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Baker v. Washington Group International

March 14, 2008


The opinion of the court was delivered by: Judge Conner


The dispute in the instant case centers around the decision of defendant Washington Group International, Inc. ("WGI") to discontinue the employment of the eighty plaintiffs.*fn1 Plaintiffs assert a claim pursuant to the Worker Adjustment and Retraining Notification Act ("WARN Act"), 29 U.S.C. §§ 2101-2109, and a claim of fraudulent inducement pursuant to state law.*fn2 Presently before the court is WGI's motion for partial summary judgment (Doc. 23) on plaintiffs' WARN Act claim. For the reasons that follow, the motion for partial summary judgment (Doc. 23) will be granted.

I. Statement of Facts*fn3

Plaintiffs are former employees of WGI's Mechanicsburg, Pennsylvania facility, which performed inventory, planning, and purchasing functions for IBM on a contract basis. (Doc. 1 ¶¶ 3-82, 85-86; Doc. 10 ¶¶ 3-82, 85-86.) WGI's contract with IBM was originally scheduled to expire on December 31, 2005, but was later extended for a period of three months to March 31, 2006. (Doc. 28, Ex. A.) According to WGI, on February 28, 2006, IBM advised WGI that its contract would not be renewed for an additional term and would instead be assumed by Manpower, Inc.. (Doc. 24 ¶¶ 5-6; Doc. 35 ¶ 6.) The following day, WGI's Director of Operations, David Rose, communicated with Manpower representatives, who confirmed that the company wished to continue to use WGI's employees to service the contract with IBM. (Doc. 24 ¶¶ 1, 7; Doc. 35 ¶¶ 1, 7.) On March 3, 2006, the 131 affected WGI employees*fn4 were verbally advised that the company had lost its contract with IBM and that they would no longer by employed by WGI effective March 31, 2006. (Doc. 1 ¶¶ 87, 89; Doc. 10 ¶¶ 87, 89; Doc. 24 ¶ 13; Doc. 35 ¶ 13.) A representative of Manpower attended the March 3, 2006 meetings and informed the affected WGI employees that they would be offered employment with Manpower and would maintain their current positions and salaries. (Doc. 24 ¶¶ 9, 10; Doc. 35 ¶¶ 9, 10.) On March 6, 2006, WGI provided the affected employees with additional information concerning severance entitlement and benefit termination. (Doc. 24 ¶ 12; Doc. 35 ¶ 12.)

Ultimately, Manpower hired 104 of WGI's former employees, including sixty-five of the eighty plaintiffs in the instant case,*fn5 to service the IBM contract. (Doc. 24 ¶¶ 17-19, 32; Doc. 35 ¶¶ 17-19, 32.) The employees hired by Manpower earned the same hourly wage as they had when they were employed by WGI and continued to work a Monday through Friday schedule. (Doc. 24 ¶¶ 20-23; Doc. 35 ¶¶ 20-23.) The employees hired by Manpower suffered no gap in employment, as they were terminated by WGI on March 31, 2006 and re-hired by Manpower on April 1, 2006. (Doc. 24 ¶ 24.)

Plaintiffs now claim that WGI's actions violated the WARN Act, which requires employers to provide their employees with sixty days' notice in advance of a plant closing or mass layoff. (See Doc. 1 ¶¶ 99-118); see also 29 U.S.C. §§ 2101-2109. On May 25, 2007, WGI filed the instant motion for partial summary judgment, asserting that plaintiffs do not qualify for the protections of the WARN Act because they did not suffer an employment loss. (See Doc. 23.) The motion has been fully briefed and is ripe for disposition.

II. Standard of Review

Through summary adjudication the court may dispose of those claims that do not present a "genuine issue as to any material fact" and for which a jury trial would be an empty and unnecessary formality. See FED. R. CIV. P. 56(c). It places the burden on the non-moving party to come forth with "affirmative evidence, beyond the allegations of the pleadings," in support of its right to relief. Pappas v. City of Lebanon, 331 F. Supp. 2d 311, 315 (M.D. Pa. 2004); FED. R. CIV. P. 56(e); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). This evidence must be adequate, as a matter of law, to sustain a judgment in favor of the non-moving party on the claims. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-89 (1986); see also FED. R. CIV. P. 56(c), (e). Only if this threshold is met may the cause of action proceed. Pappas, 331 F. Supp. 2d at 315.

