10-001830 Stuart Winsor vs. Pathway Technologies, Llc Status: Closed Recommended Order on Thursday, May 5, 2011.

Summary: Failing to demonstrate that Respondent met the statutory definition of "employer," Petitioner did not establish a prima facie case of employment discrimination.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

S TUART WINSOR , )

)

Petitioner, )

)

vs. ) Case No . 10 - 18 30

)

PATHWAY TECHNOLOGIES, LLC , )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing was conducted in this case on August 23,

2010 , in Sanford , Florida, before Lawrence P. Stevenson, a duly -

designated Administrative Law Judge with the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Stuart Winsor , pro se

1036 Greenwood Boulevard

Lake Mary , Florida 32746

For Respondent: Charles J. Thomas , Esquire

Thompson, Sizemore, Gonzalez

& Hearing , P.A.

201 North Franklin Street, Suite 1600

Tampa , Florida 3 3602

STATEMENT OF THE ISSUE

The issue is whether Respondent , Pathway Technologies, LLC

("Pathway Techn ologies"), is an "employer" under the Florida

Civil Rights Act of 1992 (the " Florida Civil Rights Act " or the

" Act " ), s ections 760.01 through 760.11 and 509.092 , Florida

Statutes, and, if so, whether Respondent committed unlawful

employment practice s contr ary to s ection 760.10, Florida

Statutes (200 9 ) , 1 / by discriminating against Petitioner b ased on

h is religion.

PRELIMINARY STATEMENT

On or about December 21, 2009 , Petitioner S tuart Winsor

("Petitioner") filed with the Florida Commission on Human

Relations ("FCHR") a Charge of Discrimination, dated

December 10, 2009, against Pathway Technologies . Petitioner

alleged that he had been discriminated against pursuant to

c hapter 760, Florida Statutes and Title VII of the Federal Civil

Rights Act as follows:

My re ligion is of Christian faith. On or

about December 2008, I was hired by the

Respondent to work in the position of Sales

Representative. One of the primary reasons

I accepted the job offer was their bold

Christian mission statement and ministry

outreach b y the company and the profession

of Christian faith by the company principles

[sic].

The job began with a company meeting held in

Bonita Springs, Florida during the period of

January 13 - 18, 2009. During the meeting and

when socializing after work, I was quite

surprised by the behavior of the principles

[sic] and management team. Their behavior

was not consistent with a Christian witness.

On January 18, 200 9, after the meeting, I

voiced m y concern to Michael Gans, about the

behavior of what I witnessed. Mr. Gans

thanked me for my candor and let me know he

was looking forward to working with me. The

following day, January 19, 2009, Mr. Gans

terminated my employment and the reason

given was that they chose not to work with

me.

I believe that I have been discriminated and

retaliated against in violation of Title VII

of the Civil Rights Act of 1964, as amended.

The FCHR investigated Petitioner's C harge of

discrimination. On March 11, 2010, the FCHR issued its

determination that there was no reasonable cau se to believe that

it had jurisdiction of this matter. The reason for this

conclusion was: "The Respondent is not an employer as defined

in the Florida Civil Rights Act of 1992, Section 760.02(7),

Florida Statutes."

On April 2 , 2010 , Petitioner timely fi led a Petition for

Relief with the FCHR . On April 6 , 2010 , the FCHR referred the

case to the Division of Administrative Hearings (ÐDOAHÑ) . The

case was assigned to Administrative Law Judge J.D. Parrish and

scheduled for hearing on June 9 , 2010 . The hear ing was

continued once , at Respondent's request, by order dated June 8,

2010. The case was rescheduled for August 23, 2010 . Due to an

illness in Judge Parrish's family, the case was transferred to

the undersigned on August 20, 2010. The hearing was held as

scheduled on August 23, 2010.

