Jeri Farrar v. Catalina Restaurant Group, Inc. et al

Filing 83

ORDER by Judge Dean D. Pregerson: Granting 77 Defendants Motion for Summary Judgment. MD JS-6. Case Terminated. (shb)

O

1
2
3

JS-6

4
5
6
7
8
9
10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12
13
14

JERI FARRAR, and others similarly
situated,

15
16
17
18
19

Plaintiffs,
v.
CATALINA RESTAURANT GROUP,
INC. and FOOD MANAGEMENT
PARTNERS, INC.

20

Defendants.

21
22
23
24
25
26
27
28

)
)
)
)
)
)
)
)
)
)
)
)
)

Case No. 16-cv-09066 DDP (JCx)

ORDER GRANTING DEFENDANTS’
MOTION FOR SUMMARY
JUDGMENT
[Dkt. 77]

Presently before the court is Defendants’ Motion for Summary Judgment. Having
considered the parties’ submissions and heard oral argument, the court adopts the
following Order.
I. BACKGROUND
Plaintiffs Jeri Farrar, Kyle Whitney, Gary Graham, Bill Dizon, Francisco Jiminez,
and Gina McMahon (“Plaintiffs”) brought this putative class action against Defendants
Catalina Restaurant Group, Inc. and Food Management Partners, Inc. (collectively,

1
2
3
4
5

“Defendants”) for violations of the Worker Adjustment and Retraining Notification Act
(“WARN Act”), 29 U.S.C. §§ 2101 et seq., and the California WARN Act, Cal. Lab. Code §
§ 1400 et seq., both resulting from an April 2015 reduction in force at Catalina Restaurant
Group’s corporate headquarters. (Dkts. 1, 41).
Catalina Restaurant Group (“Catalina”) owns and operates restaurants

6

throughout California and Arizona. (Runyon Decl. ¶ 3.) Catalina had corporate

7

headquarters in Carlsbad, California, which provided administrative support to its

8

restaurant locations. (Id. at ¶ 5.) In April 2015, Catalina implemented a reduction in

9

force, closing a number of its restaurants and terminating employees at its corporate

10

headquarters. (Donbavand Decl. ¶ 3.)

11

Plaintiffs contend that Defendants terminated the employment of 53 employees at

12

Catalina’s corporate headquarters between April 1 and April 24, 2015, thereby triggering

13

the advance notice requirements of the federal and state WARN Acts. (Pls.’ Ex. 3, Dkt.

14

79). Defendants, in contrast, declare that the WARN Acts’ advance notice provisions do

15

not apply because Catalina’s corporate headquarters laid off only 47 employees during

16

this period. (Donbavand Decl. ¶ 6.)

17

On the basis of the facts alleged above, Plaintiffs filed a putative class action

18

against Defendants, alleging violations of the federal WARN Act, 29 U.S.C. §§ 2101 et seq.

19

and the California WARN Act, Cal. Lab. Code § 1400 et seq. (Dkt. 1.) Defendants now

20

move for summary judgment.

21

II. LEGAL STANDARD

22

Summary judgment is appropriate where the pleadings, depositions, answers to

23

interrogatories, and admissions on file, together with the affidavits, if any, show “that

24

there is no genuine dispute as to any material fact and the movant is entitled to judgment

25

as a matter of law.” Fed. R. Civ. P. 56(a). A party seeking summary judgment bears the

26

initial burden of informing the court of the basis for its motion and of identifying those

27

portions of the pleadings and discovery responses that demonstrate the absence of a

28

genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). All
2

1
2
3
4
5

reasonable inferences from the evidence must be drawn in favor of the nonmoving party.
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 242 (1986). If the moving party does not
bear the burden of proof at trial, it is entitled to summary judgment if it can demonstrate
that “there is an absence of evidence to support the nonmoving party’s case.” Celotex, 477
U.S. at 323.
Once the moving party meets its burden, the burden shifts to the nonmoving party

6
7

opposing the motion, who must “set forth specific facts showing that there is a genuine

8

issue for trial.” Anderson, 477 U.S. at 256. Summary judgment is warranted if a party

9

“fails to make a showing sufficient to establish the existence of an element essential to

10

that party’s case, and on which that party will bear the burden of proof at trial.” Celotex,

