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socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 33806
Experience:  Retired (mostly)
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Hi, I have another question for you. An employee is alleging

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Hi,
I have another question for you.
An employee is alleging pregnancy discrimination against her employer company, who laid her off allegedly for budget cuts. That was a pretext, because the company hired a male to do much of what she did in her position, just with a different title. He was hired about a month after she was 'laid off;' conveniently the company found money to pay him. The company swore up and down that her alleged lay off was not performance based, as her personnel file was impeccable. However, when she told her employer that she was pregnant three months prior, she got a 10% pay cut, and was questioned about her maternity leave, and whether she'd return from work after her baby was born.
We know that we can't sue the company owner, who is also the president and CEO individually, but the company is associated with another company, owned by the same people, both in the same facility in Fremont, CA. One is import, the other is export.
The question is: can we sue both companies, even though the bigger one does not appear to be a 'parent' company, as they are separate corporate entities registered with the state? We think the larger has deeper pockets, plus the owners (who are all the same people) don't want their customers to know about the confilict, as the companies are 'competitiors' whose clients would be upset if they knew the compaies were closely related.
The discharged pregnant employees paychecks have the name of the larger company, not the smaller one that she works for.

Does that matter? How do you know if companies are parent/subsidiaries? Does CA allow both to be sued for gender discrimination, or does some nexus of company function have to be proven?

Thanks!
Submitted: 3 years ago.
Category: California Employment Law
Expert:  socrateaser replied 3 years ago.
Hi again,

If the paychecks come from the larger company, then that company is the employer, because that's the company that would be identified on the employee's IRS Form W-2 at the end of the tax year.

Even if the larger company tries to explain its way out of the issue, the prudent course is to sue both companies and then try to show that the larger company exercises "pervaisive control over the smaller," because that is the standard by which a court would determine that there really was only one controlling entity over the employee.

Note: You must file a charge with California DFEH and then request a "right to sue" letter, before you can bring an employment discrimination action. Or, you can just file the complaint and let the government handle the case.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!


socrateaser, Lawyer
Satisfied Customers: 33806
Experience: Retired (mostly)
socrateaser and 2 other California Employment Law Specialists are ready to help you
Customer: replied 3 years ago.

Thank you.

I have a brief follow up.

The DFEH did issue a right to sue notice, but it was only in the name of the company for whom the employee actually worked. The other company was not named, because the connection was not known, until the discharged employee discussed above was recently reviewing her direct deposits and saw the other company's name, instead of the company she actually worked for.

Does this matter? Can the other company be brought in without a FEHA right to sue if it's tantamount to a parent company?

 

Thanks again.

Expert:  socrateaser replied 3 years ago.
How many days has it been since the right to sue notice was issued?
Customer: replied 3 years ago.

It's been a year. In fact, she had an attorney and he filed suit against the company she worked for. They answered. The attorney then fell off the face of the earth, and she attended a CMC on her on, telling the judge the attorney is missing in action. The defense agreed to court referred mediation.

Basically, she will need to get another attorney if hers doesn't reapper, but she is worried now that she found the other company's name on her direct deposit, should she DOE them in, or wait for mediation? Is it even possible to Doe them i?

Basically, the two companies use the same office space and share some staff, but they are incorporated separately, and do not want their customers to know of their connection. She always assumed she was an employee of the one company, but the direct deposit with the other company's name has really confused the situation and she is worried about missing time deadlines to bring them in.

 

 

Expert:  socrateaser replied 3 years ago.
I think you have a big problem. A discrimination charge must be filed within 300 days of the date that the alleged discrimination occurred. Since you never filed a charge against the larger company, you have run out the statute of limitations.

You're not going to get the larger company added to this suit, unless you can establish what is known as the "alter ego" doctrine, and show that the larger and smaller company are actually one in the same (same board, same officers, same accounts, same office, same assets, etc.

If you can do that, then you could conceivably have the larger company joined as codefendant. Otherwise, you're toast.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!

socrateaser, Lawyer
Satisfied Customers: 33806
Experience: Retired (mostly)
socrateaser and 2 other California Employment Law Specialists are ready to help you
Customer: replied 3 years ago.

Well, that isn't good to hear! All I know is that the feha issued a right to sue four months after the discharge, and the complaint was filed within the one year s/l agaisnt the employer company. The issue of the other company wasn't known until the direct deposits were pulled and it said the other company's name. The positive is that the employer company defendant is insured.

I guess the best thing to do is fight to get the altar ego company Doe'd in, because as you said, the two companies are mirror images, just with different product. The owners, CEO, etc are all the same people.

 

Thanks for your input.

Expert:  socrateaser replied 3 years ago.
You're not "doe'ing" in the larger company, because you know its identity. Instead, you are alleging that the larger corporation is simply an alias for the smaller company, and that the form of operating as two different legal entities misrepresents the economic reality, which is that the two companies are actually the same legal person.

Therefore, you are seeking to "join" an indispensible party.

Hope this helps.

socrateaser, Lawyer
Satisfied Customers: 33806
Experience: Retired (mostly)
socrateaser and 2 other California Employment Law Specialists are ready to help you
Customer: replied 3 years ago.
Yes, that is quite helpful in fact. I appreciate your input.
Expert:  socrateaser replied 3 years ago.
You're welcome and good luck.
socrateaser, Lawyer
Satisfied Customers: 33806
Experience: Retired (mostly)
socrateaser and 2 other California Employment Law Specialists are ready to help you

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