Seventh Circuit Respects Corporate Formalities In Assessing Title VII Coverage

Under most of the federal civil rights laws, employers are covered only if they employ 15 or more employees.  See, e.g., 42 U.S.C. § 2000e(b) (Title VII).  Businesses that employ fewer than 15 employees are not subject to the laws, the result of a Congressional policy judgment that requiring smaller enterprises to understand and follow the laws might be too burdensome.

Of course, some businesses that employ fewer than 15 employees have sister and parent corporations that also employ workers.  Are those entities subject to the federal civil rights laws?

No, said the Seventh Circuit in Prince v. Appleton Auto, LLC, No. 20-1106 (Oct. 21, 2020), at least as long as the entities respect corporate formalities.  While some federal laws examine the integration between two entities to determine coverage, see, e.g., 29 C.F.R. § 825.104(c) (FMLA), integration alone is not enough under Title VII and the other civil rights laws.  Instead, employees of separate entities will