ANALYSIS

Andersen secks to strike Plaintiffs’ Cross-Motion for Partial Summary Judgment on Issue of

Existence of Mass Layoff, arguing that Federal Rule of Civil Procedure 56 does not allow summary
judgment be entered on an issue as sought by Plaintiffs. Instead, it only allows summary judgment on
aclaim.

Federal Rule of Civil Procedure 56(d) allows the granting of partial summary judgment on less
than a whole claim. See Fed. R. Civ. P. 56(d), Zapata Hermanos Sucessores v. Hearthside Baking Co.,
313 F.3d 385, 391 (7" Cir, 2003). Accordingly, Defendant’s Motion to Strike Plaintiffs’ Cross-Motion
for Partial Summary Judgment on Issue of Existence of Mass Layoff is denied,

The WARN Act requires employcrs of 100 or more full-time employees to give at least sixty
days’ advance notice of plant closings and mass layoffs to affected employees. See 29 U.S.C. § 2102(a).
The only issue disputed by the parties in the instant case is whether the layoffs at the 33 West Monroe
site constituted a “mass layoff” as required by the WARN Act.

The WARN Act defines a “mass layoff” as:

(3) ... a reduction in force which ~
(A) is not the result of a plant closing; and
(B) results in an employment loss at a single sie of employment during
any 30-day period for —
(i)() at least 33 percent of the employces (excluding any part-time
employees); and
(II) at least 50 employees (excluding any part-time employees); or
(ii) at least 500 employces (excluding any part-time employces)
29 U.S.C. § 2101(a)(B)(3). To trigger the notice requirement under this section, if the employer lays

off fewer than 500 employees in an action unrelated to a plant closing, the number of cmployees laid off

must excced 50 and must also excecd 33 percent of the total number of employees, The Department of


any 90-day period reach the minimum numbers and thus trigger the notice requirement. Ifan cmployer
only need be concerned with 2102(d) ifless than 50 employces were laid off within a 30-day period, the
Department of Labor could have indicated that this inquiry first be made, Instead, the Department of
Labor informs employers to add the employees laid off in a 90-day period to determine if the minimum
numbers have been reached.

Defendant also cites to other district courts that have found that ifthe statutory minimum of fifty
employees is met, the requisite statutory period is thirty days. The cases cited are nol persuasive. In
Reyes v. Greater Texas Finishing Corp., 19 F. Supp. 2d 709 (W.D. Texas 1998) (Reyes), the court found
“Tal fter a thorough reading of the statute, regulations, legislative history and relevant case law...” that
since the statutory minimum of fifty persons was met, the requisite statutory period was thirty days. In
support of its holding, the Reyes court quoted the above Senate Amendment and cited to 29 U.S.C. §
2101(a)(3). However, the Reyes court failed to indicate whether 2101(a)(3)(B)(i)(II) had also been
satisfied and did not address any of the other Icgislative history cited above.

Similarly, in Washington v. Aircap Indust. Corp., 1992 WL 547993 (D. S.C. July 8, 1992), the
court failed to address whether 2101({a)(3)(B)(i)(I) had also been met when limiting the statutory period
to thirty days. Furthermore, the Washington court was not making a decision on the merits of the
plaintiff's WARN Act claims but was deciding whether class certification was appropriate. See also,
Kelly v. Tech Inc., 195 F.R.D, 48 (8.D. Fla.) (failing to address 2102(a)(3)(B)(i)(ID) requirement and not
addressing any argument that 90-day period was appropriate).

Lastly, under Defendant’s interpretation, an employer of a large number of employccs, such as

the Defendant, could evade the requirements of the WARN Act by always laying off over 50 employees

in a 30-day period but making sure that the number of employees laid off in a 30-day period did not



20 CER. § 639.5(a)(1).

The parties do not dispule thal there was no thirty-day period in which 500 full-time employees
expericneed an employment loss. The largest number of full-time losses in any thirty-day period was
465. The parties also do not dispute that there was no thirty-day period in which 33 percent of the full-
time employees suffered an employment loss, as 465 is less than 33 percent of the 3,000 plus full-time
employees at the 33 West Monroe employment site. Based on these undisputed facts, a mass layoff did
not occur under 29 U.S.C, § 2101(3).

