Employees denied default judgment in WARN Act suit

Where maintenance and landscaping employees alleged their employer ordered a “plant closing or mass layoff” as defined by the Worker Adjustment and Retraining Notification, or WARN, Act, but they failed to plead facts showing that the harm occurred at a “single site of employment,” their motion for default judgment was twice denied.

Background

Kevin Priest, Antone Harris and Marcus Wallace were all employed by defendant DBI Services LLC to perform “highway and rest stop maintenance, landscaping, and similar duties within the Commonwealth of Virginia.” On Oct. 22, 2021, defendant, without any notice, announced the closure of its Virginia-based yards, terminated their employment and terminated the employment of more than 100 of its Virginia-based employees that performed the same highway and rest stop maintenance, landscaping and other duties that the plaintiffs performed.

On Nov. 11, 2021, plaintiffs filed a class action complaint against defendant, followed by the first amended class action complaint on Feb. 23, 2022. Despite proper service, defendant failed to appear to contest the allegations in the complaint or otherwise defend this action. On April 22, 2022, the clerk of the court entered default against the defendant.

Plaintiffs’ motion for default judgment was referred to the magistrate judge. The magistrate judge recommended that the court deny the motion for default judgment without prejudice, holding that plaintiffs failed to sufficiently allege whether defendant’s “Virginia-based yards” constituted a “single site of employment” such that defendant ordered a “plant closing or mass layoff” as defined by the WARN Act.

The court adopted the report and recommendation. On Oct. 18, 2022, plaintiffs filed a renewed motion for default judgment.

Analysis

Plaintiffs argue that they have now sufficiently alleged that defendant ordered a “plant closing or mass layoff.” In support of that contention, plaintiffs allege that (1) defendant terminated more than 100 of its employees on the same day and (2) that defendant’s Virginia-based yards, collectively, constituted a “single site of employment.” Plaintiffs have included the sworn affidavits of Priest, Harris and Wallace.

To support the allegation that defendant’s “Virginia-based yards,” collectively constituted a “single site of employment,” plaintiffs claim that defendant’s Virginia workforce’s organizational structure does not properly comport with subpart six of the Department of Labor definitions and instead that subpart eight more accurately guides the analysis.

Subpart eight notes that a “single site of employment may also apply to truly unusual organizational situations where the above criteria do not reasonably apply.” Relying on this subpart, plaintiffs argue that the unique nature of their employment and defendant’s structuring of its employees in the Virginia-based yards warrant this subpart applying, and thus all of defendant’s Virginia-based yards should be classified as a “single site of employment.”

The court accepts plaintiffs’ claim that there were more than 100 employees terminated when defendant closed all of its Virginia-based yards. However, plaintiffs have not sufficiently pled whether or not the loss of “more than one hundred” employees amounted to the loss of “at least 33 percent of the employees,” as required to prove a “mass layoff” occurred. Plaintiffs have never alleged exactly how many employees defendant employed in total at the “Virginia-based yards.”

Failing to establish a mass layoff, then, plaintiffs can only proceed under a “plant closing” theory of liability under the WARN Act. However, plaintiffs cannot proceed under the “plant closing” theory of liability, either, due to their inability to demonstrate that the harm occurred at a “single site of employment.” While they argue that subpart six is inapplicable, plaintiffs ignore subparts three and four, which reasonably apply to plaintiffs’ description of their employment with the defendant.

Even if subpart eight was available, moreover, plaintiffs have not sufficiently demonstrated a basis for aggregating an unknown number of Virginia-based yards scattered throughout the state of Virginia into a “single site of employment.” Plaintiffs have not even identified all of the Virginia-based yards they hope to aggregate into a “single site of employment,” let alone alleged enough factual details about the day-to-day operations of each of the yards or the distance between the yards to demonstrate that they constitute a “single site of employment.”

Plaintiffs’ renewed motion for default judgment denied.

Priest v. DBI Services LLC, Case No. 3:21-cv-712, March 29, 2023. EDVA at Richmond (Young). VLW 023-3-165. 13 pp.