Copy
Slip Copy, 2011 WL 1345041 (S.D.N.Y.)
(Cite as: 2011 WL 1345041 (S.D.N.Y.))
Only the Westlaw citation is currently available.
United States District Court,
S.D. New York.
Michael GUIPPONE, on behalf of himself and all others similarly situated,
Plaintiff,
v.
BH S & B HOLDINGS LLC et al., Defendant.
No. 09 Civ. 1029(CM).
March 30, 2011.
DECISION AND ORDER DENYING WITHOUT PREJUDICE PLAINTIFFS' MOTION FOR CLASS
CERTIFICATION AS AGAINST DEFENDANT BH S & B HOLDINGS LLC; GRANTING
PLAINTIFF'S
MOTION FOR CLASS CERTIFICATION AND APPOINTMENT OF CLASS COUNSEL AS AGAINST
DEFENDANT BHY S & B HOLDCO LLC; APPROVING THE FORM OF CLASS NOTICE AND
METHOD
OF DELIVERY; AND SUA SPONTE STAYING NOTIFICATION OF THE CLASS UNTIL AFTER
THE
COURT RULES ON ANY MOTION FOR SUMMARY JUDGMENT THAT DEFENDANT HOLDCO
MAY
McMAHON, District Judge.
*1 This is a WARN Act case. Michael Guippone sues on behalf of himself and 200 or more other
employees of Steve & Barry's, who were laid off summarily in connection with the closure of defendants'
facilities in Port Washington, New York (where Guippone worked) and elsewhere. Within 24 hours after
the layoffs-- and the commencement of a predecessor action under the WARN Act--one of the two
remaining defendants in this action, BH S & B Holdings LLC ("Holdings"), along with several related
entities (but not its parent, the other remaining defendant, BHY S & B Holdco LLC ("Holdco"), had filed in
Chapter 11. Holdings is still in bankruptcy, but I am advised that the proceeding has been converted to a
Chapter 7 liquidation.
This action commenced as an Adversary Proceeding in the Bankruptcy Court. It was brought against
debtor Holdings, the actual employer of plaintiff and the putative class members, and a number of other
entities, none of whom was in bankruptcy. The case arrived in this court after defendants moved to
withdraw the reference, on the ground that nearly everyone sued was entitled to resort to the district court
(Docket No. 1). Plaintiff consented to the withdrawal of the reference. I have dismissed the action against
all the originally named defendants except for Holdings and Holdco; the judgment dismissing them is
presently on appeal.
1
Guippone moved some months ago for certification of a plaintiff class consisting of all persons who
worked at or reported to one of Defendants' Facilities and who were terminated without cause on or about
November 17, 2008, within 30 days of November 17, 2008, or in anticipation of, or as the foreseeable
consequence of, the mass layoff or plant closing ordered by Defendants on or about November 17,
2008, and who are "affected employees" within the meaning of 29 U.S.C. § 2101(a)(5). Plaintiff also
sought appointment of his attorneys, Outten and Golden LLP, as class counsel.
For the past few weeks, the court has delayed issuing a decision on the motion because of the pendency of
settlement negotiations between Holdings (the debtor) and plaintiff. Holdco, the parent corporation, has not
participated in those discussions. Yesterday, I was advised that Holdings has entered into a tentative
settlement with plaintiffs. The settlement contemplates the certification of a settlement class. I am denying
the pending motion for class certification as against Holdings, but that denial is without prejudice to the
determination of the issue of class certification in connection with court approval of the settlement. I do this
simply to get the motion off my motion docket.
For the reasons stated below, the motion for class certification is granted as against defendant Holdco.
The form of notice proposed by plaintiff and the method of giving notice are approved, but no notice will
be given to the class until the court has ruled on any motion for summary judgment by Holdco, which I am
advised are forthcoming.
I. The Nature of the WARN Act and the Alleged Violation by Defendants.
*2 Under The WARN Act, before instituting a "plant closing" or "mass layoff," an employer must provide
sixty days' written notice to employees and to relevant local government entities. See 29 U.S.C. § 2102(a).
A covered employer is one that employs at least 100 full-time employees. 29 U.S.C. § 2101(a)(1).
