Court Opinion

ID: 9004851
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:23:45.990528+00
Date Added: 2024-06-11T17:11:14.375796
License: Public Domain

MAHONEY, Circuit Judge,
concurring in the judgment:
I agree with the majority’s affirmance of the denial of a preliminary injunction, and with its treatment of the COBRA issue. I disagree, however, with its analysis of the WARN issue.
The majority determines that MHM was a WARN “employer” within the meaning of § 2101(a)(1)(A) because MHM “bargained with, hired, fired, supervised, paid, and ultimately laid off the employees.” The majority then concludes that liability of MHM follows under § 2104(a)(1), which provides a civil remedy for aggrieved employees against “[a]ny employer who orders a plant closing or mass layoff in violation of [the sixty-day notice requirement of] section 2102.”
Both the majority opinion and the opinion of Magistrate Judge Margolis (adopted by Judge Cabranes) focus upon the identification of the statutory “employer.” 29 C.F.R. § 639.3(a)(2), one of the regulations promulgated by the Secretary of Labor to implement WARN pursuant to the mandate of 29 U.S.C. § 2107(a) (1988), is relevant to such an analysis. It provides:
Under existing legal rules, independent contractors and subsidiaries which are wholly or partially owned by a parent company are treated as separate employers or as a part of the parent or contracting company depending upon the degree of their independence from the parent. Some of the factors to be considered in making this determination are (i) common ownership, (ii) common directors and/or officers, (iii) de facto exercise of control, (iv) unity of personnel policies emanating from a common source, and (v) the dependency of operations.
It is undisputed that (as the majority puts it) “CCELP made the decision to close the hotel.” This would seem to establish that under the last three of the enumerated factors, MHM should be deemed “part of the contracting company [i.e., CCELP],” rather than a “separate employer[],” despite the lack of common ownership, directors, and/or officers between MHM and CCELP.
In any event, in view of CCELP’s ultimate authority over the closing decision and the numerous indicia of its involvement in the employer-employee relationship, including attendance of CCELP personnel at one of the bargaining sessions with the union regarding the impending closing, CCELP’s express contemporaneous recognition of its liability for severance and benefit costs, and numerous prior filings of governmental tax and labor forms that identified CCELP as the “employer” of the Summit Hotel employees, it seems clear that CCELP is a § 2101(a)(1)(A) “employer.” Even if MHM is also deemed a separate statutory “employer,” I would conclude that in view of CCELP’s undisputed responsibility for the closing decision, CCELP, and not MHM, is the “employer” that “order[ed]” the Summit Hotel closing within the meaning of § 2104(a)(1), and is therefore the only party liable under that statute.
I note, finally, Magistrate Judge Margol-is’ finding, amply supported by the record and not challenged on this appeal, that CCELP initially instructed MHM at the July 30, 1990 meeting to close the Summit Hotel within sixty to ninety days (thus allowing time for an appropriate WARN notice), but thereafter determined to close the hotel “immediately” and communicated this decision to MHM on August 6, 1990, resulting in an August 7 WARN notice that the hotel would be closed on August 10. This scenario would raise the issue whether, if MHM is deemed both the “employer” and the entity that “order[ed]” the hotel closing within the meaning of § 2104(a)(1), the sixty-day notice period should be reduced because “the closing ... [was] caused by business circumstances that were not reasonably foreseeable as of the time that notice would have been required.” 29 U.S.C. § 2102(b)(2)(A) (1988); see Finkler *812v. Elsinore Shore Assocs., 781 F.Supp. 1060, 1065-66 (D.N.J.1992).