Ciarlante v. Brown & Williamson Tobacco Corp.

Opinions of the United

1998 Decisions States Court of Appeals

for the Third Circuit

4-30-1998

Ciarlante v. Brown & Williamson

Precedential or Non-Precedential:

Docket 97-1152,97-1174,97-1725

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Filed April 30, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 97-1152, 97-1174 and 97-1725

LOUIS A. CIARLANTE; THOMAS A. MARSHALL,

INDIVIDUALLY AND ON BEHALF OF A CLASS OF

INDIVIDUALS

Appellants/Cross-Appellees

in Appeal No. 97-1174

v.

BROWN & WILLIAMSON TOBACCO CORPORATION;

THE AMERICAN TOBACCO COMPANY;

AMERICAN BRANDS, INC.

Brown & Williamson Tobacco Corporation and

The American Tobacco Company,

Appellants/Cross-Appellees

in Appeal No. 97-1152 and 97-1725

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 95-cv-04646)

Argued Tuesday, November 4, 1997

BEFORE: BECKER, ROTH and GARTH, Circuit Judges

(Opinion filed April 30, 1998)

John M. Elliott, Esq.

Timothy H. Myers, Esq.

Frederick P. Santarelli, Esq. (Argued)

Elliott, Reihner, Siedzikowski &

Egan

925 Harvest Drive

Union Meeting Corporate Center V

Blue Bell, PA 19422

Attorneys for Louis A. Ciarlante and

Thomas A. Marshall, Individually and

on behalf of a Class of Individuals

Barry Simon, Esq. (Argued)

Christopher J. Moran

Simon Higgins & Moran, P.C.

1650 Market Street

One Liberty Place

Philadelphia, PA 19103-7397

Attorney for Brown & Williamson

Tobacco Corporation; The American

Tobacco Company

OPINION OF THE COURT

GARTH, Circuit Judge:

This appeal requires us to decide whether the district

court properly granted summary judgment to the plaintiff

class against the defendants. The district court held as a

matter of law that the defendants' Chester, Virginia

administrative center was the plaintiffs' "single site of

employment" under the Worker Adjustment and Retraining

Notification Act, 29 U.S.C. S 2101(a)(3)(B), and therefore

awarded damages and attorneys' fees to the plaintiffs. We

hold that a genuine issue exists as to whether the Chester

center was the plaintiffs' "single site of employment," so

that the district court's grant of summary judgment was

improper. We will reverse and remand.

I.

The plaintiffs in this action are a class of over one

hundred former employees of the American Tobacco

2

Company ("the Company"), who worked throughout the

United States as traveling salespeople. Officially titled Field

Sales Representatives ("sales representatives"), the plaintiffs

were each assigned to a geographical district in which they

were responsible, along with other sales representatives, for

selling the Company's products to wholesalers and retailers

in that district. Altogether, the Company employed over one

thousand sales representatives, located in 150 different

districts covering the entire United States. Sales

representatives were each provided a company car, and

spent an overwhelming proportion of their time "on the

road" visiting customers within their district.

The sales representatives communicated with other

employees at the Company mostly by telephone. There were

two primary contacts. First, each sales representative kept

in close contact with a district sales manager, who, like the

sales representatives, lived and worked in the designated

district. Each district sales manager was responsible for

managing the handful of sales representatives assigned

within the district; like the sales representatives, most

district sales managers worked from home, and had no

other permanent office. The sales representatives' second

significant contact was with the Company's administrative

center in Chester, Virginia. Sales representatives called the

Chester center every day to check messages, and also

contacted the center regularly to order supplies.

The events that prompted this lawsuit occurred on

January 11, 1995, soon after the defendant Brown &

Williamson acquired the Company from American Brands,

Inc. On that day, the Company summoned the sales

representatives to "sales meetings" held across the country.

At the "sales meetings," Company officials announced to

the sales representatives that they were being laid off,

effective immediately. The sales representatives were forced

to hand over their keys, samples, and distribution lists to

Company representatives before they were allowed to leave.

The Company also encouraged the employees to sign

release forms, which would entitle each employee to a

week's pay and job counseling services in exchange for a

waiver of rights to additional benefits.

3

The plaintiffs in this action are employees who did not

sign the release form. They brought suit in the United

States District Court for the Eastern District of

Pennsylvania against Brown & Williamson, American

Tobacco, and American Brands, Inc. (collectively,"B&W")

alleging that B&W had violated the Worker Adjustment and

Retraining Notification Act ("WARN"), 29 U.S.C. SS 2101-09,

by failing to warn the plaintiffs of their impending layoffs.1

Enacted in 1988, WARN requires that employers provide

written notice to those employees who will be subject to a

"mass layoff " sixty days before the layoff occurs. See 29

U.S.C. S 2102(a).2 Congress defined a "mass layoff " as "a

reduction in force which . . . results in an employment loss

at the single site of employment during any 30-day period

for . . . at least 50 employees." 29 U.S.C. S 2101(a)(3)

(emphasis added). The Act entitles affected employees who

are not notified of an impending "mass layoff" to damages

from their former employer in an amount equal to back pay

for each day of the violation, for up to sixty days. See 29

U.S.C. S 2104(a).

Following class certification, it became clear that the

plaintiffs' recovery hinged on whether B&W's action was a

"mass layoff." Specifically, the central question was whether

the action had resulted in an employment loss of more than

fifty employees at one "single site of employment" as

required by 29 U.S.C. S 2101(a)(3)(B).3 In an order dated

_________________________________________________________________

1. American Brands, Inc. is no longer a party to this action, as all

claims

against it were dismissed on December 19, 1995.

2. 29 U.S.C. S 2102(a) (West Supp. 1998) provides in relevant part:

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 employ ees 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 dislocated worker unit (designat ed or created

under

title III of the Job Training Partnership Act) and the chief

elected

official of the unit of local government within which such closing

or

layoff is to occur.

3. B&W did not dispute that they had failed to provide the plaintiffs with

written notice of the impending layoffs. In fact, the record reveals that

4

September 23, 1996, the district court announced that it

would treat pending discovery applications as cross-

motions for summary judgment, focusing on the "single

site" requirement. The parties responded with both evidence

and legal argument attempting to show as a matter of law

that the single site requirement had (or had not) been

satisfied.

The sales representatives argued that they were entitled

to judgment as a matter of law because the Chester,

Virginia administrative center was their "single site of

employment." The sales representatives offered statements

by former employees suggesting that the Chester center

was the primary contact point for sales representatives in

the field. According to the statements, sales representatives

received their instructions from and reported to the

administrative center in Chester. App. 2208-10; App. 1936.

