the earliest date on which the alleged discrimination took place, but most of the Charges allege that the latest date on which discrimination took place was July 27, 2013 - the date on which the Charging Parties were fired. (E.g., Escalante Charge of Discrimination; Dominguez Charge of Discrimination, ECF No. 15-9.)[4] After receiving the questionnaires and complaints from the Charging Parties, the EEOC began to investigate Maritime.

         During the course of its investigation, the EEOC served Maritime with a subpoena, to which Maritime was not responsive. In 2015, the EEOC came to this court to enforce the subpoena. See EEOC v. Maritime Autowash, Inc., Civ. No. GLR-15-869, 2015 WL 13158495 (D. Md. June 23, 2015). The EEOC, in its Application to Show Cause Why Administrative Subpoena Should Not Be Enforced, alleged that it was investigating unlawful practices arising out of Elmer Escalante's charges. Id. at *1. Maritime argued that because Escalante was not legally authorized to work in the United States, he could not seek relief under Title VII, and therefore the EEOC could not enforce its subpoena. Id. A judge of this court, in a very brief opinion, agreed, and denied the EEOC's Application for an order to show cause. Id. at *2. The EEOC appealed and on April 25, 2016, the Fourth Circuit reversed. See EEOC v. Maritime Autowash, Inc., 820 F.3d 662. The Fourth Circuit's decision will be discussed in greater detail below, but essentially Judge Wilkinson, writing for the Court, explained that “[n]othing [in Title VII] explicitly bars undocumented workers from filing complaints, ” and that because the EEOC only needed to show an “arguable or plausible basis for its jurisdiction” at this “very early stage, ” the subpoena was enforceable. 820 F.3d at 663-66. The Court declined to specifically address the “particular issue that Maritime press[ed]-whether and to what extent Title VII covers undocumented aliens, ” noting that it was a “novel and complex problem.” Id. at 667.

         c. Defendants' changes in ownership

         While the EEOC was working to enforce its investigatory powers, corporate changes were underway at Maritime. In 2014 Mister began the process of purchasing Maritime's assets. (See Decl. Casey Lindsay ¶ 3, ECF No. 23-2.) Both parties, Maritime and Mister, entered into a letter of intent which specified a purchase price “in excess of $15, 000, 000.” (Id. ¶¶ 3-4.) After signing the letter, “the parties commenced the due diligence process and began negotiating the terms of an asset purchase agreement.” (Id. ¶ 5.)

         Mister did much to protect itself from any potential liability that Maritime might incur. The purchase was “intentionally structured as an asset acquisition to avoid assuming any existing liabilities of Maritime, ” (Lindsay Decl. ¶ 7), and the asset purchase agreement (“APA”) explicitly provided that, except for any liabilities incurred after the closing date, and any liabilities specifically assumed by Mister, the “Buyer is not assuming or becoming liable for any liabilities of Seller.” (APA § 1.3, ECF No. 23-5.) All liabilities that Mister expressly assumed were listed in a Schedule attached to the APA, and this Schedule made no mention of any employment discrimination liability. (See APA Schedule 1.3.) Maritime and Mr. Podrog agreed to indemnify and hold harmless Mister “from and against any damages [and] liabilities . . . of any kind or nature whatsoever . . . arising out of . . . any failure by [Maritime] to perform and fully discharge any of the Excluded Liabilities as set forth in this Agreement.” (Id. § 8.2.)

         Mister also explored Maritime's potential liabilities as part of its due diligence process. (See Decl. Sarah Ross ¶¶ 3-4, ECF No. 23-3.) Mister asked Maritime “to disclose any and all pending lawsuits or claims by employees.” (Id. ¶ 3.) Maritime responded in October 2014, by “forward[ing] position statements” its counsel had prepared in response to the Charges of Discrimination that the Charging Parties had filed in 2014. (Id. ¶ 4.) In addition to these position statements, Maritime sent a letter from its counsel “stating that Maritime Auto wash had an Employment Practices Liability Insurance policy with $1, 000, 000 in coverage and that [he] would be ‘surprised' if the Claimants' damages would exceed $1, 000, 000.” (Id.) According to Mister, it never received the actual Charges of Discrimination from Maritime. (Id. ¶ 5.) Mister requested from Maritime, and received, a census of Maritime's “then current employees.” (Id. ¶ 6.) This request presumably came after the letter of intent in later 2014, well over a year since the Charging Parties had been terminated by Maritime, and, as one would expect, “[n]one of the due diligence documents provided by Maritime Auto wash indicated that any of the nine [Charging Parties] were then current employees of Maritime Auto wash.” (Id.) According to Mister, Maritime never disclosed to Mister that the EEOC had sought a show cause order, the subject of which was later litigated in court (and discussed above). (Id. ¶ 7.) It is undisputed that the Charging Parties were never employed by Mister, and no employees have filed charges of discrimination naming Mister as a respondent.