At the hea ring, Petitioner testified on h is own behalf and

presented the testimony of Ga ry Davis, founding pastor of Chu rch

in the Winds . PetitionerÓs Exhibits 2 through 5, 8, 9, 15, 19,

37 through 39, 43, 56, 57, 62, 68, 69, 70, 75, 78, and 79 were

admitted into evidence. Respondent presented the testimony of

Michael Gans, an owner, member and officer of Pathway

Technologies; David Robinson, an employee of Marriott Golf; and

Michael Hamilton, director of operations at Pa thway Technologies

during the period relevant to this proceeding. Respondent's

Exhibits 1 through 5 were admitted into evidence.

Petitione r testified in rebuttal .

The two - volume transcript was filed at the Division of

Administrative Hearings on September 13 , 2010. On September 22,

2010, one day before the due date for filing proposed

recommended orders, Respondent filed a motion for extension of

time. The motion suggested that, given the length of the

hearing and complexity of the issues presented, an ex tension of

the time for filing proposed recommended orders to October 4,

2010 , would b e appropriate. The motion stated that counsel for

Respondent had attempted to contact Petitioner to ascertain his

position on the motion, but that the phone number on

Pe titioner's pleadings was no longer in service. The motion

stated that Respondent had sent an email to Petitioner's

electronic address, but had received no response. Based on

Respondent's motion and the representations made therein, the

undersigned grante d the motion for extension of time by order

dated September 23, 2010 .

Respondent, unsure whether its motion would be granted and

in an abundance of caution , filed its P roposed R ecommended O rder

on the original due date, September 23, 2010. Petitioner file d

his P roposed R ecommended O rder after the close of business on

October 4, 2010. Respondent did not object to the late filing

and Petitioner's P roposed R ecommended O rder has been considered

in the writing of this Recommended Order.

On September 29, 2010, Petitioner filed a written objection

to the order granting extension. Petitioner claimed that

Respondent had made several factual misrepresentations regarding

its efforts to reach him, and asserted that the undersigned had

violated Petitioner's due proces s rights by granting the motion

for extension before hearing Petitioner's objections. The

undersigned declined to address Petitioner's objection for the

simple reason that granting Petitioner's request and withdrawing

the order granting extension would ha ve operated to Petitioner's

detriment. Respondent had met the original deadline.

Petitioner had not met the deadline, and would not have had his

P roposed R ecommended O rder considered absent the extension.

On October 1, 2011, Petitioner filed a M otion for M istrial.

Th e motion is without merit and hereby denied without further

discussion .

On March 3, 2011, Petitioner filed a document styled

"Submission of New and Compelling Evidence," consisting of

documents culled from In re: Pathway Holdings, LLC , Case N o.

8:11 - bk - 01162 - MGW, United States Bankruptcy Court for the Middle

District of Florida, Tampa Division. Petitioner claims that

these documents disprove testimony provided by Respondent's

witnesses in the instant case as to the number of persons

employed by Pathway Technologies. Petitioner filed the

documents after the closing of the record in this proceeding.

The undersigned nonetheless reviewed the documents in order to

determine whether the record should be re - opened in light of the

"new and compellin g evidence" asserted by Petitioner. However,

the documents on their face purport only to name employees of

Pathway Holdings, LLC , as of the date of the debtor's motion to

the bankruptcy court for an order authorizing payment of pre -

petition wages, salarie s and benefits to the persons named

therein. The date of the motion was January 28, 2011, more than

two year s after the events relevant to this proceeding , and more

than one year after Petitioner filed his initial Charge of

Discrimination . Thus, Petition er's new evidence, even if it

were admi ssible , is irrelevant to this case.

The P roposed R ecommended O rders of both parties have been

considered in the writing of this Recommended Order.

FINDINGS OF FACT

1. Pathway Technologies is a turf management compan y . Its

main clients are golf courses. Pathway Technologies was

registered in 200 6 as a Florida - limited liability company, with

a principal address of 5004B U.S. 41 North in Palmetto.

2. Michael Gans is an owner, member and officer of Pathway

Technologie s. He has owned 50 percent of the stock and served

as its president since the company's inception.

