Opinion ID: 21475
Heading Depth: 2
Heading Rank: 1

Heading: WARN Act claims

Text: The district court granted in part and denied in part 4 defendants’ motion for summary judgment and plaintiffs’ motion for partial summary judgment. We review the grant of summary judgment de novo. Carpenters Dist. Council v. Dillard Dep’t Stores, 15 F.3d 1275, 1281 (5th Cir. 1994). The WARN Act prohibits employers from ordering a “plant closing or mass layoff until the end of a 60-day period after the employer serves written notice” of the closing or layoff to its employees. 29 U.S.C. § 2102(a). An employer who violates this notice provision is required to provide “back pay for each day of violation.” 29 U.S.C. § 2104(a)(1). “In short, WARN imposes a statutory duty on businesses to notify workers of impending large-scale job losses and allows for limited damages ‘designed to penalize the wrongdoing employer, deter future violations, and facilitate simplified damages proceedings.’” Staudt v. Glastron, Inc., 92 F.3d 312, 314 (5th Cir. 1996) (citation omitted). Defendants assert that the district court erred in finding that a “plant closing,” had occurred at ORH, and in finding that ORH was an “employer,” as both terms are defined by the WARN Act. The other issues decided by the district court at summary judgment are not before us on appeal.3 Section 2101(a)(2) of Title 29 defines the term “plant closing” as “the permanent or temporary shutdown of a single site 3 These include the finding that no mass layoff had occurred pursuant to 29 U.S.C. § 2101(a)(3) and that Turner, Windham and Williams could not be held directly liable under WARN. 5 of employment . . . if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees.” ORH shut down on November 3, 1995. In the 30 days preceding the shutdown, 48 employees were terminated. Therefore, there was not a shutdown of ORH pursuant to 29 U.S.C. § 2101(a)(2). The district court found, however, that there was a plant closing as defined by 29 U.S.C. § 2102(d). This section provides: [I]n determining whether a plant closing or mass layoff has occurred or will occur, employment losses for 2 or more groups at a single site of employment, each of which is less than the minimum number of employees specified in section 2101(a)(2) or (3) of this title but which in the aggregate exceed that minimum number, and which occur within any 90day 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. Defendants contest the district court’s conclusion that a plant closing occurred pursuant to § 2102(d). Defendants first argue that they presented credible evidence that lay-offs prior to October 24, 1995 were for “separate and distinct causes.” Defendants rely on statements made by Scott Blakley, the ORH administrator, in his affidavit. Blakley stated that the layoffs which occurred before October 24, 1995 were the result of separate and distinct actions because “they were the result of adjusting the staffing to correspond with the current patient census.” “[T]hese layoffs were simply the result of a business decision to adjust the employee census to account for 6 the decline in the hospital’s patient census.” Blakley stated that no decision was made to close the hospital prior to October 24, 1995. Blakley stated that ORH tried to pursue new business opportunities which would have kept the hospital open, but that those efforts failed. Section 2102(d) imposes an affirmative burden on the employer to prove that the court should disaggregate employment losses that occurred during the 90-day period. As the district court noted, “[e]ven assuming that ORH did not make the final decision to shutdown its employment site until October 24, 1995, this fact does not establish that the employment losses which preceded this date were wholly unrelated to the shutdown.” Blakley’s statement does not prove that separate and distinct actions and causes led to the pre-October 24, 1995 lay-offs. Indeed, his statements support the conclusion that ORH’s declining profitability due to changes in Medicare reimbursements led to the shutdown. Blakley’s October 27, 1995 memorandum to all the ORH employees stated that it was the “reductions in Medicaid support for poor children [which] resulted in a reduction in work force and the loss of your employment.” As noted by one district court, “layoffs that are occasioned by a continuing and accelerating economic demise are not the result of separate and distinct causes.” United Paperworkers Int’l Union v. Alden Corrugated Container Corp., 901 F. Supp. 426, 436 (D. Mass. 1995). Defendants failed to produce evidence that created 7 a genuine issue of material fact tending to show that the layoffs were due to separate and distinct causes. Defendants also argue that fewer than 50 employees were terminated during the 90-day period, therefore no plant-closing