Appendix — Viator v. Delchamps, Inc.

a) 97-86 JUL 141997

NO. GrHICE OF THE CLERK

In the

Supreme Court of the United States

OCTOBER TERM, 1997

ROBBIE A. VIATOR, DONIE R. HARMON, PAMELA S.

BARBRY, RICHARD D. KEITH; PATRICIA DOUGLAS;

ANGELA ROMERO; DONALD FONTENOT; GERALD

LEE; ODELIA LOUISE TATE; DINA LOPEZ; NANCY H.

BIMLE; MICHAEL JOSEPH TRAHAN; ANGELA R.

LOPEZ; STEVEN PAUL JOHNSON; EVERETT PAUL

MARSHALL; GARY CHESTER; KEVIN B. MATTE;

CYNTHIA L. ROUGEAU; DAVID LEE PATTON;

BRADLEY FONTENOT: TRACY BARNES: FRANK

BERLIN: AND KATHLEEN CRICH

Individually and on behalf of all persons similarly situated

Petitioners

V.

DELCHAMPS, INCORPORATED

Respondents

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

APPENDIX VOLUME I

SUBMITTED BY: SUBMITTED BY:

JAMES E. HOPKINS ROBERT J. TETE

#6990 #17384

ATTORNEY AT LAW JONES, TETE, NOLEN,

208 East Napoleon HANCHEY, SWIFT, -

Post Office Box 205 SPEARS & FONTI, L.L.P.

Sulphur, LA 70663 1135 Lakeshore Drive

318/527-7071 Post Office Box 910

Lake Charles, La 70602

(318) 439-8315

COUNSEL FOR COUNSEL FOR

PETITIONERS PETITIONERS

A B Letter Service, Inc., 327 Chartres St., New Orleans, La. (504) 581-5555 (7

i

APPENDIX

United States District Court Minute

Entry, filed February 22, 1996...........cccccccccccc..-.. A-1

United States District Court Report and

Recommendation, filed July 1, 1996..................... A-4

United States District Court Memoran-

dum Ruling and Judgment, filed August

- United States Court of Appeals, Fifth Cir-

cuit letter regarding Petitions for Rehear-

ing or Rehearing En Banc, and United

States Court of Appeals, Fifth Circuit

Decision, rendered April 15, 1997....................... A-21

The Worker Adjustment and Retraining

Notification Act (WARN)........c.ccccccccscscscosescocecesees A-33

The WARN regulations, (20 C.F.R. 639 et

| SEES SATEEN OC Ea A-47

Legislative History, House Conf. Rep. No.

100-576 Subtitle E - Advance Notification

of Plant Closings and Mass Ce A-75

Affidavit of Robbie A. Viator, Plain-

I I icc A-99

ii

APPENDIX (continued)

Page No

Defendant’s Exhibit “B’’, submitted by

SAI cccerssitiisinstcsicciiniippindiaiiiididitdipitiiaieiindaaiatl A-104

Wayne Wiggins deposition excerpts.................. A-122

Wiggins #1 and #2 deposition exhibits............. A-142

Exhibit D-17, Newspaper Advertisement,

dated Wednesday, May 22, 1985..............00000.0.. A-148

Bryan Bradley deposition excerpts.................... A-149

Affidavit of Dina Lopez

ID i iiaiiesnciessicisnscttiatinisiaticeeainsteciiieahiinnnaaaam A-161

Affidavit of Karla B. Viator

SE Te innitinnsistnisisicssndlininldidesigd adnate A-164

A-1

APPENDIX A

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

ROBBIE A. VIATOR, ET AL : DOCKET NO.95

CV 0797 LC

VERSUS a : JUDGE TRIMBLE

DELCHAMPS, INC. : MAGISTRATE

JUDGE WILSON

FILED

FEB 22 1996

MINUTE ENTRY

A telephone status conference was held this date with

councel for all parties participating. This is a suit under the

Worker Adjustment and Retraining Notificatiaon Act

(WARN Act), 29 U.S.C. § 2101 et seq. It arises out of the clos-

ing of three of the defendant’s stores in the Calcasieu Parish

area. All parties agree that there is no viable claim under

the WARN Act unless 50 or more employees suffered an

employment loss at a single site of employment. See 29 U.S.C.

§2101(aX2); 20 C.F.R. § 639.3((b). The parties further agree

that this threshold of 50 employees is not reached in this case

unless all three stores are considered a “single site of employ-

ment.” See 20 C.F.R. § 639.3(1). The question of whether the

A-2

three stores at issue constitute a “single site” under the

WARN Act is a mixed question of law and fact. Carpenters

Dist. Council v. Dillard Dept. Stores, 15 F.3d 1275, 1289 (5th

Cir. 1994), cert. denied, 115 S.Ct. 933 (1995); Williams v.

Phillips Petroleum Co., 23 F.3d 930, 934 (5th Cir. 1994), cert.

denied, 115 S.Ct. 582 (1994). Whether multiple locations con-

stitute a “single site” under the WARN Act is a legal con-

clusion to be drawn from the underlying historical facts. Id.

After hearing the arguments of counsel it appears that there

may not be a genuine issue of underlying historical fact

material to whether the three stores were a “single site”

under the WARN Act. Counsel argeed that summary judg-

ment should be considered on this issue before the motion

for class certification was submitted. Accordingly, this court

will consider granting a sua sponte summary judgment on

the issue of whether the three stores should be considered

as a “single site” under the WARN Act. The plaintiffs bear

the burden of proof on this issue and, therefore, must come

forward with competent summary judgment evidence pro-

bative of facts that could support a finding in their favor on

the “single site” issue. Plaintiffs will have until April 22,

1996, to file their summary judgment evidence and a brief.

Defendant will have until May 7, 1996, to respond. Plain-

tiffs will then have until May 17, 1996, within which to res-

pond to defendant’s submission. Thereafter, the undersign-

ed will file a report and recommendation to the district judge.

The hearing on class certification presently set for

February 29, 1996, is upset and refixed for June 10, 1996.

No argument will be heard unless ordered by the court. The

parties agree that the motion for class certification will be

decided on the basis of the record, including timely filed briefs

and any supporting or opposing documents filed therewith.

A-3

THUS DONE AND SIGNED in Chambers at Lake

Charles, Louisiana, this 224 day of February, 1996.

/s/ Alonzo P. Wilson

ALONZO P. WILSON

UNITED STATES MAGISTRATE JUDGE

A4

APPENDIX B

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

ROBBIE A. VIATOR, etal : CIVIL ACTION

VERSUS : NUMBER 95-0797

DELCHAMPS, INC. : JUDGE TRIMBLE

MAGISTRATE

JUDGE WILSON

FILED

JUL 01 1996

REPORT AND RECOMMENDATION

This suit is brought under the Worker Adjustment and

Retraining Notification Act (“WARN Act”), 29 U.S.C. § 2101,

et seg. The plaintiffs are all former employees of three

Calcasieu Parish stores owned and operated by Delchamps,

Inc. (“Delchamps”). Between February 25, 1995 and February

27, 1995, Delchamps closed all three Calcasieu Parish stores.

At that time, all area employees were severed. The employees

did not receive sixty days notice prior to the store closings

as contemplated under the WARN Act.

On May 4, 1995, plaintiffs initiated the instant suit

against Delchamps. Plaintiffs seek class certification on

behalf of all employees discharged due to the closure of the

A-5

Calcasieu Parish stores, During a February 22, 1996, schedul-

ing conference, all parties agreed that for the WARN Act pro-

visions to apply, fifth or more employees must have suffered

an employment loss at a single site of employment. See, 29

U.S.C. § 2101(aX2); 20 C.F.R. § 639.3(b). The parties further

agreed that the fifty employee threshold is not reached here

unless all three stores are considered a “single site of employ-

ment.” See, 20 C.F.R. § 639.3(1). Counsel acknowledged that

this issue should be decided via summary judgment before

the case proceeded further. Counsel were notified that the

court would consider entering a sua sponte summary judg-

ment on the issue of whether the three stores should be con-

sidered a “single site” under the WARN Act. The parties

have extensively briefed the matter; and it is now ripe for

decision.

Summary Judgment Standard

Summary judgment is appropriate “if the pleadings,

depositions, answers to interrogatories, and admissions on

file, together with affidavits, if any, show that there is no

genuine issue a to any material fact and that the moving par-

ty is entitled to a judgment as a matter of law. ” Fed. R. Civ.

P. 56(c).

When seeking summary judgment, the movant

bears the initial responsibility of demonstrating

the absence of a genuine issue of material fact

with respect to those issues on which the movant

bears the burden of proof at trial. For any mat-

ter on which the non-movant would bear the

burden of proof at trial, however, the movant

may merely point to the absence of evidence and

thereby shift to the non-movant the burden of

demonstrating

AS

by competent summary judgment proof that

there is an issue of material fact warranting trial.

Only when “there is sufficient evidence favoring

the non-moving party for a jury to return a ver-

dict for that party” is a full trial on the merits

warranted.

Transamerica Insurance Co. v. Avenell, 66 F.3d 715, 718-19

(6th Cir. 1995Xcitations omitted).

In deciding a summary judgement motion, the district court

may consider all competent summary judgment evidence in

the entire case file. Resolution Trust Corp. v. Starkey, 41 F.3d

1018, 1023 (5th Cir. 1995); United States v. Houston Pipe Line

Co., 37 F.3d 224, 227 (5th Cir. 1994).

Law

The WARN Act requires covered employers to notify

“affected employees’ of a mass layoff. “Affected employees”’

are those employees who “may reasonably be expected to ex-

perience an employment loss as a consequence of a proposed

plant closing or a mass layoff by their employer.” 29 U.S.C.

§ 2101(aX5). In turn, a “mass layoff” is defined as any employ-

ment loss at a single site of employment which involves one-

third of the employees at that site and at least fifty employees,

or alternatively, at least five hundred employees. 29 U.S.C.

§ 2101(aX3); 20 C.F.R. § 639.3(c). If a ’mass layoff” occurs

within the meaning of the WARN Act, the employer must

provide 60 days advance written notice to each affected

employee and notify various state and local officials of the

impending layoff. 29 U.S.C. § 2102. An employer who runs

afoul of the WARN Act is liable for back pay, lost benefits,

civil penalties, and attorney’s fees. 29 U.S.C. § 2104.

A-7

The WARN Act itself does not define “single site of

employment.” Instead, we must look to the regulations pro-

mulgated by the Department of Labor. They provide:

(1) A single site of employment can refer to

either a single location or a group of con-

tiguous locations. Groups of structures

which form a campus or industrial park, or

separate facilities across the street from one

another, may be considered a single site of

employment.

(2) Separate buildings or areas which are not

directly connected or in immediate proximi-

ty may be considered a single site of employ-

ment if they are in reasonable geographic

proximity, used for the same purpose, and

share the same staff and equipment. An ex-

ample is an employer who manages a

number of warehouses in an area but who

regularly shifts or rotates the same

employees from one building to another.

(3) Non-contiguous sites in the same geographic

area which do not share the same staff or

operational purpose should not be con-

sidered a single site. For example, assembly

plants which are located on opposite sides

of town and which are managed by a single

employer may be considered separate sites

if they employ different workers.

(4) The term “single site of employment” may

also apply to unusual organizational situa-

tions where the above criteria do not

reasonably apply.

A$

20 C.F.R. § 639.3(1) (1988).

Whether multiple work locations constitute a “single

site of employment” under the WARN Act is a mixed ques-

tion of fact and law. Williams v. Phillips Petroleum Co., 23

F.3d 930, 934 (6th Cir.), cert. denied, 115 S.Ct. 582 (1994)

(citing, Carpenters District Counsel v. Dillard Department

Stores, 15 F.3d 1275, 1289 (5th Cir. 1994), cert. denied, 115

S.Ct. 922 (1995) (Whether multiple locations constitute a

“single site” under the WARN Act is a legal conclusion to

be drawn from the underlying historical facts)).

In their rebuttal memorandum, plaintiffs’ assert that

16 of defendant’s 25 proposed uncontested material facts are

indeed contested. However, plaintiffs produce no competent

summary judgment evidence to support their allegation.

Assertions unsupported by facts are insufficient to oppose a

motion for summary judgment. Williams v. Weber Manage-

ment Serv., 839 F.2d 1039, 1041 (5th Cir. 1987). The material

facts remain uncontroverted; our task is to draw a legal con-

clusion therefrom.

Facts

In the six months preceding February 17, 1985,

Delchamps opened three stores in the Lake Charles/Sulphur

area. Store Numbers 104 (Nelson Road) and 105 (Highway

14) were located in Lake Charles; Store Number 106

(Maplewood Drive) was situated in Sulphur. All three stores

were built within 12 road miles of each other. The three

Calcasieu Parish stores were built on a 33,387 square foot

floor plan.! Shortly after the opening the Lake Charles/-

l¥our other Delchampe stores opened in 1985 had the same square-footage.

A-9

Sulphur area stores, Delchamps initiated a six month adver-

tising campaign in the local paper.2

In October 1994, due to declining sales and profits, the

Delchamps hierarchy made a preliminary decision to close

between twelve and fourteen of its unprofitable stores. In

January, 1995, management revised and reduced the number

of proposed store closures to seven. The estimated cost of clos-

ing the stores was $9,000,000. On February 28, 1995, store

numbers 104, 105, and 113 (Monroe) were closed. Employees

of the Lake Charles/Sulphur stores, who did not accept

Delchamps’ offer to transfer to other on-going stores, were

discharged. See, White Affidavit.

Each Delchamps grocery store: prepared its own weekly

sales report; had its own profit/loss statement; had its own

payroll and maintained its own payroll records; had its own

store manager (except for last two months Lake

Charles/Sulphur stores were open); had its own assistant and

department managers; determined its own product needs and

placed resupply orders; and hired fired, and disciplined its

own employees. White Affidavit.

Of the 88 workers employed at the three Lake

Charles/Sulphur Delchamps stores over the stores’ ten year

lifespan, 27 employees, or roughly 30 percent, were per-

manently transferred between the stores. When a store was

short-handed due to sickness, vacation, or attrition, tem-

2 The advertisement referred to the stores as “The New Delchamps

Stores.” The “s” at the end of the words appeared in a different font. Plain-

tiffs argue that the use of the different font implies that the three stores

were one. After reviewing the advertisements, we draw no such inference.

