The opinion of the court was delivered by: CEDARBAUM
This is a class action under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 (the "WARN Act") by employees of the former law firm Lord Day & Lord, Barrett Smith. Plaintiffs claim that Lord Day violated the WARN Act by closing its offices without giving notice to its employees sixty days in advance as required by the statute. Lord Day's late notice merely recited the language of one of the statutory exceptions to explain the failure to give sixty-days' notice. In its answer, Lord Day asserted as second and third affirmative defenses two statutory excuses for non-compliance with the sixty-day requirement. Plaintiffs move for partial summary judgment striking these affirmative defenses as precluded by Lord Day's failure to include in its notice a brief statement of the facts constituting the basis for giving shortened notice. For the reasons that follow, the motion is granted.
On September 1, 1994, Lord Day distributed to its employees a letter headed "Re: Notice under Worker Adjustment and Retraining Notification Act." The letter advised "each affected employee" that Lord Day would cease all business activities (aside from liquidating assets and paying obligations) on September 30, 1994 and that each employee's employment would terminate on that date. With respect to the timing of the notice, the letter stated: "The Firm was not able to give greater advance notice of this termination since this termination arises from unforeseeable business circumstances." (Aff. of Jean-Pierre Van Lent dated 12/6/95 Ex.)
The purpose of the WARN Act is to protect workers from plant closings and mass layoffs without advance notice. "Advance notice provides workers and their families some transition time to adjust to the prospective loss of employment, to seek and obtain alternative jobs and, if necessary, to enter skill training or retraining that will allow these workers to successfully compete in the job market." 20 C.F.R. § 639.1(a) (1996). Accordingly, the WARN Act requires covered employers to give notice to their affected employees sixty days before ordering a plant closing or mass layoff. 29 U.S.C. § 2102(a) (1994). Employers are excused from the sixty-day notice requirement, however, under certain circumstances. Lord Day asserts as affirmative defenses that its failure to provide sixty-days' notice did not violate the statute because two statutory exceptions apply to the Lord Day closing. (Answer to Am. Class Action Compl. PP 32-33.) The first exception, which Lord Day calls the "faltering company exception," permits an employer to order the shutdown of a site of employment less than sixty days after giving notice if "the employer was actively seeking capital or business which, if obtained, would have enabled the employer to avoid or postpone the shutdown and the employer reasonably and in good faith believed that giving the notice required would have precluded the employer from obtaining the needed capital or business." § 2102(b)(1). The second exception, which Lord Day calls the "unforeseeable business circumstances exception," exempts employers from the sixty-day notice requirement when the shutdown "is caused by business circumstances that were not reasonably foreseeable as of the time that notice would have been required." § 2102(b)(2)(A).
The Ninth Circuit analyzed s 2102(b)(3) in Alarcon v. Keller Indus., 27 F.3d 386 (9th Cir. 1994).
In Alarcon, the court held that to satisfy the WARN Act's brief statement requirement, the employer must "set forth the underlying factual events which led to the shortened [notice] period." Id. at 389. The court reasoned that Congress' purpose in requiring the brief statement "must have been to provide employees with information that would assist them in determining whether the notice period was properly shortened," and observed that Webster's dictionary defined "basis" as an "underlying condition or state of affairs." Id. It concluded that the statute requires the employer to set forth reasonably specific facts that make an exception to the statutory notice period applicable, "providing an adequate, specific explanation to affected workers." Id. at 389-90. The court explicitly held that merely citing a statutory exception by "stating, for example, 'the notice is short because we are a faltering company,'" is insufficient. Id. at 390.
A requirement that the employer set forth the specific facts that constitute the basis for reducing the notice period serves a second purpose in addition to that identified by the Ninth Circuit. Such a requirement focuses employers on the statutory conditions that must be met to reduce the notice period by prohibiting employers from relying on a vague justification for giving shortened notice. If an employer must set forth specific facts in its notice in order to rely on a statutory exception, it is more difficult for one who does not truly qualify for the exception to invoke it. It is therefore more likely that employees will receive the full sixty-day notice period in the majority of cases in which the statutory exceptions do not apply.
Lord Day's interpretation robs the statutory language of content. Congress easily could have provided that an employer relying on a statutory exception "shall identify the statutory exception on which it is relying." By providing that an employer must give a brief statement of the basis for the shortened notice, Congress indicated that it intended something more than a citation to the statute or a conclusory statement summarizing the statutory provision. If an employer could comply with s 2102(b)(3) by simply parroting a statutory exception, this section of the statute would serve no purpose.
Lord Day's notice stated only that "the Firm was not able to give greater advance notice of this termination since this termination arises from unforeseeable business circumstances." This statement does not set forth any of the facts explaining why the shortened notice period was necessary and thus violates the statute's requirement that it provide a brief statement of the basis for reducing the notice period. By the terms of the statute, Lord Day may not rely on the exceptions to the sixty-day notice requirement.
Lord Day argues that even if it failed to satisfy the statutory requirement that it provide a brief statement, it should still be permitted to rely on the statutory exceptions. It relies on a WARN regulation that provides:
The information provided in the notice shall be based on the best information available to the employer at the time the notice is served. It is not the intent of the regulations, that errors in the information provided in a notice that occur because events subsequently change or that are ...