Lead Opinion
Opinion by Judge JAMES R. BROWNING; Dissent by Judge FERNANDEZ.
Soo Cheol Kang (Kang) appeals summary judgment in favor of his employer on Title VII and state law tort claims. We reverse and remand for further proceedings.
Kang is a United States citizen of Korean national origin. In April 1994, he began working for a California corporation called U. Lim America, Inc. All of U. Lim America’s employees shared Korean heritage. Tae Jin Yoon (Yoon) was Kang’s supervisor. Yoon subjected Kang and other Korean workers to verbal and physical abuse and discriminatorily long work hours. The verbal abuse consisted of Yoon screaming at Kang for up to three hours a day and calling him “stupid,” “cripple,” “jerk,” “son of a bitch,” and “asshole.” The physical abuse consisted of striking Kang in the head with a metal ruler on approximately 20 occasions, kicking him in the shins, pulling his ears, throwing metal ashtrays, calculators, water bottles, and files at him, and forcing him to do “jumping jacks.”
U. Lim America had six or fewer employees. However, the U.S.-based company owned and operated U. Lim de Mexico, an electronics manufacturing company in Tijuana, Mexico. All of U. Lim America’s employees worked at the Tijuana factory. U. Lim de Mexico employed between 50-150 workers — all citizens of Mexico.
U. Lim de Mexico was organized under the laws of Mexico and existed for the sole purpose of assembling parts for televisions and computer monitors for sale to U. Lim America at cost plus a one percent surcharge. U. Lim America was U. Lim de Mexico’s only customer. Yoon was the Vice-President of U. Lim America and the President of U. Lim de Mexico. His father, Ki Hwa Yoon, owned both U. Lim America and U. Lim de Mexico. He was Chief Executive Officer of both companies and President of U. Lim America.
II Proceedings Below
Kang filed suit in California state court against U. Lim America and Yoon for national origin discrimination and harassment in violation of Title VII and the California Fair Employment and Housing Act. Kang also brought state law claims for wrongful termination in violation of public policy and breach of contract. Defendants removed the case to the United States District Court for the Southern District of California. The district court granted summary judgment to U. Lim America and Yoon on all Kang’s causes of action.
Kang’s appeal focused on four issues: (1) the applicability of Title VII, (2) national origin harassment, (3) national origin discrimination, and (4) equitable tolling.
We consider the district court’s summary judgment decision de novo. Warren v. City of Carlsbad,
III Application of Title VII
At the threshold, we must determine whether Title VII applies to U. Lim Amer-
This circuit applies a four-part test to determine whether two entities are an integrated enterprise for purposes of Title VII coverage. Childs v. Local 18, Int’l Bhd. of Elec. Workers,
1. Interrelation of Operations
The first factor, interrelation of operations, weighs in favor of finding the two companies to be an integrated enterprise. U. Lim America and U. Lim de Mexico shared a facility in Mexico; neither had a facility in the United States. All of U. Lim America’s employees worked in the Tijuana factory, commuting across the border each day. U. Lim America kept U. Lim de Mexico’s accounts, issued its paychecks and paid its bills. See Hukill v. Auto Care, Inc.,
2. Common Management
The second factor, common management, also favors finding the two companies to be integrated for Title VII purposes. Yoon was the Vice-President of U. Lim America and President of U. Lim de Mexico. U. Lim de Mexico supervisors reported directly to U. Lim America’s managers. See Cook v. Arrowsmith Shelburne, Inc.,
8. Centralized Control of Labor Relations
The third factor, centralized control of labor relations, is the “most critical.” Hukill,
U. Lim America had the authority to hire and fire U. Lim de Mexico employees. The Mexican supervisors reported to U. Lim America management. U. Lim America had essentially complete control over U. Lim de Mexico’s labor relations.
