Leeper v. Alliance Res. Partners, L.P.
Leeper v. Alliance Res. Partners, L.P.
Opinion of the Court
Pending before the Court is a Motion for Summary Judgment filed by Defendants (Doc. 71), a Motion to Oppose Plaintiff's Proposed Class Certification or to Stay Class Certification Pending Resolution of Defendants' Motion for Summary Judgment filed by Defendants (Doc. 72), a Motion to Certify Class filed by Plaintiff Carl Leeper ("Leeper") (Doc. 82), a second Motion for Summary Judgment filed by Defendants (Doc. 136), a Motion for Summary Judgment filed by Leeper (Doc. 138), and a Motion to Amend/ Correct Motion to Certify Class filed by Leeper (Doc. 157).
FACTUAL & PROCEDURAL BACKGROUND
Leeper brings this putative class action against Defendants Alliance Resource Partners, L.P. ("Alliance") and Hamilton County Coal, LLC ("Hamilton"), alleging violations of the Worker Adjustment and Retraining Notification Act (the "WARN Act"),
Leeper was a full-time employee of Hamilton (Doc. 136-3, p. 27).
During a meeting held on February 5, 2016, Hamilton delivered written notice to 158 full-time employees stating that "due to operational considerations," the employees *764would be placed on a "temporary layoff for the period commencing on February 6, 2016 and ending on August 1, 2016 ("Layoff Period")." (Doc. 71-2, p. 7). Hamilton explained that "[o]n August 1, 2016, [the employees] may return to [their] at-will employment with Hamilton County Coal." (Id. ). The written notice further advised that "[d]uring the Layoff Period, and beginning effective February 6, 2016, [the employees] will not be employed by Hamilton County Coal" and "are free to pursue other endeavors ... [the employees] will receive additional information related to any separation benefits to which [they] may be entitled." (Id. ).
Along with this notice, employees received a document entitled "Frequently Asked Questions Concerning the Temporary Layoffs" ("FAQs") (Doc. 71-2, p. 9). This document stated that "[a] temporary layoff is treated as a termination of employment for purposes of wages and benefits." (Id. ). It explained, among other things, that the employees' health care coverage would end, an advance would be withheld from their final paycheck (if they elected to receive a pay advance), disability benefits would end, life insurance would end, and accrued and unused vacation days would be paid out in a lump sum (Doc. 71-2).
The employees were also given a pamphlet setting forth their rights regarding unemployment benefits (Doc. 153-1, p. 14-17) and a contact form to fill out so Hamilton could reach the employees for return to work purposes (Doc. 71-2, p. 19; Doc. 71-2, p. 3; Doc. 71-4, p. 3).
Less than six months later, by August 1, 2016, 61 full-time employees had returned to work at Hamilton.
On March 8, 2016, Leeper filed this lawsuit on behalf of himself and a class of similarly situated individuals alleging that Defendants failed to provide a "60-day advanced notice of a 'mass layoff' of nearly 200 employees that occurred at its Hamilton County Coal Mine # 1 on February 5, 2016" in violation of the WARN Act (Doc.
*7651). Leeper alleges that Defendants instead provided less than twenty-four hours' notice that they were terminating their employment and that all benefits would cease as of the date of termination (Id. ). On January 4, 2017, Leeper filed an Amended Complaint, alleging an alternative theory that Defendants' actions on February 6, 2016 constituted a mass layoff because the employees experienced a reduction in hours of work of more than 50% during each month between February 6, 2016 and August 6, 2016 (Doc. 37).
Leeper's First Amended Class Action Complaint brings claims pursuant to Federal Rule of Civil Procedure 23(a), 23(b)(1), 23(b)(3), and 23(c)(4), and the WARN ACT,
Class 1:
All persons: (a) to whom Hamilton delivered the form letter attached hereto as Exhibit 14; or (b) whose employment at the Complex was terminated without cause within 90 days of February 6, 2016, without 60-days' advance written notice.
