United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 10-1848
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Leroy Sanders; Stacy Ashcraft; Julee *
Pratt; Dorothy Bailey; John Banks; *
James Bennett; Jason Bottoms; Barbara *
Bottoms; Randal Brannum; Treva *
Brannum; Jack Bratton; Marlene *
Burks; Lisa Burton; William Chaney; *
Billy Chasteen; Sherry Chasteen; *
Kenneth Cooperwood; Garrett W. Davis;*
Lakesha Decker; David Degrandchamp; *
Debra Ann Dozier; Lenora Driver; *
Meshell Duffy; Randall Eligh; Marlena * Appeal from the United States
R. English; Martez Freeman; Randal * District Court for the
Frolos; Twyla Glass; Delma Goodlow; * Eastern District of Arkansas.
April C. Hefner; Debra C. Hoofman; *
Andrea M. Huhn; Thomas M. Hyde; *
Roger Johnson; Antonio King; Jeff *
Ladd; James F. Martin; Carol McCoy; *
Jamal McCoy; Amy McDaniels; John B. *
Meriweather; Brian Miller; Jerri Ann *
Miller; Lonnie Ray Miller; Zack *
Mitchell; Amber L. Moon; Jennifer *
Morris; Preston M. Morris; Marcus *
Murray; Richard Neal; Brenda Nevels; *
Terry Newnun; Jon Nicholson; *
Andrette D. Penn; Jessica Poyner; *
Chris Pruitt; Claudia Reynolds; Mark *
Runions; William Scruggs; Foster Sims; *
Bryan Smith; Diane Stacy; Scott *
Stephens; Antwan Sullivan; Dorothy *
Thompson; Kristie Thrasher; Cheryl *
Walker; Ramona Walker; Waszell *
Watson; Debbie Wiggins; Jim Winner; *
Barbara Woodard; Barbara Wren; Carol *
Yates; Teddy Williams; Mark Gaines; *
Helen Pruitt; Lori Lawrence; Linda J. *
Mell; Aaron Cooper; Dana Barnett; *
Bobby Swain; Jamie Swain; Carl *
McGahee, Jr.; Sheila Smith; Nathaniel *
Johnson; Rebecca Glick; Tabrea Aitkns; *
Irrelon Robinson, Jr.; Margie Ashby; *
Chris Duren; Sherman Durfee; Becky *
Price; George Barksdale; Billy Medler; *
Amy Harmon; Jamie Voyles; Lindell *
Bailey; Nicole Marie Henson; Theresa *
Jones; Debbie Belew; Jamie Mason; *
David Sterling, Jr.; Matthew Lloyd; *
Kenneth Middleton; Stephanie Stegall; *
Charles Hale; Nadine Segraves; William *
Sparks; Michael Goodwin; Gerald *
Mashburn, *
*
Appellants, *
*
v. *
*
Kohler Company, *
*
Appellee. *
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Submitted: January 12, 2011
Filed: June 8, 2011
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Before WOLLMAN, LOKEN, and SMITH, Circuit Judges.
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WOLLMAN, Circuit Judge.
Appellants appeal from an order granting summary judgment to defendant
Kohler Company (Kohler) on a claim arising under the Worker Adjustment and
Retraining Notification Act (WARN Act), 29 U.S.C. § 2101, and dismissing without
prejudice supplemental state law claims. The appellants alleged that Kohler hired
them as temporary workers in the midst of a strike and then summarily dismissed them
at the strike’s conclusion without providing the notice required under the WARN Act.
The district court1 held that Kohler was not subject to the notice requirements because
the appellants failed to establish that a “mass layoff” had occurred, as defined under
§ 2101(a). The appellants assert that the district court misconstrued the meaning of
“mass layoff” and made findings that improperly glossed over genuine issues of
material fact. We affirm.
I.
Kohler manufactures stainless steel bathroom and kitchen products at its plant
in Searcy, Arkansas. As of 2006, approximately ninety-five percent of the employees
belonged to the United Auto Workers Local 1000 (Union). Collective bargaining
negotiations between the Union and Kohler stalled in December 2006, and 247 union
workers went on strike. Kohler shut the plant down shortly after the strike
commenced. Three months later, it placed advertisements in local newspapers,
interviewed potential applicants, and hired 123 replacement workers, including all 111
appellants in this action.
In March 2007, Kohler sent a letter to the new hires in which it took the
position that because the strike was an economic strike, new hires had the status of
“permanent replacement workers.” That letter also stated that if the strike was deemed
1
The Honorable Susan Weber Wright, United States District Court Judge for the
Eastern District of Arkansas.