         On January 21, 2015, the parties closed the referenced deal, and Mister took ownership of Maritime's assets, including the Edgewater facility that had employed the Charging Parties. (See APA.) Even after its due diligence, Mister did not negotiate for a lower price, and paid over $15 million, “the largest amount Mister Car Wash had ever paid for two stores in the history of the company.” (Mister Mot. Summ. J. Mem. Supp. 6, ECF No. 23-1; Decl. Lindsay ¶ 8.) As to branding, by the terms of the APA Mister had only purchased a limited license to use Maritime's trademark for twelve months after the closing date (see APA § 1.2), and Mister set about transitioning away from Maritime's public facing marketing materials, such as its signage and social media. (See Ross Decl. ¶¶ 9-11.) Mister did not change Maritime's website for several months after the sale, and continued to use Maritime's social media. (Rhodes Decl. ¶ 5 and Attachs. B & C.) But by October of 2015, Mister was no longer using Maritime's website or social media. (Ross Decl. ¶ 11.) As a result of an “unrelated trademark infringement claim over the name ‘Mister Car Wash'” the outdoor signage continued to show “Maritime Autowash, ” but that has since been converted as well. (Id. ¶ 12.)

         Mister also made considerable internal changes, such as capital improvements worth roughly $600, 000, changes to the car washing process in order to make the experience consistent with Mister's other facilities, and personnel changes. (See Id. ¶¶ 14-15, 21-24.) Mister offered employment to all of Maritime's employees (not including the Charging Parties, who were not employees of Maritime at the time of the acquisition), but required all of the employees to provide valid documentation showing they were authorized to work in the United States. (Id. ¶¶ 16-18.) Mister was only able to hire 31% of Maritime's employees (id. ¶ 18), but still, as of June 2015, almost half of Mister's workforce were former Maritime employees (Rhodes Decl. ¶ 5). Mister asserts that it had to hire many new “production-level employees” (those who physically clean the cars), and due to the inexperience of these new employees Mister had to “suspend its high-revenue detailing services at both stores, resulting in a significant decrease in the profits of each store.” (Id. ¶¶ 19-20.) In other words, according to Mister, as a result of the differences between Maritime and Mister, it had to spend over $600, 000 and lost revenue.

         To complicate matters further, after Maritime sold its Maryland car wash facilities, it too experienced some corporate change. On March 13, 2015, Phase 2 Investments (“Phase 2”) was incorporated in Florida. (Podrog Aff. ¶ 3.) David Podrog, who was President of Maritime, is also the President of Phase 2. (Id. ¶ 2.) Subsequently, Maritime Autowash, as well as a third corporation of which Mr. Podrog was President, Maritime Autowash II, merged into Phase 2. (See Id. ¶ 3; Mister Mot. Summ. J. Mem. Supp. at 2 n.3.) Under Florida law, when two corporations merge into a third corporation, the surviving corporation (here, Phase 2) “shall thenceforth be responsible and liable for all liabilities and obligations of each corporation party to the merger.” Fla. Stat. Ann. § 607.1106(1)(c).

         d. The EEOC's claims and the current posture of the dispute

         After resolving the enforcement of the subpoena before the Fourth Circuit, after Maritime sold its assets to Mister, and after Maritime then merged with Maritime Autowash II to form Phase 2, the EEOC finally concluded its investigation and sent both Defendants a Letter of Determination. (See Letter of Determination, ECF No. 41-3.)[5] In the Letter, the EEOC stated that it had “determined that Respondent Maritime violated Title VII by discriminating against [the] Charging Parties and Hispanics as a class with regard to harassment, intimidation, unequal terms and conditions of employment, lower wages, denial of promotional opportunities, disparate discipline and discharge because of their national origin (Hispanic) and in retaliation for engaging in protected activity.” (Id. at 2.) The EEOC also found that “Respondent Mister Car Wash is as [sic] a successor in interest for Title VII purposes, ” and invited both parties to engage in informal conciliation. (Id. at 2-3.) On June 14, 2017, the EEOC determined that conciliation had failed and notified the Defendants. (See Mem. 6, ECF No. 40.) It then filed the instant action on August 28, 2017, and thereafter amended its complaint. (See Compl., ECF No. 1; Am. Compl.)

