Wiltz v. M/G Transport Services, Inc.

• Decision Date: 22 January 1996
• Docket Number: No. 96-5744,96-5744
• Citation: 128 F.3d 957
• Parties: 134 Lab.Cas. P 10,075, 13 IER Cases 720 Ferdie P. WILTZ, suing on behalf of themselves and all persons similarly situated; Michael A. Spencer, suing on behalf of themselves and all persons similarly situated, Plaintiffs-Appellants, v. M/G TRANSPORT SERVICES, INC.; Midland Company, Inc.; Ingram Ohio Barge Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 957

128 F.3d 957

134 Lab.Cas. P 10,075, 13 IER Cases 720

Ferdie P. WILTZ, suing on behalf of themselves and all persons similarly situated; Michael A. Spencer suing on behalf of themselves and all persons similarly situated Plaintiffs-Appellants, v. M/G TRANSPORT SERVICES, INC.; Midland Company, Inc. Ingram Ohio Barge Company, Defendants-Appellees.

No. 96-5744.

United States Court of Appeals Sixth Circuit.

Argued Aug. 8, 1997.

Decided Oct. 31, 1997.

Rehearing and Suggestion for Rehearing En Banc Denied Jan. 22, 1996.

Paul B. Martins (briefed), James B. Helmer, Jr. (briefed), Frederick M. Morgan, Jr. (argued and briefed), Helmer, Lugbill, Martins & Neff, Cincinnati, OH, Meredith Lynn Lawrence (briefed), Crestview Hills, KY, for Plaintiffs-Appellants.

Stephen Sloan Eberly (argued and briefed), Vorys, Sater, Seymour & Pease, Cincinnati, Ohio, for Defendant-Appellee M/G Transport Services, Inc.

Michael R. Schmidt (briefed), Robert F. Keith, Cohen, Todd, Kite & Stanford, Cincinnati, OH, for Defendant-Appellee Midland Co., Inc.

Jack F. Fuchs, Thompson, Hine & Flory, Cincinnati, OH, S. Mark Klyza (briefed), Barclay D. Beery (argued and briefed), The Kullman Firm, New Orleans, LA, Henry L. Walker, II, Brown, Todd & Heyburn, Covington, KY, for Defendant-Appellee Ingram Ohio Barge Co.

Before: KRUPANSKY and SUHRHEINRICH, Circuit Judges, ROSEN ^*, District Judge.

SUHRHEINRICH, Circuit Judge.

The Worker Adjustment Retraining Notification Act (WARN or the Act), 29 U.S.C. §§ 2101-2109 (West Supp.1997), which provides for sixty-days advance notice to employees and their communities of a mass layoff or plant closing, is not implicated unless fifty employees are affected at a "single site of employment." The primary question in this appeal is whether towboat-barges are separate sites such that the number of employees may not be aggregated so as to trigger WARN's notification requirements. The district court determined that each towboat was a separate site of employment, with less than fifty employees each, and granted summary judgment to defendant employers. We disagree. However, we also conclude that fifty employees did not suffer an "employment loss" within the meaning of the Act, because most were offered continued employment by the buyer after the asset sale. We therefore AFFIRM on this alternative ground.

I.

Until December 28, 1994, M/G Transport Services, Inc., based in Paducah, Kentucky, owned 314 barges and eight towboats. M/G's towboats transported barges throughout the Ohio, Mississippi, and Tennessee River systems. M/G's towboats could be found at any given time from Pittsburgh to New Orleans, nearly a 2,000 mile span of river. Each vessel was crewed by two crews of ten employees each. Each crew generally alternated thirty-day stints. A crew consisted of one captain, one pilot, one chief engineer, one mate, one cook, an assistant engineer, and four deckhands. The captain was the ranking supervisor of the vessel. The captain, pilot, mate and chief engineer gave work instructions to the crew members that reported to them.

Each towboat had complete living quarters. Food, fuel, and supplies for the towboats were ordered and purchased by the Paducah, Kentucky office and were delivered to the towboats at various locations. Routine maintenance and repairs were performed on board the towboat, but major repairs were handled by the Paducah office.

On December 28, 1994, M/G sold its assets to defendant Ingram Ohio Barge Co. In the final purchase agreement both M/G and Ingram declined any responsibility "for any liability, obligation ... of any kind or character related to ... the WARN Act...." The agreement provided further that "[p]rior to the Closing Date, Seller, upon its own initiatives, shall terminate or permanently layoff all of the employees associated with the Purchased Assets, which termination or layoff shall be effective upon or prior to Closing." The sale became effective at 1:00 p.m. on December 28, 1994. Sometime that afternoon, M/G placed termination notices in the mail.

