Sherry Aaron v. Brown Group, Inc. , 80 F.3d 1220 ( 1996 )

No. 95-2069
Sherry Aaron; Deborah D. *
Barber; Dolores V. Beauchamp; *
Patricia Beauchamp; *
Brenda Becker; Eva M. Becker; *
Alice M. Cox; Billi Jo Crews; *
Betty Doyle; Patty Dull; *
Jessie F. Dunlap; Lois I. *
Elseman; Augusta Emmons; *
Cathy M. Ethington; Carol J. *
Foster; Joseph E. Foster; *
Virginia M. Foster; Donald *
Fritchey; Melissa C. Galbraith; *
Cristel Goodman; Lola F. Harlan; *
Lucinda R. How; Frances Huffman; *
Shirley Humphrey; Sharon L. *
Hurst; Brenda Kissinger; *
Edith Krull; Daisy L. Maddox; *
Gladys McNew; Rita Messersmith; *
Anna M. Miller; Kathryn Warnol *
Mitchell; Dorothy Newkirk; *
Beverly J. Norton; Eugenia S. * Appeal from the United States
Plotner; Becky Jo Ray; Erika K. * District Court for the Eastern
Rea; Helen J. Rea; Brenda K. * District of Missouri.
Reedy; Debbie Rhew; Phyllis Rice; *
Clifford E. Robertson; Kimberly *
Rollins; Mary Rollins; *
Troy Rollins; Virginia Rollins; *
Jane A. Ruhl; Nina L. Scrabeck; *
Mary K. Sherrell; Jerry R. *
Stricklan; Brenda S. Stricklan; *
Patricia Strickland; Phyllis J. *
Teel; Linda J. Tucker; Darlene *
Vineyard; Lula D. Wesser; *
Patricia Wiles; Allie Willis; *
Joann Wilson; Thelma Withers; *
Cynthia Wyss; Marshall Wyss; and *
Marion M. York, on behalf of *
themselves and similarly *
situated aggrieved employees; *
Laverne Akery; Tina S. Alexander; *
Etta W. Anderson; Leona Asberry; *
Ida Fae Baker; Michael Beasley; *
Dennis Beasley; S. Dianne Beasley;*
Tammy Beasley; Patricia Lynn Byrd;*
Eula Mae Cochran; Dolores Colby; *
Beth Davis; Charline Davis; *
Tim Davis; Belinda Decker; *
Shirley Sue Edwards; Raymond E. *
Edwards; Glenda K. Emmons; *
Fritchey; Jessie Gilbert; *
Richard Gilbert; Millie Hardwick; *
Shirley Kizer; William Lane; *
Martha Messersmith; Alice *
Mitchell; Jerry Nelson; Ruth A. *
Parker; Sharon K. Ray; Dianna *
Rollins; Caroline Sharp; *
Samuel Sharp; Bob E. Spurgeon; *
Elsie Spurgeon; Wanda J. Van Scoy;*
Sandra White; Ruth Wilson; *
Sharron K. Yoakum; Martha J. *
Baker; Edna Cousart; Carolyn J. *
Evans; Linda A. Glick; *
Douglas E. McClendon; Patricia *
McClendon; and Carolyn S. Prock, *
*
Appellees, *
*
v. *
*
Brown Group, Inc., doing business *
as Brown Shoe Company, *
*
Appellant. *
Submitted: February 15, 1996
Filed: April 6, 1996
Before BEAM, LOKEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
MORRIS SHEPPARD ARNOLD, Circuit Judge.
Pursuant to the Worker Adjustment and Retraining Notification Act
("WARN"), 29 U.S.C. §§ 2101-2109, the plaintiffs, on behalf of themselves
and similarly-situated individuals, sued their former employer, the Brown
Shoe Company ("Brown Shoe"). Brown Shoe moved to dismiss the case on
statute of limitations grounds, but the
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district court1 denied the motion. The district court then certified the
case for interlocutory appeal, and this appeal followed. We affirm.
I.
WARN requires certain employers to give affected employees sixty
days' notice before closing a plant or beginning a mass layoff. 29 U.S.C.
§ 2102(a). If an employer violates WARN, it is liable to each aggrieved
employee for wages and benefits for each day of the violation (for up to
sixty days). 29 U.S.C. § 2104(a)(1). The statute is enforced by way of
a civil action brought by employees. 29 U.S.C. § 2104(a)(5). Like many
federal laws, WARN does not include a statute of limitations.
