Appendices — North Star Steel Co. v. Thomas

la

APPENDIX A

Filed August 10, 1994

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 93-2008 and 93-7613

UNITED STEELWORKERS OF AMERICA,

AFL-CIO-CLC

V.

CROWN Cork & SEAL Co., INC.,

Appellant

(In No. 93-2008 )

CHARLES A. THOMAS; DARREN Boop; ROBERT W. BOWER;

WILLIAM D. BRIDGE; JAMES CLINGAN; NEAL B.

HOUSNER; JONATHAN L. NOAKER; WAYNE D. ORNER;

GERALD W. RANCK; HAROLD E. VAN SICKLE, JR.;

RICHARD A. WINTER; EUGENE L. WITMER, SR.,

Appellants

(In No. 93-7613)

Vv.

NorTH STAR STEEL COMPANY

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 92-CV-05968 )

2a

On Appeal from the United States District Court

for the Middle District of Pennsylvania

(D.C. No. 92-CV-01507)

Argued May 24, 1994

Before: Cowen and Roth, Circuit Judges

Ackerman, District Judge *

(Filed August 10, 1994)

OPINION OF THE COURT

ACKERMAN, District Judge.

These two cases present the following discrete issue: In

an action brought pursuant to the Worker Adjustment and

Retraining Notification Act, 29 U.S.C. §2101 et seq.

(“WARN”), a statute which, like so many others, fails to

explicitly provide a statute of limitations, should we fol-

low the general rule and borrow a state statute of limita-

tions or should we instead opt for the six-month statute of

limitations set forth in section 10(b) of the federal Na-

tional Labor Relations Act. The two cases present the

identical issue for review and we will consider both cases

in this Opinion.

For the reasons detailed below, we find that for cases

arising under WARN, courts should apply the most

closely analogous state statute of limitations. Thus, we

will reverse the decision in Thomas v. North Star Steel

* Honorable Harold A. Ackerman, United States District Judge

for the District of New Jersey, sitting by designation.

3a

and will affirm the decision in United Steelworkers of

America v. Crown Cork & Seal.

Background

Both of the underlying cases were filed pursuant to

WARN, a federal statute which requires companies with

one hundred or more employees to provide their workers

with a minimum of sixty days written notice before a plant

closing or mass layoff.'. Employers who fail to provide

the requisite notice must compensate employees suffering

an employment loss for each day of the violation. The

Statute creates a private civil action for damages in federal

court.

On September 9, 1991, the United Steelworkers of Amer-

ica, AFL-CIO-CLC, filed a complaint in federal court

alleging that the North Star Steel Company (“North

Star”) had violated the WARN Act by failing to give

the union sixty days advance notice of a February 25,

1991 layoff of about 270 people, at the company’s Milton,

Pennsylvania plant. Although the suit was filed more than

six months after the layoff occurred, North Star did not

raise the statute of limitations as a defense. On April 9,

1992, the district court granted the union’s motion for

summary judgment on liability, holding that the layoff

constituted a “plant closing” subject to WARN. In a

separate Order, dated December 11, 1992, the district

judge determined the number of days for which the com-

pany was required to pay WARN damages. United Steel-

1 The statute defines “plant closing” as the permanent or tem-

porary shutdown of a single site of employment, which results in

an employment loss to a certain minimum number of employees.

29 U.S.C. § 2101(a) (2). “Mass layoff” is defined as a reduction-in-

force, resulting from a plant closing, which results in a certain

minimum employment loss. 29 U.S.C. § 2101(a) (3). A layoff must

last more than six months before it qualifies as actionable under

WARN, 29 U.S.C. § 2101(a) (6) (B).

4a

workers v. North Star Steel, 809 F. Supp. 5, 6-7 (M.D.Pa.

1992), aff'd 5 F.3d 39 (1993).

Appellants were non-unionized employees of North Star,

unrepresented by the union and hence unaffected by the

union’s successful lawsuit against North Star. They there-

fore filed a separate action, the instant case, also seeking

damages pursuant to WARN. On May 25, 1993, the dis-

trict court granted North Star’s motion for summary judg-

ment, finding that the action was barred under what it

deemed to be the applicable statute of limitations. The

employees’ motion for reconsideration was denied on Au-

gust 26, 1993. This appeal followed.

United Steelworkers of America v. Crown Cork & Seal

Co., Inc. (“Crown Cork”), arises out of an event that

took place on September 30, 1991. On that day, the

company ordered a reduction-in-force and shutdown of its

Perry, Georgia plant. As a result of this reduction in

force, about 85 employees were terminated. On October

15, 1992, the United Steelworkers of America (the union)

filed a complaint, alleging that the company violated

WARN by failing to give it 60 days notice prior to the

shutdown. Crown Cork & Seal then moved for summary

judgment, contending that the action was barred by the

applicable statute of limitations. The district court denied

the motion on August 24, 1993 but in an order dated

September 26, 1993, certified the August order for im-

mediate interlocutory appeal pursuant to 28 U.S.C.

§ 1292.

We have jurisdiction over the appeal in Thomas v.

North Star Steel pursuant to 28 U.S.C. § 1291. Our

jurisdiction over United Steelworkers of America v.

Crown Cork & Seal arises from our October 13, 1993

Order granting the company permission to appeal pur-

suant to 28 U.S.C. § 1292(b). Our review over both

cases is plenary.

5a

Discussion

In this case we visit a general question of federal law

that we have repeatedly addressed: When a federal stat-

ute does not contain an explicit statute of limitations,

when is it appropriate to borrow a statute of limitations

from elsewhere in federal law rather than adopting the

most closely analogous state statute of limitations.

The companies argue that in this case, a federal statute

—the six-month statute of limitations contained in section

10(b) of the National Labor Relations Act (“NLRA”)

for filing a claim of an unfair labor practice with the

National Labor Relations Board (“NLRB”)—provides

the most appropriate limitations period. The employees

and the union exhort us to borrow one of various state

Statutes. Courts addressing the question have adopted both

approaches. Some have borrowed the six-month § 10(b)

Statute; see, e.g., Newspaper and Mail Delivers’ Union of

N.Y. and Vicinity v. United Magazine Co., 809 F. Supp.