III. Discussion

The WARN Act "provides protection to workers, their families and communities by requiring employers [of 100 or more employees] to provide notification 60 calendar days in advance of plant closings and mass layoffs." 20 C.F.R. § 639.1; see also Palmer v. Reese Bros., Inc., 160 F. App'x 173, 175 (3d Cir. 2005). The requirement of advance notice is intended 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. Employers who violate the WARN Act's notification requirements are liable to each affected employee for "back pay for each day of the violation." 29 U.S.C. § 2104(a)(1); see also Palmer, 160 F. App'x at 175-76.

To establish a prima facie case pursuant to the WARN Act, a plaintiff must prove that: (1) "the organization employed at least 100 employees, excluding part-time employees" as of the date notification was due, and (2) the organization effected "a plant closing or mass layoff as defined by the Act." Palmer, 160 F. App'x at 176; see also 29 U.S.C. §§ 2101(a)(1), 2102(a); Johnson v. Telespectrum Worldwide, Inc., 29 F. App'x 76, 77 (3d Cir. 2002). In the instant case, it is undisputed that WGI employed over 100 employees on the date that notification was due. Therefore, the dispositive question before the court is whether WGI's actions constituted a plant closing or mass layoff.

A plant closing is defined as "the permanent or temporary shutdown of a single site of employment . . . if the shutdown results in employment loss . . . during any 30-day period for 50 or more employees excluding any part-time employees," 29 U.S.C. § 2101(a)(2), while a mass layoff is defined as "a reduction in force which is not the result of a plant closing[] and [which] results in an employment loss at [a] single site of employment during any 30-day period for at least 33 percent of the employees (excluding any part-time employees) and at least 50 employees (excluding any part-time employees)," id. § 2101(a)(3). The definitions of both plant closing and mass layoff turn on the phrase "employment loss," which is defined 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." Id. § 2101(a)(6).

In the instant case, WGI argues that its actions did not trigger WARN Act notice requirements because fifty or more employees did not suffer an "employment loss." Recognizing the WARN Act's remedial purpose, courts have utilized a "practical, effects-driven analysis of whether a break in employment actually occurred" to determine whether a company's actions resulted in an employment loss. Wiltz v. M/G Transp. Servs., Inc., 128 F.3d 957, 964 (6th Cir. 1997); see Dingle v. Union City Chair Co., 134 F. Supp. 2d 441, 444 n.2 (W.D. Pa. 2000) (citing Moore v. Warehouse Club, Inc., 992 F.2d 27, 29-30 (3d Cir. 1993)); Gonzalez v. AMR Servs. Corp., 68 F.3d 1529, 1531 (2d Cir. 1995); New York's Health & Human Serv. Employees Union v. Grossman, No. 02-6031, 2007 WL 2907386, at *21 (E.D.N.Y. Oct. 3, 2007); Kephart v. Data Systems Intern., Inc., 243 F. Supp. 2d 1205, 1224 (D. Kan. Jan. 16, 2003); Local 819, Int'l Bhd. of Teamsters, AFL-CIO v. Textile Deliveries, Inc., No. 99-1726, 2000 WL 1357494, at *4 (S.D.N.Y. Sept. 20, 2000). Using this practical, effects-driven analysis, the court will address the issue of whether an employment loss resulted from WGI's actions.

Of the WARN Act's three alternative definitions of employment loss, see 29 U.S.C. § 2101(a)(6), only the phrase "employment termination" is implicated by the facts of the instant case.*fn6 Because the term "employment termination" is not defined by the WARN Act, courts must consider principles of statutory construction to ascertain its meaning. One such principle of statutory construction is that "words will be interpreted as taking their ordinary, contemporary, common meaning." Moore, 992 F.2d at 29 (3d Cir. 1993) (quoting Perrin v. United States, 444 U.S. 37, 42 (1979)). The United States Court of Appeals for the Third Circuit has held that the "ordinary meaning of the word 'terminate' in an employment context is . . . '[t]o discontinue ...

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