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Gupta v. Sears

March 26, 2009


The opinion of the court was delivered by: Nora Barry Fischer United States District Judge

Judge Nora Barry Fischer


Anita Gupta ("Plaintiff") has brought an action against Sears, Roebuck and Co. ("Sears") and Sears Holdings Corporation ("Sears Holdings") alleging employment discrimination in violation of Section 1981 of the Civil Rights Act of 1866, as amended, 42 U.S.C. § 1981; Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 20003, et seq.; and the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §621, et seq. In addition, Plaintiff claims common law breach of contract and intentional infliction of emotional distress. (Doc. No. 25). Before this Court is Defendants' Motion for Summary Judgment. (Docket No. 52). In consideration of the parties' briefs, and for the following reasons, Defendants' Motion is hereby granted, in part, and denied, in part.

I. Dismissal of Sears Holdings

Initially, the Court addresses Defendants' argument that Sears Holdings Corporation should be dismissed from this case. (Docket No. 53 at 1, n. 1). Sears is a wholly owned subsidiary of Sears Holdings. (Docket No. 25 at ¶3). Defendants argue that Sears Holdings should be dismissed from this action because it was not Plaintiff's employer, and Plaintiff does not assert that Sears Holdings took any action against her. Additionally, Defendants argue Plaintiff has failed to offer any facts showing that, as the parent corporation of Sears, Sears Holdings is liable for Sears' alleged discriminatory conduct. (Docket No. 53 at 1, n. 1).

Under Pennsylvania law, there is a strong presumption that a corporate parent will not be liable for the conduct of its subsidiary. Ziegler v. Delaware County Daily Times, 128 F.Supp. 2d 790, 795 (Miners, Inc. v. Alpine Equip. Corp., 722 A.2d 691, 694 (Pa.Super.1998))(citations omitted). See also Jean Anderson Hierarchy of Agents v. Allstate Life Ins. Co., 2 F.Supp. 2d 688, 691 (E.D. Pa. 1999) (citations omitted)("As a general rule, a parent corporation, like any stockholder, is not normally liable for the wrongful acts or contractual obligations of a subsidiary even if or simply because the parent wholly owns the subsidiary"); De La Cruz v. Piccari Press, 521 F.Supp. 2d 424, 429 (E.D. Pa. 2007). Generally, a parent corporation will not be liable for the conduct of its wholly owned subsidiary unless the plaintiff can rebut the presumption by showing that the corporate veil has been pierced. Stinson v. GAF Corp., 757 F.Supp. 644, 646 (W.D. Pa. 1990) (Culbreth v. Amosa Ltd., 898 F.2d 13, 14 (3d Cir.1990)). It is the plaintiff's burden to show that the subsidiary is the "alter ego" of the parent corporation, Stinson, 757 F.Supp. at 646, or that the subsidiary and its parent corporation are a "single entity." Ziegler, 128 F.Supp. 2d at 795. Additionally, in the context of cases involving claims of employment discrimination by a subsidiary in violation of Title VII, §1981 and the ADEA, the plaintiff may also show that the two corporations are an "integrated enterprise," i.e., that both the parent and subsidiary acted as the plaintiff's employer. De La Cruz, 521 F.Supp. 2d at 430 (citing Kemether v. PIAA, Inc., 15 F.Supp. 2d 740, 749 n.5 (E.D. Pa. 2007)).

In determining whether the subsidiary is the "alter ego" of the corporate parent, the Court considers several factors, including "intermingling of personal and corporate affairs, undercapitalization, failure to adhere to corporate formalities, or using the corporate form to perpetrate a fraud." Ziegler, 128 F.Supp. 2d at 795 (quoting Commonwealth v. Vienna Health Prods., Inc., 726 A.2d 432, 434 (Pa.Cmwlth.1999)). A subsidiary and corporate parent will be a "single entity" when the two 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." Id. (quoting Miners, Inc. v. Alpine Equipment Corp., 722 A.2d 691, 695 (Pa. Super. 1998)). The "integrated enterprise" test "is a four-factor test to determine if a subsidiary is a mere instrumentality of its parent: (1) is there functional integration of the operations of the parent and subsidiary; (2) are labor relations centrally controlled; (3) is there common management; and (4) is there common ownership and financial control." De La Cruz, 521 F.Supp. 2d at 430 (citing Kemether v. PIAA, Inc., 15 F.Supp. 2d at 749). See also Marzano v. Computer Science Corp., Inc., 91 F.3d 497, 514 (3d Cir. 1996)).

