Source: http://pa.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19980430_0086.C03.htm/qx
Timestamp: 2017-01-17 03:15:00
Document Index: 165647555

Matched Legal Cases: ['§ 2101', '§ 2102', '§ 2101', '§ 2104', '§ 2101', '§ 2101', '§ 2104', '§ 2104', '§ 2104', '§ 2101', '§ 2107', '§ 2101', '§ 639', '§ 639', '§ 639', '§ 639', '§ 639', '§ 2101', '§ 2104', '§ 2104', '§ 2104', '§ 2104', '§ 2104', '§2104', '§ 639', '§ 639', '§ 639', '§ 639', '§ 639', '§ 2101', '§ 639', '§ 639', '§ 639']

| Ciarlante v. Brown & Williamson Tobacco Corp.
Ciarlante v. Brown & Williamson Tobacco Corp.
LOUIS A. CIARLANTE; THOMAS A. MARSHALL, INDIVIDUALLY AND ON BEHALF OF A CLASS OF INDIVIDUALS APPELLANTS/CROSS-APPELLEES IN APPEAL NO. 97-1174v.BROWN & WILLIAMSON TOBACCO CORPORATION; THE AMERICAN TOBACCO COMPANY; AMERICAN BRANDS, INC. BROWN & WILLIAMSON TOBACCO CORPORATION AND THE AMERICAN TOBACCO COMPANY, APPELLANTS/CROSS-APPELLEES IN APPEAL NO. 97-1152 AND 97-1725 On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 95-cv-04646) Argued Tuesday, November 4, 1997
Before: Becker, Roth and Garth, Circuit Judges
The plaintiffs in this action are employees who did not sign the release form. They brought suit in the United States District Court for the Eastern District of Pennsylvania against Brown & Williamson, American Tobacco, and American Brands, Inc. (collectively, "B&W") alleging that B&W had violated the Worker Adjustment and Retraining Notification Act ("WARN"), 29 U.S.C. §§ 2101-09, by failing to warn the plaintiffs of their impending layoffs. *fn1 Enacted in 1988, WARN requires that employers provide written notice to those employees who will be subject to a "mass layoff" sixty days before the layoff occurs. See 29 U.S.C. § 2102(a). *fn2 Congress defined a "mass layoff" as "a reduction in force which . . . results in an employment loss at the single site of employment during any 30-day period for . . . at least 50 employees." 29 U.S.C. § 2101(a)(3) (emphasis added). The Act entitles affected employees who are not notified of an impending "mass layoff" to damages from their former employer in an amount equal to back pay for each day of the violation, for up to sixty days. See 29 U.S.C. § 2104(a).
Following class certification, it became clear that the plaintiffs' recovery hinged on whether B&W's action was a "mass layoff." Specifically, the central question was whether the action had resulted in an employment loss of more than fifty employees at one "single site of employment" as required by 29 U.S.C. § 2101(a)(3)(B). *fn3 In an order dated September 23, 1996, the district court announced that it would treat pending discovery applications as cross-motions for summary judgment, focusing on the "single site" requirement. The parties responded with both evidence and legal argument attempting to show as a matter of law that the single site requirement had (or had not) been satisfied.
The sales representatives argued that they were entitled to judgment as a matter of law because the Chester, Virginia administrative center was their "single site of employment." The sales representatives offered statements by former employees suggesting that the Chester center was the primary contact point for sales representatives in the field. According to the statements, sales representatives received their instructions from and reported to the administrative center in Chester. App. 2208-10; App. 1936. Each sales representative was required to call Chester every day to check messages, which frequently included instructions from management left on the sales representative's voice mail. App. 1936-37. Sales representatives also communicated with the Chester center to obtain sales materials, supplies, and other items they needed to perform their job. App. 2178-79. The sales representatives argued that they were entitled to judgment because their affidavits proved that the Chester center was their "single site of employment."
