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07/14/2010 18:35 2145202577 JACKSON LEWIS LLP PAGE 02/18 Representing Management Hxth1!:iivdy i.n WorKph,ce Law and Rel<tted Litig:1tir)JJ jackson lewis Attorneys :1t T...<1W Michael J. DePonte, Esq. J(I<;\won I.(JoW" llP 3611 Turtle Cr=k !;;QO Ilona", Te-xn! 75219 T(!I 214 Fl1x 214 521]-2(108 Board Certified- Texas Board of Leg a! Specialization Labor and Employment Law Civil Trial Law "'1.11111';'1', NV :-1M ,\'Il_'1N'rIl.C,\ MI,11N!lRE. Mil lI!1\MINCf1M,t,A!. /,\\STf'N. M,\ C!·nCA{;O, U. <:\"'I(:!f'JJ'.":\Tf.(lll (lH TN July 14,2010 ViII F IIcsimile lind F ederlll Express Administrative Review Board 200 Constitution Avenue NW Washington, DC 20210 nf.N\'Iil\.Ul :.11:"1NEIII'OIJS. MN Nil T'lt:Tnmr,MI :"'.1 l'I,t1Y1JJE:-'IC;E, RI 111 HARll'llRI), CT NI,',v'Ylln,.;.NY 10(;1,11>10:-11). V.'I TJI" ',ICl1,\.\IENT!!,C!,\ Jr\cI<!IflNVIU,F..l'L "nhNr.l;!:'II,II"I')'.C,\ :>,\1\ VEt_"I:;, NV (lllL,\:-.lrl\\,!'l. _<'A:>; Ht,';..!I,:I:ot;\I. \;,1 1.<,)Nfll.'iI.ANl"l,"'JY 1'1 Ul.illllilJ'HI,I. P/\ I.nS,INW'l.H:,.t.:,\ I'HOI'NlX. ,1,7. '.:1" nrr.W\;IH;H,r,\ W,\'iHINn'l'(1N.ll(; !(l!(iI\)N MIAMI,H. WHrrEl't.IIIN.<;.I"y Re: Cani S. Johnson v. Siemens Building Technologies, Ino., and Siemens, AG. ALJ Case No. 2005·S0X-QI5 Dcar Sir/Madam: Enclosed is the Brief of Berkshire Hathaway, Inc. and FlightSafety International, Inc. in connection with the above-referenced matter. All counsel of record are being scrved by facsimile. MJD/cb Enclosure cc: Jacqueline Williams Siem.ens Building Technologies, Inc. And Siem.ells AG clo Gregg LoCascio, Esq. Gereon Merten Sincerely, JACKSON LEWIS LLP Michael .J. DePonte VIA FACSIMILE VIA FACSIMILE VIA FIRST CLASS MAIL

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Page 1: :.11:1NEIII'OIJS. MN jackson lewis $III~~ !;;QO :-1M 111 · Exchange Act of 1934 (15 U.S.C. § 781), or that is required to file reports ulJder section 15(d) of the Securities Exchange

07/14/2010 18:35 2145202577 JACKSON LEWIS LLP PAGE 02/18

Representing Management Hxth1!:iivdy i.n WorKph,ce Law and Rel<tted Litig:1tir)JJ

jackson lewis Attorneys :1t T...<1W

Michael J. DePonte, Esq.

J(I<;\won I.(JoW" llP

3611 Turtle Cr=k eO~lcVOlrfl

$III~~ !;;QO

Ilona", Te-xn! 75219

T(!I 214 ~20·2400

Fl1x 214 521]-2(108

\\"wwJI:\'Ck~rllewl~.o:om

Board Certified-Texas Board of Leg a! Specialization Labor and Employment Law

Civil Trial Law

"'1.11111';'1', NV

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P:\I.I,,\~, TN

July 14,2010

ViII F IIcsimile lind F ederlll Express

Administrative Review Board 200 Constitution Avenue NW Washington, DC 20210

nf.N\'Iil\.Ul :.11:"1NEIII'OIJS. MN 1'{)I\·r.~).101:Tf!. Nil

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MIAMI,H. 1~\l\!"I.I\N1J.'-)l\ WHrrEl't.IIIN.<;.I"y

Re: Cani S. Johnson v. Siemens Building Technologies, Ino., and Siemens, AG. ALJ Case No. 2005·S0X-QI5

Dcar Sir/Madam:

Enclosed is the Brief of Berkshire Hathaway, Inc. and FlightSafety International, Inc. in connection with the above-referenced matter.