The WARN Act provides a cause of action for any employee who suffers a covered employment loss
without having received the statutorily-required notice. See 29 U.S.C. § 2104. The Act itself expressly
emphasizes the appropriateness of class-based proceedings to enforce the law and to obtain the statutory
relief: "A person seeking to enforce such liability ... may sue either for such person or for other persons
similarly situated, or both, in any district court of the United States...." See 29 U.S.C. § 2104(a)(5). As a
result, courts have regularly held that the WARN Act is "particularly amenable to class litigation." Burgio
v. Protected Vehicles, Inc. (In re Protected Vehicles, Inc.), 397 B.R. 339, 344 (D.S.C.2008), citing In re
Spring Ford Ind., 2004 Bankr.LEXIS 112 at *24 (Bankr.E.D.Pa. Jan. 20, 2004); citing Finnan v. L.F.
Rothschild & Co., 726 F.Supp. 460, 465 (S.D.N.Y.1989); Grimmer v. Lord, Day & Lord, 937 F.Supp. 255
(S.D.N.Y.1996); New Orleans Clerks and Checkers Union Local 1497 v. Ryan-Walsh, Inc., 1994 U.S. Dist.
LEXIS 2403 (E.D.La.1994) ("[T]he instant proceeding, a WARN action, falls squarely within the criteria
for sanctioning a class."). Class certification is routinely granted in WARN Act cases. See, e.g., Cruz v.
Robert Abbey, Inc., 778 F. Supp, 605 (E.D.N.Y.1991); Pearson v. Component Technology Corp., 247 F.3d
471 (3d Cir.2001) (former employees brought representative action on behalf of other employees against
employer's secured creditor under the WARN Act); Jurcev v. Central Community Hospital, 7 F.3d 618 (7th
Cir.1993) (employees who lost their jobs when hospital closed brought, on behalf of other former
employees, an action against the hospital under the WARN Act); Cashman v. Dolce
International/Hartford, Inc., 225 F.R.D. 73 (D.Conn.2004); Campbell v. A-P-A Transp. Corp., 2005 U.S.
Dist. LEXIS 28122 (D.N.J. Nov. 16, 2005); In re Spring Ford Ind., 2004 Bankr.LEXIS 112; Jones v.
Kayser-Roth Hosiery, 748 F.Supp. 1276 (E.D.Tenn.1990); Bledsoe v. Emery Worldwide Airlines, 258
2
F.Supp.2d 780 (S.D.Ohio 2003); Reyes v. Greater Texas Finishing Corp., 19 F.Supp.2d 709
(W.D.Tex.1998).
Plaintiff alleges in his Complaint that he and other similarly situated former employees who worked at the
Facilities were terminated on or about November 17, 2008 and thereafter, and were discharged without
cause; that all these former employees, as well as other employees who suffered an employment loss as the
reasonably foreseeable consequence of the mass layoffs or plant closings are "affected employees," as
defined by 29 U.S.C. § 2101(a)(5); that these former employees did not receive from Defendants 60 days'
advance written notice, as required by the WARN Act; and that Defendants failed to pay them 60 days'
wages and fringe benefits, as required by the WARN Act. The layoffs took place on or about November 17,
2008. (See Decl. of Michael Guippone at Ex. A; Decl. of Rene S. Roupinian at Ex. B; Plaintiff's Mot. For
Class Cert. Ex. C.)
*3 It is the court's understanding that defendant Holdings was the actual employer of the plaintiff and the
other members of the putative class, and that the class seeks to hold the parent company, Holdco, liable
under the so-called "joint employer" theory.
II. The Proposed Class Satisfies the Requirements of Rule 23.
In order to qualify for certification as a class action, a proposed class must meet the requirements of
Federal Rule of Civil Procedure 23(a)--numerosity, commonality, typicality, and adequacy-and one of the
subsections of Rule 23(b). See In re Salomon Analyst Metromedia Litig., 544 F.3d 474, 478 (2d Cir.2008).
Until recently, the Supreme Court's decision in Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974), was
understood to bar a district court from conducting a preliminary inquiry into the merits of the cause of
action when the court was determining, for purposes of a class certification motion, if the Rule
23 requirements were met. See In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24, 34-37 (2d Cir.2006).
Not until the Second Circuit's decision in In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24, 33
(2d Cir.2006), did it become clear in this Circuit that a merits inquiry may be necessary if related to a Rule
23 class certification requirement.
In In re IPO the Second Circuit explained that under a proper reading of Eisen, "a district court may not
grant class certification without making a determination that all of the Rule 23 requirements are met." 471
F.3d at 40. Specifically, the Court noted that Eisen properly understood "preclude [s] consideration of the
merits only when a merits issue is unrelated to a Rule 23 requirement." Id. at 41. The district court's
obligation to conduct a rigorous analysis of whether the Rule 23 requirements have been met "is not
lessened by overlap between a Rule 23 requirement and a merits issue, even a merits issue that is identical
with a Rule 23 requirement." Id. at 41.
