Court Opinion

ID: 9497754
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:59:13.436696+00
Date Added: 2024-06-11T17:58:23.860525
License: Public Domain

WOOD, Circuit Judge,
dissenting.
No one could dispute, the majority’s observation that the layoffs involved in this case were high-profile. The pages of the country’s newspapers in 2001 and 2002 were filled for weeks, if not months, with the unfolding Enron story and the role that Enron’s advisors, including Arthur Andersen, played in that saga. Nonetheless, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101-2109, (the WARN Act) applies to all cases, not just to those that are dull enough to stay below the press’s radar screen. The majority finds here that Andersen was entitled to take advantage of the unforeseen circumstances exception to the obligation to notify affected workers 60 days prior to a mass layoff or plant closing. In so holding, it either finds that notice was impossible right up to April 8, 2002, when the employees finally received the bad news, or it finds that the statute as a matter of law takes an all-or-nothing approach' — if 60 days’ notice is impossible, then no notice at all is required. Neither one of those possibilities is correct, in my opinion; the first fails as a matter of fact, and the second as a matter of law. I would find that notice was possible, and thus required, no later than^ March 1, 2002, and I would remand for further proceedings on that'basis.
First, a review of the facts shows that Andersen knew enough long before April 8, 2002, to give the required statutory notice to its employees. Plaintiff Nancy Roquet remained on the payroll for two more weeks, until April 23, which was' the date when the mass layoffs began. Under the statute, therefore, she and the many other Andersen employees in her position should have received notice of their terminations no later than February 22, 2002, assuming critically that Andersen realized that the firm was about to crumble. Although the plaintiffs have argued strenuously that. Andersen knew enough as of that date to trigger the notice obligation, I agree with the majority that the impending catastrophe was not foreseeable as of February 22, 2002. At that point, despite the negative Enron publicity, Andersen had not experienced a significant loss of business. Its lawyers advised it on February 23 that they were moving quickly to a resolution of the matter with the Department of Justice (DOJ). The tone of the email sent to the employees, reproduced ante at 587, suggests that the firm believed that some heads would roll, but that the firm itself would carry on.
This relatively positive outlook was shattered on March 1, when the DOJ informed Andersen that it was about to be indicted. No one could have been in any doubt about the grim prospects the firm faced after indictment. Such a drastic step was close to unprecedented, as the many articles commenting on it after-the-fact observed. See, e.g., Editorial, Frontier Justice, Wall *592St. J., March 18, 2002; James O’Toole, Spreading the Blame at Andersen, N.Y. Times, March 26, 2002, at A25. (Indeed, the Supreme Court has just granted cer-tiorari in Andersen’s criminal case, indicating that it is yet to be determined whether the firm should have been convicted). See Arthur Andersen LLP v. United States, cert. granted, — U.S. -, 125 S.Ct. 823, 160 L.Ed.2d 609 (2005.) Even though Andersen made a last-ditch effort to persuade DOJ to change its mind, it knew that it was in serious trouble. The DOJ does not lightly tell firms that a grand jury is about to indict them, after all. Under the WARN Act, this was enough to trigger its legal obligation to give notice to its employees. By this time, to put the point in terms of the statutory exception to the 60-day rule, it was at least “reasonably foreseeable” to the firm that the closing or mass layoffs would occur. This does not mean, in my view, that Andersen had to tell its threatened employees the reason why such a drastic restructuring was possible; it simply had the obligation to tell them that their jobs were at risk. And indeed those jobs were at risk: on March 7, as promised, DOJ filed a sealed indictment charging the firm itself with obstruction of justice. A week later, on March 14, the indictment was unsealed. Predictably, the news of the indictment dealt a body-blow to the firm, as the majority has recounted. Facing massive losses in business, Andersen gave notice to 550 of its employees on April 8 that they were going to be terminated; a short two weeks later, the departures began.