Each sales representative was required to call Chester every

day to check messages, which frequently included

instructions from management left on the sales

representative's voice mail. App. 1936-37. Sales

_________________________________________________________________

B&W had gone to great lengths to keep the layoffs a secret. The only

action by B&W that could be construed as any type of notification was

the mailing of a letter to local government officials the day before the

layoffs. The top of the letter reads, "NOTICE REQUIRED UNDER THE

WORKER ADJUSTMENT AND RETRAINING NOTIFICATION ACT." The

letter continues:

This notice is to advise you that The American Tobacco Company

("American Tobacco") will undertake a layoff at its Administrative

Service Center located at 13203 North Enon Church Road, Chester,

Virginia, 23831.

While the number of affected employees has not yet been

determined, it is expected that the layoff will affect

approximately

1550 employees at the Chester facility (inclusive of approximately

1200 Field Sales employees, located nationwide).

American Tobacco will advise affected employees of the layoff

commencing January 11, 1995. The date of separation may be

immediately upon notification to the affected employee, or, in some

cases, may be at a later date.

App. 1880.

5

representatives also communicated with the Chester center

to obtain sales materials, supplies, and other items they

needed to perform their job. App. 2178-79. The sales

representatives argued that they were entitled to judgment

because their affidavits proved that the Chester center was

their "single site of employment."

B&W's affidavits and arguments pointed to a different

conclusion. According to B&W, it was entitled to judgment

as a matter of law because the sales representatives' "single

site[s] of employment" were the geographical districts where

they actually worked. B&W maintained that the districts

were the true hubs of the sales representatives' activities,

as the local district sales managers were the employees who

directed, managed, and monitored the sales

representatives. B&W relied on various sources for support.

First, they offered the affidavit of Mr. Randy Groonwald, a

district sales manager from Milwaukee, who stated that his

sales representatives were assigned work from him, not

from Chester, Virginia. Groonwald also reported that he

was responsible for the day-to-day concerns of his sales

representatives, including hiring, training, job performance

reviews, and approval of expenses. App. 1017-18.

Groonwald's statements were supported by B&W's internal

documents, which showed that supervision of sales

representatives was the major task of district sales

managers. App. 1223. B&W also relied upon its official job

description for the sales representative position, which

indicated that the sales representatives' primary contact

within the company was with their district sales managers.

App. 1226.

In response to the sales representatives' position that

Chester was their single site of employment, B&W

maintained that the Chester center was simply an

administrative hub through which certain mailings and

messages authored outside of Chester were sent to the

sales representatives. Sales representatives were hired,

trained, and instructed within their district, B&W noted;

they worked entirely within their district; and they reported

to their district sales managers within their district. Sales

representatives did not regularly visit the Chester, Virginia

center. In fact, named plaintiff Thomas A. Marshall visited

6

the center only twice, on special trips to recognize his

outstanding sales record, App. 2266, and named plaintiff

Louis A. Ciarlante never visited Chester at all. App. 2376.

Accordingly, B&W argued that the districts, rather than the

Chester center, were the plaintiffs' "single site of

employment." Because there were fewer than fifty

employees within each geographic district, B&W claimed

that its action could not constitute a "mass layoff" under

29 U.S.C. S 2101(a)(3), and that it was entitled to judgment

as a matter of law.

In an order dated November 6, 1996, the district court

concluded as a matter of law that the Chester center was

the plaintiffs' single site of employment and entered

summary judgment in their favor. The district court

reasoned that the voluminous record in the case

"establishes, without any genuine dispute, that all

instructions, assignments, rules, and orders to the plaintiff

salesmen emanated from the Chester, Virginia

headquarters." As a result, the Chester center was the

plaintiffs' single site of employment. The court recognized

that the local district sales managers played a role in

issuing assignments to and receiving reports from the sales

representatives, but found that the role of the sales

managers was not significant. "Any contrary view," the

court explained, "would . . . undermine the purposes of the

statute. I am confident that Congress did not contemplate

permitting a company to lay off its entire sales force of

hundreds of people without being chargeable with having

achieved a `mass layoff.' "4

Having found B&W liable, the court next considered the

damages owed to the sales representatives. The first issue

was whether the full statutory damage award should be

reduced by the amount of severance payments that B&W

had made to the employees following the layoffs. B&W

contended that the answer was "yes," because 29 U.S.C.

_________________________________________________________________

4. The district court believed that its decision was bolstered by the

letters

the Company had sent to local officials on January 10, 1995. See supra

note 3. The district court opined that the letters "make[ ] clear that the

defendants themselves had concluded, at the time, that the WARN Act

did apply to these lay-offs."

7

S 2104(a)(2) directed that damage awards be reduced by

"any wages paid by the employer to the employee for the

period of the violations . . . [and] any voluntary and

unconditional payment by the employer to the employee

that is not required by any legal obligation." 29 U.S.C.

S 2104(a)(2). The district court disagreed, holding that the

damage award should not be reduced because the

severance pay awards were ERISA payments that B&W was

legally obligated to pay.

Second, the court held that the statutory damage award

of back pay from a sixty day period as directed by 29 U.S.C.

S 2104(a)(1) was to be calculated based on the pay

equivalent of sixty actual working days, rather than the

amount that a salaried employee would earn in a sixty day

time period. The court thereupon entered an order granting

summary judgment for the sales representatives.

B&W responded by submitting a Motion to Alter or

Amend Judgment and for Reconsideration and

Clarification. Attached to this motion were additional sworn

declarations by Company employees. One such employee,

Kathi Reynolds, stated that when she was a sales

representative from 1985 to 1989, she sometimes received

instructions that were mailed through the Chester facility,

but that in almost every case, the true source of her

instructions was the Company's executive headquarters in

either Stamford, Connecticut or Conyers, Georgia. App.

2462. According to B&W, this affidavit illustrated that the

district court had misunderstood the plaintiffs' statements

that the sales representatives had received instructions

"from" Chester. B&W asked the district court to reconsider

its decision, in light of the new affidavits and the district

court's haste in granting summary judgment in favor of the

sales representatives.

In a December 18, 1996 order, the district court found

this argument "disingenuous," and concluded that B&W

was not entitled to have the court consider the additional

materials. Citing "an abundance of caution," the court

nevertheless looked at the new documents, and concluded

that B&W had presented no triable issues of fact, as the

motion for reconsideration and new documents "merely

revisit[ed] arguments previously made and rejected."

8

The court did revise its conclusion concerning damages,

however. The court held that it had misconstrued the scope

of United Steelworkers of America v. North Star Steel Co.,5

F.3d 39 (3d Cir. 1993), and that the North Star case left

open the question of how to calculate back pay damages

according to 29 U.S.C. S 2104(a)(1) in the case of salaried

employees. The district court concluded that the proper

award of back pay damages for a 60 day period in the case

of a salaried employee was simply two months's salary.