B&W's affidavits and arguments pointed to a different Conclusion. According to B&W, it was entitled to judgment as a matter of law because the sales representatives' "single site[s] of employment" were the geographical districts where they actually worked. B&W maintained that the districts were the true hubs of the sales representatives' activities, as the local district sales managers were the employees who directed, managed, and monitored the sales representatives. B&W relied on various sources for support. First, they offered the affidavit of Mr. Randy Groonwald, a district sales manager from Milwaukee, who stated that his sales representatives were assigned work from him, not from Chester, Virginia. Groonwald also reported that he was responsible for the day-to-day concerns of his sales representatives, including hiring, training, job performance reviews, and approval of expenses. App. 1017- 18. Groonwald's statements were supported by B&W's internal documents, which showed that supervision of sales representatives was the major task of district sales managers. App. 1223. B&W also relied upon its official job description for the sales representative position, which indicated that the sales representatives' primary contact within the company was with their district sales managers. App. 1226.
In response to the sales representatives' position that Chester was their single site of employment, B&W maintained that the Chester center was simply an administrative hub through which certain mailings and messages authored outside of Chester were sent to the sales representatives. Sales representatives were hired, trained, and instructed within their district, B&W noted; they worked entirely within their district; and they reported to their district sales managers within their district. Sales representatives did not regularly visit the Chester, Virginia center. In fact, named plaintiff Thomas A. Marshall visited the center only twice, on special trips to recognize his outstanding sales record, App. 2266, and named plaintiff Louis A. Ciarlante never visited Chester at all. App. 2376. Accordingly, B&W argued that the districts, rather than the Chester center, were the plaintiffs' "single site of employment." Because there were fewer than fifty employees within each geographic district, B&W claimed that its action could not constitute a "mass layoff" under 29 U.S.C. § 2101(a)(3), and that it was entitled to judgment as a matter of law.
In an order dated November 6, 1996, the district court concluded as a matter of law that the Chester center was the plaintiffs' single site of employment and entered summary judgment in their favor. The district court reasoned that the voluminous record in the case "establishes, without any genuine dispute, that all instructions, assignments, rules, and orders to the plaintiff salesmen emanated from the Chester, Virginia headquarters." As a result, the Chester center was the plaintiffs' single site of employment. The court recognized that the local district sales managers played a role in issuing assignments to and receiving reports from the sales representatives, but found that the role of the sales managers was not significant. "Any contrary view," the court explained, "would . . . undermine the purposes of the statute. I am confident that Congress did not contemplate permitting a company to lay off its entire sales force of hundreds of people without being chargeable with having achieved a `mass layoff.'" *fn4
Having found B&W liable, the court next considered the damages owed to the sales representatives. The first issue was whether the full statutory damage award should be reduced by the amount of severance payments that B&W had made to the employees following the layoffs. B&W contended that the answer was "yes," because 29 U.S.C. § 2104(a)(2) directed that damage awards be reduced by "any wages paid by the employer to the employee for the period of the violations . . . [and] any voluntary and unconditional payment by the employer to the employee that is not required by any legal obligation." 29 U.S.C. § 2104(a)(2). The district court disagreed, holding that the damage award should not be reduced because the severance pay awards were ERISA payments that B&W was legally obligated to pay.
B&W responded by submitting a Motion to Alter or Amend Judgment and for Reconsideration and Clarification. Attached to this motion were additional sworn declarations by Company employees. One such employee, Kathi Reynolds, stated that when she was a sales representative from 1985 to 1989, she sometimes received instructions that were mailed through the Chester facility, but that in almost every case, the true source of her instructions was the Company's executive headquarters in either Stamford, Connecticut or Conyers, Georgia. App. 2462. According to B&W, this affidavit illustrated that the district court had misunderstood the plaintiffs' statements that the sales representatives had received instructions "from" Chester. B&W asked the district court to reconsider its decision, in light of the new affidavits and the district court's haste in granting summary judgment in favor of the sales representatives.
In a December 18, 1996 order, the district court found this argument "disingenuous," and concluded that B&W was not entitled to have the court consider the additional materials. Citing "an abundance of caution," the court nevertheless looked at the new documents, and concluded that B&W had presented no triable issues of fact, as the motion for reconsideration and new documents "merely revisit[ed] arguments previously made and rejected."
