Ciarlante v. Brown & Williamson Tobacco Corp. , 143 F.3d 139 ( 1998 )

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
4-30-1998
Ciarlante v. Brown & Williamson
Precedential or Non-Precedential:
Docket 97-1152,97-1174,97-1725
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Filed April 30, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 97-1152, 97-1174 and 97-1725
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
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
(Opinion filed April 30, 1998)
John M. Elliott, Esq.
Timothy H. Myers, Esq.
Frederick P. Santarelli, Esq. (Argued)
Elliott, Reihner, Siedzikowski &
Egan
925 Harvest Drive
Union Meeting Corporate Center V
Blue Bell, PA 19422
Attorneys for Louis A. Ciarlante and
Thomas A. Marshall, Individually and
on behalf of a Class of Individuals
Barry Simon, Esq. (Argued)
Christopher J. Moran
Simon Higgins & Moran, P.C.
1650 Market Street
One Liberty Place
Philadelphia, PA 19103-7397
Attorney for Brown & Williamson
Tobacco Corporation; The American
Tobacco Company
OPINION OF THE COURT
GARTH, Circuit Judge:
This appeal requires us to decide whether the district
court properly granted summary judgment to the plaintiff
class against the defendants. The district court held as a
matter of law that the defendants' Chester, Virginia
administrative center was the plaintiffs' "single site of
employment" under the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. S 2101(a)(3)(B), and therefore
awarded damages and attorneys' fees to the plaintiffs. We
hold that a genuine issue exists as to whether the Chester
center was the plaintiffs' "single site of employment," so
that the district court's grant of summary judgment was
improper. We will reverse and remand.
I.
The plaintiffs in this action are a class of over one
hundred former employees of the American Tobacco
2
Company ("the Company"), who worked throughout the
United States as traveling salespeople. Officially titled Field
Sales Representatives ("sales representatives"), the plaintiffs
were each assigned to a geographical district in which they
were responsible, along with other sales representatives, for
selling the Company's products to wholesalers and retailers
in that district. Altogether, the Company employed over one
thousand sales representatives, located in 150 different
districts covering the entire United States. Sales
representatives were each provided a company car, and
spent an overwhelming proportion of their time "on the
road" visiting customers within their district.
The sales representatives communicated with other
employees at the Company mostly by telephone. There were
two primary contacts. First, each sales representative kept
in close contact with a district sales manager, who, like the
sales representatives, lived and worked in the designated
district. Each district sales manager was responsible for
managing the handful of sales representatives assigned
within the district; like the sales representatives, most
district sales managers worked from home, and had no
other permanent office. The sales representatives' second
significant contact was with the Company's administrative
center in Chester, Virginia. Sales representatives called the
Chester center every day to check messages, and also
contacted the center regularly to order supplies.
The events that prompted this lawsuit occurred on
January 11, 1995, soon after the defendant Brown &
Williamson acquired the Company from American Brands,
Inc. On that day, the Company summoned the sales
representatives to "sales meetings" held across the country.
At the "sales meetings," Company officials announced to
the sales representatives that they were being laid off,
effective immediately. The sales representatives were forced
to hand over their keys, samples, and distribution lists to
Company representatives before they were allowed to leave.
The Company also encouraged the employees to sign
release forms, which would entitle each employee to a
week's pay and job counseling services in exchange for a
waiver of rights to additional benefits.
3
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. SS 2101-09,
by failing to warn the plaintiffs of their impending layoffs.1
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. S 2102(a).2 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. S 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. S 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. S 2101(a)(3)(B).3 In an order dated
_________________________________________________________________
1. American Brands, Inc. is no longer a party to this action, as all
claims
against it were dismissed on December 19, 1995.
2. 29 U.S.C. S 2102(a) (West Supp. 1998) provides in relevant part:
An employer shall not order a plant closing or mass layoff until
the end of a 60-day period after the employer serves written notice
of such an order--
(1) to each representative of the affected employ ees as of the
time
of the notice or, if there is no such representative at that time,
to
each affected employee; and
(2) to the State dislocated worker unit (designat ed or created
under
title III of the Job Training Partnership Act) and the chief
elected
official of the unit of local government within which such closing
or
layoff is to occur.
