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John Ellis, Timothy Price, and All Others Similarly Situated v. Dhl Expressinc. (Usa) and Deutsche post ag

January 11, 2011


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 08 CV 06541-Matthew F. Kennelly, Judge.

The opinion of the court was delivered by: Tinder, Circuit Judge.


Before WOOD, EVANS, and TINDER, Circuit Judges.

Package delivery service DHL Express and its German parent company, Deutsche Post AG, publicly announced on November 10, 2008, that they would stop offering U.S. domestic shipping on January 30, 2009. This announcement effectively sounded the death knell for five of DHL's six Chicagoland facilities, which handled domestic parcels almost exclusively and had been shedding jobs since August. The union that represented the drivers and clerical workers at those facilities, the International Brotherhood of Teamsters Local 705, immediately began talks with DHL to negotiate severance agreements for its members. (The collective bargaining agreements that covered the workers did not provide for severance benefits.) The negotiations were successful and on December 5, 2008, yielded a severance agreement for each bargaining unit, the drivers and the office workers. The agreements became operative on December 9, 2008, when DHL's representative signed them. Whether DHL violated the Worker Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. §§ 2101-2109, in reaching and implementing these agreements is the principal question before us in this appeal.

The agreements contained a number of different severance benefits packages. The first was available to up to 325 of DHL's full-time drivers. Drivers who opted (and qualified on seniority grounds) for this package would receive ten weeks of pay and benefits. Drivers had little time to decide whether to participate in this plan; they were simultaneously required to complete a job rebid form on which they had to indicate by the close of business on December 11, 2008, not only their future shift preferences but also whether they had signed up for the ten-week plan. The other severance packages Local 705 negotiated provided four rather than ten weeks of pay and benefits but were otherwise substantially similar to the ten-week plan. There were no limits placed upon the number of workers who could enroll in the four-week plans, though one of the packages for each bargaining unit was aimed exclusively at individuals who had already been laid off (these packages provided no benefits), and the others were aimed at workers who remained on staff. Drivers and already-laid-off office workers were given until December 22, 2008, to decide whether they wanted to participate in the four-week plans. Employed office workers appear to have been given until January 18, 2009, to make their decisions.

Workers who accepted any of the Local 705-negotiated severance packages signed the following "General Waiver and Release":

For and in consideration of the receipt of the Severance Payment and other benefits provided in the Effects Bargaining Agreement (which I acknowledge are payments and benefits beyond anything to which I am already or otherwise entitled), I hereby waive, release and discharge DHL Express (USA), Inc., its parent corporation, subsidiaries, related corporations and affiliates, their successors and assigns, and their shareholders, officers, directors, employees and agents (hereinafter together the "Company"), and the Teamsters Local Union No. 705, affiliated with the International Brotherhood of Teamsters (hereinafter the "Union") from any and all actions, causes of action, demands, claims or liabilities (whether known or unknown) arising out of my employment or the termination of my employment by the Company, including but not limited to any claims under any federal, state, or local law concerning employment rights or employment discrimination of any type, including the National Labor Relations Act, the Illinois Worker Adjustment and Retraining Notification Act, the Federal Worker Adjustment and Retraining Notification (WARN) Act, and laws involving claims of discrimination based on race, sex, religion, national origin, disability, veteran's status, union activity, marital status, retaliation, harassment or other protected categories, claims for breach of any implied or express employment contracts or covenants, claims for wrongful termination, public policy violations, defamation, emotional distress or other common law torts, or claims under any Collective Bargaining Agreement, Supplemental Agreement, Memorandum of Understanding (MOU), or any other agreement between the Company and the Union. I further understand that by accepting the Severance Payment, I am giving up my employment relationship with the Company, including any recall rights and seniority. . . .

I acknowledge that I have been and am in this document advised in writing to consult an attorney before executing this General Release and that the foregoing shall operate as a general release and as a promise not to sue, and that I have read and understand this General Release. I acknowledge I have received seven (7) days to consider this General Release before signing it, and I under-stand that I have seven (7) days to revoke it after I sign it.

A total of 506 workers (some of them were members of Automobile Mechanics Union Local 701, which negotiated its own similar four-week plan) signed a release and resigned their employment in exchange for either four or ten weeks of severance pay and benefits. Three hundred nineteen drivers took the ten-week plan, while 187 workers participated in one of the three four-week plans.

Workers who did not participate in one of the union-negotiated severance plans did not receive any severance pay from DHL. Those individuals instead retained their seniority status and recall rights, as well as the right to bring legal claims against DHL and its parent, Deutsche Post. John Ellis and Timothy Price, the named plaintiffs in this putative class action, were DHL drivers and Local 705 members who did not partici-pate in the union-negotiated plans. Ellis, who was laid off days before the discontinuation of domestic shipping was announced, and Price, who was laid off on January 9, 2009, instead filed suit, alleging that DHL and its parent Deutsche Post failed to comply with the WARN Act, which requires certain businesses contemplating "plant closings" or "mass layoffs" to inform workers of these impending events at least sixty days in advance. Ellis and Price sought back pay and benefits. See 29 U.S.C. § 2104. They also sought to represent a class of former DHL employees who had been represented by Local 705, but the district court terminated as moot their motion to certify a class after granting in full DHL's motion for summary judgment. See Muro v. Target Corp., 580 F.3d 485, 494 (7th Cir. 2009).

