STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KATHRYN WHALEY,

Petitioner,

vs.

PALM GROUP REALTY, LLC, AND HARRIETTE REED, BROKER,

Respondent.

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) Case Nos. 05-4362

) 05-4363

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RECOMMENDED ORDER

A formal hearing was conducted in this case on November 22, 2006, in Panama City, Florida, before Suzanne F. Hood, Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Kathryn Whaley, pro se

3509 Brooke Lane

Panama City, Florida 32404

For Respondent: B. R. Hutto, Esquire

Post Office Box 2528

Panama City, Florida 32402-2528 STATEMENT OF THE ISSUE

The issue is whether Respondents, individually or collectively, constitute an employer as defined in Section 760.02(7), Florida Statutes (2005), for purposes of conferring jurisdiction on the Florida Commission on Human Relations (FCHR)

to consider the Employment Charge of Discrimination filed by Petitioner against Respondents.

PRELIMINARY STATEMENT

On July 27, 2005, Petitioner Kathryn Whaley (Petitioner) filed an Employment Charge of Discrimination in FCHR Case No. 2005-02469 against Respondent Palm Group Realty, LLC (Palm Group Realty). The complaint alleged that Palm Group Realty had discriminated against Petitioner based on her sex, age, and disability.

On July 27, 2005, Petitioner filed an Employment Charge of Discrimination in FCHR Case No. 2005-02506 against Respondent Palm Cove, Inc. (Palm Cove). The complaint alleged that Palm Cove had discriminated against Petitioner based on her sex, age, and disability.

On October 21, 2005, FCHR issued a Determination: No Jurisdiction in both of the above-referenced cases. FCHR based its decisions on findings that neither Palm Group Realty nor Palm Cove was an employer as defined in Section 760.02(7), Florida Statutes (2005).

Petitioner filed a Petition for Relief in both cases. In FCHR Case No. 2005-02469, Petitioner named Harriette Reed as Respondent. In FCHR Case No. 2005-02506, Petitioner named Andrew Pace as Respondent.

FCHR referred both cases to the Division of Administrative Hearings (DOAH) on November 30, 2005. DOAH assigned DOAH Case No. 05-4362 to FCHR Case No. 2005-02469 and DOAH Case No. 05- 4363 to FCHR Case No. 2005-02506.

In December 2005, the undersigned issued a Notice of Hearing in both cases. The hearings were scheduled for February 15 and 16, 2006.

On February 14, 2006, the undersigned issued an order in DOAH Case No. 05-4362. The order placed the case in abeyance based on Petitioner’s telephonic representation that she was unable to participate in a hearing due to health problems.

On February 16, 2006, the undersigned issued an Order of Consolidation in DOAH Case Nos. 05-4362 and 05-4363. The order required the parties to file a joint status report on or before March 31, 2006.

After two additional continuances, the undersigned issued a second Notice of Hearing scheduling the hearing for

September 13, 2006. However, Petitioner did not appear at the hearing due to health problems.

On September 18, 2006, an order granted a continuance on Petitioner’s behalf and rescheduled the hearing for October 3, 2006. On September 29, 2006, the undersigned granted a continuance on Petitioner’s behalf and rescheduled the hearing for October 27, 2006.

On October 25, 2006, the undersigned issued an order denying further continuance. However, Petitioner did not make an appearance at the hearing on October 27, 2006, due to health problems.

On November 2, 2006, the undersigned conducted a telephone conference with the parties. During the conference, the parties agreed to proceed to hearing on November 22, 2006. The undersigned subsequently issued an order rescheduling the hearing for November 22, 2006.

During the hearing, Petitioner testified on her own behalf and presented two exhibits that were accepted as evidence.

Respondent presented the testimony of Ms. Reed and Mr. Pace. Respondent presented one exhibit that was admitted as evidence.

The parties did not file a copy of the hearing transcript. Petitioner filed proposed findings of facts and conclusions of law on December 1, 2006.

