1 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

_________________

T RACY M ORTON , on behalf of herself and all others similarly situated, Plaintiff-Appellee ,

v

.

T HE V ANDERBILT U NIVERSITY , Defendant-Appellant

. ┐ │ │ │ │ │ │ │ │ ┘ No. 15-5417

Appeal from the United St ates 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 JOHNS TON MARTIN & GARRISON, LLC, Nashville, Tennessee, for Appellee. ON BRIEF: Michael S. Moschel, W illiam N. Ozier, BASS, BERRY & SIMS, PLC, Nashville, Tennessee, John C. Callison, THE VANDERBILT UNIVERSITY, Nashville, Tennessee, for Appella nt. 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 Dist rict Judge for the Eastern District of Kentucky, sitting by designation. 

### >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 empl oyees who were terminated by Vanderbilt University on July 1, 2013. Their compla int, however, is only viable if Vanderbilt’s
treatment of 279 other employees was an immediate termination.
The plaintiffs have sued Vanderbilt Universi ty, claiming that their termination was in violation of the Worker Adjustment and Retr aining Notification Act (WARN Act), 29 U.S.C. § 2101 et seq. , which requires certain employers to prov ide at least 60 days’ written notice to affected employees before a mass layoff. The plai ntiffs’ 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 determin ing whether there has been a mass layoff. The plaintiffs’ claim turns on whether a separate group of Vanderbilt empl oyees 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 late r, on November 16, 2013. Although they were no longer permitted to report for work, they continue d to receive wages and accrue benefits after the notice was given. Additionally, they were not e ligible for state unemployment benefits until November 16, 2013, when they no longer received wages and accrued benefits. Thus, the employment relationship between Vanderbilt a nd the September employees did not end until November 16, 2013, the date that Vanderbilt told the employees that th eir 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.”).No. 15-5417 Morton v. The Vanderbilt University Page 3

Accordingly, because the second group of Vand erbilt employees suffered an employment loss more than 90 days after the plaintiffs were terminated and thus ca nnot 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 be fore 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 empl oyment losses are the re sult of separate and
distinct actions and causes and ar e not an attempt by the employer to evade the requirements” of the Act, 29 U.S.C. § 2102(d). Th e WARN Act defines employment lo ss as “(A) an employment termination, other than a discha rge for cause, voluntary departur e, 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 termin ated. 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 th at courts apply a “practical, eff ects-driven analysis of whether a break in employment actually occurred”).
On September 17, 2013, Vanderbilt provided 27 9 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 “remai n employed” but be placed on “paid leave” for those 60 days, and that they were no longer requi red to report to work. R. 76-1, Notice at 2, Page ID 769. These employees were told by th eir managers that they should gather their personal belongings and return al l Vanderbilt property, including identification ba dges, 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.No. 15-5417 Morton v. The Vanderbilt University Page 4

computers, and cell phones. They were then taken to meet wi th someone to discuss career transition counseling, after which they were to ld 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 remain ed on Vanderbilt’s payroll and received their full pay and bene fits on their regular pay dates for 60 days after receiving the notice. Vanderbilt continued to pay the em ployees even if they worked elsewhere.
The district court found that the Septembe r 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 em ployment loss—on September 17, 2013 or on November 16, 2013.

II
In ruling that the employment relationshi p between the September employees and Vanderbilt immediately ended once they received th eir 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, whic h 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 th ese 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.No. 15-5417 Morton v. The Vanderbilt University Page 5

Additionally, these employees we re not eligible for state un employment benefits until November 16, 2013, when they no longer rece ived wages and acc rued benefits. See T ENN

. C ODE A

NN . § 50-7-211 (2008) (“An indivi dual shall be deemed ‘unemp loyed’ 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 be nefits during the noti ce 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 pr ovided any basis to belie ve that the September employees would have been eligible for unempl oyment benefits during the period of their paid
leave.
The district court concluded that the Sept ember employees had suffered an immediate loss of employment upon receiving their no tification letters on September 17, 2013. Recognizing the obvious logical falla cy in generally equating the date of notice with the date of termination—and so rendering it impossible for an employer to ever gi ve 60 days’ notice of termination—the district court’s opinion relies on the following facts: the September employees
were “instructed to clean out their workstati ons; [] required to return all Vanderbilt property (including their identification badg es, 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, th e implication of the district court’s reasoning is that, in order for employment to c ontinue after the WARN notice, employers would need to permit employees to perf orm work after the notice and before termination, even if the employer had a host of legitimate business reason s 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 theNo. 15-5417 Morton v. The Vanderbilt University Page 6

nature of work to be performed —or whether work must be performed— during a period of employment afte r 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 perfor ming work” before concluding that “Dunlop’s decision to continue paying all be nefits 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 ho me 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 regul ations defined employees as individuals who were either “actively working” or “temporarily laidoff, or on l eave, with a reasonable expectation of recall.” 144 F.3d 400, 405 n.6 (6th Cir. 1998). The district c ourt used this definition to determine that the September employees were no longer employ ees after they were placed on paid leave because they did not have a reasonable expectat ion 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 th e employment relationship to co ntinue after the WARN notice was given—a result that th e Act does not require. In Kildea , the issue was whether employees who had been temporarily laid o ff were “affected employees” and so entitled to notice under the WARN Act. The ultimate question here, howev er, is whether there has been a permanent

4 The district court distinguished Long from the present cas e 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.No. 15-5417 Morton v. The Vanderbilt University Page 7

cessation of the employment relationship at the time of notice—and we hol d 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 provi ded 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 th e September employees with pay in lieu of notice, a purported viola tion 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 Ci r. 2006). Thus, when an employer provides pay in lieu of notice, th e employment relationshi p immediately ends.
Here, however, the September em ployees 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 sixt y (60) calendar days on November 16, 2013. During the sixty day notification pe riod you will remain employed but will be on a paid leave and will not be require d 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 co ntinue to accrue during this period. If you have not obtained another position by the end of your sixty (60) day notification period, your employment wi ll end and you will receive payout of your accrued but unused balances for vaca tion 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 employ ees 60-day notice, conti nue 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 ceas ed to be paid and accrue benefits.
6 Thus the plaintiffs’ analogy to Allen v. Sybase, Inc. , is inapposite because th at case involved aggregating layoffs in which employees had received pay in lieu of notice. 468 F.3d 642 (10th Cir. 2006).No. 15-5417 Morton v. The Vanderbilt University Page 8

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 ar gue, the plaintiff class sh ould be aggregated with the September employees to trigger the WA RN Act’s protections . The WARN Act’s aggregation provision was designed to capture employment losses th at 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 la nguage in spacing out layoffs. Congress has promulgated a 90-day aggregati on period, and it is inappropriat e for the courts to extend the period. There is nothi ng illegal about an empl oyer 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 Sept ember 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 l eave 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 unemplo yment benefits. As the September employees’ termination falls outside of the 90-day aggregati on window for the July employees, the plaintiffs were not subjected to a mass layoff as define d by the WARN Act. Accordingly, we REVERSE
the decision of the district court.