The opinion of the court was delivered by: Dalzell, J.
In this case, a 62 year old man brings claims of age discrimination in
connection with his termination as circulation director of the Delaware
County Daily Times. We here consider the defendants' motion for summary
I. Factual Background*fn1
Plaintiff Wayne Ziegler, who was born on July 2, 1938, in 1977, after
previous seventeen years in various aspects of the newspaper
business, accepted a position with the Delaware County Daily Times (the
"Daily Times") as Circulation Manager. The following year, the Daily
Times promoted him to the position of Circulation Director, the position
he held until his termination twenty years later. As Circulation
Director, Ziegler was in charge of all aspects of the circulation
department, including home delivery, single copy purchases*fn2, and
distribution. Ziegler reported directly to the Daily Times's
publisher.*fn3 The Daily Times's publisher was and is
Frank Gothie, who has held that position since 1986.
From 1989 until 1998, Goodson Newspaper Group owned the Daily Times. In
February or March, 1998, a newspaper broker contacted the Journal
Register Company ("JRC") and reported that the Goodson Newspaper Group's
papers were for sale. JRC is a publicly-traded*fn4 corporation that owns
and operates well over one hundred newspapers*fn5 nationwide. On May
17, 1998, JRC entered into a contract to purchase the Goodson Newspaper
Group, which then included newspapers in Massillon, Ohio, Oneida, New
York, Kingston, New York, Ardmore and Pottstown, Pennsylvania, as well as
the Daily Times.*fn6 The sale closed on July 15, 1998.
Immediately following the closing, Ziegler, then sixty years old, was
terminated as Circulation Director of the Daily Times. Michael Starn,
then thirty-six years old, replaced him. This action followed.
In his Complaint, Ziegler claims age discrimination against the
Delaware County Daily Times, JRC, Robert Jelenic (JRC's CEO), and William
Higginson (JRC's Vice-President of Production). Counts 1 (against the
Daily Times) and 2 (against JRC) allege that these firms violated the Age
Discrimination in Employment Act (ADEA) and the Pennsylvania Human
Relations Act (PHRA) in that their decision to terminate Ziegler was
based in whole or in part on his age. Counts 3 (against Robert Jelenic)
and 4 (against William Higginson) allege that these men violated the
PHRA, and in particular 42 Pa. Con. Stat. Ann. 955(e), by aiding,
abetting, inciting, compelling, and/or coercing Ziegler's wrongful
age-based termination, or by obstructing or preventing people from
complying with the ADEA or PHRA.
B. Defendant's Motion for Summary Judgment
A. Overview of Employment Discrimination Law
We begin with the legal structure under which our analysis must
Under the ADEA, it is "unlawful for an employer . . . to fail or refuse
to hire or to discharge any individual or otherwise discriminate against
any individual with respect to his compensation, terms, conditions, or
privileges of employment, because of such individual's age."
29 U.S.C. § 623(a)(1). When a plaintiff alleges disparate treatment,
"liability depends on whether the protected trait (under the ADEA, age)
actually motivated the employer's decision." Hazen Paper Co. v. Biggins,
507 U.S. 604, 610, 113 S.Ct. 1701 (1993). That is, the plaintiff's age
must have "actually played a role in [the employer's decisionmaking]
process and had a determinative influence on the outcome." Ibid.
Reeves v. Sanderson Plumbing Prods., Inc., 120 S.Ct. 2097, 2105 (2000).
Claims under the ADEA and PHRA*fn9 are assessed using the analytical
framework developed for Title VII claims under Price Waterhouse v.
Hopkins, 490 U.S. 228, 109 S.Ct. 1775 (1989) and McDonnell Douglas Corp.
v. Green, 411 U.S. 792, 93 S.Ct. 1817 (1973) and their progeny, Keller
v. Orix Credit Alliance, Inc., 130 F.3d 1101, 1108 (3d Cir. 1997).
Under Price Waterhouse, "if a plaintiff `show[s] by direct evidence
that an illegitimate criterion was a substantial factor in the decision,'
the burden of persuasion shifts to the employer `to show that the
decision would have been the same absent discrimination.'" Keller, 130
F.3d at 1113 (quoting Price Waterhouse, 490 U.S. at
276, 109 S.Ct. at 1804 (O'Connor, J., concurring)) (emphasis in
Alternatively, the McDonnell Douglas analytic model permits a plaintiff
to go forward in the absence of direct evidence of discrimination. The
McDonnell Douglas model consists of three steps. "First, the plaintiff
must produce evidence that is sufficient to convince a reasonable
factfinder to find all of the elements of a prima facie case," Keller,
130 F.3d at 1108. If the plaintiff makes such a showing, we move to step
two. "The burden of production (but not the burden of persuasion) shifts
to the defendant, who must then offer evidence that is sufficient, if
believed, to support a finding that it had a legitimate,
nondiscriminatory reason for the discharge," Keller, 130 F.3d at 1108. If
the defendant cannot satisfy this burden, we enter judgment for the
plaintiff. Conversely, if the defendant satisfies the burden, the
presumption of discrimination created by the prima facie case disappears,
Reeves, 120 S.Ct. at 2106, and we then proceed to step three. In step
three, the plaintiff must submit evidence from which the factfinder could
find that the defendant's allegedly legitimate reason was a pretext for
discrimination, Reeves, 120 S.Ct. at 2106.
The assessment of the defendants' motion for summary judgment that
follows will track these analytic steps.