Here, Plaintiff's Amended Complaint does not specifically allege how Defendants Sears and Sears Holdings are interrelated in order to overcome the presumption that Sears Holdings is not liable for the alleged misconduct of Sears. Indeed, Plaintiff's Amended Complaint alleges that Plaintiff was employed by Sears. (Docket No. 25 at ¶1). She does not allege that she was ever employed by Sears Holdings. Nor does Plaintiff offer any evidence that Sears, Roebuck and Co. is merely the "alter ego" of Sears Holdings, or that the two corporations are a single entity or an integrated enterprise. Because Plaintiff has not met her burden of overcoming the presumption that Sears Holdings is not liable for the conduct of its subsidiaries, the Court grants Defendants' motion to dismiss Sears Holdings as a defendant in the instant case.

II. Factual Background

As a threshold matter, the Court notes Plaintiff's failure to properly respond directly to Defendant's Undisputed Statement of Material Facts as required by the Local Rules of the United States District Court for the Western District of Pennsylvania. Local Rule 56.1 (C)(1) mandates that a non-moving party's response to a motion for summary judgment must include:

1. A Responsive Concise Statement

A separately filed concise statement, which responds to each numbered paragraph in the moving party's Concise Statement of Material Facts by:

(a) admitting or denying whether each fact contained in the moving party's Concise Statement of Material Facts is undisputed and/or material;

(b) setting forth the basis for the denial if any contained in the moving party's Concise Statement of Material Facts is not admitted in its entirety (as to whether it is undisputed or material), with appropriate reference to the record (See L.R. 56.1(B)(1) for instructions regarding format and annotation); and

(c) setting forth in separately numbered paragraphs any other material facts that are allegedly at issue, and/or that the opposing party asserts are necessary for the court to determine the motion for summary judgment.

Furthermore, Local Rule 56.1(E) provides as follows:

E. Admission of Material Facts

Alleged material facts set forth in the moving party's Concise Statement of Material Facts or in the opposing party's Responsive Concise Statement, which are claimed to be undisputed, will for the purposes of deciding the motion for summary judgment be deemed admitted unless specifically denied or otherwise controverted by a separate concise statement of the opposing party.

W.D. Pa. L.R. 56.1(C) (2008). In this case, Sears filed a Concise Statement of Material Facts in support of its Motion for Summary Judgment on September 8, 2008, (Docket. No. 54), and an Appendix thereto. (Docket. No. 55). In response, Plaintiff filed a response to Defendants' Motion for Summary Judgment, setting forth separate facts in support of her claims of employment discrimination. (Docket. No. 63). Additionally, Plaintiff's Reply Brief to Defendants' Motion for Summary Judgment sets forth separate facts in support of her claims. (Docket. No. 64). However, to the extent that Plaintiff's recitation of the facts do not address Defendants' statement of facts, Defendants' statement will be deemed admitted. W.D. Pa. L.R. 56.1(E); See GE Group Life Assur. Co. v. Turner, Civil Action No. 05-342, 2009 WL 150944 at *1 (W.D. Pa. January 20, 2009); Aubrey v. Sanders, Civil Action No. 07-0137, 2008 WL 4443826 at *1 (W.D. Pa. September 26, 2008)) (citing Jankowski v. Demand, Civ. Action No. 06-00618, 2008 WL 1901347, at *1 (W.D.Pa. April 25, 2008); GNC Franchising LLC v. Kahn, Civ. Action Nos. 05-1341; 06-00238, 2008 WL 612749, at *1 (W.D.Pa. Mar.3, 2008); Ferace v. Hawley, Civ. Action No. 05-1259, 2007 WL 2823477, at *1 (W.D.Pa. Sept.26, 2007))(citations omitted). To the extent that Plaintiff's statement of facts controverts Defendants', the Court will consider these facts in deciding whether summary judgment should be granted, as provided by Local Rule 56.1(E). Unless otherwise indicated, the following facts are undisputed.

