Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca6-15-05417/USCOURTS-ca6-15-05417-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 

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RECOMMENDED FOR FULL-TEXT PUBLICATION 

Pursuant to Sixth Circuit I.O.P. 32.1(b) 

File Name: 16a0002p.06 

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT 

_________________ 

TRACY MORTON, on behalf of herself and all others 

similarly situated, 

Plaintiff-Appellee, 

v. 

THE VANDERBILT UNIVERSITY, 

Defendant-Appellant. 

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No. 15-5417 

Appeal from the United States District Court 

for the Middle District of Tennessee at Nashville. 

No. 3:13-cv-01012—Kevin H. Sharp, District Judge. 

Argued: December 9, 2015 

Decided and Filed: January 5, 2016 

Before: BOGGS and McKEAGUE, Circuit Judges; BERTELSMAN, District Judge.*

_________________ 

COUNSEL 

ARGUED: Michael S. Moschel, BASS, BERRY & SIMS, PLC, Nashville, Tennessee, for 

Appellant. Scott P. Tift, BARRETT JOHNSTON MARTIN & GARRISON, LLC, Nashville, 

Tennessee, for Appellee. ON BRIEF: Michael S. Moschel, William N. Ozier, BASS, BERRY 

& SIMS, PLC, Nashville, Tennessee, John C. Callison, THE VANDERBILT UNIVERSITY, 

Nashville, Tennessee, for Appellant. Scott P. Tift, Jerry E. Martin, David W. Garrison, 

BARRETT JOHNSTON MARTIN & GARRISON, LLC, Nashville, Tennessee, for Appellee. 

 *

The Honorable William O. Bertelsman, United States District Judge for the Eastern District of Kentucky, 

sitting by designation.

>

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No. 15-5417 Morton v. The Vanderbilt University Page 2 

_________________ 

OPINION

_________________ 

 McKEAGUE, Circuit Judge. This is an unusual case that involves the defendant’s 

handling of the termination of employees who are not before the court and who have not 

protested their treatment. The plaintiffs are a group of 194 employees who were terminated by 

Vanderbilt University on July 1, 2013. Their complaint, however, is only viable if Vanderbilt’s 

treatment of 279 other employees was an immediate termination. 

The plaintiffs have sued Vanderbilt University, claiming that their termination was in 

violation of the Worker Adjustment and Retraining Notification Act (WARN Act), 29 U.S.C. 

§ 2101 et seq., which requires certain employers to provide at least 60 days’ written notice to 

affected employees before a mass layoff. The plaintiffs’ class, however, is insufficient in size to 

constitute a “mass layoff” as defined by the WARN Act. The plaintiffs instead rely on the 

WARN Act’s aggregation provision, which allows for separate layoffs within a 90-day period to 

be counted together in determining whether there has been a mass layoff. The plaintiffs’ claim 

turns on whether a separate group of Vanderbilt employees was laid off within 90 days of July 1, 

2013.1

This second group of Vanderbilt employees was notified on September 17, 2013 that 

their jobs would be eliminated 60 days later, on November 16, 2013. Although they were no 

longer permitted to report for work, they continued to receive wages and accrue benefits after the 

notice was given. Additionally, they were not eligible for state unemployment benefits until 

November 16, 2013, when they no longer received wages and accrued benefits. Thus, the 

employment relationship between Vanderbilt and the September employees did not end until 

November 16, 2013, the date that Vanderbilt told the employees that their employment would 

end and the date after which the employees no longer received wages and accrued benefits. 

 1

The parties agree that, if the September employees are found to have been terminated on September 17, 

2013, the total number of employees terminated within 90 days of the plaintiffs’ termination would reach the 500-

employee threshold to constitute a “mass layoff” under the WARN Act. See R. 87, Transcript at 4, Page ID 977 

(“[W]e can stipulate that if the Court rules that the 279 people who got notice on September 17th were terminated on 

that date, the 500 employee threshold is met.”). 

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Accordingly, because the second group of Vanderbilt employees suffered an employment loss 

more than 90 days after the plaintiffs were terminated and thus cannot be counted under the 

WARN aggregation provision, we reverse the decision of the district court. 