The court did revise its Conclusion concerning damages, however. The court held that it had misconstrued the scope of United Steelworkers of America v. North Star Steel Co., 5 F.3d 39 (3d Cir. 1993), and that the North Star case left open the question of how to calculate back pay damages according to 29 U.S.C. § 2104(a)(1) in the case of salaried employees. The district court concluded that the proper award of back pay damages for a 60 day period in the case of a salaried employee was simply two months's salary.
Summary judgment is appropriate when there are no genuine disputes as to any material facts. See Fed. R. Civ. P. 56(c). In such a case, a trial is unnecessary because a reasonable fact finder could not enter a judgment for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510 (1986). Accordingly, we exercise plenary review, construing all evidence and resolving all doubts raised by affidavits, depositions, answers to interrogatories, and admissions on file in favor of the non-moving party. See SEC v. Hughes Capital Corp., 124 F.3d 449, 452 (3d Cir. 1997). Our task is to lay out the substantive law governing the action, and then in light of that law determine whether there is a genuine dispute over dispositive facts. See Liberty Lobby, 477 U.S. at 248, 106 S. Ct. at 2510.
The issue in this case is whether the district court was correct as a matter of law that the Chester, Virginia administrative center was the plaintiffs' "single site of employment" according to 29 U.S.C. § 2101(a)(3). *fn5 The WARN act does not define the phrase "single site of employment." Congress did, however, expressly delegate to the Department of Labor the authority to promulgate regulations interpreting WARN. See 29 U.S.C. § 2107. These regulations must be given "controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute." Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843-44, 104 S. Ct. 2778, 2782 (1984).
This regulation narrows the inquiry considerably: we need only consider whether the Chester, Virginia administrative center was the site of employment to which the sales representatives were assigned as their home base; whether the Chester center was the site from which the sales representatives' work was assigned; and whether the Chester center was the site to which they reported. If any one of these three inquiries can be answered in the affirmative, then the Chester center is a covered "single site of employment." See Teamsters Local Union 413 v. Driver's, Inc., 101 F.3d 1107, 1110 (6th Cir. 1996) ("This subpart is written in the disjunctive: any one of the alternatives may qualify as the definition of `single site.'"). Because at least fifty employees lost their jobs following the January 11, 1995 "sales meetings," a determination that Chester is a covered site under WARN as a matter of law would lead us to affirm the district court's entry of summary judgment in favor of the plaintiffs. See 29 U.S.C. § 2101(a)(3)(B)(i).
However, if we conclude as a matter of law that Chester, Virginia was not the site of employment to which the sales representatives were assigned as their home base, nor the site from which their work was assigned, nor the site to which they reported, then the Chester center is not a covered WARN site. Because the plaintiffs have not indicated the existence of any other covered sites at which fifty or more employees lost their jobs on January 11, 1995, the Conclusion that Chester is not a covered site would lead us to reverse the order of the district court and enter summary judgment for B&W.
Whether Chester, Virginia was the sales representatives' "home base" depends on our legal construction of the term "home base" in the Secretary's regulation. B&W argues that an employee's assigned "home base" is the place from which the employee physically works on a regular basis. Under this interpretation, it is argued that the Chester center cannot be the sales representatives' home base. In contrast, the sales representatives focus less on the employee's whereabouts than on the physical location of the employer's major contacts with its employees. Accordingly, they maintain that an employee's "home base" must be a fixed physical building or structure of some kind owned by the employer. Because both the sales representatives and district sales managers worked from their homes and cars, the sales representatives contend that the Chester center must by default be considered the employees' "home base."
We agree with B&W that a traveling employee's "home base" must at a minimum be a location at which the employee is physically present at some point during a typical business trip. This follows from the text of 20 C.F.R. § 639.3(i)(6), which contrasts "the employer's regular employment sites" with the site of employment "to which [the employees] are assigned as their home base." We think that this language cannot be squared with the sales representatives's interpretation of "home base," as it effectively equates "home base"with a "regular employment site." In the context of 20 C.F.R. § 639.3(i)(6), we think that the term "home base" refers not to the physical base of the employer's operations, as the sales representatives would have it, but rather to the physical base of the employee.
