Mwarabu v. Penncro Assocs., Inc., CIVIL ACTION NO. 4:15-CV-00160
| Decision Date | 24 January 2017 |
| Docket Number | CIVIL ACTION NO. 4:15-CV-00160 |
| Parties | STEPHANIE MWARABU, Plaintiff, v. PENNCRO ASSOCIATES, INC., Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Pending in the above-referenced cause are Plaintiff and Defendant's cross-motions for summary judgment. Docs. 34, 35. Having considered the motions, responses, replies, relevant law, and for the reasons that follow, the Court DENIES Plaintiff's Motion for Partial Summary Judgment, Doc. 34, and GRANTS Defendant's Motion for Summary Judgment, Doc. 35.
The question presented by this case is whether Defendant Penncro Associates, Inc. ("Defendant" or "Penncro") complied with the Worker Adjustment and Retraining Notification Act of 1988 ("WARN," "WARN Act," or "Act"), 29 U.S.C. §§ 2101-2109, when it laid off approximately 157 employees at its Bryan, Texas facility in the winter of 2014 after losing a contract with its largest client, Bank of America ("BoA").
Penncro operated telephone call centers that engaged in collection efforts, mortgage services, customer service, and other direct-call services for customers. Doc. 35-1 at 1. The largest of Penncro's customers was BoA. Id. at 2. On April 1, 2014, Penncro and BoA entered into a General Services Agreement ("GSA") for a term of three years. Docs. 35-1 at 2, 8, 35-2 at 1. The GSA set forth the general terms and conditions under which Penncro would provide services to BoA and contained a termination clause, which allowed BoA to terminate the contract, without cause, by providing Penncro with forty-five days' written notice. Doc. 35-1 at 2, 12.
Simultaneously, Penncro and BoA entered into a Scope of Work Agreement under which Penncro provided customer-communication services in support of BoA's mortgage-servicing business (the "Mortgage Servicing Project"). Docs. 35-1 at 54-74, 35-2 at 1. The Scope of Work Agreement set a termination date of March 31, 2015. Doc. 35-1 at 54. Like the GSA, it also contained a forty-five-day-written-notice-of-termination clause Id. at 56. The Bryan, Texas call center at the heart of this dispute was opened specifically to cater to BoA's Mortgage Servicing Project. Id. at 2.
Between September and November 2014, Penncro received performance approval ratings from BoA of 100, 99, and 98 percent, respectively. Docs. 35-1 at 75-77, 35-2 at 2. Nevertheless, on October 31, 2014, BoA verbally announced to Penncro that it would be terminating the Mortgage Servicing Project effective December 31, 2014, for reasons unrelated to Penncro's performance. Docs. 35-1 at 3-5, 35-2 at 2-3. During this call, BoA representatives told Penncro that BoA was actively looking for other work to send to Penncro to make up for the difference. Docs. 35-1 at 3-5, 35-2 at 2-3.
For the next five business days, Penncro scrambled to evaluate the impact of the anticipated loss of the BoA contract, including calculating the number of individuals affected and whether other work could be found to prevent anticipated layoffs. Doc. 35-1 at 4. On November 10, 2014, Penncro called a meeting of all affected employees to notify them that BoA was terminating the Mortgage Servicing Project. Docs. 35-1 at 5, 35-3 at 33-34, 57-58. After this meeting, affected employees were provided written notice of the anticipated layoffs. Doc. 35-1 at 5-6, 80. The same day, Penncro notified the Texas Workforce Commission of the impendingmass layoff. Id. at 4-6, 81-82. The next day, November 11, 2014, Penncro received the official, written termination notice from BoA. Docs. 35-1 at 78, 35-2 at 2.
Plaintiff Stephanie Mwarabu ("Plaintiff" or "Mwarabu") attended the November 10 meeting and received the written notice. Doc. 35-3 at 28-36, 57-58. Pursuant to the notification of her impending termination, Mwarabu subsequently applied for—and received—unemployment. Id. at 86. Her last day of employment with Penncro was December 31, 2014. Id. at 53. Less than a month later, on January 20, 2015, Mwarabu then filed suit against Penncro on behalf of herself and a class of similarly situated individuals. Doc. 1. In her complaint, Plaintiff alleges that Penncro violated the WARN Act and seeks back pay and interest as damages. See id. at 6.
The purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Summary judgment under Federal Rule of Civil Procedure 56(c) is appropriate when, viewed in the light most favorable to the nonmovant, the court determines that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1996). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248.
The movant initially bears the burden of identifying those portions of the pleadings and discovery in the record that it finds demonstrate the absence of a genuine issue of material fact on which the nonmovant bears the burden of proof at trial. Lujan v. Nat'l Wildlife Fed., 497 U.S.871, 885 (1990) (citations omitted). "[A] complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323. When the moving party makes an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine dispute of material fact concerning every element of its cause of action in order to defeat the motion for summary judgment. Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir. 1998); Nat'l Ass'n of Gov't Emps. v. City Pub. Serv. Bd., 40 F.3d 698, 712 (5th Cir. 1994); Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). There is no genuine issue for trial if a rational trier could not find for the nonmoving party based on the evidence presented. City Pub. Serv. Bd., 40 F.3d at 712-13 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 584-88 (1986)).
Allegations in a plaintiff's complaint are not evidence. Wallace v. Tex. Tech Univ., 80 F.3d 1042, 1047 (5th Cir. 1996) (internal citation and quotation marks omitted) ("[P]leadings are not summary judgment evidence."); Johnston v. City of Houston, 14 F.3d 1056, 1060 (5th Cir. 1995) (quoting Solo Serve Corp. v. Westtown Assoc., 929 F.2d 160, 164 (5th Cir. 1991) (). Likewise, unsubstantiated assertions, conclusory allegations, improbable inferences, and unsupported speculation are not competent summary judgment evidence. Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994). Instead, the nonmovant must "go beyond the pleadings and by [his] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue of material fact for trial." Giles v. Gen. Elec. Co., 245 F.3d 474, 493 (5th Cir. 2001)(quoting Celotex, 477 U.S. at 324) (internal quotation marks omitted).
In ruling on a summary judgment motion, the court must consider all evidence and draw all inferences from the factual record in the light most favorable to the nonmovant, but the court may not make credibility determinations or weigh the evidence. Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007) (citing Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)).
The WARN Act requires covered employers who are planning a plant closing or mass layoff to give affected employees sixty-days' notice of such action. 20 C.F.R. § 639.2. The purpose of the advance-notice requirement is to provide "workers and their families some transition time to adjust to the prospective loss of employment, to seek and obtain alternative jobs and, if necessary, to enter skill training or retraining." Id. § 639.1. Although providing advance notice was the impetus behind it, see Watson v. Mich. Indus. Holdings, Inc., 311 F.3d 760, 765 (6th Cir. 2002) (), the WARN Act recognizes that advance notice cannot always be ensured. Accordingly, the Act carves out three exceptions to the notice requirement. See id. § 639.9. If one of these exceptions applies, employers are required to give only "as much notice as is practicable." Id.
In this case, the parties do not dispute that Plaintiff has made out a prima-facie case.1Rather, the crux of their dispute is whether the unforeseeable-business-circumstance exception applies to excuse Penncro's failure to provide its employees with the required sixty-days' notice. Penncro argues that it does. If the Court disagrees, Penncro urges in the alternative that the good-faith defense nevertheless applies to lessen its liability. Doc. 8 at ¶ 4.
The unforeseeable-business-circumstance exception applies when the closing or layoff was "caused by business circumstances that were not reasonably foreseeable as of the time that notice would have been required." 29 U.S.C. § 2102(b)(2)(A); see also 20 C.F.R. § 639.9(b). Thus, an employer must prove two elements to invoke the exception: (1) that the circumstances complained of were unforeseeable; and (2) that the circumstances complained of actually caused the mass layoff or plant shutdown. Calloway v. Caraco Pharm. Labs., Ltd., 800 F.3d 244, 251 (6th Cir. 20...
To continue reading
Request your trial