3. B&W did not dispute that they had failed to provide the plaintiffs with
written notice of the impending layoffs. In fact, the record reveals that
4
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
_________________________________________________________________
B&W had gone to great lengths to keep the layoffs a secret. The only
action by B&W that could be construed as any type of notification was
the mailing of a letter to local government officials the day before the
layoffs. The top of the letter reads, "NOTICE REQUIRED UNDER THE
WORKER ADJUSTMENT AND RETRAINING NOTIFICATION ACT." The
letter continues:
This notice is to advise you that The American Tobacco Company
("American Tobacco") will undertake a layoff at its Administrative
Service Center located at 13203 North Enon Church Road, Chester,
Virginia, 23831.
While the number of affected employees has not yet been
determined, it is expected that the layoff will affect
approximately
1550 employees at the Chester facility (inclusive of approximately
1200 Field Sales employees, located nationwide).
American Tobacco will advise affected employees of the layoff
commencing January 11, 1995. The date of separation may be
immediately upon notification to the affected employee, or, in some
cases, may be at a later date.
App. 1880.
5
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
6
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. S 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.' "4
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.
_________________________________________________________________
4. The district court believed that its decision was bolstered by the
letters
the Company had sent to local officials on January 10, 1995. See supra
note 3. The district court opined that the letters "make[ ] clear that the
defendants themselves had concluded, at the time, that the WARN Act
did apply to these lay-offs."
7
S 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.
S 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.
Second, the court held that the statutory damage award
of back pay from a sixty day period as directed by 29 U.S.C.
S 2104(a)(1) was to be calculated based on the pay
equivalent of sixty actual working days, rather than the
amount that a salaried employee would earn in a sixty day
time period. The court thereupon entered an order granting
summary judgment for the sales representatives.
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."
8
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. S 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.
On January 28, 1997, the district court entered an order
calculating a damage award for each of the sales
representatives in the class of plaintiffs. The total value of
the judgment was $696,785.44, plus interest from the date
of the termination. On September 2, 1997, the court
awarded attorney's fees to the plaintiffs pursuant to S 29
U.S.C. S 2104(a)(6) in the amount of $334,466.30 in fees
and $26,855.83 in expenses.
II.
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.
III.
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
9
employment" according to 29 U.S.C. S 2101(a)(3).5 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.S 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).
The regulation applicable to this case appears at 20
C.F.R. S 639.3(i)(6). It states:
For workers whose primary duties require travel from
point to point, who are outstationed, or whose primary
duties involve work outside any of the employer's
regular employment sites (e.g., railroad workers, bus
drivers, salespersons), the single site of employment to
which they are assigned as their home base, from
which their work is assigned, or to which they report
will be the single site in which they are covered for
WARN purposes.
20 C.F.R. S 639.3(i)(6) (1989).
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
_________________________________________________________________
5. 29 U.S.C. S 2101(a)(3) (West Supp. 1998) states:
[T]he term "mass layoff" means a reduction in force which--
(A) is not the result of a plant closing; and
(B) results in an employment loss at the single si te of employment
during any 30-day period for--
(i)(I) at least 33 percent of the employees (exclu ding any part-
time
employees); and
(II) at least 50 employees (excluding any part-tim e employees);
or
(ii) at least 500 employees (excluding any part-time employees)[.]
10
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. S 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.
Finally, if a genuine issue of material fact exists as to
whether the Chester center is a covered site for WARN
purposes, then we must reverse the district court's order
and remand.
A.
First we consider whether the Chester, Virginia
administrative center is "the single site of employment to
which [the sales representatives] are assigned as their home
base." 20 C.F.R. S 639.3(i)(6). The underlying facts here are
undisputed. Sales representatives spent the great majority
of their time servicing customers within their geographical
district. They mostly worked out of their cars, and were in
frequent contact with their district sales managers, who
lived within their respective districts and also worked from
their own homes and cars. Sales representatives did not
11
physically visit Chester, Virginia in the normal course of
business; however, they did telephone the Chester site on
a daily basis to check messages and complete
administrative tasks.
