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

REPLY Support NOTICE OF MOTION AND MOTION for Summary Judgment 77

C.D. Cal.January 8, 2018

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Spencer C. Skeen CA Bar No. 182216 spencer.skeen@ogletreedeakins.com Marlene M. Moffitt CA Bar No. 223658 marlene.moffitt@ogletreedeakins.com Tim L. Johnson CA Bar No. 265794 tim.johnson@ogletreedeakins.com OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 4370 La Jolla Village Drive, Suite 990 San Diego, CA 92122 Telephone: 858.652.3100 Facsimile: 858.652.3101 Attorneys for Defendants CATALINA RESTAURANT GROUP, INC. and FOOD MANAGEMENT PARTNERS, INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA JERI FARRAR, and others similarly situated, Plaintiff, v. CATALINA RESTAURANT GROUP, INC. and FOOD MANAGEMENT PARTNERS, INC. Defendants. Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Date: January 22, 2018 Time: 10:00 a.m. Place: Courtroom 9C Judge: Hon. Dean D. Pregerson Complaint Filed: October 25, 2015 Trial Date: March 27, 2018 Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 1 of 10 Page ID #:1372 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Defendants Catalina Restaurant Group, Inc. (“CRG”) and Food Management Partners, Inc. (“FMP”) (CRG and FMP collectively “Defendants”) submit this rely brief in support of their summary judgment motion. I. INTRODUCTION Plaintiffs claim CRG violated federal and California WARN requirements. But federal WARN does not apply unless a reduction in force (“RIF”) results in the loss of employment for at least 50 people within a 90-day period. California WARN is similar. It does not apply unless a RIF affects at least 50 employees within a 30- day period. Defendants are entitled to summary judgment because the undisputed facts establish CRG’s April 2015 RIF at its corporate headquarters (“Corporate HQ”) did not affect enough employees to trigger WARN under federal or California law. The evidence establishes only 47 people were laid off as part of the RIF. (See UMF Nos. 43-44.) Plaintiffs claim CRG’s payroll records show 53 employees lost their jobs in April 2015. (ECF No. 79 pp. 6:15-7:6.)1 But the same payroll records show six of the 53 employees allegedly fired were still on CRG’s payroll at the end of May 2015. In short, Plaintiffs’ evidence confirms that only 47 people were laid off due to the RIF. As a result, summary judgment is appropriate. To avoid summary judgment, Plaintiffs make a speculative argument devoid of evidentiary support. They claim any Corporate HQ employees who left CRG post- RIF should be counted towards the 50-employee threshold if they left within 90 days of the RIF due to a total business closure. Plaintiffs rely on Collins v. Gee W. Seattle LLC, 631 F.3d 1001, 1008 (9th Cir. 2011) to support this hypothetical contention. In Collins, the Ninth Circuit held if there is “some evidence” employees voluntarily quit within 90 days before a business completely shut-down, a triable issue may exist regarding whether the 50-employee threshold is met. (Emphasis 1 All page number citations to docketed documents refer to the ECF page number electronically stamped on the top of the conformed document. Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 2 of 10 Page ID #:1373 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT added.) Of course, Collins is inapplicable. Plaintiffs proffered no evidence of particular employees who left CRG after receiving notice of a total shutdown. In fact, they offered no evidence of a total business closure and for good reason. After the RIF and closure of many of the restaurant units, CRG continued operations. (Supplemental Declaration of Peter Donbavand [“Supp. Donbavand Decl.”], ¶ 4, Exhibi1 1.) It continued to employ Corporate HQ employees in California and performed Corporate HQ functions there. Indeed, Corporate HQ employees from April 2015 still work at CRG. (Id. at ¶ 4.) In sum, there is no evidence the RIF involved more than 47 employees and no evidentiary basis for assuming more people should be included in that number. “[M]ere allegation and speculation do not create a factual dispute for purposes of summary judgment.” Nelson v. Pima Cmty. Coll., 83 F.3d 1075, 1081-82 (9th Cir. 1996) (citing Witherow v. Paff, 52 F.3d 264, 266 (9th Cir. 1995)). For the foregoing reasons, and those that follow, summary judgment should be granted in favor of Defendants. II. DEFENDANTS ARE ENTITLED TO SUMMARY JUDGMENT