The same advertisement was used chain-wide. the different font was simply

a matter of artistic license.

A-10

porary help was sometimes sought from area stores. Deposi-

tion, Wayne Wiggins, Area Manager. During the 31 weeks

preceding the store closures, 18 employees, or 20 percent of

the total Lake Charles/Sulphur workforce, temporarily

helped out at area stores other than their own. Class

representative, Robbie Viator, estimated that over his ten

years with Delchamps, under 50 employees were temporarily

re-assigned. When temporary personnel reassignments were

necessary, the transferee store was responsible for the

employees’ wages while at the transferee store. White

affidavit.

At least one employee recalls transferring cases, boxes

and buckets from one store to another. Also, at least one

employee stated that supplies were transferred from one store

to another. See, plaintiffs’ exhibits K-O. The only equipment

commonly shared by the three stores was a pressure washer.

Each store had its own floor machine and Telxon order

machines. However, occasionally one store would be required

to borrow a floor machine or Telxon computer from another

store. There is also evidence that excess produce was transfer-

red between stores.3

Legal Conclusions

First, store numbers 104, 105, and 106 are not con-

tiguous, nor do they form a campus or an industrial park.

20 C.F.R. § 639.3(1X1). Accordingly, to be considered a single

site of employment, they must be within the same geographic

proximity. 20 C.F.R. § 639.3((2). The 12 mile maximum

distance between the stores does not preclude them from

3 Whenever a store transferred goods to another store, the transaction

was documented, or an in-kind exchange was made.

A-11

being considered a single site of employment. See, Rifkin v.

McDonnell Douglas Corp., 78 F.3d 1277 (8th Cir. 1996Xtwo

facilities 11% miles apart were impliedly considered in same

geographic proximity).

The remaining inquiry focuses on whether the stores

had the same purpose and shared the same staff and equip-

ment. 20 C.F.R. § 639.302 &3).

Whether the three stores shared the same operational

purpose depends entirely on how broadly or narrowly we

define the stores’ operational purpose. Nevertheless, it can-

not be disputed that the purpose of the three stores, (and all

Delchamps store) is to showcase and sell foodstuff for profit.4

Even if the Lake Charles/Sulphur stores had a common

purpose, they must still share the same staff and equipment.

Occasional or periodic commingling is insufficient; an

employer must “regularly” shift of rotate the “same

employees” from one facility to another. 20 CFR. §

639.3(IX2). Plaintiff has adduced evidence that a relatively

small fractrion of employees were loaned between facilities.

There is no evidence that the “same employees” were

“regularly” shifted between sites. Occasional shifting of

various employees is not enough. The regulations state by

4 In their Rebuttal Memorandum, plaintiffs rely heavily on target sales

and expense figures for the three stores. Even though the sales grossly

exceed expenses for all three stores, plaintiffs argue that only one store

was unprofitable, since it did not meet the target projections. To do so,

plaintiffs resort to an improvised expense/sales ratio. However, if we app-

ly the same ratio to all three stores, they all appear profitable We can

draw no meaningful conclusions from this data. Nor need we, since this

issue is related to the store’s common operational purpose which we have

decided in plaintiffs’ favor.

A-12

example that facilities on different sides of town should be

considered separate sites if they employ “different workers.”

20 C.F.R. § 639.3(IX3).Here, each store employed its own

workforce, and did not “share” the same staff. No employees

were employed in common; the wages of any temporary

transfers were paid by the transfereee store. Each store was,

in essence, operated autonomously.

The same conclusion applies to the equipment regularly

shared was a ressure washer. Other equipment and supplies

were sometimes shared. Once again, this does not make the

grade. See, Hooper, infra. Produce was transferred between

stores when one store had a need, and the other a surplus.

However, these transactions were documented, or on an in-

kind basis. This is akin to friendly competitors who occa-

sionally help each other out when one competitor experiences

a shortage.

Other courts considering this issue have drawn the

same conclusion from similar facts. In Frymire v. Ampex

Corp., despite managerial overlap, frequent employee

transfers, and the joint employment of some employees, the

Court found that there was no “shifting’’, “rotating’’, or

“sharing” of employees which was necessary for two or more

sites to be considered a single site of employment. Frymire

v. Ampex Corp., 61 F.3d 757, 767 (10th Cir. 1995), cert.

dismissed, 116 S.Ct. 1588 (1996).

In Wiltz v. M/G Transport Services, Inc., the court

analogized eight tugboats to branch offices or stores on its

way to holding that the tugboats could not be considered a

single site of employment. Wiltz v. M/G Transport Services,

Inc., 1996 WESTLAW 239, 439 (E.D. Ky. 1996).

A-18

In Fuentes v. Houston Industries., the court declined to

combine 48 sites to form a single site of employment despite:

only one human resources department, freely transferred

employees between job sites, and layoffs at different sites

within the same five day period, Fuentes v. Houston In-

dustries, Inc., 1994 WESTLAW 778892 (S.D. Tex. 1994).

In McClain v. Laurel Street Art Club, Inc., an art pro-

duction facility and a framing facility were not considered

a single site. McClain v. Laurel Street Art club, Inc., 925

F.Supp. 496 (E.D. Ky. 1995). The court reached this decision

even though both facilities shared the same upper manage-

ment; supplies for both facilities were ordered by one plant

and delivered to and stored at the other; new equipment was

shared; and roughly 20 percent of employees from one facility

were sporadically used by the other. Id.

In Rifkin v. McDonnell Douglas Corp., supra, an occa-

sional transfer of employees and office equipment did not con-

stitute evidence of regular sharing.

In Hooper v. Polychrome, the plaintiff sought to com-

bine two facilities: one which performed marketing, sales,

and service functions for manufacturing plate processing

equipment, and a plant which produced plate and film pro-

cessing equipment. Hooper v. Polychrome, Inc., 916 F.Supp.

1111 (. Kan. 1996). The court stated that the periodic

transfer of a significant number of employees from one facility

to another could not be equated with the shifting, rotating,

or sharing as required to find a single site of employment.

Id. Moreover, sharing isolated pieces of equipment to

periodically perform tasks does not evidence shared equip-

ment. Hooper, supra.

A-14

The evidence viewed in the light most favorable to

plaintiff compels a determination that Delchamps stores, 104,

105, and 106 should not be considered a “single site of employ-

ment” under the WARN Act.5 As mentioned previously,

there must be an emloyment loss of at least fifty (50)

employees at a single site of employment for the protections

of the WARN Act to attach. 29 U.S.C. § 2101(aX3). Since we

cannot consider all three stores as a single site, plaintiffs do

not have the requisite number of affected employees; and they

cannot pursue a claim under the WARN Act.

Accordingly, IT IS RECOMMENDED that summary

judgment be entered in favor of defendant, Delchamps, Inc.,

and against plaintiffs Robbie Viator, et al., dismissing plain-

tiffs’ claims, with prejudice.

IT IS FURTHER RECOMMENDED that plaintiffs’ mo-

tion for class certification be DENIED, as moot.

~ Under the provisions of 28 U.S.C. § 636(bX1XC), the par-

ties have ten (10) business days from receipit of this Report

and Recommendation to file any objections with the Clerk

of Court. Timely objections will be considered by the district

judge prior to a final ruling.

5 Also, the “unusual organizational situations” exception to the Depart-

ment of Labor regulations is inapplicable here. 20 C.F.R. § 639.3(1X4).

Retail stores which are owned and operated by one firm are quite com-

mon an unexceptional in the modern business climate.

A-15

FAILURE TO FILE WRITTEN OBJECTIONS TO THE

PROPOSED FINDINGS AND RECOMMENDATIONS

CONTAINED IN THIS REPORT WITHIN TEN (10)

BUSINESS DAYS FROM THE DATE OF ITS SERVICE

SHALL BAR AN AGGRIEVED PARTY FROM ATTACK-

ING THE FACTUL FINDINGS ON APPEAL, EXCEPT

UPON GROUNDS OF PLAIN ERROR, THE UN.

OBJECTED TO PROPOSED FACTUAL FINDINGS AND

LEGAL CONCLUSIONS ACCEPTED BY THE DISTRICT

COURT.

THUS DONE AND SIGNED in Chambers at Lake

Charles, Louisiana, on this 18t day of July, 1996.

/s/ Alonzo P. Wilson

ALONZO P. WILSON

UNITED STATES MAGISTRATE JUDGE

—

A-16

APPENDIX C

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

ROBBIE A. VIATOR,e¢ al. : DOCKET NO.

CV 95-0797

VERSUS : JUDGE TRIMBLE

DELCHAMPS, INC. : MAGISTRATE

JUDGE WILSON

FILED

AUG 13 1996

MEMORANDUM RULING

Currently before the court are the Plaintiff's objections

to the Report and Recommendation regarding the court’s fac-

tual findings and legal conclusions. With regard to the Plain-

tiff's objections to the court’s factual findings we must con-

sider Fed. R. Civ P. 52(a) which states that “Findings of fact,

whether based on oral or documentary evidence, shall not

be set aside unless clearly erroneeous...” The Supreme court

has held that under the clearly erroneous standard, the

reviewing court will reverse the lower court only if it “is left

with the definite and firm conviction that a mistake has been

committed.” United States v. United States Gypsum Co., 333

U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948).

A-17

After reviewing the record, this court does not believe that

a mistake has been committed by the Magistrate Judge,

therefore his factual findings will not be disturbed.

Even if this were not the case, the objections to the fac-

tual findings are irrelevant because they do not affect the

deciding issue of this case. The issue is whether the three

Delchamps stores in question can be considered a “single site

of employment” under the Worker Adjustment and Retrain-

ing Notification Act (“WARN Act”), 29 U.S.C./ 2101, et seq.

The plaintiff objects to the finding of fact without providing

adequate summary judgment evidence to contradict those

findings.

With regard to the plaintiff's objections concerning the

legal conclusions, we must review whether the court made

an error in drawing its legal conclusions in the Report and

Recommendation. In order for the plaintiffs to sustain their

burden of proof that the three closed Delchamps stores con-

stituted a single site of employment under WARN , they had

to establish that the three stores shared the “same staff and

equipment.” the record is clear, however, that each store

employed its own workforce and did not share the same staff.

Delchamps did not “regularly” shift or rotate employees or

equipment between the stores.

A-18

This court will therefore adopt the Report and Recom-

mendation as written.

Lake Charles, Louisiana, this 12th day of August, 1996.

/s/ James T. Trimble, Jr.

JAMES T. TRIMBLE, JR

UNITED STATES DISTRICT COURT

A-19

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

ROBBIE A. VIATOR, ET AL. : CIVIL ACTION

NO. 95-0797

VS. : JUDGE TRIMBLE

DELCHAMPS, INC. : MAGISTRATE

JUDGE WILSON

FILED

AUG 13, 1996

JUGDMENT

For the reasons stated in the Report and Recommen-

dation of the Magistrate Judge previously filed herein and

after an independent review of the record and a de novo deter-

mination of the issues, and consideration of the objections

filed therein, and having determined that the findings are

correct under the applicable law, it is

ORDERED that the motion for summary judgment be

and it is hereby granted in favor of defendant, Delchamps,

Inc., and against plaintiffs Robbie Viator, et al, dismissing

plaintiffs’ claims with prejudice. It is

A-20

FURTHER ORDERED that plaintiffs’ motion for

class certification be denied as moot

THUS DONE AND SIGNED in Chambers at Lake

Charles, Louisiana, the 12th day of August, 1996.

/s/ James T. Trimble, Jr.

JAMES T. TRIMBLE, JR.

UNITED STATES DISTRICT JUDGE

o_o eo fo" lll iia ttn. i

———oOeeeeeeeeeeeeeeeeeeeeeeee

A-21

APPENDIX D

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

OFFICE OF THE CLERK

April 15, 1997

CHARLES R. FULBRUGE III Tel. 504-589-6514

Clerk 600 CAMP STREET

New Orleans, La 70130

(MEMORANDUM TO COUNSEL)

(OR PARTIES LISTED BELOW)

Regarding: Fifth Circuit Statement on Petition for

Rehearing or Rehearing En Banc

No. 96-30912 Viator, Et Al v. Delchamps Inc.

USDC No. 95-CV-797

Enclosed is a copy of the court’s decision , and judgment has

been entered under FRAP 36. (However, the opinion may yet

contain typographical or printing errors which are subject

to correction.)

FRAPs 39 through 41, and Local Rules (LR) 35, 39, and 41

govern costs, rehearings, and mandates. New LR’s 35.2.10

and 40 require that a copy of the opinion or order

sought to be reviewed shall be bound with the petition

for rehearing or suggestion for rehearing en banc as

an appendix but shall not be marked or annotated.

Please read carefully the Internal Operating Procedures

(IOP’s) following FRAP 40 and LR 35 for a discussion of when

a rehearing may be appropriate, the legal standards applied

and sanctions which may be imposed if a nonmeritorious

A-22

suggestion for en banc is made.

Direct Criminal Appeals. LR 41 provides that a motion for

a stay of mandate under FRAP 41 shall not be granted simply

upon request. The petition must set forth good cause for a

stay or clearly demonstrate a substantial question is to be

presented to the Supreme court. Otherwise, the motion may

be denied and the mandate issued immediately.

Pro Se Cases. If you were unsuccessful in the district court

and/or on appeal, and will be considering filing a petition for

certiorari in the United States Supreme Court, you do not

need to file a motion for stay of mandate under FRAP 41.

The issuance of the mandate does not affect the time, or your

right, to file such a petition.

The judgment entered provides that appellants pay to ap-

pellee the costs on appeal.

Sincerely,

CHARLES R. FULBRUGE, III,

Clerk

By: /s/ Rhonda Flowers

Rhonda Flowers, Deputy Clerk

Enclosure

Mr James E. Hopkins

Mr Robert Joseph Tete

Mr Jeffrey A Schwartz

Ms Audrey N Browne

OPJDT-2

A-23

Robbie A. VIATOR, individually and on behalf of all

persons similarly situated; Donnie R. Harmon, in-

dividually and on behalf of all persons similarly

situated;Pamela S. Barbry, individually and on behalf

of all persons similarly situated; Richard D. Keith;

Patricia Douglas; Angela Romero; Donald Fontenot;

Gerald Lee; Odelia Louise Tate; Dina Lopez; Michael

Joseph Trahan; Angela R. Lopez; Steven Paul

Johnson; Everett Paul Marshall; Gary Chester; Kevin

B. Matte; Cynthia L. Rougeau; David Lee Patton;

Bradley Fontenot; Tracy Barnes; Frank Berlin;

Kathleen Crich; Nancy H. Bimle,

Plaintiffs-Appellants,

Vv.

