The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge
This case is before the court for ruling on the Motion to Dismiss (#4) filed by Defendant, the Macon County Soil and Water Conservation District. Both the Motion to Dismiss (#4) and the Memorandum in Opposition (#13) filed by Plaintiffs, Marilyn Parker and Tim McMahon, present matters outside the pleadings. Accordingly, pursuant to Rule 12(d) of the Federal Rules of Civil Procedure, this court is treating the Motion to Dismiss as one for summary judgment under Rule 56 of the Federal Rules of Civil Procedure. This court has carefully considered the arguments of the parties and the documents presented by the parties. Following this careful and thorough consideration, Defendant's Motion to Dismiss (#4) is DENIED.
On July 2, 2009, Plaintiffs filed their Complaint (#1) in this case. Plaintiffs alleged that they suffered discrimination on the basis of their age in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 626 et seq. Parker alleged that she was discriminated against during the year 2006 and McMahon alleged that he was discriminated against when his employment was terminated in 2007. On September 8, 2009, Defendant filed its Motion to Dismiss (#4). Defendant pointed out that the ADEA is only applicable to employers who have 20 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year. 29 U.S.C. § 630(b). Defendant argued that it did not have 20 or more employees for each working day in each of 20 or more calendar weeks during the relevant calendar years and is therefore not an "employer" as defined by the ADEA.
Defendant attached the affidavit of Linda Good, dated September 4, 2009, to its Motion. In her affidavit, Good stated that she is administrative coordinator for Defendant and has held that position since November 2000. She stated that she has personal knowledge of the personnel employed by Defendant in the years 2005 through 2007 and could testify competently thereto. Good stated that, with respect to the claim by Parker, Defendant did not have 20 or more employees for each working day in each of 20 or more calendar weeks between January 1, 2005, and December 31, 2006. Good also stated that, with respect to the claim by McMahon, Defendant did not have 20 or more employees for each working day in each of 20 or more calendar weeks between January 1, 2006, and December 31, 2007. Good listed the employees of Defendant during the relevant time periods and the lists showed that Defendant did not come close to having 20 employees at any relevant time.
Defendant also filed a Memorandum in Support of Motion to Dismiss (#5). Defendant argued that it is entitled to summary judgment because it does not meet the definition of "employer" under the ADEA. Defendant argued that the Seventh Circuit has ruled that the ADEA's 20-employee requirement applies to government employers, such as Defendant. See Kelly v. Wauconda Park Dist., 801 F.2d 269, 271-73 (7th Cir. 1986). Defendant further noted that the Seventh Circuit, in Schaefer v. Transp. Media, Inc., 859 F.2d 1251, 1254 (7th Cir. 1988) reiterated that the 20-employee minimum applies to all government employers, including states, political subdivisions and interstate agencies. Defendant argued that, because it is not an "employer" as defined in the ADEA, Plaintiffs cannot state a cause of action under the ADEA so that Plaintiffs' Complaint must be dismissed with prejudice.*fn1
On October 23, 2009, Plaintiffs filed a Memorandum in Opposition to Defendant's Motion to Dismiss (#13). Plaintiffs noted that, because Defendant relied on information outside the pleadings, the affidavit of Linda Good, the Motion to Dismiss must be treated as a motion for summary judgment and considered in accordance with the standard set forth in Rule 56. Plaintiffs did not dispute that Defendant itself did not have 20 or more employees at any time relevant to their claims. Plaintiffs argued, however, that an employer who falls beneath the 20 employee threshold established by the ADEA may nonetheless be considered an "employer" under the ADEA because of its affiliation with another entity. Based upon Schaefer, Plaintiffs argued that, in that situation, the aggregate number of employees of both entities are considered in determining whether the 20 employee requirement has been met. Plaintiff recognized that, in order to bridge the 20 employee requirement, the affiliated entity must have some supervisory control over the defendant-employer. Plaintiffs contended that Defendant is affiliated with the Illinois Department of Agriculture (Department), which does employ more than 20 employees, so that Defendant satisfies the requirements for being considered an "employer" within the meaning of the ADEA.
Plaintiffs attached extensive documentation to their Memorandum. The exhibits showed that the Department employed more than 20 employees at all pertinent times. Defendant receives grants from the Department to underwrite both a portion of its operating budget and to pay the salaries of its resource conservationist and its administrative coordinator. The Department required Defendant to provide a cost of living increase to both the resource conservationist and administrative coordinator. In addition, the Department established the starting salary of a first year resource conservationist. A resource conservationist employed by a soil and water conservation district in Illinois may transfer from one district to another when vacancies occur, and benefits earned by the individual related to years of service are transferred with the employee.
Except for the operating expenses related to the Lake Decatur Watershed, at least 50% of Defendant's operating budget was funded by the Department. Defendant received funds from the Department to pay its share of premium costs for a group health insurance plan created by 98 soil and water conservation districts in Illinois pooling together. The Department required Defendant to submit a monthly report, an annual report and an annual budget to the Department.
The Department published and distributed the District Operational Handbook (Handbook). Because it received a grant from the Department, Defendant was required to follow the terms of the Handbook, part of which was devoted to personnel practices. The Department assigned a Regional Representative as a liaison between the Department and Defendant who oversaw and monitored Defendant's activities to make sure it was complying with the Handbook.
The Department required Defendant, as a condition of receiving grant funds, to enter into a written employment agreement annually with each of its employees. The Department prepared the form of the agreement and provided it to Defendant. The Department specified the duration of the agreement, who was to sign it, and the terms of the agreement. The terms of the form agreement provided that the employer and employee agreed to adhere to the employment policies and minimum standardized benefits contained in the Handbook. The Handbook required Defendant to prepare written personnel policies, including a sexual harassment and drug free workplace policy. The Handbook also required Defendant to prepare a personnel file for each of its employees. Defendant was required to compile and report to the Department, as part of a monthly report, information from employee timesheets. The Department required Defendant to conduct periodic performance evaluations of its employees.
Plaintiffs argued that, based upon these facts, summary judgment should not be granted to Defendant. Plaintiffs contended that a legal relationship exists between Defendant and the Department, pursuant to the Soil and Water Conservation Districts Act (Act), 70 Ill. Comp. Stat. 405/1 et seq., which gives the Department a significant role in the organization, operation and dissolution of soil and water conservation districts such as Defendant. Plaintiffs argued that, in an operational sense, there is an affiliation between Defendant and the Department such that the Department exercises supervisory control over many of the activities of Defendant, particularly with regard to personnel matters. Plaintiffs argued that the Department clearly has "some supervisory control" over Defendant because the Act provides that the Department oversees the creation, dissolution and much of the ongoing operation of districts such as Defendant, including personnel matters, and funds much of Defendant's operating expenses. Plaintiffs argued that, pursuant to Schaefer, employees of the Department should be considered in determining whether the 20-employee threshold is satisfied.
On November 24, 2009, this court entered a text order and granted Defendant's Motion for Leave to File Reply. Defendant's Reply (#16) was therefore filed on November 24, 2009. In its Reply, Defendant argued that Plaintiffs argument was based upon dicta in Schaefer which did not form the basis for the court's ruling. Defendant also argued that, even if this court chose to apply the Seventh Circuit's dicta to this case, the relationship between Defendant and the Department is not such that the court should find that the Department's number of employees counts toward the ADEA's 20-employee minimum. Defendant argued that, based upon the Act, the relationship between the Department and Defendant is clearly advisory rather than ...