FINDINGS OF FACT

1. Petitioner is a licensed real estate agent. Sometime in 1999, Petitioner began working in Panama City, Florida, for Florida Media Group, Inc. Mr. Pace and Edward Hines own Florida Media Group, Inc., a full-service marketing company that is located in Tallahassee, Florida. Mr. Pace hired Petitioner to promote the real estate sales in Bay County, Florida, of Palm Cove, a land development company. Petitioner received a United

   States Internal Revenue Service (IRS) Form 1099 from Florida Media Group, Inc. in 2001.

2. From 2002 through April 2004, Petitioner worked directly for Palm Cove selling real estate in Palm Cove’s single-family housing subdivision in Bay County, Florida.

   Mr. Pace owns 25 percent of Palm Cove. The other three owners are Gary Wakstein, Hubert Green, and Edward Hines. Petitioner received an IRS Form 1099 in 2002, 2003, and 2004 from Palm Cove for commissions she earned by selling real estate for the developer.

3. On or about April 27, 2004, Palm Group Realty was incorporated. Palm Group Realty is owned by Ms. Reed, Mr. Pace, Mr. Hines, Mr. Green, and Mr. Wakstein. In September 2004,

   Ms. Reed became the designated real estate broker for Palm Group Realty.

4. Petitioner began working for Palm Group Realty soon after it was incorporated. She worked for the real estate agency until September 30, 2004. Petitioner received an IRS Form 1099 from Palm Group Realty in 2004 based on her commissions. Some of the commissions must not have been paid until 2005 because Palm Group Realty provided Petitioner with an IRS Form 1099 in 2005.

5. The relevant time period here is November 1, 2003, through September 30, 2004. Regarding that time period,

   Petitioner sold real estate for Palm Cove from November 1, 2003, through April 27, 2004, and for Palm Group Realty from April 27, 2004, through September 30, 2004.

6. Palm Cove and Palm Group Realty have the same address and overlapping but not precisely the same ownership. However, there is no evidence that Palm Cove, as the land developer, and Palm Group Realty, as the real estate agency, had overlapping operations after Palm Group Realty was incorporated.

7. Since April 2004, Palm Cove’s business has been limited to land development and home construction on a contracting basis. Palm Group Realty’s business is limited to real estate transactions.

8. There is no evidence that Palm Cove has ever had employees who received a salary and IRS Form W-2. Palm Cove has provided two real estate agents, one of which was Petitioner, with an IRS Form 1099.

9. During the relevant time period, Palm Group Realty had four employees who received an IRS Form W-2: Rachel Housler, Brandi Long, Beverly Wakstein, and Katherine Wilson. Palm Group Realty provided three people with IRS Form 1099: Andrew Sullivan, Harriette Reed, and Petitioner. Palm Group Realty provided the following people with an IRS Forms 1099 and W-2: Jon-Aric Long, Martha Osborne, and David Oswalt.

10. Apparently Florida Media Group, Inc., continues to handle some of the marketing aspects of the land development project for Palm Cove. At the most, Florida Media Group, Inc., has three employees.

11. Management Information Systems (MIS) is a bookkeeping company with approximately 20 independent clients, including Palm Cove and Palm Group Realty. There is no competent evidence regarding the ownership or the number of employees of MIS. The most credible evidence indicates that operations of MIS are separate and distinct from Palm Group Realty and Palm Cove.

12. Palm Group Realty, Palm Cove, and Florida Media Group, Inc., had a total of 14 salaried employees and/or independent contactors receiving commissions during the relevant period. It is impossible to determine from the record whether all 14 persons were working for one of the companies at the same time.

13. Mr. Pace and Ms. Reed testified that they personally did not have any employees during the relevant time period. Petitioner did not present any persuasive evidence to dispute their testimony.