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.
S 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. S 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
12
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 Wiltz, the plaintiffs were former crewmen for a towboat
operator based in Paducah, Kentucky. See Wiltz, 128 F.3d
at 959. Typically, the crewmen would report to Paducah for
assignment to the boats, and then embark on a thirty day
voyage escorting barges throughout the Ohio, Mississippi,
and Tennessee River Systems, returning in the end to
Paducah. Following layoffs that prompted a WARN lawsuit,
the Wiltz court noted (albeit in dicta) that Paducah was the
crewmen's home base because "80% of the crews physically
reported to Paducah for assignment to the towboats." Id. at
962.
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.
Reviewing the record, there is no evidence that any of the
plaintiffs regularly visited the Chester, Virginia
administrative center in the ordinary course of their
business trips. We know that named plaintiff Thomas A.
Marshall visited the center only twice, on special trips to
recognize his outstanding sales record, App. 2266, and that
named plaintiff Louis A. Ciarlante never visited Chester at
all. App. 2376. From the record as it now stands, we would
be inclined to hold as a matter of law that Chester is not
the sales representatives' "home base." However, because
we are remanding this case to the district court for further
13
factual development, we will not foreclose the factfinder
below from examining whether the sales representatives
can prove that some of their number did in fact use the
Chester center as their "home base" under the legal
standard we have enunciated.
B.
We next consider whether the Chester, Virginia
administrative center was the site "from which [the sales
representatives'] work [was] assigned." 20 C.F.R.
S 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.
S 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.6
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
_________________________________________________________________
6. Although the district court appears to have considered the documents
submitted along with B&W's motion for reconsideration, we will respect
the district court's explicit finding that B&W was not entitled to such
review. Accordingly, we will limit review to the record as it existed at
the
time of the district court's consideration of the cross-motions for
summary judgment. See DeLong v. Raymond Int'l, Inc., 622 F.2d 1135,
1140 (3d Cir. 1980). On remand, however, the district court will be able
to include these additional documents as part of the record.
14
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
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.
. . . .
It was through these letters and instructions coming
from the Chester Office that field salespersons were
told what specific products management wanted them
to sell and promote and how they were to do it through
specific promotional strategies that they must use.
App. 2209-10.
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.
15
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.
C.
Finally, we consider whether there is an issue as to
whether Chester was the site "to which [the sales
representatives] report[ed]." 20 C.F.R. S 639.3(i)(6). This
inquiry focuses on the location of the personnel who were
primarily responsible for reviewing sales reports and other
information sent by the sales representatives, in order to
record sales, assess employee performance, develop new
sales strategies, and the like.
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
16
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.7
_________________________________________________________________
7. In his dissent, Chief Judge Becker takes issue with our determination
that the present record presents genuine issues of material fact that
preclude resolution on summary judgment. According to Chief Judge
Becker, "th[e] evidence is not in conflict, but instead commands the
conclusion that the Chester center was the ultimate site from which the
plaintiffs' work was assigned and to which they reported." Dissenting Op.
at 26.
As we see it, Chief Judge Becker's attempt to harmonize statements
that on their face are in conflict is contrary to our duty to view
inferences from the underlying facts in the light most favorable to the
17
IV.
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. S 639.3(i)(6) and 29 U.S.C.
S 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,"8 will
undoubtedly be relevant and material to these inquiries, as
will the Company's conduct on January 11, 1995.
_________________________________________________________________
party opposing summary judgment. See Matsushita Elec. Indus. Co. v.
Zenith Radio, 475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986) (citing
United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 994
(1962)). That we might be able to hypothesize a theory that could
conceivably be consistent with what certain declarants intended to say
(but did not) is neither our function nor our concern. Rather, our charge
is to determine whether "the evidence is such that a reasonable jury
could return a verdict for the nonmoving party." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510 (1986). We believe
that the answer to that inquiry is yes, and that it is not our role as an
appellate court to go further. See Ingersoll-Rand Fin. Corp. v. Anderson,
921 F.2d 497, 504 (3d Cir. 1990) ("This court is not a factfinding
tribunal.").