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an unfair labor practices strike, as the Union claimed, then Kohler would “be legally
bound to release [the new hires] from employment to the extent necessary to create
openings for any strikers who may want to return to work.” In November 2007,
management sent an email to supervisors on the floor instructing them to
communicate to the replacement workers that they were “permanent Kohler associates
and any strike settlement would not affect that.” Kohler and the Union settled their
dispute in March 2008. As part of the settlement, Kohler agreed to reinstate the
strikers. Notwithstanding its prior assurances, Kohler fired the replacement workers
after the strike settled and returned 103 of the original 247 striking workers to their
former positions.
In late March, the appellants filed a complaint, claiming that Kohler had failed
to provide adequate termination notice under the WARN Act and alleging
supplemental state-law claims for breach of contract, fraud, unjust enrichment,
promissory estoppel, and civil conspiracy.
The WARN Act provides that covered employers must give at least sixty days’
notice of a “plant closing” or a “mass layoff.” § 2101(a). The Act defines a mass
layoff as
a reduction in force which (A) is not the result of a plant closing; and (B)
results in an employment loss at the single site of employment during
any 30-day period for . . . at least 33 percent of the employees (excluding
any part-time employees); and . . . at least 50 employees (excluding any
part-time employees)[.]
§ 2101(a)(3); see also Smullin v. Mity Enter., Inc., 420 F.3d 836, 838 (8th Cir. 2005).
The appellants alleged that Kohler’s actions constituted a mass layoff that triggered
the notice requirements; Kohler denied that a mass layoff occurred and moved for
summary judgment at the close of discovery.
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It is undisputed that Kohler fired 123 replacement workers and returned 103
striking workers to their former positions. The district court relied on Oil, Chemical,
and Atomic Workers Int’l Union v. RMI Titanium Co., 199 F.3d 881 (6th Cir. 2000),
in which the Sixth Circuit held that only those workers who were fired and not
replaced—those whose positions were eliminated—were part of a reduction in force
and, therefore, only those workers would be counted for purposes of determining
whether the numerosity thresholds of § 2101(a)(3) had been met. Id. at 885-86.
Following RMI Titanium, the district court concluded that a reduction in force of 20
employees had occurred. Because a reduction in force of 20 employees did not meet
the numerosity thresholds of § 2101(a)(3), the district court concluded that the
termination did not constitute a “mass layoff” and therefore did not trigger the notice
requirements of the WARN Act. Accordingly, it granted Kohler’s summary judgment
motion and dismissed the appellants’ supplemental state-law claims without prejudice.
II.
We review de novo the district court’s grant of a motion for summary judgment.
South Dakota v. U.S. Dep’t of Interior, 423 F.3d 790, 794 (8th Cir. 2005). Viewing
the record in the light most favorable to the non-moving party, we consider whether
a genuine issue of material fact exists and whether the moving party is entitled to
judgment as a matter of law. Id.
The appellants contend that the district court erred in relying on RMI Titanium
because that case misconstrued § 2101 and is factually distinguishable. The appellants
next claim that even if RMI Titanium is applicable, the district court erred by making
credibility determinations in Kohler’s favor and thereby glossed over genuine issues
of material fact that preclude granting summary judgment. Lastly, the appellants
contend that the district court erred in failing to consider certain reduction-in-force
calculation methods, which demonstrated that a “mass layoff” occurred or at least
raised questions of material fact on that issue.
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A.
The WARN Act does not define “reduction in force,” nor have we considered
its meaning in our WARN Act cases. The appellants contend that the district court
erred in adopting the Sixth Circuit’s interpretation in RMI Titanium. There, the
defendant employer laid off a number of employees, the majority of whom were not
replaced because of budgetary concerns. 199 F.3d at 883-84. Twenty-seven
employees, however, were laid off, temporarily rehired, and then replaced by more
senior employees who had been on an employment furlough. Id. at 885. The court
reasoned that employees whose positions had been eliminated were part of a reduction
in force and counted toward the numerosity requirements of a mass layoff, but the 27
employees who had been replaced were not part of a reduction in force and therefore
would not be counted when determining whether the requirements had been met. Id.
at 885-86.
The appellants contend that the dissent in RMI Titanium is better reasoned
because it focuses on the number of employees who were fired, not just the number
of positions that were eliminated. They maintain that a reduction in force of any size
constitutes a “mass layoff” so long as the requisite number of employees experience
an employment loss. Yet the statute defines mass layoff as “a reduction in force
“which . . . results in” the requisite number of employment losses. The phrase “results
in” implies causation. See CNG Transmission Mgmt. VEBA v. U.S., 588 F.3d 1376,
1379 (Fed. Cir. 2009) (“The plain meaning of the term ‘results in’ is ‘causes.’”) (citing
Brown v. Gardner, 513 U.S. 115, 119 (1994) (concluding that the phrase “as a result
of” can be “naturally read simply to impose the requirement of a causal connection”)).