The fourth factor also weighs in favor of finding the two companies to be an integrated enterprise. U. Lim America and U. Lim de Mexico were owned and controlled by the same person, Yoon’s father Ki Hwa Yoon. Furthermore, U. Lim de Mexico essentially made no profit and transferred all its funds to U. Lim America. See Cook,
U. Lim America argued that the definition of employee in Title VII prohibits counting foreign employees of U.S. controlled corporations for purposes of Title VII coverage. The statutory definition is inclusive rather than restrictive. The term “employee” is defined to include U.S. citizens employed by U.S. companies in foreign countries rather than to prohibit counting non-U.S. citizens. See 42 U.S.C. § 2000e(f). The definition arose out of Congress’s amendments to Title VII in the 1991 Civil Rights Act to legislatively overturn the result in EEOC v. Arabian American Oil Co.,
Morelli v. Cedel,
The purpose of the Civil Rights Act of 1991, which amended the definition of employee, was to restore civil rights protections that had been limited by the Supreme Court and to strengthen the protection and remedies of Federal civil rights laws. H. Rep. No. 102-40(1), at 4 (1991), U.S. Code Cong. & Admin. News 549, 549. Since we broadly interpret ambiguous language in civil rights statutes to effectuate the remedial purpose of the legislation, see Griffin v. Breckenridge,
The fact that some of the employees of the integrated enterprise are not themselves covered by federal antidiscrimination law does not preclude counting them as employees for the purposes of determining Title VII coverage. See Morelli,
We reverse summary judgment for the employer on Kang’s harassment claim.
To prevail on his harassment claim, Kang must show: (1) that he was subjected to verbal or physical conduct because of his national origin; (2) “that the conduct was unwelcome”; and (3) “that the conduct was sufficiently severe or pervasive to alter the conditions of the plaintiffs employment and create an abusive work environment.” See Gregory v. Widnall,
Kang presented evidence that Yoon abused him because of Yoon’s stereotypical notions that Korean workers were better than the rest and Kang’s failure to live up to Yoon’s expectations. On numerous occasions, Yoon told Kang that he had to work harder because he was Korean; he contrasted Koreans with Mexicans and Americans who he said were not hard workers; and although U. Lim de Mexico employed 50-150 Mexican workers, Yoon did not subject any of them to physical abuse. This evidence created a genuine issue of material fact as to whether Yoon’s abuse and imposition of longer working hours was based on Kang’s national origin.
Kang also presented evidence that the physical and verbal abuse and long working hours were in fact unwelcome. See Faragher v. City of Boca Raton,
Kang’s evidence further showed that the verbal and physical abuse and discriminatory working hours created a work environment that was “objectively offensive ... one that a reasonable person would find hostile or abusive.” Id. “The more outrageous the conduct, the less frequent (sic) must it occur to make a workplace hostile.” Gregory,
U. Lim America argued that Kang’s claim of hostile work environment based on national origin, was grounded on time-barred conduct because much of the conduct complained of occurred more than 300
When “an act contributing to the claim occurs within the filing period, the entire time period of the hostile environment may be considered by a court for the purpose of determining liability.” Nat’l R.R. Passenger Corp. v. Morgan, — U.S. —,
Kang alleged that Yoon’s acts established a continuing violation because they were part of a “pattern of discriminatory treatment.” Kang did not recall specific acts of verbal or physical harassment during his last two and a half weeks of work, although the evidence reflected such acts prior to that time. However, Kang alleged that the discriminatorily long working hours were required until his ter-ruination and that his termination itself, arguably the culmination of the harassment, fell within the defined period. Because this case comes to us at summary judgment, we draw all inferences in the light most favorable to Kang. We conclude that Kang raised genuine issues of material fact as to whether a continuing violation occurred and if so, whether any act fell within the statutory period.