185 (E.D.N.Y. 1992) (adopting NLRA statute); Staudt

v. Glastron, Inc., No. SA-92-CA-1174, 1993 WL 85356,

1993 U.S. Dist. LEXIS 3090 (W.D.Tex. February 23,

1993) (same). Other courts, including the only Court

of Appeals to reach the question, have expressly consid-

ered and rejected the section 10(b) six-month period,

instead opting for various state law limitations periods.

See, e.g. United Paperworkers Local 340 y. Specialty

Paperboard, Inc., 999 F.2d 51 (2d Cir. 1992) (herein-

after United Paperworkers); Wallace v. Detroit Coke

Corp., 818 F. Supp. 192 (E.D. Mich. 1993) (rejecting

NLRA statute and adopting six-year state contract stat-

ute); Automobile Mechanics’ Local No. 701 of the Int'l

Assoc. of Machinists & Aerospace Workers v. Santa Fe

Terminal Services, Inc., 830 F. Supp. 432 (N.D. Ill.

1993) (rejecting NLRA statute and adopting, without

specifying, most analogous state statute).

The two district court opinions before us now reached

contrary conclusions. The district court in North Star

6a

Steel adopted the six-month statute of limitations set forth

in § 10(b); the court in Crown Cork & Seal rejected the

§ 10(b) statute, and without deciding the appropriate

statute of limitations, found the action timely under all of

the possibilities.

Our analysis must begin with the general assumption

that when a federal statute is silent as to a statute of limi-

tations, the court should apply “the most closely analo-

gous statute of limitations under state law.” DelCostello

v. International Brotherhood of Teamsters, 462 U.S. 151,

158 (1983); see also Lampf, Pleva, Lipkind, Prupis &

Petigrow v. Gilbertson, 501 U.S. 350, , 111 S.Ct.

2773, 2778 (1991); Haggerty v. USAIR, Inc., 952 F.2d

781, 783 (3d Cir. 1992). This general rule is not set in

stone, however. Rather, the United States Supreme Court

has recognized that, in order to prevent frustration of

federal policy, it is sometimes more appropriate to borrow

a limitations period from an analogous area of federal

law. DelCostello, 462 U.S. at 162. This exception is

“closely circumscribed”, see Reed v. United Transp.

Union, 488 U.S. 319, 324 (1989), and should only be

applied “when a rule from elsewhere in federal law clearly

provides a closer analogy than available state statutes, and

when the federal policies at stake and the practicalities of

litigation make that rule a significantly more appropriate

vehicle for interstitial lawmaking”. DelCostello, 462 US.

at 172.

In following the principles enunciated in DelCostello

and Reed, we repeatedly have recognized our duty “to take

seriously [the Supreme Court's admonition] that analo-

gous state statutes of limitations are to be used unless they

frustrate or significantly interfere with federal policies.”

Reed, 488 U.S. at 327. For instance, the mere fact that

a statute touches upon issues of labor law does not mean

that the Court must resort to the statute of limitations

contained in § 10(b) of the NLRA. Thus, in Eichleay

Corp. v. Intern. Ass'n of Bridge, Structural and Orna-

Ta

mental Iron Workers, 944 F.2d 1047 (3d Cir. 1991), we

applied a state statute of limitations for vacating arbitra-

tion awards to an action to enforce an arbitration awards

pursuant to § 301 of the Labor Management Relations

Act, 29 U.S.C. § 185. Similarly, in Brenner v. Local 514,

United Brothers of Carpenters, 927 F.2d 1283 (3d Cir.

1991), we remanded the case to the district court to apply

the most closely analogous state statute of limitations to a

§ 301 claim of retaliation against internal union activities.

In Grasty v. Amalgamated Clothing & Textile Workers

Union, 828 F.2d 123 (3d Cir. 1987), cert. denied, 484

U.S. 1042 (1988), we applied Pennsylvania’s four-year

breach of contract statute of limitations to a union mem-

ber’s claim that the union failed to rebate dues and im-

properly charged disabled workers. In this case, as in

those, the federal statute may be borrowed only if it

clearly provides a closer analogy than the available state

statutes. Answering this question requires us to focus on

the respective policies behind the NLRA and WARN.

The primary purpose of the NLRA is “to protect the

right of workers to join together in labor organizations

and collectively bargain for the terms and conditions of

employment.” United Paperworkers, 999 F.2d at 54; see

also Fort Halifax Packing Co., Inc. v. Coyne, 482 US.

1, 20-21 (1987). The statute “is concerned with ensuring

an equitable bargaining process, not with the substantive

terms that may emerge from such bargaining.” Fort

Halifax, 482 U.S. at 20 (citing Metropolitan Life Ins.

Co. v. Massachusetts, 471 U.S. 724 (1985)). More

specifically, as the Supreme Court noted in Reed, the

NLRA has “effects upon the formation and operation of

the collective-bargaining agreement between the employer

and the bargaining representative, and upon the private

settlement of disputes under that agreement through griev-

ance-and-arbitration procedures”. Reed, 488 U.S. at 329.

The NLRA, then, is concerned with the importance and

integrity of a process. From the NLRA’s perspective,

8a

“minimum terms of employment” that may arise from

another federal statute—or from the process of collective

bargaining itself—are irrelevant so long as the process is

fair.

The six-month statute of limitations set forth in § 10(b)

represents Congress’s view of the proper balancing of the

various interests involved in the process of collective bar-

gaining. The six-month period takes into account “the

national interests in stable bargaining relationships and

finality of private setlements, and an employee’s interest

in setting aside what he views as an unjust settlement

under the collective-bargaining system.” DelCostello, 462

U.S. at 171 (quoting United Parcel Service, Inc. v.

Mitchell, 451 U.S. at 70-71 (1980) (opinion concurring

in the judgment) ). In De/Costello itself, it was precisely

this direct effect on the collective bargaining process that

led the Court to invoke the § 10(b) statute of limitations.

