The Employer's Legal Resource: Parent Corporation Required to Defend Claim Brought by Employee of Subsidiary
A recent order entered by the United States District Court for the Northern District of Oklahoma further illustrates when a parent company may be found to be the "employer" of a subsidiary's employee such that it can be sued for employment-related claims.
Laura Walker sued inVentiv Health, Inc. for claims arising under the ADA and FMLA. inVentiv Health moved to dismiss the complaint, arguing in part the court did not have personal jurisdiction over it. On this point inVentiv Health asserted Ms. Walker was an employee of inVentiv Commercial Services, LLC - a subsidiary of inVentiv Health - and inVentiv Health was not located in Oklahoma, was not registered to do business in Oklahoma, and did not have any employees or conduct any business in Oklahoma.
The court looked at the evidence submitted by the parties and concluded it was sufficient to allow it to exercise jurisdiction over inVentiv Health â€“ in other words, there was enough evidence that inVentiv Health was Ms. Walker's employer to allow the case to go forward against inVentiv Health. Among other things, the court noted the following evidence supported a finding that inVentiv Health was the employer:
- Documents submitted by inVentiv Health referred to Ms. Walker as an employee of both it and inVentiv Commercial Services.
- inVentiv Health provides its subsidiaries - including inVentiv Commercial Services - with certain shared administrative services, including leave of absence administration.
- The offer of employment to Ms. Walker was transmitted to her by a letter on inVentiv Health letterhead.
- The offer letter, while stating Ms. Walker's employment was with inVentiv Commercial Services, repeatedly referenced inVentiv Health, including stating "a list of the benefits you are eligible for as an employee of inVentiv Health" and "your employment with inVentiv Health is on an at will basis".
- Documents submitted to the court reflected that inVentiv Health treated inVentiv Commercial Services as one of its "four core business segments," which it also called "divisions".
- inVentiv Health and inVentiv Commercial Services occupied the same address in New Jersey.
- Communications with Ms. Walker concerning her employment and termination of employment were on letterhead labeled "inVentiv Health" and "inVentiv Health/Commercial," and the email address was "@inVentivHealth.com".
Taking all of these facts into account, the court denied inVentiv Health's motion to dismiss it from the lawsuit.
This case illustrates once again that parent corporations which involve themselves in the employment decisions of a subsidiary and treat the subsidiary as a "division" or "business segment" run the risk of being held to be the employer and required to defend against claims brought by employees of the subsidiary.
By Jon E. Brightmire, firstname.lastname@example.org