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Phason v. Meridian Rail Corp.

May 8, 2006


The opinion of the court was delivered by: James F. Holderman, District Judge


Before the court in this class action lawsuit are the parties' cross-motions for summary judgment (Dkt. Nos. 63 and 69) and a motion filed by the plaintiff class to strike the declaration of Beverly Peterson (Dkt. No. 88). In the complaint, the plaintiff class alleges that Meridian Rail Corporation ("Meridian") failed to provide notice of a plant closing or mass layoff pursuant to the Worker Adjustment and Retraining Notification Act ("WARN"), see 29 U.S.C. § 2101 et seq. After reviewing the record and the respective parties' arguments, this court grants the defendant's motion for summary judgment (Dkt. No. 63) and denies the plaintiff class's motion for summary judgment (Dkt. No. 69). The court dismisses the plaintiff class's motion to strike (Dkt. No. 88) as moot.


A. Factual Background

The alleged WARN violation at issue involves Meridian's sale of a plant in Chicago Heights to NAE Nortrak, Inc. ("Nortrak"). In addition to employing salaried employees, Meridian employed hourly union workers at that plant. There were also 6 hourly employees at a nearby location that both parties agree are included in the sale of the Chicago Heights plant to Nortrak. Prior to that, the local union and Meridian entered into a collective bargaining agreement that went into effect on April 24, 2002 and included in Article 7 rights of seniority and recall of up to two years after a layoff for hourly union workers. In September 2002, Meridian laid off 31 hourly union employees with contractual rights under the collective bargaining agreement of seniority and recall until September 2004. Meridian again in September 2003 terminated the employment of 19 hourly workers with those same rights until September 2005. The parties dispute whether the laid-off workers were entitled to be recalled. To support its position that the layoffs in September 2002 and 2003 were permanent, Meridian provides the declaration of a former human resources manager from Meridian, Beverly Peterson ("Peterson"). The class objects to Peterson's declaration and has filed a motion to strike it. That motion is moot because the court has not relied upon Peterson's declaration in reaching its decision.

On December 19, 2003, Meridian and Nortrak negotiated an asset purchase sale. Subsequently, Meridian informed its employees on December 31, 2003 that Meridian would close its production operations at the Chicago Heights plant one week later on Wednesday, January 7, 2004. The closing of the sale between Meridian and Nortrak was on January 8, 2004. On December 15, 2003, three weeks before the sale closed, purchaser Nortrak sent out a notice to the active Meridian employees that it would be accepting applications for employment up to and including December 19, 2003. The notice was also printed in the newspaper. (Zimmerman Dep. at 88.) Named plaintiff and union official Richard Zimmerman ("Zimmerman"), called each laid-off member by telephone to inform them that Nortrak was accepting applications. (Zimmerman Dep. at 88-89.) In total 113 applicants applied to Nortrak. (Def. Mem. Summ. J., Johnston Decl., Ex. 3.) Many of these applicants were former Meridian workers though neither party identifies the exact number of former Meridian employees who applied.

Nortrak Human Resource Manager, Clay Johnston ("Johnston"), provided a declaration regarding the hiring of Meridian employees at Nortrak, which the plaintiff class does not dispute.*fn1 Attached to Johnston's declaration are several exhibits listing the names of active Meridian workers at the time of the sale ("Exhibit 1"), the names of all applicants who applied to Nortrak to be hourly employees ( "Exhibit 3"), and the names of individuals that Nortrak hired ("Exhibit 4"). In Johnston's declaration, he states in paragraph 7 that "36 of the 126 Meridian employees were not hired by Nortrak." (Johnston Decl. ¶ 7.) The plaintiff class does not dispute this figure. (Pl. Resp. ¶¶ 20-27). Neither does the plaintiff class dispute Meridian's statement that 29 of those 36 active employees not hired by Nortrak were hourly workers of Meridian. (Def. L.R. 56.1 ¶ 27; Pl. Resp. ¶ 27.) In paragraphs 8, 9, 10, and 11, Johnston's declaration names 5 active Meridian employees who voluntarily chose not to seek employment with Nortrak for various reasons. Deducting the 5 Meridian employees who chose not to work for Nortrak from the 36 former Meridian employees not hired by Nortrak leaves 31 active employees who sought employment with Nortrak but were not hired.