That case involved a § 301 hybrid suit (1) against an

employer for breach of a collective bargaining agreement

pursuant to the NLRA, and (2) against a labor union

for breach of the duty of fair representation. Such a

hybrid action really alleges that the process of collective

bargaining has broken down. Thus, the NLRA policies

applied: “The employee’s interest in setting aside the

‘final and binding’ determination of a grievance through

the method established by the collective-bargaining agree-

ment unquestionably implicates ‘those consensual proc-

esses that federal labor law is chiefly designed to promote

—the formation of the . . . agreement and the private

settlement of disputes under it.’” DelCostello, 462 U.S.

at 171 (quoting Mitchell, 451 U.S. at 70-71 (opinion

concurring in judgment) ).

In DelCostello, the parallels between the cause of action

and the policies behind the NLRA were unmistakable. In

Reed, however, the Supreme Court, while acknowledging

that many employment-related statutes affecting labor will

in some way affect the collective bargaining process,

9a

cautioned that even plausible “tangential and remote”

effects upon collective bargaining are insufficient to war-

rant departure from the general rule. Reed, 488 US. at

330, 331. Thus, the Court refused to borrow the § 10(b)

NLRA statute of limitations to govern a union member’s

free speech claim against the union.

WARN falls into this latter category—any effects it

has on collective bargaining are tangential at best. The

benefits of WARN accrue not only to unionized workers

but to all workers alike. WARN, like dozens of other

employment statutes which bestow substantive rights sim-

ply “gives employees something for which they otherwise

might have to bargain.” Fort Halifax, 482 U.S. at 21

(addressing Maine plant closing law). That is why in

that case, the Supreme Court held that the NLRA did not

preempt a Maine statute providing protection to workers

from plant closings. Unlike the NLRA, the Maine regula-

tion “provide[d] protection to individual union and non-

union workers alike, and thus ‘neither encourage[dj nor

discourage[d] the collective bargaining processes... .’”

Fort Halifax, 482 U.S. at 21 (quoting Metropolitan Life,

471 U.S. at 755). The WARN protections, like the

Maine plant closing law discussed in Fort Halifax, is also

properly understood as establishing part of the “back-

drop” of rights that the parties bring to the collective

bargaining table, and not as affecting the substantive

rights that may emerge from the collective bargaining dis-

cussions. Fort Halifax, 482 U.S. at 21.

WARN serves a broader purpose as well, that goes

beyond the employer-employee relationship addressed by

the NLRA. The statute mandates that employers plan-

ning a plant closing or mass lay-off must notify the

“chief elected official of the unit of local government

within which such closing or layoff is to occur”. 29

U.S.C. § 2102(a)(2). Employers who fail to comply

with the provision are subject to civil penalties of $500

per day. 29 U.S.C. § 2104(a)(3). Thus, WARN serves

very broad societal goals—to protect workers, their fami-

10a

lies and their communities in the wake of potentially

harmful employment decisions. Its remedial nature really

has very little to do with the day to day process of col-

lective bargaining.

To be sure, it cannot be said that WARN has no

effect on collective bargaining. The companies point out,

for example, that under the NLRA, an employer must

provide notice to represented workers, in order to give

the workers the opportunity for meaningful bargaining.

See, e.g. First National Maintenance Corp. v. NLRB,

452 U.S. 666, 681 (1981). This fact does present a

superficial resemblance between the NLRA and WARN,

but on closer inspection, it highlights the difference. The

rights bestowed by the NLRA focus solely on the need

for a meaningful collective bargaining process; WARN

provides an across-the-board substantive right. The im-

plementing regulations of the statute highlight this crucial

distinction by providing that “[c]lollective bargaining

agreements may be used to clarify or [to] amplify the

terms and conditions of WARN, but may not reduce

WARN rights.” 20 C.F.R. § 639.1(g) (emphasis added).

In other words, the NLRA requires notice to protect the

meaningfulness of the _ collective-bargaining process;

WARN’s purpose is to substantively protect employees

and their communities.

The fact that courts have looked to NLRA cases in

interpreting WARN, and the fact that there are some

definitional overlaps, does not change this fundamental

_distinction between the two statutes. At best, WARN

has a family resemblance to the NLRA. In Brenner v.

Local 514, United Brothers of Carpenters, 927 F.2d

1283 (3d Cir. 1991), we rejected the proposition that a

family resemblance is sufficient to justify adopting the

§ 10(b) statute of limitations. There, we held that a

claim against a union for breach of the duty of fair repre-

sentation, while having some effect upon the collective

bargaining atmosphere, did not have an effect sufficient

lla

enough to counsel adoption of the federal statute. Jd. at

1295. In order to justify departing from the general rule,

the analogy must be more direct.”

As the Second Circuit pointed out in United Paper-

workers, courts adopting the section 10(b) statute of

limitations for WARN actions “have failed to grasp this

crucial distinction between statutes which specifically reg-

ulate the collective bargaining relationship and _ those

which remain peripheral to that concern.” United Paper-

workers, 999 F.2d at 55.

Nonetheless, despite the vast gulf between the respective

policies behind the NLRA and WARN, the companies

look for relief in our own prior decision of Haggerty v.

USAir. Their reliance is misplaced. That case addressed

the Employee Protection Program of the Airline Deregu-

lation Act, 49 U.S.C. § 1552(d)(1) (1988) (“EPP”),

a federal statute which provided certain air carrier em-

ployees with a right of first hire against other air carriers.

The EPP directly affected the collective bargaining en-

vironment by impacting on “the seniority relationships of

other employees ... .” Haggerty, 952 F.2d at 787. As

in DelCostello, this direct impact on the collective bar-

gaining environment required a statute of limitations that

furthered the need for the rapid resolution of labor dis-

putes. And since, as we noted in Haggerty itself, the air-

2 The lack of similarity between the NLRA and WARN becomes

even starker when one looks at the remedies afforded by the respec-

tive statutes. Under the NLRA, the National Labor Relations

Board has broad discretion to “ ‘take such affirmative action includ-

ing reinstatement of employees .. . as will effectuate the policies

of [the Act]’ to remedy an employer’s unfair labor practices.”

Tubari Ltd., Inc. v. NLRB, 959 F.2d 451, 453 (3d Cir. 1992).