The plaintiffs worked as unionized employees at Brown Shoe's plant
in Dixon, Missouri. Brown Shoe notified William Treece, a representative
of the United Food and Commercial Workers International Union, that the
Dixon plant would be closed and that workers would be dismissed in sixty
days. Three days later, Brown Shoe began laying off plant employees, and
the layoffs continued until the plant closed two months later.
A little more than two years after Brown Shoe notified Mr. Treece
about the plant closure, the plaintiffs filed this action, alleging that
Brown Shoe violated WARN. They claimed that the notice of the plant
closure was inadequate because Mr. Treece was not their exclusive
representative, 29 U.S.C. § 2102(a)(1), 20 C.F.R. § 639.6, and that the
layoffs effectively constituted an unlawful plant closure, 29 U.S.C. §
2101(a)(2). They sought wages and benefits for each day of the violation.
1
The Honorable Terry I. Adelman, United States Magistrate
Judge for the Eastern District of Missouri, acting by consent of
the parties. See 28 U.S.C. § 636(c)(1).
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Brown Shoe then moved to dismiss the action, arguing that it was
time-barred by the National Labor Relations Act's (NLRA) six-month statute
of limitations, 29 U.S.C. § 160(b), or, alternatively, by Missouri law's
one-year limitations period for penal statutes, Mo. Rev. Stat. § 290.110,
§ 516.380. The district court denied the motion. The court first found
that there was no reason to depart from the well-established presumption
that federal courts should borrow a statute of limitations from state law
when a federal statute does not include a limitations period. The court
then held that the action was not time-barred because Missouri's five-year
statute of limitations for actions on express and implied contracts, Mo.
Rev. Stat § 516.120(1), applied to WARN claims.
II.
In the time since the district court's decision, the Supreme Court
has resolved one significant issue in this case. In North Star Steel Co.
v. Thomas, 115 S. Ct. 1927, 1931 (1995), the Court held that federal courts
should apply the most appropriate state statute of limitations to WARN
claims. The Court specifically rejected the argument, made by Brown Shoe
below, that the NLRA's six-month limitations period should apply to WARN
claims. Id. The Court, however, did not find it necessary to decide which
state limitations period should apply because the action was timely under
any of the four possibly applicable Pennsylvania statutes of limitations
and because none of the statutes (ranging from two to six years) would
undermine the purpose of WARN. Id.
On appeal, Brown Shoe renews its argument that this case is barred
by the one-year limitations period applicable to actions under the Missouri
wage and hour statutes. In the alternative, Brown Shoe argues that we
should apply the Missouri equal pay statutes' six-month limitations period,
Mo. Rev. Stat. § 290.450, or the federal Fair Labor Standards Act's (FLSA)
two-year statute
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of limitations, 29 U.S.C. § 255(a); see also Mo. Rev. Stat. § 516.140.
III.
When borrowing a state statute of limitations for a federal cause of
action, our first task is to "characterize the essence of the claim in the
pending case." Wilson v. Garcia, 471 U.S. 261, 268 (1985). The
characterization of a claim is a question of federal law. Johnson v. State
Mut. Life Assurance Co., 942 F.2d 1260, 1262 (8th Cir. 1991) (en banc).
We next determine what state cause of action is most closely analogous to
the federal claim. Id.; see also Egerdahl v. Hibbing Comm. College, 72
F.3d 615, 617 (8th Cir. 1995). State policy becomes relevant only after
we have selected the most closely analogous state cause of action. At that
point, we defer to the state's judgment about how to balance the need to
enforce the statute with the need to weed out stale claims, by borrowing
the statute of limitations for the most closely analogous state cause of
action, unless that statute would frustrate the purposes of the federal
statute on which the claim is based. North Star Steel, 115 S. Ct. at
1930-31.
A.
Brown Shoe first suggests that the application of a five-year
limitations period to WARN frustrates a federal policy favoring short
statutes of limitations for labor-related claims. Brown Shoe claims that
federal courts, including this court, consistently borrow short statutes
of limitations for labor-related legislation. As additional evidence of
this policy, Brown Shoe also cites several federal statutes that require
aggrieved employees to file claims within six months or less. See, e.g.,
NLRA, 29 U.S.C. § 160(b) (six-month statute of limitations for filing
unfair labor practice claims with National Labor Relations Board), and
Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(e)(1); Age
Discrimination in Employment Act, 29 U.S.C. § 626(d)(1); and
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Americans with Disabilities Act, 42 U.S.C. § 12117(a) (all stating that
employee must file employment discrimination charge with the Equal
Employment Opportunity Commission within 180 days).