Although it felt that it "ha[d] no legal obligation to give written notice," on December 14, 1994, M/G sent a letter to its employees at their home addresses notifying them of a possible sale with Ingram, and that if the sale went through, their "last day of actual work for M/G will be on the date of the sale." The letter also contained the following notice concerning possible employment with Ingram:

Ingram has agreed to accept applications from our employees and we continue to be hopeful that a large percentage of M/G employees will be employed by Ingram. For those of you currently on the boats, Ingram personnel will be coming on the boats to give you applications. For those of you not currently on the boats, Ingram will be taking applications at the Executive Inn in Paducah on December 19 and 20, 1994, from the hours of 8:00 a.m. to 6:00 p.m. each day.

Between December 12 and 20, Ingram personnel boarded five of the eight motor vessels to be purchased from M/G in order to distribute applications, collect completed ones, and answer any question that M/G employees might have regarding possible employment with Ingram. On December 19 and 20, representatives of Ingram distributed applications and conducted interviews at the executive Inn in Paducah. By the end of the day on December 20, Ingram had received 106 applications from M/G employees.

Of the 160 M/G workers affected, 106 applied for jobs with Ingram. Ingram made offers to eighty-two of those workers. Forty-nine employees accepted offers from Ingram, thirty declined, and three failed Ingram's drug test. Of the forty-nine who accepted and were hired, eight started working on December 28, 1994. Only twenty-eight were hired within thirty days of December 28, 1994. Twenty-four of the 106 applicants either were not given offers by Ingram, could not be contacted, or were not put to work by Ingram after hiring for other reasons. ¹

Plaintiffs, former M/G employees Ferdie Wiltz and Michael Spencer, on behalf of themselves and those similarly situated, sued M/G, M/G's parent company, The Midland Company, and the entity to which it sold its towboat business, Ingram Ohio Barge Co., arguing that defendants violated WARN by failing to provide advance notice to plaintiffs of the sale. On cross-motions for summary judgment, the district court entered judgment for all defendants. The district court stated the issue as follows: "[A]re a number of almost self-sufficient towboats ranging up and down thousands of miles of rivers a "single site of employment" under the WARN Act [?]" Wiltz v. M/G Transport Servs., Inc., 925 F.Supp. 500, 502 (E.D.Ky.1996). The district court ruled that "due to the semi-autonomous nature of the towboats, each towboat was analogous to a branch office or store ... [and][s]ince the towboats were not in the same geographic area, each towboat was a separate site of employment." Id. at 504. Plaintiffs appeal.

II.

A.

As noted, WARN requires employers to provide sixty-days advance notice to employees and communities concerning plant closings ² or mass layoffs. ³ 29 U.S.C. § 2102(a). The Act is designed to provide workers, their families, and communities with some warning about the sudden loss of employment. 20 C.F.R. § 639.1 (1997)(Department of Labor regulation defining purpose of WARN); Teamsters Local Union 413 v. Driver's, Inc., 101 F.3d 1107, 1108, 1109 (6th Cir.1996). An employer who violates WARN is liable for back pay, lost benefits, civil penalties, and attorney fees. 29 U.S.C. § 2104(a)(1). The Act is not triggered, however, unless fifty or more employees are affected at a "single site of employment." 29 U.S.C. § 2101(a)(2).

The statute does not define "single site of employment," but Department of Labor regulations have filled in the gap. See 20 C.F.R. § 639.3(i)(1-8)(1997)(defining "single site of employment"). ⁴ See generally 29 U.S.C. § 2107 (authorizing Secretary of Labor to prescribe regulations "as they may be necessary to carry out this chapter"). "Although no bright line test exists, the plain language of the statute and regulations makes clear that geographic proximity provides the touchstone in determining what constitutes a 'single site.' " Driver's, Inc., 101 F.3d at 1109. ⁵ Thus, "[c]ontiguous facilities or those in close geographic proximity are generally single sites of employment and geographically separate facilities are generally separate sites." Id. (citing 20 C.F.R. § 639.3(i)(1-6)).

Notwithstanding, the regulations also provide for mobile workers. Subpart (6) of 20 C.F.R § 639.3(i) "addresses employees who travel from place to place in the course of performing their job." Driver's, Inc., 101 F.3d at 1110. See also 54 Fed.Reg. 16,042, 16,051 (1989)(stating that subpart (6) deals with "traveling workers who report to but do not work out of a particular office"). "While such workers may well be considered as a separate operating unit, their status must be determined in terms of the single site of employment to which they are assigned." Driver's Inc., 101 F.3d at 1110 (quoting Department of Labor's comments).

Subpart (6) provides:

(6) For workers whose primary duties require travel from point to point, who are outstationed, or whose primary duties involve work outside any of the employer's regular employment sites (e.g., railroad workers, bus drivers, salespersons), the single site of employment to which they are assigned as their home base, from which their work is assigned, or to which they report will be the single site in which they are covered for WARN purposes.

20 C.F.R. § 639.3(i)(6)(1996). The subpart is written in the disjunctive; a "single site" may be either the place to which employees are assigned as their home base, the place from which their work is assigned, or the place where they report for work. Id.; Driver's, Inc., 101 F.3d at 1110.

Plaintiffs argue, as they did before the district court, that subpart (6...