I

Under the WARN Act, an employer of 100 or more employees is generally required to 

provide at least 60 days’ written notice to affected employees before a mass layoff may occur. 

29 U.S.C. § 2102(a). A “mass layoff” is defined as “an employment loss at the single site of 

employment during any 30-day period for . . . at least 500 employees,” 29 U.S.C. § 2101(a)(3), 

but the WARN Act also permits aggregation of two or more layoffs within a 90-day period 

unless “the employer demonstrates that the employment losses are the result of separate and 

distinct actions and causes and are not an attempt by the employer to evade the requirements” of 

the Act, 29 U.S.C. § 2102(d). The WARN Act defines employment loss as “(A) an employment 

termination, other than a discharge for cause, voluntary departure, or retirement, (B) a layoff 

exceeding 6 months, or (C) a reduction in hours of work of more than 50 percent during each 

month of any 6-month period.” 29 U.S.C. § 2101(a)(6). At issue in this case is when the 

employment of the September employees was terminated. The term “termination” is not defined 

in the WARN Act, but the Department of Labor has explained that it is “to have [its] common 

sense meaning” as “the permanent cessation of the employment relationship.” 54 Fed. Reg. 

16,042, 16,047 (Apr. 20, 1989); see also Wiltz v. M/G Transport Servs., Inc., 128 F.3d 957, 963 

(6th Cir. 1997) (noting as well that courts apply a “practical, effects-driven analysis of whether a 

break in employment actually occurred”). 

On September 17, 2013, Vanderbilt provided 279 employees with individualized letters 

notifying them that their positions would be eliminated in 60 days, on November 16, 2013.2

 The 

letters stated that the employees would “remain employed” but be placed on “paid leave” for 

those 60 days, and that they were no longer required to report to work. R. 76-1, Notice at 2, 

Page ID 769. These employees were told by their managers that they should gather their 

personal belongings and return all Vanderbilt property, including identification badges, laptop 

 2

Vanderbilt also sent a letter on this date to the Tennessee Department of Labor and Workforce 

Development giving notice of reductions in force at the Vanderbilt University Medical Center. 

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computers, and cell phones. They were then taken to meet with someone to discuss career 

transition counseling, after which they were told to leave the campus. Any employee who did 

not have transportation to leave the campus was provided a pre-paid taxi voucher. The 

employees were told not to return to work and that it would be inappropriate to come to their 

work areas to socialize or visit. For the most part, their identification cards and email accounts 

were deactivated on that day. The September employees remained on Vanderbilt’s payroll and 

received their full pay and benefits on their regular pay dates for 60 days after receiving the 

notice. Vanderbilt continued to pay the employees even if they worked elsewhere. 

 The district court found that the September employees had suffered an employment loss 

on September 17, 2013 and thereby fell within 90 days of the plaintiffs’ layoff. As a result, the 

district court ruled that the plaintiffs had been subjected to a mass layoff and should have 

received 60 days’ written notice as required by the WARN Act. The district court entered a final 

judgment in the plaintiffs’ favor so that Vanderbilt could file this appeal. The sole issue is when 

the September employees suffered an employment loss—on September 17, 2013 or on 

November 16, 2013. 

II

In ruling that the employment relationship between the September employees and 

Vanderbilt immediately ended once they received their notice of termination, the district court 

ignored a crucial fact—the September employees continued to receive wages and accrue benefits 

until November 16, 2013.3

 So long as these employees were being paid and accruing benefits, 

there had not been a permanent cessation of the employment relationship. This comports with 

the purpose of the WARN Act, which is to provide workers “some transition time to adjust to the 

prospective loss of employment, to seek and obtain alternative jobs and, if necessary, to enter 

skill training or retraining that will allow these workers to successfully compete in the job 

market.” 20 C.F.R. 639.1(a). Providing the September employees with the 60-day notice gave 

them just that. 

 3

It is also important to note that the September employees were explicitly told that their position “will be 

eliminated in sixty (60) calendar days on November 16, 2013” and that if “[y]ou have not obtained another position 

by the end of your sixty (60) day notification period, your employment will end.” R. 76-1, Notice at 2, Page ID 769. 

