Damron v. Rob Fork Min. Corp., Civ. A. No. 89-250.

• Decision Date: 06 June 1990
• Docket Number: Civ. A. No. 89-250.
• Citation: 739 F. Supp. 341
• Parties: Robert DAMRON, et al., Plaintiffs, v. ROB FORK MINING CORPORATION, et al., Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

739 F. Supp. 341

Robert DAMRON, et al., Plaintiffs, v. ROB FORK MINING CORPORATION, et al., Defendants.

Civ. A. No. 89-250.

United States District Court, E.D. Kentucky, Pikeville.

June 6, 1990.

Sherry Brashear, Goss & Goss, Harlan, Ky., for plaintiffs.

Joseph L. Hamilton, Shannon Antle Northam, Stites & Harbison, Louisville, Ky., for Bethlehem Steel and BethEnergy.

Bruce A. Levy, Pikeville, Ky., James D. Asher, Polly, Craft, Asher & Smallwood, Whitesburg, Ky., for Mine 29 Mining & Processing, Inc.

Forrest H. Roles, Mark E. Heath, Smith, Heenan & Althen, Charleston, W.Va., for Rob Fork Mining Corp. and Rob Fork Processing Corp.

Charles J. Baird, Baird & Baird, Pikeville, Ky., for Jackal Mining Co. and Sidewinder Mining.

MEMORANDUM OPINION AND ORDER

HOOD, District Judge.

The plaintiffs, former employees of defendant Mine 29 Mining and Processing, Inc. Mine 29, filed this action claiming that Mine 29, in association with defendants Rob Fork Mining Corporation and Rob Fork Processing Corporation Rob Fork, Jackal Mining Company Jackal, Sidewinder Mining Company Sidewinder, and BethEnergy Mines, Inc.¹, failed to give sixty days notification of the closing of Mine 29's operations as required under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. WARN Act. Defendants Rob Fork, Jackal, and Sidewinder have each moved for summary judgment contending, among other points, that they are not "employers" within the meaning of the WARN Act.

At issue here is the extent to which laid off persons are to be included in the calculation of "employees" for purposes of the WARN Act. An "employer" under the Act is defined as a business enterprise that employs one hundred or more employees, excluding part-time employees. 29 U.S.C. § 2101(a)(1)(A). There is no specific definition of "employee" for the purposes of that section. However, the Act requires notification of a plant closing or mass layoff to all "affected employees", who are defined as those persons "who may reasonably be expected to experience an employment loss as a consequence of a proposed plant closing or mass layoff by their employer". 29 U.S.C. § 2101(a)(5).

Although enforcement of the WARN Act is vested in the courts, 29 U.S.C. § 2104(a)(5), the Secretary of Labor is instructed to promulgate interpretative regulations. 29 U.S.C. § 2107(a). The Secretary has determined that, for the purpose of calculating the requisite number of employees:

Workers on temporary layoff or on leave who have a reasonable expectation of recall should be counted as employees. An employee has a `reasonable expectation of recall' when he/she understands, through notification or industry practice, that his/her employment has been temporarily interrupted and that he/she will be recalled to the same or to a similar job.

29 C.F.R. § 639.3(a)(1).

The plaintiffs claim that Mine 29 had a total of seventy-three persons working at its operations as of October 2, 1989, including fifty-nine hourly employees and fourteen salaried. To reach the requisite one hundred employees, the plaintiffs allege that there were plans to recall approximately sixty additional hourly workers to operate two new sections of the mine on three shifts and to add two shifts to the preparation plant. These recalled workers were to come from a "panel" of laid off workers with recall rights based on seniority.²

The plaintiffs rely on the Secretary's interpretation of "employee" to assert that persons who have been laid off for over ten years may be counted as "employees" under the WARN Act because of the "boom/bust cycle" of employment in the coal mining industry. They cite the alleged recall of sixty persons as evidence of "industry practice" giving rise to a "reasonable expectation of recall" for those individuals on the panel. The plaintiffs point out that employment of hourly workers at the site grew to 220 by 1980, then dropped to zero until 1983, then grew again to 50 by 1985.

The parties have not cited any court decision interpreting this aspect of the WARN Act, nor has the court been able to locate any such opinion. The defendants first argue that the Secretary's recommended inclusion of laid off workers is incorrect, noting that the statute says nothing about laid off employees.

As earlier explained, notification is required for all "affected employees", i.e., all persons who may "reasonably be expected to experience an employment loss". An "employment loss" includes both termination and a layoff of more than six months. 29 U.S.C. § 2101(a)(6). A person who has been laid off is not terminated, but may, on the facts of the particular situation, harbor some expectation that he or she will be returned to full employment with that employer. One such situation cited by the Secretary is the construction industry, in which employees are merely laid off until the next job begins.

A person in that circumstance would reasonably experience an "employment loss" by virtue of a business closing which results in actual termination, raising the WARN Act require sixty days notification. It would be unreasonable to construe the Act as requiring notification to a person who cannot be counted as an "employee". Thus, the interpretation of the Secretary including laid off workers is clearly consistent with the WARN Act. The relevant question becomes whether laid off employees, under the facts of the particular case, would "reasonably experience an employment loss" by virtue of the employers closing.

The parties in this case have debated the meaning of the term "temporary" as used in § 639.3(a)(1). However, the inclusion use of that term by the Secretary does not denote a requisite element for applicability of the statute. The expected length of the layoff should simply be a factor considered in determining whether the employee had a "reasonable expectation" of returning to work for that employer. There is no support in the statutory language for the use of "temporary", whatever its definition, to limit the period for which an employee would have reason to believe he would be recalled. Conversely, a person may not denominate his layoff as "temporary" and automatically infer that there existed an "employment loss" by the plant closing or mass layoff.

The specific WARN Act analysis requires a determination of whether an employee would "reasonably experience an employment loss". Rather than await case law development on this phrase, the Secretary adopted a substantially similar analysis formulated under the National Labor Relations Act by the National Labor Relations Board's NLRB use of the "reasonable expectation of recall" test. The NLRB case law interpretation of that term, used in determining voter eligibility for representation elections, could then be utilized for the WARN Act. 54 Fed.Reg. 16,044.

The parties appear to agree with this suggestion by the Secretary and it, likewise, appears to this court to be an equally applicable phrase in determining those persons to be counted for WARN Act purposes. The NLRB has developed three criteria for this analysis: (1) the past experience of the employer; (2) the employer's future plans; and (3) the circumstances of the layoff, including what the employees were told as to the likelihood of recall. See, e.g., Atlas Metal Spinning Co., 266 NLRB 39, 112 LRRM 1273 (1983). The court agrees with the Secretary that industry practice contributes to this analysis.

The defendants admit that Mine 29 had never laid off any employees. On the other hand, Mine 29 had been in business only eleven months. After its initial hiring, a total of ten employees were recalled and eight more hourly workers were scheduled to be added October 2, 1989. Record No. 26, Rob Fork Exhibit A, Affidavit of Gary Royalty. Mine 29's predecessor, BethEnergy, had laid off 220 workers in 1980 and had managed to hire only some fifty workers by 1988. Record No. 40, Plai...