Thus, a district court can only certify a class action if, "after a rigorous analysis," it is satisfied that the
Rule 23 requirements have been met. Id. at 33 (internal quotation marks omitted). Moreover, courts may
resolve contested factual issues to the extent that they are relevant to a particular Rule 23 requirement. See
McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 228 (2d Cir.2008) (quotation and citation omitted); In re
IPO, 471 F.3d at 41; Lapin v. Goldman Sachs & Co., 254 F.R.D. 168, 174 (S.D.N.Y. Sept. 15, 2008).
Finally, the preponderance of the evidence standard applies to evidence proffered to establish the
requirements of Rule 23. Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d
196, 202 (2d Cir.2008).
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A. The Proposed Class Meets the Requirements of Rule 23(a).
Fed.R.Civ.P. 23(a) provides as follows:
Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative
parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2)
there are questions of law or fact common to the class, (3) the claims or defenses of the representative
parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and
adequately protect the interest of the class.
1. The Numerosity Requirement is Preliminarily Satisfied.
*4 Federal Rule of Civil Procedure 23(a)(1) requires that the class sought to be certified be "so numerous
that joinder of all members is impracticable." Joinder need not be impossible, however. Grimmer v. Lord,
Day & Lord, 937 F.Supp. 255 (S.D.N.Y.1996) (certifying class of 92 persons). See also Newberg on Class
Actions, § 3.04 (4th ed. 2002) ("It is important to remember that '[i]mpracticable does not mean
impossible.' ").
Plaintiffs are not required to specify an exact class size as a prerequisite to satisfying numerosity.
Cortigiano v. Oceanview Manor Home for Adults, 227 F.R.D. 194, 204 (E.D.N.Y.2005) (class certified
where plaintiffs proffered evidence in the form of a declaration and publically available information that
class size would exceed 150 members). Courts in the Second Circuit presume that joinder is impracticable
where the prospective class consists of 40 members or more. Robidoux v. Celani, 987 F.2d 931, 935-36 (2d
Cir.1993); Taylor v. Hous. Auth, 257 F.R.D. 23, 29 (D.Conn.2009). Classes consisting of forty or more
persons "should have a reasonable chance of success on the basis of number alone." Iglesias-Mendoza v. La
Belle Farm, Inc., 239 F.R.D. 363, 2007 U.S. Dist. LEXIS 8847 (S.D.N.Y.2007).
Plaintiff, who was a business analysis at Steve & Barry's Port Washington, New York facility, has alleged
on personal knowledge that he and almost all of the other 148 persons who worked at that facility were
eligible to receive WARN Act notice. He further alleges that approximately 259 persons worked at a
facility in Columbus, Ohio, and that more than 200 of them were fired during a period relevant to the
WARN Act. And he further alleges that these numbers--which are presumed true (and which are consistent
with filings made by defendant Holdings in the Bankruptcy Court) more than satisfy the numerosity
requirement.
Defendant Holdco argues that plaintiff cannot represent a class of persons who did not work at the New
York Steve & Barry's facility, because the WARN Act requires that notice of "plant closings" be given only
when the number of employees at an affected site exceeds 50, and plaintiff has not proved that every Steve
& Barry's site nationwide employed at least 50 persons. All employees at sites that meet the WARN Act
requirements for notice share a common interest in getting such notice, no matter where in the country they
are located, so I am not persuaded that plaintiff cannot represent a nationwide class, which is what he
proposes.
However, plaintiff can only recover on behalf of absent Steve & Barry's employees who were at facilities
that were sufficiently large to trigger the requirements of the WARN Act, and there is no evidence in the
record about whether there were facilities other than in Port Washington (or Farmington) and Ohio that
meet the statutory test for giving notice. This, of course, is an example of the type of issue where class
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certification and merits-based considerations overlap. The class definition should be tailored so that the
class consists only of persons employed at facilities where the requisite number of persons are employed. It
may be that plaintiff is only seeking to represent employees at the two facilities mentioned above; that
could be inferred from something said in plaintiff's Reply Brief (see reference to "two facilities in dispute"
on page 3). Plaintiff needs to clarify whether the proposed class consists only of persons employed at these
two facilities or whether there are other facilities that presumptively qualify for WARN Act notice (I say
"presumptively" because defendants may have other defenses to liability that may cause the number of
"affected employees" at a particular site to be less than the number of persons who worked at the site).
