Application of the Florida Civil Rights Act to Extraterritorial Employees in Sinclair V. De Jay Corp
The Florida Human Rights Act, passed in 1977, and its amendment by the Florida Civil Rights Act of 1992 (FCRA),1 substantially mirror Title VII of the Civil Rights Act of 19642 and its 1991 amendments.3 While Title VII provides remedies for employment discrimination throughout the United States, the FCRA ordinarily has been utilized as an alternative remedy only in instances in which the plaintiff/employee and defendant/employer are both “Floridians.” However, this apparent implied territorial limitation was tested in the recent 11th Circuit case of Sinclair v. De Jay Corporation, 170 F.3d 1045 (11th Cir. 1999).
Unfortunately, the court rejected the opportunity to engage in a comprehensive interpretation of the appropriate geographic reach of the FCRA, declining to examine the FCRA’s comprehensive statutory scheme or its legislative purpose; nor did the court look to interpretations of other Florida statutes with potential extraterritorial applications or analogize to parallel issues in the application of Title VII to multinational businesses. Instead, the 11th Circuit focused only on isolated definitional language within this state statute, and engaged in a simplistic “plain meaning” analysis.4 Though the limited holding of Sinclair may seem justifiable standing alone, its “plain language” standard for interpreting the FCRA leaves open a Pandora’s box of litigation over the application of the FCRA to persons5 and conduct with little or no nexus to Florida.
The Florida Civil Rights Act
The FCRA was passed in 1992. The statute was closely modeled after Title VII and Florida courts have consistently held that decisions interpreting Title VII are persuasive authority for a similar construction of the FCRA.6 However, there are differences in administrative prerequisites (for example, under the FCRA, aggrieved persons can opt for an adversary administrative hearing rather than filing suit) and differing limitations on available relief that can create substantial incentives for potential plaintiffs to pursue an FCRA claim as an alternative or in addition to a Title VII claim.7
On its face, the most significant difference between the state and federal statutes is the presumed territorial limitation of the FCRA. However, while Title VII contains specific provisions addressing the issue of its application abroad,8 no provision of the FCRA specifically addresses the statute’s geographic scope. Nevertheless, the FCRA’s express purpose is to secure freedom from discrimination “for all individuals within the state,” and thus it cannot be gainsaid that the statute is limited, in some fashion, to claims having a nexus with Florida.
Sinclair v. De Jay Corporation
The defendant/employer, De Jay, was a foreign (non-Florida) corporation and apparently maintained its principal place of business in Tennessee. However, De Jay also operated a small office in Florida where the plaintiff, Sinclair, was employed. Sinclair was apparently a resident and “citizen” of Florida, as the case was in federal court on the basis of diversity jurisdiction.9 (Sinclair asserted no Title VII or other federal claims.)
Sinclair alleged that she was sexually harassed by a De Jay supervisor and, despite her complaints, De Jay management failed to “remedy the situation.”10 Id. at 1045–46. Sinclair also made allegations of retaliation and religious discrimination. Id. at 1046. Before addressing the merits, De Jay moved for summary judgment on the grounds that it was not an “employer”11 subject to the provisions of the FCRA. The parties acknowledged that though De Jay employed more than 15 employees nationwide, it did not employ the required minimum of 15 employees within the State of Florida. Thus, the issue was purely a legal one, requiring the court to construe the proper territorial scope of the FCRA.
District Court Limited
FCRA to Florida “Employers”
The district court granted De Jay’s motion for summary judgment, holding that a defendant must employ at least 15 employees within the state of Florida to qualify as a statutory employer under the FCRA.12 The district court began its analysis of the issue by examining the stated purpose of the FCRA. Because the statute provides that the FCRA’s general purposes are to protect “individuals within the state,” the district court opined that “[t]he statute’s text makes clear that the legislature’s concern in enacting the FCRA was parochial, and, therefore, counting employees of a foreign corporation who are working in other states is profoundly inconsistent with the parochial concerns of the FCRA.” (Order, Feb. 21, 1998, p. 3.)
