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Mikolajczak v. Mann

Court of Appeals of Washington, Division 3

December 7, 2017

JULIE MIKOLAJCZAK, an individual, Respondent,
v.
BALBIR MANN d/b/a COLE'S CORNER MARKET, a Washington Sole Proprietorship, Petitioner.

          PENNELL, J.

         The Washington Law Against Discrimination (WLAD), chapter 49.60 RCW, provides a civil cause of action for workplace discrimination so long as an employer has eight or more employees. An agency rule applicable to the WLAD specifies that the employees of commonly managed corporations and other artificial persons can be combined to reach the eight employee threshold. We are asked whether this rule also allows employees of a sole proprietorship to be combined with those of a commonly managed corporation or artificial person. Our answer is no.

         A sole proprietorship is neither a corporation nor an artificial person. An individual doing business as a sole proprietor only can face WLAD liability if he or she is personally responsible for eight or more qualifying employees. The employees of a corporation or other artificial entity cannot be added to the sole proprietor's employees to meet this criterion. The trial court's ruling to the contrary is reversed.

         FACTS

         Balbir Mann is a sole proprietor doing business as Cole's Corner Market in Chelan County, Washington. Mr. Mann employs a manager to oversee the day-to-day operations of Cole's Corner, but he is also personally involved in administrative functions such as payroll. Records indicate that at all times relevant to this litigation, Cole's Corner Market employed no more than seven persons.

         Mr. Mann also owns 90 percent of the Mann Group LLC, with the remaining 10 percent owned by his son. This limited liability company does business as Sultan Chevron, a franchised gas station. Mr. Mann is solely responsible for managing the operations of the company.

         Julie Zufall (f/k/a Julie Mikolajczak) worked for Cole's Corner Market in 2013. During Ms. Zufall's term of employment, she sustained a shoulder injury and her doctor placed her on physical restrictions. Her work at Cole's Corner ended shortly thereafter. According to Ms. Zufall, her employment was terminated. Mr. Mann claims Ms. Zufall left voluntarily.

         Ms. Zufall sued Mr. Mann alleging that, in addition to several other claims, he failed to provide a reasonable accommodation for her shoulder injury in violation of the WLAD. The parties filed cross motions for summary judgment. During the motions process, the parties took issue over whether Mr. Mann qualified as an employer under the WLAD, RCW 49.60.040(11), given the evidence that Cole's Corner Market never employed at least eight persons. Ms. Zufall argued Mr. Mann did qualify as an employer because the Cole's Corner employees could be combined with the employees of the Mann Group LLC under WAC 162-16-220(6) to reach the statutory requirement of eight employees.

         The trial court ultimately issued a summary judgment order finding Mr. Mann qualified as an employer under the WLAD. No transcript exists of the summary judgment proceeding and the parties dispute the exact grounds for the trial court's ruling. What is clear is the trial court ruled as a matter of law that Mr. Mann had sufficient employees to qualify as an employer under RCW 49.60.040(11). Ms. Zufall's WLAD claim thus survived summary judgment. The trial court dismissed Ms. ZufalPs other claims, but the parties agree that the trial court intended those claims be reinstated if her WLAD claim failed.

         Mr. Mann obtained discretionary review of the trial court's order and the matter was submitted to a panel of this court after oral argument.

         ANALYSIS

         We review an order on summary judgment de novo. Lyons v. U.S. Bank Nat'l Ass'n, 181 Wn.2d 775, 783, 336 P.3d 1142 (2014). Under this standard, we engage in the same inquiry as the trial court, viewing the facts and all reasonable inferences in the light most favorable to the nonmoving party. Id.

         The WLAD prohibits an employer from firing an employee on the basis of disability. RCW 49.60.180(2). An "employer" is defined as "any person" who employs eight or more people. RCW 49.60.040(11). The WLAD's definition of "person" is broad and includes "individuals, partnerships, associations, organizations, corporations" among others. RCW 49.60.040(19). If an employer does not have eight or more employees, then that employer is exempt from the provisions of the WLAD. See Griffin v. Eller, 130 Wn.2d 58, 61, 63-64, 922 P.2d 788 (1996).

         The legislature has authorized the Washington State Human Rights Commission (HRC) to promulgate rules for implementing the WLAD. RCW 49.60.120(3). One of the objectives of the HRC's rules is "[t]o give effect to the purposes of the exemption of employers of less than eight from public enforcement of the law against discrimination, as identified in RCW 49.60.040." WAC 162-16-200(2)(c). Further, the HRC seeks to adopt rules that are "certain" and "easy to understand and apply." This occasionally requires the HRC to "simply draw a ...


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