WARN by its very terms precludes such broad equitable relief:

“Tl A] Federal court shall not have authority to enjoin a plant clos-

ing or mass layoff.” (emphasis added). Similarly, the NLRB’s

discretion in awarding back pay is broad. See Tubari, 959 F.2d

at 453. WARN, though, provides a strict statutory mechanism for

computing damages.

12a

line industry was nearly 90% unionized and the right-

to-hire program was inserted into the statute at the in-

sistence of unions, the six-month section 10(b) statute of

limitations was the obvious choice.®

In determining whether to apply a federal statute of

limitations, we also have considered whether the federal

policies at stake and the practicalities of litigation make

the NLRA statute “a significantly more appropriate ve-

hicle for interstitial lawmaking”. DelCostello, 462 US.

at 172; Haggerty, 952 F.2d at 786. The companies ar-

gue that WARN requires a single federal statute of limita-

tions, because subjecting the companies to multiple state

statutes of limitations would make it difficult for employ-

ers to calculate their contingent liabilities.

This case simply does not present serious uniformity

concerns. The need for uniformity becomes real only

when the federal statute at issue contains numerous types

of claims and legal theories or when the prospect of

multiple state statutes of limitation presents serious prac-

tical problems. Uniformity concerns motivated the Su-

preme Court in Wilson v. Garcia, 471 U.S. 261 (1985),

to apply a uniform limitations period (a state limitations

period in that case) to claims arising under 42 U.S.C.

§ 1983. As the Court pointed out, claims under the broad

civil rights statute “would encompass numerous and di-

verse topics and subtopics.” Wilson, 471 U.S. at 273.

Thus, “[i]f the choice of the statute of limitations were to

depend upon the particular facts or the precise legal

theory of each claim, counsel could almost always argue,

with considerable force, that two or more periods of lim-

itations should apply to each § 1983 claim.” Jd. at 273-

74. The Court used similar reasoning in Agency Holding

3 We also found that “as with the NLRA, the Department of

Labor has had a role in administering the EPP as the agency

charged with maintaining a listing of airline vacancies fo» the

use of protected employees under the EPP.” Haggerty, 952 F.2d

at 787.

13a

Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143

(1987): Since RICO “encompass[es] numerous diverse

topics and subtopics . . . a uniform statute of limitations

is required to avoid intolerable ‘uncertainty and time-

consuming litigation.” Jd. at 149-50 (quoting Wilson,

471 US. at 273, 272).

In Haggerty, we relied on uniformity concerns in decid-

ing to apply the section 10(b) statute. Under the EPP, a

protected employee who had been terminated or fur-

loughed could claim a right of first hire with any other

carrier that was hiring employees. We noted that airline

carriers would have difficulty “managing a cohesive policy

with respect to the EPP were they subject to the varying

limitations periods of each of the states in which they

operate.” Haggerty, 952 F.2d at 786. Thus, without a

uniform federal statute of limitations, the entire airline

industry faced constant and protracted uncertainty.

Unlike RICO and Section 1983, WARN contains but

a single cause of action, and all WARN claims involve

nearly identical fact patterns and discrete inquiries. And

unlike the EPP, under which an airline may be the for-

tuitous victim of events involving other air carriers all

across the country, WARN’s obligations simply do not

implicate such geographic concerns favoring uniformity.

As the Second Circuit put it:

“The term ‘plant closing’ as defined by the Act is

limited to single sites of employment, and venue is

limited to the district where the violation is alleged

to have occurred or where the employer does busi-

ness; unless a single plant site straddles the boundary

between two states, it is unlikely prospective plain-

tiffs will have a broad choice of fora in which to

bring their claims or that doubt will arise as to in

which state triggering events occurred. Therefore,

geographic considerations do not counsel for the ap-

plication of a uniform federal limitations period for

14a

WARN Act claims.” United Paperworkers, 999 F.2d

at 56 (quoting district court opinion).

Because of these same factors, “courts will have little

difficulty in determining which state’s law to apply and

workers will gain few advantages by suing in a court far

from the site of injury.” United Paperworkers, 999 F.2d

at 56.*

The companies’ further concern about the effect of a

plant closing on service of process, and on the mechanics

of litigation, simply do not implicate federal concerns;

rather, they are the same concerns at issue in every cause

of action, whenever the statute of limitations is longer

then a year or so.

On the other hand, a short statute of limitations could

very well frustrate the policies behind WARN. As the

Second Circuit found, under the complex administrative

scheme of the NLRA, in which the NLRB plays a large

and active role in prosecuting claims, “[t]he burden on

complainants in pursuing a claim is minimal, justifying

the short statute of limitations.” United Paperworkers,

999 F.2d at 55. WARN does not contain those adminis-

trative safeguards, and a six-month statute could very well

constitute too great a burden on the claimants.

4 Since the Crown Cork & Seal action occurred in Perry, Georgia,

there is a question as to whether the statute of limitations should

be borrowed from Georgia or Pennsylvania law. We have previously

held that “as a general rule the governing statute of limitations

should be that of the state in- which the federal court sits, unless

a party can make a compelling showing that the application of

that statutory time bar would seriously frustrate federal labor

policy or work severe hardship to the litigants.” Consolidated

Express, Inc. v. New York Shipping Associaiton, Inc., 602 F.2d

494, 507-08 (3d Cir. 1979), vacated on other grounds, 448 U.S.

902 (1980). We need not decide whether the statute of limitations

should be borrowed from Pennsylvania or Georgia law, since no

party has brought to the lower courts’ attention a statute of limi-

tations, from either state, under which the instant acions would

be untimely.

AP te a GLE LTR AD AAA AT ABI IR eC

Vet eis oA nbal go

15a

Finally, cases finding that the practicalities of litiga-

tion favor adoption of a federal statute of limitations have

focused on the problems with the potential state statutes.

For example, in Del/Costello, the Court pointed out that

the two possible state statutes were inconsistent with the

relevant federal policy favoring the finality of settlements

and the opportunity to attack an unfair result under

collective bargaining. The extremely short time periods

in state arbitration statutes “fail to provide an aggrieved

employee with a satisfactory opportunity to vindicate his

rights under § 301 and the fair representation doctrine.”