The parties do dispute whethcr 29 U.S.C. § 2102(d) applies. Defendant argues thal Section
2102(d) only applies if less than fifty employees were terminated in a thirty-day time period. Under
Defendant’s construction of 2102(d), the “minimum number of cmployces spccificd in section ...
2101(a)(3)” applies only if 2101(a)(3)(B)(i)(ii), more than 50 employees, is not met. In support of this
construction, Defendant argues that the provision “minimum number” only speaks in the singular, not
the plural; and between, 50 and 500, there is only one minimum. However, as set oul above,
2102(a)(3)(B)(i)UIT) provides “at least 50 cmployces”; and subsection III provides ‘tat least 500
employees”. (Emphasis added). Both provide a minimum number in establishing different bases for
determining a “mass layoff”.

Plaintiffs argue that Section 2102 establishes criteria for a mass layoff independent of Section
2101(3) if the layoffs (1) affected two or more groups, (2) neither 2101(a)(3)(B)(i) or 2101(a)(3)(B)Cii)
are met , and (3) the terminations were not the result of separate and distinct actions and causcs.

A court “should not construe a statute in a way that makes words or phrases meaningless,

redundant, or superfluous.” See Unites States v. Franz, 886 F.2d 973, 978 (7th Cir. 1989).



Labor regulations governing WARN enforcement provides that these figures be calculated at a
“snapshot” date, the date notice is first required to be given. See 20 C.F.R. § 639.5(a)(2).
The WARN Act also provides for aggregating the number of laid-off employees. Section
2102(d) states:
(d) Determinations with respect to employment loss

For purposes of this scction, in determining whether a plant closing or
mass layoff has occurred or will occur, employment losses for 2 or more
groups al a single site of employment, each of which is less than the
minimum number of employees specificd in section 2101(a)(2) or (3) of
this title but which in the aggregate exceed that minimum number, and
which occur within any 90-day period shall be considered to be a plant
closing or mass layoff 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 this chapter.

29 U.S.C. § 2102(d).
The Department of Labor regulations provide guidance to employers for deciding whether notice is
required --

In order for an employer to decide whether issuing notice is required, the
employer should —

(i) Look ahead 30 days and behind 30 days to determine whether
employment actions both taken and planned will, in the aggregate for
any 30-day period, reach the minimum numbers for a plant closing or a
mass layoff and thus trigger the notice requirement; and

(ii) Look ahead 90 days and behind 90 days to determine whether
employment actions both taken and planned each of which separately is
not of sufficient size to trigger WARN coverage will, in the aggregate
for any 90-day period, reach the minimum numbers for a plant closing
ora mass layoff and thus trigger the notice requirement. An cmployer
is not, however, required under section 3(d) to give notice if the
employer demonstrates that the separate employment losscs are the
result of separate and distinct actions and causes, and are not an attempt
to evade the requirements of WARN.



33 percent of the employees at a particular employment site also applies to this section [2102d]. The
‘33 percent’ requirement was inadvertently omitted from the language approved by the senate.” H.R.
Conf. Rep. No. 100-576, at 1050 (1988). This Conference Agreement fails to support Defendant’s
interpretation that 2101(a)(3)(B)(i)(1) must first be met before any other part of 2101{a)(3)(B) is
analyzed, However, it docs support the interpretation that there are two distinct methods of mecting,
and not mecting, the requirements of 2101(a)(3) as set out above.
Further support for the interpretation adopted by the Court is found in the Conference Agreement
to the Senate Amendment conceming the definition of “mass layoff’. The Conference Agrecment
modified the Scnate Amendment so that the 33 percent requirement only applies to mass layoffs that
involve morc than 49 but less than 500 employees. The Conference found that:
layoffs involving 500 or more people are likely to cause significant
economic disruption in local communities, as well as the obvious
disruption for the individuals involved. Thus, the rationale for advance
notice is strong ~ the need for individuals and communities to begin
planning for dislocation before the dislocation occurs. The justification
for a33 percent requirement for layoffs before notice is required has been
the representation by busincss interests that small layoffs of 50 or 100 or
even 200 employces at a single site with perhaps a workforce of perhaps
a thousand or more employees are such a regular part of business that
Tequiring notice in these circumstances would be unduly burdensome.
Because a layoff of 500 employces at a site of employment is a
significant and unusual action, even in a large workforce of 2000 or more
employees, the requirement of advance notice in (hese situations should
not place an undue burden on employees.

