Schroeder v. Global Aviation Holdings, Inc. (In re Global Aviation Holdings, Inc.)
Schroeder v. Global Aviation Holdings, Inc. (In re Global Aviation Holdings, Inc.)
Opinion of the Court
DECISION
This matter comes before the Court on the motion of Global Aviation Holdings,
Plaintiffs are airline pilots who were furloughed by World after the commencement of this bankruptcy case. Plaintiffs claim that World ordered a “mass layoff’ without giving 60 days notice as required under the WARN Act. This claim is premised on the assumption that the Kansas City, Missouri airport (“KMCI”), which they allege is World’s pilot base, constitutes a “single site of employment” for WARN Act purposes. Defendants point out that, while KMCI is used as a notional “base” to calculate contractual commuting time for pilots, World and its pilots have no physical connection with KMCI whatsoever. As such, Defendants argue that as a matter of law, KMCI is not a “single site of employment” at which there could have been a “mass layoff’ under the WARN Act. For the reasons set forth below, Defendants’ motion is granted, and these adversary proceedings are dismissed.
JURISDICTION
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b), and the Eastern District of New York standing order of reference dated August 28, 1996. This matter is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (B). This decision constitutes the Court’s findings of fact and conclusions of law to the extent required by Federal Rule of Bankruptcy Procedure 7052.
BACKGROUND
The following facts are undisputed.
World is a charter aircraft operator that does not generally fly fixed routes. WARN Act Debtors’ Statement of Material Facts, ECF No. 19
Prior to February 2008, the CBA required World to designate one “base” on each side of the Mississippi River, and each pilot was assigned one of the bases
In February 2008, World and IBT entered into a Letter of Agreement (the “LOA”), which changed the prior system of designating two national bases for these purposes. WAD Stmt. ¶ 5; Hiles Decl. ¶ 7; Pis. Stmt. ¶ 2; Goodpaster Decl. ¶ 3. The LOA provides, inter alia, that each pilot will be “based” at his “designated airport,” intended to be the airport closest to the pilot’s residence, for purposes of “[p]ay calculations,” “[c]ommereial movements, including the costs of the movement and required hotel accommodations,” and “[c]rew route construction.” WAD Stmt. ¶ 5; Hiles Decl. ¶ 7, Ex. A (“LOA”), at 1. The LOA further provides that pilots are shown to be “based at KMCI for electronic record keeping and bidline travel planning only,” and that “the construction of Regular Bidlines will incorporate a travel period from KMCI to the point of departure for the first live flight and will be used for planning purposes only.” LOA, at 1 (emphases added).
This means that, under the LOA, when constructing trips for pilots to bid on, World calculates commuting time for which the pilot flying the trip will be compensated by using KMCI as if it were the place from which the pilot will be commuting. WAD Stmt. ¶ 6. KMCI was chosen because it is located roughly in the center of the country, and therefore deemed reasonably equitable to all parties concerned. WAD Stmt. ¶ 7; Hiles Decl. ¶ 8. The LOA recognizes that a pilot’s actual commuting time to and from a job may well be longer or shorter than the theoretical commuting time from KMCI. LOA, at 1-2. Neither of the Debtors has facilities, operations, employees, representatives or agents at KMCI. WAD Stmt. ¶¶7, 8; Hiles Decl. ¶¶ 8, 9. World has not chartered a flight to or from KMCI since 2008, and few World pilots actually live in that area. WAD Stmt. ¶¶ 7, 8; Hiles Decl. ¶¶ 8, 9. All of World’s management personnel work from its offices in Peachtree, Georgia, and perform all flight crew assignments, supervision, and performance evaluations from that site. WAD Stmt. ¶ 9; Hiles Decl. ¶10.
On February 5, 2012, Defendants, together with other affiliated entities, filed petitions for bankruptcy relief under Chapter 11 of Title 11, U.S.C. In the months after filing its petition, World furloughed a number of pilots, including Plaintiffs, as part of a series of layoffs. WAD Stmt. ¶ 10. On July 31, 2012, Plaintiffs filed a class action complaint on behalf of all World pilots against Global, as the parent company of World. On August 3, 2012, Plaintiffs filed an amended complaint against Global, and a substantially identical complaint against World (together, the “Complaint”).