The facts simply cannot bear the interpretation that the necessity for mass layoffs was not reasonably foreseeable prior to April 8. Thus, if this is the true rationale of the majority’s opinion, I cannot subscribe to it. It is also possible, though by no means necessary, to read the majority’s opinion as holding that if the need for the layoffs was not reasonably foreseeable at the 60-day mark (February 22), then no notice at all was required by the statute. In Pena v. American Meat Packing Corp., 362 F.3d 418 (7th Cir.2004), this court left open the question whether a sufficient unforeseen circumstance occurring within the 60-day window excuses an employer from providing any notice at all, or if instead it merely reduces the amount of notice required. See id. at 422 (“Further, if the conditions were unforeseeable, it is unclear whether this qualifies AMPAC for merely a reduction in its required notice period or the complete elimination of it.”).
In my view, we should reach that question in the case before us. Taking into account the language and purpose of the WARN Act, we should hold that the 60-day period is merely reduced, not eliminated, when the necessity for a mass layoff or plant closing becomes apparent within that time period. Indeed, immediately after describing the unforeseen circumstances exception, the statute reads: “An employer relying on this subsection shall give as much notice as is practicable and at that time shall give a brief statement of the basis for reducing the notification period.” 29 U.S.C. § 2102(b)(3). If the all-or-nothing rule is truly being adopted by the majority, it is creating a conflict with the Eighth Circuit, see Burnsides v. MJ Optical, Inc., 128 F.3d 700, 704 (1997) (finding that the “unforeseeable business circumstances defense still requires [an] employer to give as much notice of closing as practicable once [the] causal event becomes known”), and the opinion should be circulated under Circuit Rule 40(e). The Third and Fifth Circuits also appear to be on the side of the Eighth on this issue. The Third Circuit has written that “in the event that an unforeseeable business circumstance arises, the notice period may be reduced or eliminated.” Hotel Employees *593and Rest. Employees Intern. Union Local 54 v. Elsinore Shore Assocs., 173 F.3d 175, 187 (3d Cir.1999). Although the Fifth Circuit in Halkias v. General Dynamics Corp., 137 F.3d 333, 336 (5th Cir.1998), afforded the employer a week to provide notice once the probability of the mass layoff became foreseeable, it did so only because it accepted that the employer provided as much notice as was practicable.
The crucial date under the WARN Act is not the date when the company knows that a mass layoff is imminent, nor is it the date when the company finally gets around to identifying the exact employees affected by the mass layoff. The Act states plainly that the trigger date is the date when a mass layoff is “reasonably foreseeable.” As soon as it is probable that a mass layoff will occur, the employer must provide notice as soon as is praeticáble. Here, Andersen knew of the indictment on March 1, yet it waited over five weeks before providing any notice to its employees.
This is not a trivial point for the employees concerned. Under my view of the statute, Roquet should have received notice on March 1 (which, obviously, is less than 60 days prior to her actual date of layoff, April 23) or very shortly thereafter. Under the most conservative approach I can imagine, she should have received notice on March 14, when the indictment was unsealed and the hemorrhaging began. (Given the majority’s disposition, - there is no need to resolve which date is correct; I would remand this question as well to the district court). Using March 1, her notice was 38 days late; using March 14, it was 25 days late. She should receive compensation for that time period. For other employees, the time periods between date of notice and date of layoff will differ, depending on when they actually lost their jobs. Robinson stayed for five weeks after April 8; a full 60 days’ notice would have been possible for her.
The majority worries that giving the required WARN Act notice might exacerbate problems for a floundering company. While this may be true, the fact is that Congress weighed the interests of companies and workers in the statute, and it drew the 60-day line we have. Companies can protect themselves to a certain degree in the wording of the notices they give. As I stated above, the company neéd not be able to identify each affected employee by name; a general notice, alerting the employees as a group to the possibility of a layoff, is what the statute requires. Finally, at least on the present facts, Andersen’s troubles were not exactly a state secret. There was nothing left to hide after March 14, when the indictment hit the front pages of the country’s newspapers. By March 1, it was reasonably foreseeable to the firm that it would need to reduce its staff drastically.
For these reasons, I would reverse and remand for further proceedings. I respectfully dissent.