Title: State v. T.J. International, Inc.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2001 WI 76 
 
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
99-2803 
 
 
Complete Title 
of Case: 
 
State of Wisconsin,  
 
Plaintiff-Respondent-Petitioner, 
 
v. 
T.J. International, Inc.,  
 
Defendant-Appellant, 
Norco Windows, Inc.  
 
Defendant, 
Jeld-Wen, Inc.,  
 
Defendant-Co-Appellant.  
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2000 WI App 181 
Reported at:  238 Wis. 2d 173, 617 N.W.2d 256 
(Published) 
 
 
Opinion Filed: 
June 28, 2001 
Submitted on Briefs: 
      
Oral Argument: 
February 27, 2001 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Rusk 
 
JUDGE: 
Frederick A. Henderson 
 
 
JUSTICES: 
 
Concurred: 
      
 
Dissented: 
      
 
Not Participating:       
 
 
ATTORNEYS: 
For plaintiff-respondent-petitioner the cause was 
argued by Jerry L. Hancock, assistant attorney general, with whom 
on the briefs was James E. Doyle, attorney general. 
 
 
For defendant-appellant, T.J. International, 
Inc., there was a brief by Robert H. Duffy, Amy Pope Brock, and 
 
2 
Quarles & Brady, LLP, Milwaukee, and oral argument by Robert H. 
Duffy. 
 
 
For defendant-co-appellant, Jeld-Wen, Inc., there 
was a brief by Lawrence T. Lynch, Anne Berleman Kearney, and 
Foley & Lardner, Milwaukee, and oral argument by Lawrence T. 
Lynch. 
 
 
An amicus curiae brief was filed by Sandra Graf 
Radtke and Murphy, Gillick, Wicht & Prachthauser, Brookfield, on 
behalf of the Midwestern Industrial Council, United Brotherhood 
of Carpenters & Joiners of America 
 
2001 WI 76 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear 
in the bound volume of the official reports. 
 
 
No. 99-2803 
 
STATE OF WISCONSIN                    :  
  IN SUPREME COURT 
 
 
State of Wisconsin,  
 
          Plaintiff-Respondent-Petitioner, 
 
     v. 
 
T.J. International, Inc.,  
 
          Defendant-Appellant, 
 
Norco Windows, Inc.  
 
          Defendant, 
 
Jeld-Wen, Inc.,  
 
          Defendant-Co-Appellant. 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed. 
 
¶1 
DIANE 
S. 
SYKES, 
J.   This 
case 
arises 
under 
Wisconsin's Business Closing and Mass Layoff Law, Wis. Stat. 
§ 109.07 (1995-96),1 and presents the question of whether a 
"business closing" under the statute includes the sale of 
business assets where there is no interruption in business 
                     
1 All statutory references are to the 1995-96 edition unless 
otherwise noted.  
FILED 
 
JUN 28, 2001 
 
Cornelia G. Clark 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
No. 
99-2803 
 
 
2 
operations 
and 
the 
"business" 
is 
therefore 
not 
actually 
"closed."  The statute requires employers to give 60-days' 
notice——to their employees and certain government officials——of 
any "business closing," defined as a "permanent or temporary 
shutdown of an employment site."  
¶2 
Defendant 
Norco 
Windows, 
Inc. 
sold 
its 
window 
manufacturing plant in Hawkins, Wisconsin, to defendant Jeld-
Wen, Inc.  The plant continuously operated without interruption 
during the transfer of ownership, and Jeld-Wen hired all but 47 
of the 396 Norco employees who applied for jobs with the new 
ownership. 
¶3 
The employees' collective bargaining representative 
filed a complaint with the Department of Workforce Development, 
alleging a violation of the business closing law.  The 
Department concluded that the sale constituted a "business 
closing" under the statute, and ordered both the seller and the 
buyer to pay penalties for failure to give notice.  The circuit 
court agreed.  The court of appeals did not, and reversed. 
¶4 
We conclude that the definition of "business closing" 
in Wis. Stat. § 109.07(1)(b) does not include the sale of 
business assets where there is no actual operational shutdown——
permanent or temporary——of the employment site.  Where, as here, 
the transfer of ownership continues rather than interrupts or 
ceases the operation of the employment site, there is no 
"business closing" under the statute, and no 60-day notice of 
the sale is required.  Accordingly, we affirm the court of 
appeals' reversal of the judgment of the circuit court. 
No. 
99-2803 
 
