Leeper v. Alliance Resource Partners, L.P. et al
Filing
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ORDER DENYING 39 Motion to Dismiss. Signed by Judge Nancy J. Rosenstengel on 9/29/2017. (bak)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
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Plaintiff,
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vs.
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ALLIANCE RESOURCES PARTNERS,
L.P., HAMILTON COUNTY COAL, LLC, )
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and DOE DEFENDANTS 1-20,
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Defendants.
CARL LEEPER, individually and on
behalf of all others similarly situated,
Case No. 16-CV-250-NJR-DGW
MEMORANDUM AND ORDER
ROSENSTENGEL, District Judge:
Pending before the Court is a Motion to Dismiss Plaintiff’s First Amended Class
Action Complaint filed by Defendants, Alliance Resource Partners, L.P. and Hamilton
County Coal, LLC (Doc. 39). For the reasons set forth below, the Court denies the Motion
to Dismiss.
FACTUAL & PROCEDURAL BACKGROUND
Plaintiff Carl Leeper brings this putative class action against Defendants Alliance
Resource Partners, L.P. (“Alliance”), Hamilton County Coal, LLC (“Hamilton”), and Doe
Defendants 1-20, alleging violations of the Worker Adjustment and Retraining
Notification Act (the “WARN Act”), 29 U.S.C. § 2101 et seq.
Prior to February 6, 2016, Leeper was a full-time employee of Defendants
Hamilton and Alliance. During his employment, he had been promoted from general
laborer to pumper to maintenance (Doc. 37, p. 4). Leeper specifically worked at the
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Hamilton County Mine #1, which is an underground mining complex located near the
city of Dahlgren in Hamilton County, Illinois (Doc. 37, p. 3). Alliance is the owner of the
Hamilton County Mine #1, and Defendant Hamilton operates the facility (Id.). Leeper
“earned regular compensation of approximately $91,000 per year and other substantial
employee benefits including, inter alia, health insurance, a 401(k) plan, short-term
disability insurance, long-term disability insurance, life insurance, accidental death and
dismemberment insurance, accrued and unused vacation days, and monthly bonuses.”
(Doc. 37, p. 4).
As alleged in the First Amended Class Action Complaint, Defendants failed to
provide a “60-day advanced notice of a ‘mass layoff’ of nearly 200 employees that
occurred at its Hamilton County Coal Mine #1 on February 5, 2016” (Doc. 37). Instead,
Defendants provided less than twenty-four hours’ notice that they were terminating
their employment and that all benefits would cease as of the date of termination (Id.).
Specifically, on the morning of February 5, 2016, Defendants held a meeting where they
provided Leeper “along with nearly 200 other full-time employees” (“Class Members”) a
written notice warning of a “temporary layoff for the period commencing February 6,
2016 and ending on August 1, 2016” (Docs. 37, p. 5; Doc. 37-1, p. 1). The notice stated that
“beginning effective February 6, 2016,” Leeper would “not be employed by Hamilton
County Coal” and explained that a “temporary layoff is treated as a termination of
employment for purposes of wages and benefits” (Doc. 37-1, p. 1, 6). The notice also
stated, however, that on August 1, 2016, “you may return to your at-will employment
with Hamilton County Coal” (Doc. 37-1, p. 1). Leeper alleges that, at the February 5
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meeting, the facility’s general manager, Ezra French, advised him that there was no
guarantee of reemployment, and they would have to reapply and interview for positions
(Doc. 37, p. 8, 13).
The First Amended Class Action Complaint alleges that, on the following day,
February 6, 2016, Defendants laid off 1821 out of 363 employees (Doc. 37, p. 8; Doc. 39-3;
Doc. 58-2, p. 21). On August 1, 2016, Defendants rehired 58 of these employees (Id.).
On January 4, 2017, Leeper filed his First Amended Class Action Complaint suing
under Federal Rule of Civil Procedure 23(a), 23(b)(1), 23(b)(3), and 23(c)(4), and the
WARN ACT, 29 U.S.C. § 2104(a)(5) on behalf of the following class (Class 1):
All current or former employees, excluding part-time employees, of
Alliance Resource Partners, L.P., Hamilton County Coal, LLC, and/or Doe
Defendants 1-20, who worked at the Hamilton County Coal Mine #1 and
who received the Termination Notice attached hereto as Exhibit 1 on or
about February 6, 2016, without previously receiving sixty (60) days
advanced written notice of a mass layoff.
