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9th Circuit: WARN Did Not Apply to Small Satellite Worksites

By Maria Greco Danaher  9/21/2007

The 9th U.S. Circuit Court of Appeals decided that certain satellite worksites could not be aggregated for purposes of the Worker Adjustment and Retraining Notification Act (WARN).

WARN requires employers to provide 60 days of notice to employees in the event of a plant closing or mass layoff involving 50 or more employees at a “single site of employment.” An employer that fails to notify workers under the act may be liable for back pay, benefits and attorneys’ fees. Notice also must be provided to the state dislocated worker unit and to the appropriate unit of local government.

Northern Line Layers Inc. (NLL), a company providing specialty construction services, employed fewer than 50 individuals at its administrative and maintenance facilities in Billings, Mont. However, at the end of 2002, NLL also employed more than 160 construction workers and project managers at construction sites in 10 different states. While financial accounting and payroll was done in Billings, day-to-day operations of the individual project sites were overseen locally by on-site project managers, each of whom had the authority to hire and fire nonmanagement crew members for that manager’s particular site.

On Jan. 1, 2003, NLL’s parent company merged NLL with another subsidiary, Par Electric, transferring 70 employees onto the Par payroll. Within 90 days, however, 58 of those employees had been laid off without any advance notice to the employees and without notice to the state.

A group of former NLL employees sued both NLL and its parent company, alleging that NLL violated WARN by failing to give notice prior to the layoffs. The employees argued that the act applied because there were more than 50 individuals affected and because the company’s multiple project sites should be viewed along with the Billings main office location as a “single site” under the act.

The lower court granted summary judgment in favor of the defendants on the basis that the employees’ “single site” argument failed.

On appeal, the 9th Circuit upheld that decision. The federal appellate court first recognized that courts have looked to Department of Labor regulations’ definitions of “single site” to determine whether groups of employees in multiple locations can qualify for WARN protection.

Examining these definitions, the court then determined that the NLL employees could not demonstrate that they were employed by NLL's Billings headquarters location because:

  • They were not assigned to Billings as a home base.
  • Their work was not assigned at the Billings location.
  • The employees did not report to the Billings site.

While any one of those alternatives would have qualified the diverse NLL locations as a single site under WARN, the 9th Circuit found that none of the three criteria applied and upheld summary judgment in favor of the employer.

Bader v. Northern Line Layers Inc ., 9th Cir., No. 05-36012 (Sept. 10, 2007).

Professional Pointer: Separate facilities may be considered a single site of employment if they are in geographic proximity, are used for the same purpose and share staff and equipment. Employees who travel during the course of a workweek (truckers or traveling salespeople, for instance) generally are deemed to be employees of a “home base” site (i.e., trucking terminal or home office) if they report there for assignments, or begin and end a workweek at that particular location. A mass lay-off or facility closure at such a site may trigger the provisions of WARN and can lead to unintended liability under the act for employers that do not fully understand the “single site” designation.

Maria Greco Danaher is an attorney with the firm of Dickie, McCamey & Chilcote in Pittsburgh.

Editor’s Note: This article should not be construed as legal advice.  

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