Milestones: Kang v. U.Lim Am., Inc., 296 F.3d 810 (9th Cir. 2002)

Summary:

Korean American sued his company for employment discrimination. Plaintiff's claim was based on the allegation that the defendant company's owner, also a Korean American, abused him on the basis that Koreans were supposed to work harder than Americans and Mexicans.

The defendant company employed less than 15 people in the United States, making it ineligible for Title VII. But the company had an affiliate in Mexico which employed more than 100. The Mexican affiliate assembled television for the U.S. company to sell in the United States. The U.S. company was Mexican affiliate's sole customer, and both companies shared the same owner. The employees of the U.S. company commuted to Tijuana to work, and the U.S. company handled the accounting of the Mexican affiliate. The U.S. company also had the authority to hire and fire employees in Mexico.

The court found that Title VII applied to the defendant based on the size of the common enterprise between the U.S. and Mexican affiliates, and found the plaintiff made a prima facie case of disparate treatment. Accordingly, the court reversed the summary judgment against the plaintiff and remanded the case.

Takeaway:

Two interesting points here. First, it is totally possible for a member of a racial minority group to file a racial discrimination suit against the supervisor of the same racial group, as long as the disparate treatment comes from some type of racial prejudice. Second, Title VII applicability may look beyond a single corporation, and use a standard lower than the traditional corporate veil standard.