3. Michael Gans described Pathway Technologies as a small

company that required him to "wear multiple hats," working in

operations and production, and as both a sales manager and a

salesman. Mr. Gans has been involved in every facet of the

business. No one else at Pathway Technologies has ever had the

authority to supervise Mr. Gans' work or to fire him from the

company.

4. The other 50 percent of Pathw ay Technologies' stock is

owned by Mr. Gans' father, Stephen Gans, who formerly served as

the company's chief executive officer. Stephen Gans was not

subject to supervision by any other person at Pathway

Technologies.

5. Stephen and Michael Gans have b een the only

stockholders in and members of Pathway Technologies since

shortly after its inception.

6. In their capacities as owners, members and officer s of

Pathway Technologies, Michael and Stephen Gans made strategic

decisions for the compan y as equal s . They shared in the profits

and losses of the company.

7. Payroll tax records presented at the hearing indicated

that, excluding Michael and Stephen Gans, Pathway Technologies

had zero employees during the first two quarters of 2008, two

employees duri ng the third and fourth quarters of 2008, nine

employees during the first quarter of 2009, 11 employees during

the second and third quarters of 2009, and ten employees during

the fourth quarter of 2009.

8. Pathway Holdings, LLC ("Pathway Holdings") is a

F lorida - limited liability company registered in 2008, with a

principal address of 5002B U.S. 41 North in Palmetto. Pathway

Holdings was created in July 2008 to purchase Organica

Technologies, LLC ("Organica"), a Pennsylvania company that

manufactured biolo gical products for sale to retail lawn and

garden centers. From the time of its creation through the end

of 2009, Pathway Holdings was neither a parent nor a subsidiary

of Pathway Technologies.

9. Pathway Holdings' articles of organization stated that

th e company's members at the time of organization were Stephen

Jaeb and Stephen Gans. The same two men are listed as "managing

members/managers" in each subsequent annual report filed with

the Division of Corporations. At the hearing, Michael Gans

testifie d that he has an ownership interest in and acts as a

managing partner of Pathway Holdings.

10. Pathway Holdings purchased Organica in August 2008.

11 . Michael Gans testified that, after Pathway Holdings

purchased Organica, Pathway Technologies conducted business with

Organica at arm's length. Pathway Technologies purchased

Organica's products, such as lawn boosters and microbial soil

conditioners, for use by its turf division. Pathway

Technologies was also a distributor of its own products and

those of other manufacturers, and purchased Organica's products

for resale. Organica invoiced Pathway Technologies for these

sales, and Pathway Technologies paid the invoices. There was

never an exclusive purchasing or distributorship arrangement

between Pathway Technologies and Organica.

12. Through the end of 2009, Organica's principal place of

business remained in the Philadelphia, Pennsylvania area. 2 /

13. Through the end of 2009, no employee of Pathway

Technologies was ever employed at the same time by Orga nica. No

employee moved from one company to the other. The companies did

not share employees. Employees of one company were never given

assignments to perform for the other.

14. Through the end of 2009, Stephen Gans was the chief

operating officer of O rganica, Steve Register was president of

Organica, and Stephen Jaeb was the managing partner of Organica.

15. During the months of July and August 2009,

Mr. Register and Organica's vice president of marketing

Dee Merica worked out of offices at 5002B U.S. 41 North in

Palmetto. With that exception, all of Organica's employees were

located outside the S tate of Florida from the time Pathway

Holdings acquired the company through the end of 2009.

16. Organica hired and fired its own employees. Organica

had i ts own employee handbook and its own employee, Beverly

Monroe, to perform human resources duties. Organica had its own

federal employer identification number and handled its own

payroll. Organica had a separate telephone number from either

of the Pathway companies.

17. After Pathway Holdings acquired Organica in August

2008, employees of Pathway Technologies were required to sign a

document titled, "Pathway Technologies, LLC and/or Organica

Technologies, LLC Company - Employee Confidentiality Agreement."