H.R. Conf, Rep. 100-576, at 1046 (1988). Thus, Congress specifically chosc two different definitions

of mass layoff that required different critcria that were not interrelated.

Defendant’s interpretation is also contrary to the Department of Labor’s regulation cited above

which informs employers to look ahead and back 90 days to determine whcther employment actions,

each of which separately are not of sufficient size to constitute a mass layoff, will in the aggregate for


‘Minute Onder Horm (06/97)

wee J United States District Court, Northern District of Illinois

‘ame i ry Sitting Judge If Other
ser Magis Jude John W. Darrah “Than hatgned Suge
CASE NUMBER 02 C 2689 DATE 3/2/2004
CASE Roquet vs. Arthur Andersen LLP
TITLE

[In the following box (a) indicute the party filing the motion, e.g. plaintiff, defendant, 3rd purty plaintifT, and (b) sta
of the motion being presented.)

tc briefly the nature

ie)

opinion and order, plaintiffs’ motion for summery judgment is denied. Defendant’s motion
judgment is granted. Enter Memorandum Opinion and Order.

a [For further detail see order attached to the original minute order.]

MOTION:

DOCKET ENTRY:

qd) o Filed motion of [ usc listing m “Motion” box above.]

(2) ia Brief in support of motion due

(3) a Answer brief to motion due___. Reply to answer brief duc___

(4) a Ruling/Hearingon_ set for at

(5) Oo Status hearing[held/continued to] [sct for/re-set for}on__—_—ssetfor_— at.

(6) Qa Pretrial conference[held/continued to) [set for/re-set for] on__— set fora

m Oa Trial[set for/re-set for]on___—_at__

(8) Oo [Bench/Jury trial] [Hearing] held/continued to at_

(9) im] This case is dismissed [with/without] prejudice and without costs[by/agrecment/purauant to}
OOFRCP4(m) OlLocal Rule 41.1 OFRCP41(a(1) 0 FRCP41(a)(2).

(io) «4 {Other docket entry) Status hearing held. For the reasons stated in the attached memorandum

for summary

No notices required, advised in open court,

No notices required.
jo notices require: qumber of ngticey a

“Number,

‘Decuirent,

Notices mailed by judge's staff. MAR 03 2004

Notified counsel by telephone, dare doctared
wv | Docketing to mail notices, G
ov | Mail AO 450 form. . voy docket: deputy nina
Copy to judge/magistrate judge. . . Sones
courtroom date riled notice
MF dcpuly’s
initials =
Date/time reccived in
L central Cletk’s Office rmnling deputy initials

BY



Accordingly, Andersen’s Motion for Summary Judgment is denied; and Plaintiffs’ Motion For
Partial Summary Judgment on Issue of Existence of Mass Layoff is granted.

For the foregoing reasons, Defendant’s Motion to Strike Plaintiffs’ Cross-Motion for Partial
Summary Judgment on Issue of Existence of Mass Layoff is denied. Defendant’s Motion for Summary
Judgment is denied. Plaintiff's Cross-Motion for Partial Summary Judgment on Issuc of Existence of

Mass Layoff is granted,

Dated: Vek 4 2a0Y p

W. DARRAH
United States District Judge

il



exceed 500, For example, a large employer could layoff 499 people cvery 31 days and avoid the
disclosure requirement, including Section 2102(d), as long as 499 employees did not constitute
33 percent of the employees. Such result would be contrary to Congress’s purpose in enacting the
statute, including 2102(d), which is intended to prevent the evasion of the statute by the manipulation
of the number of employees laid off.
CONCLUSION

A mass layoff occurs pursuant to Section 2102(d) if (1) employment losses for two or more
groups ata single site of employment; (2) cach of which is less than the minimum number of employees
specificd in section 2102(a)(2) or (3), failing to mect the requirements of 2102(a)(2) or
2102(a)(3)(B){i)(1) and 2102(a)(3)(B)()(U) or 2 102(a)(3)(B)(ii); (3) but which in the aggregate exceed
that minimum number within any 90-day period shall be considered a plant closing or mass layoff; (4)
unless the employer demonstrates that the cmployment losses are the result of separate and distinct
actions and causes and are not an attempt by the employer to evade the requirements of this chapter.