11

477 U.S. at 322. A genuine issue exists if “the evidence is such that a reasonable jury

12

could return a verdict for the nonmoving party,” and material facts are those “that might

13

affect the outcome of the suit under the governing law.” Anderson, 477 U.S. at 248. There

14

is no genuine issue of fact “[w]here the record taken as a whole could not lead a rational

15

trier of fact to find for the nonmoving party.” Matsushita Elec. Indus. Co. v. Zenith Radio

16

Corp., 475 U.S. 574, 587 (1986).
It is not the court’s task “to scour the record in search of a genuine issue of triable

17
18

fact.” Keenan v. Allan, 91 F.3d 1275, 1278 (9th Cir.1996). Counsel have an obligation to lay

19

out their support clearly. Carmen v. San Francisco Sch. Dist., 237 F.3d 1026, 1031 (9th Cir.

20

2001). The court “need not examine the entire file for evidence establishing a genuine

21

issue of fact, where the evidence is not set forth in the opposition papers with adequate

22

references so that it could conveniently be found.” Id.

23

III. DISCUSSION

24

The centerpiece of this dispute involves whether Catalina laid off 50 or more

25

employees from its Carlsbad corporate headquarters as part of its April 2015 reduction in

26

force, thereby triggering the notice requirements of the federal and California WARN

27

Acts.

28
3

Under the federal WARN Act, covered employers must provide employees with

1
2
3
4
5

advance notice of a “plant closing” or “mass layoff.” 29 U.S.C. § 2102(a). Both a “plant
closing” and “mass layoff” are triggered when, inter alia, at least 50 full-time employees
are terminated over a 30-day period. Id. §§ 2101(a)-(b). Similarly, the California WARN
Act mandates that covered businesses who order a relocation, termination, or mass layoff

6

must provide advance notice to employees. 1 Cal. Labor Code § 1401(a). Under the

7

California WARN Act, a “mass layoff” is defined as the layoff of 50 or more employees

8

during a 30-day period. Id. § 1400(d).
Defendants contend there is no evidence that Catalina terminated 50 or more

9
10

employees as part of the April 2015 reduction in force. Specifically, Defendants declare

11

that Catalina terminated only 47 employees from its corporate headquarters as part of the

12

reduction in force. (Donbavand Decl. ¶ 6), and that Catalina did not terminate 50 or more

13

employees total in the 90 days before or after the April 2015 reduction in force. (Id. ¶ 7.) 2
Plaintiffs dispute Defendants’ claims by pointing to payroll records from April 1,

14
15

2015 to May 27, 2015. These payroll records suggest that Catalina’s corporate

16

headquarters had 53 individuals on its payroll on April 1, 2015. (Pls.’ Am. Ex. 3, Page ID

17

#1351, Dkt. 80) (spreadsheet listing 53 names with a check date of “4/1/2015.”) Plaintiffs

18

assert that, by April 24, 2015, all 53 employees had been terminated. (Opp. at 4.)

19

In support of this assertion, Plaintiffs theorize that the word “TRUE” on an employee’s

20

payroll run records indicates whether an employee was laid off. For example, Plaintiffs

21

claim that Defendants “placed the word [“TRUE”] on the furthest right hand column . . .

22

for those employees terminated on April 3, 2015. (Opp. at 12 n. 4.) Plaintiffs subsequently

23

explain that “Defendants did not place the word [“TRUE”] in the furthest right-hand

24
25
26
27
28

Of these, the Complaint specifies that Defendants implemented a “mass layoff” under
California Labor Code § 1400(c)-(d). (Compl. ¶ 49-51.)
2 Under 29 U.S.C. § 2102(d), employment losses “which occur within any 90-day period
shall be considered to be a plant closing or mass layoff unless the employer demonstrates
that the employment losses are the result of separate and distinct actions and causes and
are not an attempt by the employer to evade the requirements of this chapter.”
4
1

1
2
3
4
5

column of any of these terminated employees, thus indicating that these employees no
longer work for Defendants.” (Opp. at 12 n. 5.) In other words, the notation “TRUE” next
to an employee’s payroll run entry signals that he or she would be terminated, and the
absence of the notation “TRUE” in subsequent entries indicates that he or she had
already been terminated.

6

Plaintiffs offer no explanation or evidentiary support for this reading of the

7

payroll records. Furthermore, the same payroll records indicate that the allegedly

8

terminated employees continued to receive paychecks well after their termination dates.