Id. at 166. Conversely, the relatively lengthy time period

governing legal malpractice claims “would preclude the

relatively rapid final resolution of labor disputes favored

by federal law—a problem not present when a party to a

commercial arbitration sues his lawyer.” Jd. at 168.

Here, the state statutes of limitations brought to the

lower courts’ attention—which range from the two-year

period for enforcing civil penalties under 42 Pa. Cons.

Stat. Ann. § 5524(5) to Pennsylvania’s six-year residual

statute of limitations, 42 Pa. Cons. Stat. Ann. § 5527—

do not interfere with federal policy.° Because of WARN’s

remedial nature and its limited effect on collective bar-

gaining, a short statute of limitations is unnecessary. And

none of the state statutes are so short as to interfere with

a worker’s potential for seeking or gaining relief. While

we acknowledge that none of the possible state laws pro-

vide perfect analogies to WARN, the absence of a perfect

analogy is an insufficient reason to depart from the gen-

eral rule, particularly when federal law does not provide a

satisfactory alternative. See, e.g., DelCostello, 462 U.S.

at 171; Gavalik v. Continental Can Co., 812 F.2d 834,

847 (3d Cir. 1987).

5 Other possible state statutes of limitations include the three

year period set forth in 43 Pa. Stat. Ann. § 260.9a(g) for bringing

claims under the Pennsylvania Wage Payment and Collection Law,

and the four year limitations periods for breach of an implied

contract, 42 Pa. Cons. Stat. Ann. § 5525(4).

is

16a

Here, we need not decide which state statute applies,

since the actions would be timely under any of the pos-

sible statutes of limitations brought to the court’s atten-

tion.

Conclusion

We conclude that, for the reasons detailed above, for

actions arising under WARN, courts must apply the most

closely analogous state statute of limitations. We there-

fore will affirm the district court’s Order in United Steel-

workers of America v. Crown Cork & Seal denying

Crown Cork & Seal’s motion for summary judgment. We

will reverse the Order of the district court in Thomas v.

North Star Steet granting North Star’s motion for sum-

many judgment in favor of North Star. These cases will

be remanded to the respective district courts for further

proceedings consistent with this opinion. Costs taxed

against the appellant in 93-2008. Costs taxed against the

appellee in 93-7613.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

bb } as

17a

APPENDIX B

[Filed Aug. 25, 1993]

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF

PENNSYLVANIA

Civil Action No. 92-5968

UNITED STEELWORKERS OF AMERICA, AFL-CIO/CLC

Vv.

CROWN Cork & SEAL Co., INC.

Memorandum

O’Neill, J. August 24, 1993

On October 15, 1992, plaintiff United Steelworkers of

America, AFL-CIO/CLC (“USW”), filed a complaint

seeking declaratory and monetary relief from defendant

Crown, Cork & Seal Co., Inc. (“CC & S”). Plaintiff “is

the exclusive collective bargaining representative unit com-

posed of certain” workers employed by defendant’s com-

pany. See Complaint at §.3. Defendant is a national

corporation with headquarters located in Philadelphia. It

employed more than 100 employees at its plant in Perry,

Georgia. Id. at 4.4. :

In its complaint, plaintiff alleges that defendant’s ter-

mination of about approximately 85 employees at its

Perry plant on or about September 30, 1991, violated

the provisions of the Worker Adjustment and Retraining

Act (the “WARN Act”), 29 U.S.C. § 2101 et seg. Es-

18a

sentially, plaintiff contends that defendant violated section

3(a) of the WARN Act by failing to notify the USW

of its mass layoff plans at least 60 days before the layoff.

See Complaint at §.12.

Currently before the Court is defendant’s motion for

summary judgment. Defendant contends that plaintiff’s

cause of action is barred by the applicable statute of lim-

itations. As demonstrated by counsels’ presentations at

oral argument on May 20, 1993, and subsequent corre-

spondence regarding recent decisions on the WARN Act’s

statute of limitations, the question before the Court is

topical. Because I agree with the reasoning of the Court

of Appeals for the Second Circuit in United Paperwork-

ers v. Specialty Paperboard, Inc., 1993 U.S. App. LEXIS

18608 (2d Cir. July 19, 1993), I reject defendant’s argu-

ments and therefore deny its motion for summary judg-

ment.

WARN requires companies with one hundred or more

employees to provide workers with at least sixty-days’

written notice before a mass layoff or plant closing.’ A

company that fails to provide such notice prior to a mass

layoff or plant closing may be sued in federal court by

employees who suffer an employment loss for backpay

and benefits for each day of violation. See United Paper-

workers, 1993 U.S. App. LEXIS 18608 at *3-*4 (can-

vassing WARN statute).

WARN does not include an express statute of limita-

tions. Defendant asserts that the six-month statute of

limitations contained in section 10(b) of the National

Labor Relations Act (“NLRA”), 29 U.S.C. § 160(b),

is the appropriate limitations period. Plaintiff argues that

this Court should apply a state limitations period.

1“While a termination immediately qualifies as an employment

loss, 29 U.S.C. § 2101(a) (6) (A), a layoff must last more than six

months to qualify. 29 U.S.C. § 2101(a) (6) (B).” United Paper-

workers v. Specialty Paperboard, Inc., 1993 U.S. App. LEXIS

18608 at *3.

_~ Ni |

19a

Both parties agree that the starting point for this court’s

inquiry is DelCostello v. Teamsters, 462 U.S. 151 (1983).

In DelCostello, the Court held that the six-month period

in section 10(b) of the NLRA applies when an employee

sues both an employer for breach of a collective bargain-

ing agreement and a union for breach of its duty of fair

representation for mishandling the ensuing grievance or

arbitration proceedings.

The Court set out the law governing the determination

of a limitations period for a federal civil statute in the

absence of an express period. Writing for the Court, Jus-

tice Brennan stated that “[i]n such situations. . . [w]e

have generally concluded that Congress intended that the

Courts apply the most closely analogous statute of limita-

tions under state law.” Jd. at 158.

However, as the Court noted, sometimes “state statutes

of limitations can be unsatisfactory vehicles for enforce-

ment of federal law.” Jd. at 161. In these Situations, the

Court borrows limitations periods from related federal

Statutes or employs an alternative such as laches. Jd. at

162. It then reasoned that the six-month period in sec-

tion 10(b) of the NLRA provided a better analogy than

any state statute in formulating a limitations period’ for

an employee’s “hybrid § 301/fair representation claim.”