occurred. Defendants maintain that the district court incorrectly aggregated the pre-October 24 layoffs because the court counted each individual employee that ORH laid off, rather than each “group” of employees. When aggregating employment losses, 29 U.S.C. § 2102(d) allows courts to consider “employment losses for 2 or more groups at a single site of employment, each of which is less than [50 employees],” which occur in a 90-day period. Focusing on the word “groups,” defendants argue that the court should not count any single individual laid off on any given day because an individual cannot constitute a group. See Webster’s Third New Int’l Dictionary 1004 (1981) (defining group as “two or more figures . . . forming a distinctive unit”). Excluding the employees laid off on a day when no other employees were terminated leads to a total of 48 layoffs in the 90-day period. Including those employees leads to a total of 62 layoffs within the period. The district court interpreted 29 U.S.C. § 2102(d)’s use of the word “groups” as referring to the group of employees within the 30-day period and the group of employees outside of the 30day period, but within the 90-day period. Other than their reliance on the dictionary definition of the word “groups,” 8 defendants have not presented any argument for why this court should adopt their interpretation of § 2102(d). Adopting defendant’s interpretation would lead to the anomalous result that an employer could terminate more than 50 employees in the 90-day period, but yet not be subject to WARN if the employer terminated the employment of each individual employee on a different day. We conclude that the district court’s interpretation is more in keeping with the purpose of the WARN act, which is to notify employees of large-scale job losses, and therefore agree that ORH experienced a “plant-closing.” Defendants also contest the district court’s conclusion at summary judgment that ORH was an “employer” as defined by WARN. Section 2101 defines an employer as “any business enterprise that employs - (A) 100 or more employees, excluding part-time employees; or (B) 100 or more employees who in the aggregate work at least 4,000 hours per week (exclusive of hours of overtime).” 29 U.S.C. § 2101(a)(1). Defendants contest that there was adequate evidence presented to the district court that they employed 100 or more employees. The Department of Labor’s regulations, promulgated under WARN, state that “[t]he point in time at which the number of employees is to be measured for the purpose of determining coverage is the date the first notice is required to be given.” 20 C.F.R. § 639.5(a)(2) (1999). The regulations also state that “[w]hen all employees are not terminated on the same date, the date of the first individual 9 termination within the statutory 30-day or 90-day period triggers the 60-day notice requirement.” 20 C.F.R. § 639.5(a)(1). The first individual termination in the 90-day period occurred on August 9, 1995. This individual was entitled to notice 60 days earlier, that is June 10, 1995. The district court therefore concluded that June 10, 19954 was the relevant date for determining whether ORH was an employer within the meaning of WARN. The evidence of employment levels is contained in ORH’s payroll statements. Defendants do not contest the accuracy of the payroll statements, rather they assert that the payroll for the two-week period June 1-15, 1995, does not establish that more than 100 individuals were employed by ORH. Excluding overtime hours worked during this period, ORH employees worked an average of 5564.25 hours per week.5 This is well over the 4,000 hours required under 29 U.S.C. § 2101(a)(1)(B), which qualifies ORH as an employer.6 4 Defendants focus on June 4, 1995 as the relevant date, that is 60 days before the 90 day shutdown period. Whether June 4 or June 10 is used does not change the analysis. 5 These hours are calculated by adding the total number of hours worked in the period (12241.35) and dividing by the number of work days (11) which leads to an average of 1112.85 hours worked per day, multiplied by 5 equals an average of 5564.25 hours per week. Employees who worked more than 88 hours in the period were calculated as having only worked 88 hours in order to exclude their overtime hours. 6 Defendants dispute this calculation of hours worked (continued...) 10 Although defendants state that they presented contrary evidence to the determination that ORH was an employer, defendants fail to cite to the record or describe such evidence. The record before us presents no genuine issue of material fact that ORH did not employ over 100 employees on June 10, 1995, thereby rendering ORH an employer pursuant to WARN. The district court properly determined at summary judgment that ORH was subject to the WARN notification requirement.