V Disparate Treatment
We also reverse summary judgment for the employer on Kang’s disparate treatment claim. To make out a prima facie case of disparate treatment, Kang must show that: (1) he belonged to a protected class; (2) he was qualified for his job; (3) he was subjected to an adverse employment action; and (4) similarly situated employees not in his protected class received more favorable treatment. Chuang v. Univ. of California Davis,
Kang established membership in a protected class — people of Korean national origin. Although the parties dispute whether Kang was qualified for the position when he was terminated since he was unwilling to work as much overtime as Yoon wanted, Kang raised a genuine issue of material fact as to whether he would have been required to work as much overtime if he had not been Korean. Yoon
Although U. Lim America presented legitimate nondiscriminatory reasons for its conduct, see Texas Dep’t of Cmty. Affairs v. Burdine,
Since Kang must present “very little” direct evidence of discrimination to show pretext, summary judgment should not have been granted for the employer. Godwin v. Hunt Wesson, Inc.,
VI Equitable Tolling of the State Law Claim
We also reverse summary judgment for the employer on Kang’s state tort law claim. Kang argued that his claim for wrongful termination in violation of public policy was timely filed. The governing statute of limitations is one year. Funk v. Sperry Corp.,
Under California law, the statute of limitations on Kang’s tort claim may be equitable tolled while he pursued his administrative remedies. Equitable tolling applies if: (1) the defendants had timely notice of plaintiffs first claim; (2) the defendants were not prejudiced in gathering evidence to defend against the second claim and (3) the plaintiff acted in good faith and engaged in reasonable conduct in filing the second claim. Cervantes v. City of San Diego,
The record indicates that: (1) defendants had timely notice of Kang’s first claim which was filed within the one year statute of limitations; (2) defendants were not prejudiced by Kang’s late filing of his wrongful termination claim because their investigation of Kang’s EEOC and DFEH charges would have allowed them to gather evidence to defend against the wrongful termination claim grounded on the same conduct, see Daviton v. Columbia/HCA Healthcare Corp.,
VII Conclusion
Kang presented evidence sufficient to invoke equitable tolling and raise genuine issues of material fact as to the merits of his federal harassment and discrimination claims.
REVERSED and REMANDED.
Notes
.Yoon also abused Kang's co-workers Soon Wan Park (Park) and Jae Ho Cho (Cho). Yoon called Park names such as “son of a bitch” and "son of a vagina” (apparently an offensive epithet in the Korean language), and subjected Park to physical abuse, punching him in the nose, striking him in the face with metal rulers, throwing a crystal ashtray at him, pulling his ears, and kicking him. Yoon also yelled at Cho and threw things at him.
. There is some dispute as to whether Yoon fired Kang or Kang quit. For purposes of summary judgment, U. Lim America conceded that Yoon fired Kang.
. Only one of U. Lim de Mexico’s workers was of Korean descent.
. Titíe VII applies to an employer, "engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.” 42 U.S.C. § 2000e(b).
. Title VII uses these same factors to determine whether a foreign corporation is controlled by a U.S. corporation and therefore the foreign corporation is subject to Title VII. 42 U.S.C. § 2000e-l(c). .
. U. Lim America argued that if the court found U. Lim America and U. Lim de Mexico
. Title VII requires a complainant lo file his charge with the Equal Employment Opportunity Commission (EEOC) within 180 days of the last alleged discriminatory act. 42 U.S.C. § 2000e — 5(e)(1). However, if the complainant initially files proceedings with a state agency, as Kang did here, the time limit for EEOC filing is extended to 300 days. Id.; see also Green v. Los Angeles County Superintendent of Schs.,
. Kang asserted that he submitted his complaint to the DFEH on September 23, 1998, the date the charge was signed. Although U. Lim America disputed this date, at summary judgment the court views evidence in the light most favorable to Kang. Therefore, we assume he filed the charge on September 23, 1998. Using that date, the statute of limitations on Kang's wrongful termination claim should be equitably tolled for 34 days because his administrative charges were pending with the DFEH for 27 days and with the EEOC for 7 days.
Dissenting Opinion
Dissenting:
I dissent because Title VII does not apply to this case at all and Kang did not file his California wrongful termination claim on time.
A. Title VII
In order for an employer to be covered by Title VII, it must have at least 15 employees during at least a portion of the year. See 42 U.S.C. § 2000e(b). U. Lim America never had more than 5 employees. Thus, on its face, Title VII does not even apply to U. Lim America.
