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December 19, 1997

Edna Vanderhoof
Life Extension Institute, d/b/a Executive Health Group, a Life Extension Institute Company, and Executive Health Medical Group of New Jersey, P.C., and Executive Health Medical Group of New York, as successor in interest to Life Extension Health Examiners, P.C.

The opinion of the court was delivered by: POLITAN


 Dear Counsel:

 This matter comes before the Court on the motion of defendants -- Life Extension Institute d/b/a Executive Health Group, a Life Extension Institute Company; Executive Health Medical Group of New Jersey, P.C.; and Executive Health Medical Group of New York, P.C., formerly known as Life Extension Health Examiners -- to dismiss the Amended Complaint of plaintiff, Edna Vanderhoof. Plaintiff also moves for summary judgment finding her to be an "eligible employee" under the Family and Medical Leave Act ("FMLA"). The Court heard oral argument in this matter on October 27, 1997. Based upon the reasons set forth more fully below, plaintiff's motion for summary judgment on the issue of the FMLA is GRANTED insofar as she was an eligible employee under the Act. Defendants' motion for summary judgment is GRANTED IN PART AND DENIED IN PART.


 Vanderhoof was employed by Executive Health Group ("EHG") beginning in 1989 and by 1994 had been promoted to the position of Clinic Coordinator. At the time relevant to this action, Vanderhoof was fifty-four years old. In May 18, 1995, Life Extension Institute, Inc. ("LEI"), acquired certain businesses of EHG National Health Services, Inc., by way of an asset purchase agreement. Included in the purchase was the EHG clinic in Morristown, New Jersey, where Vanderhoof was employed. LEI also acquired EHG clinics in New York City, Los Angeles, and Stamford, Connecticut. The Morristown clinic was then renamed Life Extension Institute d/b/a Executive Health Group, a Life Extension Institute Company.

 After the acquisition, there was no interruption in the operation of the Morristown clinic. Though employees apparently had to fill out new employment applications and other new employee forms, this was merely pro forma. Vanderhoof continued her employment at the clinic and performed the same duties she had performed when EHG owned it. It is undisputed that LEI informed the employees that changes would eventually be made in processes, procedures, job duties, and responsibilities. These changes included new computer software, a new way of scheduling appointments, a different pricing schedule, new clients, and a change in marketing philosophy. Certain terms and conditions contained in the employee handbook also changed.

 Vanderhoof had been involved in an automobile accident on September 22, 1994, in which she injured her knee. The pain worsened over time, and Vanderhoof informed Anne Keough, her supervisor, that she would need time off under the FMLA to have knee surgery.

 Vanderhoof's request for FMLA leave was denied in September 1995 by Stacey Busija-Leoniak, LEI's Human Resources Director. The decision was based on the fact that she had not been employed long enough. Vanderhoof instead took an unpaid leave of medical absence, and she was permitted to purchase benefits during the period of leave. According to testimony by Leoniak, there is no guarantee of reinstatement after such a leave.

 Vanderhoof's position as clinic supervisor did not exist at any of the other LEI clinic locations, and LEI management met to discuss this position and others. While Vanderhoof was on medical leave, Ann Finland, a part-time worker, and two others covered Vanderhoof's job without an increase in work hours.

 On November 7, 1995, LEI mailed a letter informing Vanderhoof that her position was being eliminated as part of a downsizing of staff. She was provided with two weeks' severance pay and her duties were redistributed among the three employees already filling in for her, including Finland. No one was hired to perform her duties and she was not qualified to do any other job (except for Findland's) in order to avoid layoff. Vanderhoof maintains that she should have been offered Finland's part-time job.

 The November 7 letter also informed Vanderhoof that she would be receiving information regarding COBRA benefits within two weeks after her benefits ceased. On November 22, 1995, Joanne Fritz of LEI's parent corporation sent a letter to Vanderhoof notifying her of her COBRA rights. The letter was sent to Vanderhoof at her home address. Vanderhoof called Fritz to ask about the paperwork, and Fritz informed her that it had been mailed. Vanderhoof never contacted Fritz again.


