Carl Leeper v. Hamilton County Coal, LLC ( 2019 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 19-1109
CARL LEEPER, individually and on
behalf of all others similarly situated,
Plaintiff-Appellant,
v.
HAMILTON COUNTY COAL, LLC,
and ALLIANCE RESOURCE PARTNERS, L.P.,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 16-CV-250 — Nancy J. Rosenstengel, Chief Judge.
____________________
ARGUED MAY 17, 2019 — DECIDED SEPTEMBER 26, 2019
____________________
Before RIPPLE, MANION, and SYKES, Circuit Judges.
SYKES, Circuit Judge. A group of workers at an Illinois coal
mine received some unwelcome news on February 5, 2016.
Their employer, Hamilton County Coal, LLC, announced a
“temporary layoff” with an expected end date of August 1,
2016. Carl Leeper, a full-time maintenance worker at the
mine, responded with this class action under the Worker
2 No. 19-1109
Adjustment and Retraining Notification Act (the “WARN
Act” or “the Act”), which requires employers to give affected
employees 60 days’ notice before imposing a “mass layoff.”
29 U.S.C. § 2102(a)(1). The Act defines a mass layoff as an
event in which at least 33% of a site’s full-time workforce
suffers an “employment loss.” Id. § 2101(a)(3)(B). The district
court entered summary judgment for Hamilton because the
work site did not experience a “mass layoff” as defined in
the Act.
We affirm. The record contains no evidence of a mass
layoff. The term “employment loss” is defined as a perma-
nent termination, a layoff exceeding six months, or an ex-
tended reduction of work hours. None of those events
occurred here. Instead, Hamilton initiated a temporary
layoff of under six months.
I. Background
Hamilton operates a coal mine near Dahlgren, Illinois. 1
On February 5, 2016, Leeper and 157 other full-time employ-
ees received a hand-delivered “Temporary Layoff Notice” on
Hamilton letterhead. The notice announced that “due to
operational considerations,” Hamilton was placing the
workers “on temporary layoff for the period commencing on
February 6, 2016 and ending on August 1, 2016.” The notice
invited them to return on that end date: “On August 1, 2016,
you may return to your at-will employment with Hamilton
County Coal.” In the meantime, however, the laid-off work-
1 In 2015 Hamilton became a subsidiary of Alliance Resource Partners,
L.P. Alliance is a codefendant but played no role in these events, so we
mention it no further.
No. 19-1109 3
ers would “not be employed by Hamilton County Coal” and
were “free to pursue other endeavors.”
The employees also received a document entitled “Fre-
quently Asked Questions Concerning the Temporary
Layoffs,” which explained that “[a] temporary layoff is
treated as a termination of employment for purposes of
wages and benefits.” It also provided information about
health insurance, retirement accounts, and other benefits.
Not long after Leeper and his coworkers received the notice,
some mine workers began returning to work. Of the
158 notice recipients, 56 resumed their employment with full
pay within six months.
About a month after receiving the notice, Leeper filed
this class-action suit alleging that Hamilton violated the
WARN Act by failing to provide 60 days’ notice before
imposing a “mass layoff.” § 2102(a)(1). The Act defines a
“mass layoff” as “a reduction in force” that “results in an
employment loss at the single site of employment during
any 30-day period for … at least 33 percent of the [full-time]
employees … ; and at least 50 employees.” § 2101(a)(3)(B).
The Act lists three categories of “employment loss”: “(A) an
employment termination, other than a discharge for cause,
voluntary departure, or retirement, (B) a layoff exceeding
6 months, or (C) a reduction in hours of work of more than
50 percent during each month of any 6-month period.”
29 U.S.C. § 2101(a)(6).
Leeper alleged two forms of employment loss. He first
asserted that more than 33% of the mine’s full-time workers
suffered an “employment termination” within the meaning
of § 2101(a)(6)(A). He later added an allegation that
Hamilton reduced the “hours of work [by] more than
4 No. 19-1109
50 percent during each month of any 6-month period.”
§ 2101(a)(6)(C).
