United Paperworkers v. SPECIALTY PAPERBOARD
| Decision Date | 31 August 1992 |
| Docket Number | No. 2:92-CV-87.,2:92-CV-87. |
| Citation | 829 F. Supp. 671 |
| Court | U.S. District Court — District of Vermont |
| Parties | UNITED PAPERWORKERS INTERNATIONAL UNION and its Local No. 340, on behalf of themselves, their members and others similarly situated v. SPECIALTY PAPERBOARD, INC. and Rock-Tenn Co. |
John Davis Shullenberger, Mickenberg, Dunn, Sirotkin & Dorsch, Burlington, VT, for plaintiffs.
Heather Briggs, Downs Rachlin & Martin, P.C., Burlington, VT, for defendants.
The United Paperworkers International Union and its Local No. 340, on behalf of members of the Local, ("plaintiffs") bring this Worker Adjustment and Retraining Notification Act, 29 U.S.C. sections 2101-2109, ("WARN Act") action against Specialty Paperboard, Inc. ("SPI") and Rock-Tenn Co. ("RTC") (collectively "defendants"). Defendants moved to dismiss the complaint on the ground that plaintiffs' claims are time-barred. For the reasons that follow, defendants' motion is denied.
This matter is before us on defendants' motion to dismiss; we will presume all factual allegations of the complaint to be true and draw all reasonable inferences in plaintiffs' favor. Miree v. De Kalb County, 433 U.S. 25, 25 n. 2, 97 S.Ct. 2490, 2492 n. 2, 53 L.Ed.2d 557 (1977).
In November, 1990, SPI began to solicit bids for its Sheldon Springs, Vermont paper mill. On February 4, 1991, SPI notified its Sheldon Springs workers that it had agreed to sell the mill to RTC on March 15, 1991, at which time all 232 hourly and salaried employees would be dismissed. The notice went on to add that RTC would continue to operate the mill at full capacity and would retain then-current SPI employees as needed to meet operational requirements. On March 4, 1991, SPI more clearly defined RTC's needs, specifying that RTC would rehire 115 SPI workers, retaining primarily those with seniority in departments that RTC elected to remain in operation.
On March 15, 1991, SPI fired all 232 workers and sold the mill to RTC. By March 18, 1991, RTC had offered positions to 141 former SPI workers, permanently dismissing seventy-nine hourly and twelve salaried workers. On March 11, 1992, the plaintiff union, on behalf of these seventy-nine workers, commenced this class action1 under the WARN Act, seeking a declaratory judgment that defendants had violated plaintiffs' WARN rights, sixty days of back pay and benefits for each dismissed employee, and costs and attorneys' fees.
Defendants filed a motion to dismiss the complaint on the ground that plaintiffs' claims are time-barred. Although the WARN act contains no statute of limitations, defendants argue that it is appropriate to apply the six month period of section 10(b) of the National Labor Relations Act, 29 U.S.C. section 160(b) to WARN Act claims.2 Plaintiffs argue it is appropriate here to apply Vermont's general six year statute of limitations for civil actions, 12 V.S.A. section 511.
The WARN Act compels employers to give sixty days notice to their employees before mass layoffs or plant closing that result in the loss of many jobs. See generally 29 U.S.C. § 2102.3 The WARN Act's purpose is to provide:
Protection to workers, their families and communities by requiring employers to provide notification 60 calendar days in advance of plant closings and mass layoffs. Advance notice provides 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 a skill training or retraining that will allow these workers to successfully compete in the job market.
Hotel Employees Local 54 v. Elsinore Shore Assoc., 768 F.Supp. 1117, 1126 (D.N.J.1991) (citing 29 C.F.R. § 639.1(a)). One of the WARN Act's principal enforcement mechanisms gives employees, or their representatives, who are aggrieved by their employer's failure to provide notice, the right to seek damages from the employer in a United States district court in an amount equivalent to sixty days pay and fringe benefits. See 29 U.S.C. § 2104(a). This is the nature of the action before us.
A person seeking to enforce an employer's liability under the WARN Act, including a representative of aggrieved employees or a unit of local government, may sue either for such person or for other persons similarly situated, or both, in any district court of the United States for any district in which the violation is alleged to have occurred, or in which the employer transacts business. 29 U.S.C. § 2104(a)(5).