 
3 
I 
¶5 
The facts are stipulated.  Norco windows have been 
manufactured in Hawkins, Wisconsin, for more than 75 years.  In 
1996 the plant was owned by Norco Windows, Inc., a division of 
T.J. International, Inc.  On July 1, 1996, Norco sold the 
business to Jeld-Wen, Inc. pursuant to an asset purchase 
agreement that had been negotiated during the several months 
leading up to the sale.    
¶6 
On April 8, 1996, Norco sent its employees the first 
of two letters detailing its intention to sell the plant.  This 
first letter informed employees that T.J. International had 
signed a letter of intent to sell 100 percent of Norco Windows 
to Jeld-Wen.  The letter also indicated that Jeld-Wen would 
continue to operate Norco's existing manufacturing facilities 
and that total employment at those facilities was expected to 
remain at approximately 700 people. 
¶7 
In the second letter, dated June 7, 1997, Norco 
informed its employees that because the sale was an asset-based 
transaction, they would no longer be employed by Norco after the 
deal was closed.  Norco also stated its understanding that Jeld-
Wen 
would 
accept 
applications 
from 
any 
Norco 
associates 
interested in working for Jeld-Wen, and indicated that further 
information on the application process would be forthcoming.  
The letter emphasized that "Jeld-Wen will make all hiring 
decisions for its work force, and any failure by Jeld-Wen to 
hire an associate should be expected to be permanent." 
No. 
99-2803 
 
 
4 
¶8 
On the same day, Jeld-Wen also sent a letter to all 
Norco employees discussing its plan to buy the facility.  Jeld-
Wen stated that, while it had not yet made any decisions about 
the details of employment at the plant, it would be offering an 
"attractive package of wages and fringe benefits," and all Norco 
employees would be given an opportunity to apply.  
¶9 
The sale was closed on July 1, 1996.  At that time, 
Norco and Jeld-Wen executed an amendment to the asset purchase 
agreement stating that Jeld-Wen agreed to: 
 
[M]ake all reasonable efforts to hire substantially 
all of Seller's employees to operate Buyer's new 
business at each acquired plant site.   
 
Nothing contained in this Section shall in any way 
give any rights to any person or entity other than 
Buyer, Seller or Surety. 
¶10 Simultaneous with the sale, Norco terminated its 459 
employees at the Hawkins plant.  During and after the change of 
ownership, 
operations 
at 
the 
plant 
continued 
without 
interruption, and the parties affirmatively stipulated that the 
sale "was not a temporary cessation in business operations."  
Jeld-Wen hired 349 of the 459 Norco employees.  The majority of 
these employees missed no work.  Sixty-three former Norco 
employees chose not to apply with Jeld-Wen.  In all, only 47 
former Norco employees who did apply were not hired by Jeld-Wen.  
II 
¶11 Shortly before the sale was finalized, on June 21, 
1996, 
James 
Lee, 
union 
president 
of 
Local 
1801, 
United 
Brotherhood of Carpenters and Joiners of America, filed a 
No. 
99-2803 
 
 
5 
complaint against Norco with the Equal Rights Division of the 
Department of Workforce Development (the Department), pursuant 
to Wis. Stat. § 109.07(4).2  The complaint alleged that Norco had 
failed to give 60-days' notice "that the plant would be closed 
July 1 and reopened by a new owner."   
¶12 The Department issued its initial determination on 
July 18, 1997, concluding that the asset sale constituted a 
"business 
closing" 
within 
the 
meaning 
of 
Wis. 
Stat. 
§ 109.07(1)(b), and that Jeld-Wen violated the statute by 
failing to provide 60-days' written notice to those Norco 
employees who were not hired within six months of the sale.  The 
Department also concluded that Norco violated the statute by 
failing to give 60-days' notice of the "business closing" to the 
president of the village board of trustees or to the village 
manager 
for 
the 
Village 
of 
Hawkins. 
 