Subclass 1:
All persons: (a) in Class 1(a) who: (i) did not work at the Complex between February 6, 2016 and August 6, 2016; or (ii) were rehired at the Complex between February 6, 2016, and August 6, 2016, at a salary or regular hourly wage less than the person's salary or regular hourly wage at the Complex as of February 5, 2016; or (iii) were rehired at the Complex between February 6, 2016, and August 6, 2016, but worked fewer hours per week than the person's hours per week worked at the Complex as of February 5, 2016; or (b) in Class 1(b).
Class 2:
All persons who: (a) are in Subclass 1; or (b) experienced a reduction in hours of work at the Hamilton County Coal Mine # 1 Complex of more than 50 percent during each month of the 6-month period between February 6 and August 6, 2016.
(Doc. 82, p. 33-34).
On June 22, 2018, Defendants filed another Motion for Summary Judgment (Doc. 136). On that same date, Leeper also filed a Motion for Summary Judgment (Doc. 138). On August 7, 2018, Leeper filed a Motion to Amend Proposed Class Definitions (Doc. 157), seeking to amend the class definitions as follows:
Class 1 (the "Termination Class"):
The 182 persons identified on the list attached hereto as Exhibit ___, to whom Defendant Hamilton delivered the RIF Notice on February 5, 2016.
Class 2 (the "Reduction in Hours and Termination Class") :
The 165 persons identified on the list attached hereto as Exhibit ___, to whom Defendant Hamilton delivered the RIF Notice on February 5, 2016, and:
(A) who were not on leave for disability or workers' compensation as of February 5, 2016 and were offered reemployment starting August 1, 2016;
or
(B) to whom Defendant issued form letters dated July 26, 2016 stating that they were not going to be rehired beginning August 1, 2016, or whom Defendants rehired between February *7665 and July 31, 2016, at a lower wage than as of February 5, 2016.
(Doc. 157).
Leeper asserts that Defendants' actions with respect to Leeper and the Class 1 Members constituted a "mass layoff" because 182 full-time employees experienced an employment loss by way of a termination under
On August 13, 2018, the Court held a hearing on the motions (Doc. 160) and took the motions under advisement.
PRELIMINARY MATTER
The Court must first address the order in which to resolve the various motions. Generally, the Federal Rules of Civil Procedure require courts to rule on the issue of class certification "at an early practicable time," which is usually before deciding any merits questions. FED. R. CIV. P. 23(c). The Seventh Circuit has acknowledged, however, that there are situations where it might be appropriate to rule on summary judgment prior to addressing class certification. Cowen v. Bank United ,
At the hearing, defense counsel asked the Court to take up the motions for summary judgment prior to the motion for class certification. "In moving for summary judgment before the motion for class certification has been resolved, the defendant loses the advantage of a judgment that has preclusive effect against all putative suitors but saves the heavy expense of defending against a class action." McCarter v. Ret. Plan for Dist. Managers of Am. Family Ins. Grp. , No. 3:07-CV-00206-BBC,
One instance in which it may be appropriate for a Court to rule on summary judgment prior to class certification is "when there is sufficient doubt regarding the likelihood of success on the merits of a plaintiff's claims." Hakim v. Accenture U.S. Pension Plan ,
In light of the likelihood of success on the merits of Leeper's claims and the current posture of this case, the Court finds it to be in the interest of judicial economy to decide the motions for summary judgment prior to addressing class certification.
LEGAL STANDARD
Summary judgment is only appropriate if the movant "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Spurling v. C & M Fine Pack, Inc. ,
In determining whether a genuine issue of fact exists, the Court must view the evidence and draw all reasonable inferences in favor of the party opposing the motion. Bennington v. Caterpillar Inc. ,
"The ordinary standards for summary judgment remain unchanged on cross-motions for summary judgment: we construe all facts and inferences arising from them in favor of the party against whom the motion under consideration is made." Blow v. Bijora, Inc. ,
ANALYSIS
The Court begins its analysis by noting that it has federal question jurisdiction over this case pursuant to
The WARN Act requires employers to provide employees with written notice of impending "plant closings" or "mass layoffs" at least sixty days prior to the closing or layoffs.