Upon review of the entire record, we are constrained by our
established jurisprudence to return this proceeding to the district court
so that the facts bearing on the "single site" question can be developed
at trial.
8. See supra note 3.
18
Given the unorthodox employment arrangements at issue
in this case, conclusory statements that the plaintiffs were
or were not assigned work "from" Chester, and that they
did or did not report "to" Chester, will generally prove
inadequate. The problem with such statements is that in
our era of modern telecommunications, it is often necessary
to distinguish the ultimate origin and destination of
information from mere conduits through which the
information has passed. An instruction may originate in
one location, be routed electronically through another, be
stored on a machine in a third, and then be received by an
individual located in a fourth. In an unhelpful sense, it can
be said that the instruction was assigned "from" any of the
first three locations, and that it was sent "to" any of the
latter three. Conclusory statements made in this context
are likely to interfere with the ability of district courts to
enter summary judgment, as they will lead to facially
contradictory factual assertions. To avoid this problem in
the future, we emphasize that we interpret 20 C.F.R.
S 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.
V.
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.
19
A.
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.
S 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.9
In United Steelworkers of America v. North Star Steel Co.,
5 F.3d 39 (3d Cir. 1993), we interpreted only thefirst part
of this formula.10 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.11 Thus, in a case where there was no
_________________________________________________________________
9. This statute provides a starting point because the resulting figure may
then be modified by additional considerations as directed by 29 U.S.C.
S 2104(a)(1)(B) and 29 U.S.C. S 2104(a)(2)-(7).
10. Judge Seitz, writing for the court, stated the issue in North Star as
follows:
The sole issue appealed by defendant is the number of days for
which it must pay damages to its aggrieved employees under Section
2104(a)(1)(A) of WARN. The district court interpreted that section
to
require that defendant pay damages for each calendar day within
the violation period. Defendant argues that Section 2104(a)(1)(A)
does not require it to pay damages to an aggrieved employee for any
day within the violation period that would not have been a regular
workday for that employee.
5 F.3d at 41.
11. We recognize that some courts have criticized North Star and have
rejected its analysis. See Saxion v. Titan-C-Manufacturing, Inc., 86 F.3d
553, 559 (6th Cir. 1996); Frymire v. Ampex Corp., 61 F.3d 757, 772
(10th Cir. 1995); Carpenters District Council v. Dillard Dept. Stores, 15
F.3d 1275, 1283-86 (5th Cir. 1994). However, we are bound to adhere to
our prior precedents. See Third Circuit Internal Operating Procedures
9.1.
20
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. S 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.
The next question we must answer is how to determine
an employee's regular rate of pay per day. Because the
sales representatives were salaried employees, we must
determine how to convert the given annual salary rate into
a daily rate of pay. The parties offer competing
methodologies. The sales representatives contend that
under North Star we must divide the annual salary by the
number of days the sales representatives actually worked in
a given year. Because the sales representatives were not
expected to work weekends or holidays, they claim that the
district court's damage award of two months' salary, by
eliminating weekends and holidays, represented back pay
for only about 40 actual working days (60 days minus
weekends and holidays), rather than the full 60 actual
working days mandated by North Star.
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
21
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.12
B.
The final issue we address is whether the district court
correctly held that the severance payments made by B&W
_________________________________________________________________
12. The district court's calculations based on the equivalent of two
months' salary was almost, but not quite, correct. Because we normally
base an annual calculation on 365 days, we think it is the better
practice for the district court to divide an employee's annual salary by
365, and then multiply that rate by number of the days of the violation
period.
22
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. S 2104(a)(2)(A).13
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. S 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.
S 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. S 2104(a)(1)(B) (expressly including
_________________________________________________________________
13. 29 U.S.C. S 2104(a)(2) (West Supp. 1998) states:
The amount for which an employer is liable under paragraph (1)
shall be reduced by--
(A) any wages paid by the employer to the employe e for the period
of the violation;
(B) any voluntary and unconditional payment by th e employer to
the employee that is not required by any legal obligation; and
(C) any payment by the employer to a third party or trustee (such
as premiums for health benefits or payments to a defined
contribution pension plan) on behalf of and attributable to the
employee for the period of the violation.
