Cruz v. Robert Abbey, Inc.

• Decision Date: 15 June 1991
• Docket Number: CV 90-2010 (ADS).,No. CV 89-4240 (ADS),CV 89-4240 (ADS)
• Citation: 778 F. Supp. 605
• Parties: Socorro CRUZ; Maria Ramos; Colon Milagros; Arcadio Cruz; William Mercado; Felix Burgos; Erlinda Sampson; and Anna Alvarez, individually and on behalf of all persons similarly situated, Plaintiffs, v. ROBERT ABBEY, INC. and Local Union Number 3 of the International Brotherhood of Electrical Workers, Defendants. Socorro CRUZ; Maria Ramos; Colon Milagros; Arcadio Cruz; William Mercado; Felix Burgos; Erlinda Sampson; and Anna Alvarez, individually and on behalf of all persons similarly situated, Plaintiffs, v. Martin ABBEY and John Doe Company, Defendants.
• Court: U.S. District Court — Eastern District of New York

778 F. Supp. 605

Socorro CRUZ; Maria Ramos; Colon Milagros; Arcadio Cruz; William Mercado; Felix Burgos; Erlinda Sampson; and Anna Alvarez, individually and on behalf of all persons similarly situated, Plaintiffs, v. ROBERT ABBEY, INC. and Local Union Number 3 of the International Brotherhood of Electrical Workers, Defendants.

Socorro CRUZ; Maria Ramos; Colon Milagros; Arcadio Cruz; William Mercado; Felix Burgos; Erlinda Sampson; and Anna Alvarez, individually and on behalf of all persons similarly situated, Plaintiffs, v. Martin ABBEY and John Doe Company, Defendants.

Nos. CV 89-4240 (ADS), CV 90-2010 (ADS).

United States District Court, E.D. New York.

June 15, 1991.

COPYRIGHT MATERIAL OMITTED

Hall & Sloan, New York City by Wendy E. Sloan, for plaintiffs.

Floyd S. Weil, New York City, for defendants Robert Abbey, Inc., Martin Abbey and John Doe Co.

Norman Rothfeld, New York City, for defendant Local Union No. 3.

MEMORANDUM AND ORDER

SPATT, District Judge.

The complaints in these two actions — CV 89-4240 ("Action # 1") and CV 90-2010 ("Action # 2")—contain the same factual and legal allegations; only the identity of the defendants differ. The substance of the allegations in the complaint in CV 89-4240 was discussed at length by the Court in Memoranda and Orders of June 12, 1990 and September 22, 1990. The actions stem from employee lay-offs since February 4, 1989 at Robert Abbey, Inc., a Brooklyn manufacturer.

Presently submitted to the Court are several motions and cross-motions. They are as follows: (1) by defendants Martin Abbey and John Doe Company to dismiss the claims in Action # 2 pursuant to Fed. R.Civ.P. 12(b)(6); (2) by defendants Martin Abbey and John Doe Company for summary judgment dismissing the claims in Action # 2; (3) by plaintiffs for certification of a class action in both Action # 1 and Action # 2; (4) by plaintiffs to consolidate Action # 1 and Action # 2; and (5) to compel or protect certain discovery.

I. MOTIONS BY MARTIN ABBEY AND JOHN DOE COMPANY TO DISMISS THE COMPLAINT IN ACTION # 2 FOR FAILURE TO STATE A CLAIM

A. The Governing Law

The applicable standard of review on a motion to dismiss is that "the court should not dismiss the complaint pursuant to Rule 12(b)(6) unless it appears `beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief'" (Goldman v. Belden, 754 F.2d 1059, 1065 2d Cir.1985 quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 1957; see also Branum v. Clark, 927 F.2d 698, 705 2d Cir.1991). In assessing the sufficiency of the Complaint, the Court must accept the allegations of the Complaint as true (see Branum v. Clark, supra; Procter & Gamble Co. v. Big Apple Industrial Bldgs., Inc., 879 F.2d 10, 14 2d Cir.1989, cert. denied, 493 U.S. 1022, 110 S.Ct. 723, 107 L.Ed.2d 743 1990), and must construe all reasonable inferences in favor of the plaintiff (see Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 1974). A motion to dismiss is addressed solely to the face of the pleading, and "the court's function ... is not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient" (Goldman v. Belden, supra, 754 F.2d at p. 1067).