The district court provided three interrelated bases for its grant of summary judgment, all of which led it to the conclusion that the WARN Act was not applicable here. First, the district court concluded that the DHL layoffs could not constitute a "plant closing" as defined in 29 U.S.C. § 2101(a)(2) because the five Chicagoland facilities could not together be considered a "single site of employment," and Price and Ellis failed to put forth allegations sufficient to raise a genuine issue of material fact as to whether a "plant closing" occurred at any of the individual facilities. Second, the district court concluded that the layoffs could not constitute a "mass layoff" as defined in 29 U.S.C. § 2101(a)(3) because the employment losses at the five facilities (considered collectively for the sake of argument) did not reach the requisite critical mass of 33% of the full-time work-force during the relevant statutory time period. Finally, the district court determined that Ellis and Price failed to raise a genuine issue of material fact regarding the voluntariness of the union-negotiated severance agreements, fatally undermining their contention that the workers who left DHL pursuant to those agreements should be counted as involuntarily separated for WARN Act purposes. See 29 U.S.C. § 2101(a)(6); 54 Fed. Reg. 16042, 16048 (Apr. 20, 1989). The district court recognized that the DHL workers had to make a tough choice in the face of daunting economic circumstances, but concluded that there was no evidence that they signed the severance agreements involuntarily. Because it found that the bases for its grant of summary judgment in favor of DHL applied equally to Deutsche Post, against whom Ellis and Price levied identical claims, the district court sua sponte granted summary judgment in favor of Deutsche Post as well and terminated the case. Ellis and Price appeal the grants of summary judgment.

We review a district court's grant of summary judgment de novo, construing all facts and reasonable inferences in the light most favorable to the non-moving party. Spivey v. Adaptive Mktg. LLC, 622 F.3d 816, 822 (7th Cir. 2010). Summary judgment is appropriate if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).

The WARN Act requires "employers" (defined as businesses with 100 or more full-time employees, 29 U.S.C. § 2101(a)(1)) to provide employees with written notice of impending "plant closings" or "mass layoffs" at least sixty days prior to the closing or layoffs. 29 U.S.C. § 2102. The WARN Act does not apply-and the employer need not provide advance notice to any of its workers-if the shutdown of a plant does not result in an employment loss of at least 50 full-time employees at a single site of employment, 29 U.S.C. § 2101(a)(2), or the layoffs do not affect at least 33% of full-time employees, 29 U.S.C. § 2101(a)(3). Despite the lack of practical distinction between eliminating 49 or 50 fulltime jobs, or between laying off 32% or 33% of a work-force in a thirty-day period, the numerical thresholds in the WARN Act are immutable. See Phason v. Meridian Rail Corp., 479 F.3d 527, 530 (7th Cir. 2007) ("The [WARN Act] draws a lot of bright lines; it is really nothing but lines. . . . None of these distinctions is inevitable; all are arbitrary. But using sharp lines makes the Act easier to administer."). If an employer crosses one of them without providing affected employees the requisite notice, it is liable to provide "each aggrieved employee" with back pay and benefits for each day that the WARN Act was violated. 29 U.S.C. § 2104. That is why the 506 departures pursuant to the union-negotiated severance agreements are crucial here: if those workers are counted in the total number of affected employees, DHL may have overstepped one of WARN's lines. If they are not counted, however, DHL is in the clear; Ellis and Price explicitly conceded this point twice at oral argument. We therefore begin and end our analysis by examining the voluntariness issue, as it is dispositive. See Spivey, 622 F.3d at 822.

The WARN Act excludes "voluntary departure[s]" from its definition of "employment loss[es]" that trigger its notification requirements. 29 U.S.C. § 2101(a)(6). The WARN Act does not provide a definition of "voluntary," though it authorizes the Secretary of Labor to issue "such regulations as may be necessary to carry out this chapter." 29 U.S.C. § 2107(a). Before enacting the regulations currently codified at 20 C.F.R. §§ 639.1-639.10, the Secretary in the Federal Register addressed public comments. See 54 Fed. Reg. 16042 (Apr. 20, 1989). In doing so, the Secretary clarified the Department of Labor's position on "what constitutes a 'voluntary departure.' " Id. at 16048. We give significant weight to these interpretations. See United States v. Mead Corp., 533 U.S. 218, 227-28 (2001) ("[T]he well-reasoned views of the agencies implementing a statute constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance, and [w]e have long recognized that considerable weight should be ...

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