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Additionally, these employees were not eligible for state unemployment benefits until 

November 16, 2013, when they no longer received wages and accrued benefits. See TENN. CODE 

ANN. § 50-7-211 (2008) (“An individual shall be deemed ‘unemployed’ in any week during 

which the individual performs no services and with respect to which no wages are payable to the 

individual . . . .” (emphasis added)). The record indicates that Vanderbilt did not believe that the 

September employees qualified for unemployment benefits during the notice period. Vanderbilt 

informed the employees that they would be eligible to apply for unemployment “after the 

separation period if [they] ha[d] not found another position.” R. 76-1, Stipulated Facts Exhibit D 

at 14, Page ID 781. The plaintiffs have not provided any basis to believe that the September 

employees would have been eligible for unemployment benefits during the period of their paid 

leave. 

The district court concluded that the September employees had suffered an immediate 

loss of employment upon receiving their notification letters on September 17, 2013. 

Recognizing the obvious logical fallacy in generally equating the date of notice with the date of 

termination—and so rendering it impossible for an employer to ever give 60 days’ notice of 

termination—the district court’s opinion relies on the following facts: the September employees 

were “instructed to clean out their workstations; [] required to return all Vanderbilt property 

(including their identification badges, which were promptly deactivated); [] instructed to leave 

the campus; and [] told not to return.” Morton v. Vanderbilt Univ., No. 3:13-01012, 2015 WL 

1756911, at *3 (M.D. Tenn. Apr. 17, 2015). Thus, the implication of the district court’s 

reasoning is that, in order for employment to continue after the WARN notice, employers would 

need to permit employees to perform work after the notice and before termination, even if the 

employer had a host of legitimate business reasons for desiring their absence from the premises 

after the notification.

Under the WARN Act, however, there is no obligation for employers to continue to 

require employees to perform work after the WARN notice, as long as the employees continue to 

receive wages and accrue benefits. As the Department of Labor has stated: 

[t]he question . . . has been raised as to whether an employment loss occurs if an 

employee retains full pay and benefits and other entitlements but is not required to 

report to work. DOL notes that neither WARN nor the regulations dictate the 

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nature of work to be performed—or whether work must be performed—during a 

period of employment after notice of an impending plant closing or mass layoff 

has been given. 

54 Fed. Reg. 16,042, 16,048 (emphasis added); see also Long v. Dunlop Sports Grp. Ams., Inc., 

506 F.3d 299, 303 (4th Cir. 2007) (noting that “Congress sought to protect employees’ 

expectation of wages and benefits, not their expectation of performing work” before concluding 

that “Dunlop’s decision to continue paying all benefits and wages for 60 days without requiring 

work in exchange . . . does not constitute an ‘employment termination’ under the Act”).4 Just as 

employers are not required to permit employees to perform work during the notice period to 

continue the employment relationship, there is no reason to believe that employers must permit 

employees to show up to work to do so. It would hardly make sense for the WARN Act’s 

aggregation provision to apply if an employer sent employees home for the notice period, but not 

apply if the employer had the employees sit in an empty room and do nothing. 

III

The district court used the definition of an “affected employee” to support its conclusion 

that the employment relationship between Vanderbilt and the September employees had 

immediately terminated on September 17, 2013. In Kildea v. Electro-Wire Products, Inc., we 

noted that the WARN Act regulations defined employees as individuals who were either 

“actively working” or “temporarily laidoff, or on leave, with a reasonable expectation of recall.” 

144 F.3d 400, 405 n.6 (6th Cir. 1998). The district court used this definition to determine that 

the September employees were no longer employees after they were placed on paid leave 

because they did not have a reasonable expectation of recall. Again, the result of such a 

conclusion is that employers would be required to permit employees to continue to work during 

the notice period in order for the employment relationship to continue after the WARN notice 

was given—a result that the Act does not require. In Kildea, the issue was whether employees 

who had been temporarily laid off were “affected employees” and so entitled to notice under the 

WARN Act. The ultimate question here, however, is whether there has been a permanent 

 4

The district court distinguished Long from the present case on the grounds that Long did not involve the 

question of the aggregation of separate layoffs. There is no principled reason, however, for differing definitions of 

employment loss when considering a single layoff as opposed to aggregating multiple layoffs. 