The document is a standard agreement under which the employee

agrees not to disclose confidential information or trade secrets

to which the employee is exposed during the course of his

duties. For the purposes of the matters at issue in this

proceeding, t he relevant datum is that the document refers to

Pathway Technologies "and/or" Organica "collectively or

individually" as "the Company."

18. Michael Gans testified that the confidentiality

agreement was created at his direction. Mr. Gans wanted both

comp anies covered by a single document because Pathway

Technologies salespeople would be selling Organica products. In

order to knowledgeably and aggressively sell Organica products,

the Pathway Technologies salespeople would need to know

confidential informa tion about the formulation, fermentation and

preparation of those products. Ms. Gans wanted to be certain

that the confidentiality provisions covering Organica employees

would also apply to Pathway Technologies' salespeople.

19. Petitioner introduced a d ocument that he obtained from

the Organica website at some time between April and early June

2010. This document carried the heading "Company Directory" and

listed 20 names, with phone numbers and email addresses for each

name. Based on the email address es, only six of the 20 names

appear ing in the Company Directory were those of Organica

employees. With the exception of Stephen Gans, who listed a

personal email address, the remainder of the names had Pathway

Technologies email addresses.

20. Michael Ga ns testified that the Organica web site was

the work of an independent web designer named Stephen Wells, who

worked under contract to create web sites for both Pathway

Technologies and Organica. Mr. Gans testified that the web

sites for Organica and Pathw ay Technologies were not high

priorities for these small companies, and that Mr. Wells was not

given a great deal of direction in creating the sites. Mr. Gans

stated that Mr. Wells mistakenly inserted information for

Pathway Technologies into the Organica directory.

21. Further, Mr. Gans testified that several of the people

listed with Pathway Technologies email addresses were not

employees of either Pathway Technologies or Organica. Mr. Gans

stated that some non - employees who performed services for th e

company were permitted to maintain Pathway Technolog ies email

accounts for ease of communication. Larry Kimbro is a friend of

Mr. Gans and owns a commercial kitchen design business .

Mr. Kimbro performed some unpaid public relations work for

Pathway Tec hnologies and was given a company email account to

facilitate his efforts. Pathway Technologies did not direct the

manner or means of the services provided by Mr. Kimbro. Mark

Warren was a friend of Mr. Gans , who was also a partner in

Pathway Holdings. Mr. Warren had a Pathway Technologies email

account though he never performed any work for the company.

Michael Gans' mother, Judy Gans, performed unpaid services for

the company and had a Pathway Technologies email address.

22. The name of at least one other person who was not an

employee of Pathway Technologies appeared on the company's web

site for a short period. Barney Cherry was briefly a consultant

and independent sales representative for Pathway Technologies,

but was not an employee of or paid by Pathway Technologies.

While he consulted for Pathway Technologies, Mr. Cherry was the

head sales manager for The Andersons, Inc., another manufacturer

and marketer of turf products and plant nutrients.

23. In any event, this "Company Directory" demonstr ated at

most that there may have been some integration of the two

companies as of April, May or June of 2010, long after

Petitioner's involvement with Pathway Technologies. It is

undisputed that Pathway Technologies was merged into Pathway

Holdings in Jan uary 2010, giving Pathway Technologies and

Organica a common owner as a preliminary step to creating an

integrated company. However, the companies' status as of mid -

2010 has no bearing on Petitioner's claim regarding Pathway

Technologies' allegedly improp er termination of his employment

in January 2009.

24 . In January 2010, Organica's corporate address was

changed from Pennsylvania to 5002B U.S. 41 North in Palmetto.

Also in January 2010, Pathway Technologies and Pathway Holdings

merged, with Pathway Hol dings remaining as the surviving entity.

Following the merger, the employees of Pathway Technologies

became employees of Pathway Holdings. As of the date of the

hearing, Pathway Technologies had no employees and was in the

process of being formally disso lved.

25 . Petitioner offered into evidence two business

directories , one created by the Economic Development Council of

the Manatee Chamber of Commerce, and the other released under

the general auspices of the Manatee County Chamber of Commerce.