Id. at 165.

The Court concluded:

We stress that our holding today should not be taken

as a departure from prior practice in borrowing limi-

tations periods for federal causes of action, in labor

law or elsewhere. We do not mean to Suggest that

federal courts should eschew use of state limitations

periods anytime state law fails to provide a perfect

analogy. On the contrary, as the courts have often

discovered, there is not always an obvious state-law

choice for application to a given federal cause of

action; yet resort to state law remains the norm for

borrowing of limitations periods. Nevertheless, when

“ana

20a

a rule from elsewhere in federal law clearly provides

a closer analogy than available state statutes, and

when the federal policies at stake and the practicali-

ties of litigation make that rule a significantly more

appropriate vehicle for interstitial lawmaking, we

have not hesitated to turn away from state law.

Id. at 171-172.

The Court affirmed its commitment to the principles

set out in DelCostello in Reed v. Transportation Union,

488 U.S. 319 (1989). In Reed, the Court was required

to determine the proper limitations period for a union

member’s suit against the union and its officers under

§ 101(a)(2) of Title I of the Labor-Management Re-

porting and Disclosure Act of 1959 (“LMRDA”) for

violation of his free speech rights. The Court held that

state general or residual personal injury statutes provided

the proper limitations period.”

Although the Supreme Court revisited the question of

how to determine the appropriate limitations time for a

civil federal statute that lacks an express period after

Reed, Justice Blackmun’s reformulation of the judicial

inquiry did not command a majority of the Court. See

Lampf, Pleva Lipkind, et al. v. Gilbertson, 111 S.Ct.

2773, 2778-2779 (distilling “hierarchical inquiry for as-

certaining the appropriate limitations period”) (1991).°

2 The Court concluded: “Because § 101(a) (2) of the LMRDA is

modeled on the First Amendment to our Constitution, there is an

analogy between §101(a)(2) claims, § 1983 claims, and state

personal injury actions. . . . The well-established rule that statutes

of limitation for federal causes of action not supplied with their

own limitations periods will be borrowed from state law thus

requires that state general or residual personal injury statutes be

applied to § 101(a) (2) suits.” Reed v. Transportation Union, 488

U.S. at 334.

3 Justice Scalia did not join this part of Justice Blackmun’s

opinion. See Lampf, Pleva Liplcind, et al. v. Gilbertson, 111 S.Ct.

at 2783 (Scalia, J., concurring in part and concurring in the

judgment).

2la

The Court of Appeals for the Third Circuit has con-

ducted the inquiry required by Del/Costello in a number

of cases. It has applied state and federal limitations pe-

riods in those cases. Compare Service Employees Inter-

national v. City Cleaning Co., Inc., 982 F.2d 89 (3d

Cir. 1992) (applying Pennsylvania law when deciding

limitations period for union’s suit to enforce a grievance

committee’s award under § 301 of the Federal Labor

Management Relations Act of 1947) with Haggerty v.

USAir, Inc., 952 F.2d 781 (3d Cir. 1992) (holding that

claims under the Employee Protection Program of the

Airline Deregulation Act of 1978 are governed by

§ 10(b) of the NLRA).

As the parties have informed this Court, there are

cases going both ways on the question of whether state

law or § 10(b) of the NLRA provides the appropriate

limitations period for a civil suit under WARN.

Cases holding that state law furnishes the correct pe-

riod include United Paperworkers vy. Specialty Paper-

board, Inc., 1993 U.S. App. LEXIS 18608 (2d Cir.

July 19, 1993) (adopting Vermont statute of limitations

for contract claims); Frymire v. Ampex Corp., 821 F.

Supp. 651 (D.Col. 1993) (adopting Colorado statute of

limitations for contract claims); Wallace v. Detroit Coke

Corp., 818 F.Supp. 192 (E.D.Mi. 1993) (adopting

Michigan statute of limitations for contract claims);

Automobile Mechanics’ Local No. 701 v. Santa Fe

Terminal Services, Inc., 1993 U.S. Dist. LEXIS 5859

(N.D.Ill. May 3, 1993) (declining to use § 10(b) of the

NLRA but not specifying state statute from which to

borrow).

Cases holding that section 10(b) of the NLRA pro-

vides the proper limitations period include News. Deliver-

ers v. United Magazine Co., 809 F.Supp. 185 (E.D.N.Y.

1992), Order granting motion for entry of judgment

granted, 1993 U.S. Dist. LEXIS 11087 (E.D.N.Y. April

10, 1993); Staudt v. Glastron, Inc., 1993 US. Dist.

22a

LEXIS 3090 (W.D.Tex. February 22, 1993); Thomas

v. North Star Steel Co., Inc., No. 4:CV-92-1507 (M.D.

Pa. May 25, 1993).

Without recounting the discussion of the Court of Ap-

peals for the Second Circuit in United Paperworkers, I

follow the reasoning of the Court in that case and con-

clude that Pennsylvania law provides the appropriate limi-

tations period for civil suits under the WARN Act. Nevi-

ther party cites a possible analogous state statute that is

shorter than two years. Because plaintiff filed its com-

plaint less than two years before defendant’s alleged termi-

nation of employees at its Perry plant, the Court does not

have to determine the particular Pennsylvania statute from

which to borrow. See, e.g., Automobile Mechanics’ Local

No. 701, 1993 U.S. Dist. LEXIS 5859 at * 18.

23a

APPENDIX C

[Filed Aug. 25, 1993]

IN THE

UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF PENNSYLVANIA

Civil Action No. 92-5968

UNITED STEELWORKERS OF AMERICA, AFL-CIO/CLC

i Vv.

CROWN CorK & SEAL Co., INC.

ORDER

AND NOW, this 24 day of August, 1993, upon con-

sideration of defendant’s motion for summary judgment,

the supporting and opposing memoranda thereto and the

transcript of the oral argument conducted on May 20,

1993, it is hereby ORDERED that defendant’s motion

for summary judgment is DENIED.

/s/ Thomas N. O’Neill, Jr.