On October 19, 2012, Defendants filed motions for summary judgment in these two adversary proceedings. Defendants point out that in order to impose liability under the WARN Act, a plaintiff must show that an employer ordered a “mass layoff’ at a “single site of employment.” Defendants argue that because they have no physical presence or other relationship with KMCI, and because World pilots do not routinely travel to KMCI as part of their work, KMCI is not a “single site of employment” as defined by the regulations promulgated under the WARN Act, and the mere fact that KMCI is used as a notional “base” to calculate contractual commuting time for the pilots is insufficient to transform it into a “single site of employment.”
On November 7, 2012, Plaintiffs filed a memorandum in opposition to Defendants’ motion, arguing that KMCI is indeed Plaintiffs’ “single site of employment” with World. In support of their contention, Plaintiffs note that the LOA refers to KMCI as the “pilot base,” and point to a number of other documents in which World referred to KMCI as the “base” or “home base” for its pilots. Plaintiffs argue that Defendants’ view of a “single site of employment” is too narrow, and that such a construction would defeat the remedial purposes of the WARN Act. Plaintiffs advocate a more expansive interpretation of the term “single site of employment” that would include KMCI even absent any physical connection to it by World or its pilots.
SUMMARY JUDGMENT STANDARD
Summary judgment is 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.” Fed.R.Civ.P. 56(a); See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). When deciding a motion for summary judgment, the court’s function is not to resolve disputed issues of fact, but only to determine whether there is a genuine issue of material fact to be tried. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is considered material if it “might affect the outcome of the suit under the governing law.” Id. at 248, 106 S.Ct. 2505. No genuine issue exists “unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Id. at 249-50, 106 S.Ct. 2505 (citations omitted). On the other hand, in reviewing a motion for sum
The facts material to this motion are not in dispute.
DISCUSSION
The purpose of the WARN Act is to protect employees, their families, and their communities by providing advance notice of impending plant closures and mass layoffs, to facilitate employees’ transitions into unemployment, their search for alternative employment, and any training they may need to compete for new employment. See 20 C.F.R. § 639.1(a); Bader v. Northern Line Layers, 503 F.3d 813, 817 (9th Cir. 2007). The WARN Act provides, in relevant part, that:
An employer shall not order a ... 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 employees 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 or entity designated by the State to carry out rapid response activities under section 2864(a)(2)(A) of this title, and the chief elected official of the unit of local government within which such closing or layoff is to occur.”
29 U.S.C. § 2102(a). A “mass layoff’ is defined as “a reduction in force which ... results in an employment loss at [a] single site of employment during any 30-day period,” of at least 50 fulltime employees constituting 33% of the workforce, or 500 fulltime employees. 29 U.S.C. § 2101(3) (emphasis added). The Secretary of Labor is authorized to promulgate regulations to carry out these statutory provisions. See 29 U.S.C. § 2107. An employer who violates the WARN Act is liable to compensate aggrieved employees for each day of the violation. See 29 U.S.C. § 2104.
Under the regulations, the term “single site of employment” is specially defined in the context of traveling employees, such as airline pilots:
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. § 639.3(i)(6). This provision covers “traveling workers who report to but do not work out of a particular office.” See Bader, 503 F.3d at 819 (citing Worker Adjustment and Retraining Notification, 54 Fed.Reg. 16,042, 16051 (Apr. 20, 1989)). For these employees, the regulation sets forth three criteria for establishing a “single site of employment”: (1) the site to which employees were assigned as their home base; (2) the site from which their work is assigned; or (3) the site to which the employees report. See Id. at 819. Any of one of these alternatives may be used to establish a “single site of employ
Plaintiffs acknowledge that KMCI is not a “single site of employment” under the second or third of the three criteria set forth in § 639.3(i)(6), as KMCI is not the site from which the pilots’ work is assigned or the site to which the pilots report. They further acknowledge that neither of the Defendants has facilities, operations, employees, representatives or agents at KMCI. However, Plaintiffs contend that KMCI should be considered the pilots’ “home base” under the first of the three criteria because KMCI is the pilots’ “paper base.” Plaintiffs’ Memorandum in Opposition, ECF No. 21 (“Opposition Brief’), at 8. Plaintiffs assert that pursuant to the LOA, World “has only one pilot base, its base at KMCI.” Opposition Brief 8. Plaintiffs also point to various business records in which World referred to KMCI as the pilots’ “base,” including pay records identifying KMCI as a departure and arrival station (Pls.Stmt., Ex. B, Ex. 1); the furlough notices identifying Plaintiffs’ base as KMCI (Pls.Stmt., Ex. B, Ex. 2); Defendants’ pilot seniority list (Pls.Stmt., Ex. A, Ex. 3); and various other documents listing KMCI as the pilots’ “base.”
