Opinion
No. C 03-03667 SI.
September 7, 2004
ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY ADJUDICATION AND GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
Now before the Court are defendants' motion for summary adjudication and plaintiff's motion for summary judgment. The parties agreed to waive oral argument. Having carefully considered the arguments of counsel in the papers submitted, the Court DENIES defendants' motion for summary adjudication and GRANTS plaintiff's motion for summary judgment for the reasons set forth below.
BACKGROUND
This case arises out of defendants' discharge of employees, allegedly without sufficient advance notice, following the sale of defendants' waste management operations. Defendants' Motion at 2. As the labor union that represented the union workers of defendant Integrated Environmental `Systems, Inc. (IES), plaintiff argues that the defendants have violated the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101 et seq. (WARN or the WARN Act). The parties have stipulated that IES terminated forty-six employees "within a ninety-day period as a result of the [December 10, 2001] sale of IES's assets to Stericycle, and at the time of their termination they were not `part-time employees' as defined in 29 U.S.C. § 2101 (a)(8)." Amended Joint Stipulation to Facts in Support of Cross Motions (Joint Stip.) at 2.
As defendants explain, defendant "Integrated Environmental Systems, Inc. [IES] was renamed Envirocal Systems, Inc." and "IES is a wholly owned subsidiary of Norcal Waste Systems, Inc." Motion at 1, n. 1. Defendants have used "IES" in their moving papers, so the Court will do the same.
The parties have further stipulated that five employees, namely Louis Arroyo, Welton Duffy, Kenneth Ervin, Frank Rice, and Udraka Jackson, "were on unpaid disability leave prior to and at the time of the sale of IES's assets to Stericycle." Joint Stip. at 3. All five employees remained on disability leave on December 11, 2001, when IES's assets were sold to Stericycle. Joint Stip. at 2-3. Arroyo's disability leave began on July 10, 2001; Duffy's disability leave began on April 28, 2000; Ervin's disability leave began on November 30, 1998; Rice's disability leave began on December 15, 1998; and Jackson's disability leave began on April 4, 1998. Joint Stip. at 3. "While on disability leave these workers did not perform any work for IES or any other Defendant in this action." Joint Stip. at 4. IES maintained each of these five workers on its payroll through December 11, 2001. Id. A notation for "unpaid worker's compensation leave" appeared in the description column of the payroll records IES maintained when the five employees were on disability leave. Id. The records list the hours worked for each employee as "80.00" for a "standard workweek per two-week pay period." Id. The payroll records also indicate a "termination date" of "12/11/01." Id. (internal quotations omitted). As Exhibit A to the Joint Stipulation, the parties have submitted the "Collective Bargaining Agreement [CBA] which governed the terms and conditions of the employment" of these five employees "at the time of their termination." Id. Now before the Court is defendants' motion for summary adjudication and plaintiff's motion for summary judgment, in which the sole issue before the Court is whether the five inactive employees were properly characterized as "part-time" under WARN. If the employees were properly characterized as "part-time," plaintiff could not, as a matter of law, establish a statutory "plant closing" or "mass layoff."
LEGAL STANDARD
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the initialburden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323; 106 S.Ct. 2548, 2553 (1986). The moving party, however, has no burden to negate or disprove matters on which the non-moving party will have the burden of proof at trial. The moving party need only point out to the Court that there is an absence of evidence to support the non-moving party's case. See id. at 325.
The burden then shifts to the non-moving party to "designate `specific facts showing that there is a genuine issue for trial.'" See Celotex Corp., 477 U.S. at 324 (quoting Fed.R.Civ.P. 56(e)). To carry this burden, the non-moving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586; 106 S.Ct. 1348, 1356 (1986). "The mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252; 106 S.Ct. 2505, 2512 (1986). In a motion for summary judgment, the evidence is viewed in the light most favorable to the non-moving party, and all justifiable inferences are to be drawn in its favor. See id. at 255. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ruling on a motion for summary judgment." Id. Conclusory, speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment. Thornhill Pub. Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). Hearsay statements found in affidavits are inadmissible. See, e.g., Fong v. American Airlines, Inc., 626 F.2d 759, 762-63 (9th Cir. 1980).
