Leonard Rifken v. McDonnell Douglas , 78 F.3d 1277 ( 1996 )

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No. 95-2605
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Leonard Rifkin, James F. *
Hutson, on their own behalf *
and on behalf of all others *
similarly situated; Gerald *
Blair, *
*
Appellants, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
McDonnell Douglas Corporation, *
a Corporation, *
*
Appellee. *
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Submitted: January 8, 1996
Filed: March 6, 1996
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Before BEAM, MORRIS SHEPPARD ARNOLD, Circuit Judges, and ALSOP,* District
Judge.
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ALSOP, District Judge.
Appellants Leonard Rifkin, et al., bring this action claiming
McDonnell Douglas Corporation violated their rights under the
Worker Adjustment and Retraining Notification (“WARN”) Act by
failing to provide timely notice to workers who suffered an
employment loss. 29 U.S.C. §§ 2101-09 (1992). They appeal the
District Court’s1 ruling that there was no “mass layoff” as defined
*The HONORABLE DONALD D. ALSOP, United States District Judge
for the District of Minnesota, sitting by designation.
1
The Honorable Lawrence O. Davis, United States Magistrate
Judge fo the Eastern District of Missouri, to whom the case was
referred for final disposition by consent of the parties pursuant
to 28 U.S.C. § 636(c)(1988).
in the WARN Act because the requisite 500 employees did not suffer
an employment loss and, because there was no “mass layoff”, the
WARN Act does not apply. We affirm.
I.
In early 1992, Leonard Rifkin and James F. Hutson were
employees of McDonnell Douglas Corporation in the metropolitan St.
Louis area. Between October 16, 1992 and January 14, 1993, 609
employees, including appellants, were laid off by McDonnell
Douglas. None of these employees received the 60 days’ written
notice required by the WARN Act.
These 609 employees worked at different locations in the St.
Louis metropolitan area. Five hundred sixty-two (562) employees
worked at the St. Louis County location whereas 47 employees worked
at the St. Charles County location.2 These two locations are 11 ½
miles apart. Fifty-two (52) employees were “part-time” employees
as defined by the WARN Act (50 at the St. Louis County location and
2 at the St. Charles County location). Both parties agree the
part-time employees do not count towards the requisite 500
employees. Thirty-five (35) employees who had been laid off during
this period were rehired within six months (32 at St. Louis and 3
at St. Charles). Thirty-one (31) employees elected early
retirement in lieu of being laid off (all at St. Louis).
2
There are actually two locations in St. Charles County and
numerous locations in St. Louis County. The parties do not
dispute whether the locations within each separate county may be
grouped together. The only dispute is whether those locations in
St. Louis County may be grouped together with the two St. Charles
County locations. Accordingly, we simply refer to St. Louis
County and St. Charles County as two different locations as
opposed to multiple locations.
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Appellants Rifkin and Hutson filed suit in the Eastern
District of Missouri on January 21, 1993 claiming McDonnell Douglas
violated the WARN Act. On August 11, 1993, appellants filed their
first amended complaint adding Gerald Blair as a plaintiff and
requesting they be allowed to bring the suit as a class action on
behalf of all McDonnell Douglas employees who were permanently laid
off between October 16, 1992 and January 14, 1993. A motion for
class certification filed October 13, 1993 was denied by the
Honorable Charles Shaw on December 22, 1994.
McDonnell Douglas filed its Motion for Summary Judgment on
January 7, 1995, arguing the WARN Act does not apply because there
was no “mass layoff.” Under the WARN Act, at least 500 employees
must suffer an “employment loss” at a single site in order for
there to be a “mass layoff.”3 First, McDonnell Douglas argued the
St. Louis County and St. Charles County sites were not a “single
site” as defined by the WARN Act and thus the number of laid off
employees from these separate locations could not be aggregated for
purposes of meeting the 500 employee requirement. Second,
McDonnell Douglas argued that employees who were laid off and later
rehired within six months did not suffer an employment loss as
defined by the WARN Act because their layoffs were not in fact
permanent. Finally, McDonnell Douglas argued the employees who
opted for early retirement in lieu of layoff did not suffer an
employment loss as defined by the WARN Act.4 The District Court
3
A “mass layoff” is also defined as a layoff of at least 33
percent of the employees, at a minimum of 50 employees (excluding
part-time employees). 29 U.S.C. § 2101(a)(3). Appellant does not
argue this, however.
4
Appellants also challenge the District Court’s denial of class
certification in the underlying matter. This issue will not be
addressed because, as a result of the court’s present holding,
the issue is moot.