DELCHAMPS INCORPORATED,

Defendant-Appellee.

No. 96-30912

Summary Calendar.

United States Court of Appeals,

Fifth Circuit.

April 15, 1997.

Former employees brought class action against

employer, alleging violation of Worker’s Adjustment Retrain-

ing and Notification Act (WARN) by failing to provide them

with 60 days notice prior to employer’s closing of three stores.

The United States District Court for the Western District

of Louisiana, James T. Trimble, Jr., J., granted employer’s

summary judgment motion, and class appealed. The

A-24

Court of Appeals, W. Eugene Davis, Circuit Judge held that

three stores did not share same staff or equipment, and thus,

could not be treated as “single site of employment” under

WARN Act.

Affirmed.

Appeal from the United States District Court for the

Western District of Louisiana.

Before DAVIS, EMILIO M. GARZA and STEWART,

Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Appellants, all previously employed by the grocery store

chain Delchamps, Inc. in and around Lake Charles, Loui-

siana, filed the current class action lawsuit, alleging

Delchamps violated the Worker’s Adjustment Retraining and

Notification Act (“WARN’), 29 U.S.C. §§ 2101-2109 (1994),

by failing to provide them with sixty days notice prior to

Delchamps’ closing of its three area stores. The district court

granted summary judgment in favor of Delchamps, con-

cluding that Delchamps three Lake Charles area stores did

not constitute a “single site of employment” under WARN

and, therefore, that the stores did not employ enough workers

to come within the scope of the Act. We affirm.

1.

In the six months preceding February 17, 1985,

Delchamps opened three grocery stores in the greater Lake

Charles area. All of the stores were located in Calcasieu

A-25

Parish, Louisiana, two in the city of Lake Charles and the

other in nearby Sulphur, Louisiana. The three stores were

located within approximately twelve miles of each other and

all had the same 33,387 square foot floor p’.. Shortly after

the three Lake Charles-area stores were opened, Delchamps

initiated a coordinated six-month advertising campaign for

the stores in the local paper.

Summary judgment evidence established that approx-

imately twenty-seven employees, out of a total of eighty-eight

persons employed by the three stores over a ten-year period,

had been permanently transferred between stores on at least

one occasion.Some eighteen employees had been temporari-

ly transferred between stores during the thirty-one weeks

preceding the closures as a result of loss of an employee,

employee sickness or vacation, or similar employment needs.

Similarly, limited transfers of inventory between the three

stores were not un-common. The evidence established that

Delchamps would occasionally transfer some inventory bet-

ween the stores whenever necessary to assist with a temporry

shortage in one of the stores.

However, further summary judgment, evidence

established that each store prepared its own weekly sales

report; had its own profit/loss statements; determined its own

product needs and placed its own resupply orders; had its own

management staff (except for the two months preceding the

closures when the stores shared a common store manager);

had its own payroll and maintained its own employees; and

hired, fired, and disciplined its own workers. Delchamps also

made sure that whenever an employee transfer occurred, the

transferring employee’s pay came from the temporary place

of employment, rather than from the employee’s base store.

A-26

Similarly, Delchamps carefully kept track of all inventory

transfers and made sure that such inventory was either car-

ried on the books of the receiving store or traded in exchange

for other merchandise.

On February 14, 1995, as part of a larger reduction

brought on by declining sales and profits, Delchamps an-

nounced its intent to close its three Lake Charles-area stores

by the end of the month. The stores were closed on February

28, 1995. Employees of the Lake Charles-area stores who did

not accept Delchamps offer to transfer to other stores were

discharged.

On May 4, 1995, appellant filed the present lawsuit.

The district court granted summary judgment in favor of

Delchamps. The primary issue the court considered was

whether or not the three Lake Charles-area stores constituted

a “single site of employment” as defined by WARN and ap-

plicable Department of Labor (“DOL’s) regulations. The court

concluded that under the DOL’s regulations, the stores could

not be considered a single site of employment. Because none

of the individual stores employed the statutory minimum of

fifty full-time emplyees, the district court held that WARN

does not apply to the closings. Appellants timely appealed.

Il.

A.

[1,2] We review the district court’s grant of summary

judgment de novo. Carpenters District Council of New Orleans

& Vicinity v. Dillard Dept. Stores, Inc. 15 F.3d 1275, 1281

A-27

(6th Cir.), cert. denied, __. U.S. ___, 115 S.Ct. 933, 130

L.Ed.2d 879 (1994); FDIC v. Myers, 955 F.2d 348, 349 (5th

Cir.1992). The issue of whether multiple work locations con-

stitute a “single site of employment” under WARN is a mixed

question of law and fact. Williams v. Phillips Petroleum Co.,

23 F.3d 930, 934 (5th Cir.), cert. denied, ___ U.S. __, 115

S.Ct. 582, 130 L.Ed.2d 497 (1994). Accordingly, we review

the district court’s application of law de novo, Carpenters

District Council, 15 F.3d at 1281; United States v. Long, 996

F.2d 731, 732 (6th Cir. 1993), while reviewing the court’s fin-

dings of facts for clear error. Carpenters District Council, 15

“F.3d at 1281; Fed.R.Civ.P. 52(a).

B.

WARN requires covered employers to notify “affected

employees” of a “mass layoff.” “Affected employees” are

defined as “employees who may reasonably be expected to

experience an employment loss as a consequence of a pro-

posed plant closing or mass layoff by their employer.” 29

U.S.C. § 2101(aX5). A “mass layoff“ includes any employment

loss at a single site of employment which involves one third

of the employees at that site and at least fifty employees, or

alternatively, at least five hundred employees. 29 U.S.C. §

2101(aX3). When such a layoff occurs, the employer must pro-

vide at least sixty days written notice to each affected

employee and notify various state and local officials of the

impending layoff 29 U.S.C. § 2102. An employer who fails

to provide such notice is liable for back pay, lost benefits,

civil penalties, and attorneys fees, 29 U.S.C. § 2104.

While WARN does not specifically define what con-

stitutes a single site of employment, the DOL regulations do.

A-28

These regulations provide in relevant part:

(3) Separate buildings or areas which are not directly

connected or in immediate proximity may be con-

sidered a single site of employment if they are in

reasonable geographic proximity, used for the same

purpose, and share the same staff and equipment.

An example is an employer who manages a number

of warehouses in an area but who regularly shifts

or rotates the same employees from one building

to another.

(4) Non-contiguous sites in the same geographic area

which do not share the same staff or operational pur-

pose should not be considered a single site. For ex-

ample, assembly plants which are located on op-

posite sides of town and which are managed by a

single employer may be considered separate sites

if they employ different workers.

20 C.F.R. § 639.3(i) (1996) (emphasis added). Moreover, the

DOL made clear in its analysis of its implementing regula-

tions that “(t]he general rule is that separate facilities are

separate sites.” 54 Fed.Reg. ¢ 16,050 (April 21, 1989). The

DOL further added that exceptions to the general rule are .

“narrow” and limited to cases where geographically distinct

sites have an “inextricable operational purpose.” Id. at {

16,049. As we observed in Williams, “[tJhe regulations in-

dicate that two plants across town will rarely be considered

a single site for purposes of a mass layoff.” Williams, 23 F.3d

at 934.

[3] Based on the DOL’s regulations and our case law,

we conclude that separate facilities are only to be treated as

a single site of employment if all three factors identified in

A-29

the regulations are met, namely: 1) the separate facilities

are in “reasonable geographic proximity” of one another, 2)

they are “used for the same purpose”; 3) and they “share the

same staff and equipment.” 20 C.F.R. § 693.3(iX3). Any other

reading would be inconsistent with the plain language of the

regulation.

Because we agree with the district court that the three

stores did not share the same staff or equipment, we need

not address the other factors and express no view on the

district court’s resolution of these issues. We will consider

separately the questions of whether the three Delchamps

stores shared the same staff or equipment.

C.

[4] Appellants have adduced evidence that roughly 30

percent of full-time employees at the Lake Charles-area stores

had been permanently transferred between stores at least

once during a ten-year period. There is also evidence that

in the thirty-one weeks leading up to the closures, roughly

20 percent of the total employees of the three stores had been

transferred on a temporary basis to assist with temporary

employment shortages in other stores. Such temporary

transfers appear to have been of short duration ranging bet-

ween a few hours to, in at least one instance, just over six

weeks.

However, uncontroverted summary judgment evidence

established that each of the stores employed and controlled

its own work-force and that at no time did the stores employ

workers in common. To the contrary, the record establishes

that Delchamps took pains to ensure that any transferred

A-30

employee was paid by the temporary store, rather than the

employee’s base store. In short, there is simply no evidence

that the stores routinely shifted the “same employees” bet-

ween the sites.

[5] Even assuming these transfers constitute “sharing”

of employees as envisioned by the regulations, the relative-

ly small number of these transfers suggests that they do not

rise to a sufficient level to consider the stores a single site

of employment. The regulations strongly suggest that WARN

only applies if an employer “regularly shifts or rotates the

same employees from one building to another.” 20 C.F.R. §

639.3(iX3). In other words, occasional intermingling of various

employees is insufficient to place an employer within the act’s

coverage. See, e.g., Frymire v. Ampex Corp., 61 F.3d 757, 767

(10th Cir.1995) (“{E}ven assuming transfers did occur fre-

quently, we cannot equate this phenomenon with the ‘shif-

ting,’ ‘rotating’ or even ‘sharing’ of employees that defines

a non-‘separate’ workforce.”) (citations omitted); Rifkin v.

McDonnell Douglas Corp., 78 F.3d 1277, 1281 (8th Cir.1996)

(“{Olecasional transfers of employees and office equipment

... does not establish the necessary connection between loca-

tions to constitute a single site.”) Hooper v. Potychronne, Inc.,

916 F.Supp. 1111, 1117 (D.Kan.1996) (“{Elven assuming that

a significant number of employees of either facility spent a

portion of their time as the other facility spent a portion of

their time at the other facility, we cannot equate this periodic

occurrence with the ‘shifing,’ ‘rotating’ or even ‘sharing’ of

employees of a non-‘separate’ workforce. . . .”).

The regulations also state by way of example that

facilities located on opposite sides of a town should be con-

sidered separate sites of employment if they employ “different

A-31

workers.” 20 C.F.R. § 639.3(iX4). Here, it is undisputed that

nearly 70 percent of the total combined workers of the three

stores over a ten year period were never permanently

transferred between stores. An even greater number were

never transferred on a temporary basis. Combined with the

fact that no employee was over paid at one store for work

performed at another, these numbers convince us that each

Delchamps store employed “different workers” within the

meaning of the DOL’s regulations.

D.

[6] The same conclusion applies to appellants’ claims

that the stores routinely shared equipment. The only piece

of equipment appellants have pointed to as being used com-

monly between the three stores is a single pressure washer.

Appellants also point to several instances where produce or

other inventory was transferred between stores when one

store had a need and the other a surplus. Even assuming

these occasional transfers of inventory are significant for pur-

poses of the regulations, the record establishes that these

transfers were either closely documented and accounted for

on each store’s separate books, or the inventory was traded

for other merchandise. See, e.g, Rifkin, 78 F.3d at 1281

(“[Olecasional transfers of employees and office equipment

between the different sites . . . does not establish the

necessary connection between locations to constitute a ‘single

site.’ There is no evidence that employees and equipment are

regularly shared as opposed to occasionally transferred.”)’

Hooper, 916 F.Supp. at 1117 (“{Wle do not believe that the

use of isolated pieces of equipment . . . . mandates a deter-

mination of ‘single site’ states.”). Under the circumstances

we find no support for the conclusion that the stores regularly

shared equipment.

A-32

Ii.

Because appellants have failed to produce competent

summary judgment evidence establishing that Delchamps’

three Lake Charles-area stores regularly shared the same

staff or equipment, their WARN claims must fail. According-

ly, the order of the district court granting summary judgment

in favor of Delchamps is AFFIRMED

AFFIRMED.

A-33

APPENDIX E

PUBLIC LAW 100-379 [S 2527]; August 4, 1988

WORKER ADJUSTMENT AND RETRAINING

Aug. 4-

NOTIFICATION ACT

P.L. 2100-379

For a Related Legislative Report, see Conference Report

(H.Rept. 100-576, title VI, subtitle E) on p. 2078.

An Act is required advance notification of plant

closings and mass layoffs, and for other purposes

Worker

Adjustment

and

Retraining

Notification

Act. Bus-

iness and

industry.

Employment

and unem-

ployment 29

USC 2101

note.

Be it enacted by the Senate and House of

Representatives of the United States of America

in Congress assembled,

SECTION 1. SHORT TITLE: TABLE OF

CONTENTS.

(a) SHORT TITLE.—This Act may be

cited as the “Worker Adjustment and

Retraining Notification Act’’.

(b) TABLE OF CONTENTS.—The table

of contents is as follows:

Sec. 1. Short title.

Sec. 2. Definitions; exclusions from definition

of loss of employmnent. USC 2101 note.

Sec. 3. Notice required before plant closings

and mass layoffs.

Sec. 4. Exemptions.

Sec. 5. Administration and enforcement of

requirements.

102 STAT. 890

A-34

Sec. 6. Procedures in addition to other rights

of employees.

Sec. 7. Procedures encouraged where not

required.

Sec. 8. Authority to prescribe regulations.

Sec. 9. Effect on other laws.

Sec. 10. Report on employment and intern-

tional competitiveness.

Sec. 11. Effective date.

29 USC 2101.SEC. 2. DEFINITIONS; EXCLUSIONS

FROM DEFINITION OF

LOSS OF EMPLOYMENT.