The Econ omic Development Council directory listed Pathway

Technologies' address as 5002B U.S. 41 North, whereas the

general Chamber of Commerce directory listed Pathway

Technologies' address as 5004B U.S. 41 North.

26 . Mr. Gans testified that this information had been

provided to the Chamber of Commerce by Mr. Kimbro, acting as

Pathway Technologies' outside public relations contact.

Mr. Gans explained the address disparity in terms of the dates

of the directories. When Pathway Technologies merged with

Pathway Ho ldings in January 2010, the former's address changed

from 5004B U.S. 41 North to 5002B U.S. 41 North. Therefore, the

Economic Development Council directory must have been created in

2010, and the general Chamber of Commerce directory must have

been produc ed in 2009 or earlier.

27 . Petitioner had no firsthand knowledge of how many

employees Pathway Technologies employed at any given time.

Using internet research, Petitioner created a list of

"confirmed" and "suspected" Pathway Technologies employees that

he used to refresh his memory as he testified . 3

28 . As to the names on Petitioner's list, Michael Gans

testified that Delores and Glenn Anderson had never been

associated with Pathway Technologies. In fact, Mr. Gans had

never heard of them.

29 . Deepa Me hta was a member of Pathway Technolog ies at

its inception in 2006 , but left the company shortly thereafter

for personal reasons. Ms. Mehta was never an employee of the

company, nor was she paid a salary by the company.

30 . Stephen Jaeb is a member of Pat hway Holdings, but has

never been a member or employee of Pathway Technologies.

31 . Wendell Cave, Roger Welker, and Jerry Mills worked for

a company named Independent Turf Partners ("ITP"), a Stuart

based company. In November 2008, Pathway Technologies e xplored

the possibility of using ITP as the distribution arm of its turf

division. However, nothing came of this exploration, and

Messrs. Cave, Welker and Mills were never employed or paid by

Pathway Technologies.

32 . Mr. Gans testified that 11 people on Petitioner's list

had been employed by Pathway Technologies at one time or another

over the course of 2008 and 2009: Eastland Collen, Michael Dean,

Richard Gray, Michael Hamilton, William Nye, Dwight Pickett,

Charles Turvin, Toby Washburn, Jeff Wells, Sco tt Reidel, and

Ryan Brooks. All of these individuals are accounted for in

Pathway Technologies' payroll records.

33 . The evidence establishe d that at no time relevant to

this proceeding did Pathway Technologies employ more than 11

people.

34 . Michael and Stephen Gans mutually ran Pathway

Technologies. Neither of them could be hired or fired by the

company. Their work could not be regulated or supervised by the

company. They did not report to someone higher in the company.

Neither man had a contract of employment with the company. Both

men shared in the profits, losses and liabilities of the

company . Thus, Michael and Stephen Gans could not be considered

employees of Pathway Technologies.

35 . Even if Michael and Stephen Gans were counted as

employ ees, the total number of individuals directly employed by

Pathway Technologies at any one time would reach only 13 .

36 . Petitioner contends that Pathway Technologies and

Organica should be considered a "single employer" or "integrated

employer" under prev ailing precedents, meaning that their

employees could be aggregated to reach the threshold number of

15 for purposes of the Florida Civil Rights Act.

37 . The evidence established that, during 2008 and 2009,

Pathway Technologies and Organica had their plac es of business

in different states and did not share employees . The companies'

business operations were conducted at arm's length. Pathway

Technologies purchased Organica's products for distribution, and

for use in its own consultative turf management op eration.

38 . In 2008 and 2009, Organica controlled its own labor

relations: it hired and fired its own employees, managed its own

payroll, maintained its own employee handbook, and had its own

employee assigned to perform human resources duties.

39 . Step hen Gans was a member of both Pathway Technologies

and Pathway Holdings, the latter of which owned Organica after

August 2008. Stephen Gans was listed as a manager /member in the

Division of Corporations filings of both Pathway Technologies

and Organica.