On January 28, 1997, the district court entered an order

calculating a damage award for each of the sales

representatives in the class of plaintiffs. The total value of

the judgment was $696,785.44, plus interest from the date

of the termination. On September 2, 1997, the court

awarded attorney's fees to the plaintiffs pursuant to S 29

U.S.C. S 2104(a)(6) in the amount of $334,466.30 in fees

and $26,855.83 in expenses.

II.

Summary judgment is appropriate when there are no

genuine disputes as to any material facts. See Fed. R. Civ.

P. 56(c). In such a case, a trial is unnecessary because a

reasonable fact finder could not enter a judgment for the

nonmoving party. See Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248, 106 S. Ct. 2505, 2510 (1986). Accordingly,

we exercise plenary review, construing all evidence and

resolving all doubts raised by affidavits, depositions,

answers to interrogatories, and admissions on file in favor

of the non-moving party. See SEC v. Hughes Capital Corp.,

124 F.3d 449, 452 (3d Cir. 1997). Our task is to lay out the

substantive law governing the action, and then in light of

that law determine whether there is a genuine dispute over

dispositive facts. See Liberty Lobby, 477 U.S. at 248, 106 S.

Ct. at 2510.

III.

The issue in this case is whether the district court was

correct as a matter of law that the Chester, Virginia

administrative center was the plaintiffs' "single site of

9

employment" according to 29 U.S.C. S 2101(a)(3).5 The

WARN act does not define the phrase "single site of

employment." Congress did, however, expressly delegate to

the Department of Labor the authority to promulgate

regulations interpreting WARN. See 29 U.S.C.S 2107. These

regulations must be given "controlling weight unless they

are arbitrary, capricious, or manifestly contrary to the

statute." Chevron, U.S.A., Inc. v. Natural Resources Defense

Council, 467 U.S. 837, 843-44, 104 S. Ct. 2778, 2782

(1984).

The regulation applicable to this case appears at 20

C.F.R. S 639.3(i)(6). It states:

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. S 639.3(i)(6) (1989).

This regulation narrows the inquiry considerably: we

need only consider whether the Chester, Virginia

administrative center was the site of employment to which

the sales representatives were assigned as their home base;

whether the Chester center was the site from which the

_________________________________________________________________

5. 29 U.S.C. S 2101(a)(3) (West Supp. 1998) states:

[T]he 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 si te of employment

during any 30-day period for--

(i)(I) at least 33 percent of the employees (exclu ding any part-

time

employees); and

(II) at least 50 employees (excluding any part-tim e employees);

or

(ii) at least 500 employees (excluding any part-time employees)[.]

10

sales representatives' work was assigned; and whether the

Chester center was the site to which they reported. If any

one of these three inquiries can be answered in the

affirmative, then the Chester center is a covered "single site

of employment." See Teamsters Local Union 413 v. Driver's,

Inc., 101 F.3d 1107, 1110 (6th Cir. 1996) ("This subpart is

written in the disjunctive: any one of the alternatives may

qualify as the definition of `single site.' "). Because at least

fifty employees lost their jobs following the January 11,

1995 "sales meetings," a determination that Chester is a

covered site under WARN as a matter of law would lead us

to affirm the district court's entry of summary judgment in

favor of the plaintiffs. See 29 U.S.C. S 2101(a)(3)(B)(i).

However, if we conclude as a matter of law that Chester,

Virginia was not the site of employment to which the sales

representatives were assigned as their home base, nor the

site from which their work was assigned, nor the site to

which they reported, then the Chester center is not a

covered WARN site. Because the plaintiffs have not

indicated the existence of any other covered sites at which

fifty or more employees lost their jobs on January 11, 1995,

the conclusion that Chester is not a covered site would lead

us to reverse the order of the district court and enter

summary judgment for B&W.

Finally, if a genuine issue of material fact exists as to

whether the Chester center is a covered site for WARN

purposes, then we must reverse the district court's order

and remand.

A.

First we consider whether the Chester, Virginia

administrative center is "the single site of employment to

which [the sales representatives] are assigned as their home

base." 20 C.F.R. S 639.3(i)(6). The underlying facts here are

undisputed. Sales representatives spent the great majority

of their time servicing customers within their geographical

district. They mostly worked out of their cars, and were in

frequent contact with their district sales managers, who

lived within their respective districts and also worked from

their own homes and cars. Sales representatives did not

11

physically visit Chester, Virginia in the normal course of

business; however, they did telephone the Chester site on

a daily basis to check messages and complete

administrative tasks.

Whether Chester, Virginia was the sales representatives'

"home base" depends on our legal construction of the term

"home base" in the Secretary's regulation. B&W argues that

an employee's assigned "home base" is the place from

which the employee physically works on a regular basis.

Under this interpretation, it is argued that the Chester

center cannot be the sales representatives' home base. In

contrast, the sales representatives focus less on the

employee's whereabouts than on the physical location of

the employer's major contacts with its employees.

Accordingly, they maintain that an employee's "home base"

must be a fixed physical building or structure of some kind

owned by the employer. Because both the sales

representatives and district sales managers worked from

their homes and cars, the sales representatives contend

that the Chester center must by default be considered the

employees' "home base."

We agree with B&W 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. This follows from the text of 20 C.F.R.

S 639.3(i)(6), which contrasts "the employer's regular

employment sites" with the site of employment "to which

[the employees] are assigned as their home base." We think

that this language cannot be squared with the sales

representatives's interpretation of "home base," as it

effectively equates "home base" with a "regular employment

site." In the context of 20 C.F.R. S 639.3(i)(6), we think that

the term "home base" refers not to the physical base of the

employer's operations, as the sales representatives would

have it, but rather to the physical base of the employee.

Our construction is consistent with both Teamsters Local

Union 413 v. Driver's, Inc., 101 F.3d 1107, 1110 (6th Cir.

1996) and Wiltz v. M/G Transport Services, Inc., 128 F.3d

957, 961-62 (6th Cir. 1997). The plaintiffs in Driver's, Inc.

were eighty-five truck drivers who had been discharged

without warning. Although their former employer's

12

management functions were located in Delaware, Ohio, the

drivers had each been permanently assigned to one of

eleven different base terminals in six different states. The

maximum number of employees who were assigned to any

one base terminal was eighteen, such that the plaintiffs'

right to recover hinged upon whether the drivers' "single

site of employment" was the one base terminal to which

they were each assigned, or rather the amalgamation of all

eleven terminals. Addressing the question of which site was

the truckers' "home base," the Sixth Circuit concluded that

each base terminal provided the plaintiffs' home base

because it was the physical location where "[e]ach trucker

starts and ends his or her workweek." Id. at 1110.

In Wiltz, the plaintiffs were former crewmen for a towboat

operator based in Paducah, Kentucky. See Wiltz, 128 F.3d

at 959. Typically, the crewmen would report to Paducah for

assignment to the boats, and then embark on a thirty day

voyage escorting barges throughout the Ohio, Mississippi,

and Tennessee River Systems, returning in the end to

Paducah. Following layoffs that prompted a WARN lawsuit,

the Wiltz court noted (albeit in dicta) that Paducah was the

crewmen's home base because "80% of the crews physically

reported to Paducah for assignment to the towboats." Id. at

962.

