Local Joint Executive Bd. of Culinary v. LasVagas Sands

• Decision Date: 11 April 2001
• Docket Number: No. 98-17065,98-17322,98-17065
• Citation: 244 F.3d 1152
• Parties: (9th Cir. 2001) LOCAL JOINT EXECUTIVE BOARD OF CULINARY/BARTENDER TRUST FUND; BARTENDERS UNION, LOCAL 165; CULINARY WORKERS UNION, LOCAL 226; HARVEY MCCOY; RON BYFORD, Plaintiffs-Appellants, v. LAS VEGAS SANDS, INC., dba Sands Hotel Casino, Defendant-Appellee. LOCAL JOINT EXECUTIVE BOARD OF CULINARY/BARTENDER TRUST FUND; BARTENDERS UNION, LOCAL 165; CULINARY WORKERS UNION, LOCAL 226; HARVEY MCCOY; RON BYFORD, Plaintiffs-Appellees, v. LAS VEGAS SANDS, INC., dba Sands Hotel Casino, Defendant-Appellant
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1152

244 F.3d 1152 (9th Cir. 2001)

LOCAL JOINT EXECUTIVE BOARD OF CULINARY/BARTENDER TRUST FUND; BARTENDERS UNION, LOCAL 165; CULINARY WORKERS UNION, LOCAL 226; HARVEY MCCOY; RON BYFORD, Plaintiffs-Appellants, v. LAS VEGAS SANDS, INC., dba Sands Hotel Casino, Defendant-Appellee.

LOCAL JOINT EXECUTIVE BOARD OF CULINARY/BARTENDER TRUST FUND; BARTENDERS UNION, LOCAL 165; CULINARY WORKERS UNION, LOCAL 226; HARVEY MCCOY; RON BYFORD, Plaintiffs-Appellees, v. LAS VEGAS SANDS, INC., dba Sands Hotel Casino, Defendant-Appellant.

No. 98-17065, 98-17322

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted February 14, 2000

Filed April 11, 2001

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Andrew J. Kahn, McCracken, Stemerman, Bowen & Holsberry, Las Vegas, Nevada, for the plaintiffs-appellants-crossappellees.

David N. Frederick, Lionel, Sawyer & Collins, Las Vegas, Nevada, for the defendant-appellee-cross-appellant.

Appeal from the United States District Court for the District of Nevada Philip M. Pro, District Judge, Presiding. D.C. No.CV-96-00755-PMP/LRL, D.C. No.CV-96-00755-PMP/LRL

Before: Alex Kozinski, Ferdinand F. Fernandez, and William A. Fletcher, Circuit Judges.

W. FLETCHER, Circuit Judge:

Las Vegas Sands, Inc. ("Sands") violated the Worker Adjustment Retraining and Notification Act ("WARN Act" or "Act"), 29 U.S.C. SS 2101-2109, by giving its employees 45 rather than 60 days advance notice of the closure of its hotel casino in Las Vegas. The Local Joint Executive Board of Las Vegas ("the Union") and two individual representatives of nonunion employees sued for damages under the Act. Sands does not dispute that it violated the Act and must pay damages, but it contends that payments it made shortly after the closure satisfy its statutory obligations. On cross-motions for summary judgment, the district court granted partial summary judgment to both sides. Both sides appeal.

We affirm all the substantive decisions of the district court on issues of federal law.¹ We hold that under 29 U.S.C. S 2104(a)(1)(A) tip income is included within the definition of "back pay" to which employees are entitled, and that employees who can prove that they would have worked on a holiday are entitled to back pay at the rate they would have been paid for that holiday. Further, we hold that under S 2104(a)(2)(B) payments made to nonunion employees on the condition that they not quit before the date of the closure are not "voluntary and unconditional payment[s]" that Sands may deduct from its WARN Act damages, and that payments made to union employees pursuant to a bargained-for Memorandum of Agreement are also non-deductible "voluntary and unconditional payment[s]."

We reverse one procedural decision. We hold that the district court erred in denying class certification to the would-be class of nonunion employees.

I

On May 15, 1996, Sands informed its employees that it would close its hotel casino on June 30, 1996. By providing only 45 days notice of the termination, rather than the 60 days required by the WARN Act, Sands became liable to each employee for "back pay" for the remaining 15-day period. See 29 U.S.C. SS 2102 2104.

In a June 4, 1996 letter, Sands offered severance pay to some nonunion employees who would lose their jobs because of the closure. Under the terms of the letter, Sands would pay more than the WARN Act required to nonunion employees with more than five years service, subject to the condition that they remain at work until the actual closure. The letter did not offer anything to union employees because severance pay is a mandatory subject of bargaining. See Kirkwood Fabricators, Inc., v. NLRB, 862 F.2d 1303, 1306-7 (8th Cir. 1988). After engaging in collective bargaining, Sands and the Union signed a Memorandum of Agreement ("MOA") on July 3, 1996, three days after the closure. The MOA provided that union employees would receive the same severance payments that the June 4th letter had offered to nonunion employees.

