18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 741 adequately demonstrated causation necessary for standing. Id . at *15. For these reasons, the Court denied Defendant’s motion to dismiss. Fleming, et al. v. Bayou Steel Board Holdings II LLC, 2021 U.S. Dist. LEXIS 83036 (E.D. La. April 30, 2021). Plaintiffs, a group of former employees, filed a class action alleging that Defendants failed to provide sufficient notice before closing the Bayou Steel mill, its corporate headquarters, and related facilities on October 1, 2019, in violation of the Worker Adjustment and Retraining Notification Act (“WARN”). Defendants filed a motion for summary judgment, which the Court denied. Plaintiffs asserted that Defendants, Bayou Steel BD Holdings II, LLC and Black Diamond Capital Management, LLC, were liable for Bayou Steel’s violation of the WARN as a "single employer." Id . at *4. Defendants’ structure was fairly complex, and included: (i) Black Diamond Opportunity Fund IV, LP, a non-Defendant private equity fund, which acquired Bayou Steel; (ii) Bayou Steel became BD LaPlace, LLC, d/b/a Bayou Steel Group ("Bayou Steel"); (iii) Bayou Steel was owned by Bayou Steel Investment, LLC; (iv) Bayou Steel Investment was owned by Bayou Steel BD Holdings, LLC; (v) Bayou Steel BD Holdings, LLC was owned by Defendant Bayou Steel BD Holdings II, LLC ("BD Holdings II"), which was a holding company with no employees owned by Black Diamond Opportunity Fund IV, LP; and (vi) Defendant Black Diamond Capital Management, LLC ("BDCM") was a privately held investment management firm. Id . at *3-4. The Court explained that in determining whether a parent or entity is liable as a single employer under the WARN, the pertinent case law authorities utilized a five-factor test reviewing: (i) common ownership, (ii) common directors and/or officers, (iii) de facto exercise of control, (iv) unity of personnel policies emanating from a common source, and (v) the dependency of operations. Id . at *6-7. The Court concluded that there were genuine issues of material fact regarding four of the five factors in the single employer liability test. Accordingly, the Court denied Defendant’s motion for summary judgment. As to the first factor, Plaintiff asserted that BDCM was the parent and owner of Bayou Steel through BD Holdings II and other intermediaries, and submitted sworn deposition testimony from Bayou Steel’s executives and a PowerPoint presentation outlining the corporate structure. The Court determined that Plaintiff submitted sufficient evidence to create a material issue of fact regarding the common ownership. The Court found that Plaintiff offered sufficient communications from Bayour Steel personnel that presented a genuine issue of material fact that directors may have been influenced by BDCM, such that they were not truly independent. As to the third factor, the Court noted that Plaintiffs cited to plenty of evidence showing that most of the members of the Board were heavily influenced by BDCM. The Court opined that the BDCM affiliated directors also voted to hire BDCM’s recommended bankruptcy counsel and financial advisor, who presented to the remainder members of the Board before those members voted to file for bankruptcy. As to the unity of personnel policies, the Court determined that Plaintiffs submitted evidence that the parties discussed cost-cutting measures for Bayou Steel with BDCM management, communicated these measures to the Board, and Bayou Steel subsequently implemented these measures. Although the Court agreed with Defendant that there was no genuine dispute that Bayou Steel relied on BDCM for operations, it concluded that since there were genuine issues of material fact regarding four of the five factors, summary judgment was not appropriate. The Court therefore denied Defendants’ motion for summary judgment on the issue of liability under the WARN as a single-employer. Gunderson, et al. v. Alta Devices, Inc., 2021 U.S. Dist. LEXIS 95441 (N.D. Cal. May 19, 2021). Plaintiffs, a group of former employees, filed a class action alleging that Defendant failed to provide 60-days advance notice prior to their termination in violation of the Worker Adjustment and Retraining (“WARN”) Act. Plaintiffs filed a motion for class certification pursuant to Rule 23, which the Court granted. Plaintiffs sought to certify a class consisting of Defendant’s former employees who reported to the Sunnyvale, California facility and were laid off, furloughed, and/or terminated when that facility closed. The Court found that the class was sufficiently numerous as it contained between 240 and 300 employees who were laid off. The Court also held that Plaintiffs had sufficiently demonstrated that there were several common questions between class members, including: (i) whether Defendant’s actions triggered the 60-day notice requirement of the WARN Act; (ii) whether statutory exceptions to the notice requirement applied; (iii) whether the Defendant failed to provide notice; and (iv) whether Plaintiffs and the proposed class suffered an employment loss. Id . at *5. The Court further ruled that Plaintiffs’ claims were typical to the claims of putative class members, as they alleged that they were victims of Defendant’s alleged violation of the WARN Act. The Court likewise determined that Plaintiffs and Plaintiffs’ counsel met the adequacy requirement. The Court also opined that common questions predominated any questions facing individual members of the proposed class for purposes of Rule 23(b)(3). Finally, the Court held