Clarification will have to be accomplished before notice is sent to the members of the class (which, for
reasons announced below, will not happen for some time). However, as Holdings' own bankruptcy filings
plus the allegations of a plaintiff who has demonstrated personal knowledge indicate that the numerosity
requirement is satisfied, this should not be an impediment to the certification of a class.
2. Questions of Law and Fact are Common to all Members of the Proposed Class.
*5 The second prerequisite of class certification is that "there be questions of law or fact common to the
class." Fed.R.Civ.P. 23(a)(2).
In Campbell v. A-P-A Transp. Corp., 2005 U.S. Dist. LEXIS 28122 at *10, the court, granting class
certification, found that a proposed class of approximately 527 employees who were allegedly laid off
without the 60-day advance notice required by the WARN Act satisfied the commonality requirement of
class action rule. The named plaintiff and proposed class were united by the common legal question of
whether the employer complied with the statutory notice requirements of WARN. Id., citing Gomez v.
American Garment Finishers Corp., 200 F.R.D. 579 (W.D.Tex.2000) ("the threshold of commonality is not
high and ... is met when there is at least one issue, the resolution of which will affect all or a significant
number of the putative class members") (internal citations omitted); see also Cortigiano v. Oceanview
Manor Home for Adults, 227 F.R.D. 194, 205 (E.D.N.Y.2005).
Here, Plaintiff claims that he and the other Class Members were terminated as part of a common plan
stemming from Defendants' decision to discontinue business operations and close the Facilities.
Additionally, the factual and legal questions stem from a common core of facts regarding Defendants'
actions and a common core of legal issues regarding every Class Member's rights, as follows: (a)
Defendants employed more than 100 employees; (b) all the Class Members are protected by the WARN
Act; (c) the Class Members were employees of the Defendants; (d) Defendants discharged the Class
Members on or within 30 days of November 17, 2008, and thereafter in connection with the mass layoffs or
plant closings; (e) the Class Members were "affected employees," as they lost their employment as a result
of the mass layoffs or plant closings; (f) Defendants terminated the employment of the Class Members
without cause; (g) Defendants terminated the employment of the Class Members without giving them at
least 60 days' prior written notice as required by the WARN Act; and (h) Defendants failed to pay the Class
Members 60 days' wages and benefits.
In short, virtually all the issues are common to the Class and the only differences are minor, namely, the
rate of pay and the date of termination. Again, to the extent that certain Steve & Barry's employees may not
have been entitled to WARN Act notice because of the size of the facilities in which they worked, they can
be carved out of the class by refining the definition proposed by plaintiff.
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The fact that class members suffered different damages is no bar to class certification. Where each member
had different degrees of injury or even where defenses might exist only as to particular individuals,
commonality has been found for class certification. See 1 Newberg, supra, § 3.11. Class action suits under
the WARN Act almost always involve a class comprised of persons who held different positions, were paid
different amounts and may have been terminated on different dates. See, e.g., Trinidad v. Breakaway
Courier Sys., 2007 U.S. Dist. LEXIS 2914 at * 15 (S.D.N.Y. Jan. 12, 2007), citing Duprey v. Conn. Dep't
of Motor Vehicles, 191 F .R.D. 329, 337 (D.Conn.2000) ("a difference in damages arising from a disparity
in injuries among the plaintiff class does not preclude typicality."); Carpenters Dist. Council v. Dillard
Dep't Stores, 15 F.3d 1275 (5th Cir.1994), cert. denied, 513 U.S. 1126, 115 S.Ct. 933, 130 L.Ed2d. 879
(1995); Frymire v. Ampex Corp ., 858 F.Supp. 1081 (D.Colo.1994), aff'd in part, rev'd in part, 61 F.3d 757
(10th Cir.1995), cert. dismissed, 517 U.S. 1182, 116 S.Ct. 1588, 134 L.Ed2d 685 (1996); United
Steelworkers v.. North Star Steel Co., 809 F.Supp. 5 (M.D.Pa.1992), aff'd in part, vacated in part and
remanded, 5 F.3d 39 (3d Cir.1993), cert. denied, 510 U.S. 1114, 114 S.Ct. 1060 (1994); Washington v.
Aircap Indus., Inc., 831 F.Supp. 1292 (D.S.C.1993).