Company's Status as a Proper Defendant
Before beginning our discussion of the Price Waterhouse or McDonnell
Douglas frameworks, we must first address a threshold question, namely,
whether JRC was Ziegler's employer for purposes of liability under the
ADEA or PHRA. In their motion for summary judgment, defendants argue that
in order for JRC to be liable under Count 2, we must first find that JRC
was Ziegler's employer, since liability for Ziegler's termination under
the PHRA or ADEA lies with his employer. In response, Ziegler argues that
JRC, as the Delaware County Daily Times's corporate parent at the time
Ziegler was terminated, was in fact Ziegler's employer*fn11.
Marzano v. Computer Science Corp., 91 F.3d 497 (3d Cir. 1996)*fn12
addressed the circumstances under which a corporate parent and one of its
subsidiaries can be treated as a single employer for purposes of
employment discrimination law.*fn13 In Marzano, our Court of Appeals
essentially analyzed this question as analogous to the question of
piercing the corporate veil in the particular circumstances of
employment, and looked initially to applicable state law*fn14 for
In Pennsylvania*fn15, there is a strong presumption against piercing
the corporate veil, Miners, Inc. v. Alpine Equip. Corp., 722 A.2d 691,
694 (Pa.Super. 1998) (citing Lumax Indus., Inc. v. Aultman, 669 A.2d 893,
895 (Pa. 1995)). Pennsylvania courts have also recognized*fn16 that
there are two separate types of veil piercing theories: the "alter ego"
theory, in which a plaintiff seeks to hold a controlling owner of a
corporation liable, and "single entity" theory, in which a plaintiff
argues that two corporations share common ownership and are in fact
operating as a single corporate combine.*fn17 With respect to "alter ego"
veil piercing, "factors which may, at times, justify disregarding the
corporate form and holding the shareholder(s) liable include
intermingling of personal and corporate affairs, undercapitalization,
failure to adhere to corporate formalities, or using the corporate form
to perpetrate a fraud," Commonwealth v. Vienna Health Prods., Inc.,
726 A.2d 432, 434 (Pa. Cmwlth. 1999). In "single entity" veil piercing,
"two or more corporations are treated as one because of identity of
ownership, unified administrative
control, similar or supplementary business functions, involuntary
creditors, and insolvency of the corporation against which the claim
lies," Miner's, Inc., 722 A.2d at 695.*fn18
In addition to looking to state corporate law, the Marzano panel looked
to decisions in other circuits, and quoted at length from Johnson v.
Flowers Indus., Inc., 814 F.2d 978 (4th Cir. 1987), in which the Fourth
Circuit held that the presumption that a corporate subsidiary, and not
the parent, was the individual's employer could be overcome in one of two
First, the parent could control the employment practices and decisions
of the subsidiary. If the parent company hired and fired the subsidiary
employees, routinely shifted them between the two companies, and
supervised their daily operations, it would be hard to find that the
parent was not their employer. Second, the parent might so dominate the
subsidiary's operations that the parent and the subsidiary are one entity
and thus one employer. For example, the subsidiary may be highly
integrated with the parent's business operations, as evidenced by the
commingling of funds and assets, the use of the same work force and
business offices for both corporations, and the severe
undercapitalization of the subsidiary. The parent might also fail to
observe such basic corporate formalities as keeping separate books and
holding separate shareholder and board meetings.
Marzano, 91 F.3d at 513 (quoting Johnson, 814 F.2d at 981).
With this guidance, we now move to examine the relationship between JRC
and the Daily Times. As Marzano makes clear, we begin with the
presumption that the corporate parent is not the employer, and we will
consequently proceed by canvassing the validity of Ziegler's arguments as
to why the veil should be pierced.
We should note at the outset that there is no claim here that JRC ever
directly employed Ziegler. To the extent that Ziegler was "employed" by
JRC for ADEA purposes, it was through the Daily Times.*fn19
Consequently, the only time in which Ziegler could have been a JRC
employee was in the few hours between the closing of the sale of the
Goodson Newspaper Group to JRC and Ziegler's termination, Ex. D, Defs.'
Mem. of Law (Dep. of Frank Gothie) at 124-25 (noting that he was informed
that closing had occurred by a phone call in the late morning of July
15, 1998 and that "shortly" afterward he began the process of informing
the four terminated Daily Times employees, including Ziegler).
In any event, Ziegler organizes his general arguments regarding the
relationship between JRC and the Daily Times along four lines: functional
integration of operations, centralized control of labor relations, common
management, and common ownership.*fn20 These categories correspond
largely to the "single entity" veil piercing theory.
With respect to centralized control of labor relations, Ziegler points
out that the 1998 W-2 form for Michael Starn, Ziegler's replacement,
lists JRC as Starn's employer and that both Starn and Frank Gothie, the
Daily Times's publisher, received JRC stock options as part of their
compensation, Pl.'s Mem. of Law at 48. Ziegler also points out that in
answers to interrogatories, Robert Jelenic, JRC's CEO, stated that he had
to power to, inter alia, hire, transfer, and discharge the employees of
JRC or of facilities JRC owned, Pl.'s Mem. of Law at 48, Ex. U, Pl.'s
Mem. of Law (Defendants' Responses to Interrogatories). Further, Ziegler
cites Frank Gothie's testimony that after JRC's purchase of the Goodson
Newspaper Group was announced, Gothie became aware that JRC had a model
for the number of people that it expected to be on the staff of a
newspaper the size of the Daily Times, and that under this model, the
Daily Times would have to reduce the number of people on its staff in
certain ways after JRC's ...