McClain v. Laurel Street Art Club, Inc.

925 F. Supp. 496, 11 I.E.R. Cas. (BNA) 1189, 1995 U.S. Dist. LEXIS 20846, 1995 WL 857632
CourtDistrict Court, E.D. Kentucky
DecidedJuly 28, 1995
DocketCivil Action No. 94-91
StatusPublished
Cited by4 cases

This text of 925 F. Supp. 496 (McClain v. Laurel Street Art Club, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McClain v. Laurel Street Art Club, Inc., 925 F. Supp. 496, 11 I.E.R. Cas. (BNA) 1189, 1995 U.S. Dist. LEXIS 20846, 1995 WL 857632 (E.D. Ky. 1995).

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

BERTELSMAN, Chief Judge.

This is' an action under the Worker Adjustment Retraining Notification Act, 29 U.S.C. § 2101 et seq. (“WARN”).

After pretrial proceedings, it was determined that the only issue of fact was whether the defendant’s two facilities constituted a “single site of employment” as defined in the WARN Act. The parties waived a jury on this issue, and it was tried to the court on July 26,1995.

[497]*497Pursuant to Rule 52 of the Federal Rules of Civil Procedure, the court sets forth its findings of fact and conclusions of law as follows:

Findings of Fact

1. The Laurel Street Art Club (“LSAC”) was a Kentucky subehapter S corporation that manufactured, framed and shipped inexpensive artwork for retail sale in department and furniture stores.

2. Prior to February of 1994, the Laurel Street Art Club (“LSAC”) maintained both its production operations and its framing and shipping operations in a single location in Hebron, Kentucky.

3. In February of 1994, LSAC moved its shipping and then its framing operations to a separate location in Florence, Kentucky, approximately 12 to 14 miles from the Hebron facility.

4. LSAC continued to manufacture the art at the Hebron facility and then shipped it by tractor trailer to the Florence facility to be framed, prepared for sale, and shipped to retail dealers.

5. In addition to the shipping and general framing operations, the Florence facility housed the production, framing and shipping operations for a new product line, the Parker Allen product line (which produced prints), for approximately one month in April of 1994.

6. The two operations, one in Hebron and one in Florence, shared a switchboard and a computer network. Local telephone directories listed only the Hebron address for the corporation, and United States mail was delivered only to the Hebron location, although items could be shipped via private parcel services directly to the Florence location.

7. LSAC management supervised both locations, but each location was directly supervised by separate plant managers who maintained offices only at the plant they managed.

8. Supplies for both facilities were ordered and distributed by the manager of the Florence plant. Although supplies were occasionally delivered directly to the Florence plant, the vast majority of supplies were delivered to and stored at the Hebron plant. Supplies maintained at the Hebron plant were then transferred to the Florence plant on an as needed basis.

9. Employees were primarily employed in a particular division, e.g., framing, shipping, silk screening. An employee’s wage was determined by the division to which he was assigned. For example, production employees generally earned $8.00 per horn:, while framers earned $5.00 per hour plus a bonus based on the number of units framed. Employees in the framing department typically earned up to $13.00 per hour, including their hourly bonus. For this reason, many employees sought employment in the framing division. When openings arose in the framing division, LSAC generally “promoted” a proven employee from another division to fill the opening in the framing division.

10. Sometime between February and May of 1994, LSAC management decided to terminate operations at the Hebron and Florence facilities and move the company to Mexico. LSAC employees employed at the Hebron and Florence facilities were not apprised of the company’s decision until May 9, 1994.

11. The company ceased all production at both the Hebron and Florence facilities on May 13,1994, although a small percentage of employees continued to work for a short time thereafter to effectively move the operation to Mexico.

12. At the time of the notification, approximately 40 employees were assigned to the Florence location, while almost 50 employees were assigned to the Hebron location. However, the defendant admits that it' employed more than 100 employees during at least one pay period in the month of May, 1994.

13. The majority of employees worked only in their assigned work area, but employees from the framing division who had previously worked in production occasionally were asked to assist in the production division or to perform other tasks, such as loading and unloading trucks, on an as needed basis. For the four to six weeks immediately prior to May 13, 1994, approximately five to ten employees were asked to perform tasks out[498]*498side of their department on an almost daily basis. These tasks frequently required them to clock in and begin work at the Florence facility and then report to the Hebron facility for the remainder of the day. Two employees were officially transferred from the Florence facility to the Hebron facility for a period of time during those final weeks of operation.

Conclusion of Law

The applicable statute requires that employers of 100 or more employees provide a minimum of sixty days written notice before “the permanent or temporary shutdown of a single site of employment, ... if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees.... ” 29 U.S.C.A. §§ 2101(a)(2) and 2102(a) (1995 Supp.).

The decision in this case turns on whether the two facilities operated by LSAC constituted a “single site of employment.” Although the statute does not define “single site of employment,” the regulations promulgated by the Department of Labor provide in pertinent part:

(3) Separate buildings or areas which are not directly connected or in immediate proximity may be considered a single site of employment if they are in reasonable geographic proximity, used for the same purpose, and share the same staff and equipment. An example is an employer who manages a number of warehouses in an area but who regularly shifts or rotates the same employees from one building to another.
(4) Non-eontiguous sites in the same geographic area which do not share the same staff or operational purpose should not be considered a single site. For example, assembly plants which are located on opposite sides of a town and which are managed by a single employer are separate sites if they employ different workers.

20 C.F.R. § 639.3(i)(3) and (4) (1995).

Consistent with the regulations, courts generally conclude that two plants operated by the same employer in different locations constitute separate sites for purposes of the WARN Act unless the locations share employees and equipment. See, e.g., Williams v. Phillips Petroleum Co., 23 F.3d 930 (5th Cir.1994); United Mine Workers v. Jim Walter Resources, Inc., 6 F.3d 722 (11th Cir.1993); Salyer v. Universal Concrete Products, Case No.

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925 F. Supp. 496, 11 I.E.R. Cas. (BNA) 1189, 1995 U.S. Dist. LEXIS 20846, 1995 WL 857632, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcclain-v-laurel-street-art-club-inc-kyed-1995.