         The EEOC's amended complaint alleged that Hispanic employees at Maritime were “relegated” to lower paid positions, denied overtime, and denied their fair share of tips. (Am. Compl. ¶¶ 36-37; 42-43.) It alleged that Maritime would require the Charging Parties to perform additional tasks that it did not request of its non-Hispanic employees, such as cleaning the “car tunnel and machinery, power wash[ing] the property, perform[ing] landscaping duties, ” and performing tasks at Maritime's manager's homes, all without additional compensation. (Id. ¶¶ 46, 48-49.) Furthermore, the EEOC alleged that Maritime treated the Charging Parties and other Hispanic employees differently at work, forcing them to eat outside, “drink unfiltered water, and utilize an unlocked unisex bathroom which needed repair.” (Id. ¶ 51.) It alleged that Maritime would not let them take full lunch breaks or take other work breaks, and that Maritime did not provide them with access to the indoor facilities or proper equipment to perform their work. (Id. ¶¶ 52-55.) The complaint described verbal harassment as well, alleging that Managers at Maritime would swear at the Charging Parties, “bark[] commands to them, ” and threaten to fire them. (Id. at ¶ 57.)

         Phase 2 filed a motion to dismiss under Rule 12(b)(6) or for summary judgment on October 27, 2017 (ECF No. 15) and Mister filed a motion to dismiss under Rules 12(b)(1) and 12(b)(6) or for summary judgment on November 27, 2017 (ECF No. 23). The EEOC also moved for attorney's fees under Rule 4(d)(2) after effecting alternative service on Phase 2, and moved to strike certain portions of Mister's reply in support of its motion to dismiss. Those motions have been disposed of in an earlier order. (ECF No. 39.) The EEOC has responded to both Phase 2 and Mister's motions to dismiss and both Defendants have replied. These motions are therefore ripe for review.

         II. Nature of the motions and their standards

         The motions submitted by Defendants are captioned as motions to dismiss under Rule 12(b)(6) (and, for Mister's motion, Rule 12(b)(1)) or “in the alternative” for summary judgment. As both Defendants make challenges to subject-matter jurisdiction, the Court considers each of Defendants' motions in part under Rule 12(b)(1). See Neal v. Residential Credit Solutions, Inc., Civ. No. JKB-11-3707, 2012 WL 1453597, at *1 (D. Md. Apr. 24, 2012) (considering a motion under Rule 12(b)(6) as if brought under Rule 12(b)(1)). The Court considers the remainder of Defendants' motions to be motions for summary judgment under Rule 56.[6] Under Rule 12(d) a Court may convert a motion to dismiss to one for summary judgment and consider matters outside the pleadings, but the parties must “be given a reasonable opportunity to present all the material that is pertinent to the motion.” Fed.R.Civ.P. 12(d). When, however, “the movant expressly captions its motion ‘in the alternative' as one for summary judgment, and submits matters outside the pleadings for the court's consideration, the parties are deemed to be on notice that conversion under Rule 12(d) may occur; the court ‘does not have an obligation to notify parties of the obvious.'” Pevia v. Shearin, Civ. No. ELH-13-2912, 2015 WL 629001, at *3 (D. Md. Feb. 10, 2015) (quoting Laughlin v. Metro Wash. Airports Auth., 149 F.3d 253, 261 (4th Cir. 1998)). The Defendants here captioned their motions as summary judgment motions “in the alternative, ” and the EEOC appears to have grasped “the obvious, ” as it has submitted material outside the pleadings. It is therefore appropriate to consider the remainder of Defendants' motions as motions for summary judgment.

         The burden of proving subject-matter jurisdiction is on the plaintiff. See Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). The Defendants here have brought factual challenges to subject-matter jurisdiction, arguing that the facts supporting jurisdiction are not true, and not that the complaint fails to allege necessary jurisdictional facts. See Id. Under a factual challenge, “the court may consider exhibits outside the pleadings . . . [and] is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Williams v. U.S., 50 F.3d 299, 304 (4th Cir. 1995) (internal quotation marks and citations omitted).