3. The Claims of the Representative Parties are Typical of the Claims of the Class.
*6 Federal Rule of Civil Procedure 23(a)(3) requires that "the claims or defenses of the representative
parties [be] typical of the claims or defenses of the class." The typicality requirement is met when the
representative Plaintiffs claims arise from a course of conduct by Defendant that also gives rise to the
claims of other Class Members based on the same legal theory. In re Oxford Health Plans, Inc. Sec.
Litig., 191 F.R.D. 369, 375 (S.D.N.Y.2000); Dura-Bilt Corp. v. Chase Manhattan Corp., 89 F.R.D. 87, 99
(S.D.N.Y.1981); 1 Newberg, supra, at § 3:13 at 326 (4th edition 2002) (" '[Typicality refers to the nature of
the claim or defense of the class representative, and not to the specific facts from which it arose or the relief
sought' "). The question is whether the class representatives' claims have the same essential characteristics
as the claims of the class at large. Id. If the elements of the cause of action to be proved by the
representative are the same as those of the class, the claim is typical. Id. Typicality under Rule
23(a)(3) should be determined with reference to the company's actions, not with respect to particularized
defenses it might have against certain class members. Trinidad v. Breakaway Courier Sys., 2007 U.S. Dist.
LEXIS 2914 at *5, citing Wagner v. NutraSweet Co., 95 F.3d 527, 534 (7th Cir.1996).
Here, the Class Representative (i.e., the Plaintiff) suffered the same type of injury as the rest of the Class,
and from the Plaintiffs Declaration it does not appear that there are any conflicts of interest between the
representatives of the Class and the other Class Members. (See Decl. of Michael Guippone.) Defendants'
failure to comply with the requirements of the WARN Act represents a single course of conduct resulting in
injury to all Class Members including the Plaintiff. Neither Plaintiff nor other Class Members received 60
days' notice or 60 days' wages and benefits, pursuant to the requirements of the WARN Act.
Thus, the factual situation of the Class Representatives and the legal theories upon which the action is
grounded are not only typical of the entire Class, but are identical.
4. Plaintiff will Fairly and Adequately Protect the Interests of the Class.
Federal Rule of Civil Procedure 23(a)(4) provides that a class action is maintainable only if " 'the
representative parties will fairly and adequately protect the interests of the class." This element requires a
two-step analysis. First, the court must determine whether the named class representatives have interests
that "are free from conflicts of interest with the class they seek to represent. Amchem Prods v. Windsor, 521
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U.S. 591, 625 (1997); In re Oxford Health Plans, Inc. Sec. Litig., 191 F.R.D. at 376 citing In re Drexel
Burnham Lambert Group, Inc., 960 F.2d 285, 291 (2d Cir.1992). Second, the court must find that the class
would be represented by qualified counsel. Marisol A. ex. rel. v. Giuliani, 126 F.3d 372, 378 (2d Cir.1997);
In re Drexel Burnham Lambert Group, Inc., 960 F.2d 285, 291 (2d Cir.1992); Eisen v. Carlisle &
Jacquelin, 391 F.2d 555, 562 (2d Cir.1968), cert. denied, 417 U.S. 156 (1974).
*7 The first element of Rule 23(a)(4) is met in this case because, as set forth above, no divergence exists
between the interests of the proposed Class Representative and the interests of the Class as a whole.
Guippone's interest is exactly the same as that of any other employee who was entitled to WARN Act
notice.
The second element of Rule 23(a)(4) is met because Plaintiff's counsel is "qualified, experienced and
generally able to conduct the proposed litigation." Id. The background of Plaintiff's counsel is set forth in
detail in the Roupinian Declaration. The firm is well known to the court and has the requisite experience to
prosecute a WARN Act case on behalf of the class.
B. The Proposed Class Meets the Requirements of Rule 23(B)(3) .
In addition to meeting the prerequisites for class certification under Rule 23(a), a class must meet only one
of the three alternative requirements for treatment as a class action under Fed.R.Civ.P. 23(b). Here, the
class meets the requirements of Fed.R.Civ.P. 23(b)(3).
Class certification is proper under Rule 23(b)(3) where "the questions of law or fact common to the
members of the class predominate over any questions affecting only individual members, and ... a class
action is superior to other available methods for the fair and efficient adjudication of the controversy."
Martens v. Smith Barney, 181 F.R.D. 243, 260 (S.D.N.Y.1998) (satisfaction of the commonality
requirement of Rule 23(a) "goes a long way toward satisfying the Rule 23(b)(3) requirement of
commonality").