14. The companies referenced here did not have overlapping/integrated operations such that they could be considered a solitary employer. Petitioner’s testimony to the contrary is not credible, as it is, for the most part, based on hearsay or uncorroborated by properly authenticated documentary

    evidence, which would constitute the best evidence of the contested facts.

    CONCLUSIONS OF LAW

    
    

15. DOAH has jurisdiction over the parties and the subject matter of this proceeding pursuant to Sections 120.569, 120.57(1), and 760.02(7), Florida Statutes (2005).

16. This case concerns the question of whether FCHR has jurisdiction to investigate Petitioner’s discrimination complaints. The resolution of the question depends on whether Respondents, individually or collectively, constitute an “employer” subject to the Florida Civil Rights Act of 1992. Section 760.02(7), Florida Statutes (2005), defines an “employer” as follows:

    'Employer' means any person employing 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year, and any agent of such a person.

    
    

17. Petitioner bears the burden to establish her claim consistent with the criteria above. See McDonnell Douglas Corp.

    v. Green, 411 U.S. 792 (1973); Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248 (1981). Petitioner must establish this proof by a preponderance of the evidence. § 120.57(1)(j), Fla. Stat. (2005).

18. The Florida Civil Rights Act on job discrimination is patterned after Title VII of the Civil Rights Act 1964, 42

    U.S.C. § 2000e-2. In instances in which a Florida Statute is modeled after a federal law on the same subject, the Florida statute will take on the same construction as the federal law if such interpretation is harmonious with the spirit and policy

    of the Florida legislation. Brand v. Florida Power Corporation, 633 So. 2d 504 (Fla. 1st DCA 1994). The Florida Civil Rights Act is patterned after Title VII, and federal discrimination law should be used as guidance when construing Florida's law. Id.

    See School Board of Leon County v. Hargis and the Florida Commission on Human Relations, 400 So. 2d 103 (Fla. 1st. DCA 1981).

19. "The ultimate touchstone under [the law] is whether an employer has employment relationships with 15 or more individuals for each working day in 20 or more weeks during the year in question." Walters v. Metropolitan Educational Enterprises, Inc., 519 U.S. 202, 212 (1997). The "payroll method" is the appropriate method to use in determining whether an employer "has" an employee for purposes of the 15-person threshold. Id. Accordingly, the time period in question as it relates to Petitioner is November 1, 2003, through September 30, 2004.

20. Respondents’ actual payroll records are not in evidence. However, the greater weight of the evidence indicates that the 15-employee threshold for 20 weeks is not reached on an

    individual basis for Palm Cove, Palm Group Realty, Florida Media Group, Inc., Mr. Pace, or Ms. Reed.

21. At the most, Palm Cove had two commissioned sales persons including Petitioner before April 27, 2004. Palm Group Realty had 10 employees or commissioned sales persons including Petitioner after April 27, 2004. Florida Media Group, Inc., had three employees. Ms. Reed and Mr. Pace had no employees. There is no evidence that each of these employees or commissioned sales persons worked each working day in each of 20 or more calendar weeks, for Palm Cove, Palm Group Realty, and/or Florida Media Group.

22. Petitioner asserts that when the employees of all named respondents and other alleged related entities are added together within the relevant time period, the total would meet the definition of "employer" set out in Section 760.02(7), Florida Statutes (2005), as to the requisite number of employees.

23. For Petitioner to be able to combine the employees of Palm Cove, Palm Group Realty, MIS, and/or Florida Media Group, Inc., in the count to establish the required number of employees, she must by extension of Title VII case law, prove that one or more of the companies meet the "single employer" or "integrated enterprise" test. The test is recognized by the courts as being part of a liberal construction pertaining to the

    term "employer" set forth in Title VII. See Lyes v. the City of Rivera Beach, Florida, 166 F.3d 1332, 1341 (11th Cir. 1999).

    The court in Lyes explained at 1341:

    
    

    In keeping with this liberal construction, we sometimes look beyond the nominal independence of an entity and ask whether two or more ostensibly separate entities should be treated as a single, integrated enterprise when determining whether a plaintiff's 'employer' comes within the coverage of Title VII.