See 
Wis. 
Stat. 
§ 109.07(4m)(a).  The Department ordered Jeld-Wen to pay penalty 
wages and benefits totaling $306,455.04, and a fine of $30,000 
($500 per day surcharge provided in Wis. Stat. § 109.07(4m)(a) 
for failing to notify the highest official of the Village of 
Hawkins).   
¶13 Norco, Jeld-Wen, and the union each requested a review 
of the initial determination, and on September 15, 1997, the 
Department issued a final determination, affirming and adopting 
the initial determination in its entirety, with the exception of 
                     
2 Wisconsin Statute § 109.07(4)(a) provides that: "[a]n 
employe whose employer fails to notify timely the employe under 
sub. (1m) may file a claim with the department."   
No. 
99-2803 
 
 
6 
the 
penalty 
wage 
calculations. 
 
The 
final 
determination 
reexamined the penalty wage calculations and concluded that 
extra payments made to affected employees should be deducted 
from the overall wage penalty liability.   
¶14 On November 25, 1997, the Department issued an amended 
final determination which concluded that both the initial 
determination and the final determination erred by ordering 
Jeld-Wen, rather than T.J. International, to pay the surcharge 
provided in Wis. Stat. § 109.07(4m)(a).  The Department also 
determined that the penalties owed to the affected employees 
should be reduced by the severance payments paid by T.J. 
International.  The amended final determination set the amount 
of penalty wages at $187,590.31.   
¶15 On December 12, 1997, the Department referred the case 
to the Department of Justice for recovery of the penalties, 
pursuant to Wis. Stat. § 109.07(4)(b).3  On March 11, 1998, the 
State filed a complaint in Rusk County Circuit Court.  The 
complaint alleged that the sale of business assets at the 
Hawkins plant was a "business closing" within the meaning of 
§ 109.07(1)(b), and that the defendants failed to comply with 
                     
3 Wisconsin Statute § 109.07(4)(b) provides: 
If the [Department] does not recover payment 
within 180 days after a claim is filed or within 30 
days 
after 
it 
notifies 
the 
employe 
of 
its 
determination under par. (a), whichever is first, the 
[Department] shall refer the claim to the department 
of justice.  The department of justice may bring an 
action in circuit court on behalf of the employe to 
recover the payment under sub. (3).   
No. 
99-2803 
 
 
7 
the statute's notice requirements by failing to give 60-days' 
written notice. 
¶16 The facts were stipulated and all parties moved for 
summary judgment.  The State argued that the sale of Norco's 
assets to Jeld-Wen constituted a "business closing" under the 
statute, requiring 60-days' notice, which was not given.  T.J. 
International (for itself and Norco) and Jeld-Wen argued that 
the asset sale was not a "business closing," and even if it was, 
the amendment to the asset purchase agreement, in which Jeld-Wen 
agreed to "make all reasonable efforts to hire substantially 
all" of Norco's employees, was sufficient to trigger a statutory 
exception to liability for failure to give notice. See Wis. 
Stat. § 109.07(6).  Additionally, Jeld-Wen moved for dismissal 
on two jurisdictional grounds: (1) that it had never been named 
as an employer in the initial claim filed with the Department, 
and (2) that the Department failed to comply with Wis. Stat. 
§ 109.07(4)(b) by not referring the claim to the State within 
180 days after the claim was filed with the Department.4   
¶17 The Circuit Court for Rusk County, Judge Frederick A. 
Henderson, granted the State's motion for summary judgment.  
After resolving the jurisdictional issues against Jeld-Wen, the 
court accepted the State's argument that the asset sale 
constituted a "business closing" under the statute.  The court 
                     
4 Jeld-Wen also raises these jurisdictional challenges in 
this appeal.  We have concluded that the statute does not apply 
in the first instance; we therefore decline to address whether 
the 
union 
or 
the 
Department 
fulfilled 
the 
statute's 
jurisdictional requirements. 
No. 
99-2803 
 