Appellants’ reading decouples “reduction in force” from the numerosity thresholds
that modify it and eliminates the causal connection established by the phrase “results
in.” In contrast, we understand “reduction in force” to mean a net loss in the
underlying productivity of a business, with the numerosity thresholds specifying the
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extent of the net loss that must result from such a reduction in force to qualify as a
“mass layoff.”
We agree with the Sixth Circuit: employees who are fired but replaced are not
part of a reduction in force and do not count as part of the aggregate number of
employee layoffs that must be met to satisfy the numerosity thresholds of
§ 2101(a)(3). When a company fires one worker and replaces him with another, there
is no net loss in the number of employees and no “reduction in force” as the term is
commonly understood. See Matthews v. Allis-Chalmers, 769 F.2d 1215, 1217 (7th
Cir. 1985) (“[B]y definition, when the employer reduces his work force he hires no
one to replace the ones he let go.”) overruled on other grounds by Oxman v. WLS-
TV, 846 F.2d 848 (7th Cir. 1988). This reading is consistent with how we have
construed “reduction in our force” in our employment discrimination cases. See, e.g.,
Ramlet v. E.F. Johnson, Co., 507 F.3d 1149, 1154 (8th Cir. 2007) (classifying
reduction in force cases as those in which the duties of the plaintiff were eliminated
or redistributed); Gaworski v. ITT Commercial Fin. Corp., 17 F.3d 1104, 1109 (8th
Cir. 1994).
The appellants also contend that RMI Titanium is distinguishable on the facts
because the 27 employees whose status was at issue were aware that they would
eventually be replaced by the more senior employees, whereas Kohler repeatedly
assured the appellants that their jobs were secure. As we read RMI Titanium, the
workers’ awareness of imminent replacement did not alter the legal analysis, much
less prove decisive to the court’s ultimate conclusion. Accordingly, we conclude that
employees who are fired but replaced by others are not part of a reduction in force and
are not part of the aggregate calculation that determines whether the numerosity
threshold has been met.
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B.
The appellants maintain that even if the district court interpreted the statute
correctly, it erred by making impermissible credibility determinations regarding
disputed facts. In advancing this claim, appellants lean heavily on the language in
which the district court couched its factual finding: “The Court further finds no
credible evidence to support plaintiffs’ theory that Kohler created 123 new positions
when it hired replacement workers.” D. Ct. Order of March, 18, 2010, at 12.
This theory has its roots in a roster that Kohler produced listing all the
individuals employed at the Searcy facility from its first day of operation until March
7, 2008. This roster listed 388 people, including the 247 striking workers. While
before the district court, the appellants claimed that the inclusion of the striking
workers on the roster confirmed that they were considered “active employees” by
Kohler for the duration of the strike. Were that the case, they argued, Kohler created
new positions when it hired replacement workers and eliminated those positions when
it fired them, such that the numerosity thresholds had been satisfied even under the
more exacting RMI Titanium test.
Kohler maintained that the striking workers were not “active employees” during
the strike and suggested that the appellants had misconstrued the import of the roster
to serve their own ends. Kohler submitted affidavits indicating that the striking
workers had received COBRA notice and had received no salary or payment during
the strike, which it claimed is a common-sense benchmark of employee status.
The district court determined that the striking workers were not “employees”
of Kohler during the strike and that Kohler did not create new positions when it hired
replacement workers, but filled extant positions that had been vacated at the onset of
the strike. The district court further explained that the appellants’ calculation
erroneously included 32 striking workers who had departed voluntarily. Voluntary
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departures do not constitute an “employment loss” under the express terms of the
statute and therefore do not count in the aggregate calculation. See 29 U.S.C.
§ 2101(a)(6).
We disagree with the appellants’ assertion that these determinations are
inappropriate credibility determinations. The district court did not improperly weigh
the evidence when determining how to classify the striking workers and did not err in
determining that the appellants had failed to provide a viable legal theory on which
to base its calculations. Moreover, though the appellants complain that it is unrealistic
to think that 32 striking workers would depart voluntarily, they produced no evidence
supporting an alternative scenario. Their conclusory statements on these issues fail
to create a genuine issue of material fact and do not preclude the grant of summary
judgment.
Finally, we reject the appellants’ claim that the district court erred in
considering and rejecting only two of the four theories it proffered. The district court
may not have directly addressed each theory they put forth, but it clearly rejected them
all by concluding that the reduction in force was insufficient to satisfy the numerosity
threshold. We agree with the district court that the various theories offered by
appellants fail, as a matter of law, to establish that a mass layoff occurred that would
trigger the notice requirements of the WARN Act.
The judgment is affirmed.
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