As stated above, the parties do not dispute that a mass layoff did not occur as defined in
2101(a)(3). Therefore, based on the above statutory construction, a determination of whether a mass
layoff occurred based on Section 2 102(d) must then be made. The undisputed facts show that there were
employment losses for two or more groups at 33 West Monroe, each of which are less than the minimum
number of employees specified in section 2102(a)(3), but which in the aggregate of 90 days excced 500
employees, specifically, 635 employees.

Furthermore, Andersen docs not present any undisputed facts or argument that the employment
losses were the result of separate and distinct actions and causes and were not an attempt by Andersen

to evade the requirements of this chapter.

10



Contrary to Defendant’s argument, the plain language of Section 2102(d), “each of which is
less than the minimum number of employees specified in section 2101(a)(2) or (3), does not support
the narrow interpretation that only 2101(a)(3)(B)()(1) sets out the minimum number of employees
referenced in 2102(d) as fifty. Congress chose to use “2101(a)(3)” in the statute. Congress did not, but
could have easily, refer specifically to Section 2101(a)(3)(B)(i)(II) or simply 50 employees in referring
to the minimum number in Section 2101{a)(2). Section 2101{a)(3) allows two different definitions of
a mass layoff, either of which, if met, require notice be given. Ifa layoff meets the requirements of
2101(a)(3)(B)i), which requires both an employment loss of 33 percent and a minimum of “at least 50
employees”, then 2101(a)(3)(B)(ii) need not be addressed, and 2102(d) would not apply. Similarly, if
a layoff meets the requirements of 2101(a)(3)(B)(ii), which only requires a total of a minimum of “at
Icast 500 employees” laid off, then 2101(a)(3)(B)(i) need not be addressed, and 2102(d) would not apply.
Clearly, Congress intended that Section 2102(d) only applies if 2101(a)(2) or (3) are not met.

Although no reference beyond the language of the statute is necessary, a discussion of legislative
history raised by the Defendant is appropriate, Defendant cites to a Senate Amendment to Section 2102
to support its argument. This Amendment stated:

The Senate Amendment provides for the determination of a plant
closing or mass layoff based on aggregation of smaller employment
losses. Under the Amendment, employment losses at a single site for 2
or more groups of employees, cach of which is less than 50 employees,
but which in the aggregate total at least 50 employees, that occur within
a 90-day period, will be considered a closing or layoff subject to
notification...
H.R, Conf. Rep. No. 100-576, at 1050 (1988).
However, a closer look at the legislative history of the WARN Act fails to support Defendant’s

narrow Teading of the exception and the Senate Amendment. The Conference Agreement for the above

Senate Amendment clarified that “the requirement that a mass layoff of 50 to 499 employees must affect



At all relevant times between February 1, 2002, and April 8, 2002, the number of full-time
employees at 33 West Monroe was in excess of 3,000. (Def.’s 56.1(a)(3) Statement 4 44), In the thirly-
day period beginning with the period April 23, 2002, through May 22, 2002, and for several thirty day
periods beginning each subsequent day thereafter, the number of full-time employees involuntarily
terminated in each thirty-day period exceeded 50. (Id., | 45). In the thirty-day period beginning with
the period April 8 2002, through May 7, 2002, and going forward through the thirty-day period ending
July 30, 2002, the number of full-time Andersen employees involuntarily terminated at 33 West Monroe
was less than 500. (Id., | 46).

The largest number of full-time employees terminated from its 33 West Monroe employment
site in any thirty-day period with the period of April 8, 2002, through May 7, 2002, and going forward
through the thirty-day period ending July, 30, 2002, was 465. (Def.’s §6.1(a)(3) Statement 9/47). In
each thirty-day period beginning April 8, 2002, through May 7, 2002, and continuing through a thirty-
day period ending July 30, 2002, the number of Andersen employees involuntarily terminated from its
33 West Monroe employment site was less than 33 percent of the full-time employces employed at that
employment site. (Id., 4 48).