1. Plaintiff's Personal, Educational and Employment Background

Plaintiff is an American citizen who immigrated to the United States from India in 1979. (Docket No. 64 at ¶ 4; Docket No. 68 at ¶ 4). At all times relevant to this cause of action, Plaintiff was an employee of Sears at its South Hills Village Mall location. (Docket No. 63 at ¶ 4; Docket No. 68 at ¶ 4). Plaintiff is noticeably of Indian descent in both appearance and accent. (Docket No. 63 at ¶ 6; Docket No. 68 at ¶ 6). After immigrating to the United States, Plaintiff began working at Sears in the South Hills Village Mall in October of 1986. (Docket No. 63 at ¶ 8; Docket No. 68 at ¶ 8). She was discharged from her position at Sears on December 3, 2005. (Docket No. 54 at ¶ 230).

Plaintiff was born on August 2, 1956. (Docket No. 63 at ¶ 5; Docket No. 68 at ¶ 5). At the time of her termination in 2005, she was forty-nine years of age. (Docket No. 63 at ¶ 5; Docket No. 68 at ¶ 5). At the time of the events leading to the Plaintiff's discharge, she had obtained the position of Lead Cashier ("CAC Lead"). (Docket No. 63 at ¶ 8; Docket No. 68 at ¶ 8). CAC Lead was considered a managerial position at Sears. (Docket No. 54 at ¶46). In this position, Plaintiff reported directly to Wayne Kohler, the Operations Manager of the South Hills Village Sears store. (Docket No. 55, Exh. G at 3; Docket No. 55, Exh. B-1 at 25). In her position as CAC Lead, the Plaintiff was responsible for overseeing associates and cashiers who worked the registers, called "cash wraps." (Docket No. 54 at ¶49; Docket No. 55, Exh. B-1 at 20). In addition to scheduling associates, Plaintiff had responsibility to train associates on the cash registers and to ensure that they were properly used. (Docket. No. 54 at ¶¶ 57-59). At the time of her termination, David Marquis was the General Manager of the South Hills Village Sears store. (Docket No. 54 at ¶3; Docket No. 63 at ¶ 16). Marquis was supervised by district manager Cindy Stuck. (Docket No. 54 at ¶6).

2. Sears' Employee Discount and Honesty Policies

As an employee at Sears, the Plaintiff was entitled to an employee discount. (Docket No. 55, Exh. A at 9; Docket No. 54 at ¶ 65). The policy, entitled the "Associate Discount Policy" is found in the Sears "Associate Handbook," which was in effect at the time of the events leading to the Plaintiff's termination in December 2005. (Docket No. 54 at ¶ 37). In regard to the employee discount, the policy provides:

Associate Discount Policy

It is the policy of the Company to grant Sears associates a discount on purchases made with cash, check, Sears Card, Sears MasterCard, other in-house credit card, and PIN-based debit card transactions where debit cards are accepted.

Application The discount applies to merchandise and services purchased and paid for by associates, spouses and their dependent children who have current discount identification. Purchases made for later reimbursement by individuals not eligible for the discount are prohibited. This includes parents and other ineligible family members.

Please see the Associate Discount Reference Card at for information on where this discount applies.

Associate Eligibility

The discount privilege is extended to new associates as soon as they are placed on the payroll and receive their discount identification card in the mail. They are entitled to a discount as long as they remain on the payroll. Discount Cards Salaried and full-time hourly associates, regardless of length of service and part-time associates with at least one year of service are eligible to receive one discount card for their spouse or a dependent child who is at least age 16 and additional cards for eligible student dependents. All children, including students, must qualify as dependents for Federal Income Tax purposes.

Abuse It is your responsibility to ask for the discount only where you are eligible. Abuse of the dis-count privilege will result in discipline, up to and including termination of employment, and/ or revocation of the discount privilege.