All counsel of record are being scrved by facsimile.

MJD/cb Enclosure cc: Jacqueline Williams

Siem.ens Building Technologies, Inc. And Siem.ells AG clo Gregg LoCascio, Esq. Gereon Merten

Sincerely,

JACKSON LEWIS LLP

~~-Michael .J. DePonte

VIA FACSIMILE

VIA FACSIMILE VIA FIRST CLASS MAIL

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07/14/2010 18:35 2145202577 JACKSON LEWIS LLP PAGE 03/18

CARlU S. JOHNSON, § BEFORETHE

Complainant, § ADMINISTRATIVE REVIEW BOARD § U.S. DEPARTMENT OF .LABOR

v. § § Mill CASE NO. 08,032 §

SIEMENS BUILDING TECHNOLOGlV.,s, INC. AND SEIMENS, AG,

§ § ALJ CASE NO. 2005-S0X-Oi5 §

Respondents. §

BRIEF OF BERKSHIRE HATHAWAY, INC AND FLIGHTSAFETV INTERNATIONAL INC.

Respectfully submitted,

ACKSON LEWIS LLP

Pa I .. Hash Texas Bar No. 09198020 Michael.!. DePonte, Esq. Texas Bar No. 24001392 3811 Turtle Creek Blvd., Suite 500 Dallas. Texas 75219-4497 PH: (214) 520-2400 FX: (214) 520-2008

ATTORNEYS FOR BERKSHIRE HATHAWAY, INC AND FLIGHTSAFETY INTERNATIONAL INC.

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07/14/2010 18:35 2145202677 JACKSON LEWIS LLP PAGE 04/18

TABLE OF CONTENTS

1. STANDARD OF REVlEW ................................................................................................... 1

II. ARGUMENT ....... , ................................................................................................................. 1

A. Introdtiction ................ , ................................. , ................................ , ................................... 1

B. A subsidiary is not categorically covered under Section 806 ........................................... 2

C. A subsidiary must be an agent for its publicly traded parent corporation to be subject to Section 806 ........................ " ..... , ...... , ...................................... , ... , ... " ........ , ......... " ......... , .. 3

D. The ARB should use the integrated enterprise test and then determine if the parent acted through any centralized control oflabor relations Witll its subsidiary ........... , ................ .4

I. The integrated enterprise test is wide! y used and accepted .......................................... .4

2. If the ARB finds iliat a parent and subsidiary arc an integrated enterprise it should then determine whether ilie parent acted through any labor relations regarding the subsidiary's employee .... , ... ,"' ................................................ , ...................................... 7

E. There is no other theory under which subsidiaries of publicly traded parent should be held liable under Section 8,06 .......................................................................... , ................ 9

m. CONCLUSION ............................................... " .................................................................. 9

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TABLE OF AUTHORITIES

FEDERAL CASES

Baker v. Stuart Broadcasting Co .. , 560 F.2d 389 (8th Cir. 1977) ....................................... "" ........................................... 5

Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235 (2nd eir. 1995) ........................ " .......................................................... 5,7

Engine Manufacturers Association v. South Coast Air Quality Management District, 541 U.S. 246 (2004) .................................. "" .................................................. 2

Frank v. U.S. West, Inc., 3 FJd 1357(lOthCir.l993) ................................................................................ .4,7,8

Hoffman v. Tyeo Jnternational. LTD., 2006 U.S. Dist. LEXIS 91392 (E.D. Pa. Dec. 18, 2006) ............................................... 9

llel Containers International Corp. v. Atlanttrafik Exp. Servo Lid., 909 F.2d 698 (2nd Cir. 1990) .......... ............................. ................ ...." .................... ..4

Johnson v. Flowers Industrial, Inc., 814 F.2d 978 (4th Cir.J987) ...................... " .... "."........... .................. ..4

Krivo Industrial Supply Co. v. National Distillers & Chemical Corp., 483 F.2d 1098 (5th Cir.1973) ........................................ " ............................................. .4