In both Driver's, Inc. and Wiltz, the employees' home

bases were the sites where they began and ended their

business trips. Accordingly, these cases are consistent with

our view that a traveling employee's "home base" must be

a site that the employee visits during the course of a typical

business trip.

Reviewing the record, there is no evidence that any of the

plaintiffs regularly visited the Chester, Virginia

administrative center in the ordinary course of their

business trips. We know that named plaintiff Thomas A.

Marshall visited the center only twice, on special trips to

recognize his outstanding sales record, App. 2266, and that

named plaintiff Louis A. Ciarlante never visited Chester at

all. App. 2376. From the record as it now stands, we would

be inclined to hold as a matter of law that Chester is not

the sales representatives' "home base." However, because

we are remanding this case to the district court for further

13

factual development, we will not foreclose the factfinder

below from examining whether the sales representatives

can prove that some of their number did in fact use the

Chester center as their "home base" under the legal

standard we have enunciated.

B.

We next consider whether the Chester, Virginia

administrative center was the site "from which [the sales

representatives'] work [was] assigned." 20 C.F.R.

S 639.3(i)(6). Our concern here is with the source of the

"day-to-day" instructions received by the sales

representatives, notwithstanding "centralized payroll and

certain other centralized managerial or personnel

functions." Driver's, Inc., 101 F.3d at 1111 (citing

International Union, United Mine Workers v. Jim Walter

Resources, Inc., 6 F.3d 722, 724-26 (11th Cir. 1993)). Given

the unusual working arrangements that 20 C.F.R.

S 639.3(i)(6) covers, this legal standard may require a

developed factual record in order to distinguish the true

source of the instructions from mere conduits through

which the instructions passed. We look to the record to

determine whether a genuine issue of material fact exists as

to whether the Chester, Virginia center was the source of

the day-to-day instructions for the sales representatives.6

The statements offered by the sales representatives

indicate that Chester was the origin of day-to-day

instructions. Thomas J. Ogorek, who served as a district

sales manager from August 1993 until January 1995,

declared that "sales representatives . . . generally received

instructions and assignments on what to sell our

customers in letters and memos . . . . [sent] by mail from

_________________________________________________________________

6. Although the district court appears to have considered the documents

submitted along with B&W's motion for reconsideration, we will respect

the district court's explicit finding that B&W was not entitled to such

review. Accordingly, we will limit review to the record as it existed at

the

time of the district court's consideration of the cross-motions for

summary judgment. See DeLong v. Raymond Int'l, Inc., 622 F.2d 1135,

1140 (3d Cir. 1980). On remand, however, the district court will be able

to include these additional documents as part of the record.

14

our Chester Office." App. 1936. Similarly, the plaintiffs offer

the declaration of Marc Lowery, who worked at the Chester

center from 1986 until 1995. Lowery reported that "[t]he

Chester office supplied the [daily instruction] information,

and was the engine for the field's activity. We supplied what

to do, where to do it, and the materials for doing it." App.

2217. Lowery reported that it was his responsibility

to coordinate and issue, out of the Chester Office, all

releases, bulletins and instructions to the field sales

organization, including the field sales representatives

and the district sales managers. These included the

day-to-day instructions, assignments and procedures

to be followed by the field sales representatives and

district sales managers.

. . . .

It was through these letters and instructions coming

from the Chester Office that field salespersons were

told what specific products management wanted them

to sell and promote and how they were to do it through

specific promotional strategies that they must use.

App. 2209-10.

B&W responds with statements indicating that the

Chester, Virginia site was not the source of day-to-day

instructions. Central to this response is the statement of

Randy Groonwald, a former district sales manager from

Wisconsin, who reported that the sales representatives in

his district "were assigned work . . . by me . . . [and] were

not assigned work by anyone in Chester, Virginia." App.

1018. Groonwald also verified the accuracy of B&W's

representation that instruction and development of sales

representatives was a district sales manager's primary task,

and also that it was part of the sales manager's job to

manage sales productivity and allocate sales efforts. App.

1017-18; App. 1223. In addition, B&W relies on the

deposition of named plaintiff Thomas A. Marshall, a former

sales representative. Marshall was asked, "[d]id you ever

take any orders from anyone at the administrative center

down in Chester, Virginia?" His response: "No, I didn't."

App. 2270.

15

These conflicting statements force us to conclude that

there is a genuine issue of material fact concerning whether

the Chester, Virginia center was the location from which

work was assigned to the sales representatives. If we were

to credit the statements of Ogorek and Lowery over those of

Groonwald and Marshall, then we would conclude that

Chester is the location from which work was assigned; if we

were to credit Groonwald and Marshall over Ogorek and

Lowery, then we would conclude that it was not. The

summary judgment standard forbids us from making these

judgments, however. See Liberty Lobby, 477 U.S. at 249

("[A]t the summary judgment stage the judge's function is

not himself to weigh the evidence and determine the truth

of the matter but to determine whether there is a genuine

issue for trial."). Accordingly, we hold that this is a material

issue for trial.

C.

Finally, we consider whether there is an issue as to

whether Chester was the site "to which [the sales

representatives] report[ed]." 20 C.F.R. S 639.3(i)(6). This

inquiry focuses on the location of the personnel who were

primarily responsible for reviewing sales reports and other

information sent by the sales representatives, in order to

record sales, assess employee performance, develop new

sales strategies, and the like.

Reviewing the record, we hold that there is a genuine

issue of fact concerning whether the Chester center was the

site to which the sales representatives reported. The

plaintiffs have offered statements indicating that Chester

was the primary audience for the sales representatives'

reports. For example, Mark Lowery reported that "[t]he

Chester office is where all reported information flowed and

. . . where it all ended up." App. 2217. Similarly, Thomas

Ogorek declared that "[f]ield sales representatives . . .

reported all . . . employment-related information to the

Chester office." App. 1936. Ogorek acknowledged that

district sales managers such as himself sometimes played

a role in the reporting process, but stated that his role was

secondary: "I would facilitate the Chester office by collecting

the information and forms from the . . . sales

16

representatives, and [by] then funneling them to the

Chester office." Id.

In contrast, B&W has offered statements indicating that

the sales representatives reported primarily to the district

sales managers. Plaintiff Thomas A. Marshall indicated at

his deposition that he submitted all summaries of his sales

performance to his district sales manager, and that he

regularly left messages for his district sales manager on the

manager's voicemail. App. 2267-68. District sales manager

Randy Groonwald reported that the sales representatives in

his district "hand-delivered or mailed to me daily call

summaries detailing their activities [every] week," and that

they "did not report to anyone in Chester, Virginia." App.

