Macisaac v. Waste Management Collection

• Decision Date: 12 December 2005
• Docket Number: No. A108599.,A108599.
• Citation: 36 Cal.Rptr.3d 650,134 Cal.App.4th 1076
• Court: California Court of Appeals Court of Appeals
• Parties: Stanley MacISAAC, Plaintiff and Appellant, v. WASTE MANAGEMENT COLLECTION AND RECYCLING, INC., Defendant and Respondent.

36 Cal.Rptr.3d 650

134 Cal.App.4th 1076

Stanley MacISAAC, Plaintiff and Appellant, v. WASTE MANAGEMENT COLLECTION AND RECYCLING, INC., Defendant and Respondent.

No. A108599.

Court of Appeal, First District, Division 2.

December 12, 2005.

Kelly Jackson Christianson & Smith, LLP, Heather Bussing Smith, Philip H. Kelly, Santa Rosa, for Appellant.

Littler Mendelson, P.C., Ronald John Holland, Barbara M. Russell, Gabriel S. Levine, San Francisco, for Respondent.

KLINE, P.J.

The California Worker Adjustment and Retraining Notification Act (the California WARN Act) (Lab.Code, § 1400 et seq.)¹ forbids an employer from ordering a "mass layoff" unless the employer gives 60 days' notice to the employees affected by the order and to various government entities. (§ 1401, subd. (a).) This appeal requires us to determine whether there has been a "mass layoff" within the meaning of the California WARN Act where employees are transferred from one employer to another for whom they perform the same work at the same rates of pay and with whom they retain the same benefits. We conclude, as did the trial court, that under the facts of this case, there was no "mass layoff" triggering the notice requirements of the California WARN Act. We will therefore affirm the trial court's judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Waste Management Collection and Recycling, Inc., doing business as Empire Waste Management, Inc. (Empire Waste), is a company that provides refuse collection, disposal, and recycling services. Prior to February 1, 2003, Empire Waste had a contract to provide these services to the City of Santa Rosa (the City) through December 31, 2006. In 2002, the City announced its intent to accept bids for a contract to provide these services to the City after December 31, 2006. Empire Waste and several other garbage companies submitted bids to the City to perform the post-2006 work. In September 2002, the City awarded the post-2006 contract to North Bay Disposal Corporation (North Bay).

After the City awarded the post-2006 contract to North Bay, North Bay offered to purchase the remaining years of Empire Waste's contract with the City. Empire Waste agreed to sell, and the companies negotiated the terms of the sale in late 2002 and early 2003. As part of the purchase agreement, North Bay agreed to buy equipment, including trucks, from Empire Waste. The agreement also provided that Empire Waste would transfer to North Bay 41 garbage truck drivers whose routes covered the City. North Bay, in turn, agreed to hire these drivers to drive the same routes in the City that they had covered for Empire Waste, using the same equipment, working the same Monday through Friday schedule, at the same pay and date of hire for seniority and benefits purposes, and with benefits equivalent to those they received from Empire Waste. To provide support services necessary to the contract with the City, North Bay also agreed to offer a mechanic employed by Empire Waste an equivalent position at North Bay. Thus, under the terms of the purchase agreement, a total of 42 Empire Waste employees would be transferred to North Bay. We will refer to these individuals as the Transferred Employees.

The sale transaction could not be effective until it was approved by the City. Empire Waste and North Bay expected to receive the City's approval on or before February 1, 2003, and the parties agreed to make the sale effective on that date. Empire Waste and North Bay wished to close their transaction as soon as possible after they obtained the City's approval so that they could ensure a smooth transition. The February 1, 2003, date was also chosen to coincide with the beginning of a new billing cycle to reduce the risk of confusion for customers in the City.

On January 1, 2003, the California WARN Act took effect. (See § 1400 et seq., added by Stats.2002, ch. 780, § 1, pp. 3697-3699.) One week later, on January 8, 2003, Empire Waste notified the Transferred Employees that the contract with the City was being sold to North Bay and that their jobs would be transferred to North Bay effective February 1, 2003, with the same pay and benefits. The City approved North Bay's purchase of the remainder of Empire Waste's contract a few days before February 1, 2003. Empire Waste removed the Transferred Employees from its payroll on Friday, January 31, 2003, and North Bay added the Transferred Employees to its payroll the following day.

On their next scheduled workday (Monday, February 3, 2003), 41 of the 42 Transferred Employees reported for work at North Bay's facility,² which is located across the street from that of Empire Waste. Beginning on that day, the Transferred Employees performed the same work for North Bay that they had performed for Empire Waste. Drivers drove the same routes in the City using the same trucks they had driven for Empire Waste, and the same mechanic serviced those trucks. In accordance with the terms of the purchase agreement, the Transferred Employees received the same pay and benefits and kept the same seniority dates at North Bay that they had had at Empire Waste. The Transferred Employees suffered no loss of pay or benefits, and none of them lost their jobs at North Bay within the first 30 days.