Ruling on cross-motions for summary judgment, the dis-
trict judge rejected Leeper’s first theory that the mine work-
ers experienced an employment termination within the
meaning of the Act. Relying on regulatory guidance distin-
guishing an employment termination from a layoff, the
judge placed this work stoppage in the latter category. And
because the layoff did not exceed six months and 56 workers
returned to full-time employment within that time, the
workers hadn’t suffered an employment loss and the WARN
Act’s 33% threshold was not met. See § 2101(a)(6)(B) (catego-
rizing “a layoff exceeding 6 months” as an “employment
loss”) (emphasis added).
Turning to Leeper’s second argument, the judge framed
the issue as whether a “layoff” under the Act “can simulta-
neously be considered a ‘reduction in hours of work of more
than 50 percent in each month of any 6-month period.’” If so,
§ 2101(a)(6)(B) would be superfluous because every layoff
exceeding six months would already constitute a “reduction
in hours” under § 2101(a)(6)(C). The judge concluded that
subsections (B) and (C) describe distinct categories of work
stoppages. This case involved a layoff, she held, and because
it did not exceed six months, it was not covered by the Act.
The judge entered final judgment for Hamilton. This appeal
followed.
II. Discussion
We review a summary judgment de novo, reading the
record in the light most favorable to Leeper and drawing all
No. 19-1109 5
reasonable inferences in his favor. Tolliver v. City of Chicago,
820 F.3d 237, 241 (7th Cir. 2016).
The sole question is whether the evidence establishes that
a mass layoff occurred. Leeper maintains that more than 33%
of the mine’s full-time workforce experienced an employ-
ment termination within the meaning of § 2101(a)(6)(A).
Alternatively, he argues that a sufficient number of workers
suffered a “reduction in hours of work of more than
50 percent during each month of any 6-month period” under
§ 2101(a)(6)(C).
A. Employment Termination
We begin by distinguishing an “employment termina-
tion” from a “layoff.” Department of Labor guidance ex-
plains that “for the purposes of defining ‘employment loss,’
the term ‘termination’ means the permanent cessation of the
employment relationship and the term ‘layoff’ means the
temporary cessation of that relationship.” Worker Adjust-
ment and Retraining Notification, 54 Fed. Reg. 16,042, 16,047
(Apr. 20, 1989). Other circuits have embraced this distinc-
tion. See, e.g., Morton v. Vanderbilt Univ., 809 F.3d 294, 296
(6th Cir. 2016); Long v. Dunlop Sports Grp. Americas, Inc.,
506 F.3d 299, 302 (4th Cir. 2007). The presence of temporal
language in § 2101(a)(6)(B)—“exceeding 6 months”—and its
absence from § 2101(a)(6)(A) supports the Department’s
interpretation.
This distinction raises a follow-up question: How do we
evaluate whether a cessation of the employment relationship
is permanent or temporary? It’s always possible for a worker
to be rehired in the future, so one can never know for sure
whether a termination is permanent. Do we evaluate perma-
6 No. 19-1109
nence from the ex-ante perspective of a worker who just
received a dismissal notice, from the ex-post perspective of a
court presented with evidence that workers were rehired, or
something in between?
Consider this hypothetical: On January 1 Steve’s employ-
er informs him, quite unequivocally, that he is fired. Five
months later the employer calls Steve and offers to rehire
him. He accepts. For WARN Act purposes, what happened
to Steve? With the benefit of hindsight, it might seem obvi-
ous that Steve experienced a “temporary cessation” of his
employment—that is, a layoff. And because the layoff did
not exceed six months, Steve didn’t suffer an “employment
loss” under § 2101(a)(6)(B). So he doesn’t count toward the
Act’s 33% threshold. The judge here basically took that
approach, reasoning that the 56 workers who “were fully
restored to pre-layoff wages within six months” did not
experience a permanent termination of employment.
Hamilton of course prefers this analysis.
Leeper urges us to reject this hindsight-based reasoning.
Instead he proposes a test based on an employee’s objective
expectation of recall. If a reasonable employee would inter-
pret the firing as permanent, then Leeper would say that a
§ 2101(a)(6)(A) employment termination occurred. So in the
example above, Steve suffered an employment termination
on January 1. His eventual rehiring is irrelevant to that
categorization.
Leeper has the better argument. Congress specified three
separate and distinct categories of employment action in
§ 2101(a)(6). We must respect the choice embodied by that
statutory structure. To that end, we avoid giving a provision
“an interpretation that causes it to duplicate another.”