1018. Groonwald also stated that the company's official job

description for the sales representative position was

accurate in its statement of the major contacts that sales

representatives would have with other company employees.

App. 1017. The description states that the major contact

was "[f]requent contact with District Sales Manager to keep

him/her informed of all developments," and does not

mention contact with the Chester center. App. 1226.

These statements submitted by the sales representatives

and B&W are in conflict. According to the former, the sales

representatives reported to the Chester, Virginia

administrative center; according to the latter, the sales

representatives reported to their local district sales

managers. Thus, there is a genuine issue of material fact as

to whether the Chester site was the location to which the

sales representatives reported, precluding resolution on

summary judgment.7

_________________________________________________________________

7. In his dissent, Chief Judge Becker takes issue with our determination

that the present record presents genuine issues of material fact that

preclude resolution on summary judgment. According to Chief Judge

Becker, "th[e] evidence is not in conflict, but instead commands the

conclusion that the Chester center was the ultimate site from which the

plaintiffs' work was assigned and to which they reported." Dissenting Op.

at 26.

As we see it, Chief Judge Becker's attempt to harmonize statements

that on their face are in conflict is contrary to our duty to view

inferences from the underlying facts in the light most favorable to the

17

IV.

In summary, we conclude that a genuine issue of

material fact exists as to whether the Chester, Virginia

administrative center was a "single site of employment"

according to 20 C.F.R. S 639.3(i)(6) and 29 U.S.C.

S 2101(a)(3)(B). We will therefore reverse the order of the

district court granting the sales representatives' motion for

summary judgment and denying B&W's motion for the

same, and remand for proceedings consistent with the

foregoing opinion.

On remand, the parties and the district court should

focus attention on the precise questions of whether the

Chester, Virginia center was the representatives' home

base, the site from which the sales representatives' work

was assigned, and the site to which they reported. The

Company's own actions in characterizing its "notice" sent to

local government officials as being required under WARN,

and its suggestion that the sales representatives were

considered "employees at the Chester facility,"8 will

undoubtedly be relevant and material to these inquiries, as

will the Company's conduct on January 11, 1995.

_________________________________________________________________

party opposing summary judgment. See Matsushita Elec. Indus. Co. v.

Zenith Radio, 475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986) (citing

United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 994

(1962)). That we might be able to hypothesize a theory that could

conceivably be consistent with what certain declarants intended to say

(but did not) is neither our function nor our concern. Rather, our charge

is to determine whether "the evidence is such that a reasonable jury

could return a verdict for the nonmoving party." Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510 (1986). We believe

that the answer to that inquiry is yes, and that it is not our role as an

appellate court to go further. See Ingersoll-Rand Fin. Corp. v. Anderson,

921 F.2d 497, 504 (3d Cir. 1990) ("This court is not a factfinding

tribunal.").

Upon review of the entire record, we are constrained by our

established jurisprudence to return this proceeding to the district court

so that the facts bearing on the "single site" question can be developed

at trial.

8. See supra note 3.

18

Given the unorthodox employment arrangements at issue

in this case, conclusory statements that the plaintiffs were

or were not assigned work "from" Chester, and that they

did or did not report "to" Chester, will generally prove

inadequate. The problem with such statements is that in

our era of modern telecommunications, it is often necessary

to distinguish the ultimate origin and destination of

information from mere conduits through which the

information has passed. An instruction may originate in

one location, be routed electronically through another, be

stored on a machine in a third, and then be received by an

individual located in a fourth. In an unhelpful sense, it can

be said that the instruction was assigned "from" any of the

first three locations, and that it was sent "to" any of the

latter three. Conclusory statements made in this context

are likely to interfere with the ability of district courts to

enter summary judgment, as they will lead to facially

contradictory factual assertions. To avoid this problem in

the future, we emphasize that we interpret 20 C.F.R.

S 639.3(i)(6) to focus not on the formalities of where certain

machines were located, but rather on where the people

were who were ultimately responsible for creating and

receiving the information. On remand, the district court

should focus its inquiry accordingly.

V.

In remanding the "single site" issue to the district court,

it is not inappropriate for this court to provide guidance to

the district court on the question of damages. See, e.g.,

Advanced Medical, Inc. v. Arden Med. Sys., Inc., 955 F.2d

188, 200 (3d Cir. 1992). In particular, we feel compelled to

consider two questions that were briefed and argued fully

before us. These questions are 1) whether the district court

erred in holding that the proper baseline measure of

damages was two months' salary, and 2) whether the

district court correctly held that the severance payments

paid by B&W to the sales representatives should not be

subtracted from the damage award. Both are legal issues

upon which we exercise plenary review.

19

A.

The WARN Act specifies that any employer who violates

the Act "shall be liable to each aggrieved employee . . . for

. . . back pay for each day of violation at a rate of

compensation not less than the higher of [either] the

average regular rate received by such employee during the

last 3 years of the employee's employment [or] the final

regular rate received by such employee." 29 U.S.C.

S 2104(a)(1) (West Supp. 1998). This statute requires us to

establish the number of days in a given violation, and then

multiply that number by an employee's regular rate of pay

per day, in order to arrive at a starting point for the damage

award owed to each aggrieved employee.9

In United Steelworkers of America v. North Star Steel Co.,

5 F.3d 39 (3d Cir. 1993), we interpreted only thefirst part

of this formula.10 In that case, we held that the number of

days in a given violation period was the number of calendar

days in the violation period, rather than the number of

actual work days.11 Thus, in a case where there was no

_________________________________________________________________

9. This statute provides a starting point because the resulting figure may

then be modified by additional considerations as directed by 29 U.S.C.

S 2104(a)(1)(B) and 29 U.S.C. S 2104(a)(2)-(7).

10. Judge Seitz, writing for the court, stated the issue in North Star as

follows:

The sole issue appealed by defendant is the number of days for

which it must pay damages to its aggrieved employees under Section

2104(a)(1)(A) of WARN. The district court interpreted that section

to

require that defendant pay damages for each calendar day within

the violation period. Defendant argues that Section 2104(a)(1)(A)

does not require it to pay damages to an aggrieved employee for any

day within the violation period that would not have been a regular

workday for that employee.

5 F.3d at 41.

11. We recognize that some courts have criticized North Star and have

rejected its analysis. See Saxion v. Titan-C-Manufacturing, Inc., 86 F.3d

553, 559 (6th Cir. 1996); Frymire v. Ampex Corp., 61 F.3d 757, 772

(10th Cir. 1995); Carpenters District Council v. Dillard Dept. Stores, 15

F.3d 1275, 1283-86 (5th Cir. 1994). However, we are bound to adhere to

our prior precedents. See Third Circuit Internal Operating Procedures

9.1.

