436 F.3d 906 (8th Cir. 2006), Wilson v. Airtherm Products, Inc.
|Citation:||436 F.3d 906|
|Party Name:||Charles T. WILSON; Caryless Vondran; Willie Ferell; Onixe Anderson; Dallas W. Watlington; Tommy Humphrey; Neartis Clark; Alvin Smith, Jr.; Tommie Outley; Billy Fleming; Lloyd A. Nichols; Gary R. Thomas; Alvin Smith; Jimmy L. Dooley; Kenneth Rogers; William Dawson; Samuel J. Cullum; Thomas Anthony; Corey Amos; Bobby Hedrick; Charles Busby; Larry Fos|
|Case Date:||February 03, 2006|
|Court:||United States Courts of Appeals, Court of Appeals for the Eighth Circuit|
Submitted: Nov. 16, 2005.
Appeals from the United States District of Arkansas.
Michael B. Wallace, argued, Jackson, Mississippi (M. Nan Alessandra and David M. Korn, New Orleans, Louisiana, on the brief), for appellant.
Pamela Dean Walker, Little Rock, Arkansas (James E. Nickels, North Little Rock, Arkansas, on the brief), for appellee.
Before MURPHY, BOWMAN, and GRUENDER, Circuit Judges.
BOWMAN, Circuit Judge.
Former employees of Airtherm Products, Inc. (API) sued API for failing to notify them of a plant closing as required by the Worker Adjustment and Retraining Notification Act (WARN Act), 29 U.S.C. §§ 2101-09 (2000), before API sold its business to Airtherm LLC (ALLC). Concluding that API violated the WARN Act by terminating its employees' employment without guaranteeing that ALLC would hire the employees after the sale was concluded, the District Court granted summary judgment to the former employees and awarded damages in the amount of $515,661.92. Reviewing de novo the District Court's grant of summary judgment, Smullin v. Mity Enter., Inc., 420 F.3d 836, 837 (8th Cir. 2005), we conclude that the WARN Act's sale-of-business exclusion, 29 U.S.C. § 2101(b)(1), protected API from liability in the circumstances of this case. Therefore, we reverse.
API formerly engaged in the business of manufacturing heating and air conditioning products. In 2000, ALLC's parent company, Mestek, Inc., which also manufactured heating and air conditioning products, became interested in purchasing API's business. When Mestek formed ALLC as a subsidiary for the purchase of API, Mestek decided to use the name Airtherm because that name had value in the heating
and air conditioning market. On May 24, 2000, API and ALLC executed an Asset Purchase Agreement (Purchase Agreement) for the sale of API's manufacturing business to ALLC. Under the Purchase Agreement, ALLC agreed to offer employment to all of API's employees. An exhibit appended to the Purchase Agreement contained a list of API's employees. Closing was scheduled for June 30, but the parties did not close the sale on or before that date. On August 21, API and ALLC executed the First Amendment to Asset Purchase Agreement (Amended Purchase Agreement). The Amended Purchase Agreement replaced the section of the Purchase Agreement that included ALLC's promise to offer employment to all of API's employees with a section that included the following promise: "Effective on the next working day following the Closing Date, [ALLC] (a) shall offer employment to all salaried and clerical employees of [API] in St. Louis and Arkansas; and (b) shall offer employment to employees within the bargaining unit represented by the [union]." Joint Appendix at 138. The Amended Purchase Agreement also changed the closing date from June 30 to August 25. The Amended Purchase Agreement added provisions under which ALLC agreed to indemnify API for WARN Act violations and API agreed to notify the union in writing about the decision to close the manufacturing plant and allow the union to request bargaining over the effects of the plant closure. Specifically, API agreed to allow ALLC to approve the contents of the letter to the union, and once approved, ALLC promised to indemnify API for any liability under the WARN Act.1
On August 22, ALLC assured API in writing that ALLC would "hire a substantial number of [API's] current employees" such that "[t]he jobs of fewer than 50 people will be affected by termination." Id. at 99. The letter also included an "Employment Application Schedule" to be posted for API's employees so they would know that ALLC would accept applications from the employees on Monday, August 28, and on Tuesday, August 29. Id. at 100. In an August 23 letter from API's...
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