Leeper asserts that Defendants’ actions with respect to Leeper and the Class 1 Members
constituted a “mass layoff” because 182 full-time employees experienced an
employment loss by way of a termination under 29 U.S.C. § 2101(a)(6)(A).
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Defendants Alliance and Hamilton filed a Corrected Memorandum in Support of their Motion to
Dismiss to include a Supplemental Affidavit of Ezra French to clarify that, subsequent to February 6, 2016,
two additional individuals voluntarily requested to be laid off and were included in the alleged temporary
layoff (Doc. 58-2, p. 23). The Court granted Defendants leave to file the Corrected Memorandum along
with a Supplemental Affidavit. The Supplemental Affidavit serves to correct an administrative error in the
original affidavit. Nonetheless, because this Supplemental Affidavit is not specifically referenced in the
First Amended Class Action Complaint, as it was prepared after the First Amended Class Action
Complaint was filed, the Court will not consider it or use the corrected number in this Order. The Court
notes that Defendants have stated that the Supplemental Affidavit has no material impact on Defendants’
arguments in their pending Motion to Dismiss, and the Court does not find this clarification to be germane
to its analysis.
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In the alternative, Leeper brings this class action pursuant to Federal Rule of Civil
Procedure 23(a), 23(b)(1), 23(b)(3), and 23(c)(4), and the WARN Act, 29 U.S.C.
§ 2104(a)(5), on behalf of himself and the following class (Class 2):
All current or former employees, excluding pat-time employees, of
Alliance Resource Partners, L.P., Hamilton County Coal, LLC, and/or Doe
Defendants 1-20, who worked at the Hamilton County Coal Mine #1 and
who received the Termination Notice attached hereto as Exhibit 1 on or
about February 6, 2016, without previously receiving sixty (60) days
advanced written notice of a mass layoff and who either: (a) were not
rehired by Alliance Resource Partners, L.P., Hamilton County Coal, LLC,
and/or Doe Defendants 1-20 after February 6, 2016; or (b) experienced a
reduction in hours of work of more than 50 percent during each month of
the 6-month period between February 6 and August 6, 2016.
Leeper alternatively argues that Defendants’ actions constituted a “mass layoff”
with respect to Leeper and the Class 2 Members because at least 150 employees
experienced a reduction in hours of work of more than 50 percent during each month of
the six-month period between February 6 and August 6, 2016, or because 92 employees
were terminated and at least 58 employees experienced a reduction in hours of work of
more than 50 percent during each month of the six-month period between February 6
and August 6, 2016.
On January 18, 2017, Defendants Alliance and Hamilton filed a Motion to Dismiss
Plaintiff’s First Amended Class Action Complaint (Doc. 39) on the basis that there was
no “mass layoff” because at least 33 percent of Hamilton’s employees did not experience
an employment loss, and a “layoff” may not be treated as a reduction of hours under 29
U.S.C. § 2101(a)(6)(C). On February 21, 2017, Leeper filed a Response in Opposition to
Defendants’ Motion to Dismiss (Doc. 40). On March 7, 2017, Defendants Alliance and
Hamilton filed a Reply brief (Doc. 41). On August 25, 2017, Defendants Alliance and
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Hamilton filed a Corrected Memorandum in Support of Defendants’ Motion to Dismiss
(Doc. 58). On September 8, 2017, Leeper filed a Response to Defendants’ Corrected
Memorandum (Doc. 60). On September 22, 2017, Defendants Alliance and Hamilton
filed a Reply Brief (Doc. 61).
LEGAL STANDARD
To survive a Rule 12(b)(6) motion, a complaint must “state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). While a
complaint need not include detailed factual allegations, there “must be enough to raise a
right to relief above the speculative level.” Id. at 555. The plaintiff must “plead [] factual
content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” McReynolds v. Merrill Lynch & Co., 694 F.3d 873, 885 (7th Cir.
2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662 (2009)). “In reviewing the sufficiency of a
complaint under the plausibility standard, [a court must] accept the well-pleaded facts
in the complaint as true, but [it] ‘need not accept as true legal conclusions, or threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements.’”
Alam v. Miller Brewing Co., 709 F.3d 662, 665-66 (7th Cir. 2013) (quoting Brooks v. Ross, 578
F.3d 574, 581 (7th Cir. 2009)). When ruling on a motion to dismiss, a federal court may
consider documents attached to the pleadings without converting the motion to dismiss
into a motion for summary judgment, as long as the documents are referred to in the
complaint and central to the plaintiff’s claims. See Adams v. City of Indianapolis, 742 F.3d
720, 729 (7th Cir. 2014); FED. R. CIV. P. 10(c).