The district court next relied on a decision by a hearing officer in Palermo v. Kuppenheimer Mfg. Co., Inc., 11 F.A.L.R. 4860 (May 2, 1989), which the district court construed as an authoritative interpretation by the Florida Commission on Human Relations (FCHR).13 The relevant portion of the opinion in Palermo stated that it was inappropriate to consider whether the FCRA had been violated “[a]bsent proof that Respondent employed at least 15 employees in Florida during the relevant time period.” Id. (quoting Palermo, 11 F.A.L.R. at 4866 (emphasis added)). The district court construed Palermo as requiring that a defendant employ more than 15 employees within the state of Florida, in order to be an “employer” subject to the FCRA. Construing the hearing officer’s statement as representative of the FCHR’s interpretation of the statute, the district court determined that it should defer to this statement in Palermo as “exclud[ing] out-of-state employees for purposes of establishing defendant’s status as an employer.” (Order, Feb. 21, 1998, pp. 3–4); Sinclair, 170 F.3d at 1047. The district court further opined that it must apply the standard set forth in Palermo because it fit the “FCRA’s parochial premise,” and, therefore, was not “arbitrary, capricious, or manifestly contrary to the statute.” (Order, Feb. 21, 1998, p. 4.)
Lastly, the district court addressed other federal courts’ interpretations of Title VII, amid claims that extraterritorial employees should be counted toward Title VII’s 15 employee minimum. Id. The district court noted that “many district courts have refused to count foreign employees of foreign corporations when determining whether a defendant is an employer under Title VII.” (Order, Feb. 21, 1998, p. 4.)14 Thus, by adhering to the Florida Supreme Court’s mandate that the FCRA be interpreted consistent with Title VII,15 the district court found an additional ground to limit the application of the FCRA toentities that could qualify as “employers” without looking beyond the state of Florida.
11th Circuit Sidesteps Analysis of FCRA’s Scope
In reviewing the district court’s grant of summary judgment, the 11th Circuit ultimately disagreed, reversing and remanding for further proceedings. However, though the appellate panel addressed each of the substantive bases for the district court’s decision, the 11th Circuit ultimately refused to consider any of the issues argued by the parties and addressed by the lower court.16 Instead, the panel simply noted conflicting arguments on each successive point, but then concluded that an analysis of those points was unnecessary because the “plain meaning” of the FCRA was clear, unambiguous, and thus controlling. adhering to the “plain meaning” of the FCRA’s definition of “employer,” the court ultimately failed to consider definitively the legislative purpose, comparable interpretations of Title VII, or the FCHR’s interpretation of the FCRA.
ed its analysis to the subpart which defines “employer.”17 The court noted that this subpart does not specifically require that an employer have at least 15 employees in Florida, but merely defines “employer” as “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 person.” Id. at 1046 (citing F.S. Ann. §760.02(7)). Focusing on the absence of any express geographic restriction in this isolated definition, the court concluded that requiring an “employer” to have 15 employees in Florida would alter the plain meaning of the statute by imposing an additional, territorial restriction. Id. Thus, because De Jay Corporation conceded that it employed a total of 100 employees nationwide, the court determined that it fell “squarely within the statutory definition.” Id. at 1046.
Although the court held it inappropriate to even consider the statute’s purpose in light of its supposedly plain and unambiguous language, the 11th Circuit did initially address the district court’s finding that, “counting employees of a foreign corporation who are working in other states is profoundly inconsistent with the parochial concerns of the FCRA.” Sinclair, 170 F.3d at 1047. While agreeing that the FCRA’s purpose is “parochial,” the appellate panel suggested that this “parochial purpose” might be better served by an expansive reading of the FCRA to ensure a comprehensive protection of Floridians.
criticized the lower court’s analysis for only considering the impact of extraterritorial application of FCRA on employers (“[the district court’s interpretation] focuses solely on one side of the employment relationship. . . . ”). contrast, the 11th Circuit’s “plain language” analysis deliberately avoided any analysis of the impact of extraterritorial applications of the FRCA whatsoever. Indeed, the court failed to consider the effect of its “plain meaning” interpretation in other contexts (including the other side of the employment relationship which is likewise not limited to Florida employees) by only examining the definition of “employer.”