No. 19-1109 7
Nielsen v. Preap, 139 S. Ct. 954, 969 (2019) (quoting ANTONIN
SCALIA & BRYAN A. GARNER, READING LAW: THE
INTERPRETATION OF LEGAL TEXTS 174 (2012)). The judge’s
retrospective analysis makes § 2101(a)(6)(A) duplicative. If a
period of unemployment must exceed six months to consti-
tute an employment termination, then that category is
functionally indistinguishable from § 2101(a)(6)(B).
That reading condemns prospective WARN Act plaintiffs
to statutory limbo. An aggrieved worker might think that
evidence of an unambiguous firing clearly satisfies
§ 2101(a)(6)(A). But under Hamilton’s reasoning, this would-
be plaintiff cannot know whether an employment termina-
tion occurred until the event also qualifies as a “layoff ex-
ceeding six months.” That disregards our decision in Phason
v. Meridian Rail Corp., 479 F.3d 527 (7th Cir. 2007). There we
explained that “[a]n ‘employment loss’ occurs when any one
of the subsections applies.” Id. at 529. Hamilton’s proposed
interpretation effectively appends a six-month waiting
period to § 2101(a)(6)(A) that appears nowhere in the text.
The better reading of the statute is that § 2101(a)(6)(A)
and (B) require an initial categorization of the dismissal
imposed on the employee. Was the worker permanently
terminated or temporarily laid off? Answering that threshold
question requires an objective analysis of the employee’s
dismissal notice, not a hindsight-informed count of how
many employees returned within a six-month period.
After this initial categorization, later events may become
relevant to the Act’s mass-layoff inquiry. For instance, the
statute tells us:
8 No. 19-1109
A layoff of more than 6 months which, at its
outset, was announced to be a layoff of
6 months or less, shall be treated as an em-
ployment loss under this chapter unless—
(1) the extension beyond 6 months is caused
by business circumstances … not reasona-
bly foreseeable at the time of the initial
layoff; and
(2) notice is given at the time it becomes
reasonably foreseeable that the extension
beyond 6 months will be required.
29 U.S.C. § 2102(c). This language only confirms the necessi-
ty of an up-front determination. To apply § 2102(c), we must
first determine whether the relevant action was “announced
to be a layoff.” Once we’ve categorized the dismissal as a
layoff, we can evaluate its duration. Conversely, the statute
doesn’t impose a duration requirement on “employment
termination,” which evokes an event rather than a period.
The judge relied in part on Rifkin v. McDonnell Douglas
Corp., where the employer gave employees a “layoff notice”
explaining that the layoff was “expected to be permanent.”
78 F.3d 1277, 1282 (8th Cir. 1996). Some recipients of the
notice were rehired within six months. Id. at 1279. The
Eighth Circuit reasoned:
A common sense reading of the statute indi-
cates it is the actuality of a termination which
controls and not the expectations of the em-
ployees. An employee cannot be defined as
“terminated” if he or she is, in fact, rehired in
the same position. Further, the fact that the
No. 19-1109 9
layoff was merely “expected to be permanent”
as opposed to a termination left open the pos-
sibility of a rehire and thus weighs against
classifying this situation as an employment
termination.
Id. at 1282 (emphasis added).
The Eighth Circuit’s holding rested in part on the court’s
view of the WARN Act’s purpose: “to ensure adequate
opportunities (by way of notice of imminent employment
loss) for retraining and/or reemployment.” Id. (quotation
marks omitted). Because the rehired workers had “no need
for retraining or alternative jobs,” they did not suffer an
“employment loss” under the Act. Id.
But the WARN Act doesn’t define “employment loss” as
an event requiring retraining or an alternative job. And
“[d]eciding what competing values will or will not be sacri-
ficed to the achievement of a particular objective is the very
essence of legislative choice,” so we cannot simply “assume
that whatever furthers the statute’s primary objective must be
the law.” Rodriguez v. United States, 480 U.S. 522, 526 (1987)
(per curiam). As we’ve explained, the Act delineates distinct
categories in its definition of “employment loss.” See Phason,
479 F.3d at 529. A retrospective analysis that blurs the dis-
tinctions between the categories is inconsistent with the Act’s
text and structure. Accordingly, if an objective observer
would conclude that an employee suffered a permanent
cessation of his employment relationship, a § 2101(a)(6)(A)
“employment termination” occurred. The employer’s subse-
quent decision to offer the employee his old job cannot
retroactively transform that once-permanent firing into a
temporary layoff.