Our construction is consistent with both Teamsters Local Union 413 v. Driver's, Inc., 101 F.3d 1107, 1110 (6th Cir. 1996) and Wiltz v. M/G Transport Services, Inc., 128 F.3d 957, 961-62 (6th Cir. 1997). The plaintiffs in Driver's, Inc. were eighty-five truck drivers who had been discharged without warning. Although their former employer's management functions were located in Delaware, Ohio, the drivers had each been permanently assigned to one of eleven different base terminals in six different states. The maximum number of employees who were assigned to any one base terminal was eighteen, such that the plaintiffs' right to recover hinged upon whether the drivers' "single site of employment" was the one base terminal to which they were each assigned, or rather the amalgamation of all eleven terminals. Addressing the question of which site was the truckers' "home base," the Sixth Circuit concluded that each base terminal provided the plaintiffs' home base because it was the physical location where "[e]ach trucker starts and ends his or her workweek." Id. at 1110.
In both Driver's, Inc. and Wiltz, the employees' home bases were the sites where they began and ended their business trips. Accordingly, these cases are consistent with our view that a traveling employee's "home base" must be a site that the employee visits during the course of a typical business trip.
We next consider whether the Chester, Virginia administrative center was the site "from which [the sales representatives'] work [was] assigned." 20 C.F.R. § 639.3(i)(6). Our concern here is with the source of the "day-to-day" instructions received by the sales representatives, notwithstanding "centralized payroll and certain other centralized managerial or personnel functions." Driver's, Inc., 101 F.3d at 1111 (citing International Union, United Mine Workers v. Jim Walter Resources, Inc., 6 F.3d 722, 724-26 (11th Cir. 1993)). Given the unusual working arrangements that 20 C.F.R. § 639.3(i)(6) covers, this legal standard may require a developed factual record in order to distinguish the true source of the instructions from mere conduits through which the instructions passed. We look to the record to determine whether a genuine issue of material fact exists as to whether the Chester, Virginia center was the source of the day-to-day instructions for the sales representatives. *fn6
The statements offered by the sales representatives indicate that Chester was the origin of day-to-day instructions. Thomas J. Ogorek, who served as a district sales manager from August 1993 until January 1995, declared that "sales representatives . . . generally received instructions and assignments on what to sell our customers in letters and memos . . . . [sent] by mail from our Chester Office." App. 1936. Similarly, the plaintiffs offer the declaration of Marc Lowery, who worked at the Chester center from 1986 until 1995. Lowery reported that "[t]he Chester office supplied the [daily instruction] information, and was the engine for the field's activity. We supplied what to do, where to do it, and the materials for doing it." App. 2217. Lowery reported that it was his responsibility
B&W responds with statements indicating that the Chester, Virginia site was not the source of day-to-day instructions. Central to this response is the statement of Randy Groonwald, a former district sales manager from Wisconsin, who reported that the sales representatives in his district "were assigned work . . . by me . . . [and] were not assigned work by anyone in Chester, Virginia." App. 1018. Groonwald also verified the accuracy of B&W's representation that instruction and development of sales representatives was a district sales manager's primary task, and also that it was part of the sales manager's job to manage sales productivity and allocate sales efforts. App. 1017-18; App. 1223. In addition, B&W relies on the deposition of named plaintiff Thomas A. Marshall, a former sales representative. Marshall was asked, "[d]id you ever take any orders from anyone at the administrative center down in Chester, Virginia?" His response: "No, I didn't." App. 2270.
These conflicting statements force us to conclude that there is a genuine issue of material fact concerning whether the Chester, Virginia center was the location from which work was assigned to the sales representatives. If we were to credit the statements of Ogorek and Lowery over those of Groonwald and Marshall, then we would conclude that Chester is the location from which work was assigned; if we were to credit Groonwald and Marshall over Ogorek and Lowery, then we would conclude that it was not. The summary judgment standard forbids us from making these judgments, however. See Liberty Lobby, 477 U.S. at 249 ("[A]t the summary judgment stage the Judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial."). Accordingly, we hold that this is a material issue for trial.