 
8 
also concluded that the amendment to the asset purchase 
agreement was inconsistent with the language of the statutory 
exception, and, in any event, since Jeld-Wen did not hire 
substantially all affected employees, the exception to liability 
for failure to give notice did not apply.  
¶18 The court of appeals reversed, concluding that the 
plain language of the statute's definition of "business closing" 
required a "permanent or temporary shutdown of an employment 
site," and because the Hawkins plant never shut down, there was 
no "business closing" within the meaning of the statute.  State 
v. T.J. Int'l, Inc., 2000 WI App 181, ¶10, 238 Wis. 2d 173, 617 
N.W.2d 256.  We accepted the State's petition for review. 
III 
¶19 We review a circuit court order granting or denying a 
motion for summary judgment independently, using the same 
methodology as the circuit court.  Jankee v. Clark County, 2000 
WI 64, ¶48, 235 Wis. 2d 700, 612 N.W.2d 297.  Summary judgment 
is appropriate when there are no genuine issues of material fact 
in dispute and the moving party is entitled to judgment as a 
matter of law.  Wis. Stat. § 802.08(2).   
¶20 The summary judgment motion in this case was submitted 
on stipulated facts and presents a question of statutory 
interpretation, which we review de novo.  State v. Sostre, 198 
Wis. 
2d 
409, 
414, 
542 
N.W.2d 
774 
(1996). 
 
Statutory 
interpretation begins with the language of the statute, and if 
the language is plain and unambiguous, we apply it without 
further inquiry into extrinsic interpretive aids.  UFE Inc. v. 
No. 
99-2803 
 
 
9 
LIRC, 201 Wis. 2d 274, 281, 548 N.W.2d 57 (1996).  If statutory 
language is ambiguous, that is, if "'reasonable minds could 
differ as to its meaning,'" we look to the scope, history, 
context, subject matter, and purpose of the statute to help 
establish its proper interpretation.  Brauneis v. LIRC, 2000 WI 
69, ¶21, 236 Wis. 2d 27, 612 N.W.2d 635 (quoting Harnischfeger 
Corp. v. LIRC, 196 Wis. 2d 650, 662, 539 N.W.2d 98 (1995)).   
IV 
¶21 This 
claim 
arises 
under 
Wis. 
Stat. 
§ 109.07, 
Wisconsin's Business Closing and Mass Layoff Law.  Everyone 
agrees that the relevant statutory language is unambiguous. 
¶22 The law requires certain employers to provide their 
employees and specified government officials with 60 days' 
written notice of a "business closing" or "mass layoff".  More 
specifically, the statute provides in relevant part: 
 
Subject to sub. (5) or (6), an employer who has 
decided upon a business closing or mass layoff in this 
state shall promptly notify the subunit of the 
department that administers s. 106.15, any affected 
employe, any collective bargaining representative of 
any affected employe, and the highest official of any 
municipality in which the affected employment site is 
located, in writing of such action no later than 60 
days prior to the date that the business closing or 
mass layoff takes place. 
Wis. Stat. § 109.07(1m).  The law is patterned after the federal 
Worker Adjustment and Retraining Notification Act (WARN), which 
establishes similar notification requirements in the event of a 
"plant closing" or "mass layoff" that results in an "employment 
loss."  See 29 U.S.C. §§ 2101-09 (1999).  The law applies to all 
No. 
99-2803 
 
 
10
business enterprises that employ 50 or more persons in this 
state.  Wis. Stat. § 109.07(1)(d).   
¶23 Before notice is required under the Wisconsin law, 
there must be an imminent "mass layoff" or "business closing."  
Wis. Stat. § 109.07(1m).  These are defined terms.  A "mass 
layoff" is "a reduction in an employer's work force that is not 
the result of a business closing and that affects . . . [a]t 
least 25% of the employer's work force or 25 employes, whichever 
is greater."  Wis. Stat. § 109.07(1)(f)1.  Jeld-Wen hired more 
than 75 percent of Norco's former employees, and so the State 
does not argue that a "mass layoff" occurred at the Hawkins 
plant.  Instead, it characterizes the sale of the window factory 
as a "business closing."   
¶24 A "business closing" is a "permanent or temporary 
shutdown of an employment site or of one or more facilities or 
operating units at an employment site or within a single 
municipality that affects 25 or more employes, not including new 
or low-hour employes."  Wis. Stat. § 109.07(1)(b).  The sale of 
the Hawkins plant, therefore, will amount to a "business 
closing" under the statute only if it has resulted in "a 
permanent or temporary shutdown of an employment site." 
¶25 Words and phrases in a statute are interpreted in 
accordance with their ordinary and accepted meaning.  Perrin v. 
United States, 444 U.S. 37, 42 (1979); Meier v. Champ's Sport 
Bar & Grill, Inc., 2001 WI 20, ¶22, 241 Wis. 2d 605, 623 N.W.2d 
94.  A "shutdown" is "[a] cessation of operations or activity, 
as at a factory."  The American Heritage Dictionary of the 
No. 
99-2803 
 