Lockard v. Pizza HUl, Inc., 162 FJd 1062 (10th elr. 1998) ..... " ..... " ......................................... " ....................... 5

Luskv. Foxmeyer Health Corp., 129 FJd 773 (5th Cir. 1997) ............................................................. " .............. 4, 5,7,8

Lyes v. City of Riviera Beach, 166 F.3d 1332 (11th elf. 1999) .................................... " ............................................... 5

Meyer v. Holley, 537 U.S. 280 (2003) ........................................... , ......................................................... 3

National Carbide Crop. V Commissioner, 336 US 422 (1949) ....................................... , .............. , ................................................ 4

RadiO Union V. Broadcast Service, 380 U.S. 255 (l965) ........... , ......................................................................................... 5

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07/14/2010 18:35 2145202677 JACKSON LEWIS LLP PAGE 06/18

Reilly v. TXU Corp" 2009 U.S. Dist. LEXIS 26522 (N.D. Tex. 2009) ................... , ...................................... 7

Romano v, U~Haullnternational, 233 F.3d 655 (1st eir. 2000) ................................................................................ " ........ 5

Royal Industrial Ltd. v. Krajl Foods, Inc" 926 F, Supp. 407 (S.D,N,Y. 1996) ................................................................................ 3

In re S. African Apartheid Litigation, 633 F. Supp. 2d 117 (S.D.NY 2009) ......................................................................... .4

Saalim )I, Dycom Indus" 2008 U,S, Dist. LEXIS 62208 (D.N.J. 2008) ....... , .................................................... 8, 9

Schweitzer)l, Advanced Telemarketing Corp., 104 F.3d 761 (5th Cir. 1997) .................................................................................. 5, 7

Trevino )I. Celanese Corp" 70 I F.2d 397 (5th Cir. 1983) ................ , .. , .. , .... , .................................. ' ...... , .. , ..... " .. , ..... 5

United States v. Bestjood5, 524 U.S, 51 (1998) ........................ , ............... , ... " ................ , ..... , ........................... 3

ARB DECISIONS

Gereon Merten v. Berkershire Hathaway, Inc, and FlighlSafety Internalional Inc., ARB Case No, 09-025, AU Case No, 2008-S0X-40 ........ , .................................. 1

Henrich v, Eco/ab, Inc" ARB No. 05-030, ALJ No. 2004-S0X·OSl (ARB June 29, 2006) ............................... 1

FEDERAL STATUTES

20 C.F.R. § 1980.IIO(c) , ....................... "" ......................................................................... 1

15 U.S.C. § 781, , ... , ...................... ', .. ', .............. , ..... ,., ............ ,", ........................ ,', ................ 2 .

15 U,S.C, § 78o(d», ............................... , ............ , ...................................... , .. , .. , ........ 2

18 U.S,C, I 514A(a) .................. , .................... , ..................................................................... 3

Secretary's Order 1-2002, 67 Fed, Reg, 64,272 ................................................................... 1

29 C,FK § 825.I04(c)(2) .................................................................................................. 5

ii

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MISCELLANEOUS

Restatement (Second) of Agency § I .................................................................................. 4

iii

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07/14/2010 18:35 2145202577 JACKSON LEWIS LLP PAGE 08118

CARR). S, JOHNSON, § BEFORE THE

Complainant, § ADMINISTRATlVE REVIEW BOARD § U.S, DEPARTMENT OF LABOR

v.

SIEMENS BUILDING TECHNOLOGIES, INC. AND SEIMENS, AG,

Respondents.

§ § ARB CASE NO. 08-032 § § § AL,J CASE NO. 2005-S0X-OIS § §

NOW COME Berkshire Hathaway, Inc and FlightSafety International Inc., Respondents

ill the l:natter of Gereon Merten v. Berkershire Hathaway. Inc, and FltghtSafety International

Inc., ARB Case No. 09-025, AU Case No. 2008-S0X-40 ("Respond~nts") and pursuant to the

Administrative Review Board's request for additional briefing dated April 15, 2010 in the above-

captioned matter, submit this Brief.

I. STANDARD OF REVIEW

The Administrative Review Board's ("ARB") jurisdiction to review an Administrative

Law Judge ("AU") decision is set forth in the Secretary'S Order 1-2002, 67 Fed. Reg. 64,272.