(a) DEFINITIONS.— As used in this Act—

(1) the term “employer” means any

business enterprise that employs—

(A) 100 or more employees, excluding

art-time employees; or

(B) 100 or more employees who in the

aggregate work at least 4,000 hours per

week (exclusive of hours of overtime);

(2) the term “plant closing’ means the

permanent or temporary shutdown of a single

site of employment, or one or more facilities

or operating units within a single site of

employment, if the shutdown results in an

employment loss at the single site of employ-

ment 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—

A-35

(iT) at least 33 percent of the

employees (excluding any part-time

employees); and

(ID 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 9a) or 8(f) of the Na-

tional Labor Relations ACt (29 U.S.C. 15a),

158(f) or section 2 of the Railway Labor Act

(45 U.S.C. 152);

(5) the term “affected employees’ means

employees who may reasonably be expected

to experience an employment loss as a con-

sequence of a proposed plant closing or mass

layoff by their employer;

(6) subject to subsection (b), the term

“employment loss” means (A) an employment

termination, other than a discharge for cause

voluntary departure, or retirment, (B) a layoff

exceeding 6 months, or (C) a reduction in

hours of work of more than 50 percent dur-

ing each month of any 6-month period;

(7) the term “unit of local government”

means any general purpose political subdivi-

sion of a State which has the power to levy

taxes and spend funds, as well as general cor-

porate and police powers; and

(8) the term “part-time employee”

means an employee who is employed for an

average of fewer than 20 hours per week or

who has been employed for fewer than 6 of

the 12 months preceding the date on which

A-36

notoce is required.

(b) EXCLUSIONS FROM DEFINITION

OF EMPLOYMENT LOSS.—(1) In the case of

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

the seller shall be responsible for providing

notice for any plant closing or mass layof in

accordance with section 3 of this Act, up to and

including the effective date of the sale. After

the effective date of the sale of part or all of

an employer’s business, the purchaser shall be

responsible for providing notice for any plant

closing or mass layoff in accordance with sec-

tion 3 of this Act. Notwithstanding any other

provision of this Act, 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 pur-

chaser immediately after the effective date of

the sale.

(2) Notwithstanding subsection (aX6), an

employee may not be considered to have ex-

perienced an employment loss if the closing or

layoff is the result of the relocation or con-

solidation of part or all of the employer’s

business and, prior to the closing or layoff—

(A) the empioyer 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 employ-

ment; or

(B) the employer offers to transfer the

employee to any other site of employment

regardless of distance with no more than a

6-month break in employment, and the

employee accepts within 30 days of the offer

A-37

or of the closing or layoff, whichever is later.

29 USC SEC. 3. NOTICE REQUIRED BEFORE

2102 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 |

employees as of the time of the notice or, if .

there is no such representative at that time, |

to each affected employee; and

(2) to the State dislocated worker unit

(designated 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.

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

ment which the employer shall notify is the unit of local

government to which the employer pays the highest taxes

for the year preceding the year for which the determination

is made.

102 STAT. 891 |

A-38

P.L.100-379 LAWS OF 100th CONG.—2nd SESS. Aug.4

(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 required the

employer was actively seeking capital or

business which, if obtained, would have enabl-

ed the employer to avoid or postpone the shut-

down and the employer reasonably and in good

faith believed that giving the notice required

would have precluded the employer from ob-

taining the needed capital or business.

(2XA) 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 circumstances that were

not reasonably foreseeable as of the time that

notice would have been required.

(B) No notice under this Act shall be re-

quired if the plant closing or mass layoff is due

to any form of natural! disaster, such as a flood,

earthquake, or the drought curently ravaging

the farmlands of the United States.

(3) An employer relying on this subsec-

tion shall give as much notice as is practicable

and at that time shall give a brief statement

of the basis for reducing the notification period.

(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 Act unless—

102 STAT. 892

29 USC

2103

A-39

(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 in-

itial layoff: and

(2) notice is given at the time it becomes

reasonably foreseeable that the extension

beyond 6 months will be required.

(dq) DETERMINATIONS WITH

RESPECT TO EMPLOYMENT LOSS.—For

purposes of this section, in determining

whether a plaint closing or mass layoff has oc-

curred 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 2(a)

(2) or (3) but which in the aggregate exceed

that minimum number, and which occur

within any 9)-day period shall be considered

to be a plant closing or mass layoff unless the

employer demonstrates that the employment

losses are the result of separate and distinct

actions and causes and are not an attempt by

the employer :o evade the requirements of this

Act.

SEC. 4. EXEMPTIONS.

This Act shall not apply to a plant closing or

mass layoff f—

(1) theclosing is of a temporary facili-

ty or the closing or layoff is the result of the

completion of a particular project or under-

taking, ant the affected emplyees were

hired with the understanding that their

A-40

employment was limited to the duration of

the facility or the project of undertaking; or

(2) the closing or layoff constitutes a

strike or constitutes a lockout not intended

to evade the rquirements of this Act. Nothing

in this Act shall rquire an emloyer to serve

written notice pursuant to section Xa) of this

Act when permanently replacing a person

who is deemed to be an economic striker

under the National Labor Relations Act: Pro-

vided, That nothing in this Act shall be deem-

ed to validate or invalidate any judicial or ad-

ministrative ruling relating to the hiring of

permanent replacement for economic strikers

under the National Labor Relations Act.

Aug. 4- WORKER NOTIFICATION ACT- P.L. 100-379

20 USC SEC. 5. ADMINISTRATION AND

2104. ENFORCEMENT OF REQUIREMENTS.

(a) CIVIL ACTIONS AGAINST

EMPLOYERS.—(1) Any employer who orders

a plant closing or mass layoff in violation of

section 3 of this Act shall be liable to each ag-

grieved employee who suffers an employment

loss as a result of such closing or layoff for—

Wages (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

—- _—- ea YS

A-41

Health and (B) benefits under an employee benefit

medical plan described in section 3(3) of the Employee

care. Retirement Income Security Act of 1974 (29

U.S.C. 1002(8)), including the cost of medical

expenses incurred during the employment

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 viola-

tion, 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.

(2) The amount for which an employer is

liable under paragraph (1) shall be reduced

by—

Wages. (A) any wages paid by the employer to

the employee for the period of the violation;

(B) any voluntary and unconditional pay-

ment by the employer to the employee that is

not required by any legal obligation; and

Health and (C) any payment by the employer to a

medical care third party or trustee (such as premiums for

Retirement. health benefits or payments to a defined con-

tribution pension plan) on behalf of an at-

tributable 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.

(3) Any employer who violates the pro-

visions of section 3 with respect to a unit of

local government shall be subject to a civil

penalty of not more than $500 for each day of

such violation, except that such penalty shall

—

A-42

not apply if the employer pays to each aggriev-

ed 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.

Courts, U.S. (4) If an employer which has violated this

Act proves to the satisfaction of the court that

the act or omission that violated this Act was

in good faith and that the employer had

reasonable grounds for believing that the act

or omission was not a violation of this Act the

court may, in its discretion, reduce the amount

of the liability or penalty provided for in this

section.

State and (5) A person seeking to enforce such

local govern- liability, including a representative of

ments. employees or a unit of local government ag-

grieved under paragraph (1) or (3), may sue

either for such person or for other persons

similarly situated, or both, in any district court

of the United States for any district in which

the violation is alleged to have occurred, or in

which the employer transacts business.

Courts, U.S. (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.

102 STAT. 893

P.L. 100-379-LAWS OF 100th CONG.—2nd SESS.- Aug.4

(7) For purposes of this subsection, the

term, “aggrieved employee” means an

employee who has worked for the employer

ordering the plant closing or mass layoff and

aan eee a =

A-43

who, as a result of the failure by the employer

- to comply with secton 3, did not receive time-

ly notice either directly or through his or her

representative as required by section 3.

Courts, U.S. (b) EXCLUSIVITY OF REMEDIES.—

The remedies provided for in this section shal]

be the exclusive remedies for any violation of

this Act. Under this Act, a Federal court shall

not have authority to enjoin a plant closing or

mass layoff.

29 USC SEC. 6. PROCEDURES IN ADDITION TO

2105 OTHER RIGHTS OF EMPLOYEES.

Contracts. The rights and remedies provided to

employees by this Act are in addition to, and

not in lieu of, any other contractual or

statutory rights and remedies of the

employees, and are not intended to alter or af-

fect such rights and remedies, except that the

period of notification required by this Act shall

run concurently with any period of notification

required by contract or by any other statute.

29 USC SEC. 7. PROCEDURES ENCOURAGED

2106. WHERE NOT REQUIRED.

It is the sense of Congress that an

employer who is not required to comply with

the notice requirements of secton 3 should, to

the extent possible, provide notice to its

employees about a proposal to close a plant or

permanently reduce its workforce.

_~

29 USC

2107.

29 USC

2108.

29 USC

2109.

A-44

SEC. 8. AUTHORITY TO PRESCRIBE

REGULATIONS.

(a) The Secretary of Labor shall prescribe

such regulations as may be necessary to carry

out this Act. Such regulations shall, at a

minimum, include interpretative regulations

describing the methods by which employers

may provide for appropriate service of notice

as required by this Act.

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

last known address or inclusion of notice in the

employee’s paycheck will be considered accep-

table methods for fulfillment of the employer’s

obligation to give notice to each affected

employee under this Act.

SEC. 9. EFFECT ON OTHER LAWS.

The giving of notice pursuant to this Act,

if done in good faith compliance with this Act,

shall not constitute a violation of the National

Labor Relations Act or the Railway Labor Act.

SEC. 10. REPORT ON EMPLOYMENT

AND INTERNATIONAL COMPETI-

TIVENESS.

Two years after the date of enactment of

this Act the Comptroller General 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

Educetion and Labor a report containing a

nW.. eee + —- —

A-45

detailed and objective analysis of the effect of

this Act on employers (especially small- and

medium-sized business), the economy (interna-

tional competitiveness), and employees (in

terms of levels and conditions of employment).

The Comptroller General shall assess both

costs and benefits, including the effect on pro-

ductivity, competitiveness, unemployment

rates and compensation, and worker retrain-

ing and readjustment.

102 STAT. 894

Aug. 4 WORKER NOTIFICATION ACT P.L. 100-379

29 USC SEC. 11. EFFECTIVE DATE.

2101 note.

This Act shall take effect on the date which is 6 months

_ after the date of enactment of this Act, except that the

authority of the Secretary of Labor under section 8 is effec-

tive upon enactment.

[Note by the Office of the Federal Register. —The forego-

ing Act, having been presented to the President of the United

States on Friday, July 22, 1988, and not having been returned

by him to the House of Congress in which it originated within

the time prescribed by the Constitution of the United States,

has become law without his signature on August 4, 1988.]

A-46

LEGISLATIVE HISTORY-—S. 2527:

CONGRESSIONAL RECORD, Vol. 134 (1988):

June 22-24, 27-29, July 6, considered and passed Senate.

July 13, considered and passed House.

WEEKLY COMPILATION OF PRESIDENTIAL

DOCUMENTS, Vol. 23 (1988):

Aug. 2, Presidential statement.

102 STAT. 895

A-47

APPENDIX F

PART 639—WORKER ADJUSTMENT AND

RETRAINING NOTIFICATION

Sec.

639.1 Purpose and scope.

639.2 What does WARN require?

639.3 Definitions.

639.4 Who must give notice?

639.5 When must notice be given?

639.6 Who must receive notice?

639.7 What must the notice contain?

639.8 How is the notice served?

639.9 When may notice be given less that 60 days in

advance.

639.10 When may notice be extended?

Employment and Training Administration, Labor

AUTHORITY: 29 U.S.C. 2107(a)

Source: 54 FR. 16064, Apr. 20, 1989, unless otherwise

noted.

§ 639.1 Purpose and scope.

(a) Purpose of WARN. The Worker Adjustment and

Retraining Notification Act (WARN or the Act) provides pro-

tection to workers, their families and communities by require-

ing employers to provide notification 60 calendar days in ad-

vance of plant closings and mass layoffs. Advance notice pro-

vides workers and their families some transition time to

A-48

adjust to the prospective loss of employment, to seek and ob-

tain alternative jobs and, if necessary, to enter skill train-

ing or retraining that will allow these workers to successfully

compete in the job market. WARN also provides for notice

to State dislocated worker units so that dislocated worker

assistance can be promptly provided.

(b) Scope of these regulations. These regulations

establish basic definitions and rules for giving notice im-

plementing the provisions of WARN. The Department’s ob-

jective is to establish clear principles and broad guidelines

which can be applied in specific circumstances. However, the

Department recognizes that Federal rulemaking cannot ad-

dress the multitude of industry and company-specific situa-

tions in which advance notice will be given.

(c) Notice encouraged where not required. Section 7 of

the Act states:

It is the sense of Congress that an employer who is not re-

quired to comply with the notice requirements of section 3

should, to the extent possible, provide notice to its employees

about a proposal to close a plant or permanently reduce its

workforce.

(d) WARN enforcement. Enforcement of WARN will be

through the courts, as provided in section 5 of the statute.

Employees, their representatives and units of local govern-

ment may initiate civil actions against employers believed

to be in violation of §3 of the Act. The Department of Labor

has no legal standing in any enforcement action and,

therefore, will not be in a position to issue advisory opinions

of specific cases. The Department will provide assistance in

A-49

understanding these regulations and may revise them from

time to time as may be necessary.

(e) Notice in ambiguous situations. It is civically

desirable and it would appear to be good business practice

for an employer to provide advance notice to its workers or

unions, local government and the State when terminating

a significant number of employees. In practical terms, there

are some questions and ambiguities of interpretation in-

herent in the application of WARN to business practices in

the market economy that cannot be addressed in these regula-

tions. It is therefore prudent for employers to weigh the

desirability of advance notice against the possibility of ex-

pensive and time-consuming litigation to resolve disputes

where notice has not been given. The Department encourages

employers to give notice in all circumstances.

(f) Coordination with job placement and retraining pro-

grams. The Department, through these regulations and

through the Trade Adjustment Assistance Program (TAA)

and Economic Dislocation and Worker Adjustment

Assistance Act (EDWAA) regulations, encourages maximum

coordination of the actions and activities of these programs

to assure that the negative impact of dislocation on workers

is lessened to the extent possible. By providing for notice to

the State dislocated worker unit, WARN notice begins the

process of assisting workers who will be dislocated.

(g) WARN not to supersede other laws and contracts. The

provisions of WARN do not supersede any laws or collective

bargaining agreements that provide for additional notice or

additional rights and remedies. If such law or agreement pro-

vides for a longer notice period. WARN notice shall run

A-50

concurrently with that additional notice period. Collective

bargaining agreements may be used to clarify or amplify the

terms and conditions of WARN but may not reduce WARN

rights.