The notice requirements of the WARN Act are triggered if there is a "mass layoff."
Leeper argues that Defendants failed to provide the necessary 60 days' notice to himself and the proposed class when at least 33 percent and more than 50 of Hamilton's employees experienced an employment *768loss on February 6, 2016. Specifically, Leeper argues that the employment loss he and the proposed class suffered was a termination as set forth in
Under Leeper's first theory, he argues that 158 full-time employees were terminated out of a total of 315 full-time employees, which constitutes more than 33 percent of the Hamilton workforce. Defendants respond that the employment loss was actually a layoff . They argue that, since the layoff did not exceed six months as required under
Thus, the Court must first address whether the employees suffered a termination or a layoff. If the Court finds that the undisputed facts show that the employment loss was a termination, then the termination was effective as of February 6, 2016, it affected all 158 full-time employees, and the subsequently rehired employees do not change that conclusion. If the Court finds that the undisputed facts show that the employment loss suffered was a layoff then, as Defendants argue, the layoff did not exceed six months, because 61 full-time employees returned to work within the six-month period (56 were fully restored to pre-layoff wages and 5 returned to work at reduced wages). Under this line of reasoning, there would have been no "employment loss" under
The guidelines from the Department of Labor explain that, for purposes of defining "employment loss," "termination" means the "permanent cessation of the employment relationship" and "layoff" means the "temporary cessation of that relationship."
The parties make much to-do about the terminology used in the written notice and supporting documentation given to the employees. The notice calls it a "temporary *769layoff," but the FAQs explain that a "temporary layoff" is treated as a "termination of employment for purposes of wages and benefits." Regardless of the terminology used by the employer, it is the actuality of the event that controls. Thus, the Court must look to whether it was a termination involving the "permanent cessation of the employment relationship" or a temporary layoff involving the "temporary cessation of that relationship." Of the 158 employees that received the written notice, 56 were fully restored to pre-layoff wages within six months.
Because 56 of the 158 full-time employees who received the written notice returned to work within six months, Leeper cannot establish that more than 33 percent of the 315 full-time employees experienced an employment termination. Instead, these workers suffered a layoff (or a "temporary cessation" of the employment relationship) because they returned to work at pre-layoff wages. While the Court is certainly empathetic to the employees' situation, the Warn Act "draws a lot of bright lines" and "[b]right lines must be enforced consistently or they won't work." Phason v. Meridian Rail Corp. ,
Leeper alternatively argues that Defendants' actions constituted a "reduction in hours of work of more than 50 percent in each month of any 6-month period," as set forth in
The relevant section of the WARN Act reads as follows: "the term 'employment loss' means (A) an employment termination, other than a discharge for cause, voluntary departure, 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."
Leeper argues that, under the plain language of the statute, an employment loss occurs when any one of the subsections apply, and the WARN Act clearly contemplates that an employee may suffer multiple employment losses, necessitating separate notices. Defendants respond by pointing out that the plain language of the statute distinguishes between the terms "layoff" and "reduction in hours" and argue that adopting Leeper's interpretation *770would render section subsection (B) meaningless.
Under the rules of statutory interpretation, courts "must first look to the language of the statute and assume that its plain meaning accurately expresses the legislative purpose." U.S. v. Miscellaneous Firearms, Explosives, Destructive Devices and Ammunition ,
The WARN Act's definition of "employment loss" separately and alternately delineates "termination," "layoff," and "reduction in hours," thereby indicating that such terms encompass distinct actions by the employer.
Leeper has not cited to any controlling authority indicating that the Court should read the statute in the way that he suggests. Leeper cites to Phason v. Meridian Rail Corp. ,
Phason involved a plant closing, which
The Seventh Circuit Court of Appeals agreed with the plaintiffs, holding that Meridian terminated the employees within the meaning of subsection (A) when it closed its operations and "severed all ties" to the workers on December 31, 2003.
The Court of Appeals briefly addressed Meridian's argument that subsection (C) did not apply.
