{"id":1144,"date":"2024-01-26T10:58:21","date_gmt":"2024-01-26T14:58:21","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=1144"},"modified":"2024-01-26T10:59:09","modified_gmt":"2024-01-26T14:59:09","slug":"virginia-federal-court-authorizes-2-4-million-award-for-erisa-severance-plan-benefits-in-warn-act-class-action","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2024\/01\/26\/virginia-federal-court-authorizes-2-4-million-award-for-erisa-severance-plan-benefits-in-warn-act-class-action\/","title":{"rendered":"Virginia Federal Court Authorizes $2.4 Million Award For ERISA Severance Plan Benefits In WARN Act Class Action"},"content":{"rendered":"

\"\"<\/a>By Gerald L. Maatman, Jr., Jennifer A. Riley, and Kathryn Brown<\/strong><\/p>\n

Duane Morris Takeaways:<\/em><\/strong> On January 16 and 17, 2024, in Messer v. Bristol Compressors International, LLC, No. 1:18-CV-00040 (W.D. Va.), on remand from a Fourth Circuit decision, Judge James P. Jones of the U.S. District Court for the Western District of Virginia issued an opinion and order<\/a> entering judgment<\/a> in the amount of $2,407,471.90 for severance pay benefits owed under an ERISA employee benefits plan based on violations of the 60-day notice requirement of the Worker Adjustment and Retraining Notification Act (WARN Act), 29 U.S.C. \u00a7 2102(a)(1). The multi-million dollar ruling stems from a 2018 WARN-covered \u201cplant closing\u201d and follows an earlier award on November 23, 2021 of $1.39 million to certain class members for damages including back pay and interest owed pursuant to the WARN Act for the same notice violation underlying the recent ruling. <\/em><\/p>\n

The decision highlights the extremely technical nature and high stakes of WARN Act litigation in the class action context. <\/em><\/p>\n

Case Background<\/strong><\/p>\n

On July 31, 2018, Bristol Compressors International (BCI) notified employees that it would close its manufacturing facility in Bristol, Virginia, and their employment would terminate on or before September 30, 2018. BCI implemented several rounds of terminations over the next three and a half months, beyond the originally anticipated date of September 30, 2018 for the final terminations. However, BCI did not issue additional notice under the WARN to those whose employment ended after September 30, 2018.\u00a0 The manufacturing facility ultimately closed on November 16, 2018.<\/p>\n

On October 19, 2018, a group of former employees sued BCI- under the WARN Act.\u00a0 The plaintiffs alleged that the company failed to provide 60 days\u2019 notice of their terminations in accordance with the specific requirements of the WARN Act.<\/p>\n

On June 20, 2019, the Court granted the plaintiffs\u2019 motion for certification of three sub-classes of former employees terminated due to the plant closing under Rules 23(a) and 23(b)(3). Sub-class One included employees involuntarily terminated between July 31, 2018 and August 31, 2018. Sub-class Two included employees involuntarily terminated after August 31, 2018 who signed a stay bonus agreement that included an express waiver of claims under the WARN Act. Sub-class Three included employees involuntarily terminated after August 31, 2018 who had not signed a stay bonus agreement.<\/p>\n

Following a bench trial, the Court in 2020 granted summary judgment to BCI on the plaintiffs\u2019 claim for benefits owed under a company severance pay plan. The Court found that BCI validly terminated its severance pay plan before the employment terminations.\u00a0 In a separate 2020 opinion, the Court dismissed upon summary judgment the WARN Act claims of four class members whose employment ended on October 19, 2018. The Court reasoned that BCI\u2019s July 31, 2018 notification was adequate to prepare them for their later job losses. The plaintiffs appealed those prior rulings to the Fourth Circuit.<\/p>\n