In addition, any liability incurred under paragraph (1) with
respect
to a defined benefit pension plan may be reduced by crediting the
employee with service for all purposes under such a plan for the
period of the violation.
23
ERISA benefits in WARN damages calculations); Tobin v.
Ravenswood Aluminum Corp., 838 F. Supp. 262, 273 n.17
(S.D.W.Va. 1993).
If, after remand, the plaintiffs prevail in this action, the
damages must be calculated accordingly.
VI.
We hold that a genuine dispute exists concerning
whether the Chester, Virginia administrative center is a
single site of employment covered by WARN. Accordingly,
we will reverse the January 28, 1997 order of the district
court entering summary judgment for the plaintiffs, and
will remand for proceedings consistent with the foregoing
opinion. As the sales representatives are no longer a
"prevailing party" according to 29 U.S.C. S 2104(a)(6), we
must also vacate the order of the district court dated
September 2, 1997, which had awarded attorney's fees to
the plaintiff class.
24
BECKER,* 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. S 639.3(i)(6). Nonetheless, I am
constrained to dissent from Parts III and IV of the majority
opinion 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.
I.
It will be useful to commence the discussion of the
liability issue by rescribing the guidance that the majority
imparts to the district court at the close of its liability
discussion.
Given the unorthodox employment arrangements at
issue in this case, conclusory statements that the
plaintiffs were or were not assigned work "from"
Chester, and that they did or did not report "to"
Chester, will generally prove inadequate. The problem
with such statements is that in our era of modern
telecommunications, it is often necessary to distinguish
the ultimate origin and destination of information from
mere conduits through which the information is
passed.
* * *
To avoid this problem in the future, we emphasize that
we interpret 20 C.F.R. S 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.
_________________________________________________________________
*Honorable Edward R. Becker, United States Circuit Judge for the Third
Circuit, assumed Chief Judge status on February 1, 1998.
25
Maj. Op. at 19 (emphasis added). I agree with the majority
that in applying 20 C.F.R. S 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.
As I will show, this evidence is not in conflict, but instead
commands the conclusion that the Chester center was the
ultimate site from which the plaintiffs' work was assigned
and to which they reported. Since I believe that the
evidence is so clear that the Chester center was the site
26
from which plaintiffs' work was assigned and the site to
which they reported, I do not deal with whether the Chester
center was also their "home base" as that phrase is used in
20 C.F.R. S 639.3(i)(6).
A.
I turn first to whether the Chester center was the site
from "which [the sales representatives'] work [was]
assigned." 20 C.F.R. S 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 14-15. 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:
Q. Did you ever take any orders from anyone at the
administrative center down in Chester, Virginia?
A. No, I didn't.
App. 2270.
As I will show, however, Groonwald's statement conflicts
with the view that Chester was the ultimate source of the
sales representatives' assignments only if one ignores, as
the majority apparently has, the uncontroverted evidence
that the Chester center was the source of assignments for
both the district sales managers and the sales
representatives. Marshall's testimony, when placed in
context, not only does not create a genuine issue of
material fact, but strongly counsels in favor of summary
judgment for the plaintiffs.
1.
Marc Lowery and Dwight Hughes, former employees at
the Chester center, described the process by which
27
assignments were distributed to American Tobaccofield
sales personnel. Lowery declared that:
[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.
* * *
It was through these letters and instructions coming
from the Chester office that field salespersons were told
what specific products management wanted them to
sell and promote and how they were to do it through
specific promotional strategies that they must use.
These instructions in the form of "Sales Coverage"
letters were regularly issued from the Chester office
every five (5) to eight (8) weeks.
App. 2209-10. (emphasis added).
Similarly, Hughes stated that:
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].
...
[These letters] told the sales representatives and district
sales managers what to sell and how to sell it.
App. 2186. (emphasis added).
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 nowhere in
28
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.
The majority also relies on the following portion of
Thomas Marshall's deposition:
Q. Did you ever take any orders from anyone at the
administrative center down in Chester, Virginia?
A. No, I didn't.
This excerpt, when returned to its proper context, provides
no support for remand.
