Martin v. AMR Services Corp., 93-CV-4900 (JBW).

• Citation: 877 F. Supp. 108
• Decision Date: 22 February 1995
• Docket Number: No. 93-CV-4900 (JBW).,93-CV-4900 (JBW).
• Parties: William MARTIN, Joe Velez, Jose Gonzalez, Russell Carpino, and George Johnson, individually and on behalf of all other persons similarly situated, Plaintiffs, v. AMR SERVICES CORPORATION, a subsidiary of AMR Corporation, Defendants.
• Court: U.S. District Court — Eastern District of New York

877 F. Supp. 108

William MARTIN, Joe Velez, Jose Gonzalez, Russell Carpino, and George Johnson, individually and on behalf of all other persons similarly situated, Plaintiffs, v. AMR SERVICES CORPORATION, a subsidiary of AMR Corporation, Defendants.

No. 93-CV-4900 (JBW).

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

February 22, 1995.

COPYRIGHT MATERIAL OMITTED

Stuart A. Weinberger, Law Offices of Richard M. Greenspan, P.C., Ardsley, NY, for plaintiffs.

Edward A. Brill, Proskauer, Rose, Goetz & Mendelsohn, New York City, for defendants.

MEMORANDUM, ORDER AND JUDGMENT

WEINSTEIN, Senior District Judge:

Plaintiffs charge that defendant AMR Services Corp. ("AMR") failed to comply with the notice requirements of the Worker Adjustment and Retraining Notification Act ("WARN"), 29 U.S.C. § 2101 et seq., when it closed its Security Department at New York's John F. Kennedy Airport in the Spring of 1993. All relevant evidence has been produced by discovery or adequate affidavits and concessions in argument or in briefs.

AMR moves for summary judgment, contending that since fewer than 50 employees suffered an "employment loss" as defined by WARN, that statute's notice requirement were not triggered and therefore no statutory violation occurred. Plaintiffs also seek summary judgment. At issue is whether AMR's actions with respect to 18 employees placed in other jobs at AMR shortly after they were told their department had been eliminated suffered an employment loss as defined by WARN. Since these employees did not lose their employment, AMR's motion for summary judgment is granted and plaintiffs' cross motion is denied.

I. FACTS

AMR is an aviation ground services company whose operations include freight distribution and servicing, baggage handling, aircraft parts distribution, and other services for the airline industry. In May 1993, AMR decided to close its Security Department at JFK Airport and contract-out its functions. At the time, AMR employed 91 people in the security unit, one salaried manager and 90 hourly workers.

The parties agree that AMR is an employer as defined under WARN, 29 U.S.C. § 2101(a), and is subject to its provisions. In addition to the rights that employees may have under WARN, AMR employees have additional rights under AMR's internal employment regulations, specifically AMR's "Reduction in Force/Recall" manual ("RIF Regulations").

Under the RIF Regulations, "employees may be declared surplus as a result for sic a need for reduction in force in a specific work unit." A subsection of the RIF Regulations entitled "Reduction in Force Policy" provides seniority-qualified worker protections common in industry. It states:

All surplused employees in the specific work unit affected will have the following placement options ...:

a. The senior most qualified employees (i.e. individual ability to adapt to new position, prior job performance/attendance, performance evaluation, etc.) may displace a probationary employee in the same job classification in a similar work unit at the station.

b. The senior most qualified employee may fill existing vacancies in the same or other job classifications in the system.

General Manager or Regional Personnel Manager for the station affected by a reduction in force will contact Director Personnel, HDQ, to obtain complete list of vacancies in the system.

Qualified employees will be interviewed for position(s). It is management's discretion to offer or not offer the position.

Employee's pay would be rated on the last day worked in position from which surplused, or minimum rate of the new position, whichever is greater. If rate at time of surplus is greater than new rate, market rates will govern.

If either option a or b is not available to surplused employees he/she will be subsequently laid-off from the company.

RIF Regulations at 1-2.

Another subsection, entitled "Recall," provides for employment of laid off workers. It reads:

Surplused employees who have completed probation prior to, or on the last day worked, will be placed on the recall roster....

An employee retains recall rights to position(s) from which surplused for two years from the last day worked in that position....

Recalled employees will be paid their former rate held when surplused, or the minimum for the position to which recalled, whichever is greater....

Employees will not accrue seniority while on layoff. Upon recall or reemployment during active recall period, seniority accrued before layoff will be credited to the employee.

Id. at 3.