As noted above, the issue at stake is what statute of limitations period applies to plaintiffs' WARN Act claims. There is no dispute that Congress, in drafting the WARN Act, failed to include an express statute of limitations for claims arising under the Act. "It is the usual rule that when Congress has failed to provide a statute of limitations for a federal cause of action, a court `borrows' or `absorbs' the local time limitation most analogous to the case at hand." Lampf, Pleva, Lipkind v. Gilbertson, ___ U.S. ___, ___, 111 S.Ct. 2773, 2778, 115 L.Ed.2d 321 (1991) (citations omitted). This practice of applying state statutes of limitation to federal causes of action has enjoyed sufficient longevity that a court may assume that Congress, in declining to incorporate a limitations period into a piece of legislation, intends by its silence for the court to borrow an analogous period from state law. Id. (citations omitted).
While the usual rule is to borrow state statutes of limitation, there are instances requiring the application of a federal limitations period. Usually these exceptions arise where the state rules are at odds with the purpose or operation of the federal substantive law. Id. (citing DelCostello v. Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 2289, 76 L.Ed.2d 476 (1983)). However, this is a closely circumscribed exception to be made only when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking. Id. (citations omitted).
A review of recent Supreme Court decisions reveals the contours of this limited exception to the rule of borrowing state law limitations periods. The Court has indicated it may be appropriate to select a federal limitations period when (1) the statutory claim in question covers a multiplicity of types of actions, leading to the possible application of a number of different types of state statutes of limitations, (2) the federal claim does not precisely match any state law claim, (3) the challenged action is multistate in nature, perhaps leading to forum shopping and inordinate litigation expense, and (4) a federal statute proves a very close analogy. Ceres Partners v. GEL Assoc., 918 F.2d 349, 357 (2d Cir.1990). The selection of a federal limitations period may also be appropriate where the federal cause in question is implied from a statute that also contains an express cause of action and accompanying limitations period. See generally Lampf, ___ U.S. at ___, 111 S.Ct. at 2773.
As noted above, the main purpose of the WARN Act is to provide an employee with advance notice of his or her employer's planned major personnel actions. The Act gives an employee, aggrieved by his or her employer's failure to abide by the notice requirement, the right to seek as damages from the employer sixty days back pay and benefits. Although styled as such, WARN Act damages are not back pay because they are not compensation for past labor or services. Finkler v. Elsinore Shore Assoc., 725 F.Supp. 828, 832 (D.N.J.1989). Instead, WARN Act damages compensate an employee for the injuries caused by his or her improper termination, much akin to either an action for wrongful discharge or severance pay, each of which is subject to Vermont's general six year statute of limitations for civil actions, 12 V.S.A. § 511.
Unlike actions under 42 U.S.C. section 1983 and the civil RICO statute, 18 U.S.C. § 1964, the WARN Act addresses a single specific social concern and wrongful behavior. See Wilson v. Garcia, 471 U.S. 261, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985) (); Agency Holding Corp. v. Malley-Duff & Assoc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987) (). Therefore, federal interests of predictability and judicial economy do not counsel the adoption of one source, or class of sources, either federal or state in origin, for borrowing purposes with the WARN Act. See Lampf, ___ U.S. at ___, 111 S.Ct. at 2779.
Applying Vermont's six year statute of limitations to WARN Act claims would not have the undesirable effect of encouraging forum shopping. The term "plant closing" as defined by the Act is limited to single sites of employment, 29 U.S.C. § 2101(a)(2), and venue is limited to the district where the violation is alleged to have occurred or where the employer does business, 29 U.S.C. § 2104(a)(5); unless a single plant site straddles the boundary between two states, it is unlikely prospective plaintiffs will have a broad choice of fora in which to bring their claims or that doubt will arise as to in which state triggering events occurred. Therefore, geographic considerations do not counsel for the application of a uniform federal limitations period for WARN Act claims.
No federal statute truly affords a closer fit to the WARN Act than Vermont's general civil six year statute. Defendants argue that section 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b), which establishes a six month limitations period for making charges of unfair labor practices to the National Labor Relations Board is "extremely analogous" and should be selected,...
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