(Docket No.55, Exh. A).*fn1 The Associate Handbook also contained the following relevant provisions under the heading "Workplace Conduct":

Selling Practices

Always do your work honestly and truthfully. Never misrepresent Sears products or services. Sell products and services at the appropriate price. Ensure customers receive all discounts to which they are entitled. Do not provide customers discounts to which they are not entitled.


Conflicts of Interest Act in the best interest of Sears and Sears customers. Avoid working for competition unless approved by your manager. Do not accept gifts that violate the company gift policy from companies that do business with Sears unless approved by your manager. Associates should pay the appropriate price for merchandise purchased from Sears. Associates should not obtain discounts that they are not entitled to receive.


Examples of unacceptable business conduct that can lead to termination include, but are not limited to: ...

Theft or dishonesty ...

Violating associate discount policy; giving unauthorized mark downs to customers/associates ...

(Docket No. 55, Exh. A at 11). In regard to violations of company policy regarding sales, the handbook further provides:

Sales Related Violations

Failure to adhere to correct pricing fees, credit acceptance policies, check acceptance policies, point-of-sale policies and business ethics is a violation of Company policy. Appropriate disciplinary procedures, using approved documentation of performance issues for ethics or policy violations, should be applied if these policies are violated. (Docket No. 55, Exh. A at 20).

Additionally the handbook contained the following provision with respect to potential discipline measures:

Progressive Discipline

The Company uses progressive discipline to address substandard performance or conduct, which if not corrected, can lead to termination. This process is intended generally to give associates the opportunity to improve their performance and avoid termination. The process does not, and is not intended to, either alter associates' at-will status or create any contractual rights of any kind, whether express or implied. The Company reserves the right, in its discretion, to skip a step or forego the process entirely.

(Docket No. 55, Exh. A at 16).

Plaintiff understood that she was required to perform her work honestly and truthfully while employed by Sears. (Docket No. 54 at ¶69). Plaintiff signed a form acknowledging receipt of the company handbook. (Docket No. 56, Exh. A at p. 3).

3. "Family and Friends Night" Events

In addition to the employee discount as outlined in the Associate Handbook, twice a year the South Hills Village Sears store held "Family and Friends Night" events, which permitted employees, their family and friends to make purchases in the store and receive additional discounts on certain items. (Docket No. 54 at ¶ 89; Docket No. 63 at ¶ 11). One such event was held on Sunday November 13, 2005 from 6:00 to 9:00 p.m. (Docket No. 54 at ¶ 90; Docket No. 63 at ¶ 10). A flyer for the event listed the types of discounts available at the event:

* Save an additional 10% off regular, sale and clearance prices *

* (Excludes Home Electronics. Additional Exclusions apply.

See below)... ... Sears Associates and Retirees can enjoy these savings in addition to their employee discount. Just present your discount card at purchase ... (Docket No. 55, Exh. C-3 at 47). The exclusions to the 10% discount were listed in small print on the bottom of the flyer:

* Not valid on advertised items (including any number of items purchased on Buy One Get One events), footwear, in-store specials ... Savings reduction is off regular & clearance prices. In a case where the 20% discount is lower than the ad price, the register will automatically give the lower price. Applies to new purchases & new layaways only ... Not valid on previous purchases, Home Electronics, DVD [illegible], video games, Special Purchases, Great Price Items, Levi's Jeans, Sears Auctions on ebay, outlet store purchases,, catalog orders, fragrances ... Introductory Offers, Celestial Star diamonds, fine jewelry clearance ..."

(Docket No. 55, Exh. C-3 at 47). According to Sears, this flyer, in addition to at least two others, were produced to announce the subject event to associates and their friends and families. (Docket No. 54 at ¶ 91). In her deposition, Plaintiff testified that she received a flyer of this type prior to the "Family and Friends Night" events. (Docket No.55, Exh. C-1 at 17-18). Additionally, the Plaintiff testified that she understood that items marked "Introductory Offer" were excluded from the 10% discount for purposes of the "Family and Friends Night" event at issue. (Docket No. 55, Exh. C-1 at 17-19).

