John Ellis, et al v. DHL Express, Incorporated, et al

Filing

Filed opinion of the court by Judge Tinder. AFFIRMED. Diane P. Wood, Circuit Judge; Terence T. Evans, Circuit Judge and John Daniel Tinder, Circuit Judge. [6278436-3] [6278436] [09-3596]

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In the

United States Court of Appeals
For the Seventh Circuit
No. 09-3596
JOHN E LLIS, T IMOTHY P RICE, and
all others similarly situated,
Plaintiffs-Appellants,
v.
DHL E XPRESS INC. (USA) and
D EUTSCHE P OST AG, formerly known as
D EUTSCHE P OST W ORLD N ET,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 08 CV 06541—Matthew F. Kennelly, Judge.

A RGUED S EPTEMBER 9, 2010—D ECIDED JANUARY 11, 2011

Before W OOD , E VANS, and T INDER, Circuit Judges.
T INDER, Circuit Judge. 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

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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

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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 alreadylaid-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

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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 acknowl-

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edge I have received seven (7) days to consider
this General Release before signing it, and I understand 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 fourweek plans.
Workers who did not participate in one of the unionnegotiated 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 participate 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

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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 workforce 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

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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 full-

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time jobs, or between laying off 32% or 33% of a workforce 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

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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 accorded to an executive department’s construction of a statutory scheme it is entrusted to administer . . . .” (quotations omitted)); see also Johnson v.
Telespectrum Worldwide, Inc., 29 F. App’x 76, 78 (3d Cir.
2002) (giving weight to the very interpretations at issue
here).
The Secretary explained that “incentive programs,
including incentive retirement programs and voluntary
layoffs” should typically be considered voluntary departures within the meaning of the WARN Act so long
as the circumstances surrounding them comport with
traditional legal notions of voluntariness. 54 Fed. Reg. at
16048. That is, “a worker’s resignation or retirement
may be found to not be voluntary if the employer
has created a hostile or intolerable work environment
or has applied other forms of pressure or coercion
which forced the employee to quit or resign,” or “where
a worker was unduly pressured to accept the program.”
Id. The Secretary expressly disagreed with the proposition that “a worker who, after the announcement of a
plant closing or mass layoff, decides to leave early
has necessarily been constructively discharged or quit
‘involuntarily.’ ” Id. In other words, worker participation

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in incentive programs is generally considered voluntary unless the employer improperly induced workers
to leave their jobs, either by creating a hostile or intolerable work environment or by applying other forms
of undue pressure or coercion.
We have not previously addressed the issue of voluntariness in the WARN Act context, though we have considered the voluntariness of early retirement offers. In
that analogous context, we explained,
The “voluntariness” question . . . turns on such
things as: did the person receive information about
what would happen in response to the choice?
was the choice free from fraud or other misconduct? did the person have an opportunity to
say no? A very short period to make a complex
choice may show that the person could not
digest the information necessary to the decision.
This would show that the offer of information
was illusory and there was no informed choice.
But when the employee has time to consult spouse
and financial adviser, the fact that he still found
the decision hard cannot be decisive.
Henn v. Nat’l Geographic Soc’y, 819 F.2d 824, 828-29 (7th
Cir. 1987). The arguments raised by Ellis and Price echo
these very concerns. Ellis and Price contend that the
resignations, particularly those of the already-laid-off
workers, cannot be considered voluntary because the
employees resigned against a backdrop of extreme economic uncertainty and pressure exerted by DHL.
They emphasize that the drivers were simultaneously

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presented with the severance agreements and the job
rebid forms, which in their view rendered any choice
they had about signing up for one of the severance packages a Hobson’s choice at best. They also contend that
the 319 drivers who accepted the ten-week plan had
inadequate time to make their decisions. With respect
to the already-laid-off workers who accepted the fourweek packages aimed at them, Ellis and Price assert
that their resignations could not possibly have been
voluntary because they did not have jobs to resign from.
While we recognize the unenviable positions in which
DHL’s Chicagoland workers found themselves, we are
unpersuaded by these arguments and cannot conclude on the evidence before us that the workers who
accepted the union-negotiated severance packages did
so involuntarily. The affidavits of former DHL employees that Ellis and Price present paint a wrenching
picture of a difficult decision that had to be made
quickly. But they do not demonstrate that the workers
were given incomplete information, or that DHL somehow strong-armed them into signing the release forms
and accepting the severance packages against their will.
(Indeed, Ellis and Price expressly disclaim any arguments that DHL harassed workers or created a hostile
work environment to induce them to resign.) To the
contrary, several affiants testified that their managers
declined to discuss the options with them. Cf. Henn,
819 F.2d at 829 (observing that employer’s unwillingness
to advise potential early retirees whether to accept an
early retirement offer was probably due to a desire to
“avoid charges of placing undue pressure on the employees”). The severance agreements and the General