We find Brown Shoe's assertion that Congress and the federal courts
have established a federal policy favoring short limitations periods for
labor-related claims doubtful at best. We need not undertake the extensive
review of federal labor policy necessary to resolve that issue, however,
because the Supreme Court has held that a limitations period longer than
the five years applied by the district court below would not frustrate
WARN's purposes. In North Star Steel, the Court stated that "even the
longest of the periods, six years, is not long enough to frustrate the
interest in a relatively rapid disposition of labor disputes." 115 S. Ct.
at 1931 (internal quotation marks omitted).
Brown Shoe also argues that Missouri favors short limitations periods
for labor-related claims. Such a state policy, if it indeed exists, is
irrelevant to our task of determining which state claim is most closely
analogous to the plaintiffs' WARN claims. As we indicated above, the
classification of a federal claim for statute of limitations purposes is
a question of federal, not state, law. Johnson, 942 F.2d at 1262.
"Congress surely did not intend to assign to state courts and legislatures
a conclusive role in the formative function of defining and characterizing
the essential elements of a federal cause of action." Wilson, 471 U.S. at
269. It is only after we classify the federal claim and determine which
state cause of action is most closely analogous to it that we defer to
state law. Missouri certainly may decide to curtail the time for
vindicating certain types of claims, but we reject Brown Shoe's invitation
to allow those decisions to influence our classification of the claim at
issue in this case.
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B.
We turn now to Brown Shoe's assertion that the Missouri wage and hour
statutes' one-year limitations period should be applied to WARN claims.
Brown Shoe focuses on two provisions of the wage and hour statutes in
particular, namely, Mo. Rev. Stat. § 290.100 and § 290.110. Brown Shoe
believes that these provisions effectuate the same policy as WARN, that is,
to "provide[] 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(a).
Brown Shoe is right that the provisions to which it points resemble
some of WARN's requirements. Mo. Rev. Stat. § 290.100 requires employers
to notify their employees thirty days before reducing their wages. If the
employer fails to give proper notice, it must pay $50 to each affected
employee. Mo. Rev. Stat. § 290.110 requires employers to pay discharged
employees all back pay promptly. If the employer withholds the back pay
more than a week after the employee requests it, the employee is entitled
to continue to collect wages for up to sixty days (or until he or she is
fully compensated for his or her services).
We do not share Brown Shoe's view, however, that these technical
similarities compel us to apply the Missouri wage and hour statutes'
limitations period to WARN. The Missouri wage and hour statutes are
considerably narrower than WARN. Most importantly, the provisions cited
by Brown Shoe do not address WARN's primary purpose, namely, to notify
employees about prospective employment loss and to give them time to
prepare for impending economic dislocation. The Missouri wage and hour
statutes differ from WARN in other important ways as well. Mo. Rev. Stat.
§ 290.110 protects employees from unscrupulous employers who withhold wages
that the employees earned before their
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discharge. WARN, on the other hand, is not "a claim for backpay because
it does not compensate for past services." United Paperworkers
International Union v. Specialty Paperboard, Inc., 999 F.2d 51, 55 (2d Cir.
1993). Furthermore, the Missouri Supreme Court has held that an employee
is not entitled to recover benefits such as vacation pay under Mo. Rev.
Stat. § 290.110. See Brackett v. Easton Boot & Shoe Co., 388 S.W.2d 842,
849 (Mo. 1965). WARN provides that employees are entitled to recover wages
and benefits.
WARN is also unlike Mo. Rev. Stat. § 290.100. That provision's
notice requirement applies only to changes in employment conditions
(specifically, decreases in pay) that occur during an ongoing employment
relationship. It does not apply after an employee is terminated.
Furthermore, the $50 penalty for a violation is minuscule compared to
WARN's penalty (full wages and benefits for up to sixty days). See Mo.
Rev. Stat. § 290.100, 29 U.S.C. § 2104(a)(1).
C.