    
    

    We have identified three circumstances in which it is appropriate to aggregate multiple entities for the purposes of counting employees. First, where two ostensibly separate entities are “highly integrated with respect to ownership and operations,” we may count them together under Title VII. McKenzie, 834 F.2d at 933 (quoting Fike v. Gold Kist, Inc., 514 F.Supp. 722, 726 (N.D.Ala.), aff'd, 664 F.2d

    295 (11th Cir. 1981)). This is the “single employer” or "integrated enterprise" test .

    . . .

    
    

    In determining whether two non-governmental entities should be consolidated and counted as a single employer, we have applied the standard promulgated in NLRA cases by the National Labor Relations Board. See, e.g., McKenzie, 834 F.2d at 933. This standard sets out four criteria for determining whether nominally separate entities should be treated as an integrated enterprise.

    Under the so-called “NLRB test,” we look for “(1) interrelation of operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership or financial control.”

    
    

24. There is no evidence of interrelated operations between Palm Cove, Palm Group Realty, MIS, and Florida Media

    Group, Inc., during the relevant time period. Palm Cove and Palm Group Realty shared the same address and may have shared the same bookkeeper, but they functioned independently in their respective businesses, as developer/construction contractor and real estate agency. MIS is an independent bookkeeping service. Florida Media Group, Inc., is a marketing firm located in Tallahassee, Florida.

25. On the subject of centralized control of labor relations, individuals working for Palm Group Realty took direction from Ms. Reed when she became the designated broker. Mr. Pace had the apparent authority to hire Petitioner to work initially for Florida Media Group, Inc., and subsequently for Palm Cove. There is no evidence regarding the person or persons in control of labor relations for MIS. The preponderance of the evidence indicates that the companies never had centralized control of labor.

26. As for the element of common management, Ms. Reed was involved only in the management of Palm Group Realty. Mr. Pace was involved in the management of Palm Cove and Florida Media Group, Inc. There is no evidence regarding the management of MIS.

27. Regarding common ownership or financial management, there is no evidence regarding the checking accounts of the companies at issue here. However, it is clear that Palm Cove

    and Palm Group Realty have different employer identification numbers.

28. As to common ownership, Ms. Reed is a part owner in Palm Group Realty, along with Mr. Pace, Mr. Hines, Mr. Wakstein, and Mr. Green. The owners of Palm Cove are Mr. Pace, Mr. Hines, Mr. Wakstein, and Mr. Green. Mr. Pace and Mr. Hines own Florida Media Group, Inc. There is no competent evidence regarding the ownership of MIS. There are common owners between the companies but no company has exactly the same overall ownership.

29. On balance, having applied the criteria, it is clear that Palm Cove, Palm Group Realty, MIS, and Florida Media Group, Inc., are not nominally independent entities, appropriately treated as a single integrated enterprise. Because they are meaningfully separate and independent entities for purposes of determining jurisdiction in this case, their combined employees during the relevant time should not be counted.

30. Petitioner has not met her burden of proof that a sufficient numbers of employees worked for Palm Cove, Palm Group Realty, Mr. Pace, or Ms. Reed for the requisite number of weeks to establish jurisdiction. Therefore, FCHR is without jurisdiction to proceed with the processing of Petitioner’s discrimination complaints.

RECOMMENDATION

Upon the consideration of the facts found and conclusions of law reached, it is

RECOMMENDED:

That FCHR enter a final order finding that it is without jurisdiction to proceed in these cases based upon Petitioner's failure to show that Respondents constitute "an employer" as defined in Section 760.02(7), Florida Statutes.

DONE AND ENTERED this 29th day of December, 2006, in Tallahassee, Leon County, Florida.

S

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 29th day of December, 2006.

COPIES FURNISHED:

Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 05-004362

Orders for Case No: 05-004362