§ 639.2 What does WARN require?

WARN requires employers who are planning a plant

closing or a mass layoff to give affected employees at least

60 days’ notice of such an employment action. While the

60-day period is the minimum for advance notice this provi-

sion is not intended to discourage employers from voluntarily

providing longer periods of advance notice. Not all plant clos-

ings and layoffs are subject to the Act, and certain employ-

ment thresholds must be reached before the Act applies.

WARN sets out specific exemptions, and provides for a reduc-

tion in the notification period in particular circumstances.

Damages and civil penalties can be assessed against

employers who violate the Act.

§639.3 Definitions.

(a) Employer. (1) The term “employer” means any

business enterprise that employs—

(i) 100 or more employees, excluding part-time

employees; or

(ii) 100 or more employees, including part-time

employees, who in the aggregate work at least 4,000 hours

per week, exclusive of hours of overtime.

Workers on temporary layoff or on leave who have a

reasonable expectation of recall are counted as employees.

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A-51

An employee has a “reasonable expectation of recall’ when

he/she understands, through notification or through industry

practice, that his/her employment with the employer has been

temporarily interrupted and that he/she will be recalled to

the same or to a similar job. The term “employer” includes

non-profit organizations of the requisite size. Regula Federal,

State, local and federally recognized Indian tribal govern-

ments are not covered. However, the term “employer” in-

cludes public and quasi-public entities which engage in

business (i.e., take part in a commercial or industrial enter-

prise, supply a service or good on a mercantile basis, or pro-

vide independent management of public assets, raising

revenue and making desired investments), and which are

separately organized from the regular government, which

have their own governing bodies and which have indepen-

dent authority to manage their personnel and assets.

(2) Under existing legal rules, independent contractors

and subsidiaries which are wholly or partially owned by a

parent company are treated as separate employers or as a

part of the parent or contracting company depending upon

the degree of their independence from the parent. Some of

the factors to be considered in making this determination

are (i) common ownership, (ii) common directors and/or of.

ficers, (iii) de facto exercise of control, (iv) unity of personnel

policies emanating from a common source, and (v) the

dependency of operations.

(3) Workers, other than part-time workers, who ar ex-

empt from notice under section 4 of WARN are nonetheless

counted as employees for purposes of determining coverage

ag an employer.

A-52

(4) An emplyer may have one or more sites of employ-

ment under common ownership or control. An example would

be a major auto maker which has dozens of automobile plants

throughout the country. Each plant would be considered a

site of emplyment, but there is only one “employer”, the auto

maker.

(b) Plant closing. The term “plant closing” means the

permanent or temporary shutdown of a “single site of employ-

ment”, or one or more “facilities or operating units” within

a single site of employment, if the shutdown results in an

“employment loss” during any 30-day period at the single

site of employment for 50 or more employees, excluding any

part-time employees. An employment action that results in

the effective cessation of production or the work performed

by unit, even if a few employees remain, is a shutdown. A

“temporary shutdown” triggers the notice requirement on-

ly if there are a sufficient number of terminations, layoffs

exceeding 6 months, or reductions in hours of work as

specified under the definition of “employment loss.”

(c) Mass layoff. (1) The term “mass layoff’ means a

reduction in force which first, is not the result of a plant clos-

ing, and second, results in an employment loss at the single

site of employment during any 30-day period for:

(i) At least 33 percent of the active employees, excluding

part-time employees, and

(ii) At least 50 emloyees, excluding part-time employees.

Where 500 or more employees (excluding part-time

employees) are affected, the 33% requirement does not app-

ly, and notice is required if the other criteria are met. Plant

closings involve employment loss which results from the shut-

Aes at

Me cette eek Latin etbaNL: RAN RRR ek UB anes oo Leanna rehibe ddd

A-53

down of one or more distinct units within a single site or the

entire site. A mass layoff involves employment loss,

regardless of whether one or more units are shut down at

the site.

(2) Workers, other than part-time workers, who ar ex-

empt from notice under section 4 of WARN are nonetheless

counted as employees for purposes of determining coverage

as a plant closing or mass layoff. For example, if an employer

closes a temporary project on which 10 permanent and 40

temporary workers are employed, a covered plant closing has

occurred although only 10 workers are entitled to notice.

(d) Representative. The term “representative” means an

exclusive representative of employees within the meaning

of section Xa) or 8(f) of the National Labor Relations Act or

section 2 of the Railway Labor Act.

(e) Affected employees. The term “affected employees’”’

means employees who may reasonably be expected to ex-

perience an employment loss as a consequence of a proposed

plant closing or mass layoff by their employer. This includes

individually identifiable employees who will likely lose their

jobs because of bumping rights or other factors, to the ex-

tent that such individual workers reasonably can be iden-

tified at the time notice is required to be given. The term

“affected employees” includes managerial and supervisory

employees, but does not include business partners. Consul-

tant or contract employees who have a separate employment

relationship with another employer and are paid by that

other employer, or who are self-employed, are not “affected

employees” of the business to which they are assigned. In

addition, for purposes of dertermining whether coverage

thresholds are met, either incumbent workers in jobs being

A-54

eliminated or, if known 60 days in advance, the actual

employees who suffer an employment loss may be counted.

(f) Employment loss. (1) The term “employment loss”

means (i) an employment termination, other than a discharge

for cause, voluntary departure, or retirement, (ii) a reduc-

tion in hours of work of individual employees of more than

50% during each month of any any 6-month period.

(2) Where as temination or a layoff (see paqragraphs

(fX1Xi) and (ii) of this section) is involved, an employment loss

does not occur when an employee is reassigned or transfer-

red to employer-sponsored programs, such as retraining or

job search activities, as long as the reassignment does not

constitute a constructive discharge or other involuntry

termination.

(3) An employee is not 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, or all of the employer’s business and prior to

the closing or layoff.

(i) the employer offers to transfer the employee to a dif-

ferent site of employment within a reasonable commuting

distance with no more than a 6-month break in employment,

or

(ii) The employer offers to transfer the employee to any

other site of employment regardless of distance with no more

than a 6-month break in emloyment, and the employee ac-

cepts within 30 days of the offer or of the closing or layoff,

whichever is later.

(4) A “relocation or consolidation” of part or all of an

employer’s business, for purposes of paragraph § 639.3(hX4)

WALA ASEH RS Sal RIA i ae

sete Veet on

A-55

means that some definable business, whether customer

orders, product lines, or operations, is transferred to a dif-

ferent site of employment and that transfer results in a plant

closing or mass layoff.

(g) Unit of local government. The term “unit of local

government” means any general purpose political subdivi-

sion of a State, which has the power to levy taxes and spend

funds and which also has general corporate and police powers.

When a covered employment site is located in more than one

unit of local government, the employer must give notice to

the unit to which it determines it directly paid the highest

taxes for the year preceding the year for which the determina-

tion is made. All local taxes directly paid to the local govern-

ment should be aggregated for this purpose.

(h) Part-time employee. The term “part-time” employee

means an employee who is employed for an average of fewer

than 20 hours per week or who has been employed for fewer

than 6 of the 12 months preceding the date on which notice

is required, including workers who work full-time. This term

may include workers who would traditionally be understood

as “seasonal” employees. The period to be used for calculating

whether a worker has worked “an average of fewer than 20

hours per week”’ is the shorter of the actual time the worker

has been employed or the most recent 90 days.

(i) Single site of employment. (1)A single site of employ-

ment can refer to either a single location or a group of con-

tiguous locations. Groups of structures which form a cam-

pus or industrial park, or separate facilities across the street

from one another, may be considered a single site of

employment.

(2) There may be several single sites of employment

A-56

within a single building, such as an office building, if separate

employers conduct activities within such a building. For ex-

ample, and office building housing 50 different businesses

will contain 50 single sites of employment. The offices of each

employer will be its single site of employment.

(3) Separate buildings or areas which are not directly

connected or in immediate proximity may be considered a

single site of employment if they are in reasonable geographic

proximity, used for the same purpose, and share the same

staff and equipment. An example is an employer who

manages a number of warehouses in an area but who regular-

ly shifts or rotates the same employees from one building to

another.

(4) Non-contiguous sites in the same geographic area

which do not share the same staff or operational purpose

should not be considered a single site. For example, assembly

plants which are located on opposite sides of a town and which

are managed by a single employer are separate sites if they

employ different workers.

(5) Contiguous buildings owned by the same employer

which have separate management, produce different pro-

ducts, and have separate workforces are considered separate

single sites of employment.

(6) 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

———

i tlie

A-57

assigned, or to which they report will be the single site in

which they are covered for WARN purposes.

(7) Foreign sites of employment are not covered under

WARN. US. workers at such sites are counted to determine

whether an employer is covered as an employer under §

639.3(a).

(8) The term "single site of employment” may also apply

to truly unusual organizational situations where the above

criteria do not reasonably apply. The application of this

definition with the intent to evade the purpose of the Act to

provide notice is not acceptable.

(j) Facility or operating unit. The term ‘facility” refers

to a building or buildings. The term “operating unit” refers

to an organizationally or operationally distinct product,

operation, or specific work function within or across facilities

at the single site.

(k) State dislocated worker unit. The term “State

dislocated worker unit” means a unit designated or created

in each State by the Governor under title III of the Job Train-

ing Partnership Act, as amended by EDWAA.

(1) State. For the purpose of WARN, the term “State”

includes the 50 States, the District of Columbia, the Com-

monwealth of Puerto Rico, and the U.S. Virgin Islands.

§ 639.4 Who must give notice?

Section 3(a) of WARN states that “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 * * *” Therefore, an employer who is anticipating

A-58

carrying out a plant closing or mass layoff is required to give

notice to affected employees or their representative(s), the

State dislocated worker unit and the chief elected official of

a unit of local government. (See definitions in § 639.3 of this

part.)

(a) It is the responsibility of the employer to decide the

most appropriate person within the employer’s organization

to prepare and deliver the notice to affected employees or

their representative(s), the State dislocated worker unit and

the chief elected official of a unit of local government. In most

instances, this may be the local site plant manager, the local

personnel director or a labor relations officer.

(b) An employer who has previously announced and car-

ried out a short term layoff (6 months or less) which is being

extended beyond 6 months due to business circumstances (in-

cluding unforeseeable changes in price or cost) not reasonably

foreseeable at the time of the initial layoff is required to give

notice when it becomes reasonably foreseeable that the ex-

tension is required. A layoff extending beyond 6 months from

the date the layoff commenced for any other reason shall be

treated as an emplyment loss from the date of its

commencement.

(c) In the case of the sale of part or all of a business,

section 2(bX1) of WARN defines who the “employer” is. The

seller is responsible for providing notice of any plant clos-

ing or mass layoff which takes place up to and including the

effective date (time) of the sale, and the buyer is responsible

for providing notice of any plant closing or mass layoff that

takes place thereafter. Affected employees are always entitled

to notice; at all time the employer is responsible for providing

notice.

ee eS ee ee _—?

A-59

(1) If the seller is made aware of any definite plans on

the part of the buyer to carry out a plant closing or mass layoff

within 60 days of purchase, the seller may give notice to af-

fected employees as agent of the buyer, if so empowered. If

the seller does not give notice, the buyer is nevertheless,

responsible to give notice. If the seller gives notice as the

buyer’s agent, the responsibility for notice still remains with

the buyer.

(2) It may be prudent for the buyer and seller to deter-

mine the impact of the sale on workers, and to arrange bet-

ween them for advance notice to be given to affected

employees or their representative(s), if a mass layoff or plant

closing is planned.

§ 639.5 When must notice be given?

(a) General rule, (1) With certain exceptions discusssed

in paragraphs (b), (c) and (d) of this section and in §639.9 of

this part, notice must be given at least 60 calendar days prior

to any planned plant closing or mass layoff, as defined in

these regulations. When all employees are not terminated

on the same date, the date of the first individual termina-

tion within the statutory 30-day or 90-day period triggers the

60-day notice requirement. A worker’s last day of employ-

ment is considered the date of that worker’s layoff. The first

and each subsequent group of terminees are entitled to a full

60 days’ notice. In order for an employer to decide whether

issuing notice is required. the employer should—

(i) Look ahead 30 days and behind 30 days to determine

whether employment actions both taken and planned will,

in the aggregate for any 30-day period, reach the minimum

numbers for a plant closing or a mass layoff and thus trigger

A-60

the notice requirement; and

(ii) Look ahead 90 days and behind 90 days to deter-

mine whether employment actions both taken and planned

each of which separately is not of sufficient size to trigger

WARN coverage will, in the aggregate for any 90-day period,

reach the minimum numbers for a plant closing or a mass

layoff and thus trigger the notice requirement. An employer

is not, however, required under section 3(d) to give notice if

the employer demonstrates that the separate employment

losses are the result of separate and distinct actions and

causes, and are not an attempt to evade the requirements

of WARN.

(2) The point in time at which the number of employees

is to be measured for the purpose of determining coverage

is the date the first notice is required to be given. If this

“snapshot” of the number of employees employed on that date

is clearly unrepresentative of the ordinary or average employ-

ment level, then a more representative number can be used

to determine coverage. Examples of unrepresentative employ-

ment levels include cases when the level is near the peak

or trough of an employment cycle or when large upward or

downward shifts in the number of employees occur around

the time notice is to be given. A more representative number

may be an average number of employees over a recent period

of time or the number of employees on an alternative date

which is more representative of normal employment levels.

Alterative methods cannot be used to evade the purpose of

WARN, and should only be used in unusual circumstances.

(b) Transfers. (1) Notice is not required in certain cases

involving transfers, as described under the definition of

“employment loss” at § 639.3(f) of this part.

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A-61

(2) An offer of reassignment to a different site of employ-

ment should not be deemed to be a “transfer” if the new job

constitutes a constructive discharge.

(3) The meaning of the term “reasonable commuting

distance” will vary with local and industry conditions. In

determining what is a “reasonable commuting distance”, con-

sideration should be given to the following factors: geographic

accessibility of the place of work, the quality of the roads,

customarily available transportation, and the usual travel

time.

