Duane Morris Class Action Review - 2023 - Report - Page 375
sufficiently similar in both fact and law to meet the predominance requirement of Rule
23(b)(3).
The Third Circuit is the only federal appeals court to have addressed the question
whether the WARN Act’s “single site of employment” provision applies only to mobile
employees who travel regularly and do not customarily report to an office or also covers
employees who telecommute. In Ciarlante, et al. v. Brown & Williamson Tobacco Corp.,
143 F.3d 139 (3d Cir. 1998), the Third Circuit held that a remote employee’s single site
of employment turns on who assigns the employee’s work and from where. If the
employee’s direct supervisor is the original source of work instruction and works at a
location other than the employer’s main headquarters, then the supervisor’s worksite is
the employee’s single site of employment. But if the direct supervisor is a “mere conduit”
of the work instructions that come from elsewhere in the chain of command, then the
location of the original source of that instruction is the single site of employment for
WARN Act purposes.
In Hoover, et al. v. Drivetrain LLC, 2022 Bankr. LEXIS 2312 (Bankr. D. Del. Aug. 19,
2022), the Bankruptcy Court in Delaware – applying Third Circuit precedent – explained
that “[t]he degree of autonomy that an intervening supervisor must have to break the
chain is a disputed question of law.” Id. at *13. Before the court was a class action
against a company that filed for bankruptcy after its owner was indicted on fraud
charges. The company’s main facility was in Las Vegas, but it had about 130
employees in four departments who worked remotely. The laid-off employees moved for
class certification and argued that “so long as corporate headquarters is playing any
substantive role at all – as opposed to merely providing back-office support for the true
decision-makers who are in the field – the headquarters is the single site of
employment.” Notably, the court declined to entertain that argument at the class
certification stage, explaining that it went to the merits of the WARN Act claims. For its
part, the defendant contended that if the court were to certify the class, a separate subclass of remote employees should be required. The court disagreed and certified one
class consisting of onsite and remote employees. Foretelling the parties’ arguments at
the merits stage, the court opined that the “plaintiffs will seek to meet their burden
primarily by relying on evidence that the heads of the debtor’s engineering and sales
departments, both of whom were physically located in the company’s Las Vegas
headquarters, had sufficient substantive involvement that the headquarters should be
treated as the site from which the employee’s work was assigned, while the defendants
will respond by arguing that for some number of members within the class, lower level
employees, who were not located in Las Vegas, were sufficiently ‘autonomous’ such
that those employees’ single site of employment was not Las Vegas.” Id. at *14.
Although Hoover did not involve COVID-19, it nonetheless reflects the impact the rise in
telecommuting, fueled largely by the pandemic, will have on WARN Act litigation going
forward.
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© Duane Morris LLP 2023
Duane Morris Class Action Review – 2023
