United Paperworkers Intern. Union and Its Local 340 v. Specialty Paperboard, Inc.

• Decision Date: 19 July 1993
• Docket Number: D,No. 1523,1523
• Citation: 999 F.2d 51
• Parties: , 125 Lab.Cas. P 10,769, 8 IER Cases 1025 UNITED PAPERWORKERS INTERNATIONAL UNION AND ITS LOCAL 340, on behalf of themselves, their members and others similarly situated, Plaintiffs-Appellees, v. SPECIALTY PAPERBOARD, INC. and Rock-Tenn Co., Defendants-Appellants. ocket 93-7093.
• Court: U.S. Court of Appeals — Second Circuit

Page 51

999 F.2d 51

62 USLW 2057, 125 Lab.Cas. P 10,769,

8 IER Cases 1025

UNITED PAPERWORKERS INTERNATIONAL UNION AND ITS LOCAL 340 on behalf of themselves, their members and others similarly situated, Plaintiffs-Appellees, v. SPECIALTY PAPERBOARD, INC. and Rock-Tenn Co., Defendants-Appellants.

No. 1523, Docket 93-7093.

United States Court of Appeals Second Circuit.

Argued June 11, 1993.

Decided July 19, 1993.

Heather Briggs, Burlington, VT (Downs, Rachlin & Martin, of counsel), for defendant-appellant.

John D. Shullenberger, Burlington, VT (Mickenberg, Dunn, Sirotkin & Dorsch, of counsel), for plaintiffs-appellees.

Before: OAKES, WINTER and McLAUGHLIN, Circuit Judges.

OAKES, Circuit Judge:

The facts of the case are simple: on Friday, March 15, 1991, defendant Specialty Paperboard Inc. ("SPI") sold a paper mill located in Sheldon Springs, Vermont to defendant Rock-Tenn Co. ("RTC") and terminated the jobs of all 232 employees of the mill. That same day, RTC rehired 141 of these employees. On March 13, 1992, the United Paperworkers International Union and Local 340 (the "union") brought suit on behalf of the laid-off employees under the Worker Adjustment and Retraining Notification Act ("WARN"), 29 U.S.C. §§ 2101 et seq. (1988). The union alleged that SPI and RTC had failed to give notice to the workers of the impending lay-offs as required by WARN. The complaint was filed as a class action pursuant to 29 U.S.C. § 2104(a)(5) (1988) and Fed.R.Civ.P. 23(b)(2).

The United States District Court for the District of Vermont, Albert W. Coffrin, Judge, denied defendants' motion to dismiss the claim as time-barred. The district court declined to apply the National Labor Relations Act's ("the NLRA") six-month statute of limitations to WARN, which lacks any limitation period of its own. Instead, the court adopted Vermont's six-year statute of limitations for civil actions. SPI and RTC brought this interlocutory appeal under 28 U.S.C. § 1292(b) (1988) and Fed.R.App.P. 5(d) to challenge the district court's determination. For the following reasons, we affirm.

DISCUSSION

WARN requires that companies with one hundred employees or more provide their workers with a minimum of sixty-days' written notice before a plant closing ¹ or mass layoff. ² While a termination immediately qualifies as an employment loss, 29 U.S.C. § 2101(a)(6)(A), a layoff must last more than six months to qualify. 29 U.S.C. § 2101(a)(6)(B). An employer who fails to provide the statutory notice before such a layoff or plant closing is liable to those employees suffering an employment loss ³ for backpay and lost benefits for each day of violation. 29 U.S.C. § 2104(a)(1). WARN provides for a civil action for damages in federal court. ⁴

As often happens, Congress failed to provide WARN with a statute of limitations A civil action, except one brought upon the judgment or decree of a court of record of the United States or of this or some other state, and except as otherwise provided, shall be commenced within six years after the cause of action accrues and not thereafter.

                leaving it to the courts to find an appropriate period.   SPI and RTC argue that the six-month period of § 10(b) of the NLRA, 29 U.S.C. § 160(b) (1988), should apply to WARN claims.   According to the union, however, the district court correctly found Vermont's general six-year statute of limitations for civil actions, Vt.Stat.Ann. tit. 12, § 511 (1973 & 1992 Supp.), the most appropriate period to apply.   The statute reads as follows
                

This limitations period applies to both tort and contract claims. ⁵

In the face of repeated Congressional silence, the Supreme Court has developed an analytic framework for courts to use in the search for the proper statute of limitations. Although federal law determines which statute of limitations to apply, see UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966), the Court has recently reiterated that when a federal statute contains no limitations period, courts should " 'borrow[ ]' or 'absorb[ ]' the local time limitation most analogous to the case at hand." Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, --- U.S. ----, ----, 111 S.Ct. 2773, 2778, 115 L.Ed.2d 321 (1991) (citations omitted). If the state limitation would undermine the goals of the federal statute, however, the Supreme Court has set forth limited circumstances under which it might be preferable to borrow a federal limitations period. Id.