THOMAS N. O’NEILL, Jr.

ta

24a.

APPENDIX D

[Filed Sep. 19, 1993]

: IN THE

UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF PENNSYLVANIA

Civil Action No. 92-CV-5968

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Plaintiff,

Vv.

CROWN CorK & SEAL Co., INC.,

Defendant.

ORDER

AND NOW, this 16 day of Sept., 1993, upon con-

sideration of defendant Crown Cork & Seal Co., Inc.’s

Motion for Certification for Interlocutory Appeal Pursu-

ant to 28 U.S.C. § 1292(b), and the response thereto,

the Court hereby certifies that its ORDER dated August

24, 1993 denying defendant’s motion for summary judg-

ment involves a controlling question of law as to which

there is substantial ground for difference of opinion and

that an immediate appeal from the order may materially

advance the ultimate termination of the litigation.

By THE Court:

/s/ Thomas N. O’Neill, Jr.

THOMAS N. O’NEILL, JR.

U.S.D.J.

{Entered 9/17/93]

25a

APPENDIX E

STATUTES INVOLVED

WORKER ADJUSTMENT AND

RETRAINING NOTIFICATION

§ 2101. Definitions; exclusions from definition of loss

of employment

(a) Definitions

As used in this chapter—

(1) the term “employer” means any business en-

terprise that employs—

(A) 100 or more employees, excluding part-

time employees; or

(B) 100 or more employees who in the ag-

gregate work at least 4,000 hours per week (ex-

Clusive of hours of overtime) ;

(2) the term “plant Closing” means the perma-

nent or temporary shutdown of a single site of em-

ployment, or one or more facilities or operating

units within a single site of employment, if the shut-

down 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;

(3) the term “mass layoff” means a reduction in

force which—

(A) is not the result of a plant closing; and

(B) results in an employment loss at the

Single site of employment during any 30-day

period for—

(i)(I) at least 33 percent of the em-

Ployees (excluding any part-time employ-

ees); and

26a

(II) at least 50 employees (excluding

any part-time employees) ; or

(ii) at least 500 employees (excluding

any part-time employees) ;

(4) the term “representative” means an exclusive

representative of employees within the meaning of

section 159(a) or 158(f) of this title or section 152

of title 45;

(5) the term “affected employees” means employ-

ees who may reasonably be expected to experience

an employment loss as a consequence of a proposed

plant closing or mass layoff by their employer;

(6) subject to subsection (b) of this section, the

term “employment loss” means (A) an employment

termination, other than a discharge for cause, volun-

tary 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;

(7) the term “unit of local government” means

any general purpose political subdivision of a State

_ which has the power to levy taxes and spend funds,

as well as general corporate and police powers; and

(8) the term “part-time employee” means an em-

ployee 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.

(b) Exclusions from definition of employment loss

(1) In the case of a sale of part or all of an em-

ployer’s business, the seller shall be responsible for pro-

viding notice for any plant closing or mass layoff in ac-

cordance with section 2102 of this title, up to and includ-

ing the effective date of the sale. After the effective date

of the sale of part or all of an employer’s business, the

27a

purchaser shall be responsible for providing notice for

any plant closing or mass layoff in accordance with sec-

tion 2102 of this title. Notwithstanding any other pro-

vision of this chapter, any person who is an employee

of the seller (other than a part-time employee) as of

the effective date of the sale shall be considered an

employee of the purchaser immediately after the effective

date of the sale.

(2) Notwithstanding subsection ( a)(6) of this section,

an employee may not be considered to have experienced

an employment loss if the closing or layoff is the result

of the relocation or consolidation of part or all of the

employer’s business and, prior to the closing or layoff—

(A) the employer offers to transfer the employee

to a different site of employment within a reasonable

commuting distance with no more than a 6-month

break in employment; or

(B) the employer offers to transfer the employee

to any other site of employment regardless of dis-

tance with no more than a 6-month break in em-

ployment, and the employee accepts within 30 days

of the offer or of the closing or layoff, whichever

is later.

§ 2102. Notice required before plant closings and mass

layoffs

(a) Notice to employees, State dislocated worker units,

and local governments

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 em-

ployees as of the time of the notice or, if there is

no such representative at that time, to each affected

employee; and

28a

(2) to the State dislocated worker unit (desig-

nated or created under title III of the Job Training

Partnership Act [29 U.S.C. 1651 et seq.]) and the

chief elected official of the unit of local government

within which such closing or layoff is to occur.

If there is more than one such unit, the unit of local

government which the employer shall notify is the unit

of local government to which the employer pays the high-

est taxes for the year preceding the year for which the

determination is made.

(b) Reduction of notification period

(1) An employer may order the shutdown of a single

site of employment before the conclusion of the 60-day

period if as of the time that notice would have been re-

quired the employer was actively seeking capital or busi-

ness which, if obtained, would have enabled the employer

to avoid or postpone the shutdown and the employer rea-

sonably and in good faith believed that giving the notice

required would have precluded the employer from obtain-

ing the needed capital or business.

(2)(A) An employer may order a plant closing or

mass layoff before the conclusion of the 60-day period

if the closing or mass layoff is caused by business cir-

cumstances that were not reasonably foreseeable as of the

time that notice would have been required.

(B) No notice under this chapter shall be required if

the plant closing or mass layoff is due to any form of

natural disaster, such as a flood, earthquake, or the

drought currently ravaging the farmlands of the United

States.

(3) An employer relying on this subsection shall give

as much notice as is practicable and at that time shall

give a brief statement of the basis for reducing the noti-

fication period.

fa Vai NP Neh lat eg a 2

29a

(c) Extension of layoff period

A layoff of more than 6 months which, at its outset,

was announced to be a layoff of 6 months or less, shall

be treated as an employment loss under this chapter un-

less—

(1) the extension beyond 6 months is caused by

business circumstances (including unforeseeable

changes in price or cost) not reasonably foreseeable

at the time of the initial layoff; and

(2) notice is given at the time it becomes reason-

ably foreseeable that the extension beyond 6 months

will be required.