The ARB reviews an ALJ's findings of fact in Sarbancs-Oxley Act ("SOX") cases under the

substantial evidence standard. 20 C.F,R. § 1980.110(c). In contrast, the ARB exercises de novo

review of the AU's conclusions of law. Henrich 11. Ecolab, Inc., ARB No. 05.030, ALJ No.

2004-S0X-OSI (ARB June 29,2006).

n. ARGUMENT

A. Introduction.

In 2008, the Wall Street J oumal quoted Sharon W orlhy, a Labor Department

spokeswoman, as stating that the agency '''believes that there is no Jegal basis for the argument

that subsidiaries of covered corporations are automaticaHy covered,' under the Sarban¢s-Oxley

BRIEF OF BESfONDENTS BERKSHlRE HATHA WAY, INC AND FLT9HTSAFEiY INTERNATIONAL INC.

Page 1

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whistleblower provision. 'The plain language of the statute only applies to publicly traded

corporations. '" Whistleblowel's are L~fi Dangling - Technicality Lead~ Labor Department to

Dismiss Cases, WALL STREET JOURNAL, September 4,2008.

The Department of Labor's position is consistent with the proper application of well-

established legal principals outlined below. An employee of a subsidiary cannot maintain a

Section 806 claim against a parent company absent evidence that the parent and subsidiary are an

integrated enterprise. Section 806 applies only to publicly traded companies and their officers,

employees, contractOl:s, subcontractors, or agents. Therefore, a subsidiary must have acted as the

agent for a publicly traded parent corporation for it to be subject to Section 806. To determine

whether a subsidiary is an agent for a publicly traded parent corporation the ARB should usc the

integrated enterprise test and then determine whether the parent acted through any "centralized

control oflabor relations" regarding the subsidiary's employee. This is the only theory by which

an employee of a subsidiary to a publicly traded company may fall under the provisions of

Section 806.

B. A subsidiary is not categorically covered under Section 806.

Subsidiaries are oot categorically covered under Section 806. "Statutory construction

must begin with the language employed by Congress and the assumption that the ordinary

meaning of that language accurately expresses the legislative purpose." Engine Mfrs. Assn. v.

South Coast Air Quality Managemem Disl., 541 U.S. 246 (2004) (citations omitted). The statute

at issue speci.fically states:

No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. § 781), or that is required to file reports ulJder section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. § 78o(d»), or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate

BRIEF OF RESPONDENTS .IlERKSHIRE BATBA WAY, INC AND FLIGHTSAFETY INTEgNATIONAL INC.

Page 2

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07/14/2010 18:35 2145202677 JACKSON LEWIS LLP PAGE 10/18

against an employee in the tenns and conditions of employment because of any lawful act done by the employee- -

18 U.S.C. 1514A(a) (also referred to as Section 806). In other words, the plal_n language of

Section 806 states that it applies only to (1) publicly traded companies and (2) "any officer,

employee, contractor, subcontractor, or agent of such company." Id. (emphasis added).

Nowhere in the statute are subsidiaries considered "publicly traded companies.'" Thus, absent

a finding that a subsidiary has acted in some other specific enumerated capacity for the publicly

traded entity, there is no basis for automatically subjecting the subsidiary to SOX's provisions.

C. A subsidiary mllst be aD. agent {PI' its publicly traded parent corporation to be subject to Section 806.

To be subject to the provisions of Section 806, a subsidiary must be an agent of its parent

corporation. However, subsidiaries are not agents of their parent corporation simply by virtue of

their business relationship. Principles may only be held liable for tbe acts of their agents acting

within tile scope of/heir authority. Meyer v. Holley, 537 U.S. 280, 285 (2003). Thus, "[JJust as

onc corporation can hire another to act as its agent, a parent can commission its subsidiary to do

the same." Royal Indus. Ltd. v. Kraft Foods, Inc., 926 F. Supp. 407, 413 (S.D.N.Y. 1996).