The Fourth Circuit\u2019s Ruling<\/strong><\/p>\n

On April 3, 2023, the Fourth Circuit, in an unpublished opinion<\/a>, reversed and remanded parts of the 2020 rulings.\u00a0 Messer v. Bristol Compressors International, LLC<\/em>, 2023 U.S. App. LEXIS 7826 (4th Cir. Apr. 3, 2023) (per curiam).<\/p>\n

The Fourth Circuit reversed the denial of severance pay benefits to the class, concluding the company did not terminate the severance pay plan in accordance with the ERISA\u2019s requirements for modifying or terminating an ERISA-governed benefits plan.\u00a0 As a result, the severance pay plan was in effect when the employment terminations occurred.<\/p>\n

The Fourth Circuit affirmed the decision upholding the release of claims under the WARN Act to members of Sub-class Two. However, because the release of claims in the stay bonus agreements those class members signed explicitly carved out claims for vested benefits under the company\u2019s \u201cwritten benefit plans,\u201d members of Sub-class Two did not waive their claims for severance pay benefits owed to them under the ERISA-governed employee benefit plan.<\/p>\n

The Fourth Circuit also vacated the grant of summary judgment to BCI on the WARN Act claims of the four plaintiffs whose employment ended on October 19, 2018.\u00a0 The Fourth Circuit pointed to the regulation under the WARN Act providing that, if an employer postpones a covered plant closure for 60 days or more, additional 60 days\u2019 notice under the WARN Act is owed to affected employees.\u00a0 See<\/em> 20 C.F.R. \u00a7 639.10. Because the company issued no additional notice to those four individuals after July 31, 2018, but terminated their employment after September 30, 2018, the Fourth Circuit opined that a WARN Act violation was established.<\/p>\n

The District Court\u2019s Decision<\/strong><\/p>\n

On remand, the Court granted the plaintiffs\u2019 unopposed motion for summary judgment on the two issues on which the Fourth Circuit reversed and remanded. Consistent with the Fourth Circuit\u2019s ruling, the Court held that all class members were entitled to severance pay benefits under the severance pay plan, plus interest, and the four plaintiffs whose employment ended on October 19, 2018 were in addition owed back pay and prejudgment interest for a 60-day period.<\/p>\n

On January 17, 2014, the Court ordered the case closed, with leave granted to class counsel to file a supplemental motion for attorneys\u2019 fees and costs within 30 days.<\/p>\n

Implications For Employers<\/strong><\/p>\n

The Messer <\/em>case is illustrative of the many decisions in recent years in which plaintiffs have recovered multi-million dollar judgments following class certification of WARN Act claims. Employers should remain vigilant to the WARN Act, and the potential exposure to 60 days\u2019 worth of back pay, lost benefits and prejudgment interest in the event of violations, well before implementing any mass layoff or plant closure that may trigger its strict notification requirements.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Kathryn Brown Duane Morris Takeaways: On January 16 and 17, 2024, in Messer v. Bristol Compressors International, LLC, No. 1:18-CV-00040 (W.D. Va.), on remand from a Fourth Circuit decision, Judge James P. Jones of the U.S. District Court for the Western District of Virginia issued an … <\/p>\n

Continue reading “Virginia Federal Court Authorizes $2.4 Million Award For ERISA Severance Plan Benefits In WARN Act Class Action”<\/span><\/a><\/p>\n","protected":false},"author":575,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[7,9,87],"class_list":["post-1144","post","type-post","status-publish","format-standard","hentry","category-general"],"authors":[{"term_id":7,"user_id":575,"is_guest":0,"slug":"gmaatman","display_name":"Gerald L. Maatman, Jr.","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/maatmangerald-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":9,"user_id":576,"is_guest":0,"slug":"jariley","display_name":"Jennifer A. Riley","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/08\/rileyjennifer-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":87,"user_id":645,"is_guest":0,"slug":"krbrown","display_name":"Kathryn R. Brown","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/05\/brownkathryn-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/1144","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/575"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=1144"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/1144\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=1144"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=1144"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=1144"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=1144"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}