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Waiver and Release were both negotiated by Local 705
with the workers’ interests in mind, and were written
unambiguously in plain English. The General Waiver
and Release also expressly advised workers to consult
an attorney before signing, as did a letter that Local 705
sent to the already-laid-off workers.
We appreciate that two business days may not have
been an expansive window in which to fully discuss
matters with an attorney. But see Joe v. First Bank Sys.,
Inc., 202 F.3d 1067, 1070 (8th Cir. 2000) (noting that a
WARN Act plaintiff “presented no meaningful proof of
duress” which was “not surprising since [he] had the
release for two or three days and discussed it with his
attorney”). Yet “the need to make a decision in a
short time, under pressure, is an unusual definition of
‘involuntary.’ ” Henn, 819 F.2d at 828. Indeed, many
criminal defendants must decide whether to sign take-itor-leave-it plea agreements; “the need to act in haste
does not make the plea ‘involuntary’ if the defendant
knows and accepts the terms of the offer.” Id. Of
course, criminal defendants are afforded procedural safeguards to ensure that their decisions truly are
voluntary. See Fed. R. Crim. P. 11. The workers here
were not required to have their decisions evaluated by
an impartial judge, but neither is there any evidence
that DHL denied them the opportunity to educate themselves about their options or to discuss the terms of the
offers with their families, friends, financial advisors, or
attorneys. Moreover, the workers who were considering the ten-week package had not two days but
nine in which to do so; the General Waiver and Release

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gave workers seven days after accepting a severance
package in which to reconsider and revoke their acceptance. That the workers had to decide whether to take
the bird in the hand—the severance packages—or the
bird in the bush—the right to retain their seniority rank,
remain on the recall rolls for three years, and pursue
claims against DHL—in a short period of time does
not render their decisions involuntary. Nor does
the fact that neither bird was particularly attractive.
Ellis and Price’s final argument about the voluntariness
of the departures—that the already-laid-off workers
could not leave DHL voluntarily because they had no
jobs to leave from—gets them no further. Their position
presupposes that the already-laid-off workers lost
their attachment to DHL the moment they were laid
off. The record shows, and Ellis and Price acknowledged at oral argument, that laid-off workers retained
their hard-earned seniority status and recall rights
with DHL for up to three years. If the laid-off workers
elected to sign the General Waiver and Release in exchange for the severance package, they gave up those
potentially valuable rights and fully cut their ties
with DHL. They may not have been walking away
from specific positions, but they were electing to end
their relationships with DHL rather than waiting
around for three years to see if new opportunities came
to fruition.
In offering its workers the olive branch of severance
pay, DHL was hedging its bets against WARN Act liability. Employers are permitted to “gamble” that enough

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workers accept their proffered incentive packages to
absolve them from potential WARN Act liability, 54
Fed. Reg. at 16043, and DHL successfully tossed the dice
here. Ellis and Price are in effect asking us to prohibit such
behavior, but we cannot rewrite the WARN Act.
We likewise decline their invitation to treat the WARN
Act less like the notification procedure that it is and
more like the universally applicable Fair Labor Standards
Act and Older Workers Benefit Protection Act that it is
not. That is, we maintain our previous stance that
WARN Act claims can be waived as part of a voluntarily
signed general release. See Hardy v. Chi. Hous. Auth., 189
F. App’x. 510, 512 (7th Cir. 2006) (citing Joe, 202 F.3d at
1070, and Int’l Ass’n of Machinists & Aerospace Workers
v. Compania Mexicana de Aviacion, 199 F.3d 796, 799 (5th
Cir. 2000)).
We are left with only one issue to resolve: whether the
district court erred in sua sponte granting summary
judgment to Deutsche Post. Recall that Ellis and Price
brought WARN Act claims against both DHL and
its parent, and only DHL moved for summary judgment. The district court, reasoning that if Ellis and Price
could not prevail against one defendant they could not
prevail against its alleged alter ego, granted summary
judgment to both companies. Ellis and Price contend
that because they had limited opportunity to conduct
discovery with respect to Deutsche Post (it is based in
Germany and there was significant delay in serving it
with process and bringing it into the case), summary
judgment was inappropriately granted.

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District courts have the authority to enter summary
judgment sua sponte as long as the losing party was on
notice that it had to come forward with all its evidence.
Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec,
529 F.3d 371, 384 (7th Cir. 2008) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 326 (1986)). “In addition, we have
held that if a district court grants one defendant’s
motion for summary judgment, it may sua sponte
enter summary judgment in favor of non-moving defendants if granting the motion would bar the claim against
those non-moving defendants.” Id. (citing Malak v. Associated Physicians, Inc., 784 F.2d 277, 280 (7th Cir. 1986)); see
also Acequia, Inc. v. Prudential Ins. Co. of Am., 226 F.3d 798,
807 (7th Cir. 2000) (“[W]here one defendant succeeds
in winning summary judgment on a ground common
to several defendants, the district court may also grant
judgment to the non-moving defendants, if the plaintiff
had an adequate opportunity to argue in opposition.”).
The district court did not overstep its authority here.
All of Ellis and Price’s substantive allegations implicate
both DHL and Deutsche Post; their first amended complaint even alleges that Deutsche Post was “at all times . . .
the alter ego of DHL Express and maintains strict control over DHL Express.” First Am. Compl. ¶ 4. When
the district court correctly concluded that summary
judgment for DHL was appropriate, the necessary implication was that the identical claims against Deutsche
Post could not succeed either. Whether the departures
were voluntary, whether there was a “plant closing,” and
whether there was a “mass layoff” are issues that

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were wholly unaffected by the precise corporate identity
of the defendant. Further, Ellis and Price had ample
notice that DHL was pursuing summary judgment on
the claims that were common to both defendants, and
they vigorously opposed the motion by procuring and
coming forward with hundreds of pages of documents
and declarations. The district court’s grant of summary
judgment in favor of both defendants is A FFIRMED.

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