(4) In cases where the transfer is beyond reasonable com-

muting distance, the employer may become liable for failure

to give notice if an offer to transfer is not accepted within

30 days of the offer or of the closing or layoff (whichever is

later). Depending upon when the offer of transfer was made

by the employer, the normal 60-day notice period may have

expired and the plant closing or mass layoff may have oc-

curred. An employer is, therefore, well advised to provide

60-day advance notice as part of the transfer offer.

(c) Temporary employment. (1) No notice is required if

the closing is of a temporary facility, or if the closing or layoff

is the result of the completion of a particular project or under-

taking, 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.

(2) Employees must clearly understand at the time of

hire that their employment is temporary. When such

understandings exist will be determined by reference to

employment contracts, collective bargaining agreements, or

A-62

employment practices of an industry or a locality, but the

burden of proof will lie with the employer to show that the

temporary nature of the project or facility was clearly com-

municated should questions arise regarding the temporary

employment understandings.

(3) Employers in agriculture and construction frequent-

ly hire workers for harvesting, processing, or for work on a

particular building or project. Such work may be seasonal

but recurring. Such work falls under this exemption if the

workers understood at the time they were hired that their

work was temporary. In uncertain situations, it may be pru-

dent for employers to clarify temporary work understandings

in writing when workers are hired. The same employers may

also have permanent employees who work on a variety of jobs

and tasks continuously through most of the calendar year.

Such employees are not included under this exemption. Giv-

ing written notice that a project is temporary will not con-

vert permanent employment into temporary work, making

jobs exempt from WARN.

(4) Certain jobs may be related to a specific contract or

order. Whether such jobs are temporary depends on whether

the contract or order is part of a long-term relationship. For

example, an aircraft manufacturer hires workers to produce

a standard airplane for the U.S. fleet under a contract with

U.S. Air Force with the expectation that its contract will con-

tinue to be renewed during the foreseeable future. The

employees of this manufacturer would not be considered

temporary.

(d) Strikes or lockouts. The statute provides an exemp-

tion for strikes and lockouts which are not intended to evade

the requirements of the Act. A lockout occurs when, for

A-63

tactical or defensive reasons during the course of collective

bargaining or during a labor dispute, an employer lawfully

refuses to utilize some or all of its employees for the perfor-

mance of available work. A lockout not related to collective

bargaining which is intended as a subterfuge to evade the

Act does not quali’, for this exemption. A plant closing or

mass layoff at a site of employment where a strike or lockout

is taking place, which occurs for reasons unrelated to a strike

or lockout, is not covered by this exemption. An employer

need not give notice when permanently replacing a person

who is deemed to be an economic striker under the National

Labor Relations Act. Non-striking employees at the same

single site of employment who experience a covered employ-

ment loss as a result of a strike are entitled to notice;

however, situations in which a strike or lockout affects non-

striking employees at the same plant may constitute an un-

foreseeable business circumstances, as discussed in § 639.9,

and reduced notice may apply. Similarly, the “faltering com-

pany” exception, also discussed in § 639.9, and reduced notice

may apply. Similarly, the “faltering company” exception, also

discussed in § 639.9 may apply in strike situations. Where

a union which is on strike represents more than one bargain-

ing unit at the single site, non-strikers includes the non-

striking bargaining units(s). Notice also is due to those

workers who are not a part of the bargaining unit(s) which

is involved in the labor negotiations that led to the lockout.

Employees at other plants which have not been struck, but

at which covered plant closing or mass layoffs occur as a direct

or indirect result of a strike or lockout are not covered by

the strike/lockout exemption. The unforeseeable business cir-

cumstances exceptions to 60 days’ notice also may apply to

these closings or layoffs at other plants.

A-64

§639.6 Who must receive notice?

Section Xa) of WARN provides for notice to each

representative of the affected employees as of the time notice

is required to be given or, if there is no such representative

at that time, to each affected employee. Notice also must be

on the State dislocated worker unit and the chief elected of-

ficial of the unit of local government within which a closing

or layoff is to occur. Section 2(bX1) of the Act states that “any

person who is an employee of the seller (other than a part-

time employee) as of the effective date [time] of the sale shall

be considered an employee of the purchaser immediately after

the effective date [time] of the sale.”’ This provision preserves

the notice rights of the employees of a business that has been

sold, but creates no other employment rights. Although a

technical termination of the seller’s employees may be deem-

ed to have occurred when a sale becomes effective. WARN

notice is only required where the employees, in fact, ex-

perience a covered employment loss.

(a) Representative(s) of affected employees. Written notice

is to be served upon the chief elected officer of the exclusive

representative(s) or bargaining agent(s) of affected employees

at the time of the notice. If this person is not the same as

the officer of the local union(s) representing affected

employees, it is recommended that a copy also be given to

the local union official(s).

(b) Affected employees. Notice is required to be given

to employees who may reasonably be expected to experience

an employment loss. This includes employees who will like-

ly lose their jobs because of bumpting rights or other factors,

to the extent that such workers can be identified at the time

notice is required to be given. If, at the time notice is required

to be given. If, at the time notice is required to be given, the

Te ge Se eT

A-65

employer cannot identify the employee who may reasonably

be expected to experience an employment loss due to the

elimination of a particular position, the employer must pro-

vide notice to the incumbent in that position. While part-time

employees are not counted in determing whether plant clos-

ing or mass layoff thresholds are reached, such workers are

due notice.

(c) State dislocated worker unit. Notice is to be served

upon the State dislocated worker unit. Since the States are

restructuring to implement training under EDWAA, service

of notice upon the State Governor constitutes service upon

the State dislocated worker unit until such time as the Gover-

nor makes public State procedures or serving notice to this

unit. :

(d) Chief elected official of the unit of local government.

The identity of the chief elected official will vary according

to the local government structure. In the case of elected

boards, the notice is to be served upon the board’s

chairperson.

§ 639.7 What must the notice contain?

(a) Notice must be specific. (1) All notice must be specific.

(2) Where voluntary notice has been given more than

60 days in advance, but does not contain all of the required

elements set out in this section, the employer must ensure

that all of the information required by this section is pro-

vided in writing to the parties listed in § 639.6 at least 60

days in advance of a covered employment action.

(3) Notice may be given conditional upon the occurrence

or nonoccurrence of an event, such as the renewal of a

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major contract, only when the event is definite and the con-

sequences of its occurrence or nonoccurrence will necessari-

ly, in the normal course of a business, lead to a covered plant

closing or mass layoff less than 60 days after the event. For

example, if the non-renewal of a major contract will lead to

the closing of the plant that produces the articles supplied

under the contract 30 days after the contract expires, the

employer may give notice at least 60 days in advance of the

projected closing date which states that if the contract is not

renewed, the plant closing will occur on the projected date.

The notice must contain each of the elements set out in this

section.

(4) The information provided in the notice shall be based

on the best information available to the employer at the time

the notice is served. It is not the intent of the regulations,

that errors in the information provided in a notice that oc-

cur because events subsequently change or that are minor,

inadvertent errors are to be the basis for finding a violation

of WARN.

(b) As used in this section, the term “date” refers

to a specific date or to a 14-day period during which a separa-

tion or separations are expected to occur. If separations are

planned according to a schedule, the schedule should indicate

the specific dates on which or the beginning date of each

14-day period during which any separations are expected to

occur. Where a 14-day period is used, notice must be given

at least 60 days in advance of the first day of the period.

(c) Notice to each representative of affected employees

is to contain:

(1) The name and address of the employment site where

the plant closing or mass layoff will occur, and the name

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and telephone number of a company official to contact for

further information;

(2) A statement as to whether the planned action is ex-

pected to be permanent or temporary and, if the entire plant

is to be closed, a statement to that effect;

(3) The expected date of the first separation and the an-

ticipated schedule for making separations;

(4) The job titles of positions to be affected and the

names of the workers currently holding affected jobs.

The notice may include additional information useful to the

employees such as information on available dislocated worker

assistance, and, if the planned action is expeced to be tem-

porary, the estimated duration, if known.

(d) Notice to each affected employee who does not have

a representative is to be written in language understandable

to the employees and is to contain:

(1) A statement as to whether the planned action is ex-

pected to be permanent or temporary and, if the entire plant

is to be closed, a statement to that effect;

(2) The expected date when the plant closing or mass

layoff will commence and the expected date when the in-

dividual employee will be separated;

(3) An indication whether or not bumping rights exist.

(4) The name and telephone number of a company

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official to contact for further information.

The notice may include additional information useful to the

employees such as information on available dislocated worker

assistance, and, if the planned action is expected to be tem-

porary, the estimated duration, if known.

(c) The notices separately provided to the State

dislocated worker unit and to the chief elected official of the

unit of local government are to contain:

(1) The name and address of the employment site where

the plant closing or mass layoff will occur, and the name and

telephone number of a company official to contact for further

information;

(2) A statement as to whether the planned action is ex-

pected to be permanent or temporary and, if the entire plant

is to be closed, a statement to that effect;

(3) The expected date of the first separation, and the

anticipated schedule for making separations;

(4) The job titles of positions to be affected, and the

number of affected employees in each job classification;

(5) An indication as to whether or not bumping rights

exist;

(6) The name of each union representing affected

employees, and the name and address of the chief elected of-

ficer of each union.

A-69

The notice may include additional information useful to the

employees such as a statement of whether the planned ac-

tion is expected to be temporary and, if so, its expected

duration.

(f) As an alternative to the notices outlined in paragraph

(e) above, an employer may give notice to the State dislocated

worker unit and to the unit of local government by providing

them with a written notice stating the name of address of

the employment site where the plant closing or mass layoff

will occur; the name and telephone number of a company of-

ficial to contact for further information; the expected date

of the first separation; and the number of affected employees,

The employer is required to maintain the other information

listed in § 639.7(e) on site and readily accessible to the State

disclocated worker unit and to the unit of general local

government. Should this information not be available when

requested, it will be deemed a failure to give required notice.

§ 639.8 How is the notice served?

Any reasonable method of delivery to the parties listed

under § 639.6 of this part which is designed to ensure receipt

of notice of least 60 days before separation is acceptable (e.g.,

first class mail, personal delivery with optional signed

receipt). In the case of notification directly to affected

employees, insertion of notice into pay envelopes is another

viable option. A ticketed notice, i.e., preprinted notice regular-

ly included in each employee’s pay check or pay envelope,

does not meet the requirements of WARN.

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§ 639.9 When may notice be given less than 60 days in

advance?

Section 3(b) of WARN sets forth three conditions under

which the notification period may be reduced to less than 60

days.The employer bears the burden of proof that conditions

for the exceptions have been met. If one of the exceptions is

applicable, the employer must give as much notice as is prac-

ticable to the union, non-represented employees, the State

dislocated worker unit, and the unit of local government and

this may, in some cicumstances, be notice after the fact. The

employer must, at the time notice actually is given, provide

a brief statement of the reason for reducing the notice period,

in additon to the other elements set out in § 639.7.

(a) The exception under section 3(bX1) of WARM, termed

“faltering company’, applies to plant closings but not to mass

layoffs and should be narrowly construed. To qualify for

reduced notice under this exception:

(1) An employer must have been actively seeking capital

or business at the time that 60-day notice would have been

required. That is, the employer must have been seeking finan-

cing or refinancing through the arrangement of loans, the

issuance of stocks, bonds, or other methods of internally

generated financing; or the employer must have been seek-

ing additional money, credit, or business through any other

commercially reasonable method. The employer must be able

to identify specific actions taken to obtain capital or business.

(2) There must have been a realistic opportunity to

A-71

obtain the financing or business sought.

(3) The financing or business sought must have been

sufficient, if obtained, to have enabled the employer to avoid

or postpone the shutdown. The employer must be able to ob-

jectively demonstrate that the amount of capital or the

volume of new business sought would have enable the

employer to keep the facility, operating unit, or site open for

a reasonable period of time.

(4) The employer reasonably and in good faith must

have believed that giving the required notice would have

precluded the employer from obtaining the needed capital

or business. The employer must be able to objectively

demonstrate that it reasonably thought that a potential

customer or source of financing would have been unwilling

to provide the new business or capital if notice were given,

that is, if the employees, customers, or the public were aware

that the facility, operating unit, or site might have to close.

This condition may be satisfied if the employer can show that

the financing or business source would not choose to do

business with a troubled company or with a company whose

workforce would be looking for other jobs. The actions of an

employer relying on the “faltering company” exception will

be viewed ina company-wide context. Thus, a company with

access to capital markets or with cash reserves may not avail

itself of this exception by looking solely at the financial con-

ditions of the facility, operating unit, or site to be closed.

(b) The “unforeseeable business circumstances” excep-

tion under section 3(bX2XA) of WARN applies to plant clos-

ings and mass layoffs caused by business circumstances that

were not reasonably foreseeable at the time that 60-day

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notice would have been required.

(1) An important indicator of a business circumstance

that is not reasonably foreseeable is that the circumstance

is caused by some sudden, dramatic, and unexpected action

or condition outside the employer’s control. A principal

client’s sudden and unexpected termination of a major con-

tract with the employer, a strike at a major supplier of the

employer, and an unanticipated and dramatic major economic

downturn might each be considered a business circumstance

that is not reasonably foreseeable. A government ordered clos-

ing of an employment site that occurs without prior notice

also may be an unforeseeable business circumstance.

(2) The test for determining when business cir-

cumstances are not reasonably foreseeable focuses on an

employer’s business judgment. The employer must exercise

such commercially reasonable business judgment as would

a similarly situated employer in predicting the demands of

its particular market. The employer is not required, however,

to accurately predict general economic conditions that also

may affect demand for its products or services.

(c) The “natural disaster” exception in section 3(bX2XB)

of WARN applies to plant closings and mass layoffs due to

any form of a natural disaster.

(1) Floods, earthquakes, droughts, storms, tidal waves

or tsunamis and similar effects of nature are natural disasters

under this provision.

(2) To qualify for this exception, an employer must be

able to demonstrate that its plant closing or mass layoff is

A-73

a direct result of a natural disaster.

(3) While a disaster may preclude full or any advance

notice, such notice as is practicable, containing as much of

the information required in § 639.7 as is available in the cir-

cumstances of the disaster still must be given, whether in

advance or after the fact of an employment loss caused by

a natural disaster.

(4) Where a plant closing or mass layoff occurs as an

indirect result of a natural disaster, the exception does not

apply but the “unforeseeabale business circumstance” excep-

tion described in paragraph (b) of this section may be

applicable.