On June 30, 1996, Sands closed its hotel casino. On July 18, Sands paid its former employees what it deemed to be their WARN Act damages. In calculating damages, Sands compensated employees for working days rather than calendar days that fell within the 15-day period. Sands did not include in its calculations the tips the employees would have earned during the 15-day period of inadequate notice. Sands also did not include double time pay for those employees who would have worked on the July 4th holiday, even though employees working on that day would have been paid that additional amount. Sands paid both union and nonunion employees with more than five years service the severance promised in the June 4th letter and the MOA. Although Sands did not normally provide prorated vacation pay for nonunion employees who quit or were discharged prior to their service anniversary, it made prorated payments to those employees.

The Union, on behalf of its members, and individual plaintiffs, on behalf of a would-be class of nonunion employees, sued Sands for damages under the WARN Act.

II

The WARN Act provides that employers within the scope of the Act "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." 29 U.S.C. S 2102(a). Employers who violate the Act by failing to provide timely notice shall be liable to each aggrieved employee . . . for

(A) back pay for each day of violation at a rate of compensation not less than the higher of

(i) the average regular rate received by such employee during the last 3 years of the employee's employment; or

(ii) the final regular rate received by such employee . . . .

29 U.S.C. S 2104(a)(1) (emphasis added).

When construing statutory language, we look first to its plain meaning. See Sacramento Reg'l County Sanitation Dist. v. Reilly, 905 F.2d 1262, 1268 (9th Cir. 1990). If the term at issue has a settled meaning, we infer that Congress meant to incorporate that meaning unless other language in the statute compels a contrary meaning. See American Tobacco Co. v. Patterson, 456 U.S. 63, 68 (1982). If alternative readings are possible, we determine "whether one construction makes more sense than the other as a means of attributing a rational purpose to Congress." Longview Fibre Co. v. Rasmussen, 980 F.2d 1307, 1311 (9th Cir. 1992); see Sacks v. Commissioner, 69 F.3d 982, 992 (9th Cir. 1995). "Absent a clearly expressed legislative intention to the contrary," the language of the statute is "regarded as conclusive." Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980).

In an earlier case brought under the WARN Act, we wrote that "[t]he term back pay has traditionally been understood to mean a sum equal to what [workers] normally would have earned had the violation not occurred." Burns v. Stone Forest Indus. Inc., 147 F.3d 1182, 1185 (9th Cir. 1998) (internal quotation omitted). However, we have never, before this case, had occasion to decide the specific issue of whether tips and vacation pay are included within the term "back pay" as used in the WARN Act.

As used in other federal statutes,"back pay" consistently includes tips. See, e.g., NLRB v. Lee Hotel Corp., 13 F.3d 1347, 1348, 1351 (9th Cir. 1994) (approving inclusion of tips in back pay calculation under the National Labor Relations Act ("NLRA"), 29 U.S.C. SS 151-169); Hilton Int'l Co. v. Union de Trabajadores de La Industria Gastronomica de Puerto Rico, 600 F. Supp. 1446, 1451 (D.P.R. 1985) ("tips are considered wages, part of [a worker's] compensation . . . and [are] properly included in a back pay award " for breach of a collective bargaining agreement under the NLRA (citations omitted)); In re Club Troika, Inc., 2 NLRB 90, 94 (1936) (noting that, under the NLRA, "in order that the discharged employees may be `made whole' the term `back pay' must . . . be regarded as including both the wage paid and the tips received"); Jackson v. McCleod, 748 F. Supp. 831, 836 (S.D. Ala. 1990) (including tips in the calculation of back pay under 42 U.S.C. S 1981).

As used in other federal statutes,"back pay" also includes holiday and overtime pay. See, e.g., Nichols v. Frank, 771 F. Supp. 1075, 1079 (D. Or. 1991) (taking into account nightand weekend-shift differentials in back pay calculation under Title VII of the Civil Rights Act of 1964), aff'd in Nichols v. Frank, 42 F.3d 503, 516 (9th Cir. 1994)); see also Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 263 (5th Cir. 1974) (finding under Title VII that "the ingredients of back pay should include more than`straight salary' ": "Interest, overtime, shift differentials, and fringe benefits such as vacation and sick pay are among the items which should be included in back pay."); Cox v. American Cast Iron Pipe Co., 784 F.2d 1546, 1562 (11th Cir. 1986) (same); Meadows v. Ford Motor Co., 510 F.2d 939, 947 (6th Cir. 1975) (same); Minette Mills, Inc., 316 N.L.R.B. 1009, 1013 (1995) (affirming inclusion of credit for paid holidays in back pay calculation under NRLA); Kossman v. Calumet County, 849 F.2d 1027, 1033 (7th Cir. 1988) (affirming inclusion of overtime pay in back pay calculation under Age Discrimination in Employment Act).

Sands contends that the term back pay is not used in its normal sense in the WARN Act. It argues that WARN Act damages are a penalty designed to deter future violations, rather than the traditional labor relations make-whole remedy designed to compensate employees for their losses, and that "back pay" under the WARN Act therefore includes neither tips nor holiday pay that an employee would have received if he or she had worked during the period of a WARN Act violation.

A

Sands urges us not to look to other federal statutes but to other provisions of the WARN Act. Under 29 U.S.C. S 2104(a)(1)(A)(i) and (A)(ii), the Act establishes a floor for damages, using either an average rate of...