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Complaint Alleges Facts Sufficient to Find Company was Plaintiff’s Employer

Hollensteiner v. Waterfield Group
No: 10-cv-00200-AW (D.Md. 2011)

by Lindsey N. Lanzendorfer, Summer Associate
Semmes, Bowen & Semmes (

In this recent case, the United States District Court for the District of Maryland held that the Complaint alleged facts sufficient to survive a Motion to Dismiss. In his Complaint, Plaintiff, Malcolm Hollensteiner, contended that Defendant, Waterfield Group, effectively terminated his employment—as a senior vice president of retail mortgage banking at Waterfield Bank—but did not actually terminate him until it was no longer required to provide a severance payment. Waterfield Group argued that Hollensteiner failed to allege facts sufficient to establish the existence of an employment relationship between the two parties. Instead, Waterfield Group alleged that their subsidiary, Waterfield Bank, employed Hollensteiner.

When reviewing a Motion to Dismiss, a Court can only consider documents that are part of the pleadings. If the parties present matters outside the pleadings, the Court must treat the motion as one for summary judgment. FED. R. CIV. P. 12(d). Additionally, to survive a Motion to Dismiss, a plaintiff must provide enough detail to “nudge his claim across the line from conceivable to plausible.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

In this case, the U.S. District Court found that the four corners of the Complaint merely stated that Waterfield was Hollensteiner’s employer. Without more, this bald assertion would fail to establish an employment relationship. However, Hollensteiner provided the court with additional documents to consider. Because neither party wanted to turn the Motion to Dismiss into a Motion for Summary Judgment, the District Court decided it would be more efficient to consider the documents and permit Hollensteiner to amend the Complaint than to dismiss the case without prejudice.

Moving to the merits of the case, the District Court rejected Hollensteiner’s argument that the integrated-employer doctrine, which allows a parent company to be liable for the actions of its subsidiaries, applied. The Court found the theory was developed for federal labor and civil rights cases and did not decide to extend it in this case. Moreover, piercing the corporate veil did not apply as Maryland law only permits the doctrine when the corporate form has been used by a shareholder to perpetuate fraud. On his third try, the District Court found Hollensteiner alleged enough facts to make it plausible that Waterfield Group fit the definition of “employer” under the Maryland Wage Payment and Collection Act. The Court reasoned that although Waterfield Group may not have had the power to select and hire Hollensteiner, it provided Hollensteiner with paychecks, permitted him to participate in a stock options plan, and seem to have power over his termination and severance payment. The Employment Agreement also suggested that the employment was subject to policy guidelines of Waterfield Group. Finally, Hollensteiner alleged that he collaborated closely with Waterfield Group’s Irvine, California office. Accordingly, the District Court denied the Motion to Dismiss and permitted the claim to proceed to discovery.