4 0 . Michael Gans is listed as a manager/member in the

Pathway Technologies filings with the Division of Corporations.

He is not named in the filings for Organica, though he testified

that he in fact has an ownership interest in Organica and acts

as a mana ging partner in Organica's parent, Pathway Holdings.

41 . As more fully explained in the Conclusions of Law

below, Petitioner has failed to establish that Pathway

Technologies is an "employer" as that term is defined in s ection

760.02(7) which is an indisp ensible threshold element of

Petitioner's claim for relief. Therefore, there is no need to

make findings as to the remainder of Petitioner's claim.

CONCLUSIONS OF LAW

42 . The Division of Administrative Hearings has

jurisdiction of the subject matter of and the parties to this

proceeding. §§ 120.569 and 120.57(1), Fla. Stat.

43 . The Florida Civil Rights Act prohibits discrimination

in the workplace , and prohibits retaliation against an employee

for engaging in protected activity such as filing a charge o f

discrimination with the FCHR .

44 . The FCHR's enforcement authority as to workplace

discrimination is limited to acts committed by an "employer" as

defined by s ection 760.02(7):

" Employer " means any person employing 15 or

more employees for each working day in each

of 20 or more calendar weeks in the current

or preceding calendar year, and any agent of

such a person.

45 . The Florida Civil Rights Act's definition of

"employer" corresponds to the definition of employer found in

Title VII of the Civil Righ ts Act of 1 964 ("Title VII") at 42

U.S.C. § 2000e(b), which provides in relevant part:

The term " employer " means 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 we eks

in the current or preceding calendar year,

and any agent of such a person....

46 . Because the Florida Civil Rights Act was modeled on

Title VII, Florida courts have determined that federal case law

interpreting Title VII applies when a court is calle d upon to

construe the Florida Civil Rights Act. See Valenzuela v.

GlobeGround North America, LLC , 18 So. 3d 17, 21 (Fla. 3d DCA

2009); Patterson v. Consumer Debt M gmt. and Educ . , Inc. , 975 So.

2d 1290, 1291 (Fla. 4th DCA 2008); Byrd v. BT Foods, Inc. , 94 8

So. 2d 921, 925 (Fla. 4th DCA 2007) .

47 . Under Title VII, the phrase "current or preceding

calendar year" refers to the calendar year in which the alleged

discrimination or retaliation occurred, and to the calendar year

that preceded the act. Komorowsk i v. Townline Mini - Mart and

Rest . , 162 F.3d 962, 966 (7th Cir. 1998); Mousa v. Lauda Air

Luftfahrt, A.G. , 258 F. Supp. 2d 1329, 1334 (S.D. Fla. 2003).

48 . The unlawful acts in this case were alleged to have

occurred in January 2009. Therefore, Petition er was required to

demonstrate that Pathway Technologies had 15 or more employees

during each working day in 20 or more calendar weeks in 2008 or

2009 to be covered under the Florida Civil Rights Act. McKenzie

v. Davenport - Harris Funeral Home , 834 F.2d 93 0, 932 (11th Cir.

1987). 4 /

49 . The United States Supreme Court has held that persons

who control an enterprise are not "employees" to be counted when

determining coverage under Federal antidiscrimination

legislation. Clackamas Gastroenterology Assoc . , P. C. v. Wells ,

538 U.S. 440 (2003). 5 / In Clackamas , the Court determined that

common law master - servant concepts should be applied to arrive

at a definition of "employee" where the statutory definition is

" a mere 'nominal definition' that is 'completely cir cular and

explains nothing.'" 538 U.S. at 444 ( quoting Nationwide Mutual

Ins . Co . v. Darden , 503 U.S. 31 8 , 323 (1992) ) . The Court found

the following six factors relevant in determining whether a

shareholder or di rector should be counted as an employee:

Whether the organization can hire or fire

the individual or set the rules and

regulations of the individual's work ;

Whether and, if so, to what extent the

organization supervises the individual's

work ;

Whether the individual r e ports to someone

higher in the organization ;

Whether and, if so, to what extent the

individual is able to influence the

organization ;

Whether the parties intended that the

individual be an e m ployee, as expressed in

written agreements or contracts ; and

Whether the individual share s in the

profits, losses, and l iabilities of the

organization.