Reviewing the record, we hold that there is a genuine issue of fact concerning whether the Chester center was the site to which the sales representatives reported. The plaintiffs have offered statements indicating that Chester was the primary audience for the sales representatives' reports. For example, Mark Lowery reported that "[t]he Chester office is where all reported information flowed and . . . where it all ended up." App. 2217. Similarly, Thomas Ogorek declared that "[f]ield sales representatives . . . reported all . . . employment- related information to the Chester office." App. 1936. Ogorek acknowledged that district sales managers such as himself sometimes played a role in the reporting process, but stated that his role was secondary: "I would facilitate the Chester office by collecting the information and forms from the . . . sales representatives, and [by] then funneling them to the Chester office." Id.
In contrast, B&W has offered statements indicating that the sales representatives reported primarily to the district sales managers.
Plaintiff Thomas A. Marshall indicated at his deposition that he submitted all summaries of his sales performance to his district sales manager, and that he regularly left messages for his district sales manager on the manager's voicemail. App. 2267-68. District sales manager Randy Groonwald reported that the sales representatives in his district "hand-delivered or mailed to me daily call summaries detailing their activities [every] week," and that they "did not report to anyone in Chester, Virginia." App. 1018. Groonwald also stated that the company's official job description for the sales representative position was accurate in its statement of the major contacts that sales representatives would have with other company employees. App. 1017. The description states that the major contact was "[f]requent contact with District Sales Manager to keep him/her informed of all developments," and does not mention contact with the Chester center. App. 1226.
These statements submitted by the sales representatives and B&W are in conflict. According to the former, the sales representatives reported to the Chester, Virginia administrative center; according to the latter, the sales representatives reported to their local district sales managers. Thus, there is a genuine issue of material fact as to whether the Chester site was the location to which the sales representatives reported, precluding resolution on summary judgment. *fn7
In summary, we conclude that a genuine issue of material fact exists as to whether the Chester, Virginia administrative center was a "single site of employment" according to 20 C.F.R. § 639.3(i)(6) and 29 U.S.C. § 2101(a)(3)(B). We will therefore reverse the order of the district court granting the sales representatives' motion for summary judgment and denying B&W's motion for the same, and remand for proceedings consistent with the foregoing opinion.
On remand, the parties and the district court should focus attention on the precise questions of whether the Chester, Virginia center was the representatives' home base, the site from which the sales representatives' work was assigned, and the site to which they reported. The Company's own actions in characterizing its "notice" sent to local government officials as being required under WARN, and its suggestion that the sales representatives were considered "employees at the Chester facility," *fn8 will undoubtedly be relevant and material to these inquiries, as will the Company's conduct on January 11, 1995.
In remanding the "single site" issue to the district court, it is not inappropriate for this court to provide guidance to the district court on the question of damages. See, e.g., Advanced Medical, Inc. v. Arden Med. Sys., Inc., 955 F.2d 188, 200 (3d Cir. 1992). In particular, we feel compelled to consider two questions that were briefed and argued fully before us. These questions are 1) whether the district court erred in holding that the proper baseline measure of damages was two months' salary, and 2) whether the district court correctly held that the severance payments paid by B&W to the sales representatives should not be subtracted from the damage award. Both are legal issues upon which we exercise plenary review.
The WARN Act specifies that any employer who violates the Act "shall be liable to each aggrieved employee . . . for . . . back pay for each day of violation at a rate of compensation not less than the higher of [either] the average regular rate received by such employee during the last 3 years of the employee's employment [or] the final regular rate received by such employee." 29 U.S.C. § 2104(a)(1) (West Supp. 1998). This statute requires us to establish the number of days in a given violation, and then multiply that number by an employee's regular rate of pay per day, in order to arrive at a starting point for the damage award owed to each aggrieved employee. *fn9
In United Steelworkers of America v. North Star Steel Co., 5 F.3d 39 (3d Cir. 1993), we interpreted only the first part of this formula. *fn10 In that case, we held that the number of days in a given violation period was the number of calendar days in the violation period, rather than the number of actual work days. *fn11 Thus, in a case where there was no warning prior to the plant closing or mass layoff, we have held that an employer would be liable for an award covering the full 60 day period specified as a maximum violation period in the statute, rather than a shorter period. See id. at 42-43; 29 U.S.C. § 2104(a)(1). Because the sales representatives here were obviously given no warning prior to their layoffs, an application of North Star to our case directs the Conclusion that their damages must be calculated using a 60 day violation period.