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granted McDonnell Douglas’s Motion for Summary Judgment. According
to the court below, the St. Louis and St. Charles sites were not a
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“single site”, and those employees laid off and rehired within six
months and those employees who opted for early retirement in lieu
of layoff did not suffer an employment loss. Accordingly, the 500
employee requisite number was not met.
Mr. Rifkin, et al., now appeal the District Court’s decision
in all respects.
II.
Summary judgment is appropriate when no genuine issue of
material fact remains and the movant is entitled to judgment as a
matter of law. Fed.R.Civ.P. 56(c). We review a grant of summary
judgment de novo, applying the same standard as the trial court.
We view the record in the light most favorable to the non-moving
party, with all reasonable inferences drawn in that party’s favor.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255. But if the
record as a whole could not lead a rational trier of fact to find
for the non-moving party, there is no genuine issue for trial.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1987). We also review a district court’s interpretation of a
statute de novo. Crane v. Sullivan, 993 F.2d 1335, 1336 (8th Cir.
1993).
The WARN Act requires that an employer give 60 days’ notice to
all affected workers before ordering a mass layoff. 29 U.S.C. §
2102(a)(3). A mass layoff is defined as a reduction in force
which:
(B) results in an employment loss at the single site of
employment during any 30-day period for-
(i)(I)at least 33 percent of the employees (excluding any
part-time employees); and
(II)at least 50 employees (excluding any part-time
employees); or
(ii)at least 500 employees (excluding any part time
employees); . . . 29 U.S.C. § 2101(a)(3).
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Appellant argues the WARN Act applies because, under §
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2102(a)(3)(B)(ii), at least 500 employees suffered an employment
loss at the single site composed of the metropolitan St. Louis
area, including the St. Charles County sites. The issues to be
determined on appeal all concern the aggregation of the number of
employees who suffered an employment loss: (A) whether
geographically separate sites, those located in St. Louis County
and those in St. Charles County, compose a “single site”, thus
allowing the aggregation of the number of laid off employees at
both locations; (B) whether employees at these locations who were
laid off and then rehired within six months suffered an employment
loss as defined by § 2101(a)(6); (C) whether employees at the St.
Louis sites who chose early retirement in lieu of layoff suffered
an employment loss as defined by § 2101(a)(6).
A. Single Site
There is no statutory definition of “single site” of
employment in the WARN Act but Deparment of Labor (“DOL”)
regulations and comments provide significant guidance in
interpreting these provisions. The DOL Comments to the WARN Act
state: “workers who suffer an employment loss at another single
site of employment are not counted in determining whether plant
closing or mass layoff coverage thresholds are met.” DOL Comments,
54 Fed. Reg. 16,042, 16,047 (1989). The DOL defines “single site
of employment” spatially by stating a “single site of employment
can refer to either a single location or a group of contiguous
locations.” 20 C.F.R. § 639.3(i)(1)(1995). As a general rule,
geographically related facilities are single sites of employment
whereas geographically separate facilities are separate sites. DOL
Comments, 54 Fed. Reg. 16,042, 16,049-50 (1989).
Sites need not be contiguous in order to be considered a
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“single site”, but in order for non-contiguous sites to be deemed
a “single site”, there must be some connection between the sites
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beyond that of common ownership. In the situation of non-
contiguous sites, the DOL states:
(4) Non-contiguous sites in the same geographic area
which do not share the same staff or operational purpose
should not be considered a single site. For example,
assembly plants which are located on opposite sides of a
town and which are managed by a single employer are
separate sites if they employ different workers. 20
C.F.R. § 639.3(i)(4)(1995).
A DOL discussion paper further clarifies that “geographically
separate buildings (i.e. several blocks or miles apart) would not
appear to constitute a single site unless they were part of a
single operation. An example of such an exception might be two
warehouses several blocks apart sharing the same staff and
equipment.” 9A Ind.Empl.Rights Man. (BNA) 595:954 (1988);
International Union, United Mine Workers v. Jim Walter Resources,
Inc., 6 F.3d 722 (11th Cir. 1993).
The WARN Act’s legislative history supports this definition.
The House/Senate conferees removed “all references to ‘place of
employment’ and replace[d] them with ‘single site of employment.’
This change is intended to clarify that geographically separate
operations are not to be combined when determining whether the
employment threshold for triggering the notice requirement is met.”