In a motion for partial summary judgment, where the moving party has shown that there is no genuine issue of material fact as to the defense or claim, and the non-moving party cannot demonstrate that such an issue does exist, a court can grant summary judgment for the moving party "upon all or any part thereof." Wang Lab., Inc. v. Mitsubishi Elec., Am., Inc., 860 F. Supp. 1448, 1450 (C.D. Cal. 1993). The granting of any part of the summary judgment is commonly known as the granting of a "partial summary judgment." American Nurses' Ass'n v. Illinois, 783 F.2d 716, 729 (7th Cir. 1986). For partial summary judgments, no actual judgment is entered. Instead, "[a] partial summary judgment is merely an order deciding one or more issues in advance of trial. . . ." Minority Police Officers Ass'n v. South Bend, 721 F.2d 197, 200 (7th Cir. 1983). The judge reserves the power to alter the matters adjudicated any time prior to entry of final judgment. See St. Paul Fire Marine Ins. Co. v. F.H., 55 F.3d 1420, 1425 (9th Cir. 1995).
DISCUSSION
A. The WARN Act
The WARN Act requires certain enterprises to provide advance notice of a "plant closing" or "mass layoff" if at least fifty employees, excluding statutory "part-time" employees, will lose their jobs. 29 U.S.C. § 2102 provides that:
(a) . . . An employer shall not order a plant closing or 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 [designated State dislocated worker unit] . . . and the chief elected official of the unit of local government within which such closing or layoff is to occur.20 C.F.R. § 639.2 explains that:
WARN requires employers who are planning a plant closing or a mass layoff to give affected employees at least 60 days' notice of such an employment action. While the 60-day period is the minimum for advance notice, this provision is not intended to discourage employers from voluntarily providing longer periods of advance notice. Not all plant closings and layoffs are subject to the Act, and certain employment thresholds must be reached before the Act applies. WARN sets out specific exemptions, and provides for a reduction in the notification period in particular circumstances. Damages and civil penalties can be assessed against employers who violate the Act.29 U.S.C. § 2101 provides statutory definitions and exclusions from the definition of the loss of employment. According to 29 U.S.C. § 2101 (2):
the term "plant closing" means the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees (emphasis added).
Subsection (3) of 29 U.S.C. § 2101 defines "mass layoff" as:
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) (emphasis added).
A separate part of the statute extends the 30-day period to 90 days in some instances. According to defendants, "[w]hether the applicable period in this case is 30 days or 90 days is immaterial. Defendants therefore do not dispute, for purposes of this motion only, Plaintiff's contention that the applicable counting period is 90 days." Defendants' Motion at 6, n. 2.
"[A]ffected employees" under the statute are those "employees who may reasonably be expected to experience an employment loss as a consequence of a proposed plant closing or mass layoff by their employer." 29 U.S.C. § 2101 (5). The statute defines a "part-time employee" as "an employee who is employed for an average of fewer than 20 hours per week or who has been employed for fewer than 6 of the 12 months preceding the date on which notice is required." 29 U.S.C. § 2101 (8).
According to defendants, "the inactive workers are properly characterized as `part-time,' and thus . . . no `plant closing' or `mass layoff' occurred as a matter of law." Defendants' Motion at 7. Plaintiff, on the other hand, argues that the five employees on disability leave at the time of their termination are not properly characterized as "part-time" employees under WARN. The Court must determine whether defendants terminated fifty employees under WARN's provisions.
B. Employees on disability leave are not properly characterized as "part-time" employees
Reported cases have not squarely addressed the issue presently before the Court, nor do the WARN Act or the regulations interpreting it define the status of employees on disability leave. According to defendants, however, the statute's other definitions are sufficiently clear and unambiguous to make judicial attention to the issue unnecessary. Desert Palace, Inc., dba Caesars Palace Hotel Casino v. Costa, 539 U.S. 90, 98 (2003). Defendants argue that the five employees on disability leave at the time of their terminations are undoubtedly properly characterized as "part-time" employees under WARN's provisions because under the "plain language of the Act . . . to avoid being excluded as `part-time,' the employee must have averaged at least 20 hours per week during the 90-day period immediately preceding the putative notice date" of October 12, 2001, i.e., sixty days before December 11, 2001. Defendants' Motion at 7-8. Since plaintiff has conceded that the five workers at issue did not work at all, much less for an average of 20 hours per week, during any possible construction of the 90-day period, defendants conclude that the workers "were `part-time' and therefore properly excluded from the `50 or more employees' count." Id. at 8. Furthermore, four of the five employees at issue started their leaves more than six months before the putative notice date of October 12, 2001, also indicating to defendants that these four employees are properly characterized as "part-time," since "they could not have worked six of the 12 months preceding October 12, 2001." Id. at 11.
