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Construction Workers at Multiple Jobsites Cannot Be Counted Together to Trigger Notice Requirement Under WARN, Court Holds
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February 16, 2009
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By Laura Bourgeois
The U.S. Court of Appeals for the 9th Circuit has ruled that employees of a construction company that worked at scattered construction jobsites on different projects were not employed at a “single site” and, therefore, did not qualify for prior notice of termination under the federal WARN Act. Bader v. Northern Line Layers, Inc., 530 F.3d 813 (9th Cir. 2007).
The court affirmed dismissal on summary judgment of a suit filed by employees of Northern Line Layers, Inc. seeking compensation after being laid off without the 60 days of notice required by the Worker Adjustment and Retraining Notification Act, 29 USC §§2101-2109. The court held that WARN did not apply because there were not enough workers at one site of employment to trigger WARN obligations. The construction sites where the plaintiffs worked were spread over 10 states and did not constitute a “single site of employment” under WARN.
Northern was a subsidiary of Quanta Services, Inc. and provided specialty construction services, mainly for telecommunications companies. Northern’s central administrative office and maintenance shops were located in Billings, Montana. The company also employed project managers and workers at construction sites in Arizona, California, Colorado, Nevada, North Carolina, Texas, Utah, Vermont, and Wyoming.
Because of an economic downturn in 2002, Quanta merged the assets of Northern with another of its subsidiaries, Par Electric, and in early 2003 transferred 70 Northern employees to Par’s payroll. In less than four months, almost all of the transferred employees were laid off. Sixty-four of the laid-off employees filed suit alleging that Northern violated WARN, which requires a 60-day advance notice to employees and to the state in the event of a plant closing or mass layoff. Employers that fail to give notice when required are liable for 60 days of back pay and benefits plus attorney fees.
Both plant closings and mass layoffs are defined under WARN as the loss of employment by at least 50 full-time employees and taking place at a “single site of employment” during a 30-day period. WARN covers both temporary and permanent plant closings. A mass layoff must involve at least 33 percent of the workforce at a single work site and at least 50 workers.
In August 2002, Northern had 33 employees in Billings, 3 administrative employees based outside Billings and 162 other employees working on construction sites in seven states, each site with 1 to 35 employees. By December 2002, Northern 28 employees in Billings, 2 administrative employees based outside Billings and 82 employees at jobsites in 10 states, each site with 1 to 28 employees.
Plaintiffs claimed that their “site of employment” for purposes of WARN was the company headquarters in Billings as opposed to the numerous actual work sites. The court disagreed, relying on the definition of “single site of employment” promulgated by the Department of Labor at 20 CFR §639.3(i). The definition contains eight subsections, and the court considered six of them to be potentially relevant to the case.
The court categorized Subsections (1) through (5) as geographic definitions that would not be helpful to plaintiffs because those definitions involved facilities located close to each other. Subsection (1) might have applied so that the adjacent office and maintenance shop in Billings would be considered a “single location or group of contiguous locations.” However, the number of employees in Billings was less than 50, so WARN did not apply. The remote construction jobsites could not be counted together and considered a “single site of employment” because there were in many different states and were not “in reasonable geographic proximity.” None of the jobsites had 50 full-time employees.
Consequently, the court focused on Subsection (6), which applies to mobile employees who work at sites physically separate from their site of employment. Plaintiffs claimed they were “outstationed” employees under Subsection (6). The subsection lists three alternatives that can qualify as a mobile employee’s single site of employment: 1) the site to which a worker was assigned as his home base; 2) the site from which work was assigned; or 3) the site to which the worker reported.
An employee’s home base has been defined as “the place from which he leaves at the start of the work period and/or returns at the end of the work period, or at the very least, where he is physically present at some point during the typical work period.” See, Ciarlante v. Brown & Williamson Tobacco Corp., 143 F.3d 139 (3d Cir. 1998); Teamsters Local Union 413 v. Driver’s Inc., 101 F.3d 1107 (6th Cir. 1996). Plaintiffs offered no evidence that the employees who worked at the remote jobsites ever physically reported to Billings, and the court dismissed the plaintiffs’ interrogatory answers that they “worked out of Billings” as merely assertions of legal conclusions unsupported by facts. It concluded that they worked from scattered home bases.
To determine where work was assigned, the court looked to the management of the workers. Of particular importance was the fact that day-to-day decisions were overseen by on-site project managers, and most of the outstationed employees considered these managers to be their supervisors. These project managers had the authority to hire and fire employees without supervision from the Billings office. The plaintiffs tried to argue that because the Billings office was responsible for all accounting and payroll, it should be considered as managing the remote construction sites. The court disagreed, noting that the workers were engaged in construction and not accounting. Consequently, the court found their work assignments originated on-site with their direct supervisors.
The third criteria – the site to which an outstationed employee reports -- is the site at which management issues work orders and directly reviews the employee’s job performance. The court concluded that it was “improbable” that the staff in Billings evaluated the performance of non-management workers at remote construction sites, considering “the material nature of the work product in this case.”
Because Billings did not qualify as plaintiffs’ home base, the site from which their work was assigned or the site to which they reported, it could not be considered as the “single site of employment” for outstationed employees. Therefore, the layoffs did not qualify as “mass layoffs” within the meaning of WARN because Northern did not have at least 50 full-time employees at a single site of employment. Accordingly, Northern was not required to provide 60 days’ WARN notice to the employees and the state.
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