B&W disagrees with the sales representatives' approach, and insists that the daily rate should be calculated by dividing the annual salary of each representative by 365, the number of days in a year. According to B&W, North Star establishes that the regular daily rate is the pay for each actual working day only for hourly employees. Because salaried employees such as the sales representatives are exempt under the Fair Labor Standards Act and may be forced to work overtime and weekends, B&W argues that a different approach is warranted in the case of salaried employees.
As an initial matter, we note that our North Star precedent was silent as to whether the plaintiffs in that case were hourly or salaried employees of North Star Steel Company. Indeed, North Star offers no guidance on how to convert to a daily rate, either from an annual rate (in the case of salaried employees) or from an hourly one (in the case of hourly employees). The North Star court expressly declined to address this matter, as the parties in that case had stipulated to the daily rate and had asked the court only to decide the number of days in the violation period. See 5 F.3d at 43, 43 n.7. Thus, the sales representatives misconstrue North Star when they claim it supports their approach to calculating a daily rate, and B&W does the same when it attempts to distinguish it on the basis, unstated in the opinion, that the employees in that case were paid on an hourly basis.
After examining the arguments raised by the parties, we agree with B&W - and the district court- that the proper way to convert an annual salary rate into a daily rate is simply to divide the annual salary by the number of days in a year. We believe that this approach best serves the Congressional intent because it reflects the reality that a salaried employee is generally hired to perform a particular task, regardless (within reason) of the time required to complete the task. Indeed, to attempt to measure how many days a salaried employee "actually works" in a given year is to engage in needless abstraction. What does it mean to "work a day"? Has an employee who has opted to work twelve hours per day for four days per week worked fewer "days" than another who works eight hours per day for six days per week? We leave these questions for the philosophers.
Accordingly, we hold that the regular daily rate of a salaried employee is the employee's annual salary divided by the number of days in a year. *fn12
The final issue we address is whether the district court correctly held that the severance payments made by B&W to the sales representatives pursuant to the Company's ERISA plan should not be subtracted from the damage figures. B&W argues that these payments should have been subtracted from the damage figure because they constituted "wages" according to 29 U.S.C. § 2104(a)(2)(A). *fn13 For evidence, B&W points to the fact that the severance payments were labeled "salary continuation" payments, and that they matched the wages that B&W paid when the sales representatives were working.
We find B&W's argument to be without merit. The severance payments made by B&W are not "wages" as contemplated by 29 U.S.C. § 2104(a)(2)(A), but rather ERISA payments that the company was already legally obligated to make regardless of the work the sales representatives performed. The fact that these payments happened to be labeled "salary continuation" benefits, and that they happened to be set at the level of the sales representatives' wages, is irrelevant. The payments made by B&W were not made in exchange for work that the sales representatives would have performed during the period of the violation. Accordingly, they are not "wages" according to 29 U.S.C. § 2104(a)(2)(A), and the district court was correct in refusing to subtract these amounts from the damages award. See 29 U.S.C. §2104(a)(1)(B) (expressly including ERISA benefits in WARN damages calculations); Tobin v. Ravenswood Aluminum Corp., 838 F. Supp. 262, 273 n.17 (S.D.W.Va. 1993).
LOUIS A. CIARLANTE; THOMAS A. MARSHALL, INDIVIDUALLY AND ON BEHALF OF A CLASS OF INDIVIDUALS, Appellants/Cross-Appellees in Appeal No. 97-1174; v. BROWN & WILLIAMSON TOBACCO CORPORATION; THE AMERICAN TOBACCO COMPANY; AMERICAN BRANDS, INC., Brown & Williamson Tobacco Corporation and The American Tobacco Company, Appellants/Cross-Appellees in Appeal No. 97-1152 and 97-1725,
BECKER, *fn14 Chief Circuit Judge, Concurring and Dissenting.