The Court may not consider matters submitted outside the pleading at issue unless notice is given to all parties that the motion is being converted to a motion for summary judgment and the parties are afforded a reasonable opportunity to present additional pertinent material (see Krijn v. Pogue Simone Real Estate Co., 896 F.2d 687, 689 2d Cir.1990; see also Festa v. Local 3 Int'l Brotherhood of Elec. Workers, 905 F.2d 35, 38 2d Cir.1990 this rule is mandatory). No notice having been given to the parties that the Court would convert the defendants' motion into a motion for summary judgment, the Court declines to consider the affidavit of Martin Abbey as it relates to his "Cross Motion to Dismiss" (cf. Maggette v. Dalsheim, 709 F.2d 800, 802 2d Cir.1983 "a court is not obligated to treat a 12(c) motion as a motion for summary judgment").

B. The Complaint In Action # 2

The complaint in Action # 2 alleges two causes of action against both Martin Abbey and John Doe Company: (1) that they violated the notification requirements of the Worker Adjustment and Retraining Act of 1988 ("WARN"), 29 U.S.C. § 2101, et seq., in connection with a "plant closing" or "mass layoff" at Robert Abbey, Inc., as those terms are defined in the statute; and (2) that they breached the seniority provisions of the collective bargaining agreement in force and effect between Robert Abbey, Inc. and Local Union Number 3 of the International Brotherhood of Electrical Workers ("Local 3"), by failing to lay off workers in order of seniority.

The claims in Action # 2 are dependent on the alleged relationship between the defendants and Robert Abbey, Inc. In this regard, the complaint alleges as follows:

"9. ... Upon information and belief, John Doe Company is and has been at all times material hereto the alter ego, joint employer and successor employer, and successor to and assignee and agent of Robert Abbey, Inc.....

8.^* At all times mentioned herein or material hereto, defendant Martin Abbey was the Vice-President and an owner of Robert Abbey, Inc. and, upon information and belief, an owner of John Doe Company, and a controlling corporate officer or director or manager of each of them and exercised control of all aspects of management of both Robert Abbey, Inc. and John Doe Company, including, but not limited to, labor relations. Upon information and belief, Martin Abbey is, and has been at all times material hereto, the alter ego and joint employer of Robert Abbey, Inc. and of John Doe Company and the successor employer and the successor to and assignee and agent of Robert Abbey, Inc., and an employer within the meaning of 29 U.S.C. Section (a)(1) and 29 U.S.C. Section 2102 of WARN."

C. Discussion

(i) The WARN Claim Against Martin Abbey

The basic WARN requirement is as follows:

"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 ... and the chief elected official of the unit of local government within which such closing or layoff is to occur." (29 U.S.C. § 2102a)

A review of the statute, its applicable regulations and its legislative history indicate that "employer" does not include individual persons.

29 U.S.C. § 2101(a)(1) defines "employer" as follows:

"(1) the term `employer' means any business enterprise that employs —

(A) 100 or more employees, excluding part-time employees; or

(B) 100 or more employees who in the aggregate work at least 4,000 hours per week (exclusive of hours of over-time)." (29 U.S.C. § 2101a1 emphasis supplied)

WARN authorizes the Secretary of Labor (the "Secretary") to promulgate regulations necessary to carry out its provisions (see 29 U.S.C. § 2107a). In this regard, the Secretary has provided as follows:

"The term `employer' includes non-profit organizations of the requisite size. Regular Federal, State, local and federally recognized Indian tribal governments are not covered. However, the term `employer' includes public and quasi-public entities which engage in business (i.e., take part in a commercial or industrial enterprise, supply a service or good on a mercantile basis, or provide 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 independent authority to manage their personnel and assets." (20 C.F.R. § 639.3)

In addition, the Senate-House Conference Report which accompanied the WARN legislation stated as follows:

"`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." (House Conf. Rep. No. 100-576, 100th Cong., 2nd Sess., 1045, 1046 reprinted in 5 U.S.Code Cong. & Admin.News 1988, 2078, 2079 emphasis supplied)

In the Court's view, the statute, regulations and legislative history indicate that Congress defined "employer" as a "business enterprise" and intended a "business enterprise" to mean a corporate entity—i.e. corporation, limited partnership, or partnership —not an individual. (See Solberg v. Inline Corp., 740 F.Supp. 680, 685 D.Minn.1990 while recognizing "that WARN is a remedial statute and must be construed broadly," nonetheless held that "such a view does not counsel a court to disregard entirely the plain meaning of the words used by Congress"). The legislative history explicitly supports this view of the law (see House Conf.Rep. No. 100-576, supra "the Conferees intended that a `business enterprise' be deemed synonymous with the terms company, firm or business"); the statute, by defining "employer" as "any business enterprise that employs—100 or more employees," implicitly supports this view, since it is the rare individual who employs "100 or more employees" without resort to any type of corporate form. (See also Webster's Third International Dictionary 1976, p. 757 defining "enterprise" as "a unit of economic organization or activity (as a factory, a farm, a mine); esp: a business organization: FIRM,...