A family member might not be a Title VII “employee” of a closely held family business. The Third Circuit U.S. Court of Appeals recently dismissed a Title VII claim against a family-owned business for religious discrimination. Mariotti v. Mariotti Building Products, Inc., No. 11-3148 (3d Cir. April 29, 2013). The plaintiff served as vice-president and secretary of the company. His siblings discharged him, allegedly “for cause,” after they were upset by his comments about his own religious beliefs at their father’s funeral. Applying the Supreme Court’s test from Clackamas Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003), the Third Circuit determined that the plaintiff was not an “employee” of the business, because he was a shareholder, director, and a corporate officer, and he had the right to control the enterprise and to participate in fundamental decisions of the business.

Even the fact that the plaintiff had a written employment agreement did not make him an employee for purposes of Title VII. Instead, the plaintiff’s participation in the governance of the business made him either more or less than an “employee” – he was an owner.