The Ninth Circuit recently affirmed the decision of a federal trial court denying former construction workers’ claims that their termination violated the Worker Adjustment and Retraining Notification (WARN) Act.
The Ninth Circuit recently affirmed the decision of a federal trial court denying former construction workers’ claims that their termination violated the Worker Adjustment and Retraining Notification (WARN) Act. The Court held that the workers were not covered by WARN because they did not demonstrate that 50 or more laid-off employees worked at a single site of employment. See Bader et al v. Northern Line Layers, Inc. (September 10, 2007).
Plaintiffs in this case were former employees of Northern Line Layers, Inc., (NLL) and worked at various construction sites across several states. While all administrative functions took place at NLL’s facility in Billings, Montana, the plaintiffs did not work in administrative roles. Instead, they were construction workers, assigned to construction sites at which NLL placed employees.
As part of a merger, more than 50 NLL employees were laid off. NLL did not provide formal WARN notice to either the affected NLL employees or to the Montana State Dislocated Worker Unit. Several employees brought suit, claiming that NLL’s conduct violated WARN. The trial court ruled in favor of NLL, finding that NLL’s Billings office was not a “single site of employment” for 50 or more laid-off employees, as required to trigger WARN.
The Ninth Circuit affirmed. In so holding, the Court evaluated the regulations promulgated by the Department of Labor for interpretation of WARN, and specifically the regulations related to the definition of “single site of employment.” In particular, given the significant number of affected employees who were construction workers working at sites remote from the Billings headquarters office, the Court evaluated the provision of the regulations related to employees who are “outstationed” or whose primary duties involve work outside of the employer’s regular employment sites.
The Ninth Circuit rejected the plaintiffs’ argument that all NLL employees who work outside of Billings are “outstationed,” that Billings is their “home base,” and that the Billings headquarters therefore is a “single site of employment for all NLL employees.” The Court explained that the term “outstationed” refers to a situation where employees live for a short period of time at a certain site, departing for home when the work is done. In this case, the remote construction workers were not residents of Montana and did not, therefore, consider Billings to be their home.
The DOL comments regarding the regulations note that this provision is intended to apply to “mobile workers” who do not report to a specific office. Here, the construction workers were stationed at specific construction sites. Billings was not the “home base” of NLL’s construction-site employees. The Court also determined that Billings was not the site from which these employees’ work was assigned. The work was assigned and overseen by on-site project managers.
Accordingly, the former employees failed to raise a genuine issue of material fact regarding whether 50 or more people were laid off at a “single site of employment” under the WARN Act and summary judgment in favor of the employer was appropriate.
Employers’ Bottom Line:
In addition to federal WARN requirements, as discussed in this case, many states, including California, have their own WARN requirements. It is essential that every employer who is contemplating a layoff or downsizing be aware of the state and federal notification requirements associated with downsizing. If you have any questions about the practical or legal implications of downsizing, or any employment law issue, please contact the author of this Alert, Helene Wasserman, at (213) 237-2403 or hwasserman@fordharrison.com
Helene is the host of the Employer Helpcast, which is a “one stop website” for both “nuts and bolts” employment law advice and insight into new legal developments affecting employers.
