Title VII may apply to city agency with fewer than 15 employees.

The Eleventh Circuit has ruled that a city agency may be liable for discrimination under Title VII even though it does not have the 15 employees required to be considered an "employer" under the statute.

In reversing summary judgment, the court found that city employees in other departments could be considered for aggregation purposes if the agency and the city had "sufficiently overlapping operations so as to be considered a single employer." (Lyes v. City of Riviera Beach, Florida, 126 F3d 1380 (11th Cir. 1997).)

Plaintiff Shari Lyes worked for the Riviera Beach Community Redevelopment Agency (CRA) as a planner from 1989 until she was terminated in 1993. That year, she learned that another city planner, Neil Crilly, was being considered for CRA's executive director vacancy.

Lyes asked why she was not offered the job. She claimed she was told by a commissioner and the city manager--who was the interim executive director--that she was unqualified because of her gender. They told her gender was a factor because the job required frequent interaction with male developers. Lyes filed a grievance with the CRA board.

About a month later, Crilly was named to the post, making him Lyes's direct supervisor. Lyes then filed a complaint with the Equal Employment Opportunity Commission (EEOC), alleging discrimination in hiring. The day after notice of the complaint was forwarded to the CRA, Crilly suspended Lyes for refusing to attend a meeting. Crilly claimed he had no knowledge of the EEOC complaint when he suspended her. Lyes then filed a second EEOC complaint against the city, alleging retaliation. She also filed internal grievances.

For his part, Crilly requested that the city's personnel director review the disciplinary action that he had taken against Lyes. In a report, the director found in favor of Crilly.

Within two months, Crilly gave Lyes a negative performance review and a week later fired her. Lyes filed a third EEOC complaint, alleging retaliation for the second complaint. She also requested an appeal hearing before the CRA board. The hearing was granted, and the board unanimously upheld her termination.

Lyes's complaint alleged Title VII violations. The district court held that it lacked jurisdiction because the Community Redevelopment Agency was not an "employer" within the meaning of the statute. Title VII defines "employer" as "a person engaged in an industry affecting commerce who has 15 or more employees...."

On appeal, Lyes claimed the district court erred because the CRA and the city of Riviera Beach together have more than 15 employees and should be aggregated for counting purposes. She argued that the agency received about two-thirds of its funds from the city. The city's governing body, the city council, also served as the head of the agency, and each council member was a member of the agency's board of commissioners. The agency did, however, maintain its own bank accounts and records, and it had a separate staff and offices.

The Eleventh Circuit Court of Appeals agreed with Lyes, adopting the standard used under the National Labor Relations Act (NLRA) to determine whether the CRA and the city of Riviera Beach were acting as a single employer. NLRA factors include interrelation of operations, centralized control of labor relations, common management, and common ownership or financial control.

Although the NLRA does not apply to public employers, the court found "no principled reason" why jurisdictional questions should be resolved any differently, especially since Title VII "includes as `persons' capable of being `employers,' both private and many public entities."

The court also found that Lyes had presented sufficient evidence that the city and the CRA had interrelated operations, that they had centralized control of labor relations, that they shared common management, and that the CRA was fiscally dependent on the city.

West Palm Beach, Florida, attorney Michael McHale, who represented Lyes, said the court's opinion should be helpful to plaintiff lawyers addressing "the often elusive definition of a Title VII 'employer."' He added that the NLRA test is workable and applicable to both public and private employers.

"All alleged employers should be examined in the initial stages of the investigation and when [plaintiff lawyers are] formulating the charges before the EEOC to determine whether Title VII applies," McHale said.