First, a review of the testimony preceding the excerpt
makes clear that when Marshall stated that he did not
receive instructions from anyone at Chester, he simply
meant that he did not receive instructions from any
particular person at Chester:
Q. You didn't answer my question. Who in Chester,
Virginia did you report to?
A. Well to the company itself.
Q. So there is no person that you reported to there?
A. There is no person.
Q. So you did not have a boss in Chester, Virginia; is
that right?
A. Well, there's lots of bosses in Chester, Virginia.
Q. Was there a particular person, a boss that told you
what to do in Chester, Virginia, that you --
A. No.
Q. -- can identify today?
29
A. No.
App. 2260.
More fundamentally, the overall content of Marshall's
testimony unequivocally supports the view that the sales
representatives received their assignments from the Chester
center. Nowhere is the imprudence of the majority's reliance
on Marshall's testimony to preclude summary judgment
more in evidence then in the following exchange:
Q. You make a distinction between supervising and
reporting; is that right?
A. Yes, I think I do.
Q. Now, explain that to me, in your own words.
A. Well, I believe that there were supervisors,
supervising the sales reps in the field. But I think
that the sales reps, we were instructed by the
[Chester] office, and the office seemed to have full
control of us. Anything we did out there seemed to
relate to the office. I could not get hold of Mr.
Ogorek [his sales manager] if I wanted to, except
on voice mail.
Tom Ogorek didn't tell me what to do out there in
the field. I was sent a campaign letter from Chester,
Virginia stating what I was to do, and how long I
was to do it, how much I was to spend, and the
brands I was to work. They made the changes in
the field. If there was an executive order out there
changing our field operation, it came from voice
mail.
App. 2260. (emphasis added)
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
30
10-11, 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.S 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.
The role of the sales managers in the American Tobacco
"reporting process", is best summarized by Joseph Pierce,
the former head of Sales Audit and Analysis for American
Tobacco:
I understand that in earlier years the original expense
report forms were mailed directly to the Chester office
from the homes of each field sales representative,
which resulted in our receiving a thousand or so
separate envelopes from all over the country.
Eventually, we used the district sales managers to
collect the original report forms from the field sales
representatives in their group, and the district sales
managers would send the originals to the Chester
office, which resulted in our receiving only about 150
or so envelopes (the number of district sales managers)
from fewer locations.
In this regard the district sales manager assisted the
Chester office, to the extent they eyeballed the forms,
unstapled papers, matched the receipts to the proper
form, and otherwise organized the paperwork in a form
that made it easier for our staff in the Chester office to
review and analyze each of the approximately 1,000
field sales representative's expense reports and
paperwork. Even after we started using the district
31
sales managers to funnel the paperwork from the field
to the Chester Office, it was still the Chester Office
which reviewed and analyzed the field sales
representatives' expense reports and approved for
processing (or disapproved) the reports.
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.1
C.
Out of an abundance of caution, I address the
contention, raised by the defendants, that the Chester
center itself was just a conduit since the assignments that
it sent to the field personnel and the reports that it received
were passed through it to the executive offices of American
Tobacco located in Stamford, Connecticut. The majority
does not focus on this possible view of the evidence and
instead frames the choice of plaintiffs' single site of
_________________________________________________________________
1. I am not sure what to make of the majority's statement at the outset
of this section that its "inquiry focuses on the location of the personnel
who were primarily responsible for reviewing[the plaintiffs' reports]."
Maj. Op at 16 (emphasis added). While I believe that the personnel at the
Chester center were both primarily and ultimately responsible for
reviewing the reports, I am uncertain as to how much of the majority's
analysis turns on a distinction between these two terms -- or even
whether the shifting terminology is intentional. At all events, I believe
that this inconsistency should not affect the majority's instruction to
the
district court to focus its inquiry on remand on those "ultimately
responsible for creating and receiving the information."
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employment as being between the Chester center and the
geographical districts in which the plaintiffs' worked.
However, I address this argument, because the defendants
may attempt to revive it on remand.
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. S 2101(a)(3)(B).
D.
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. S 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. S 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 19. 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
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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.
S 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.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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