However, "a parent corporation is not liable for acts of its subsidiaries simply because it owns

the subsidiary's stock." RESTATEMENT (THIRD) OF AGENCY § 1.0] emt. f(2) (citing United States

11. Best(oods, 524 U.S. 51,61-63(1998) (holding that it is a basic tenant of agency law that parent

companies are not ipso/acro liable for the actions of their subsidiaries). Under federal common

law,

the relationship of principal and agent does not obtain unless the parent has manifested its desire for the subsidiary to act upon the parent's behalf, the

In fact. if a publicly traded company's 15(d) reporting obligations have boen temporary suspended_ the Securities Exchange Commission will exclude the Gompany from SOX·s purview. See SEC Division of Corporation Finance, Sarbanes"Oxley Act of 2002 - FAQ l. .BRIEF OF RESPONDENTS .BERKSHIRE HATHAWAY, INC AND FLIQaTSAFETY INTERNATIONAL INC.

PageS

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subsidiary has consented so to act, the parent has the right to exercise control over the subsidiary with respect to matters entrusted to the subsidiary, and the parent exercises its control in a manner more direct than by voting a majority of the stock in the subsidiary or making appointments to the subsidiary's Board of Directors.

In re S. African Apartheid Litig., 633 F. Supp. 2d 117, 121 (S.D.N.Y. 2009) (quoting

RESTATEMENT (SECOND) OF AGENCY § I); see also, llelContainers In!'! Corp. v. Atlanttraflk

Exp. Servo Ltd., 909 F.2d 698, 702-03 (2d Cir. 1990) (establishing similar standards concerning

express and implied agency) (citations omitted). For example, in National Carbide Corp. v.

Commissioner 336 U.S. 422 (1949), the Court addressed whether three wholly owned

subsidiaries of a corporation were agents of the parent corporation for tax purposes. The

subsidiaries argued that since they were the agents of the parent, the income from their actlyities

was actually the parent company's income. National Carbide, 336 U.S. at 424. The Court held

that the fact that the subsidiaries were completely owned and controlled by the parent was not

enough (0 support the conclusion that they were the parent's agents. ld. at 429. Accordingly,

absent a principle/agent relationship wherein the subsidiary acted on behalf of the parent

corporation, for a specific purpose, a subsidiary cannot be subject to the provisions of Section

806.

D. The ARB should nse the integrated entemrise test and then determine if the parent acted through any eentralized control oflabor relations with its subsidia!:y

1. The integrated enternrise test is widely used and accepted

The "doctrine of limited liability" creates a strong presumption that a parent corporation

is not liable fOr (he employment actions of its subsidiaries. Lusk v. Foxmeyer Health Corp., 129

F.3d 773, 778 (5th Cir. 1997) (citing Frank v. US West, Inc., 3 F.3d 1357, 1362 (lOth

Cir.1993); Johnson v. Flowers Indus .. Inc., 814 F.2d 978, 980 (4th Cir.1987); see also Krivo

BRIEF OF RESPONDENTS BERKSmRE HATHA WA Y, INC AND FLiGHTSI\FEIY INTERNATIONAL INC.

Poge4

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07/14/2010 18:35 2145202577 JACKSON LEWIS LLP PAGE 12/18

Indus. Supply Co. v. National Distillers & Chem. Corp., 483 F.2d 1098, 11 02 (5th Cir.1973)

(corporate form is not disregarded lightly since the law created corporations primarily to allow

limited liability). An exception to tm.s doctrine exists where the parent and subsidiary companies

arc really a single, integrated enterprise - a single employer. Schweitzer v. Advanced

Telemarketing Corp., 104 FJd 761, 763 (5 'h Cir. 1997) (citing Trevino v. Celanese Corp., 701

F.2d 397,404 (5th Cir. 1983».

To determine whether a parent corporation and its subsidiary may be regarded as a

"single employer" in the context of employment matters, the Fifth Cixcuit adopted the four-part

analysis originally created by the Supreme Court for labor disputes in Radio Union v. Broadcast

Service, 380 U.S. 255, 257 (1965); see a/so, Lusk, 129 F.3d at 777. The four-part test examines:

(1) interrelation of operations, (2) centralized control of labor relations, (3) common

management, and (4) common ownership or financial control. Trevino, 701 F.2d at 404.2 The

integrated enterprise test is also utilized by several governmental entities. The Department of

Labor utilizes the test to determine whether separate entities are joint employers under the

Family Medical Leave Act. Specifically, 29 C.F.R. § 825.104(c)(2) states:

Separate entities will be deemed to be parts of a single employer for purposes of FMLA jf they meet the "integrated employer" test. Where this test is met, the employees of all entities making up the integrated employer will be counted in determining employer coveragc and employee eligibility. A determination of whether or not separate entities are an integrated employer is not dctermined by the application of any single criterion, but rather the entire relationship is to be reviewed in its totality. Factors consjdered in detelmining whether two or more entities are an integrated employer include:

(1) Common management;

Other Courts have applied the integrated entell"ise test. See, e.g., Romano v. U-Haul [nt'!, 233 F.3d 655, 662 (I" Cir. 2000). Lyesv. City of Riviera Beach, 166 F.3d 1332, 1342 (l1th CiT. 1999) (en bane); Lookard v. Pizza If",. Inc., 162 F.3d 1062, 1069 (10th Cir. 1998): Cook v. Arrowsmith She/b."n •.. fnc .. 69 F.3d 1235. 1240-41 (2d Cir. 1995); Baker 11. Stuart Broadcasling Ca., 560 F.2d 389. 391 (8th Cir. 1977).

BRIEF OF RESPONDENTS BERKSHIRE HATHA WA y, INC AND FLIGHTSAFETY INTERNA TlONAL .INC.

rageS

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07/14/2010 18:35 2145202577 JACKSON LEWIS LLP PAGE 13/18

(li) Interrelation between operations;

(iii) Centralized control of labor relations; and

(iv) Degree of common ownership/financial control.

29 C.F.R. § 825.104(c)(2). Similarly, the Equal Employment Opportunity Commission provides

additional guidance through .lts Compliance Manual, stating:

The factors to be considered in determining whether separate entities should be treated as an integrated enterprise are:

• The degree of interrelation between the operations

• Sharing of management services such as "heck ""Titing, preparation of mutual policy manuals, contract negotiations, and completion of business licenses

• Sharing of payroll and insurance programs

• Sharing of services of managers and personnel

Sharing use of office space, equipment, and storage

Operating the entities as a single unit

• The degree to which the entities share common management

• Whether the same individuals manage or supervise the different entities

• Whether the entities have common officers and boards of directors

• Ce:ntralized control of labor rel9tion~

• Whether tlJere is a centralized source of authority for development of personnel policy

• Whether one entity maintains pcrsolU1cl records and screens and tests applicants for employment

• Whether the entities share a personnel (human resources) department and whether inler-company transfers and promotions of personnel are common

Whether the same persons make the employment decisions for both entities

• The degree of common.ownership or financial control over the entities

• Whether the same person or persons own Of control the different entities

BRIEF OF RESPONDENTS BERKSHIRE HATHA WAY, INC AND FLIGHTSAFETY INTERNATIONAL INC.

Poge 6

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• Whether the same persons serve as officers andlor directors of the different entities

• Whether one company owns the majority or all of the shares of the oth.cr company.

PAGE 14/18

EEOC Compliance Manual, Section 2-UI(I3)(1)(a)(iii)(a). "The purpose of these factors is to

establish the degree of control exercised by one entity over the operation of another enti~y." Id.

2. If the ARB finds that a parent and subsidiary are an integrated enterprise it should then determine whether the parent acted through any labor relations regarding the subsidiary's employee

If the ARB.finds that a parent and subsidiary are an integrated enterprise, it should then

answer the ultimate question of whether the parent acted through the subsidiary regarding the

subsidiary's employee. Courts regularly extend their analysis to address the primary question:

"what entity made the final decisions regarding employment matters related to the person[sJ

claiming discrimination?" Schweitzer, 104 FJd at 764 (quoting Trevino, 701 F.2d at 404); see

also Lusk, 129 F.3d at 777 (staling, "This analysis ultimately focuses on the question of whether

the parent corporation was a final decision-maker in connection with the employment matters .

underlying the litigation."); Cook v. Arrowsmith Shelburne, Inc., 69 FJd 1235, 1240 (2n~ Cir.

J 995) (same); Frank v. U.S. West; Inc., 3 F.3d 1357 (10th Cir. 1993) (same). In other words,

there must be more than common ownership and operations to satisfy the integrated enterprise

test for employment matters. "There must be some nexus between the patent company and the

subsidiary's daily employment decisions, to support an inference that the subsidiary and the

parent were 'functionally integrated. '" Reilly v. TXU Corp., 2009 U.S. Dis!. LEXIS 26522 (N.D.