Considerations of judicial economy and efficiency are of paramount importance and, where, as here,
determination of the common, predominant issues shared by the Class Members will dispose of the matter,
class certification should be ordered. Labbate-D'Alauro v. GC Servs. Ltd. Pshp., 168 F.R.D. 451 (E.D.N .
Y.1996). A class action is the superior method of resolving this dispute because many of the claims are
quite small, making individual lawsuits impracticable. Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 809
(1985); Eisen v. Carlisle & Jacquelin, 391 F.2d at 566-567. As shown above, common questions of fact
and law overwhelmingly predominate over the minor questions affecting individual claims.
In addition, Fed.R.Civ.P. 23(b)(3) requires that Plaintiff demonstrate that "a class action is superior to
other available methods for the fair and efficient adjudication of the controversy." Four factors are set forth
in Fed.R.Civ.P. 23(b) (3) to guide the court's determination as to whether a class action is superior and
whether issues of fact and law common to Class Members predominate over individual matters:
(a) the class members' interest in individually controlling the prosecution or defense of separate action; (b)
the extent and nature of any litigation concerning the controversy already begun by or against class
members; (c) the desirability or undesirability of concentrating the litigation of the claims in the particular
forum; and (d) the likely difficulties in managing a class action.
*8 Fed.R.Civ.P. 23(b)(3).
7
Here, neither Plaintiff nor any of the other Class Members has an interest in individually controlling the
prosecution of separate actions. (See Decl. of Michael Guippone ¶¶ 10-11.) To Plaintiff's knowledge, no
other litigation concerning the controversy has been commenced against Holdco. (See Decl. of Michael
Guippone ¶ 13.) Concentrating any WARN litigation in a single class action will avoid multiple suits.
Finally, the difficulties in managing this litigation as a class action are few: the Class Members can be
easily identified; the potential liability of Defendants can be readily calculated; and there is but one
combined course of conduct-that of Defendants-to examine and adjudicate. (See Decl. of Michael
Guippone). While there are reasons to question whether a class action is superior to bankruptcy, Holdco is
not in bankruptcy, so this issue (raised by recent cases) is of no moment.
For the reasons discussed above, the motion for class certification is hereby GRANTED as against Holdco.
The court appoints Michael Guippone as class representative and Outten and Golden LLP as class counsel
in the class action against Holdco. The grant of class certification is conditional at present, because the
actual class definition remains to be crafted in light of data demonstrating which Steve & Barry's facilities
employed enough persons to presumptively trigger WARN Act notice.
Usually when a court grants a motion for class certification, there follows a period when notice is prepared
and transmitted to the class, and members are given an opportunity to opt out of this action. However, this
is not the usual case, because Holdco was not plaintiff's (or any class member's) actual employer-Holdings, the debtor in bankruptcy, was. Plaintiff seeks to impose WARN Act liability on Holdco under a
"joint employer" theory, but it is extremely difficult to establish that a parent company is the "joint
employer" of its subsidiary's employees--particularly where, as here, the employees worked for many years
for a company (Steve & Barry's) that was acquired by Holdings, which in turn is owned by Holdco. The
court has always imagined that Holdco would move for summary judgment at the close of discovery on the
ground that plaintiff is unable to raise a genuine issue of fact on the joint employer issue. 1 recently asked
the parties what their plans were and was advised by Holdco's counsel that Holdco was indeed planning to
make such a motion--and also motions for summary judgment on a number of other issues as well.
I do not intend to delay the resolution of those issues; neither am I prepared to force Holdco to incur any
expense relating to class certification until such time as I have decided whether this case is actually going
to go to trial. Accordingly, I direct that the giving of class notice be stayed pending the court's ruling on any
motion that defendant Holdco may bring for summary judgment.
*9 When (and it) notice is finally sent, it will be in the form of first class mail to each class member's last
known address. The form of notice proposed by plaintiff is sufficient--it summarizes the nature of the
pending WARN Act litigation and apprises the proposed Class, among other things, of the Class definition,
of the claims, issues and defenses, that complete information regarding the action is available upon request
from Class Counsel, that any Class Member may opt-out of the Class, that if they do not opt-out, they will
be bound by any judgment or settlement in the litigation and that if they do not opt-out, they may appear by
their own counsel. In short, the proposed Notice satisfies all the requirements of Rule 23(c)(2)(B).
This constitutes the decision and order of the court. The Clerk is directed to remove the Motion at Docket
# 58 from the court's list of active motions.
Slip Copy, 2011 WL 1345041 (S.D.N.Y.)
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