10 No. 19-1109
We now return to February 2016, when Hamilton fur-
nished 158 full-time workers with the layoff notice and
Frequently Asked Questions documents. What did Hamilton
communicate to Leeper and his coworkers: a temporary
suspension or permanent end to their employment?
Even construed in Leeper’s favor, the record reveals that
Hamilton announced a temporary cessation of his employ-
ment. The notice referred to the employment action as a
“temporary layoff” and defined a precise “layoff period.”
And it instructed the workers to return—not reapply to
return—once that period ended: “On August 1, 2016, you
may return to your at-will employment with Hamilton
County Coal.” Nothing in the notice suggests a “permanent
cessation of the employment relationship.” 54 Fed. Reg. at
16,047.
Leeper cites other statements in the documents, arguing
that Hamilton “invok[ed] policies applicable to employment
terminations,” not layoffs. And while the notice called the
event a layoff, the Frequently Asked Questions packet
explained that “[a] temporary layoff is treated as a termina-
tion of employment for purposes of wages and benefits.” It
also said that workers were eligible for unemployment
benefits and referred to the “employment termination date.”
Finally, Leeper observes that Hamilton withheld advances,
provided separation benefits, and paid out unused vacation
days in the paycheck for the last pay period prior to the
layoff.
In short, Leeper offers evidence that his employment was
terminated. That’s necessary but insufficient. The relevant
distinction between a layoff and an employment termination
is whether that termination was expected to be temporary or
No. 19-1109 11
permanent. Leeper hasn’t generated a material factual
dispute on that point. Hamilton clearly announced a tempo-
rary layoff lasting under six months, and no language in
either the notice or the Frequently Asked Questions shows
that Leeper and his coworkers were permanently fired.
Moreover, Leeper never argues that the layoff extended
beyond six months, implicating §§ 2101(a)(6)(B) and 2102(c).
Accordingly, the mine workers did not experience an em-
ployment termination under § 2101(a)(6)(A).
B. Hours Reduction
Alternatively, Leeper argues that more than 33% of the
mine workforce suffered “a reduction in hours of work of
more than 50 percent during each month of any 6-month
period.” § 2101(a)(6)(C). His logic is simple: When an em-
ployer terminates an employee, it reduces his hours to
zero—by definition, more than a 50% cut.
Leeper’s interpretation merges subsections (B) and (C) of
§ 2101(a)(6). Under his reasoning, every “layoff exceeding
6 months” would also constitute a six-month “reduction in
hours of work.” So once again there is a surplusage problem.
And his reading contradicts the plain meaning of subsec-
tion (B). A “reduction in hours of work”—unlike the other
two events—is not a cessation of the worker’s employment
relationship. It occurs when an employer retains an employ-
ee but assigns him less work, effectively cutting his pay.
That’s a difference in kind, not degree. Leeper’s interpreta-
tion also contradicts the duration requirement in subsec-
tion (B). If a temporary layoff is also a “reduction in hours of
work,” then it becomes an “employment loss” after five and
a half months, not six. That odd construction poses problems
12 No. 19-1109
for § 2102(c), which provides that some layoffs in excess of
six months do not constitute an employment loss.
Leeper cites Graphic Communications International Union,
Local 31-N v. Quebecor Printing (USA) Corp., 252 F.3d 296 (4th
Cir. 2001), but that case considered whether a worker can
experience successive employment losses—for instance, when
a permanent termination follows a layoff. The Fourth Circuit
concluded that the WARN Act envisions successive em-
ployment losses necessitating separate warnings. Id. at 299.
But that doesn’t support Leeper’s contention that the same
employment action can satisfy both the “layoff” and “reduc-
tion in hours” categories.
Hamilton initiated a layoff lasting under six months. Un-
der Department of Labor guidance, that temporary cessation
of the employment relationship wasn’t an employment
termination under § 2101(a)(6)(A). And because Hamilton
laid off the affected employees rather than reducing their
work hours, § 2101(a)(6)(C) is irrelevant. Leeper cannot show
that more than 33% of the mine’s full-time workforce experi-
enced an employment loss. Because this was not a mass
layoff under the Act, Hamilton wasn’t obligated to give the
workers 60 days’ notice.
AFFIRMED