Defendants also rely on legislative history concerning the definition of a "part-time" employee. The House/Senate Conference Report on the WARN Act's final text explains:
The Senate amendment defines a "part-time employee" as one who is hired to work an average of fewer than fifteen hours per week. It also defines a "seasonal employee" as one who is hired for a period not to exceed three months per year to do work that is seasonal in nature. The Conference Agreement combines these concepts into a single definition of "part-time" employee, which includes employees who work fewer than twenty hours per week or who have worked fewer than six months in the twelve-month period prior to the point at which the employer is required to serve notice. The definition of "seasonal employee" is therefore eliminated. Defendants' motion at 8, citing H.R. Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 1045 (1988), reprinted in 1988 USCCAN. 2078, 2080.
However, mention of employees absent from work because ofdisability is noticeably absent and the quotation reveals Congress' intent to eliminate the "seasonal employee" category, but says nothing about a full-time employee on disability leave.
Defendants support their argument that the five employees on disability leave must be counted as part-time employees by citingMoore v. The Warehouse Club, Inc., 992 F.2d 27, 31-32 (3rd Cir. 1993). That case, however, differed significantly from the case at hand, since it concerned a student who worked when it suited her academic and personal schedules. The court looked to the most recent 90 day period to calculate the student-employee's average hours worked, causing her "number of hours [to] fall short of the required 20-hour per week minimum." Moore, 992 F.2d at 32 (brackets added). Defendants seek to apply Moore to this case and to treat the full-time employees on unpaid workers compensation leave as part-time employees, arguing that "the inactive [i.e., disabled] employees are analogous to seasonal employees." Defendants' motion at 10. This Court, however, does not find the employees on disability leave "analogous to seasonal employees." The Moore court properly regarded the student as a part-time employee, since she worked very few, or very many hours, according to her personal and academic needs. The employees in the instant case have not made such choices; instead, they are full-time employees, who were not working at all because they were on disability leave as a result of workplace injuries.
According to defendants, WARN's "statutory structure demonstrates Congress' intent that WARN be triggered only if the job action meets a minimum threshold level of loss of employment opportunities." Defendants' Motion at 12-13. Defendants conclude that "[i]t is entirely consistent with these clear provisions to . . . disregard the termination of an employee who has performed no work for the company for years because of an injury." Defendants' motion at 13 (emphasis in the original).
Plaintiff, on the other hand, argues that the employees on disability leave are not properly characterized as "part-time" because they legitimately expected to return to work full-time for defendants. To support its position, plaintiff cites provisions of the CBA, which afforded the employees on disability leave certain rights and benefits, and analogous case law holding that laid-off employees do not properly count as "part-time" employees if they had a legitimate expectation of returning to full-time employment with defendants. See Kildea v. Electro-Wire Products, Inc., 144 F.3d 400, 404 (6th Cir. 1998);Butler v. Giant Markets, 960 F.Supp. 884, 891 (M.D.Pa. 1997) ("An employee on temporary lay-off with a reasonable expectation of being recalled is a covered employee under WARN."). Plaintiff also cites regulations promulgated under WARN, namely 20 C.F.R. § 639.1 et seq. and asks the Court to "take guidance from other federal statutes, notably the National Labor Relations Act (`NLRA'), under which employees on disability leave are treated as employees." Id.
Plaintiff argues that "[t]he NLRB has long held that employees on sick or disability leave share and retain a substantial interest in the terms and conditions of employment, such that that employee is eligible to vote in representation and decertification elections conducted by the board." Plaintiff's motion at 12. Plaintiff concludes that "[u]nder Board law the five employees at issue here would be considered employees eligible to vote in a representation election because they were never discharged or resigned, they retained their seniority and were kept on the company's payroll records." Id. at 13. While the Court does not rely on this line of reasoning, the Court finds plaintiff's arguments persuasive.
