Legal Memorandum: Employer's Liability for Sex Discrimination

Issue: Can a defendant be held liable for sex discrimination based on a hostile work environment caused by a separate business entity with which the defendant shares a business facility in Iowa?

Baker v. Stuart Broadcasting Co., 560 F.2d 389 (8^th Cir. 1977) (“the standard to be employed to determine whether consolidation of separate entities is proper are the standards promulgated by the National Labor Relations Board: (1) interrelation of operations, (2) common management, (3) centralized control of labor relations; and (4) common ownership or financial control.”).

Sandoval v. American Building Maintenance Indus., Inc., 578 F.3d 787 (8^th Cir. 2009) (“When evaluating the degree of interrelation, the EEOC considers sharing services such as check writing, preparation of mutual policy manuals, contract negotiations, completion of business licenses, sharing payroll and insurance programs, sharing services of managers and personnel, sharing office space, equipment, and storage, and operating the entities as a single unit. The degree to which the entities share common management includes whether the same individuals manage or supervise the different entities or whether the entities have common officers and boards of directors.  The EEOC also considers the extent to which there is a centralized source of authority for development of personnel policy, maintenance of personal records, human resources, and employment decisions.  Finally, the degree of common ownership or financial control asks whether one company owns the majority or all shares of the other and if the entities share common officers or directors.”).

Henson v. Hawker Beechcraft Corp., No. 4:09CV00440 JLH, 2010 U.S. Dist. LEXIS 81535 (E.D. Kan. Aug. 10, 2010) (“Applying this [Baker] test to the evidence, HBC and HBS are interrelated, but they do not constitute a single, […]