The plaintiff class asserts that there were 165 Meridian workers actively employed at the time of the sale, and that 85 of those workers were hired by Nortrak. (Pl. L.R. 56.1 ¶¶ 1, 3.) The plaintiff class provides no factual basis for these figures other than plaintiff Zimmerman's testimony in his deposition. Zimmerman, however, admits in his affidavit that he did not know the exact number of Meridian employees hired. (Id., Ex. 3, Zimmerman Aff. ¶ 29.) Zimmerman's estimations are inadmissible under Federal Rule of Evidence 602 because they are not based on personal knowledge. See Stinnett, 301 F.3d at 613.

This court therefore accepts the personnel figures supported by statements in Johnston's declaration, which have not been disputed by the plaintiff class, and in Exhibits 1, 3, and 4 attached to Johnston's declaration, which also have not been disputed by the plaintiff class. (Pl. Resp. ¶¶ 20-27.) According to Meridian, there were 126 active employees at Meridian at the time of the sale to Nortrak, 90 of whom were hired by Nortrak. This number, however, does not reveal how many workers, who were active or with recall rights, sought employment at Nortrak and were rejected. For that, this court must rely on Exhibit 3 to Johnston's declaration, the list of applicants who applied to Nortrak.

Based on this court's review of the exhibits attached to Johnston's declaration and Johnston's statements, which are not disputed by the plaintiff class, and viewing the evidence in the light most favorable to the plaintiff class, this court finds that the undisputed evidence establishes sufficient facts about the applicants who applied to Nortrak during the relevant period of December 15, 2003 through December 19, 2003 for the court to make a determination on the parties' motions for summary judgment. Comparing the names of active Meridian workers at the time of the sale (Ex. 1) to the list of applicants (Ex. 3) and the list of employees ultimately hired by Nortrak (Ex. 4), this court finds that the applicants listed in Exhibit 3 were hourly employees. Three of those hourly employees-Rickey Crose, Fidel Desiderio, and Luis Gonzalez-were hired into salaried positions at Nortrak. (Exs. 3 and 4.) In addition, 7 hourly workers hired by Nortrak on January 19, 2004 and later (Ex. 4) are not included in the list of applicants (Ex. 3). Otherwise, both parties agree that the list of the 113 applicants (Ex. 3) is a complete list of applicants, excluding those salaried active employees who applied for a position.*fn2 (Def. L.R. 56.1 ¶ 18; Pl. Resp. ¶ 18.)

The parties did not delve deeper into the list of applicants (Ex. 3). This court, however, finds that task essential to an appropriate analysis. Comparing the list of persons applying to Nortrak (Ex. 3) with the list of those hired by Nortrak (Ex. 4), there were 41 applicants of the 113 total who were not hired by Nortrak.*fn3 That 41 number was determined by subtracting the 72 hourly applicants hired by Nortrak as set forth in Exhibit 4, including the additional 3 hourly Meridian employees hired into salaried positions, from the 113 total applicants listed in Exhibit 3. Knowing that 41 applicants were not hired by Nortrak from the list of 113 candidates (Ex. 3) and knowing, as both parties agreed, that 29 active hourly employees who applied to Nortrak were not hired (Def. L.R. 56.1 ¶ 27, Pl. Resp. ¶ 27), it is clear that 12 applicants (41-29=12) who were not active employees of Meridian at the time of the sale were not hired by Nortrak.

Johnston also provided undisputed evidence regarding Nortrak's hiring of laid-off Meridian workers. According to Johnston, Nortrak hired 3 hourly employees of the 31 who had been laid off in September 2002 and 17 of the 19 hourly employees laid off in September 2003.

Problematically for the determination of summary judgment, neither party has identified the names of the employees with recall rights who were laid off in September 2002 and 2003 and who later applied to Nortrak but were not hired. The closest Meridian comes is on page 12 of its memorandum in opposition to the plaintiffs' summary judgment motion (Dkt. No. 78), where Meridian refers to a seniority list (Zimmerman Dep., Ex. 3) about which Zimmerman was questioned at his deposition. That exhibit lists only 18 of the 31 employees laid off in September 2002. Meridian states without further ...

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