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DAVIS v. CONNECTICUT GEN. LIFE INS. CO.

April 19, 1990

MICHAEL D. DAVIS
v.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY AND CIGNA CORPORATION



The opinion of the court was delivered by: NIXON

 JOHN T. NIXON, UNITED STATES DISTRICT JUDGE

 Pending before the Court are the Magistrate's Report and Recommendation, the defendants' Objection to Report and Recommendation of Magistrate, the defendants' Motion for Leave to File Motion for Summary Judgment and the defendants' Motion for Summary Judgment which addresses the plaintiff's claim for breach of contract against the defendants for the defendants failure to conduct an internal job search.

 DISCUSSION

 On February 5, 1990 the Court directed the Magistrate to consider the defendant CIGNA Corporation's motion for summary judgment. In the Report and Recommendation the Magistrate recommended that the defendant CIGNA Corporation's motion for summary judgment be denied. The defendant CIGNA Corporation now objects to the Magistrate's recommendation that CIGNA Corporation's motion for summary judgment be denied.

 1. The Defendant CIGNA Corporation's Motion for Summary Judgment on the Plaintiff's Contract Claim

 The Magistrate based his recommendation that the defendant CIGNA Corporation's motion for summary judgment on the plaintiff's contract claim be denied on the determination that this Court previously held that an employment contract existed between the CIGNA Corporation and the plaintiff. The Magistrate based this determination upon his belief that the Court found that the "CIGNA and You" employee handbook created an employment contract between the defendant CIGNA Corporation and the plaintiff. The defendant CIGNA Corporation vigorously argues that the Court did not reach such a conclusion.

 2. The Defendant CIGNA Corporation's Motion for Summary Judgment on the Plaintiff's Sex Discrimination Claim

 The Magistrate recommended that the Court deny the defendant CIGNA Corporation's motion for summary judgment on the plaintiff's claim of sex discrimination in violation of Tennessee Code Annotated 4-21-401(a). The Magistrate determined that the decisional law under Title VII of the Civil Rights Act of 1964, as amended [Title VII], would govern the decision of whether the defendant CIGNA Corporation, the parent of the defendant Connecticut General Life Insurance Company, could be held liable for the alleged sex discrimination.

 The defendant CIGNA Corporation objects to the Magistrate's determination and argues that Tennessee, rather than Title VII, decisional law should apply. The defendant CIGNA Corporation further argues that application of Tennessee decisional law to the present case demonstrates that the defendant CIGNA Corporation is not liable for the alleged discriminatory acts of its subsidiary.

 The Magistrate chose to rely on Title VII decisional law because Tennessee Code Annotated section 4-21-101(a)(1) provides that the purpose and intent of the Tennessee Human Rights Act are "to provide for the execution of the policies embodied in . . . the federal Civil Rights Acts of 1964, 1968 and 1972 . . . as amended."

 This question has not been addressed by the Tennessee courts. In the absence of Tennessee precedent, the Court finds that this expression of legislative intent is not clear enough to justify departing from well-established Tennessee case doctrine setting forth the standards for determining a corporate parent's liability for the alleged discriminatory employment acts of its subsidiary.

 The leading Tennessee Supreme Court case on the issue of corporate parent liability is Continental Bankers Life Insurance Company v. Bank of Alamo, 578 S.W.2d 625 (Tenn. 1979). The Continental Banker's court adopted a three-pronged test from Lowendahl v. Baltimore & O. R. Co., 247 A.D. 144, 287 N.Y.S. 62 (1936), aff'd 272 N.Y. 360, 6 N.E.2d 56, rehearing denied, 273 N.Y. 584, 7 N.E.2d ...


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