 
11
English Language 1674 (3d ed. 1992).  A "site" is commonly 
understood to be "[t]he place where a structure or group of 
structures was, is, or is to be located . . . [t]he place or 
setting of something."  Id. at 1688. 
¶26 The State has stipulated that operations at the 
Hawkins plant never stopped at any point during the transfer of 
ownership; 
window 
manufacturing by 
former 
Norco 
employees 
continued there uninterrupted.  Accordingly, no employment 
"site" was ever "shut down," either temporarily or permanently. 
¶27 The State argues that even though there was no 
"shutdown" of the plant, there was a "shutdown" of Norco's 
employment site, because Norco ceased to be an employer there.  
But this is a strained reading of the statute, essentially 
rewriting it to apply whenever a particular business owner exits 
the scene, even if there is continuity of operation under the 
new management and no permanent or even temporary shutdown of 
the employment site. 
¶28 The definitional language of Wis. Stat. § 109.07(1)(b) 
makes no reference to the "employer," only to the "employment 
site."  The legislature has therefore chosen to limit the 
application of this statute to business closures of "employment 
sites," defined by reference to geography or location rather 
than ownership.  It follows, then, that a transfer of business 
asset ownership does not constitute a "business closing" unless 
it results in either a temporary or permanent shutdown in the 
operation of the employment site. 
No. 
99-2803 
 
 
12
¶29 The surrounding references in the definition support 
this conclusion.  The statute uses the phrase "shutdown of an 
employment site or of one or more facilities . . . at an 
employment site or within a single municipality."  Wis. Stat. 
§ 109.07(1)(b) (emphasis added).  This reference to facilities 
"at an employment site or within a single municipality" 
reinforces the legislative focus on geographic location rather 
than ownership.  A sale of business assets does not bring about 
a "business closing" within the meaning of this statute unless 
the old owner's departure or the new owner's arrival is 
accompanied by a temporary or permanent shutdown in the 
operation of the employment site. 
¶30 The State points to one of the statute's exceptions as 
support for its argument that the sale of business assets 
constitutes a "business closing."  Wisconsin Statute § 109.07(6) 
provides, among other things, an exception to liability for 
failure to give notice where the "business closing" or "mass 
layoff" is the result of the sale of part or all of an 
employer's business: 
 
An employer is not liable under this section for 
a failure to give notice to any person under sub. 
(1m), if the department determines that the business 
closing or mass layoff is the result of any of the 
following: 
 
(a) The sale of part or all of the employer's 
business, if the purchaser agrees in writing, as part 
of the purchase agreement, to hire substantially all 
of the affected employes with not more than a 6-month 
break in employment. 
No. 
99-2803 
 
 
13
¶31 The State argues, apparently by implication, that the 
language of this exception demonstrates that business sales do 
in fact constitute "business closings" under the statute.  We do 
not read the statute to mean that a business sale can never 
constitute a "business closing," only that some will and some 
won't, depending on the facts.  A business sale that produces a 
temporary or permanent shutdown of the employment site is a 
"business closing," and in that event, the employer is excepted 
from liability for failure to give notice if the purchaser 
agrees in writing to hire substantially all the affected 
employees within six months.  The exception does not modify the 
statutory definition of "business closing," which triggers the 
duty to give notice in the first place.  Indeed, the exception 
is specifically tied to the definition, and by its terms applies 
only if a "business closing" or "mass layoff" is the result of 
the sale of all or part of an employer's business.  Nor does the 
exception provide an alternate basis for liability under the 
statute.  Because we conclude that the sale of Norco's assets to 
Jeld-Wen did not result in a "business closing" under the 
statute, we do not reach the issue of whether Jeld-Wen's 
agreement to make "reasonable efforts" to hire "substantially 
all" of Norco's employees was sufficient to bring the exception 
into play.   
¶32 We note that Wis. Admin. Code § DWD 279.002 (Apr., 
2001), entitled "Interpretation" specifies that "[w]henever 
possible, 
this 
chapter 
will 
be 
interpreted 
in 
a 
manner 
consistent with the Federal Worker Adjustment and Retraining 
No. 
99-2803 
 