AMR sent letters dated May 21, 1993 to each of the 90 hourly workers stating that they had been "declared surplus" due to the Security Department's elimination. The letters provided that the employees' final day of work would be May 31, 1993, but that they would be paid through Friday, June 4, 1993. A similar letter dated May 3, 1993 advised the department manager that his last day was May 3, 1993 and that he would be paid through May 17, 1993. The letters noted that those employees who were members of the AMR Services Corp. Group Life and Health Benefits Plan "may elect to convert their coverage to an individual policy," and that "solicitation for conversion would be sent under separate cover." Solicitations for conversion were subsequently provided to the 11 employees who were eligible members of the health plan. There is some disagreement between the parties regarding the status and disposition of a number of the employees. AMR contends that the 90 hourly employees should be classified as follows:

1) 19 part-time employees who worked an average of fewer than 20 hours per week in the 90 days preceding the date on which notice under WARN would have been due.

2) 7 part-time employees who worked fewer than 6 of the 12 months preceding the date on which WARN notice would have been due.

3) 18 employees who were immediately placed in other AMR jobs at JFK airport, pursuant to AMR's RIF Regulations, with no loss of time on the job.

4) 5 employees who were laid off effective June 4, 1993, but were then recalled to other AMR jobs at JFK Airport within 6 months.

5) 13 employees who transferred to jobs at other AMR Corp. subsidiary companies, American Airlines, or Flagship Airlines.

6) 28 employees who were laid off for longer than 6 months.

Plaintiffs do not dispute AMR's description of the part-time employees, groups (1) and (2) above. They do, however, dispute the contention that the employees in group (3) were notified pursuant to AMR's RIF Regulations. They also argue that the employees in group (3) and (4) were not "laid off" or "immediately placed" in other positions, contending instead that these employees were "terminated."

According to an uncontradicted affidavit submitted by AMR's Personnel Supervisor, Mildred L. Hammack, it is AMR's practice to generate transaction records "in the normal course of business to reflect any employee's termination from the company," and other changes in an employee's status, including lateral transfers, reassignments to other jobs due to reorganizations, or promotion. Hammack Aff. at 8. AMR generated one transaction record for each of the 18 employees in group (3) to reflect their changes in employment. The records reveal that the 18 employees were placed in their new positions on either May 29, June 4, June 5, or June 7, 1993. Hammack Aff. at 7 and copies of original records. Codes in the transaction records for these employees further identify their changes in status, as denoted by AMR, as either "lateral," "reassignment," or "promotion," with one record noting "correction." Hammack Aff. at 7. According to Ms. Hammack's affidavit,

None of the 18 employees received the termination information that is sent in the normal course of business to AMR employees whose employment is being terminated; none ever received the payment for accrued vacation time that is normally due an employee upon termination; and all retained their existing company seniority, as reflected on the transaction records evidencing their job placements.

Hammack Aff. at 8.

The parties have agreed to narrow the scope of their dispute to the 18 employees in group (3). The resolution of their status is dispositive of the motion.

II. LAW

A. WARN Provisions

WARN requires 60-day notice of plant closings or other specified types of employee terminations. It provides:

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

....

29 U.S.C. § 2102(a). The parties agree that AMR is an "employer" as defined by WARN. See id. § 2101(a)(1).

The term, "mass layoff," is defined in terms of numbers and percentages of those laid off as a "reduction in force" which:

(A) is not the result of a plant closing; and

(B) results in an employment loss at the single site of employment during any 30-day period for —

(i)(I) at least 33 percent of the employees (excluding any part time employees); and

(II) at least 50 employees (excluding any part-time employees); or

(ii) at least 500 employees (excluding any part-time employees).

Id. § 2101(a)(3)(A)-(B). "Employment loss" is defined as a termination, a lay off exceeding 6 months, or a substantial reduction in hours of work:

(A) an employment termination, other than a discharge for cause, voluntary departure, or retirement, (B) a layoff exceeding 6 months, or (C) a reduction in hours of work of more than 50 percent during each month of any 6-month period.

Id. § 2101(a)(6). Lay offs do not constitute an "employment loss" unless they exceed six months' duration. Id.; see Kildea v. Electro Wire Prods., Inc., 775 F.Supp. 1014, 1019 (E.D.Mich.1991); Jones v. Kayser-Roth Hosiery, Inc., 748 F.Supp. 1276, 1284 (E.D.Tenn.1990).

B. Practical, Effects-Driven Conception of "Employment...