The Supreme Court has emphasized that these circumstances are "closely circumscribed." Reed v. United Transp. Union, 488 U.S. 319, 324, 109 S.Ct. 621, 625, 102 L.Ed.2d 665 (1989). We have recently highlighted that this statement is equally true in the labor context:

[W]e borrow federal rather than state limitations periods where (1) a federal rule ... clearly provides a closer analogy than state alternatives, and (2) the federal policies at stake and the practicalities of the litigation render the federal limitation "a significantly more appropriate vehicle for interstitial lawmaking."

Phelan v. Local 305, 973 F.2d 1050, 1058 (2d Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1415, 122 L.Ed.2d 785 (1993) (quoting DelCostello v. Brotherhood of Teamsters, 462 U.S. 151, 172, 103 S.Ct. 2281, 2294, 76 L.Ed.2d 476 (1983)). ⁶ The considerations set forth in DelCostello have led to divergent outcomes, even for those statutes which explicitly regulate trade unions. Rightly, courts have been reluctant to consider every suit in which a union plays a part as requiring a federal limitations period. See Hoosier, 383 U.S. at 707, 86 S.Ct. at 1114 (applying state statute of limitations to § 301 claim for vacation pay); DelCostello, 462 U.S. at 164-65, 103 S.Ct. at 2290-91 (applying NLRA statute of limitations to hybrid § 301/duty of fair representation claim); Reed, 488 U.S. at 334, 109 S.Ct. at 630 (applying state personal injury statute of limitations to union member free speech claim). Each case turns on its individual facts. See Phelan, 973 F.2d at 1058-59. In DelCostello, the Court stated that it would look to the federal limitations period because of the national concern for "stable bargaining relationships and finality of private settlements." 462 U.S. at 171, 103 S.Ct. at 2294 (citation omitted). In Reed, on the other hand, where the concerns were tangential to the collective bargaining relationship, Several courts have already addressed the lack of a limitations period for a WARN action, with divergent results. Compare Wallace v. Detroit Coke Corp., 818 F.Supp. 192 (E.D.Mich.1993) (finding the NLRA statute of limitations inapplicable in WARN case and relying on six-year state contract statute of limitations), Automobile Mechanics' Local No. 701 of the Int'l Assoc. of Machinists & Aerospace Workers v. Santa Fe Terminal Services, Inc., 830 F.Supp. 432 (N.D.Ill.1993) (rejecting NLRA § 10(b) but declining to choose appropriate state limitations period), and Frymire v. Ampex Corp., 821 F.Supp. 651 (D.Colo.1993) (following Wallace ) with Newspaper and Mail Deliverers' Union of N.Y. and Vicinity v. United Magazine Co., 809 F.Supp. 185 (E.D.N.Y.1992) (finding NLRA most analogous), and Staudt v. Glastron, Inc., No. SA-92-CA-1174, 1993 WL 85356, 1993 U.S.Dist. LEXIS 3090 (W.D.Tex. Feb. 23, 1993) (same). No court of appeals, however, has reached a decision on this issue.

                the court applied a state limitations period.  488 U.S. at 334, 109 S.Ct. at 630;  see also Hoosier, 383 U.S. at 702, 86 S.Ct. at 1111 ("Lack of uniformity in this area [i.e., outside of collective bargaining] is therefore unlikely to frustrate in any important way the achievement of any significant goal of labor policy.").   As noted in Phelan, "[w]e therefore have borrowed the Section 10(b) limitations period where claims have directly implicated the collective bargaining relationship...."  973 F.2d at 1060.
                

A WARN cause of action does not fit the limited circumstances under which a federal statute of limitation should be applied. Courts are only to apply a federal statute of limitations if the federal statute is clearly more analogous and the state period would undermine federal policy. Initially we note that Congress has characterized a WARN claim as a private civil action which should not be interpreted as altering federal labor policy. See 29 U.S.C. § 2105 ("The rights and remedies provided to employees by the Act are in addition to, and not in lieu of any other contractual or statutory rights and remedies ... and are not intended to alter or affect such rights and remedies....") RTC and SPI argue, however, that WARN is exactly the kind of statute which requires a federal limitations period, specifically that provided in NLRA § 10(b).

Section 10(b) of the NLRA gives aggrieved persons six months to file a charge with the National Labor Relations Board (the "Board") alleging unfair labor practices. Unlike WARN, however, the NLRA is a statute enacted to protect the right of workers to join together in labor organizations and collectively bargain for the terms and conditions of employment. In rejecting an employer's claim that Maine's plant closing law was preempted by the NLRA, the Supreme Court underscored the differing policies behind the NLRA and the notification statute. "Such regulation [a state-law plant closing notice requirement] provides protections to individual union and nonunion workers alike, and thus 'neither encourage[s] nor discourage[s] the collective-bargaining processes that are the subject of the NLRA.' " Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 20-21, 107 S.Ct. 2211, 2222-23, 96 L.Ed.2d 1 (1987) (quoting Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 755, 105 S.Ct. 2380, 2397, 85 L.Ed.2d 728 (1985)). The purpose of WARN, unlike that of the NLRA, is not to ensure labor peace but to alleviate the distress associated with job loss for both the workers and the community in which they live. This is...