As a preliminary matter, Plaintiffs’ contention that the LOA establishes KMCI as the pilots’ sole “base” is inaccurate; the LOA provides two “bases” to be used in connection with bidding and payment calculations. LOA, at 1. The LOA first provides that each pilot will be assigned a “designated airport,” intended to be the airport closest to each pilot’s residence. LOA, at 1; WAD Stmt. ¶5. Under the terms of the LOA, “the Company will base each crewmember at his designated airport for purposes of ... [p]ay calculations[,] Commercial movements, including the costs of the movement and required hotel accommodations!, and] [c]rew route construction.” LOA, at 1. Secondly, the LOA provides that “the Company will show all crewmembers based at KMCI for electronic record keeping and bidline travel planning only,” and that “construction of Regular Bidlines will incorporate a travel period from KMCI to the point of departure to the first live flight and will be used for planning purposes only.” LOA, at 1. The LOA thus designates KMCI as a theoretical starting point for computing distances when World prepares trips for pilots to bid on, and for purposes of calculating pilots’ compensation and time off for commuting to and from their jobs. In order to determine whether KMCI’s status as a notional base for these purposes is sufficient to establish KMCI as a “single site of employment” under the WARN Act, it is necessary to understand the term “home base” as used in § 639.3(i)(6).
The WARN Act regulations do not define “home base,” but courts have uniformly adopted the view that employees must have some physical presence at a site for it to constitute a “home base.” The first case to address the meaning of “home base” under § 639.3(f)(6) was Teamsters Local Union 413 v. Driver’s, Inc., 101 F.3d 1107 (6th Cir. 1996). There, the Sixth Circuit determined that eleven terminals maintained by a trucking company throughout the United States did not constitute a “single site of employment” under the WARN Act, concluding that the purposes and framework of the WARN Act and its regulations demonstrated that
In Wiltz v. M/G Transport Svcs., Inc., 128 F.3d 957 (6th Cir. 1997), the Sixth Circuit was again called upon to consider the meaning of “single site of employment” for traveling workers. There, furloughed towboat crewmembers argued that the towboat company’s headquarters in Paducah, Kentucky, rather than the individual towboat-barges on which the crewmembers worked, constituted the crewmembers’ “single site of employment” for WARN Act purposes. The Sixth Circuit agreed, rejecting the district court’s conclusion that each of the towboat-barges constituted a separate “branch office.” Wiltz, 128 F.3d at 961-62. Acknowledging that where traveling employees are concerned, the § 639.3(i)(6) criteria may point to a site where there is minimal geographic impact, the court distinguished Driver’s, Inc., where the individual terminals to which the truckers were assigned constituted a “single site of employment” under other provisions of § 639.3(i): “[bjecause the true focus was the terminal, and not the trucks themselves, the analysis of subpart (6), while applicable, was not dispositive ... Thus, Driver’s, Inc. ’s presumption that absence of community impact cuts against a finding of ‘single site’ is not fatal to plaintiffs’ claims in this case.” Id. at 963. Nonetheless, in finding that the company’s headquarters was a “single site of employment,” the court cited, among other things, the physical connection between the crewmembers and headquarters: the court noted that 80% of the crews reported to Paducah for assignment to towboats, as well as the fact that all crew assignments were made from the Paducah office and that towboat crewmembers reported to the port engineer there. Id. at 962.