20

warning prior to the plant closing or mass layoff, we have

held that an employer would be liable for an award covering

the full 60 day period specified as a maximum violation

period in the statute, rather than a shorter period. See id.

at 42-43; 29 U.S.C. S 2104(a)(1). Because the sales

representatives here were obviously given no warning prior

to their layoffs, an application of North Star to our case

directs the conclusion that their damages must be

calculated using a 60 day violation period.

The next question we must answer is how to determine

an employee's regular rate of pay per day. Because the

sales representatives were salaried employees, we must

determine how to convert the given annual salary rate into

a daily rate of pay. The parties offer competing

methodologies. The sales representatives contend that

under North Star we must divide the annual salary by the

number of days the sales representatives actually worked in

a given year. Because the sales representatives were not

expected to work weekends or holidays, they claim that the

district court's damage award of two months' salary, by

eliminating weekends and holidays, represented back pay

for only about 40 actual working days (60 days minus

weekends and holidays), rather than the full 60 actual

working days mandated by North Star.

B&W disagrees with the sales representatives' approach,

and insists that the daily rate should be calculated by

dividing the annual salary of each representative by 365,

the number of days in a year. According to B&W, North Star

establishes that the regular daily rate is the pay for each

actual working day only for hourly employees. Because

salaried employees such as the sales representatives are

exempt under the Fair Labor Standards Act and may be

forced to work overtime and weekends, B&W argues that a

different approach is warranted in the case of salaried

employees.

As an initial matter, we note that our North Star

precedent was silent as to whether the plaintiffs in that

case were hourly or salaried employees of North Star Steel

Company. Indeed, North Star offers no guidance on how to

convert to a daily rate, either from an annual rate (in the

case of salaried employees) or from an hourly one (in the

21

case of hourly employees). The North Star court expressly

declined to address this matter, as the parties in that case

had stipulated to the daily rate and had asked the court

only to decide the number of days in the violation period.

See 5 F.3d at 43, 43 n.7. Thus, the sales representatives

misconstrue North Star when they claim it supports their

approach to calculating a daily rate, and B&W does the

same when it attempts to distinguish it on the basis,

unstated in the opinion, that the employees in that case

were paid on an hourly basis.

After examining the arguments raised by the parties, we

agree with B&W -- and the district court -- that the proper

way to convert an annual salary rate into a daily rate is

simply to divide the annual salary by the number of days

in a year. We believe that this approach best serves the

Congressional intent because it reflects the reality that a

salaried employee is generally hired to perform a particular

task, regardless (within reason) of the time required to

complete the task. Indeed, to attempt to measure how

many days a salaried employee "actually works" in a given

year is to engage in needless abstraction. What does it

mean to "work a day"? Has an employee who has opted to

work twelve hours per day for four days per week worked

fewer "days" than another who works eight hours per day

for six days per week? We leave these questions for the

philosophers.

Accordingly, we hold that the regular daily rate of a

salaried employee is the employee's annual salary divided

by the number of days in a year.12

B.

The final issue we address is whether the district court

correctly held that the severance payments made by B&W

_________________________________________________________________

12. The district court's calculations based on the equivalent of two

months' salary was almost, but not quite, correct. Because we normally

base an annual calculation on 365 days, we think it is the better

practice for the district court to divide an employee's annual salary by

365, and then multiply that rate by number of the days of the violation

period.

22

to the sales representatives pursuant to the Company's

ERISA plan should not be subtracted from the damage

figures. B&W argues that these payments should have been

subtracted from the damage figure because they

constituted "wages" according to 29 U.S.C. S 2104(a)(2)(A).13

For evidence, B&W points to the fact that the severance

payments were labeled "salary continuation" payments, and

that they matched the wages that B&W paid when the sales

representatives were working.

We find B&W's argument to be without merit. The

severance payments made by B&W are not "wages" as

contemplated by 29 U.S.C. S 2104(a)(2)(A), but rather ERISA

payments that the company was already legally obligated to

make regardless of the work the sales representatives

performed. The fact that these payments happened to be

labeled "salary continuation" benefits, and that they

happened to be set at the level of the sales representatives'

wages, is irrelevant. The payments made by B&W were not

made in exchange for work that the sales representatives

would have performed during the period of the violation.

Accordingly, they are not "wages" according to 29 U.S.C.

S 2104(a)(2)(A), and the district court was correct in

refusing to subtract these amounts from the damages

award. See 29 U.S.C. S 2104(a)(1)(B) (expressly including

_________________________________________________________________

13. 29 U.S.C. S 2104(a)(2) (West Supp. 1998) states:

The amount for which an employer is liable under paragraph (1)

shall be reduced by--

(A) any wages paid by the employer to the employe e for the period

of the violation;

(B) any voluntary and unconditional payment by th e employer to

the employee that is not required by any legal obligation; and

(C) any payment by the employer to a third party or trustee (such

as premiums for health benefits or payments to a defined

contribution pension plan) on behalf of and attributable to the

employee for the period of the violation.

In addition, any liability incurred under paragraph (1) with

respect

to a defined benefit pension plan may be reduced by crediting the

employee with service for all purposes under such a plan for the

period of the violation.

23

ERISA benefits in WARN damages calculations); Tobin v.

Ravenswood Aluminum Corp., 838 F. Supp. 262, 273 n.17

(S.D.W.Va. 1993).

If, after remand, the plaintiffs prevail in this action, the

damages must be calculated accordingly.

VI.

We hold that a genuine dispute exists concerning

whether the Chester, Virginia administrative center is a

single site of employment covered by WARN. Accordingly,

we will reverse the January 28, 1997 order of the district

court entering summary judgment for the plaintiffs, and

will remand for proceedings consistent with the foregoing

opinion. As the sales representatives are no longer a

"prevailing party" according to 29 U.S.C. S 2104(a)(6), we

must also vacate the order of the district court dated

September 2, 1997, which had awarded attorney's fees to

the plaintiff class.

24

BECKER,* Chief Circuit Judge, concurring and dissenting.

I join in Part V of the majority opinion which provides

guidance to the district court on the question of damages.

I also subscribe to the majority's conclusion that the

determination of plaintiffs' "single site of employment" is

governed by 20 C.F.R. S 639.3(i)(6). Nonetheless, I am

constrained to dissent from Parts III and IV of the majority

opinion since I believe that, under the legal precepts

announced therein, the Chester center was clearly the

plaintiffs' single site of employment, and that there is no

genuine issue of material fact on that question. I would

therefore affirm the district court's order granting the

plaintiffs' motion for summary judgment on liability.

I.

It will be useful to commence the discussion of the

liability issue by rescribing the guidance that the majority

imparts to the district court at the close of its liability

discussion.

Given the unorthodox employment arrangements at

issue in this case, conclusory statements that the

plaintiffs were or were not assigned work "from"

Chester, and that they did or did not report "to"

Chester, will generally prove inadequate. The problem

with such statements is that in our era of modern

telecommunications, it is often necessary to distinguish

the ultimate origin and destination of information from

mere conduits through which the information is

passed.

