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