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ARTICLE · 23 MAY 2013

Third Circuit Holds That Shareholder-Director Cannot Sue For Discrimination

Pepper Hamilton LLP
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The Third Circuit Court of Appeals recently ruled that a shareholder-director of a closely held family corporation was not an "employee" under Title VII, and therefore could not sue for discrimination.

United StatesEmployment and HR
Tracey Diamond
Tracey Diamond

The Third Circuit Court of Appeals recently ruled that a shareholder-director of a closely held family corporation was not an "employee" under Title VII, and therefore could not sue for discrimination. See Mariotti v. Mariotti Building Products, Inc., No. 11-3148, 2013 WL 1789440 (3d Cir. April 29, 2013).

Mariotti Building Products, Inc. is a "closely held family business" started by Louis S. "Babe" Mariotti in 1947. In the 1960s, Babe's sons, plaintiff Robert Mariotti, Sr. and his two brothers, Eugene and Louis, joined the business, which eventually grew to be worth more than $60 million. In his more than 45 years with the company, Robert developed a number of business areas, training staff in the day-to-day management of several product lines. He principally managed the manufactured housing sales division, as well as customer credit, bill paying, purchasing, and the inbound transportation of product lines. He was a shareholder and an officer of the corporation,

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