* * *

To avoid this problem in the future, we emphasize that

we interpret 20 C.F.R. S 639.3(i)(6) to focus not on the

formalities of where certain machines were located, but

rather on where the people were who were ultimately

responsible for creating and receiving the information.

On remand, the district court should focus its inquiry

accordingly.

_________________________________________________________________

*Honorable Edward R. Becker, United States Circuit Judge for the Third

Circuit, assumed Chief Judge status on February 1, 1998.

25

Maj. Op. at 19 (emphasis added). I agree with the majority

that in applying 20 C.F.R. S 639.3(i)(6) to this case, a court

must be careful to distinguish "mere conduits" from those

people "ultimately responsible for creating and receiving the

information" from the sales representatives. I dissent

essentially because I believe that the majority has failed to

faithfully apply its own precepts.

If the majority had done so, it would have been compelled

by the evidence to conclude, as the district court already

has, that:

The record in this case establishes, without any

genuine dispute, that all instructions, assignments,

rules, and orders to the plaintiff salesmen emanated

from the Chester Virginia administrative headquarters.

[It is not] significant that, to some extent, specific

assignments and instructions were issued by way of

the district managers, or that plaintiffs' reports to the

administrative headquarters were funneled through

their district managers.

Ciarlante v. Brown & Williamson Tobacco Corp., No.

CIV.A.95-4646, 1996 WL 65448, *2 (E.D. Pa. Nov. 6, 1996)

(emphasis added). The highlighted portion of the district

court opinion reflects the uncontroverted evidence that both

the sales representatives and the sales managers reported

back to the Chester center from which they received their

assignments and from which all of their day to day needs

were handled. In other words, the evidence shows that the

sales managers acted as conduits between the Chester

center and the sales representatives. It is only by ignoring

this evidence, and hence its own admonition to look to who

was "ultimately responsible for creating and receiving the

information", that the majority can conclude that a genuine

issue of material fact is raised by evidence that the sales

representatives received instructions from and reported to

both the Chester center and their sales managers.

As I will show, this evidence is not in conflict, but instead

commands the conclusion that the Chester center was the

ultimate site from which the plaintiffs' work was assigned

and to which they reported. Since I believe that the

evidence is so clear that the Chester center was the site

26

from which plaintiffs' work was assigned and the site to

which they reported, I do not deal with whether the Chester

center was also their "home base" as that phrase is used in

20 C.F.R. S 639.3(i)(6).

A.

I turn first to whether the Chester center was the site

from "which [the sales representatives'] work [was]

assigned." 20 C.F.R. S 639.3(i)(6). The majority

acknowledges that there is abundant evidence that Chester

was the source of plaintiffs' day to day assignments. See

Maj. Op. at 14-15. However, the majority finds a genuine

issue of material fact on the basis of two pieces of evidence

that "conflict" with this view. The first is the statement of

Randy Groonwald, a former sales manager in Wisconsin,

that the sales representatives in his district "were assigned

work . . . by me . . . [and] were not assigned work by

anyone in Chester, Virginia." App. 1018. The second is the

following snippet from the deposition of Thomas A.

Marshall, a named plaintiff, and former sales

representative:

Q. Did you ever take any orders from anyone at the

administrative center down in Chester, Virginia?

A. No, I didn't.

App. 2270.

As I will show, however, Groonwald's statement conflicts

with the view that Chester was the ultimate source of the

sales representatives' assignments only if one ignores, as

the majority apparently has, the uncontroverted evidence

that the Chester center was the source of assignments for

both the district sales managers and the sales

representatives. Marshall's testimony, when placed in

context, not only does not create a genuine issue of

material fact, but strongly counsels in favor of summary

judgment for the plaintiffs.

1.

Marc Lowery and Dwight Hughes, former employees at

the Chester center, described the process by which

27

assignments were distributed to American Tobaccofield

sales personnel. Lowery declared that:

[My job was] to coordinate and issue, out of the

Chester office, all releases, bulletins and instructions

to the field sales organization, including the field sales

representatives and the district sales managers. These

included the day-to-day instructions, assignments and

procedures to be followed by the field sales

representatives and district sales managers.

* * *

It was through these letters and instructions coming

from the Chester office that field salespersons were told

what specific products management wanted them to

sell and promote and how they were to do it through

specific promotional strategies that they must use.

These instructions in the form of "Sales Coverage"

letters were regularly issued from the Chester office

every five (5) to eight (8) weeks.

App. 2209-10. (emphasis added).

Similarly, Hughes stated that:

Sales representatives and district sales managers

received their instructions and assignments in the form

of written memos or letters that we called `field sales

information,' `sales campaign,' or `sales coverage'

letters. These instructions and assignments were

generally issued in mass mailings [from the Chester

Office].

...

[These letters] told the sales representatives and district

sales managers what to sell and how to sell it.

App. 2186. (emphasis added).

As the foregoing makes clear, Groonwald's statement that

the sales representatives in his district "were assigned work

. . . by me . . . [and] were not assigned work by anyone in

Chester, Virginia" is easily reconciled with the evidence that

the Chester center was the ultimate source of all of

plaintiffs' assignments. The fact is that nowhere in

28

Groonwald's affidavit does he contradict the evidence that,

like all sales mangers, he received the day to day

assignments that he gave to his sales representatives from

the Chester office. Thus, at most, Groonwald's affidavit

indicates that he served as a conduit between Chester and

his sales representatives. As the majority noted, mere

conduits must be disregarded in the effort to determine the

ultimate source of plaintiffs' day to day assignments.

2.

The majority also relies on the following portion of

Thomas Marshall's deposition:

Q. Did you ever take any orders from anyone at the

administrative center down in Chester, Virginia?

A. No, I didn't.

This excerpt, when returned to its proper context, provides

no support for remand.

First, a review of the testimony preceding the excerpt

makes clear that when Marshall stated that he did not

receive instructions from anyone at Chester, he simply

meant that he did not receive instructions from any

particular person at Chester:

Q. You didn't answer my question. Who in Chester,

Virginia did you report to?

A. Well to the company itself.

Q. So there is no person that you reported to there?

A. There is no person.

Q. So you did not have a boss in Chester, Virginia; is

that right?

A. Well, there's lots of bosses in Chester, Virginia.

Q. Was there a particular person, a boss that told you

what to do in Chester, Virginia, that you --

A. No.

Q. -- can identify today?

29

A. No.

App. 2260.

More fundamentally, the overall content of Marshall's

testimony unequivocally supports the view that the sales

representatives received their assignments from the Chester

center. Nowhere is the imprudence of the majority's reliance

on Marshall's testimony to preclude summary judgment

more in evidence then in the following exchange:

Q. You make a distinction between supervising and

reporting; is that right?