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ANALYSIS
Defendants Alliance and Hamilton (hereafter collectively referred to as
“Defendants”) argue that Leeper’s claims as set forth in the First Amended Class Action
Complaint fail to state a claim upon which relief can be granted under the WARN Act.
Congress passed the WARN Act with the purpose of providing “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 . . . .”
20 C.F.R. § 639.1(a); Roquet v. Arthur Andersen LLP, 398 F.3d 585, 586 (7th Cir. 2005) (“[I]ts
purpose is to soften the economic blow suffered by workers who unexpectedly face
plant closings or mass layoffs.”). Thus, the WARN Act requires employers 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. Leeper alleges that Defendants
failed to provide the necessary sixty days notice to himself and the proposed class when
they terminated at least 33 percent and more than 50 of Hamilton’s employees on
February 6, 2016.
Defendants’ Argument that the First Amended Class Action Complaint Fails to
Demonstrate that At Least 33 percent of Employees Experienced an Employment Loss
The notice requirements of the WARN Act are triggered if there is a “mass
layoff.” 29 U.S.C. § 2102(a). Courts apply the WARN Act only to mass layoffs that meet
certain employment thresholds. 20 C.F.R. § 639.2. The WARN Act defines a “mass
layoff” as a reduction of force which results in employment loss for “at least 33 percent
of the employees” and “at least 50 employees.” 29 U.S.C. § 2101(a)(3). An “employment
loss” is defined as: (a) an employment termination, other than a discharge for cause,
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voluntary departure, or retirement, (b) a layoff exceeding 6 months, or (c) a reduction in
hours of work of more than 50 percent during each month of any 6-month period. 29
U.S.C. § 2101(a)(6).
Leeper specifically alleges in his First Amended Class Action Complaint that
“over 50, and at least 33 percent of the employees . . . experienced the employment loss.”
(Doc. 37, p. 14). Significantly, Leeper pleads the employment loss as a termination as set
forth in 29 U.S.C. § 2101(a)(6)(A) (See, e.g. Doc. 37, p. 5, 13, 14). Specifically, Leeper pleads
that 182 employees were terminated out of a total of 363, which constitutes more than 33
percent of the Hamilton workforce. Defendants argue, however, that the employment
loss was a layoff (not a termination) that failed to exceed six months as required under 29
U.S.C. § 2101(a)(6)(B). Specifically, Defendants point to the affidavit of Ezra French to
argue that 90 of the 182 employees originally laid off either returned to work within six
months or voluntarily declined to do so. Thus, Defendants argue that less than 33
percent of Hamilton employees experienced an employment loss under the WARN Act.
The issue raised by Defendants’ motion is whether the employees suffered a
termination (as alleged by Leeper in the First Amended Class Action Complaint) or a
layoff (as argued by Defendants). If the answer is the former, then the termination was
effective as of February 6, 2016, it affected all 182 employees, and the subsequently
rehired employees do not change that conclusion. If the answer is the latter then, as
Defendants argue, the layoff did not exceed six months because 74 employees were
recalled within the six month period (16 returned as of July 27, 2016 and 58 returned as
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of August 1, 2016). Under this line of reasoning, there would have been no employment
loss under 29 U.S.C. § 2101(a)(6)(B) because the layoff did not exceed six months.
A termination involves a “permanent cessation of the employment relationship.”
Acevedo v. Heinemann’s Bakeries, Inc., 619 F. Supp. 2d 529, 534 (N.D. Ill. 2008). In the
statute of limitations context, the Second Circuit Court of Appeals has noted that “a
termination immediately qualifies as an employment loss,” which is in contrast to a layoff,
which must exceed six months in duration. United Paperworkers Int’l Union & its Local 340
v. Specialty Paperboard, Inc., 999 F.2d 51, 52 (2d Cir. 1993) (emphasis added). Case law
provides that it is the actuality of the termination that controls and not the expectations
of the employees. See Rifkin v. McDonnell Douglas Corp., 78 F.3d 1277, 1282 (8th Cir. 1996).
Although the notice is titled “Temporary Layoff Notice,” Leeper pleads the
employment loss as a termination because the “Temporary Layoff Notice” specifically
states that the layoff “is treated as a termination of employment for purposes of wages
and benefits.” (Doc. 37-1, p. 6). It also stated that, as of February 6, 2016, the employees
would “not be employed by Hamilton County Coal” (Doc. 37-1, p. 1). Additionally, the
“Temporary Layoff Notice” provided that, upon the employment termination date,
health care coverage would cease, any FMLA wages and benefits being received would
discontinue, and accrued and unused vacation days would be paid in a lump sum (Doc.