§ 639.10 When may notice be extended?

Additional notice is required when the date or schedule

of dates of a planned plant closing or mass layoff is extend-

ed beyond the date of the ending date of any 14-day period

announced in the original notice as follows:

(a) If the postponement is for less than 60 days, the ad-

ditional notice should be given as soon as possible to the par-

ties identified in § 639.6 and should include reference to the

earlier notice the date (or 14-day period announced in the

original notice as follows:

(a) If the postponement is for less than 60 days, the ad-

ditional notice should be given as soon as possible to the par-

ties identified in § 639.6 and should include reference to the

earlier notice, the date (or 14-day period) to which the planned

action is postponed, and the reasons for postponement. The

notice should be given in a manner which will provide the

A-74

information to all affected employees.

(b) If the postponement is for 60 days or more, the ad-

ditional notice should be treated as new notice subject to the

provisions of §§639.5, 639.6 and 639.7 of this part. Rolling

notice, in the sense of routine periodic notice given whether

or not a plant closing or mass layoff is impending, and with

the intent to evade the purpose of the Act rather than give

specific notice as required by WARN, is not acceptable.

PART 640—STANDARD FOR BENEFIT

PAYMENT PROMPTNESS—

UNEMPLOYMENT COMPENSATION

Sec.

640.1 Purpose and scope.

640.2 Federal law requirements.

640.3 Interpretation of Federal law requirements.

A-75

APPENDIX G

LEGISLATIVE HISTORY

HOUSE CONF. REP. NO. 100-576

[page 1045]

SUBTITLE E~ADVANCE NOTIFICATION OF PLANT

CLOSINGS AND MASS LAYOFFS

Present law

There is no present law for this provision.

House bill

The House bill contains no comparable provision.

1. SHORT TITLE (SEC. 6401 OF CONFERENCE

AGREEMENT)

Senate amendment

The Senate Amendment has no provision for a short

title. The advance notification provisions were identified as

Part B of the Economic Dislocation and Worker Adjustment

Assistance Act.

Conference agreement

The Conference Agreement separates the advance

notification provisions from the worker adjustment provisions

of the Economic Dislocation and Worker Adjustment

Assistance Act. Section 6401 of the Conference Agreement

A-76

creates a new subtitle for the advance notification provisions.

The short title for this subtitle is the Worker Adjustment and

Retaining Notification (“WARN”) Act. By separating the ad-

vance notification provisions from the worker adjustment pro-

visions, the Conferees intend as an administrative matter

for the WARN Act to be an original law, not an amendment

to the Job Training Partnership Act. At the same time, the

Conferences reaffirm that advance notice is an essential com-

| ponent of a successful worker readjustment program, and

they regard the two subtitles as closely interrelated.

2. DEFINITIONS/EXCLUSIONS FROM DEFINITIONS

(SEC. 331, 334 (1), 2) OF SENATE AMENDMENT;

SEC. 6402 OF CONFERENCE AGREEMENT)

Senate amendment

The Senate Amendment defines the terms “employer,”

“plant closing,” “mass layoff,” “representative,” “affected

employees,” “employment loss,” “‘unit of local government,”

“part-time employmee,” and “seasonal employee.”

9? 6

The Senate Amendment includes exemptions from

notification for plant closings or mass layoffs resulting from

the sale or relocation of a business. Under the exemption for

sales, no notice is required if the plant closing or mass layoff

results from the sale to hire substantially all affected

employees with no more than a six-month break in employ-

ment. Under the relocation exemption, no notice is required

if the plant closing or mass layoff results from a relocation

of a business within a reasonable commuting distance and

the employer offers to transfer substantially all affected

employees to the new location with no more than a six-month

break in employment.

—rree—v————— SMa ——

A-77

TRADE AND COMPETITIVENESS ACT

P.L. 100-418

[page 1046]

Conference agreement

The Conference Agreement adopts the definitions in the

Senate Amendment with the following modifications:

“Employer”. The Conference Agreement retains the

Senate Amendment language that the term “employer”

means a business enterprise. The Conferees intend that a

“business enterprise” be deemed synonymous with the terms

company, firm or business, and that it consist of one or more

sites of employment under common ownership or control. For

example, General Motors has dozens of automobile plants

throughout the country. Each plant would be considered a

site of employment, but as provided in the bill, there is only

one “employer”—General Motors.

“Plant Closing”. The Conference Agreement strikes all

references to “place of employment” and replaces them with

“single site of employment.” This change is intended to

clarify that geographically separate operations are not to be

combined when determining whether the employment

threshold for triggering the notice requirement is met. For

example, an automobile assembly plant on the east side of

town and an assembly plant on the west side of town ordinari-

ly would be two separate “sites of employment.” On the other

hand, an assembly plant on the east side of town that hap-

pens to extend to both sides of a public street is not two

distinct “Sites.”

A-78

The Conferees otherwise retain the Senate language,

but wish to clarify that a “temporary shutdown” triggers the

notice requirement only if there are a sufficient number of

terminations or layoffs exceeding six months, as specified

under the definition of “employment loss.”

“Mass Layoff’. The Conference Agreement modifies the

Senate Amendment so that the 33 percent requirement ap-

plies only to a mass layoff that involves more than 49 but

fewer than 500 employees. Where the employment loss in-

volves 500 or more employees, the 33 percent requirement

would not apply, and notice would be required. The Conferees

believe that layoffs involving 500 or more people are likely

to cause significant economic disruption in local communities,

as well as the obvious disruption for the individuals involv-

ed. Thus, the rationale for advance notice is strong—the need

for individuals and communities to begin planning for disloca-

tion before the dislocation occurs. The justification for a 33

percent requirement for layoffs before notice is required has

been the representation by business interests that small

layoffs of 50 or 100 or even 200 employees at a single site

with a workforce of perhaps a thousand or more employees

are such a regular part of business that requiring notice in

these circumstances would be unduly burdensome. Because

a layoff of 500 employees at a site of employment is a signifi-

cant and unusual action, even in a large workforce of 2000

or more employees, the requirement of advance notice in

these situations should not place an undue burden on

employers.

“Employment Loss”. The Senate Amendment includes

two kinds of layoffs that would trigger the bill’s

requirements—those of indefinite duration and those of

A-79

definite duration exceeding 6 months. The Conference Agree-

ment combines these into a single triggering event—a layoff

exceeding 6 months. The Senate Amendment includes within

its definition of an employment loss a reduction in hours of

more than 50 percent during any 6-month period. The Con-

ference Agreement clarifies that this reduction in hours must

occur in each of 6 consecutive months to be considered an

employment loss. As an example, an employee who works

less than half-time for five consecutive months, but who

works full-time in the sixth, would not be considered to have

experienced an employment loss.

“Part-time employee”. The Senate Amendment defines

a “part-time employee” as one who is hired to work an

average of fewer than 15 hours per week. It also defines a

“seasonal employee” as one who is hired for a period not to

exceed 3 months per year to do work that is seasonal in

nature. The Conference Agreement combines these concepts

into a single definition of “part-time” employee, which in-

cludes employees who work fewer than 20 hours per week

or who have worked fewer than 6 months in the 12-month

period prior to the point at which the employer is required

to serve notice. The definition of “seasonal employee” is

therefore eliminated.

LEGISLATIVE HISTORY

HOUSE CONF. REP. NO. 100-576

[page 1047]

Exclusions from Definition of Employment Loss. The

Conference Agreement incorporates the exemptions from

notification for sales and relocations of a business in modified

form as exclusions from the definition of “employment loss.”

Thus,

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a closing or layoff resulting from the sale of part or all of the

employer’s business does not give rise to an employment loss

if

(a) the employee is covered at the time of the sale by

a written rehire agreement between the buyer and the

seller of the business to which the employee is explicit-

ly made a third party beneficiary with rights against

the purchaser under applicable state law; or

(b) the employee within 30 days after the sale is

offered employment by the buyer.

In addition, a closing or layoff resulting from the reloca-

tion or consolidation of part or all of the employer’s business

does not give rise to an employment loss for a particular

employee if, prior to the employee’s termination or layoff,

(a) the employer offers to transfer that employee

within a reasonable commuting distance; or

(b) the employer offers to transfer the employee to

any other site of employment regardless of distance, and

the employee accepts within 30 days of the offer or of

the termination or layoff, whichever is later.

An example to which this may apply would be a situa-

tion where an employer owns five grocery stores in a

metropolitan area. After deciding that one of the stores is

no longer competitive, the employer decides to shut it down

and makes a timely offer to transfer its employees to one or

more of the remaining stores with no more than a six-month

break in employment.

A-81

TRADE AND COMPETITIVENESS ACT

P.L. 100-418

[page 1048]

3. NOTICE REQUIREMENTS (SEC. 332 (A) OF SENATE

AMENDMENT; SEC. 6403 (A) OF CONFERENCE

AGREEMENT)

Senate amendment

The Senate Amendment requires 60 days notice in ad-

vance of a plant closing or mass layoff to affected employees

(or their representative), to the State dislocated worker unit

designated or created under the Economic Dislocation and

Worker Adjustment Assistance Act, and to the chief elected

official of the unit of local government where the closing or

layoff occurs.

Conference agreement

The Conference Agreement adopts the Senate provision.

4. REDUCTION OF NOTIFICATION PERIOD (SEC. 332

(B) OF SENATE AMENDMENT: SEC. 6403 (B) OF

CONFERENCE AGREEMENT)

Senate amendment

The Senate Amendment provides for a reduction of the

notification period in two specific circumstances. Under the

“faltering company” exception, an employer actively seeking

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capital or business which would avoid or postpone indefinitely

a shutdown, need not give the full 60 days notice if the

employer reasonably and in good faith believes that notice

would preclude the employer from obtaining the needed

capital or business.

Under the second exception, the notice requirement is

reduced if the closing or mass layoff is caused by business

circumstances not reasonably foreseeable at the time notice

would have been required. Both exceptions require the

employer to give as much notice as is practicable and pro-

vide a brief statement of the basis for reducing the notice

period.

Conference agreement

After some discussion, the Conferees agree to retain

both exceptions, but wish to cary the meaning of the Senate

Amendment as follows:

Faltering Company. The provision would permit, under

specifically defined circumstances, an employer to shut down

one or more sites of employment without providing the full

notice required by the bill. The defense is intended as a nar-

row one applicable only where it was unclear 60 days before

the closing whether the closing would occur; the employer

was actively pursuing measures that would avoid or in-

definitely postpone the closing; and the employer reasonably

believed both that it had a realistic opportunity of obtain-

ing the necessary capital or business and that giving notice

would prevent the employer’s actions from succeeding.

The key phrases are first that the employer was

ee

A-83

actively seeking capital or business”; second that, had the

employer obtained this capital or business, it “would have

enabled the employer” to prevent or forestall the shutdown,

and third, that the employer “reasonably and in good faith

believed” that giving the notice required would have preclud-

ed the employer from obtaining the necessary capital or

business that it had a realistic opportunity to obtain. Thus,

to avail itself of this defense an employer must prove the

specific steps it had taken, at or shortly before the time notice

would have been required, to obtain a loan, to issue bonds

or stock, or to secure new business. This duty to seek capital

or business falls on the employer, not the single site alone,

and assumes that the employer lacks the necessary capital

or business. Moreover, the employer must show the

reasonable basis for its good-faith belief that giving the re-

quired notice would have prevented the employer from ob-

taining the capital or business that the employer had a

realistic opportunity to obtain. Finally, the employer also

must show that, upon learning that the workplace would be

closed, it promptly notified the employees and explained why

earlier notice had not been given.

Unforeseeable Business Circumstances. The Conferees

recognize that there may be cases in which unforeseeable

events necessitate a plant closing or mass layoff and it is not

economically feasible to require the employer to give notice

and wait until the end of the notice period before effecting

the plant closing, or mass layoff. For example, a natural

disaster may destroy part of a plant; a principal client of the

employer may suddenly and unexpectedly terminate or

repudiate a major contract; or an employer may experience

a sudden, unexpected and dramatic change in business con-

ditions such as price, cost, or declines in customer orders.

A-84

In these situations, the employer is required to give notice

as soon as the closing or mass layoff becomes reasonably

foreseeable, but the employer is permitted to implement the

proposed closing or layoff without waiting until the end of

the full notice period.

LEGISLATIVE HISTORY

HOUSE CONF. REP. NO. 100-576

[page 1049]

5. EXTENSION OF LAYOFF PERIOD (SEC. 332 (C) OF

SENATE AMENDMENT, SEC. 6403(C) OF CON-

FERENCE AGREEMENT)

Senate amendment

The Senate Amendment provides that a layoff of

definite duration of less than six months that extends beyond

six months shall be treated as a layoff of indefinite duration

subject to notification unless (1) the extension is caused by

business circumstances not reasonably foreseeable at the time

of the initial layoff; and (2) notice is provided as soon as it

is reasonably foreseeable that the extension is required.

Conference agreement

The Conference Agreement has eliminated the concept

of a layoff of indefinite duration as was provided in the Senate

Amendment. Therefore, the Conferees have modified the

language of section 6403(c) to conform that section to the

simplified definition in section 6402(aX6). Employers

operating under this provision lawfully may postpone

A-85

giving notice until some time after a layoff has commenced

only if they announced when ordering the layoff that the

layoff would be for less than six months and if the employer

proves that the layoff has been extended due to unforeseeable

business circumstances.

TRADE AND COMPETITIVENESS ACT

P.L. 110-418

[page 1050]

6. DETERMINATION OF EMPLOYMENT LOSS (SEC.

333(C) OF SENATE AMENDMENT, SEC. 6403(D) OF

CONFERENCE AGREEMENT)

Senate amendment

The Senate Amendment provides for the determination

of a plant closing or mass layoff based on aggregation of

smaller employment losses. Under the Amendment, employ-

ment losses at a single site for 2 or more graonps of employees,

each of which is less than 50 employees, but which in the

aggregate total at least 50 employees, that occur within a

- 90-day period, will be considered closing or layoff subject to

notification, unless the employer demonstrates the employ-

ment losses result from separate and distinct actions and

causes and are not an attempt to evade the notice

requirements.