9

Cf. Compl. ¶ 18 (“The terminated employees received no severance, and were only paid

10

through the day they were laid off.”). For example, Plaintiffs claim that employees

11

Christopher Barkley, William Clark, and Vincent Plaza were all terminated on April 24,

12

2015. (Pls.’ Am. Ex. 3, Page ID #1360.) Yet each of these employees received paychecks on

13

May 13, 2015, (Id., Page ID #1368), and continued to receive paychecks on May 27, 2015.

14

(Id., Page ID #1370.) 3 Similarly, Plaintiffs contend that employee Luseane Netane was laid

15

off on April 3, 2015 because her name appears with the word “TRUE” next to it in the

16

payroll run. (Opp. at 6.) However, Netane continued to receive checks on April 24, 2015

17

and May 27, 2015. (Pls.’ Am. Ex. 3, Page ID #1360, 1370.) Employee Marciela Canizalez,

18

whom Plaintiffs assert was terminated on April 15, 2015, (Opp. at 7), also continued to

19

receive payments on April 24, 2015, as well as May 27, 2015. (Pls.’ Am. Ex. 3, Page ID

20

#1360, 1370.)
The court finds that Catalina’s payroll records do not reasonably support

21
22

Plaintiffs’ theory of termination, whereby all 53 of the employees at Catalina’s corporate

23

headquarters were terminated as of April 24, 2015. Instead, the payroll record bolsters

24

Defendants’ contention that 47 employees were terminated as part of the April 2015

25

reduction in force. The names of six out of the original 53 employees appear on Catalina’s

26

payroll as of May 27, 2015. (Pls.’ Am. Ex. 3, Page ID #1370.) Absent evidence that

27
28

3

No further paycheck data is provided for the period after May 27, 2015.
5

1
2
3
4
5

undermines Defendants’ claims, the court concludes that Plaintiffs have not created a
triable issue of fact as to whether at least 50 corporate headquarters employees were
terminated as a result of the April 2015 reduction of force.
In addition, Plaintiffs emphasize that employment losses that occur within a 90
day period “shall be considered to be a plant closing or mass layoff,” unless the employer

6

demonstrates that these employment losses actions are separate and distinct, and not an

7

attempt to effect an end-run around the requirements of the WARN Act. See 29 U.S.C. §

8

2102(d). Defendants state that “Catalina did not terminate 50 or more employees total in

9

the 90 days before or after the April 2015 reduction in force.” (Donbavand ¶ 7.) Plaintiffs

10

proffer no evidence of additional terminations over a 90-day period that were not

11

reflected in the April 1 to May 27, 2015 payroll records. Therefore, even assuming that §

12

2102(d) applies here, Plaintiffs have submitted no evidence of subsequent layoffs that

13

should be considered together with the April 2015 layoffs when determining whether the

14

WARN Act thresholds have been triggered.

15

Finally, Plaintiffs contend that employees who voluntarily leave their positions

16

after they receive notice of a plant closing also count toward “employment loss,” and

17

must be counted toward the 50-person threshold for advance notice under the WARN

18

Act. In Collins v. Gee West Seattle, the Ninth Circuit ruled that “[w]here an employee's

19

reason for departing is because the business is closing, such a departure cannot be

20

termed ‘voluntary’ under the Act.” Collins v. Gee W. Seattle LLC, 631 F.3d 1001, 1009 (9th

21

Cir. 2011). Even so, the record is devoid of evidence of any employees who left

22

voluntarily because of the closure of Catalina’s corporate headquarters. And, even if

23

some employees had done so, their departures would have been reflected in the payroll

24

records that Plaintiffs submitted for the period from April 1 to May 27, 2015.

25

In view of the evidence set forth, Plaintiffs have not created a triable issue of fact

26

as to whether 50 or more corporate headquarters employees were terminated as part of

27

the April 2015 reduction in force. Therefore, Defendants are entitled to summary

28

judgment on Plaintiffs’ federal and state WARN Act claims.
6

1
2
3
4
5

IV. CONCLUSION
For the reasons stated above, the court GRANTS Defendants’ Motion for
Summary Judgment.
IT IS SO ORDERED.

6
7

Dated: January 22, 2018

8
9
___________________________________

10

DEAN D. PREGERSON

11

UNITED STATES DISTRICT JUDGE

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7