 
14
Notification Act, 29 USC 2101 et seq., the federal regulations 
and court decisions interpreting that Act to the extent that the 
provisions of federal and state law are the same."  Both 
defendants cite federal cases interpreting the WARN Act in 
support of their positions.  We agree with the State that none 
of these cases is particularly helpful to our analysis of the 
Wisconsin law. 
¶33 First, WARN contains a provision that the Wisconsin 
law does not.  29 U.S.C. § 2101(b)(1), the "sales exception," 
excludes from the definition of "employment loss" a business 
sale that results in the "technical termination" of employment. 
 Int'l Oil, Chemical & Atomic Workers, Local 7-517 v. Uno-Ven 
Co., 170 F.3d 779, 783-84 (7th Cir. 1999).  Most of the cited 
cases invoke the sales exception in one way or another and are 
therefore inapposite.  See Int'l Alliance of Theatrical & Stage 
Employees & Moving Picture Mach. Operators v. Compact Video 
Servs., Inc., 50 F.3d 1464, 1467-68 (9th Cir. 1995); Headrick v. 
Rockwell Int'l Corp., 24 F.3d 1272, 1280-82 (10th Cir. 1994). 
¶34 One case cited by counsel, Reyes v. Greater Texas 
Finishing Corp., 19 F. Supp. 2d 709 (W.D. Texas 1998), does 
address the definition of "plant closing,"5 but it does not do so 
                     
5 WARN uses the term "plant closing" rather than "business 
closing."  A "plant closing" is defined as "the permanent or 
temporary shutdown of a single site of employment, or one or 
more facilities or operating units within a single site of 
employment, if the shutdown results in an employment loss at the 
single site of employment during any 30-day period for 50 or 
more employees excluding any part-time employees.  29 U.S.C. 
§ 2101(a)(2).    
No. 
99-2803 
 
 
15
within the context of a business sale and therefore does not 
assist our analysis.  Finally, Eret v. Continental Holding, 
Inc., 838 F. Supp. 358 (N.D. Ill. 1993), discusses the statutory 
term "shutdown," but in the context of the Employee Retirement 
Income Security Act (ERISA), see 29 U.S.C. § 1001-53, and so it, 
too, is inapplicable here. 
¶35 The State has one final argument.  It says that its 
interpretation of the statute best effectuates the legislature's 
intent, which was to give workers a reasonable opportunity to 
provide for the future of their families during periods of 
economic uncertainty.  We cannot quarrel with this extrapolation 
of general legislative purpose, as it is apparent on the face of 
the statute.  But what the State really asks for is an expansion 
of the statute's application to circumstances plainly not 
covered by its text.  The legislature explicitly confined the 
applicability of this law to permanent or temporary shutdowns of 
employment sites.  This language cannot reasonably be read to 
include a business asset sale that does not shut down an 
employment site but, rather, continues it. 
¶36 We conclude, therefore, that the notice requirements 
of Wisconsin's Business Closing and Mass Layoff Law, Wis. Stat. 
§ 109.07, did not apply in this case, because the sale of the 
window manufacturing plant in Hawkins, Wisconsin, did not 
involve a permanent or temporary shutdown of the employment site 
there.  Accordingly, we affirm the court of appeals' decision 
reversing the judgment of the circuit court. 
No. 
99-2803 
 
 
16
By the Court.—The decision of the court of appeals is 
affirmed. 
 
 
 
 
 
 
 
 
 
 
No. 
99-2803 
 
 
1