In February 2003, Empire Waste's parent corporation and related companies were involved in a company-wide reduction in force, which was separate and distinct from the employee transfer occasioned by the sale to North Bay. On or about February 21, 2003, Empire Waste terminated 20 employees as part of the reduction in force. None of these employees were transferred to North Bay or to any other company. Empire Waste offered the 20 employees severance benefits in exchange for a general release of claims, including claims under the California WARN Act.

On June 26, 2003, MacIsaac filed an action in Sonoma County Superior Court against Empire Waste.³ In that action, MacIsaac claimed that Empire Waste had violated section 1401, subdivision (a), by failing to give the Transferred Employees and the employees who were part of the reduction in force 60 days' notice of what MacIsaac termed their "layoff." After Empire Waste answered the complaint, the parties informed the court that they would be filing cross-motions for summary judgment. They agreed to stipulate to the material facts and further agreed that the case involved "a pure issue of law" — the interpretation of the California WARN Act.

Both parties moved for summary judgment, and the trial court held an oral hearing on the cross-motions. In a written order, the trial court granted Empire Waste's motion for summary judgment and denied MacIsaac's motion. The trial court found that the plaintiffs "were not separated from their positions for lack of funds or lack of work within the meaning of Cal-WARN. Therefore, the Drivers were not laid off within the language of the statute, and there was no mass layoff triggering Cal-WARN's notice requirements." The trial court accordingly entered judgment in favor of Empire Waste, and MacIsaac noted a timely appeal.

DISCUSSION

This appeal presents questions of statutory interpretation that are of first impression in California. We have found no California case construing the terms of the California WARN Act.⁴ Legal commentary and other secondary authority on the statute are also in short supply. (See Chin et al., Cal. Practice Guide: Employment Litigation (The Rutter Group 2004) ¶¶ 6:770 to 6:855, pp. 6-78 to 6-84 (hereafter "Chin") [general discussion of statute]; Emanuel & Besch, California's Worker Adjustment and Retraining Notification Act (Sept.2003) 26 L.A. Lawyer 21 (hereafter "Emanuel & Besch") [comparing statute to its federal counterpart and noting numerous unresolved issues of statutory interpretation].) We therefore confront the task before us with little assistance from judicial precedent or scholarly writings. Despite this absence of authority, our inquiry is guided by well-established legal principles governing our standard of review and the interpretation of statutes. We will set out these governing principles before turning to the issues in this case.

A. Standard of Review

MacIsaac appeals from a trial court order denying his motion for summary judgment and granting summary judgment to Empire Waste. On appeal, the trial court's order is subject to de novo review, because the parties have stipulated to the relevant facts and the issues before us are questions of statutory interpretation. (See Regents of University of California v. Superior Court (1999) 20 Cal.4th 509, 531, 85 Cal.Rptr.2d 257, 976 P.2d 808 [appellate court exercises de novo review of ruling on summary judgment motion and underlying statutory construction issues]; City of Saratoga v. Hinz (2004) 115 Cal.App.4th 1202, 1212, 9 Cal.Rptr.3d 791 ["the interpretation of a statute and the application of that statute to undisputed facts . . . is subject to this court's independent or de novo review"]; see also International Alliance of Theatrical Stage Employees, etc. v. Laughon (2004) 118 Cal.App.4th 1380, 1387, 14 Cal.Rptr.3d 341 [interpretation and application of statutes is a matter of independent review].)

B. The Three-Step Process of Statutory Interpretation

In interpreting the statutory language at issue, "[w]e begin with the fundamental rule that our primary task is to determine the lawmakers' intent." (Delaney v. Superior Court (1990) 50 Cal.3d 785, 798, 268 Cal.Rptr. 753, 789 P.2d 934 (Delaney).) The process of interpreting the statute to ascertain that intent may involve up to three steps. (Californians Against Waste v. Department of Conservation (2002) 104 Cal.App.4th 317, 321, 127 Cal.Rptr.2d 905, citing Halbert's Lumber, Inc. v. Lucky Stores, Inc. (1992) 6 Cal.App.4th 1233, 8 Cal.Rptr.2d 298 (Halbert's Lumber); see Mejia v. Reed (2003) 31 Cal.4th 657, 663, 3 Cal.Rptr.3d 390, 74 P.3d 166.) As other courts have noted, the key to statutory interpretation is applying the...