4. Plaintiff's Attempt to Purchase Earrings from Judy Forbes

Prior to the "Family and Friends Night" event on November 13, 2005, Plaintiff became interested in purchasing a pair of diamond earrings that she noticed in a jewelry shipment. (Docket No. 55, Exh. C at 38; Docket No. 54 at ¶ 98). On Sunday November 5, 2005, Plaintiff placed the earrings on hold so that she could purchase them at a later date. (Docket No. 54 at ¶ 96; Docket No. 55, Exh. C-1 at 22). Thereafter, on Wednesday November 8, Plaintiff went back to purchase the earrings. At that time, another associate, Judy Forbes, was working the register in the jewelry department. (Docket No. 54 at ¶ 98; Docket No. 55, Exh. C-1 at 22). Plaintiff asked if she could continue to keep the earrings on hold until Sunday November 13, 2005. (Docket No. 54 at ¶ 98-99; Docket No. 55, Exh. C-1 at 41). Plaintiff testified at her deposition that she asked Forbes if she could keep the earrings on hold and purchase them on Sunday because she wanted to use a gift card to purchase them, and she did not have the gift card with her at that time. (Docket No. 55, Exh. C-1 at 41-42). Furthermore, the Plaintiff testified that she was going out of town to Philadelphia, and would not be able to return to purchase the earrings until that Sunday. Id.

A. We have a name tag around our neck, so in that pouch I had my associate discount card and I had my Sears card. So I hand [Judy Forbes] my associate discount card. When she-- I think she scanned the earrings. Then I told her, I said: Oh, Judy, I don't have my gift card with me, can I keep the earrings on hold, and I can buy them on Sunday? Because I was going out of town for three days, I think. I went three or four days.

According to Plaintiff, Forbes told her that the earrings could not be kept on hold for longer than twenty-four hours, so the Plaintiff informed her that she would purchase the earrings on Sunday if they were still available. Id. Sears contends that Forbes informed the Plaintiff that the earrings in question were an "Introductory Offer" and did not qualify for the ten percent discount. (Docket No. 54 at ¶100). The Plaintiff testified that after her conversation with Forbes, she was called to help an associate, but that Forbes later approached her and the following interaction occurred:

A. So then I came back. I was walking back, and Judy, she had a paper in her hand, something like this. ... She says: These earrings don't qualify for ten percent. I said: Judy, I'm not asking for ten percent; I don't have my gift card, so I'm not buying my earrings; I'll buy them on Sunday.

(Docket No. 55, Exh. C-1 at 25). Sears disputes this interaction took place between the Plaintiff and Judy Forbes. According to Sears, Forbes showed the Plaintiff a flyer for "Family and Friends Night" and informed her that the earrings she wished to purchase did not qualify for a ten percent discount, to which Plaintiff replied, "We'll let the register decide." (Docket No. 54 at ¶101).

5. Sears' Initial Investigation of Plaintiff In her deposition, Judy Forbes could not recall that Plaintiff made this statement, she only recalled that she had reported something regarding the Plaintiff to Loss Prevention, specifically to Dennis Yusko, the store's Loss Prevention Manager. (Docket No. 55, Exh. F at 34-35; Docket No. 63 at ¶36). Forbes testified:

Q: So, your honest response is here under oath that after ... having reviewed the log, it honestly doesn't jog your memory as to any specifics?

A: No, it doesn't. ...

A: I remember, obviously, I went to loss prevention because something did not settle with me.

A: I recall approaching Dennis [Yusko]. I do not know a date.

Q: And you don't remember any approach or discussion with Gupta?

A: No. (Docket No. 55, Exh. H at 34). Forbes did not make a written statement regarding the incident. Id. Dennis Yusko testified that Judy Forbes informed him that this conversation occurred, and that the Plaintiff had told Forbes to "let the register decide."(Docket No. 55, Exh. L at 10-11). As a result Sears asserts that "Yusko assumed that [Plaintiff] appeared to be planning to engage in fraudulent action," and opened an investigation pertaining to the Plaintiff's ...

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