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cessation of the employment relationship at the time of notice—and we hold that there has not 

been a cessation of the employment relationship as long as the employees continued to be paid 

and accrue benefits. 

IV

Plaintiffs also note that Vanderbilt provided the September employees with pay and 

benefits for 60 days, regardless of whether they got new jobs during that period.5 And so, 

plaintiffs argue, Vanderbilt actually provided the September employees with pay in lieu of 

notice, a purported violation of the WARN Act. Pay in lieu of notice occurs when an employer 

immediately terminates a set of employees without notice and simultaneously provides 60 days’ 

back pay of wages and benefits. See, e.g., Bledsoe v. Emery Worldwide Airlines, Inc., 635 F.3d 

836, 840 (6th Cir. 2011); Allen v. Sybase, Inc., 468 F.3d 642, 646 (10th Cir. 2006). Thus, when 

an employer provides pay in lieu of notice, the employment relationship immediately ends. 

Here, however, the September employees were not given pay in lieu of notice—they were 

given pay in addition to notice.6

 Notice was given on September 17, 2013: 

Your position will be eliminated in sixty (60) calendar days on November 16, 

2013. During the sixty day notification period you will remain employed but will 

be on a paid leave and will not be required to report for work. You may use this 

time to seek other employment, whether within or outside Vanderbilt. Any 

benefits that you currently receive will continue to accrue during this period. If 

you have not obtained another position by the end of your sixty (60) day 

notification period, your employment will end and you will receive payout of 

your accrued but unused balances for vacation and personal time in your final 

regular paycheck. 

R. 76-1, Notice at 2, Page ID 769. And there is no dispute that pay was given throughout the 

entire 60-day period following notice. The WARN Act is not triggered when an employer does 

exactly what Vanderbilt did here—provide employees 60-day notice, continue to pay them their 

 5

Plaintiffs make much of the fact that Vanderbilt continued to pay the September employees even if they 

found new jobs during the notice period, noting that the WARN Act would not require this. It is difficult to see why 

an employer should be penalized for being more generous than legally required. Regardless, such action on 

Vanderbilt’s part does not weigh against the determination that these employees continued to have an employment 

relationship with Vanderbilt until they ceased to be paid and accrue benefits. 

6

Thus the plaintiffs’ analogy to Allen v. Sybase, Inc., is inapposite because that case involved aggregating 

layoffs in which employees had received pay in lieu of notice. 468 F.3d 642 (10th Cir. 2006). 

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wages and provide them their benefits, but not permit them to report for duty during the notice 

period. See 54 Fed. Reg. 16,042, 16,048 (noting that “neither WARN nor the regulations dictate 

the nature of work to be performed—or whether work must be performed—during a period of 

employment after notice of an impending plant closing or mass layoff has been given” (emphasis 

added)). 

V

 Plaintiffs also argue that by placing the September employees on paid leave Vanderbilt 

impermissibly evaded the requirements of the WARN Act by manipulating the timing and 

numbers of employees laid off. And so, they argue, the plaintiff class should be aggregated with 

the September employees to trigger the WARN Act’s protections. The WARN Act’s 

aggregation provision was designed to capture employment losses that were alone not sufficient 

in number “but which in aggregate exceed the minimum number, and which occur within any 

90-day period.” 29 U.S.C. § 2102(d) (emphasis added). This statutory language is clear, and 

employers are permitted to rely on such language in spacing out layoffs. Congress has 

promulgated a 90-day aggregation period, and it is inappropriate for the courts to extend the 

period. There is nothing illegal about an employer spacing out layoffs so that some occur 

beyond a relevant 90-day period. While plaintiffs understandably feel that they received less 

favorable severance treatment than the September employees, Vanderbilt’s actions did not 

violate the WARN Act. 

* * *

The September employees did not suffer an immediate employment loss in September 

2013. Rather, they remained employed on paid leave until they no longer received wages and 

accrued benefits in November 2013. It was then that their positions were finally terminated and 

they were eligible to apply for state unemployment benefits. As the September employees’ 

termination falls outside of the 90-day aggregation window for the July employees, the plaintiffs 

were not subjected to a mass layoff as defined by the WARN Act. Accordingly, we REVERSE 

the decision of the district court. 

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