(d) Determinations with respect to employment loss

For purposes of this section, in determining whether a

plant closing or mass layoff has occurred or will occur,

employment losses for 2 or more groups at a single site

of employment, each of which is less than the minimum

number of employees specified in section 2101(a)(2) or

(3) of this title but which in the aggregate exceed that

minimum number, and which occur within any 90-day

period shall be considered to be a plant closing or mass

layoff unless the employer demonstrates that the employ-

ment losses are the result of separate and distinct actions

and causes and are not an attempt by the employer to

evade the requirements of this chapter.

§ 2103. Exemptions

This chapter shall not apply to a plant closing or mass

layoff if—

(1) the closing is of a temporary facility or the

closing or layoff is the result of the completion of

a particular project or undertaking, and the affected

employees were hired with the understanding that

their employment was limited to the duration of the

facility or the project or undertaking; or 3

a

30a

(2) the closing or layoff constitutes a strike or

constitutes a lockout not intended to evade the re-

quirements of this chapter. Nothing in this chapter

shall require an employer to serve written notice

pursuant to section 2102(a) of this title when per-

manently replacing a person who is deemed to be an

economic striker under the National Labor Relations

Act [29 U.S.C. 151 et seq.]: Provided, That noth-

ing in this chapter shall be deemed to validate or in-

validate any judicial or administrative ruling relating

to the hiring of permanent replacements for economic

strikers under the National Labor Relations Act.

§ 2104. Administration and enforcement of requirements

(a) Civil actions against employers

(1) Any employer who orders a plant closing or mass

layoff in violation of section 2102 of this title shall be

liable to each aggrieved employee who suffers an employ-

ment loss as a result of such closing or layoff for—

(A) back pay for each day of violation at a rate

of compensation not less than the higher of—

(i) the average regular rate received by such

employee during the last 3 years of the employ-

ee’s employment; or

(ii) the final regular rate received by such

employee; and

(B) benefits under an employee benefit plan de-

scribed in section 1002(3) of this title, including

the cost of medical expenses incurred during the em-

ployment loss which would have been covered under

an employee benefit plan if the employment loss had

not occurred.

Such liability shall be calculated for the period of the

violation, up to a maximum of 60 days, but in no event

for more than one-half the number of days the employee

was employed by the employer.

een athe ~~

3la

(2) The amount for which an employer is liable under

paragraph (1) shall be reduced by—

(A) any wages paid by the employer to the em-

ployee for the period of the violation;

(B) any voluntary and unconditional payment by

the 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 bene-

fits 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 re-

duced by crediting the employee with service for all pur-

poses under such a plan for the period of the violation.

(3) Any employer who violates the provisions of sec-

tion 2102 of this title with respect to a unit of local gov-

ernment shall be subject to a civil penalty of not more

than $500 for each day of such violation, except that such

penalty shall not apply if the employer pays to each ag-

grieved employee the amount for which the employer is

liable to that employee within 3 weeks from the date the

employer orders the shutdown or layoff.

(4) If an employer which has violated this chapter

proves to the satisfaction of the court that the act or

omission that violated this chapter was in good faith and

that the employer had reasonable grounds for believing

that the act or omission was not a violation of this chap-

ter the court may, in its discretion, reduce the amount of

the liability or penalty provided for in this section.

(5) A person seeking to enforce such liability, includ-

ing a representative of employees or a unit of local gov-

ernment aggrieved under paragraph (1) or (3), may sue

either for such person or for other persons similarly sit-

uated, or both, in any district court of the United States

32a

for any district in which the violation is alleged to have

occurred, or in which the employer transacts business.

(6) In any such suit, the court, in its discretion, may

allow the prevailing party a reasonable attorney’s fee as

part of the costs.

(7) For purposes of this subsection, the term,’ “ag-

grieved employee” means an employee who has worked

for the employer ordering the plant closing or mass layoff

and who, as a result of the failure by the employer to

comply with section 2102 of this title, did not receive

timely notice either directly or through his or her rep-

resentative as required by section 2102 of this title.

1 «8

(b) Exclusivity of remedies

The remedies provided for in this section shall be the

exclusive remedies for any violation of this chapter. Un-

der this chapter, a Federal court shall not have authority

to enjoin a plant closing or mass layoff.

§ 2105. Procedures in addition to other rights of em-

ployees :

The rights and remedies provided to employees by this

chapter are in addition to, and not in lieu of, any other

contractual or statutory rights and remedies of the employ-

ees, and are not intended to alter or affect such rights and

remedies, except that the period of notification required

_ by this chapter shall run concurrently with any period

of notification required by contract or by any other

statute.

§ 2106. Procedures encouraged where not required

It is the sense of Congress that an employer who is

not required to comply with the notice requirements of

section 2102 of this title should, to the extent possible,

provide notice to its employees about a proposal to close

a plant or permanently reduce its workforce.

1 So in original. The comma probably should not appear.

33a

§ 2107. Authority to prescribe regulations

(a) The Secretary of Labor shall prescribe such regu-

lations as may be necessary to carry out this chapter.

Such regulations shall, at a minimum, include interpre-

tative regulations describing the methods by which em-

ployers may provide for appropriate service of notice as

required by this chapter.

(b) The mailing of notice to an employee’s last known

address or inclusion of notice in the employee’s paycheck

will be considered acceptable methods for fulfillment of

the employer’s obligation to give notice to each affected

employee under this chapter.

§ 2108. Effect on other laws

The giving of notice pursuant to this chapter, if done

in good faith compliance with this chapter, shall not

constitute a violation of the National Labor Relations

Act [29 U.S.C. 151 et seq.] or the Railway Labor Act

[45 U.S.C. 151 et seq.].

§ 2109. Report on employment and international com-

petitiveness

Two years after August 4, 1988, the Comptroller Gen-

eral shall submit to the Committee on Small Business of

both the House and Senate, the Committee on Labor

and Human Resources, and the Committee on Education

and Labor a report containing a detailed and objective

analysis of the effect of this chapter on employers (es-

pecially small- and medium-sized businesses), the econ-

omy (international competitiveness), and employees (in

terms of levels and conditions of employment). The

Comptroller General shall assess both costs and benefits,

including the effect on productivity, competitiveness, un-

employment rates and compensation, and worker retrain-

ing and readjustment.