I join in Part V of the majority opinion which provides guidance to the district court on the question of damages. I also subscribe to the majority's Conclusion that the determination of plaintiffs' "single site of employment" is governed by 20 C.F.R. § 639.3(i)(6). Nonetheless, I am constrained to Dissent from Parts III and IV of the majority since I believe that, under the legal precepts announced therein, the Chester center was clearly the plaintiffs' single site of employment, and that there is no genuine issue of material fact on that question. I would therefore affirm the district court's order granting the plaintiffs' motion for summary judgment on liability.
To avoid this problem in the future, we emphasize that we interpret 20 C.F.R. § 639.3(i)(6) to focus not on the formalities of where certain machines were located, but rather on where the people were who were ultimately responsible for creating and receiving the information. On remand, the district court should focus its inquiry accordingly.
Maj. Op. at 23-24 (emphasis added). I agree with the majority that in applying 20 C.F.R. § 639.3(i)(6) to this case, a court must be careful to distinguish "mere conduits" from those people "ultimately responsible for creating and receiving the information" from the sales representatives. I Dissent essentially because I believe that the majority has failed to faithfully apply its own precepts.
If the majority had done so, it would have been compelled by the evidence to conclude, as the district court already has, that: The record in this case establishes, without any genuine dispute, that all instructions, assignments, rules, and orders to the plaintiff salesmen emanated from the Chester Virginia administrative headquarters. [It is not] significant that, to some extent, specific assignments and instructions were issued by way of the district managers, or that plaintiffs' reports to the administrative headquarters were funneled through their district managers.
Ciarlante v. Brown & Williamson Tobacco Corp., No. CIV.A.95-4646, 1996 WL 65448, *2 (E.D. Pa. Nov. 6, 1996) (emphasis added). The highlighted portion of the district court opinion reflects the uncontroverted evidence that both the sales representatives and the sales managers reported back to the Chester center from which they received their assignments and from which all of their day to day needs were handled. In other words, the evidence shows that the sales managers acted as conduits between the Chester center and the sales representatives. It is only by ignoring this evidence, and hence its own admonition to look to who was "ultimately responsible for creating and receiving the information", that the majority can conclude that a genuine issue of material fact is raised by evidence that the sales representatives received instructions from and reported to both the Chester center and their sales managers.
I turn first to whether the Chester center was the site from "which [the sales representatives'] work [was] assigned." 20 C.F.R. § 639.3(i)(6). The majority acknowledges that there is abundant evidence that Chester was the source of plaintiffs' day to day assignments. See Maj. Op. at 18-19. However, the majority finds a genuine issue of material fact on the basis of two pieces of evidence that "conflict" with this view. The first is the statement of Randy Groonwald, a former sales manager in Wisconsin, that the sales representatives in his district "were assigned work . . . by me . . . [and] were not assigned work by anyone in Chester, Virginia." App. 1018. The second is the following snippet from the deposition of Thomas A. Marshall, a named plaintiff, and former sales representative:
[My job was] to coordinate and issue, out of the Chester office, all releases, bulletins and instructions to the field sales organization, including the field sales representatives and the district sales managers. These included the day-to- day instructions, assignments and procedures to be followed by the field sales representatives and district sales managers.
Sales representatives and district sales managers received their instructions and assignments in the form of written memos or letters that we called `field sales information,' `sales campaign,' or `sales coverage' letters. These instructions and assignments were generally issued in mass mailings [from the Chester Office].
As the foregoing makes clear, Groonwald's statement that the sales representatives in his district "were assigned work . . . by me . . . [and] were not assigned work by anyone in Chester, Virginia" is easily reconciled with the evidence that the Chester center was the ultimate source of all of plaintiffs' assignments. The fact is that no where in Groonwald's affidavit does he contradict the evidence that, like all sales mangers, he received the day to day assignments that he gave to his sales representatives from the Chester office. Thus, at most, Groonwald's affidavit indicates that he served as a conduit between Chester and his sales representatives. As the majority noted, mere conduits must be disregarded in the effort to determine the ultimate source of plaintiffs' day to day assignments. 2.
