Hospital workers certify Rule 23 class action alleging additional WARN Act notice required
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Thursday, August 18, 2016

Hospital workers certify Rule 23 class action alleging additional WARN Act notice required

By Matt Pavich, J.D. A North Carolina district court has granted certification of a Rule 23 class action to a group of former hospital employees in their WARN Act lawsuit. The court found that questions of fact common to the class predominated over individual inquiries (Hutson v. CAH Acquisition Company 10, LLC dba Yadkin Valley Community Hospital, August 15, 2016, Osteen, W., Jr.). On February 27, 2015, the hospital issued notice to its employees that all employees would be terminated and the hospital would close on April 30, 2015, due to an impasse with the county. However, after the employer agreed to a lease extension running through July 31, 2015, with the county, it kept the hospital open. Despite this reprieve, the hospital was unable to reach an agreement with the county and on May 21, 2015, it notified some, but not all, employees that they would be terminated on May 23, 2015. It closed the hospital on May 22, 2015, and the named plaintiffs filed a WARN Act lawsuit and sought certification of the class of terminated employees. The court certified the class, finding that the class met the requirements under the FRCP 23. Because the employer did not dispute that the proposed class of approximately 130 member was sufficiently numerous, the court turned its attention to the remaining requirements. Common questions of fact. The employer argued that the issue of what it communicated regarding the original shutdown date to each employee could not be determined on a class-wide basis. However, the court found that the relevant inquiry focused not on the February notice, but on what, if any, notice employees received about the actual closing and termination date. The WARN Act requires employers to provide written notice at least 60 days prior to a mass layoff or plant closing. The employer provided 60 days’ notice of the original closing date, but the hospital did not, in fact, close on that date and the workers remained employed. The WARN Act implementing regulations require an additional notice if a scheduled layoff and closing has been postponed. If that postponement is for 60 days or more, the regulations require that the notice be treated as a new separate notice. Thus, the court found that the February 27 notice ceased to be effective when the original termination date passed with neither a layoff nor a closing. As a result, the court found that the employer was required to issue a new notice specifying the new termination date. Thus, the only real question was whether the May 21 notice was timely and sufficient, and that, the court held, was a common question of fact. Therefore, the court found that the class satisfied the commonality element. For the same reasons, the court also found that the claims of the named plaintiffs were typical of the petitioned-for class. Named plaintiffs adequately represented the class. The court also found that the named plaintiffs could adequately represent the class. The termination date was the same for all employees, the WARN Act notice was identical, and the named plaintiffs sought the same redress as all the employees. In addition, the court found that the counsel for the named plaintiffs was adequate. Common claims predominate. Lastly, the court found that claims common to the class predominated over individual claims. The court found that legal and factual issues were identical across the class. Moreover, the class action would be a superior method of adjudicating the dispute, because establishing liability under the WARN Act would turn on uncomplicated issues, such as whether the hospital was an employer, and because the amounts in controversy were fairly small. Therefore, the court found that the proposed class met the requirements for certification and granted the employees’ motion.

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