ON PLAINTIFFS’ FEDERAL WARN CLAIM Under federal law, “[t]o constitute a WARN violation, an employer must have ordered a plant closing or mass layoff without providing each employee, either individually or through her representatives, with [60]-days advance notice.” Frymire v. Ampex Corp., 61 F.3d 757, 764 (10th Cir. 1995) (citing 29 U.S.C. § 2102). A “plant closing” is “the loss of employment for at least 50 full-time employees at a single site of employment during any 30-day period, as a result of the permanent or temporary shutdown of a single site of employment.” Bader v. Northern Line Layers, Inc., 503 F.3d 813, 817 (9th Cir. 2007) (citing 29 U.S.C. § 2101(a)(2)). A “mass layoff” is a “reduction-in-force that does not result from a plant closing but includes the loss of at least 50 full-time employees at a single site and at least 33 percent of the total workforce at that site.” Id. (citing 29 U.S.C. § 2101(a)(3)). Federal WARN also provides that several smaller layoffs over a 90-day period can be aggregated to Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 3 of 10 Page ID #:1374 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT constitute a plant closing or mass layoff unless “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.” 29 U.S.C. § 2102(d). A. The Undisputed Facts Establish that Only 47 Employees were Laid Off from CRG’s Corporate Headquarters Within the Relevant Time Period The requisite number of employees were not laid off to trigger the notice requirement under federal WARN. The evidence establishes that only 47 people were laid off a result of the RIF. (See UMF Nos. 43-44.) Plaintiffs claim an issue of facts exist because “[t]he employment records showing 53 laid off employees directly conflicts with Mr. Donbavand’s declarations of 46 or 47 employees laid off.”2 (ECF No. 79 p. 17:15-17.) Unfortunately for Plaintiffs, the employment records they rely on do not support their position. Plaintiffs rely exclusively on CRG’s payroll records in April and May 2015. (See ECF No. 79 at pp. 6:14-7:6, 7:14-12:12; ECF No. 79-5 at Ex. 3.) Plaintiffs claim they can ascertain when an employee was laid off based on the presence or absence of a notation in CRG’s payroll records—the word “TRUE” in a column titled “lddflag.” Plaintiffs assert “Defendants placed the word true on the furthest right hand column on Exhibit 3 – D002130 - D002131 with the payroll run for those employees terminated on April 3, 2015.” (ECF No. 79 at n. 1.) They then contradict themselves and claim that the absence of the word “TRUE” in the furthest right-hand column in subsequent pay periods indicates “these employees no longer work for Defendants.” (ECF No. 79 at n. 2.) It is entirely unclear why Plaintiffs believe that 2 Plaintiffs note Mr. Donbavand testified that only 46 employees were laid off in a prior case entitled Ross v. Catalina Restaurant Group, Inc., Central District of California Case No. 2:15-cv-2626-DDP-JPR (“Ross Action”). (ECF No. 79 pp. 16:9- 17:12.) The discrepancy between the number of affected employees identified in the Ross Action (46) and the number of affected employees identified here (47) was due to an inadvertent payroll coding error. (See Supp. Donbavand Decl., ¶¶ 3-7.) But importantly, the discrepancy is immaterial because the number of affected employees still does not exceed the 50-employee threshold. Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 4 of 10 Page ID #:1375 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT the “TRUE” notation is in any way related to the employee’s employment status. But Plaintiffs’ claims are belied by the same payroll records on which they rely. Specifically, Plaintiffs claim that as of April 1, 2015, CRG had 53 employees at its Corporate HQ based on CRG’s payroll records at Bates No. D002129. (ECF No. 79, at p. 6:15-16.) Plaintiffs proceed to go through the “TRUE” notations, and citing to Bates No. D002149, they conclude that “[b]y April 24, 2015, Defendant CRG had ended the employment of all 53 employees.” (ECF No. 79 at pp. 6:16-7:6.) Yet, Plaintiffs’ Exhibit 3 at Bates No. D002148 shows that six of the 53 employees allegedly terminated as of April 24, 2015, were still on CRG’s payroll and receiving paychecks as of May 27, 2015.3 (See ECF No. 79-5 at p. 28.) Plaintiffs’ misreading of the payroll records leads them to conclude that employees were terminated when they were not. For example, Plaintiffs claim Vincent Plaza was terminated on April 24, 2015, by comparing payroll records at Bates Nos. D002136 with D002140. (See ECF No. 79 p. 12:9-12, n. 2.) Yet, the records Plaintiffs rely on show that Mr. Plaza received paychecks on April 29, 2015 (ECF No. 79-5 at p. 17), May 13, 2015 (Id. at p. 19) and May 27, 2015 (Id. at p. 21). In sum, the evidence Plaintiffs submitted is consistent with CRG’s assertion it only laid off 47 employees at the Corporate HQ. (See UMF Nos. 43-44.) Consequently, the undisputed facts conclusively establish that only 47 employees were laid off. Thus, the RIF did not trigger the federal or California WARN requirements. Defendants are entitled to summary judgment. 