• August 27, 2009

The Eighth Circuit revived a plaintiff’s hostile work environment claim that the U.S. District Court, D. Minn. (Kyle, J.) had thrown out. Plaintiffs first brought suit against American Building Maintenance Inc. (ABMI), the parent company of their employer, American Building Maintenance of Kentucky (ABMK), which they added more than 90 days later. They made claims under Title VII of the Civil Rights Act and under the Minnesota Human Rights Act (MHRA) alleging sexual harassment, hostile workplace, and other employment-related claims.

With two months left on the deadline for bringing a lawsuit after receipt from the EEOC of the plaintiffs’ right-to-sue letters, Defense counsel pointed out that Plaintiffs sued the wrong entity, the corporate parent and not ABMK, their employer. When plaintiffs got around to suing ABMK, the 90-day time period after issuance of the right-to-sue letter had run out. The Eighth Circuit affirmed Judge Kyle’s rejection of their motion to amend to add ABMK, as outside the statute of limitation based on equitable tolling. (Plaintiffs had delayed the motion because, at the same time, they had wanted to add new plaintiffs who were awaiting their own right-to-sue letters.)

Next, plaintiffs argued that ABMI and ABMK were so intertwined that a case against one should be treated as a case against the other, an argument that the District Court rejected, citing the preference to respect the corporate form. After an exhaustive description of the interrelationship and involvement between the two entities, on this score, the 8th Circuit reversed Judge Kyle. “These descriptions of ABMI’s involvement in the operations of its subsidiaries, and in particular ABMK’s, are sufficient to create a genuine issue of material fact with respect to whether ABMI and ABMK are an integrated enterprise.”

Next, the Eighth Circuit addressed Judge Kyle’s rejection on summary judgment of the “non-time-barred” plaintiffs on their claims under Title VII and the MHRA. “[W]e reverse and remand the district court’s dismissal of Laureano’s and Giron’s hostile workplace claims, with instructions to determine whether evidence of widespread sexual harassment was sufficient to put ABMK on constructive notice….[T]he district court refused to consider evidence offered to show ABMK knew or should have known sexual harassment was rampant throughout the company, thereby giving it constructive notice.” (The District Court was under the impression that Eighth Circuit law dictated that plaintiff had to be aware of harassment and hostile work environment in order for the evidence of it to be admissible. The Eighth Circuit rejected this reading of its precedent.)

Judge Gruender concurred in part and dissented in part. He would have upheld the District Court’s decision in its entirety.

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