Turning to the district court’s reliance on Palermo, the 11th Circuit determined that the “in Florida” language in that decision must have been “totally gratuitous.” Sinclair, 170 F.3d at 1048. Moreover, the appellate court noted that “the language in a hearing officer’s report and recommendation in a particular case does not constitute an agency interpretation to which we owe deference.” Id. Once again, however, the panel expressly rejected the notion that the FCHR’s position on the territorial reach of the FCRA was significant, holding that even if the proffered interpretation of Palermo was accorded “agency interpretation” status, it would be disregarded as contrary to the plain meaning of the statute. Id. once again retreating to the plain language of the FCRA, and rejecting a proffered (but improbable) agency interpretation as irrelevant, the court has further undercut any basis for future courts to grapple with other questions concerning the extraterritorial reach of the FCRA.18
Lastly, the 11th Circuit addressed the district court’s reliance on other federal courts’ interpretations of Title VII19 on the similar question of whether American20 workers abroad count toward the 15 “employee” minimum for Title VII jurisdiction. Id. The district court noted that “many district courts have refused to count foreign employees of foreign corporations when determining whether a defendant is an employer under Title VII.” (Order, Feb. 21, 1998, p. 4.) However, the 11th Circuit panel noted that several of these lower court opinions were subsequently overturned by the Second Circuit’s decision in Morelli v. Cedel, 141 F.3d 39 (2d Cir. 1998).21 Even while expressly acknowledging the possibility that Morelli may have been wrongly decided (the Morelli opinion concedes that it is contrary to every lower court opinion),22 the court refused to consider the merits of the competing authorities interpreting Title VII. Further, although the 11th Circuit noted that Morelli provides that “[t]he nose count of the employees relates to the scale of the employer rather than to the extent of the protection,” the 11th Circuit never even attempted to apply this rationale to its own analysis in Sinclair. Id. at 1048.
Curiously, the panel does not again resort to its “plain language” talisman, but instead concludes: “[W]e are not inclined to compare relations between the United States and foreign countries to the relations between states.” Id. at 1048. This statement is particularly puzzling amidst a decision premised on the notion that the plain meaning of definitional statutory language is dispositive. Though the operative definition on which the court relies is identical in the FCRA and Title VII, the opinion nevertheless suggests that different outcomes may obtain. This policy based notion directly conflicts with the court’s predominant, “plain language” rationale.
Clearly, the end-all for the 11th Circuit in this case was the plain language of §760.02(7) of the FCRA which the court found to be completely unambiguous. However, by focusing entirely on the definition of “employer,” without a single reference to the definition of “aggrieved person,” the court’s rationale suggests that persons with no nexus to Florida may bring FCRA claims.23
A consideration of the following scenarios will serve to demonstrate the potential issues created, or at least left open, by Sinclair’s overly simplistic reasoning:
1) Plaintiff is a Georgia resident employed by a corporation incorporated in Georgia with its principal place of business also in Georgia. Plaintiff sells defendant’s products to Florida companies, and occasionally goes to Florida to either write the contracts, or otherwise service her Florida accounts. Defendant maintains no offices in Florida. Apart from the plaintiff, defendant has no other employees working in Florida. Plaintiff alleges that she has been the victim of discrimination when her employment is terminated.
2) A corporation incorporated in Delaware, with its principal place of business in Maryland, holds its annual winter retreat at a resort in south Florida. Defendant neither maintains any offices in Florida, employs any Florida residents, nor transacts business in Florida. Plaintiff, a Maryland resident who has attended her employer’s winter retreat in south Florida, alleges that she was subjected to sexual harassment, with some of the incidents occurring while attending the employer’s winter retreat in south Florida.
3) Plaintiff is a Tennessee resident employed by a California corporation. A division of the California corporation maintains an office in Florida. The plaintiff has never worked for this division nor performed any services for the company in Florida. Plaintiff alleges that she is being held back by a “glass ceiling,” while men in the corporation, including those in Florida, are advancing to higher paying positions.
As the “plain language” of the FCRA imposes no express territorial limits, Sinclair would suggest that the Florida statute applies in any case meeting the minimal requirements for personal jurisdiction in Florida.
Sinclair offered the opportunity to impose sensible limits on the territorial reach of the FCRA. Unfortunately, the 11th Circuit declined this opportunity in favor of a flawed “plain language” analysis. After Sinclair, Florida courts appear open to the bold foreign plaintiff on a forum shopping spree. Appropriate limits are sure to come, but not without substantial litigation that could have been avoided by a more definitive analysis in Sinclair. q
1 Fla. Stat. §§ 760.01–760.11.
2 42 U.S.C. §§2000e et seq.
3 42 U.S.C. §1981a.
4 It is also somewhat puzzling that the court did not even appear to consider the obvious alternative of referring this important question of Florida law to the Florida Supreme Court.
5 Under the FCRA, actions may be brought by “aggrieved persons.” There is no express limitation to “employees,” much less Florida residents. Fla. Stat. §760.02(10) (1997).