Q. Was there a particular person, a boss that told you what to do in Chester, Virginia, that you --
Q. -- can identify today?
In short, none of the evidence relied on by the majority conflicts with the view that the ultimate source of the sales representatives' assignments was the Chester center. B.
While a determination that the plaintiffs' work was assigned from the Chester center is, by itself, a sufficient basis on which to affirm the district court, see Maj. Op. at 13, I also believe that the majority errs in concluding that there is a genuine issue of material fact as to whether the Chester center was the site to "which [the sales representatives] report[ed]." 20 C.F.R. § 639.3(i)(6). The majority reaches this Conclusion by finding a conflict between, for example, the statement of Mark Lowery, who worked at the Chester center from 1986 to 1995, that "[t]he Chester office is where all reported information flowed and . . . where it all ended up" and the statement of Randy Groonwald that the sales representatives in his district "hand-delivered or mailed to me daily call summaries detailing their activities [every] week," and that they "did not report to anyone in Chester, Virginia." However, it is only by ignoring the import of evidence critical to its inquiry -- evidence that the sales representatives reported to Chester through the sales managers -- that the majority is able to find a conflict between these statements.
App. 2202- 03. (emphasis added).
Pierce's statement is confirmed by other evidence that makes clear that all of the plaintiffs' reports (be they sales or expense reports) ultimately flowed to the Chester center, and that, to the extent that the district sales managers helped funnel the information from the field, they were assisting and facilitating the work of the Chester center. Based on this understanding of the American Tobacco "reporting process", I believe that there is no genuine issue of fact that the sales managers were merely conduits through which the plaintiffs reported to the Chester center, and thus that the Chester center was the site to which the plaintiffs' reported. I would affirm the district court on this basis as well. *fn15
While there has been insufficient factual development for us to determine whether in fact the Stamford office was the location "of the people who were ultimately responsible for creating and receiving the information" from the plaintiffs, I do not believe that such development is necessary to the Disposition of this case. Even if the defendants were to succeed in showing that the Stamford office, rather than the Chester center, was the plaintiffs' single site of employment, the defendants would still be liable under the WARN Act, as a matter of law, since the "mass layoff" would still have resulted "in an employment loss at the single site of employment . . . for . . . at least 50 employees." See 29 U.S.C. § 2101(a)(3)(B).
Before concluding, I must consider the broader, policy-based aspect of the issue. This is the first time that a court has been asked to apply 20 C.F.R. § 639.3(i)(6) to determine the single site of employment for a geographically dispersed workforce that does not physically report to any site of employment at any time. Cf. Wiltz v. M/G Transport Services, Inc., 128 F.3d 957 (6th Cir. 1997) (issue was whether separate towboats on which plaintiffs' lived during 30 day assignments or defendant's main office to which over 80% of the crews physically reported for assignments to towboats was single site of employment pursuant to 20 C.F.R. § 639.3(i)(6)); Teamsters Local Union 413 v. Driver's, Inc., 101 F.3d 1107 (6th Cir. 1996) (issue was whether eleven separate trucking terminals to which plaintiffs' physically reported could be combined to constitute one single site of employment under the Act ).
The majority observes that the employment arrangement at issue is "unorthodox." See Maj. Op. at 23. I take this to mean that it believes that this case represents something of an outlier. I disagree. Rather, I suspect that such situations represent the new frontier in WARN Act litigation. In the next decade, technology will permit workers of all types, not just salespeople or other mobile workers, to escape the physical confines of traditional offices. I acknowledge that the majority has recognized the possibility that such plaintiffs may prevail within the framework of 20 C.F.R. § 639.3(i)(6), hence the remand here for further proceedings. However the tenor of the majority opinion, and its refusal to affirm the grant of summary judgment for plaintiffs on what I believe to be an unequivocal record, sends the opposite (and wrong) message and, I think, establishes bad precedent.