Clackamas , 538 U.S. at 449 - 450 ( quoting Equal Employment

Opportunit y Commission Compliance Manual § 605:0009 ) .

50 . Applying the Clackamas test to the findings of fact

concerning Michael and S tephen Gans, it is concluded that

neither man was an employee of Pathway Technologies for purposes

of s ection 760.02(7). Michael and Stephen Gans were owners,

members and officers of Pathway Technologies. The company did

not supervise either of the men i n their work. Neither man

reported to anyone higher in the company. Michael and Stephen

Gans supervised the company's business, made strategic decisions

for the company, and shared in the company's profits and losses.

There was no evidence of an employm ent agreement between the

company and either Michael or Stephen Gans.

51 . The United States Supreme Court has ruled that the

proper basis for determining whether an employer has an

employment relationship with an individual on a given day is the

"payroll method," i.e., whether the individual appears on the

employer's payroll records for the day in question. Walters v.

Metropolitan Educ . Enter . , Inc. , 519 U.S. 202, 206 - 207 (1997) ,

followed by Laurie v. Ala . Court of Criminal Appeals , 256 F.3d

1266, 1268 - 12 69 (11th Cir. 2001).

52 . Not including Michael or Stephen Gans, no more than

two persons appear on Pathway Technologies' payroll records at

any given time during 2008, and no more than eleven individuals

appear on Pathway Technologies' payroll records at any given

time during 2009. Even if Michael and Stephen Gans were counted

as employees, the payroll of Pathway Technologies never reached

the fifteen employee threshold set by Section 760.02(7), Florida

Statutes, during the years 2008 or 2009.

53 . In McK enzie , 834 F.2d at 933, the court set forth the

standard for determining whether two or more entities should be

treated as a single employer for purposes of Title VII:

The predominant trend in determining whether

two businesses should be treated as a singl e

or joint employer under § 2000e(b) is to

apply the standards promulgated by the

National Labor Relations Board (NLRB). The

NLRB factors include: (1) i n terrelation of

operations, (2) centralized control of labor

relations, (3) common management, and (4)

common ownership or f i nancial control. The

showing required to warrant a finding of

single employer status has been described as

"highly integrated with respect to ownership

and operations." (Citations and footnote

omitted)

54 . Petitioner conten ded that Pathway Technologies and

Organica should be treated as a single employer , and that their

employees should be aggregated for purposes of reaching the

statutory threshold of fifteen employees.

55 . Application of the McKenzie criteria to the facts i n

the instant case does not lead to the conclusion that Pathway

Technologies and Organica were "highly integrated" in their

ownership and operations. There was clearly an element of

common ownership, as Michael and Stephen Gans were the

controlling member s of Pathway Technologies and also had an

ownership interest in Pathway Holdings, which purchased Organica

in August 2008. However, common ownership alone is insufficient

to establish that two entities meet the "integrated employer"

test i n the absence of other indicia of integration. See

Kolczynski v. United Space Alliance, LLC , 2005 U.S. Dist LEXIS

20508, 11 - 13 (M.D. Fla. 2005); Cruz - Lovo v. Ryder System, Inc. ,

298 F. Supp. 2d 1248, 1254 (S.D. Fla. 2003).

56 . The evidence established that during 2008 a nd 2009,

Pathway Technologies and Organica operated in different states

and that they did not share employees. They conducted business

with each other at arm's length. In 2008 and 2009, Organica

controlled its own labor relations: it hired and fired its own

employees, managed its own payroll, maintained its own employee

handbook, and had its own employee assigned to perform human

resources functions.