Tex. 2009) (citing Lusk, 129 FJd at 778).

The practical application of the integrated enterprise lest is exemplified in Saalim v.

Dycom Indus., wherein the court refused to hold that the plaintiff was an employee of both the

BRIEF OF RESPONDENTS BERKSHIRE HATHA WAY, INC AND FLlGHTSAFETY INTERNA TIQNAL me.

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07/14/2010 18:35 2145202577 JACKSON LEWIS LLP PAGE 15/18

subsidiary and the parent corporation despite the patent corporation's oversight of its

subsidiaries. 2008 U.S. Dist. LEXIS 62208 (D.NJ. July 31, 2008).) Despite the intertwined

relationship of Dycom and its subsidiaries, the court in Saalim refused to hold Dycom liable for

the employment actions of the subsidiaries. The court specifically recognized that even thongh

Dycom required its subsidiaries to adopt employment poiicies, and even controlled the salaries

and bonuses paid to employees, "[a) parent's broad general policy statement regarding

employment matters [is] not enough" to establish a parent's control over a subsidiary. ld. at *16-

20, quoting Frank v. Us. West. Inc., 3 F.3d 1357, 1363 (10th Cir. \993) (finding application of

parent's equal opportunity policy, identity statement, and ERISA gnidelines to subsidiaries

insufficient evidence of labor control); see also, Lusk, 129 F.3d. 773, 780-81, (holding that

In Saalim, the Court analyzed the relationship between p.rent corporation, Dycom, and the subs.ldiaries, Utiliquest and STS, and found: .

• The Presidents of Utiliquest and STS report to Dycom's Chkf Operating OfficerlExecutive Vice President;

$0 Dycom offie:ials meet qum1:erly with their insurance carrier to review claims against Dycom~s subsidiaries;

• Dycom hires or takes part in hiring the presidents, vie. presidents and other officers of its subsidiaries; Dyeom engaged and paid an outside agency to help in finding the Utiliquest CFO and extended an offer of employment to Dennis Tarosky 'on behalf of Dyeom Industries! Inc.';

• Dycom Oversees subsidiaries' employee salarieslboDuses and changes in operational stmclUre; subsidiaries provide Dycom with reports concerning payroll, operational activities, and employee disciplinary actions;

® Dycom requires its subsidiaries to adopt harassment and electronic communications poliCies and even provides fonn policies for its subsidiaries to use;

• Dycom requires all subsidiary cmployees to sign and abide by its Business Code of Conduct and Ethics; it al,o ove.rsee, enforcement ofthi$ policy; and

It Dycom and its subsIdjaries have the same insurance plans.

Saallm, 2008 U.S. Dist. L.EXIS 62208, *4·5. Moreover, Dycom represented in its corporale publications and filing, that a.ll of its sttbsi~iarjes' employees were their own and that four individuals were corporate officers for Dycom, Utiliqu·est. and STS. lei. at '5.

BRIEF OF RESPONDENTS BERKSHIRE HATHA WAY, INC AND FLiGHTSAFETY INTERNATIONAL INC

Poge 8

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07/14/2010 18:35 2145202577 JACKSON LEWIS LLP PAGE 15/18

National Intergroup, Inc. as the holding corporation for the plaintiffs' employer, could not be

held liable for reduction in force and the plaintiffs' subsequent discharge); Hoffman v. Tyco

Int'!, LTD., 2006 V.S. Dist. LEXIS 91392 (E.D. Pa. Dec. 18, 2006) (finding no personal

jurisdiction over defendant Tyco whete company operated 800 ntnnber for all its subsidiaries).

Thus, unless a parent acted with "a degree of control that exceeds the control nonnally exercised

by a parent corporation," there is no basis for subjecting the parent to liability under Section 806

for the actions of its subsidiary. Saalim, 2008 U.S. Dist. LEXIS 62208, *20 (citations omitted),

E. Tbere is no other theory under which subsidIaries of publicly traded parent should be held liable under Section 806.

Finally, pursuant to the Board's final inquiry, Respondents submit that there is no other

basis or theory for subjecting the subsidiary of a publicly traded company to liability under

Section 806. The integrated enterprise test provides an accepted methodology to determine the

i.nterrelation of parents and. their subsidiaries in employment matters and no other theory of

liability under Section 806 is required.

