Oil Chemical and Atomic Workers Int'l v. RMI

• Citation: 199 F.3d 881
• Decision Date: 03 November 1999
• Docket Number: AFL-CIO,No. 98-4336,98-4336
• Parties: (6th Cir. 2000) Oil, Chemical and Atomic Workers International Union, Local 7-629,, et al., Plaintiffs-Appellants, v. RMI Titanium Company, Defendant-Appellee. Argued:
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 881

199 F.3d 881 (6th Cir. 2000)

Oil, Chemical and Atomic Workers International Union, Local 7-629, AFL-CIO, et al., Plaintiffs-Appellants, v. RMI Titanium Company, Defendant-Appellee.

No. 98-4336

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: November 3, 1999

Decided and Filed: January 12, 2000

Julie H. Hurwitz, David A. Santacroce, SUGAR LAW CENTER FOR ECONOMIC AND SOCIAL JUSTICE, Detroit, Michigan, Theodore E. Meckler, Cleveland, Ohio, for Appellants.

Barton A. Bixenstine, ULMER & BERNE, Cleveland, Ohio, for Appellee.

Before: MARTIN, Chief Judge; DAUGHTREY, Circuit Judge; HILLMAN,^* District Judge.

DAUGHTREY, J., delivered the opinion of the court, in which MARTIN, C. J., joined. HILLMAN, D. J. (pp. 12-36), delivered a separate dissenting opinion.

OPINION

MARTHA CRAIG DAUGHTREY, Circuit Judge.

The plaintiffs, Oil, Chemical and Atomic Workers' (OCAW) Union Local 7-629, Kenneth Allen, and a class of OCAW members separated from employment during July and August 1991, advanced a claim for damages under the Worker Adjustment Retraining and Notification Act of 1988 (WARN) against the defendant, RMI Titanium Company. The plaintiffs alleged that by failing to give its employees adequate notice of the layoffs, the company violated provisions of the Act. In response to cross-motions for summary judgment, the district court ruled in the company's favor, finding that the plaintiffs had failed to establish the requisite number of layoffs to trigger the notice provisions under WARN. We affirm.

I. PROCEDURAL AND FACTUAL BACKGROUND

The facts are largely undisputed. RMI Titanium experienced a downturn in its business beginning in 1990, which precipitated a series of layoffs as part of a continuing reduction in its workforce, beginning with an initial layoff of 60 unionized employees in 1990. In January 1991, the company warned union representatives of the need for further reductions and laid off another 29 employees in February 1991. Despite these efforts, RMI posted losses of $2.5 million in the first six months of 1991.

During the spring of 1991, approximately 197 unionized, non-salaried employees and 72 non-unionized, salaried employees were working full-time at RMI's Metals Plant. Of the unionized employees,14 senior union members participated in a "voluntary layoff" program negotiated with RMI in 1986 and made available to employees during periods of workforce reduction. Employees taking a voluntary layoff received one month's unpaid leave, subject to renewal, and were replaced by union members previously (involuntarily) laid off from the plant who possessed similar job skills. At the end of the senior employee's voluntary layoff, the replacement was returned to "layoff" status, unless he or she was asked to replace another senior employee.

Of the 72 non-unionized employees working at the Metals Plant during the first half of 1991, approximately 13 employees were assigned to a research and development project referred to internally as the Electrolytic Titanium Project (ETP). The project's objective was the development of a variation on titanium production processes in use at the Metals Plant. RMI shared funding responsibilities for this project with an Italian company, Ginatta Torino Titanium.

The company continued its layoffs during the summer of 1991, laying off 85 additional unionized workers in July and August, and five non-unionized employees, including three members of the ETP team. Also during this time, approximately 35 senior unionized employees took one- or two-month leaves under the voluntary layoff program; they were replaced by previously separated junior employees recalled from and then returned to layoff status. Apparently, none of the employees laid off during this period received advance notice of their change in job status.

Despite these measures, the company's financial misfortunes continued, and it commenced shutting down some of its production facilities in January 1992. The Metals Plant closed on February 15, 1992. Later that year, the plaintiffs brought this WARN action against RMI, claiming violation of the notice provisions of the Act.