 Rule 56 of the Federal Rules of Civil Procedure directs a court to enter summary judgment against a party which has failed to establish the existence of an essential element of its cause of action, and as to which that party bears the ultimate burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); Spangle v. Valley Forge Sewer Auth., 839 F.2d 171, 173 (3d Cir. 1988). The purpose of summary judgment is to eliminate a trial where it is unnecessary and would only cause delay and expense to the court and the litigants. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977).

 Under Rule 56, summary judgment may only be granted if, drawing all inferences in favor of the nonmoving party, there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. See Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir. 1987), cert. dismissed, 483 U.S. 1052 (1987). The moving party bears the initial burden of identifying evidence which demonstrates the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. Once that burden has been met, the nonmoving party must set forth "specific facts showing that there is a genuine issue for trial," id. at 324, or the factual record will be taken as presented by the moving party and judgment will be entered as a matter of law. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986).

 Because there are various claims which need to be discussed, the Court will begin with an analysis of plaintiff's summary judgment motion on her FMLA claim and then address defendants' summary judgment motion.


 The FMLA was enacted to provide leave for workers whose personal or medical circumstances necessitate leave in excess of what their employers provide. 29 C.F.R. § 825.101. "Eligible" employees of a covered employer are allowed to take up to twelve weeks of leave for medical reasons, for the birth or adoption of a child, and for the care of a child, spouse, or parent who has a serious health condition. 29 C.F.R. § 825.100(a). More specifically, the FMLA applies when an employee's own serious health condition makes the employee unable to perform the functions of his or her job. 29 U.S.C. § 2612(a)(1)(D). Employees who take leave pursuant to the statute are entitled to return to the same or equivalent position and benefits as they had held previously. An employer who denies an employee these entitlements is in violation of the FMLA. 29 U.S.C. §§ 2614(a)(1), 2615(a); 29 C.F.R. § 825.100(c).

 An eligible employee is one who has been employed "for at least 12 months by the employer with respect to whom leave is requested." 29 U.S.C. § 2611(2)(A)(i). The term "employer" encompasses "any successor in interest of an employer." 29 U.S.C. § 2611(4)(A)(ii)(II). LEI denied plaintiff's request for FMLA leave because it determined that it was not a "successor in interest" to EHG.

 The issue of what constitutes a successor in interest under the FMLA is an issue of first impression in this Circuit. The FMLA has not yet promoted a flood of litigation, and the only case that has substantively addressed the issue of what constitutes a successor in interest under the Act is Rhoads v. FDIC, 956 F. Supp. 1239, 1252-54 (D. Md. 1997).

 The regulations issued by the Department of Labor ("DOL") interpreting the FMLA state:

When an employer is a "successor in interest," employees' entitlements are the same as if the employment by the predecessor and successor were continuous employment by a single employer. . . . A successor which meets FMLA's coverage criteria must count periods of employment and hours worked for the predecessor for purposes of determining employee eligibility for FMLA leave.

 29 C.F.R. § 825.107(c).

 The DOL regulations also set forth factors that should be considered when determining whether an employer is a "successor" as contemplated by the FMLA:

(1) Substantial continuity of the same business operations;
(2) Use of the same plant;
(3) Continuity of the work force;
(4) Similarity of jobs and working conditions;
(5) Similarity of supervisory personnel;
(6) Similarity in machinery, equipment, and production methods;
(7) Similarity of products or services;
(8) The ability of the predecessor to provide relief.

 29 C.F.R. § 825.107(a). Though these regulations are clearly not binding on the Court, they do provide some guidance in answering the question of successorship. The Court will also look to Title VII cases and cases arising under the National Labor Relations Act ("NLRA") for guidance on ...

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