Plaintiff emphasizes that 20 C.F.R. § 639.3 (a) provides that "when determining whether an employer is covered by WARN, inactive employees, including employees on [temporary] layoff and on leave, are to be counted as `employees,' and are therefore not excluded as `part-time employees.'" Plaintiff's Oppo. at 2. A worker on temporary layoff or on leave must have a reasonable expectation of recall to be counted as an employee. 20 C.F.R. § 639.3(a)(1). An "employee has a `reasonable expectation of recall' when he/she understands, through notification or through industry practice, that his/her employment with the employer has been temporarily interrupted and that he/she will be recalled to the same or to a similar job." Id. Thus plaintiff "urges the Court to apply this regulation to WARN's plant closing provision — as both provisions employ identical language — and hold that employees on leave are not excluded as `part-time employees.'" Plaintiff's Oppo. at 2.
This Court must "look first to the plain language of the statute." Alarcon v. Keller Ind., Inc., 27 F.3d 386, 389 (9th Cir. 1994). If the language of the statute is unclear, the Court considers legislative history and "will also consider the interpretation of the statute contained in the regulating agency's regulations. . . ." Id. The literal language of the statute at issue is clear, but it fails to answer the question the parties present to the Court. Various WARN regulations distinguish among part-time employees, inactive employees, and active employees. For example, in interpreting the thirty-three percent requirement of 29 U.S.C. §§ 2101(a)(3)(B)(i)(I) (II) concerning mass layoffs, the WARN regulations explain that the thirty-three percent provision is calculated as "[a]t least 33 percent of the active employees, excluding part-time employees." 20 C.F.R. § 639.3(c)(i). As plaintiff argues, "this distinction would have been altogether unnecessary if inactive employees were considered `part-time employees' under WARN, as such employees are already statutorily excluded from the `33%' and `fifty-employee' thresholds." Plaintiff's Oppo. at 5. Thus the regulations suggest that "the DOL was aware of the issue of inactive employees and it clearly incorporated them into the definition of `employees' and not `part-time employees.'" Id., citing 20 C.F.R. § 639.3(a).
Furthermore, "[c]ollective bargaining agreements may be used to clarify or amplify the terms and conditions of WARN, but may not reduce WARN rights." 20 C.F.R. § 639.1(g). In the instant case, the five employees on disability leave retained significant employment rights, most notably the right to return to their jobs, or comparable jobs, for three years following a work-related injury. Joint Stip. Ex. A, § 5(a). A notation for "unpaid worker's compensation leave" appeared in the description column of the payroll records IES maintained when the five employees were on disability leave. Joint Stip. at 4. On the notice date of October 12, 2001, only one of the employees at issue, namely Jackson, had been on disability leave for more than three years, since Jackson's disability leave began April 4, 1998. Thus four of the employees at issue had guaranteed rights of return under the CBA.
Defendants have objected to portions of the declaration of Antonio Christian, which interprets the CBA. The Court overrules the evidentiary objections, since the Court did not rely on the declaration. Instead, the Court itself interpreted the CBA.
Ervin's disability leave began November 30, 1998, less than three years before the notice date, although more than three years before the subsequent date of sale, and his guaranteed right of return did not expire until December 1, 2001. On the notice date, Ervin had a guaranteed right of return under the CBA; he might have returned to work before the date of sale. The dates of disability for the other three employees at issue were less than three years before either the notice date or sale date (December 15, 1998, Rice; April 28, 2000, Duffy; July 10, 2001, Arroyo).
"The purpose of the WARN Act is to ensure that workers receive advance notice of plant closures and mass layoffs that affect their jobs." Alarcon, 27 F.3d at 388, citing 20 C.F.R. § 639.1(a). "This provides workers with time to adjust to their loss of employment, to seek and obtain alternative jobs, and where necessary, to seek retraining to allow successful competition in the job market." Id. For purposes of defining "employer" and "employee," 20 C.F.R. § 639.3(a)(1) defines "an `employee' as an individual who is either (1) actively working or (2) temporarily laid off, or on leave, with a reasonable expectation of recall." Kildea v. Electro-Wire Products, Inc., 144 F.3d 400, 405 (6th Cir. 1998). The statute should not be applied mechanically to equate a full-time employee not actively working because of a work-related injury with a part-time employee. Instead, at least four, and perhaps all five, of the employees at issue were full-time employees, although they were not actively working because they were on disability leave.
The full-time employees on disability leave were improperly regarded as "part-time" employees; thus defendants employed at least 50 employees who were not part-time employees under the provisions of WARN.
CONCLUSION
For the foregoing reasons, the Court DENIES defendants' motion for summary adjudication [docket # 20] and GRANTS plaintiff's motion for summary judgment [docket #23]. The Court DENIES defendants' objections to evidence in the declaration of Antonio Christian. [docket #29]