H.R. Conf. Rep. No. 576, 100th Cong., 2d Sess. 1045 (1988),
reprinted in 1988 U.S.C.C.A.N. 2078, 2079.
Other circuits interpret the regulations and legislative
history similarly, holding that sharing of staff and equipment, and
sharing the same operational purpose are appropriate criteria for
determining whether two non-contiguous sites comprise a “single
site” under the WARN Act. See Williams v. Phillips Petroleum
Company, 23 F.3d 930 (5th Cir. 1994); International Union, United
Mine Workers v. Jim Walter Resources, Inc., 6 F.3d 722 (11th Cir.
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1993).
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Appellant argues: (1) he has created a genuine issue of
material fact as to whether the St. Louis and St. Charles sites
share the same staff, equipment, and operational purpose; and, in
the alternative, (2) the “truly unusual organizational situation”
exception set forth at 20 C.F.R. § 639.3(a)(i)(8) applies in the
case at hand.
(1) Operational staff and purpose
Appellants argue their submissions create a genuine issue of
material fact as to whether the St. Louis and St. Charles locations
are a “single site”. The evidence alleges that McDonnell Douglas
operations are, in general, quite integrated. The evidence further
alleges occasional transfer of employees and office equipment
between the different sites, and central maintenance of personnel
files. This evidence, even if true, does not establish the
necessary connection between locations to constitute a “single
site.” There is no evidence that employees and equipment are
regularly shared as opposed to occasionally transferred. Jim
Walters, 6 F.3d at 726. Further, appellants alleged some
similarities and connections amongst the products produced at the
different sites. However, similarity of “operational purpose”
means more than “produce the same product.” It suggests, at least,
the sharing of some management and personnel. Jim Walters, 6 F.3d
at 727. Appellants’ evidence does not establish a genuine issue of
material fact regarding any of these “single site” criteria.
(2) Truly Unusual Organizational Situation
Appellants also argue McDonnell Douglas’s St. Louis and St.
Charles locations fit within the “truly unusual organizational
situation” exception to the “single site” rule. 20 C.F.R. §
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639.3(a)(i)(8)(1995). Under this exception, two or more apparently
separate sites may be deemed a “single site” if other criteria set
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out by the DOL do not reasonably apply. The case which best
defines this exception is Carpenters Dist. Council v. Dillard Dep’t
Stores, 15 F.3d 1275, 1290 (5th Cir. 1994), cert. denied, 115 S. Ct.
933 (1995). In Carpenter’s Dist. Council, the court held that two
separate locations were a “single site” when employees, housed
together, were split off into a different building due to space
considerations yet continued to perform the same functions. In the
situation at hand, there is nothing unusual about the organization
of the St. Louis and St. Charles County sites. Any connection
between the two sites is nothing more than that present in most
large corporate organizations.
The St. Louis and St. Charles sites are not a “single site” as
defined by DOL regulations and they do not come under the “truly
unusual organizational situation” exception. Accordingly, the
number of employees who suffered an employment loss at these two
separate locations may not be aggregated to reach the 500 employee
threshold.
The Court’s holding that the St. Louis and St. Charles sites
are not a “single site” has the following effect. Of the 609
employees who allegedly suffered an employment loss, 47 worked at
the St. Charles location, leaving the total potential number of
employees suffering an employment loss at 562. Forty-nine (49) of
the St. Louis employees were part-time employees, reducing the
total to 513. Thirty-two (32) St. Louis employees were rehired
within 6 months and 28 retired before layoff. If those employees
who were rehired within six months did not suffer an employment
loss, then the total potential number of employees suffering an
employment loss is 481. In the alternative, if those employees who
opted for early retirement in lieu of a layoff did not suffer an
employment loss, the total potential number of employees suffering
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an employment loss is 485. Accordingly, if appellants’ arguments
on either issue fail, this Court must affirm the lower court
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because the 500 employee requirement is not met.
B. Rehired employees
The layoff notice given to the affected employees stated they
were being laid off as part of a reduction in force and that the
layoff was “expected to be permanent.” Thirty-two (32) of these
employees were rehired within six months. The WARN Act defines
“employment loss” as . . . “(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). Appellants argue that, because the layoffs
were “expected to be permanent”, these were employment terminations
and the situation falls under § 2101(a)(6)(A). Thus, appellants
argue, the subsequent rehiring was irrelevant.
A common sense reading of the statute indicates it is the
actuality of a termination which controls and not the expectations
of the employees. An employee cannot be defined as “terminated” if
he or she is, in fact, rehired in the same position. Further, the
fact that the layoff was merely “expected to be permanent” as
opposed to a termination left open the possibility of a rehire and
thus weighs against classifying this situation as an employment
termination.