Conference agreement

Language has been added to conform this subsection

to tue definition of mass layoff that appears in section

A-86

6402(aX3). The Conferees wish to clarify that the requirement

that a mass layoff of 50 to 499 employees must affect 33 per-

cent of the employees at a particular employment site also

applies to this section. The “33 percent” requirement was

inadvertently omitted from the language approved by the

Senate. Thus, for example, an employer employing 300

workers at a single site which laid off 25 employees on each

of four separate occasions within a 90-day period would

presumptively be deemed to have implemented a mass layoff

of more than 50 employees affecting 33 percent of the

workforce. On the other hand, no such presumption would

arise where the same employer laid off. . employees on each

of 4 occasions over the same 90-day period, because the “33

percent” requirement would not have been met.

7. EXEMPTIONS (SEC. 334(3), (4) OF SENATE

AMENDMENT, SEC. 6404 OF CONFERENCE

AGREEMENT)

Senate amendment

The Senate Amendment exempts particular plant clos-

ings and mass layoffs from the notice requirements. No notice

is required if the closing is a shutdown of a temporary facili-

ty or the mass layoff results from the completion of a par-

ticular project so long as the affected employees were hired

with the understanding that the job was limited to the dura-

tion of the facility or project.

The Senate Amendment also exempts from the notice

requirement those closings or layoffs that constitute a strike

or a lockout.

A-87

Conference agreement

As discussed earlier in this Report, the Conference

Agreement transforms two exemptions in the Senate

Amendments—for sale and relocation of a business—into ex-

clusions from the definition of “employment loss.” The Con-

ference Agreement retains the remaining two exemptions as

exemptions with the following modifications:

Temporary Facility. The Conference Agreement adds

language to clarify that this exception applies either to a clos-

ing or to a layoff. In addition, the Agreement clarifies that

the exemption from the notice requirement is available where

the closing or layoff is the result of the completion of a par-

ticular “undertaking,” as well as a particular “project.’”’ Use

of the term “project’ in the Senate Amendment had been read

by some as precluding its application to certain other term-

porary activities. The Senate floor debate included discus-

sion of this exemption, and the Conferees felt that clarifica-

tion of the intent of the Senate provision would be advisable.

There are two basic requirements for this exemption

to apply. First, the employees in question must have been

hired with the understanding that their jobs would last on-

ly until an obviously limited activity of the employer was

completed. This condition must have been clearly stated to

the employees at the time they begin work. Second, the work

must in fact be temporary or limited. The Conferees do not

intend that employers be able to avoid the notice require-

ment by a formal process of periodically telling workers that

their jobs will last only until completion of a particular pro-

ject or undertaking, when both employer and employees

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expect and intend to continue the employment relationship

indefinitely.

Thus, floor statements by the sponsors of the bill in the

Senate indicated that the exemption could apply to ship-

building and overhaul projects where employees were hired

with the requisite understanding and where the work is in

fact only for the duration of a particular project. Although

the precise date on which operations will cease sometimes

cannot be specified at the beginning of the unertaking, the

employees know that when the work is done, their jobs will

lapse. Similarly, this exemption also applies where an

employer hires employees for a specified and obviously

limited term and the employees are informed in writing of

the exact date of termination either at the outset or at some

other point preceding the 60-day notice period.

Lockout. The Senate bill exempts closings and layoffs

from the notice requirement when they constitute a strike

or lockout. A lockout occurs when, for tactical reasons

relating to collective bargaining, an employer refuses to

utilize some or all of its employees for the performance of

available work. The Conference Agreement clarifies that only

lockouts not undertaken for the purpose of evading the notice

requirements qualify for the exemption. An employer may

not, for example, shut down an establishment and evade the

notice requirement by calling the shutdown a lockout.

LEGLISLATIVE HISTORY

HOUSE CONF. REP. NO 100-576

[Page 1051]

8. ADMINISTRATION AND ENFORCEMENT OF

NOTICE REQUIREMENTS (SEC. 333A), (B) OF

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SENATE AMENDMENT, SEC. 6405, 6408 OF CON.

FERENCE AGREEMENT)

Senate amendment

The Senate Amendment establishes enforcement

mechanisms against an employer which fails to meet the

notice requirements. An employee who suffers an employ-

ment loss and who does not receive timely notice (either

directly or through the employee's representative) may bring

a civil action against the employer. The employer would be

liable for back pay for each day of the violation plus the cost

of related fringe benefits for each day of the violation minus

any earnings or related fringe benefits received from the

employer during the violation period.

If the employer does not provide timely notice to the

unit of local government, the employer would be subject to

a civil penalty equal to $500 for each day of the violation.

If more than one unit of local government has jurisdiction

over the area in which the closing or layoff wil] occur, the

employer must notify only the unit of local government to

which the employer paid the highest taxes for the year

preceding the year when the notice is required.

The Senate Amendment provides that a court may

reduce an employer’s liability to employees or an employer’s

penalty to the unit of local government if that employer

demonstrates that it acted in good faith and hadPtasonable

grounds for believing it was not violating the notice

requirements.

The Senate Amendment includes venue and attorneys’

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fees provisions. A person seeking to enforce the liability pro-

visions of this part may sue, individually or on behalf of

others similarly situated, in any U.S. district court in a

district in which the violation occurred or in which the

employer transacts business. A court, in addition to any judg-

ment awarded to plaintiffs under this section, may allow a

reasonable attorneys’ fee.

The remedies provided for in the Senate Amendment

are the exclusive remedies available for violation of the notice

requirements.

TRADE AND COMPETITIVENESS ACT

P.L. 100-418

[Page 1052)

Conference agreement

The Conference agreement adopts the Senate provision

with the following modifications:

Each day of violation. The Senate Amendment provides

that an employer which violates the notice provisions of sec-

tion 6408 is liable for back pay and a civil fine for “each day

of violation” The Conferees wish to clarify that “each day

of violation” is limited to the requisite notice period. Thus,

the maximum violation period is 60 days, and it could be less

depending upon the amount of notice given by the employer.

For example, if the employer provides 20 days notice, then

the maximum violation period for purposes of calculating

back pay awards or civil fines would be 40 days. (“Violation

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period” refers to the period of time after a shutdown or layoff

in violation of this Act, and extends for the number of days

that notice was required but not given.)

Damage payments to employees. The Conference agree-

ment modifies the Senate Amendment language pertaining

to offset. The conferees wish to clarify that for each day of

violation, an employer is liable to each aggrieved employee

for the amount paid in wages and benefits to such employee

prior to the layoff, as set forth in section 6405(aX1). The Con-

ferees also intend that an employer may satisfy its liability

with respect to benefits by paying the cash value of such

benefits for the period of violation, subject to the offset pro-

visions in section 6405(aX2).

Under 6405(aX2), the amount owed by the employer

may be reduced through cetain payments made by the

employer for the period of the violation. An offset would oc-

cur if the employer’s mass layoff involved a reduction in hours

of 75 percent for 6 consecutive months but the employer con-

tinued to pay the affected employees 25 percent of their

wages. The offset provision also would apply if an employer

offers employees a payment (in the absence of any legal oblig-

tion), in a voluntary and unconditional effort to ease the

burden of termination or simply as a gesture of goodwill. (The

Conferees wish to note here that damages are fully satisfied

when an employer makes the payment prescribed in section

6405(3)). If the employer continues to make payments to a

third party or trustee (such as premiums for health benefits

or payments to a defined contribution pension plan), which

are attributable to the employee for the violation period, the

payments made also would offset the back pay remedy. Final-

ly, with respect to the portion of benefit liability arising

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from a defined benefit pension plan, an employer could satisfy

that portion of its liability by crediting the employee with

service for all purposes for the period of the violation.

By contrast, payments owing because of written or oral

agreement, and made on account of the employment loss,

would not offset the back pay remedy. Such payment may

include severance pay, pension benefits or any other kind

of benefit that an employee is entitled to receive. These are

benefits that are payable as compensation for past services

because of layoff or shutdown has occurred, whether or not

the terms of the layoff or shutdown actually violate the Act.

In addition, they are benefits that an employee would not

receive if employment had continued.

Further, the only payments that may offset the back

pay remedy are those made by the violating employer. Wages

received from another employer, or unemployment compen-

sation payments received from the State, may not be used

to offset the remedy.

LEGISLATIVE HISTORY

HOUSE CONF. REP. NO. 100-576

[page 1053)

Damage payments to local governments. The Conferees

intend that employers which violate the notice requirements

with respect to the affected unit of local government be sub-

ject to a civil penalty of up to $500 per day of violation. Thus,

the maximum penalty payable to a local government is

$30,000. In the event that a violation is found, a court in

determining the amount of the penalty may take into account

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the severity of the violation, the employer’s size, and the

employer’s ability to pay such a penalty. The Conferees fur-

ther intend to provide an incentive and a mechanism for

employers to satisfy their obligation to their employees in

the event they fail to provide 60 days advance notice to their

employees. An employer will be relieved of the $500-a-day

penalty to the local unit of government if it fully and pro-

mptly satisfies any financial liability to its employees under

section 6405(aX1). In order to avoid the payment to the unit

of local government, an employer must complete full payment

to its employees within 3 weeks from the point at which it

orders a shutdown or layoff.

In addition, the Conferees agree that the Secretary of

Labor should be authorized to promulgate regulations to ease

administration and enforcement of the WARN Act. The Con-

ference Agreement recognizes that interpretive regulations

could play a constructive role in the implementation of this

legislation.

Although the Deparatment of Labor does not have an

enforcement role, the Agreement authorizes the Secretary

of Labor to promulgate regulations as he or she deems

necessary. At a minimum, these regaulations must prescribe

standards governing the service of notice to affected

employees. The Conferees intend that an employer be diligent

in its effort to notify a representative of employees or the

employees themselves. At the same time, the Conferees do

not expect an employer to go to extraordinary and unreason-

ble lengths to notify each and every employee. For example,

a mailing to the current addresses of employees might suf-

fice, even though a few employees might have moved

unbeknownst to the employer.

A-94

TRADE AND COMPETITIVENESS ACT

P.L. 100-418

[page 1054]

9. RELATION TO OTHER RIGHTS (SEC. 335 OF

SENATE AMENDMENT; SEC. 6406 OF CON-

FERENCE AMENDMENT)

Senate amendment

The Senate Amendment provides that the rights and

remedies provided under the advance notification provisions

are in addition to any other contractual or federal statutory

rights and remedies available to affected employees.

Conference agreement

The Conference Agreement provides that with one ex-

ception the rights and remedies provided under the advance

notification provisions do no preempt or displace rights and

remedies provided under other statutes or under contractual

agreements. The Conferees are aware that many legal issues

related to plant closings and mass layoffs currently may be

addressed under collective bargaining agreements and some

of these same issues also may be dealt with under state or

other federal law. See, e.g., Fort Halifax, Packing Company

v. Coyne,19 107 S. Ct. 2211 (1987) (ERISA does not preempt

state law prescribing severance pay). The Conferees intend

that the effect of these other laws and contracts should not

be disturbed by the new federal provision. The only qualifica-

tion to this rule involves the length of notice before a

10 482 US. 1, 96 L.Ed.2d I.

A-95

plant shutdown, the 60-day requirement contained in this

bill will run concurrently with the 90-day requirement under

state law. Similarly, if a collective bargaining agreement re-

quires that an employer give 120 days notice before closing

a plant, the new 60-day requirement will run concurrently

with the longer contractual notice period.

10. SENSE OF THE CONGRESS ON NOTICE (SEC. 336

OF SENATE AMENDMENT, SEC. 6407 OF CON.

FERENCE AGREEMENT)

Senate amendment

The Senate Amendment expresses the sense of Congress

that an employer not required by this Act to provide advance

notice of a plant closing or mass layoff is encouraged to pro-

vide advance notice irrespective of its obligations under

federal law.

Conference agreement

The Conference Agreement adopts the Senate provision.

11. EFFECT ON OTHER LAWS (SEC. 338 OF SENATE

AMENDMENT, SEC. 6409 OF CONFERENCE

AGREEMENT)

Senate amendment

The Senate Amendment provides that an employer at-

tempting in good faith to comply with the advance notice pro-

visions of the Act cannot be found in violation of the National

Labor Relations Act or the Railway Labor Act.

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LEGISLATIVE HISTORY

HOUSE CONF. REP. NO. 10-576

[page 1055)

Conference agreement

The Conference Agreement adopts the Senate provision.

12. EFFECTIVE DATE (SEC 337 OF SENATE AMEND-

MENT, SEC. 6410 OF CONFERENCE

AGREEMENT)

Senate amendment

The Senate Amendment provides that the advance

notice requirements established by the Act shall become ef-

fective six months and two days after the date of enactment.

Conference agreement

The Conference Agreement adopts the Senate provision

with two minor changes. The effective date of the advance

notice provisions is changed to six months after the date of

enactment. In addition, the Conference Agreement provides

that the authority granted to the Secretary of Labor to

prescribe regulation to carry out the advance notice provi-

sion is eifective upon the date of enactment.

PART F—NATIONAL SCIENCE FOUNDATION

UNIVERSITY INFRASTRUCTURE

1. Section 571 of the bill amends Title VII of the Higher

A-97

Education Act (HEA) by adding a new Part I, the College

and University Research Facilities and Instrumentation

Modernization Program (hereafter referred to as the “Pro-

gram”). The Senate bill has no comparable provision.

House recedes with an amendment creating an

academic research facilities modernization program and a

college science instrumentation program at the National

Science Foundation.

Title I (b)

The conferees mean by the term “independent non-

profit research institution” those institutions in that category

that have traditionally been eligible for NSF grants, such

as research institutes. The conferees expect NSF to specify

further which institutions will be eligible for facilities grants

as part of the interim guidelines to be published in the

Federal Register pursuant to sub-section (d).

Title I (c)

The conferees agree that proposals submitted under Ti-

tle I will be subject to merit review following NSF’s current

procedures. The merit review panels must include represen-

tatives from a mix of institutions reflective of the variety of

US. institutions eligible for receiving funding under this pro-

gram. The conferees are particularly concerned that univer-

sities that have not traditionally been large recipients of NSF

grants be represented on the panels.

In determining the appropriate non-federal share for

an institution, NSF should take into account the relative

A-98

financial strength of the institution. However, under no cir-

cumstances may the non-federal share be less than 50 per-

cent. As minority institutions may have difficulty raising

funds and may have small endowments, NSF may allow such

institutions to provide a portion of their 50 [STOP]