         The Defendants have also brought motions to dismiss that the Court will construe as motions for summary judgment. “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing predecessor to current Rule 56(a)). The burden is on the moving party to demonstrate the absence of any genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If sufficient evidence exists for a reasonable jury to render a verdict in favor of the party opposing the motion, then a genuine dispute of material fact is presented and summary judgment should be denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, the “mere existence of a scintilla of evidence in support of the [opposing party's] position” is insufficient to defeat a motion for summary judgment. Id. at 252. The facts themselves, and the inferences to be drawn from the underlying facts, must be viewed in the light most favorable to the opposing party, Scott v. Harris, 550 U.S. 372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008), who may not rest upon the mere allegations or denials of his pleading but instead must, by affidavit or other evidentiary showing, set out specific facts showing a genuine dispute for trial, Fed.R.Civ.P. 56(c)(1). Supporting and opposing affidavits are to be made on personal knowledge, contain such facts as would be admissible in evidence, and show affirmatively the competence of the affiant to testify to the matters stated in the affidavit. Fed.R.Civ.P. 56(c)(4).

         III. Analysis

         There is much overlap between the arguments presented by both Defendants. Therefore, the Court will not address each motion separately. Rather, it will first address fundamental challenges brought by the Defendants - to the EEOC's standing and this Court's jurisdiction - and then proceed to the Defendants' substantive arguments.

         a. Standing

         Mister never employed the Charging Parties, the discriminatory actions alleged in the Amended Complaint were not performed by Mister, and the EEOC only named Mister as a Defendant under a theory of “successor liability.” Mister makes much of these facts. In addition to making substantive arguments that it would be inequitable to apply successor liability in this case, Mister makes additional preliminary challenges based on the fact that it never employed the Charging Parties: namely, that the EEOC lacks standing to assert claims against Mister, and that this Court does not have subject-matter jurisdiction over the claims against Mister. The Court will first address Mister's standing argument, and then turn to jurisdiction. The Court will address the substantive issue of whether it is equitable to hold Mister liable as a successor only after establishing the EEOC's standing and the Court's jurisdiction over the claims in this case.

         Mister argues that because it never employed the Charging Parties “there is no fairly traceable connection between the Claimants' alleged injuries and Mister Car Wash, ” and therefore the EEOC lacks standing. (Mister Mot. Summ. J. Mem. Supp. at 17-18.) The “Claimants, ” by which Mister seems to mean the Charging Parties, did not bring this case. The EEOC did. And the EEOC has standing to bring it. The EEOC is bringing this case under the statutory authority granted to it by Title VII, to vindicate the public's interest. See Gen. Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 326 (1980). “If it were true that . . . [the EEOC's] prayer for relief could be dictated by [the employee who filed the charge], [defendant's] analysis might be persuasive. But once a charge is filed, the exact opposite is true under the statute-the EEOC is in command of the process.” EEOC v. Waffle House, Inc., 534 U.S. 279, 291 (2002). The EEOC has named Mister as a Defendant under the theory that it is a successor to Maritime for purposes of liability under Title VII, and thus the injury - Maritime's alleged violation of Title VII - is fairly traceable to Mister. Cf. Deming v. First Franklin, No. 09-5418RJB, 2010 WL 891009, at *3 (W.D. Wash. Mar. 9, 2010) (order vacated on reconsideration on other grounds) (finding that plaintiff's injuries were traceable to successor corporations and plaintiff had standing against them).

         b. Jurisdiction

          Even if the fact that the Charging Parties were never employed by Mister does not defeat the EEOC's constitutional standing, Mister still argues that it does defeat the Court's subject-matter jurisdiction over the claims against it. Furthermore, both Defendants argue that the Court does not have jurisdiction over certain claims because the Charging Parties did not exhaust their administrative remedies.

         i. “Successor jurisdiction”

         Mister clearly believes that because it never employed the Charging Parties this Court does not have jurisdiction over the claims against Mister. It is unclear why. Mister appears to argue that charging parties must be “employees” of a defendant in order for a court to have jurisdiction over Title VII claims against that defendant, and that the Charging Parties here were never “employees” of Mister. Whether an aggrieved person was an “employee” under Title VII, however, does not determine whether the Court has jurisdiction over the underlying claim. See Donatello v. Cty. of Niagara, 15-CV-39V, 2016 WL 3090552, at *6-*8 (W.D.N.Y. June 2, 2016).