Andersen terminated 436 employces on 20 different dates at its 33 West Monroe cmployment
site between April 23, 2002, and May 22, 2002. (Plaints.’ 56.1(b)(3) Statement 4 53). Andersen
terminated 154 employees on 22 different dates at its 33 West Monroe employment site between
May 23, 2002, and June 21, 2002. (Id., 54). Andersen terminated 45 employees on 19 different dates
at its 33 West Monroe employment site between June 22, 2002, and July 21, 2002. (Id., 4] 55).

Andersen gave Roquct notice on April 8, 2002, that she was terminated as of April 23, 2002.
(Plaints.’ 56.1(b)(3) Statement § 56). Andersen gave Robinson notice on April 8, 2002, that she was

terminated as of May 15, 2002. (Id., 4 37).


On March 14, 2002, the United States Department of Justice made its indictment of Andersen
on certain criminal charges. (Def.’s 56.1(a)(3) Statement] 24). On or about April 8, 2002, notices were
sent to a number of Andersen’s employees, including some employees at its 33 West Monroe
employment site, notifying each employec to whom a notice was addressed that his or her employment
would be terminated at a future date after a specified period of continued employment, referred to as
“job search” time. Based on business necds, some employees’ cmployment was extended beyond the
initial anticipated termination date indicated in their notice. (Id., 26). Decisions as to who should
receive notice on April 8, 2002, of future termination at each Andersen site were made by local
management, based on their best assessment of which employces were least critical to serve what
business was anticipated to remain after the indictment. (Id., { 27), During his or her paid job search
period, cach cmployec continued to be an employce of Andersen. His or her cmployment terminated
at the earlier of cither (1) the end of his or her job search period, (2) his or her voluntary termination of
employment or (3) the receipt of an offer of replacement employment by another firm. (Id., 929).

The notice Andersen gave a number of employces on or about April 8, 2002, did not terminate
any cmployee’s employmentas of that date. (Def.’s $6.1(a)(3) Statement ] 30). The earliest termination
of cmployment pursuant to the April 8, 2002 notices occurred on April 23, 2002. This was because
every employee was given at Icast two weeks of paid job search employment after April 8, 2002. (Id.,
431). On Or about April 11, 2002, Andersen sent several focal government offices notices that it
anticipated (hat there may be layoffs at certain employment sites, including 33 West Monroe, cither in
excess of 500 or 33 percent of its workforce at those employment sites over a 180-day period. No
notices sent to government offices indicated a particular number of anticipated layoffs in a thirty-day

period. (Id., ] 32).


UNITED STATES DISTRICT COURT DOCKETEE
NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION MAR 0 3 2004
NANCY J. ROQUET and CORETTA ROBINSON, __)
Plaintiffs, ‘ No. 02 C 2689
v. } Judge John W. Darrah
ARTHUR ANDERSEN LLP, }
Defendant. )

MEMORANDUM OPINION AND ORDER

Plaintiffs, Nancy J. Roquet (“Roquet”) and Coretta Robinson (‘Robinson”), brought a class
action suit against Defendant, Arthur Andersen LLP (“Andersen”), alleging Defendant violated the
Worker Adjustment and Retraining Notification Act (“WARN Act”), 29 U.S.C. § 2101-2109. Presently
before the Court are: (1) Defendant’s Motion to Strike Plaintiffs” Cross-Motion for Partial Summary
Judgment on Issue of Existence of Mass Layoff, (2) Defendant’s Motion for Summary Judgment, and
(3) Plaintiffs’ Cross-Motion for Partial Summary Judgment on Issue of Existence of Mass Layoff.

BACKGROUND

Anderscn was engaged in the busincss of accounting, auditing and tax and business and
speciality consulting in various locations in the United States. (Def.’s 56.1(a)(3) Statement § 3). In
March and April 2002, Andersen had employed sites in more than cighty locations in the United States,
including its employment site at 33 West Monroc Street, Chicago, Minois. (Id., J 8). Andersen’s
employccs were assigned to one employment site, (Id., 4 11). Andersen’s employment site at 33 West
Monroe was not contiguous with any other Andersen location. (d., $12). As of mid and late March
2002, Andersen employed in excess of 25,000 persons in its more than eighty employment sites

throughout the United States. (Id., 4] 25).