3 Significantly, even if these employees were “terminated” and did not perform any work, an employee still does not suffer an “employment loss” when he or she continues to receive wages and benefits. Long v. Dunlop Sports Grp. Americas, Inc., 506 F.3d 299, 303 (4th Cir. 2007). Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 5 of 10 Page ID #:1376 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT B. Plaintiffs’ Failed to Submit Evidence that Employees, Other Than Those Laid Off As Part of the RIF, Should Be Counted Toward the 50-Employee WARN Threshold Without evidentiary support, Plaintiffs claim other employees should be counted toward the total number of employees laid off for purposes of federal WARN requirements. They argue that an employee’s departure after receiving notice of an upcoming business closure or shutdown may be considered “involuntary” under federal WARN. (ECF No. 79 p. 15:3-15.) Plaintiffs rely exclusively on the Ninth Circuit case of Collins v. Gee W. Seattle LLC, 631 F.3d 1001 (9th Cir. 2011). But Collins is easily distinguishable. In Collins, the employer informed its employees “via written memo” it was planning to close its doors. Id. at 1003. After the announcement, employees stopped reporting to work, and by the planned closure date, only 30 of 150 employees remained. Id. The Ninth Circuit rejected the employer’s argument that WARN notice was not required because all but 30 employees left their job of their own free will. Id. at 1005. The Ninth Circuit explained the employers’ argument “flips the basic structure of the WARN Act on its head” because “[i]nstead of placing the onus on the employer to give 60-days’ notice…,” the employer’s reading of federal WARN looks solely at the number of employees remaining at the time of closure. Id. at 1005-06. Since the contemplated plant closure in Collins would have affected all 150 employees, they were all reasonably expected to experience an employment loss. Id. 1006. Furthermore, the employer’s “records note that all employees who were terminated after [the date of the announcement], left as a consequence of the business closing.” Id. The Collins court concluded that “because there was at least some evidence in the record that Employees left their jobs because the business was closing, summary judgment is inappropriate.” Id. at 1008 (emphasis added; footnote omitted). Here, unlike in Collins, there is no evidence any employees knew of or quit because a looming business shutdown, which makes sense. There was never a Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 6 of 10 Page ID #:1377 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT complete closure or shutdown of CRG or its Corporate HQ functions. CRG’s Corporate HQ continued to operate after the RIF and not all Corporate HQ employees were laid off. Some Corporate HQ services were moved to San Antonio, Texas, while others stayed in California. In fact, some of the Corporate HQ employees from April 2015 still work for CRG. (See Supp. Donbavand Decl., ¶ 8.) Plaintiffs presented no evidence that any employees not involved in the RIF for facing future employment loss due to a business closure.4 Unlike Collins, there is absolutely no evidence here any employees “left their jobs because the business was closing.” See Collins, 631 F.3d at 1008. Here, the only thing in common with Collins is that Plaintiffs’ argument “flips the basic structure of the WARN Act on its head.” Like the employer in Collins, Plaintiffs err by looking at the number of employees that allegedly lost their employment rather than the number reasonably expected to suffer an employment loss. Federal WARN is meant to eliminate the pressure caused by the “unexpected and urgent need to find new employment.” Collins, 631 F.3d at 1006. An employee who is not a part of