In Ciarlante v. Brown & Williamson Tobacco Corp., 143 F.3d 139 (3d Cir. 1998), the Third Circuit reviewed a WARN Act claim brought by Brown and Williamson’s traveling sales representatives who were divided into geographical districts throughout the United States where they spent the majority of their time, but who also regularly contacted the company’s administrative center in Virginia by telephone to check messages, order materials and supplies, receive instructions, and report to supervisors. Ciarlante, 143 F.3d at 141-43. In concluding that the Virginia location did not constitute the employees’ “home base” under § 639.3(f)(6), the Court found 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.” Ciarlante, 143 F.3d at 146 (citing Driver’s, Inc., 101 F.3d at 1110; Wiltz, 128 F.3d at 961-62).
The conclusion that physical connection to a location is essential to a finding that the location is a worker’s “home base” was also adopted by the Ninth Circuit in Bader v. Northern Line Layers, 503 F.3d 813, 817 (9th Cir. 2007). There, furloughed construction workers argued that the compa
Plaintiffs have not cited, nor has this court been able to find, any authority that would support the view that a site may be considered an employee’s “home base” under § 639.3(f)(6) unless the employee is physically present at the site “at some point during a typical work period.” Bader, 503 F.3d at 819-20. In order to establish a “home base” under the WARN Act, a plaintiff must at the very least be able to show a physical connection between the employee and the location in question. While the precise level of connection necessary to establish a “home base” may vary from case to case, it is clear that Defendants’ use of KMCI as a notional base for purposes of preparing bids on jobs, and for calculating pilots’ commuting compensation and required time off, cannot establish it as a “home base” in any reasonable sense of the term. Plaintiffs’ employment has no actual connection to KMCI whatsoever, and World does not maintain a presence there in any capacity. Rather, KCMI’s status as a “base” is fictional: KMCI is an arbitrary point on a map used as an imaginary starting and ending place for World’s pilots, for the sole purpose of simplifying bidline planning and calculating commuting compensation and required time off. In light of the purposes of the WARN Act and the regulatory provisions outlined above, there is no basis for considering KMCI a “home base” under the WARN Act regulations.
The existence of World documents referring to KMCI as its pilot “base” or “home base” does not alter this conclusion. The facts concerning the World pilots’ lack of any actual connection to KMCI are undisputed, and the use of these terms in Defendants’ business records cannot transform KMCI into a “single site of employment” for WARN Act purposes.
Finally, Plaintiffs argue that KMCI should be considered the pilots’ “single site of employment” under the “catch-all” provision found in 20 C.F.R. § 639.3(i)(8), which provides that “the term ‘single site of employment’ may also apply to truly unusual organizational situations where the above criteria do not apply.” Plaintiffs contend that, unlike other commercial airlines, World flies its pilots to its customers, which makes it a “truly unusual” organization to which the “catch-all” provision may apply. This contention must be rejected, as this is not a situation where none of the other criteria set forth in § 639.3(f) apply. Section 639.3(i)(6) provides that the site from which employees’ work is assigned, or the site to which they report, may alternatively constitute a “single site of employment.” Plaintiffs concede that all World management personnel work from World’s facility in Peachtree, Georgia, and that all flight crew assignments, supervision, and performance evaluations originate from there. WAD Stmt. ¶ 9. By its terms,
CONCLUSION
For the reasons set forth above, Defendants’ motion is granted, and the complaints in these two adversary proceedings are dismissed. A separate order will issue.
. References to ECF Docket numbers are to the Schroeder, et al. v. Global Aviation case, No. 12-1227-cec.
. Plaintiffs admit all factual assertions contained in the WARN Act Debtors’ Statement of Material Facts. See Plaintiffs’ Response to WARN Act Debtor’s Consolidated Statement of Material Facts.
. Neither party has submitted evidence that precisely defines these terms, but it is undisputed that they relate to the bidding and compensation schemes described above.
. The only difference between the two complaints is the additional allegation in the complaint against Global that World and Global are a "single employer” of the class members under the WARN Act. Global does not dispute
. Citations to the paragraphs in the Complaint are to the complaint filed in Schroeder, et al. v. Global Aviation, No. 12-1227-cec.
Reference
- Full Case Name
- In re GLOBAL AVIATION HOLDINGS, INC., Debtors. Daniel Schroeder and Charles Martin, Jr., individually and on behalf of all others similarly situated v. Global Aviation Holdings, Inc., Defendant Daniel Schroeder and Charles Martin, Jr., individually and on behalf of all others similarly situated v. World Airways, Inc.
- Cited By
- 2 cases
- Status
- Published