         The requirement that an administrative charge of discrimination must be filed against a defendant before suit in a Title VII case, however, is jurisdictional. See Jones v. Calvert Grp., Ltd., 551 F.3d 297, 300 (4th Cir. 2009). And it is undisputed that neither the Charging Parties nor the EEOC brought administrative charges against Mister. Therefore, the Court must determine whether it has jurisdiction over the claims against Mister even though the Charging Parties never brought charges of discrimination against Mister. The Court finds that it does have jurisdiction over Mister because Mister has been named as a successor to Maritime and sufficient jurisdictional facts exist to satisfy Title VII.

         Title VII does not explicitly establish liability for successor entities, but many courts have imposed such liability nonetheless. See Lipscomb v. Techs., Servs., & Information, Inc., Civ. No. DKC-09-3344, 2011 WL 691605, at *7 (D. Md. Feb. 18, 2011) (citing cases). The U.S. Court of Appeals for the Fourth Circuit is not among them - it has yet to speak on the issue. See Id. However, several District Courts in the Fourth Circuit have. See id.; Weintraub v. Bd. of Cty. Comm'rs for St. Mary's Cty., Civ. No. DKC-2008-2669, 2009 WL 10685453, at *4 (D. Md. May 26, 2009); EEOC v. Ecurie Alford, Ltd., Civ. No. 91-113-NN, 1993 WL 389433, at *9 (E.D. Va. July 15, 1993); EEOC v. Thurston Motor Lines, Inc., 124 F.R.D. 110, 113-14 (M.D. N.C. 1989). To the Court's knowledge, no court has found that the doctrine of successor liability does not apply to Title VII, and both the EEOC and Mister seem to agree that the doctrine has at least potential application to this lawsuit.[7] If successor liability applies to Title VII, it must create a jurisdictional exception; virtually by definition in a successor liability case no charge of discrimination will have been filed against the successor entity. At least one judge in this District has considered successor liability as an “exception” to the jurisdictional requirement that an employee first file charges of discrimination with the EEOC naming the defendant-employer. See Lipscomb, 2011 WL 691605, at *7-*10.

         The notion of successor liability as an exception to Title VII's jurisdictional requirements raises troubling issues. Courts have noted that “[s]uccessor liability [under Title VII] is an equitable determination, ” Prince v. Kids Ark Learning Center, LLC, 622 F.3d 992, 994 (8th Cir. 2010), generally requiring a court to balance a number of factors, see Lipscomb, 2011 WL 691605, at *8. Considerations of equity generally may not “apply to overcome a jurisdictional bar.” Harris v. Hutchinson, 209 F.3d 325, 328 (4th Cir. 2000). So it is hard to see how a court could have jurisdiction over a Title VII claim against a defendant only after finding that, based on a variety of factors, the equities favor holding that defendant liable for the acts of its predecessor. To do so would seem to put the cart before the horse. But to apply successor liability to Title VII and not read the doctrine as providing a jurisdictional exception would also be to endorse an odd conclusion: successor corporations could be held liable for the actions of their predecessors, but courts would almost never have jurisdiction over these claims (because employees and the EEOC would rarely, if ever, name a potential successor corporation in their charges of discrimination). Or, the rule would be that after a successor corporation purchases a predecessor, the charging parties (or the EEOC) must refile additional charges of discrimination against that successor. Such a rule would prejudice plaintiffs who may not learn of a successor until after the statute of limitations has run, and at the very least would create unnecessary additional paperwork. See EEOC v. MacMillan Bloedel Containers, Inc., 503 F.2d 1086, 1093 (6th Cir. 1974).

         MacMillan, a leading case on successor liability in Title VII, provides a route around this odd result. In MacMillan, an employee filed charges with the EEOC against her employer, Flintkote Company. Id. at 1088. Later, MacMillan “took over operation of Flintkote's Cleveland facility” where the employee worked. Id. The EEOC then filed suit against MacMillan, alleging that all jurisdictional requirements had been met, including that a charge had been properly filed with the EEOC against “Defendant Corporation.” Id. MacMillan moved to dismiss the EEOC's complaint for lack of subject-matter jurisdiction and for summary judgment. Id. at 1088-89. The Sixth Circuit ultimately held that there were genuine issues of fact with regard to whether MacMillan could be held liable for Flintkote's ...


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