57 . The companies had one officer in common, Stephen Gans.

Pathway Technologies and Organica shared an employee

confidentiality agreement in order to protect Organica's trade

secrets . These factors were the only indicia of operational

integration between the two companies, and do not establish that

the companies were "highly integrated" with respect to th eir

operations. Pathway Holdings took actions in 2010 that resulted

in greater integration of the companies, but those actions were

taken long after Petitioner's involvement with Pathway

Technologies had ended.

58 . A demonstration that Respondent was an "employer" as

defined in s ection 760.02(7) is an essential, threshold element

of Petitioner's prima facie case of employment discrimination.

Arbaugh , 546 U.S. at 516. Petitioner's evidence was

insufficient to establish that Pathway Technologies employed 15

or more employees for each working day in each of 20 or more

calendar weeks in 2008 or 2009. Therefore, Petitioner has

failed to prove a prima facie case of unlawful employment

discrimination.

RECOMMENDATION

Based on the foregoing Findings of Fact an d Conclusions of

Law, it is

RECOMMENDED that the Florida Commission on Human Relations

issue a final order finding that Petitioner failed to prove that

Pathway Technologies, LLC is an "employer" pursuant to s ection

760.02(7) and dismissing the Petition fo r Relief filed in th is

case .

DONE AND ENT ERED this 5 th day of May, 2011 , in Tallahassee,

Leon County, Florida.

S

LAWRENCE P. STEVENSON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 5 th day of May, 2011 .

ENDNOTES

1 / Citations shall be to Florida Statutes (200 9 ) unless

otherwise specified. Section 760.10, Florida Statutes, has been

unchanged since 1992.

2 / Petitioner offered corporate filings for Organica that

indicated an address of 5004B U.S. 4 1 North in Palmetto as the

company's registered office in 2008 and 2009. Michael Gans

testified that these filings were incorrect and that Organica's

principal business address did not change from Pennsylvania to

Florida until January 2010. The undersign ed is persuaded that

the company employed a Florida address as its "registered

office" for purposes of its Division of Corporations filings,

but that it continued to have a principal place of business in

Pennsylvania through the end of 2009.

3 / In his P r oposed R ecommended O rder, Petitioner stated that his

list was entered into evidence at the hearing, over his

objection. In fact, the list was not entered into evidence.

Because Petitioner was testifying from the list, the undersigned

directed Petitioner to show the list to counsel for Respondent.

Neither party moved the list into evidence.

4 / The McKenzie court characterized the plaintiff's burden as

"proving that subject matter jurisdiction exists," 834 F.2d at

932. The United States Supreme Court has since held that Title

VII's "employee numerosity" requirement is not a question of

subject matter jurisdiction but an ingredient of the plaintiff's

claim for relief. Arbaugh v. Y&H Corp . , 546 U.S. 500, 516

(2006). This distinction was relevant in Arb augh because the

defendant raised the numerosity question only after the

evidentiary hearing. If numerosity were jurisdictional, then

defendant could raise it at any point in the proceeding s ; if it

were an element of plaintiff's claim, then the defendant had

waived the issue by failing to raise it at the hearing. In the

instant case, the distinction does not avail Petitioner because

the numerosity question was raised by Respondent at the outset

of the case and was fully litigated at the hearing.

5 / Cl ackamas dealt with the Americans wit h Disabilities Act, 42

U.S.C. §§ 12101 et seq . Mehta v. HCA Health Servs . of Fla . ,

Inc. , 2006 U.S. Dist. LEXIS 79536 (M.D. Fla. 2006), applied the

Clackamas test in the Title VII context.

COPIES FURNISHED :

Denise Cra wford, Agency Clerk

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

Stuart Winsor

3200 South Orlando Drive, Suite 232

Sanford, Florida 32773

Charles J. Thomas, Esquire

Thompson, Sizemore, Gonzalez & He aring, P.A.

201 North Franklin Street, Suite 1600

Tampa, Florida 33602

Larry Kranert, General Counsel

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.