6 See, e.g., Byrd v. Richardson Greenshields Securities, Inc., 552 So. 2d 1099 (Fla. 1989).
7 In addition to significant differences in the administrative prerequisites and time limits governing civil actions under the two statutes, the absence of any limit or “cap” on compensatory damages under the FCRA makes it an attractive supplement or even alternative to a Title VII claim. Compare 42 U.S.C. §1981a(b)(3) with Fla. Stat. §760.11(5) (1997).
8 42 U.S.C. §2000e-1.
9 See 28 U.S.C. §1332.
10 Neither the 11th Circuit’s opinion, the district court’s opinion, nor either of the parties’ briefs indicates where the plaintiff directed her complaints of the alleged harassment (i.e., to management located in Florida or elsewhere); similarly, there is no indication as to where the appropriate decisions and/or action should have been taken (i.e., human resources and/or upper management in Florida or elsewhere). Although not argued by either party, these additional facts may have demonstrated the presence or absence of some nexus to Florida.
11 The FCRA provides: “‘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.” Fla. Stat. §760.02(7) (1997).
12 Order Granting Defendant’s Motion For Summary Judgment And Closing Case And Dismissing Case With Prejudice, February 21, 1998 (J. Hurley). This order was not published in any reporter, and was obtained directly from the court file.
13 FCHR is the state agency acting in a similar capacity to the federal EEOC. Fla. Stat. §760.03 (1997).
14 See, e.g., Minutillo v. Aqua Signal Corp., No. 96 C 3529, 1999 WL 156495 (N.D. Ill. Mar. 31, 1997); Russell v. Midwest-Werner & Pfleiderer, Inc., 955 F. Supp. 114 (D. Kan. 1997); Kim v. Dial Service Int’l, Inc., No. 96 Civ. 3327, 1999 WL 5902 (S.D.N.Y. Jan. 8, 1997); Feit v. Biosynth Int’l, Inc., No. 95 C 6774, 1999 WL 99726 (N.D. Ill. Mar. 4, 1996); RAO v. Kenya Airways, Ltd., No. 94 Civ. 6103 (CSH), 1999 WL 366305 (S.D.N.Y. June 30, 1995); Goyette v. DCA Advertising, Inc., 830 F. Supp. 737 (S.D.N.Y. 1993).
15 See supra note 6.
16 The district court relied upon these three reasons in granting Defendant’s Motion For Summary Judgment (Order, Feb. 21, 1998), and the defendant then relied on those three reasons in its Answer Brief submitted to the 11th Circuit. Id. at 1047.
17 Fla. Stat. §760.02(7) (1997).
18 Oddly, the FCHR failed to recite expressly the commission’s position on the proper geographic domain of the FCRA. Instead, its amicus brief merely challenged the bases for the district court’s decision. The FCHR expressly repudiated any suggestion that Palermo reflected the commission’s interpretation and explicitly informed the court that “the language in Palermo was clearly dicta.” Id. However, FCHR failed to offer any alternative argument, authority or policy basis to support a contrary reading of the FCRA, and failed to offer any guidance on the proposed extent of the extraterritorial application of the FCRA.
19 See supra note 14.
20 Title VII explicitly excludes foreign citizens working abroad from the definition of “employee.” Thus, the question of counting workers abroad is only implicated if the workers are U.S. citizens. 42 U.S.C. §2000e(f). See also Russell v. Midwest-Werner & Pfleiderer, Inc., 955 F. Supp. 114, 115 (D. Kan. 1997).
21 Morelli involved interpretation of the Age Discrimination in Employment Act (ADEA) rather than Title VII. However, despite some differences in potentially relevant statutory language, a subsequent district court opinion in the Second Circuit held that Morelli was controlling in Title VII cases as well. Greenbaum v. Handesbanker, NY, 26 F. Supp. 2d 649, 651 (S.D.N.Y. 1998).
22 See Morelli, 141 F. 3d at 45 n.1.
23 Although the dicta in this decision indicates that the court may have considered an aggrieved person to be a “Floridian,” this language is neither controlling nor consistent with the court’s plain meaning analysis. Courtney B. Wilson is a shareholder with Coll Davidson Smith Salter & Barkett in Miami, Florida, and heads the firm’s labor and employment practice.
Sarah A. Mindes is a 1996 honors graduate of the University of Florida College of Law and an associate with Coll Davidson Smith Salter & Barkett.
This column is submitted on behalf of the Labor and Employment Law Section, Robert J. Sniffen, chair, and F. Damon Kitchen, editor.