We also reject Brown Shoe's contention that either the Missouri equal
pay statutes' six-month limitations period or the FLSA's two-year
limitations period should apply to WARN. The Missouri equal pay statutes
make it unlawful to pay women less than men for substantially identical
work. Mo. Rev. Stat. § 290.410, § 290.440. Despite Brown Shoe's assertion
that the Dixon plant employed primarily women, we do not think that this
case can properly be characterized as a disparate pay sex discrimination
claim.
We believe that the Supreme Court precluded the application of the
FLSA's statute of limitations in North Star Steel Co., 115 S. Ct. at
1930-31, when it rejected the contention that the six-month statute of
limitations applicable to claims under the NLRA was appropriate for WARN
claims and held that the federal
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courts ought to look to state law for an appropriate limitations period.
In any event, the FLSA is not closely analogous to WARN. Like the Missouri
wage and hour statutes, the FLSA allows aggrieved employees to recover
unpaid wages for past services; it does not provide the comprehensive
relief included in WARN. 29 U.S.C. § 216(b); see also United Paperworkers,
999 F.2d at 55 (comparing WARN and FLSA). Furthermore, the FLSA is
partially enforced by an elaborate administrative structure that helps
workers protect their statutory rights. 29 U.S.C. § 211, § 216(c). WARN
does not establish a similar administrative enforcement mechanism.
D.
Finally, we believe that the district court correctly concluded that
Missouri's five-year statute of limitations for all "actions upon
contracts, obligations or liabilities, express or implied," should govern
WARN claims. Mo. Rev. Stat. § 516.120(1). By enacting WARN, Congress
imposed upon certain employers an obligation to notify their employees
before laying them off or closing a facility. In a sense, WARN inserts
additional terms into covered employment contracts. We therefore conclude
that a WARN action is most closely analogous to an action to recover
damages for a breach of an implied contract (or breach of an obligation)
to notify employees before terminating them.
Although we are not bound by their results, our decision comports
with two recent well-reasoned opinions from the Second and Tenth Circuits.
In Frymire v. Ampex Corp., 61 F.3d 757, 764 (10th Cir. 1995), the Tenth
Circuit applied Colorado's three-year statute of limitations for contracts
to WARN. In an opinion written by Judge Bright of this court, the court
reasoned that "the WARN Act imposes a federal mandate upon employers that
effectively obligates them as if bound by the terms of an employment
contract." Id. Similarly, in United Paperworkers, 999 F.2d at 57, the
Second Circuit applied Vermont's six-year statute of limitations for
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contract actions to WARN. The court concluded, "Like ... a contract
action, WARN actions in some sense compensate workers and communities for
their reliance interests. Thus, we find an application of the contract
limitations period best approximates the federal legislative intent." Id.;
see also Wallace v. Detroit Coke Corp., 818 F. Supp. 192, 196-97 (E.D.
Mich. 1993) (applying Michigan's contract limitations period to WARN).
Brown Shoe argues that we cannot analogize a WARN claim to a breach
of contract action because Missouri is an "at-will" employment state. It
reasons that because Missouri employers can generally fire employees or
change employment conditions without cause, Dake v. Tuell, 687 S.W.2d 191,
193 (Mo. 1985) (en banc), the district court erred in holding that the
contract limitations period applied to WARN. We disagree. The fact that
at-will employees in Missouri may not sue their employers for wrongful
discharge -- unless the discharge violates public policy, id., Luethans v.
Washington Univ., 838 S.W.2d 117, 119-20 (Mo. Ct. App. 1992) -- does not
preclude us from finding that a WARN action is most closely analogous to
a contract action. See, e.g., Frymire, 61 F.3d at 764 (applying contract
limitations period even though Colorado is at-will employment state).
Furthermore, as the plaintiffs point out, the five-year statute of
limitations applied by the district court below is not limited to contract
claims. It covers actions for breach of an obligation as well, and the
Missouri courts have held that Mo. Rev. Stat. § 516.120(1) governs actions
based on an obligation created by a statute. See Coleman v. Kansas City,
173 S.W.2d 572, 577 (Mo. 1943), and Barberi v. University City, 518 S.W.2d
457, 458 (Mo. Ct. App. 1975) (both dealing with claims for additional
compensation owed based on city ordinance).
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IV.
Because the plaintiffs filed this action well within the applicable
five-year statute of limitations, we affirm the decision of the district
court.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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