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Rymal v. Baergen6/8/2004
nt.
Before we commence a substantive discussion of Jager, we reject plaintiff's argument that Baergen was the sole proprietor of MTD, and as such, he was both an employer and employee and can thus be held liable as an employer under the CRA. The record reflects that MTD is a Michigan corporation. Baergen testified in his deposition that he was the sole shareholder in MTD, a subchapter S corporation. Plaintiff testified in her deposition that she was a twenty-five percent owner of MTD and an employee, but she conceded that there was no written documentation showing her ownership. Plaintiff asserted that no MTD stock was ever issued; however, she made no claim that MTD was not a corporate entity, nor did she present evidence that MTD was not a recognized Michigan corporation. A corporation and sole proprietorship are two separate and distinct business entities. See Clark v United Technologies Automotive, Inc, 459 Mich 681, 693; 594 NW2d 447 (1999). Under MCL 37.2201(a) of the CRA, an "employer" is defined as a "person" with one or more employees, and a "person" is defined as including a corporation, MCL 37.2103(g). The law treats a corporation as an entirely separate entity from its shareholders, even where one individual owns all the corporation's stock. Foodland Distributors v Al-Naimi, 220 Mich App 453, 456; 559 NW2d 379 (1996); Kline v Kline, 104 Mich App 700, 702; 305 NW2d 297 (1981). Here, MTD was plaintiff's employer because the corporation had one or more employees, not Baergen. Moreover, a review of the complaint reveals specific allegations that Baergen was an agent and employee of MTD and that plaintiff was an employee of MTD, not Baergen. Additionally, tax documents indicate that MTD System, Inc., was plaintiff's employer.
Plaintiff fails to argue that MTD's corporate veil should be pierced, and the documentary evidence would not support a piercing, such that Baergen should be treated as the actual employer, assuming that the doctrine is even applicable in the context of the CRA. "The traditional basis for piercing the corporate veil has been to protect a corporation's creditors where there is a unity of interest of the stockholders and the corporation and where the stockholders have used the corporate structure in an attempt to avoid legal obligations." Foodland, supra at 456. In the case at bar, there was no evidence suggesting that Baergen was using the corporate structure in an attempt to avoid legal obligations.
For the corporate veil to be pierced, the corporate entity must be a mere instrumentality of another individual or entity. Id. at 457, quoting SCD Chemical Distributors, Inc v Medley, 203 Mich App 374, 381; 512 NW2d 86 (1994). Further, the corporate entity must have been used to commit a wrong or fraud. Id. Additionally, and finally, there must have been an unjust injury or loss to the plaintiff. Id. There is no single rule delineating when a corporate entity should be disregarded, and the facts are to be assessed in light of a corporation's economic justification to determine if the corporate form has been abused. Id. at 456-457.
In the case before us today, we find no evidence indicating that MTD was a sham corporation or a mere instrumentality of Baergen used to commit a wrong. Rather, it appears that MTD is a legitimate corporation and that plaintiff was at one time employed by MTD.
Turning to Jager, the plaintiff there worked for Nationwide Truck Brokers, Inc. (NTB), through an employee lease agreement, and she was supervised by James Wilkerson. Jager accused Wilkerson of making unwanted sexual advances and inappropriate touching. She filed suit against numerous defendants, including Wilkerson, alleging two counts of discriminati
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