III. CONCLUSION

Absent evidence that a subsidiary acted as an agent of its publicly traded parent with

respect to the employment of a "whistlcblowcr" employee under Section 806, there is no basis to

subject the parent to liability for the subsi.diaries' actions. An employee must demonstrate that

the parent and subsidiary are an integrated enterprise that acted as a single employer to retaliate

against the employee for engaging in a protected activity under the terms of Section 806. Absent

an employee's satisfaction of the integrated employer test, with an emphasis on any alleged

centralized control of labor relations, an employee cannot maintain a Section 806 claim against a

publicly traded parent corporation.

BRIEF OF RESPONDENTS BERKSHIRE RATHA WAY, INC AND FLIGHTSAFETY INTERNATIONAL INC.

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07/14/2010 18:35 2145202577 JACKSON LEWIS LLP

Respectfully submitted,

Texas Bar No. 09198020 Michael J. DePonte, Esq. Texas BarNo. 24001392 3811 Turtle Creek Blvd., Suite 500 Dallas, Texas 75219-4497 PH: (214) 520·2400 FX: (214) 520·2008

ATTORNEYS FOR BERKSHIRE HATHAWAY, INC AND FLIGHTSAFETY INTERNATIONAL INC.

CERTIFICATE OF SERVICE

I certify that for the foregoing was served on the following cOlmsel of record via facsimile the 14th day of July, 2010.

unsel

BBlEF OF RESPONDENTS BERKSHIRE HATRA. WAY. INC AND FLlGHTSAFETY INTERNATIONAL INC.

PAGE 17118

rage 10

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07/14/2010 18:35 2145202577

Administrative Review Board 200 C011.stitution Avenue NW Washington, DC 20210

Siemens Building Technologies, me. SiemensAG clo Gregg LoCascio, Esq. 655 fifteenth Street Washington, DC 20005

Gereon Merten 32 Friend Street Congers, NY 10920

Jacqueline Williams 2524 Hennepin Avenue Minneapolis, MN 5540S

JACKSON LEWIS LLP

SERVICE SHEET

BRIEF OF RESPONDENTS BERKSHIRE llAmA WAX, INC AND . FLIGHlSAFETY INTERNATIONAL INC,

PAI.::it. 1 tll .t tl

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07/14/2010 18:30 2145202577 JACKSON LEWIS LLP PAGE 01/18

Representing Management eJ«:lusively in Workplace L.iW rind Related Litigation

hlJIANY,NY GREnNVIll.ll, sC MORRISTOWN, l'lJ AL&UQUf,RQU);, NM l'IARTr'O~I), CT I'l'f.W ORU!ANS, LA

AT1.ANH., G'" HQUS10N, TX N!.',W YORK, 1'1'1'

mP,J'MNGH},M, A1. JflC:K~ON\llLLB. fl. 9MhHA._NE

IIQSTON,MA LAS VEGAS, NV OP,J,NGli Ci)tINTY, CA

(;H1(:flGO,lL Lf)N(j ISl.ilND, NY ORL .... NDO, FL

CLfiVUl.,.AND, 01-1 LOS AJ'lC;;ltU,S, C" rtiJ1.A\)1iLPHlh, M

DALLAS, TX MEMPHIS,TN I'HOI!.NIX, AZ

DBl'IVF,!I., CO MIAMI,l'l. rJTT~IlVKG!~, I'A

DI!TftOlT. MJ MINNl!.ArOLIb", MN I'ORTLAND, OR

FAX To: Administrative Review Board (202) 693"6220

Jacqueline Williams (612) 354-7012 Gregg LoCascio (202) 879-5200

From: Michael J. DePonte Subject: Date:

ALJ Case No. 2005-S0X-015, Johnson v. Siemens. et aI. April 29,2010

ClientlMattcl" #: 125506 Pages: J'fJ Original: Will Follow x Will Not Follow

MESSAGE: Please see the attached.

Pl •• se contact Edye :Brown if tbere are any problems with tbis transmission. :

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