Law School Case Brief
Childress v. Darby Lumber, Inc. - 357 F.3d 1000 (9th Cir. 2004)
To determine whether "single employer" status exists where multiple companies are involved, a reviewing court considers four factors: (1) common ownership, (2) common management, (3) centralized control of labor relations, and (4) interrelation of operations. Common ownership is the least important factor, and the remaining three factors are guideposts only. "Single employer" status ultimately depends on all the circumstances of a case and is characterized as an absence of an arms length relationship found among unintegrated companies.
Darby Lumber, Inc. (DLI) acquired all of the shares of Bob Russell Construction (BRC). The one former employer had 88 employees while the other former employer had 18 employees. DLI's workers were then advised that one former employer was having financial problems and informed that there would be a "major layoff." The next day, DLI shut its mill down and laid off all of the former employees. BRC continued its operations at the mill for several weeks, but then shut them down and laid off the remaining former employees. The former employees filed suit and alleged violations of the Worker Adjustment and Retraining Notification Act, 29 U.S.C.S. §§ 2101-2109 (WARN Act). The district court found, based on an analysis of the Labor Management Relations Act and WARN Act factors for determining single employer status, that "BRC and DLI are a single employer for the purposes of the WARN Act." The trial court granted summary judgment to the former employees and awarded them attorney fees.
Did the trial court err in holding that BRC and DLI are a single employer for the purposes of the WARN Act?
The appellate court found the former employers were one employer under the WARN Act that applied to entities employing 100 or more workers, they did not show they were exempt from the WARN Act's 60-day mass layoff notice requirement, the trial court did not abuse its discretion in ruling on discovery disputes, and it properly awarded attorney fees.
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