Although the DOL has never addressed this particular
situation, its comments indicate it is actuality and not
expectations or terminology which control whether or not an
employment loss has occurred.
A commentator questioned whether employees laid off for an
indefinite period (i.e. where the employer expects to recall
them but does not know whether their recall will occur before
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or after 6 months) are automatically to be considered as
experiencing an employment loss at the time of the layoff. In
this situation, the layoff is not automatically deemed an
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employment loss. If the layoff lasted for more than six
months, the workers would experience an employment loss,
would be counted toward the trigger level for the plant
closing or mass layoff of which their individual layoffs
were a part, and would have been entitled to notice if
the layoff or closing met coverage thresholds. DOL
Comments, 54 Fed. Reg. 16,042, 16,049 (1989).
Finally, this conclusion is consonant with the purpose of the
WARN Act, that is, “to ensure adequate opportunities (by way of
notice of imminent employment loss) for retraining and/or
reemployment.” Moore v. Warehouse Club, Inc., 992 F.2d 27, 30 (3d
Cir. 1993). It is designed to give “workers and their families
some transition time to adjust to the prospective loss of
employment, to seek and obtain alternative jobs and, if necessary,
to enter skill training or retraining that will allow these workers
to successfully compete in the job market.” 20 C.F.R. § 639.1
(1995); Martin v. AMR Services Corp., 877 F. Supp. 108, 113
(E.D.N.Y. 1995), aff’d, Gonzalez v. AMR Services, 68 F.3d 1529 (2d
Cir. 1995). Employees in the situation at hand who were in fact
rehired do not fall within the purpose of the WARN Act because
there is no need for retraining or alternative jobs. Accordingly,
the number of employees rehired within six months do not count
towards the requisite 500 employees who suffered an employment
loss. Oil, Chemical, and Atomic Workers, Int’l Union, Local 7-515,
AFL-CIO v. American Home Prods. Corp., 790 F. Supp. 1441 (N.D. Ind.
1992)(holding that employees whose positions were terminated but
were later rehired within six months did not suffer an employment
loss.); cf Martin v. AMR Servs. Corp., 877 F. Supp. 108 (E.D.N.Y.
1995), aff’d, Gonzalez v. AMR Services, 68 F.3d 1529 (2d Cir.
1995); Kildea v. Electro Wire Products , Inc., 775 F. Supp. 1014
(E.D.Mich. 1991).
C. Retirees
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Finally, appellants argue that those employees who opted for
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early retirement in lieu of layoff suffered an “employment loss”
under the WARN Act. Once again, employment loss is defined in the
WARN Act as “(A) an employment termination, other than a discharge
for cause, voluntary departure, or retirement.” 29 U.S.C. §
2101(a)(6)(A). The plain wording of the statute indicates a
retirement is not an “employment loss.” DOL Comments state:
If . . . at the time the decision to give notice has to
be made, the employer is not certain that its early
retirement incentives will be accepted or how many
workers will accept early retirement, the employer is
best advised to give notice. If the employer ‘gambles’
that a sufficient number of employees will accept the
offer and ‘loses’, the employer’s cost will be 60 day’s
pay and benefits . . . .” DOL Comments, 54 Fed. Reg.
16,042, 16,043 (1989).
By implication, the DOL’s position is that early retirement in lieu
of layoff is not an “employment loss” under the WARN Act. This is
consonant with the purpose of the WARN Act, providing time for
retraining and reemployment, because those who choose early
retirement are not in need of such warning. Accordingly, we agree
with the lower court that those employees who opted for early
retirement in lieu of layoff did not suffer an “employment loss.”
III.
In summary, the work sites located in St. Louis County cannot
be joined with those located in St. Charles County to compose a
single site and thus the number of workers at the separate sites
may not be aggregated for purposes of meeting the 500 employee
requisite for a “mass layoff” under the WARN Act. Further, those
employees who were laid off and later recalled within 6 months and
those employees who opted for early retirement in lieu of a layoff
did not suffer an “employment loss” as defined by the WARN Act and,
accordingly, do not count for purposes of meeting the 500 employee
requisite for a "mass layoff." Finally, the district court's
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denial of class certification is moot as appellant’s claims fail on
the
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merits. Accordingly, for the reasons discussed above, we affirm
the District Court’s order granting summary judgment for McDonnell
Douglas Corporation.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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