A. Yes, I think I do.

Q. Now, explain that to me, in your own words.

A. Well, I believe that there were supervisors,

supervising the sales reps in the field. But I think

that the sales reps, we were instructed by the

[Chester] office, and the office seemed to have full

control of us. Anything we did out there seemed to

relate to the office. I could not get hold of Mr.

Ogorek [his sales manager] if I wanted to, except

on voice mail.

Tom Ogorek didn't tell me what to do out there in

the field. I was sent a campaign letter from Chester,

Virginia stating what I was to do, and how long I

was to do it, how much I was to spend, and the

brands I was to work. They made the changes in

the field. If there was an executive order out there

changing our field operation, it came from voice

mail.

App. 2260. (emphasis added)

In short, none of the evidence relied on by the majority

conflicts with the view that the ultimate source of the sales

representatives' assignments was the Chester center.

B.

While a determination that the plaintiffs' work was

assigned from the Chester center is, by itself, a sufficient

basis on which to affirm the district court, see Maj. Op. at

30

10-11, I also believe that the majority errs in concluding

that there is a genuine issue of material fact as to whether

the Chester center was the site to "which [the sales

representatives] report[ed]." 20 C.F.R.S 639.3(i)(6). The

majority reaches this conclusion by finding a conflict

between, for example, the statement of Mark Lowery, who

worked at the Chester center from 1986 to 1995, that "[t]he

Chester office is where all reported information flowed and

. . . where it all ended up" and the statement of Randy

Groonwald that the sales representatives in his district

"hand-delivered or mailed to me daily call summaries

detailing their activities [every] week," and that they "did

not report to anyone in Chester, Virginia." However, it is

only by ignoring the import of evidence critical to its inquiry

-- evidence that the sales representatives reported to

Chester through the sales managers -- that the majority is

able to find a conflict between these statements.

The role of the sales managers in the American Tobacco

"reporting process", is best summarized by Joseph Pierce,

the former head of Sales Audit and Analysis for American

Tobacco:

I understand that in earlier years the original expense

report forms were mailed directly to the Chester office

from the homes of each field sales representative,

which resulted in our receiving a thousand or so

separate envelopes from all over the country.

Eventually, we used the district sales managers to

collect the original report forms from the field sales

representatives in their group, and the district sales

managers would send the originals to the Chester

office, which resulted in our receiving only about 150

or so envelopes (the number of district sales managers)

from fewer locations.

In this regard the district sales manager assisted the

Chester office, to the extent they eyeballed the forms,

unstapled papers, matched the receipts to the proper

form, and otherwise organized the paperwork in a form

that made it easier for our staff in the Chester office to

review and analyze each of the approximately 1,000

field sales representative's expense reports and

paperwork. Even after we started using the district

31

sales managers to funnel the paperwork from the field

to the Chester Office, it was still the Chester Office

which reviewed and analyzed the field sales

representatives' expense reports and approved for

processing (or disapproved) the reports.

App. 2202- 03. (emphasis added).

Pierce's statement is confirmed by other evidence that

makes clear that all of the plaintiffs' reports (be they sales

or expense reports) ultimately flowed to the Chester center,

and that, to the extent that the district sales managers

helped funnel the information from the field, they were

assisting and facilitating the work of the Chester center.

Based on this understanding of the American Tobacco

"reporting process", I believe that there is no genuine issue

of fact that the sales managers were merely conduits

through which the plaintiffs reported to the Chester center,

and thus that the Chester center was the site to which the

plaintiffs' reported. I would affirm the district court on this

basis as well.1

C.

Out of an abundance of caution, I address the

contention, raised by the defendants, that the Chester

center itself was just a conduit since the assignments that

it sent to the field personnel and the reports that it received

were passed through it to the executive offices of American

Tobacco located in Stamford, Connecticut. The majority

does not focus on this possible view of the evidence and

instead frames the choice of plaintiffs' single site of

_________________________________________________________________

1. I am not sure what to make of the majority's statement at the outset

of this section that its "inquiry focuses on the location of the personnel

who were primarily responsible for reviewing[the plaintiffs' reports]."

Maj. Op at 16 (emphasis added). While I believe that the personnel at the

Chester center were both primarily and ultimately responsible for

reviewing the reports, I am uncertain as to how much of the majority's

analysis turns on a distinction between these two terms -- or even

whether the shifting terminology is intentional. At all events, I believe

that this inconsistency should not affect the majority's instruction to

the

district court to focus its inquiry on remand on those "ultimately

responsible for creating and receiving the information."

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employment as being between the Chester center and the

geographical districts in which the plaintiffs' worked.

However, I address this argument, because the defendants

may attempt to revive it on remand.

While there has been insufficient factual development for

us to determine whether in fact the Stamford office was the

location "of the people who were ultimately responsible for

creating and receiving the information" from the plaintiffs,

I do not believe that such development is necessary to the

disposition of this case. Even if the defendants were to

succeed in showing that the Stamford office, rather than

the Chester center, was the plaintiffs' single site of

employment, the defendants would still be liable under the

WARN Act, as a matter of law, since the "mass layoff"

would still have resulted "in an employment loss at the

single site of employment . . . for . . . at least 50

employees." See 29 U.S.C. S 2101(a)(3)(B).

D.

Before concluding, I must consider the broader, policy-

based aspect of the issue. This is the first time that a court

has been asked to apply 20 C.F.R. S 639.3(i)(6) to determine

the single site of employment for a geographically dispersed

workforce that does not physically report to any site of

employment at any time. Cf. Wiltz v. M/G Transport

Services, Inc., 128 F.3d 957 (6th Cir. 1997) (issue was

whether separate towboats on which plaintiffs lived during

30 day assignments or defendant's main office to which

over 80% of the crews physically reported for assignments

to towboats was single site of employment pursuant to 20

C.F.R. S 639.3(i)(6)); Teamsters Local Union 413 v. Driver's,

Inc., 101 F.3d 1107 (6th Cir. 1996) (issue was whether

eleven separate trucking terminals to which plaintiffs

physically reported could be combined to constitute one

single site of employment under the Act).

The majority observes that the employment arrangement

at issue is "unorthodox." See Maj. Op. at 19. I take this to

mean that it believes that this case represents something of

an outlier. I disagree. Rather, I suspect that such situations

represent the new frontier in WARN Act litigation. In the

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next decade, technology will permit workers of all types, not

just salespeople or other mobile workers, to escape the

physical confines of traditional offices. I acknowledge that

the majority has recognized the possibility that such

plaintiffs may prevail within the framework of 20 C.F.R.

S 639.3(i)(6), hence the remand here for further

proceedings. However the tenor of the majority opinion, and

its refusal to affirm the grant of summary judgment for

plaintiffs on what I believe to be an unequivocal record,

sends the opposite (and wrong) message and, I think,

establishes bad precedent.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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