Leeper also cites to Graphic Communs.Int'l Union, Local 31-N v. Quebecor Printing Corp. ,
The only case that appears to have considered this issue so far (perhaps because it is a relatively novel theory) is United Steel v. Ainsworth Engineered (USA), LLC , Civil No. 07-4731 ADM/RLE,
Overall, the Court concludes that the employees did not suffer an employment loss as that term is defined in § 2101(a)(6). Thus, any failure by Hamilton to provide 60 days' advanced notice before instituting the layoff did not constitute a violation of the WARN Act. In light of this finding, the Court need not address the argument that Alliance was not an employer under the WARN Act.
CONCLUSION
For the reasons explained above, the Court GRANTS
IT IS SO ORDERED.
The parties dispute whether Leeper was also an employee of Alliance for purposes of the WARN Act (Doc. 138, p. 23-26; Doc. 153, p. 23-26).
Some employees started returning to work as early as February 10, 2016 (Doc. 75, p. 93).
The numbers have changed over the course of the briefing, which has caused the Court some confusion. At the hearing on August 13, 2018, the undersigned explicitly confirmed with the attorneys on both sides that the above-mentioned statements regarding the total amount of full-time employees, the amount of full-time employees who received the written notice, the amount of full-time employees that returned to work (at full wages and reduced wages), the amount of full-time employees that voluntarily declined the opportunity to return to work, and the amount of full-time employees that were discharged for cause are accurate.
Specifically, these workers were called by Hamilton representatives regarding the opportunity to return to work (Doc. 121-6, p. 6). If the employee said "yes," then he was told to report to work on a certain date and that he would be required to undergo the necessary retraining and to submit to return-to-work screening (Doc. 121-7, p. 2). Employees also were required to fill out paperwork with human resources, such as an employee authorization form, which indicated that they were a "rehire," the hourly wage offered, and the start date (Doc. 124).
Specifically,
(3) the 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 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).
While Leeper previously referred to this argument as his alternative argument in his Motion for Partial Summary Judgment, he now refers to the termination argument as the "alternative argument" (Doc. 138, p. 21). Regardless, the Court will address the arguments in the above sequence.
A district court in the Northern District of Illinois similarly looked to this Department of Labor regulation in order to interpret the term "employment termination." See Acevedo v. Heinemann's Bakeries, Inc. ,
These employees received years-of-service credit for purposes of their 401(k) benefits as if they had no break in service during the temporary layoff period and did not lose vesting by virtue of having been placed on a temporary layoff (Doc. 136-6, p. 3; Doc. 153-11, p. 3).
As Defendants aptly point out, there are logical and practical reasons for distinguishing a "layoff" from a "reduction in hours." For example, where as in this case the employer implements a temporary layoff, the employee is free to obtain other employment during the layoff period. This differs from a situation in which employers could string workers along by continuing to regularly occupy their time while significantly reducing their work hours on an indefinite basis.
Subsection (C) also would encompass a layoff exceeding 5 ½ months, but falling short of 6 months, which many of the employees experienced in this case. That is because the moment the layoff exceeds 5 ½ months, the employee would have experienced a reduction in work hours of more than fifty percent in each month of a six-month period. Thus, if the Court construes the statute as Leeper suggests, employers would be told under subsection (B) that they need to give advanced notice under the WARN Act of a layoff expected to exceed six months, and they would have to read between the lines to learn under subsection (C) that they also need to give advanced notice under the WARN Act for a layoff expected to exceed 5 ½ months. The Court does not believe that Congress intended the WARN Act to operate in such a manner.
Section 2101(b)(1) provides: Notwithstanding any other provision of this Act, any person who is an employee of the seller (other than a part-time employee) as of the effective date of the sale shall be considered an employee of the purchaser immediately after the effective date of the sale.
The Court grants this motion only to the extent it relies upon the revised and corrected numbers as argued by counsel and agreed to by both sides at the hearing on August 13, 2018.
Reference
- Full Case Name
- Carl LEEPER, Individually and on Behalf of All Others Similarly Situated v. ALLIANCE RESOURCE PARTNERS, L.P., and Hamilton County Coal, LLC
- Cited By
- 1 case
- Status
- Published