37-1, p. 6-10). Leeper further alleges that they were told that “they would have to submit
applications and reapply for employment at the Hamilton County Mine, interview for
these positions, and there was no guarantee of employment (Doc. 37, p. 8).
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Although Mr. French’s affidavit states that seventy-four of those employees have
either returned to work or confirmed their intent to return to work, it does not provide
any detail as to the circumstances of the terms of employment for these rehired workers
(Doc. 39-3, p. 2-3; Doc. 58-2, p. 21-22).2 Significantly, it does not tell us whether those
workers were rehired for the same position. See Rifkin, 78 F.3d at 1282 (“[a]n employee
cannot be defined as ‘terminated’ if he or she is, in fact, rehired in the same position.”)
(emphasis added); see also Int’l Oil, Chemical & Atomic Workers, Local 7-517 v. Uno-Ven Co.,
170 F.3d 779, 784 (7th Cir. 1999) (“We may assume without having to decide that here as
elsewhere the concept of constructive termination . . . is available to prevent such
shenanigans as offering to rehire the workers at a wage so much lower than their
previous wage, or on conditions so much inferior, as to rebut an inference of continuity
of employment.”). Nor does it shed any light on whether these employees did in fact
have to reapply for and interview for positions of employment at the Hamilton County
Mine, as Leeper alleges in the First Amended Class Action Complaint.
Thus, contrary to Defendants’ assertions, the Court does not find that the First
Amended Class Action Complaint presents legally dispositive facts that directly
undermine Leeper’s characterization of the Temporary Layoff Notice as a termination.
Instead, Defendants’ fact-intensive arguments are more appropriate for summary
judgment. See, e.g. Automobile Mechanics’ Local No. 701 v. Santa Fe Terminal Servs., 830 F.
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The Court may consider the affidavit of Ezra French because it is specifically referred to in the First
Amended Class Action Complaint. See, e.g., Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012)
(“A motion under Rule 12(b)(6) can be based only on the complaint itself, documents attached to the
complaint, documents that are critical to the complaint and referred to in it, and information that is subject
to proper judicial notice.”); see also Adams v. City of Indianapolis, 742 F.3d 720, 729 (7th Cir. 2014)
(“[D]ocuments attached to a motion to dismiss are considered part of the pleadings if they are referred to
in the plaintiff’s complaint and are central to his claim.”).
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Supp. 432, 434 (N.D. Ill. 1993) (finding that “[w]hether the action in dispute was a
termination of jobs or a layoff cannot be resolved on the pleadings” and resolution of
such dispute “will have to await summary judgment, a trial, or another appropriate
proceeding.”).
Defendants’ Argument that Leeper fails to state an alternative claim that there was a
“mass layoff” because the employees experienced a reduction in hours
Leeper’s First Amended Class Action Complaint alleges, as an alternate ground
for relief, that employees experienced a 50 percent reduction in hours during each month
of the six months between February 6, 2016, and August 6, 2016. Defendants cite to
United Steel v. Ainsworth Engineered (USA), LLC to argue that you cannot apply a
reduction of hours employment loss to a time period during which the employer has
specifically announced a layoff. Ainsworth, which was decided on summary judgment,
ultimately held that because the action involved a layoff, a category (C) reduction in
hours employment loss could not be found. United Steel v. Ainsworth Engineered (USA),
LLC, No. Civ. 07-4731 ADM/RLE, 2008 WL 4857905, at *6 (D. Minn. Nov. 10, 2008). Here,
the Court has already found that Defendants’ fact-intensive arguments that the action
alleged involves a layoff are more appropriate for summary judgment. Thus, the Court
does not find Ainsworth to be persuasive at this stage of the proceedings.
Simply construing all allegations and drawing all reasonable inferences in
Leeper’s favor, the Court finds that Leeper’s First Amended Class Action Complaint
states a claim for relief.
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CONCLUSION
For the reasons explained above, Defendants Alliance Resource Partners, L.P.’s
and Hamilton County Coal, LLC’s Motion to Dismiss Plaintiff’s First Amended Class
Action Complaint (Doc. 39) is DENIED.
IT IS SO ORDERED.
DATED: September 29, 2017
s/ Nancy J. Rosenstengel___________
NANCY J. ROSENSTENGEL
United States District Judge
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