Kang recognizes as much, but he argues that the employees of U. Lim de Mexico should be swept into the count, and it would then be far over the 15 employee requirement. It is true that there are times when the employees of two separate entities can be treated as if they belonged to one entity for Title VII purposes. See, e.g., Cook v. Arrowsmith Shelburne, Inc.,
The plain language of 42 U.S.C. § 2000e(f) which, while generally unhelpfully defining an employee as “an individual employed by an employer,” goes on to state that “[wjith respect to employment in a foreign country, such term includes an individual who is a citizen of the United States.” Thus, it is apparent that “[u]n-less an American citizen, a person employed abroad is not an ‘employee’ under Title VII.” Russell v. Midwest-Werner &
The above reasoning is compatible with and underscored by the reasoning of the Supreme Court on the related question of whether aliens working in the United States are covered by Title VII. The Court pointed out that because 42 U.S.C. § 2000e-l(a) provides that Title VII does not apply “ ‘with respect to the employment of aliens outside any State,’ ” it must apply “with respect to the employment of aliens inside any State.” Espinoza v. Farah Mfg. Co. Inc.,
I recognize that this may conflict with a holding of the Second Circuit under the Age Discrimination in Employment Act. See Morelli v. Cedel,
As I see it, the root of the Second Circuit’s decision is a belief that the purpose of the employee numerosity requirement is to protect smaller employers, and companies with a number of foreign employees in a foreign land are not small employers. Id. at 45.
Kang, who felt oppressed by his employer, which hired only Koreans and thought of him and other Koreans as a kind of working elite, seeks to maintain a Title VII action against that employer, U. Lim America. However, U. Lim America had a very slight presence in this country, and very few United States citizens working for it anywhere. In fact, over the whole time he was with the company, it had a total of seven employees (five at any one time) and of those no more than two were United States citizens. Even were we to consider the employees of U. Lim de Mexico, no United States citizens would be added. Thus, the total of employees in the United States and United States citizen employees abroad never came even close to the 15 employees required before Title VII applies. See 42 U.S.C. § 2000e(b). None of Kang’s arguments can immask that fact.
B. California FEHA
The district court dismissed Kang’s wrongful termination claim because California’s one year statute of limitations barred it. See Cal.Civ.Proc.Code § 340; Funk v. Sperry Corp.,
Kang was terminated on February 2, 1998, and did not file his action until February 16, 1999. He perceives the difficulty, but believes that the statute should have been tolled while proceedings under Title VII, and under the California Fair Housing and Employment Act, Cal. Gov’t Code § 12940, were pending. Of course, California does apply equitable tolling principles when a party is pursuing one avenue of -relief and others are possible. See Arnold v. United States,
I am satisfied that California would not apply equitable tolling here because the few days that an administrative proceeding was pending
The California Supreme Court has pointed out that nothing actually impedes a person from filing his tort claim in a timely fashion and then amending to join a delayed FEHA claim later. See Rojo v. Kliger,
Finally, even if the 12 days
Thus, I respectfully dissent.
. I do note that the test has been used in an attempt to make the "affiliated" corporation liable for the acts of the immediate employer. See Lockard v. Pizza Hut, Inc.,
. 42 U.S.C. § 2000e(f).
. See also, Wells v. Clackamas Gastroenterology Assocs.,
. Because U. Lim America is not covered by Title VII, neither is Yoon. In addition, individual defendants are not liable under Title VII. Miller v. Maxwell’s Int’l Inc.,
. Kang expressly asked that there be no actual administrative proceeding and, thus, his claim was pending before the Equal Employment Opportunity Commission for a mere seven days and before the California Department of Fair Employment and Housing for an even shorter five days.
. Kang asserts that because his DFEH complaint purports to have been signed by him on September 23, 1998, it must be taken as filed on that date, but the department's stamp shows it was actually received on October 15, 1998. The notice to sue states that as the date of filing, and because he asked for an immediate right-to-sue notice, it gave it to him on October 20, 1998.