the RIF and is not under the threat of employment loss in the near future does not face an “unexpected and urgent need to find new employment.” If Plaintiffs’ position were adopted, employers would be required to determine the number of employees reasonably expected to suffer an employment loss and also speculate on how other employees, who are not a part of the RIF, may react to it. More important, if the employer guesses wrong and provides notice to an employee based on its false assumption the employee would react adversely, the employee would unnecessarily face pressure from an “unexpected and urgent need to find new employment” even though the employee was not really at risk of losing his or her 4 Plaintiffs claim “Defendants announced the closing of the corporate office.” (ECF No. 79 p. 16:2-3.) But the deposition testimony Plaintiffs cited merely states: “There was a transition period before the office was fully closed.” (See Donbavand Depo. p. 20:6-7 [ECF No. 79-3 p. 6].) Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 7 of 10 Page ID #:1378 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT employment in the first place. This outcome goes against both the letter and spirit of the law and should be rejected. At bottom, the undisputed evidence shows that only 47 employees were laid off because of the RIF. Plaintiffs merely speculate that additional employees may have known about a potential closure (that did not occur) and may have left their employment because of a non-existent closure. “[M]ere allegation and speculation do not create a factual dispute for purposes of summary judgment.” Nelson v. Pima Cmty. Coll., 83 F.3d 1075, 1081–82 (9th Cir. 1996) (citing Witherow v. Paff, 52 F.3d 264, 266 (9th Cir. 1995)). Plaintiffs submitted no evidence to support their speculation. None exists. Therefore, they have failed to create a genuine dispute of material fact. Defendants are entitled to summary judgment. III. DEFENDANTS ARE ENTITLED TO SUMMARY JUDGMENT ON PLAINTIFFS” CALIFORNIA WARN CLAIM California WARN generally requires covered “employers” to provide notice to employees 60 days prior to ordering “a mass layoff, relocation, or termination at a covered establishment….”5 Cal. Labor Code § 1401(a). A “covered establishment” is defined as “any industrial or commercial facility or part thereof that employs, or has employed within the preceding 12 months, 75 or more persons.” Cal. Lab. Code § 1400(a). A “mass layoff” occurs when 50 or more employees at a covered establishment are separated from their position in a 30-day period. Cal. Lab. Code § 1400(c), (d). Importantly, unlike its federal counterpart, California WARN does not authorize an alternate 90-day test to determine whether the requisite number of employees have been let go to constitute a “mass layoff.” See generally Lab. Code §§ 1400-08. Only 47 employees separated from CRG’s Corporate HQ in the 30-day period between April 1, 2015 and May 1, 2015, regardless of reason. (See UMF Nos. 43-44; 5 Plaintiffs only allege that they “suffered a ‘layoff’ within the meaning of California WARN” in their First Amended Complaint. (ECF No. 41 at ¶¶ 40-48.) Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 8 of 10 Page ID #:1379 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ECF No. 79-5 at p. 28 [showing six of the 53 employees, who Plaintiffs claim were laid off, were still employed in May 2015].) Accordingly, California WARN does not apply. Defendants are entitled to summary judgment. IV. CONCLUSION For the foregoing reasons, Defendants request the Court grant summary judgment in their favor and dismiss Plaintiffs’ claims in their entirety with prejudice. DATED: January 8, 2018 OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. By: /s/ Spencer C. Skeen Spencer C. Skeen Marlene M. Moffitt Tim L. Johnson Attorneys for Defendants Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 9 of 10 Page ID #:1380 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 Case No. 16-cv-09066-DDP-JPRx REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT CERTIFICATE OF SERVICE I hereby certify that on January 8, 2018, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the email addresses denoted on the Notice of Electronic Filing. I certify under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on January 8, 2018. By: /s/Spencer C. Skeen Spencer C. Skeen 32551142.1 Case 2:16-cv-09066-DDP-JPR Document 81 Filed 01/08/18 Page 10 of 10 Page ID #:1381