II. DISCUSSION

WARN Liability

The Worker Adjustment Retraining and Notification Act provides, in pertinent part, that:

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 . . . 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) (1994). The purpose of this provision is "to ensure that 'workers receive advance notice of plant closures and mass layoffs that affect their jobs.'" Kildea v. Electro-Wire Products, Inc., 144 F.3d 400, 405 (6th Cir. 1998) (quoting Marques v. Telles Ranch, Inc., 131 F.3d 1331, 1333 (9th Cir. 1997)). Under WARN, an "affected employee" is an employee "who may reasonably be expected to experience an employment loss as a consequence of a proposed plant closing or mass layoff by their employer." 29 U.S.C. § 2101(a)(5). An "employer" is "any business enterprise that employs . . . 100 or more employees, excluding part-time employees." 29 U.S.C. § 2101(a)(1)(A). An "employment loss" is "an employment termination, other than a discharge for cause, voluntary departure, or retirement . . . a layoff exceeding 6 months, or . . . a reduction in hours of work of more than 50 percent during each month of any 6-month period." 29 U.S.C. § 2101(a)(6).

Certain statutory thresholds apply in order for a layoff or sequence of layoffs to constitute a "mass layoff" and subject an employer to liability under WARN:

[T]he term "mass layoff" means 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).

29 U.S.C. § 2101(a)(2). In order to trigger the notice requirement under this section, if the employer lays off fewer than 500 employees in an action unrelated to a plant closing, the number of employees laid off must exceed 50 and must also exceed 33 percent of the total number of employees. Department of Labor regulations governing WARN enforcement require that these figures be calculated at a "snapshot"date, the date notice is first required to be given. See 20 C.F.R. § 639.5(a)(2) (1999). Even where the number of layoffs does not exceed both 50 and 33 percent of the total number of employees, however, layoffs occurring in separate reduction actions may be aggregated into a "mass layoff" if each set of layoffs involves fewer workers than required by the two statutory thresholds and all layoffs occur within the same 90-day period. See 29 U.S.C. § 2102(d). Where this is the case, the employer will be liable under WARN for failure to notify "unless [it] demonstrates that the employment losses are the result of separate and distinct actions and causes and are not an attempt by the employer to evade the requirements of [WARN]." Id.

In this case, the parties stipulate that RMI employed 269 workers on the "snapshot" date for the first of the layoffs in question, May 23, 1991. All parties also agree that 85 unionized and two non-unionized employees were laid off during the 90-day period following the initial layoffs, and that these layoffs may be added together to make 87 total layoffs, or 32.34 percent of the total employees. The parties disagree as to the district court's conclusion that neither the layoffs of the three non-unionized members of the ETP team nor the layoffs of 27 OCAW members after temporary recall, events that took place during the same 90-day period, should be counted with the other layoffs in order to reach the "mass layoff" threshold for WARN liability.

ETP Employees

The appellants argue that the ETP layoffs, like the earlier layoffs of unionized employees, resulted from "[RMI's] continuing loss of income and resulting financial decline" and, therefore, that RMI failed to demonstrate "separate and distinct actions and causes" for the ETP layoffs that would allow it to avoid WARN liability. See 29 U.S.C. § 2102(d). RMI argues in response that the layoffs of the three ETP employees were due to the failure of project co-sponsor Ginatta to pay its required share of expenses. The company supported its summary judgment motion on this point with the affidavit of Jerome Bennett, who at the time of the layoffs in question was an RMI executive in charge of employee relations. Bennett's affidavit referred to a letter from John F. Hornbostel, Jr., RMI's general counsel, to Dr. Marco V. Ginatta, dated September 5, 1991, advising Ginatta that, since monies previously agreed to be provided by Ginatta to RMI "for May and June expenses" had not been received, RMI would "shut down the MX-4 Facility at RMI's Metals Plant in Ashtabula, Ohio, tomorrow, Friday, September 6, 1991." The record indicates that the three employees in question were terminated the following Monday. The district court considered the letter in reaching its decision on the motion, along with Bennett's February 1994 affidavit and September 1993 deposition, in which he attributed the ETP layoffs to problems obtaining funding from Ginatta.

The appellants attempted to rebut RMI's assertions only with the deposition testimony of Warren Jensen, RMI's vice-president of personnel during 1991. Jensen, who was responsible for personnel matters at all five of RMI's plants at the time, stated that RMI's financial losses caused the "large force reductions in [its] salaried work force" during 1991. The record in this case shows that part of his deposition testimony included the following exchange:

Q: Do you...