Messer v. Bristol Compressors Int'l

1

TONY A. MESSER; PHILIP E. BARBROW; BENJIE G. HICKS; KENDALL W. LUTTRELL; DARRELL G. MURRAY; DENNIS J. STILTNER; TIMOTHY M. WAMPLER; MICHAEL L. PARKER; CHARLES E. VESTAL; JIMMY AMBERGEY; DAVE S. BOOHER; JOANNE T. BOOHER; JOHN S. BOOKER; DAVID BROWNING; SUMMER CARMACK; WILLIAM C. CHURCH; MELVIN E. CLARK; JOYCE DAUGHTERY; HOMER L. DAVIS; PATRICIA C. EADS; DAVID ESTEP; JAMES D. FOSTER; DENNIS A. FRALEY; CURTIS D. HAYDEN; PENNY HELTON; GAYLORD K. HOBBS, JR.; GARY HOUSER; SHERRIE HUBBARD; MICHAEL LEONARD; GEARL LOWE; MANDY MARTIN; STEWART MAXFIELD; DAVID C. MCCLAIN; FLOYD D. MCMILLAN; JACKIE L. MULLINS; TOMMY MULLINS; DOROTHY M. ORR; DAVID O'QUINN; LARRY J. RICHARDS; DANNY L. SALTZ; KAREN P. SCYPHERS; JAMES E. SMITH; JAMIE STOUT; ROBERT L. SULLINS; TIMOTHY A. THOMAS; ALISON WALLS; JEFF WAMPLER; DAVID A. STOVALL; KEVIN N. MUMPOWER, Plaintiffs - Appellants, v. BRISTOL COMPRESSORS INTERNATIONAL, LLC, trading as Bristol Compressors, Defendant-Appellee, and GARRISON INVESTMENT GROUP, LP Defendant.

No. 21-2363

United States Court of Appeals, Fourth Circuit

April 3, 2023

UNPUBLISHED

Submitted: March 24, 2023.

Appeal from the United States District Court for the Western District of Virginia, at Abingdon. James P. Jones, Senior District Judge. (1:18-cv-00040-JPJ-PMS)

ON BRIEF:

Mary Lynn Tate, TATE LAW PC, Abingdon, Virginia, for Appellants. ^[1]

Before WILKINSON, HARRIS, and HEYTENS, Circuit Judges.

Affirmed in part, vacated in part, and remanded by unpublished per curiam opinion.

Unpublished opinions are not binding precedent in this circuit.

PER CURIAM:

Plaintiffs a group of former employees of Bristol Compressors International, LLC ("BCI"), appeal the district court's orders granting three motions for partial summary judgment that BCI filed in Plaintiffs' class action lawsuit under the Worker Adjustment and Retraining Notification Act of 1988 ("the WARN Act"), 29 U.S.C. §§ 2101-2109. At issue here are three questions: first, whether BCI validly eliminated its severance plan prior to the termination of Plaintiffs' employment; second, whether certain Plaintiffs waived their claims against BCI by signing a Stay Bonus Letter Agreement ("SBLA"); and third, whether four Plaintiffs ("the Four") received adequate notice under the WARN Act prior to the termination of their employment. For the following reasons, we affirm the district court's orders in part, vacate in part, and remand for further proceedings.

"We review a summary judgment award de novo, based on our independent review of the entire record." Bellon v PPG Emp. Life & Other Benefits Plan, 41 F.4th 244 251 (4th Cir. 2022) (internal quotation marks omitted). Summary judgment is only appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "In conducting summary judgment review, the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in the non-movant's favor." Bellon, 41 F.4th at 251 (cleaned up).

The WARN Act "requires certain employers to provide notice to their employees of sudden, significant employment loss so that they could seek alternative employment and their communities could prepare for the economic disruption of a mass layoff." Schmidt v. FCI Enters. LLC, 3 F.4th 95, 101 (4th Cir. 2021) (internal quotation marks omitted). The Act specifically provides that a covered employer "shall not order a plant closing or mass layoff until the end of a 60-day period after the employer serves written notice of such an order . . . to each affected employee." 29 U.S.C. § 2102(a)(1). An employer who violates this requirement "shall be liable to each aggrieved employee who suffers an employment loss as a result of such closing or layoff for" both "back pay for each day of violation" and "benefits under an employee benefit plan." Id. § 2104(a)(1)(A)-(B). Damages are "calculated for the period of the violation, up to a maximum of 60 days . . . ." Id. § 2104(a)(1). The WARN Act is also "supplemented by extensive Department of Labor regulations, which we must give controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute." Schmidt, 3 F.4th at 101 (cleaned up).

I.

First, Plaintiffs argue that the district court erred by granting BCI's motion for partial summary judgment related to the elimination of BCI's employee severance plan. It is undisputed that the severance plan was an employee benefit plan covered by ERISA.^[2]ERISA plans are interpreted "under ordinary principles of contract law, enforcing the plan's plain language in its ordinary sense. Where a term is ambiguous, we must construe it against the drafter, and in accordance with the reasonable expectations of the insured." Wheeler v. Dynamic Eng'g, Inc., 62 F.3d 634, 638 (4th Cir. 1995) (citations omitted). And although "we interpret an ERISA plan under federal common law, we may use principles of state common law to guide our analysis." Id.

Because the severance plan was an unvested employee welfare benefit plan under ERISA, BCI was "free to amend the terms of the plan or terminate it entirely." Bellon, 41 F.4th at 252 (internal quotation marks omitted); see Biggers v. Wittek Inds., Inc., 4 F.3d 291, 295 (4th Cir. 1993). "Every employee benefit plan covered by ERISA, however, must be established pursuant to a written instrument, with procedures outlined for amending the plan and identifying those with authority to make amendments." Biggers, 4 F.3d at 295 (citing 29 U.S.C. § 1102(a)(1), (b)(3)); see also Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 78 (1995). Amendments or modifications of ERISA plans "must be implemented in conformity with the formal amendment procedures and must be in writing." Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 58-59 (4th Cir. 1992).

Here, the severance plan was wholly contained within BCI's employee handbook, and the plan could be amended or eliminated pursuant to the same procedure as any other portion of the handbook.^[3] The handbook stated:

Nothing in this handbook is meant to create an employment contract and nothing in this handbook may be modified or amended except in writing by the Human Resources department. The Company reserves the right to modify, change, or eliminate provisions in this handbook.

(J.A. 438).^[4] The handbook further provided that "[t]he Company may change the provisions of this Handbook at any time and the programs and policies outlined in this Handbook are not contractual in nature." (J.A. 487).

On July 27, 2018, BCI's Board of Directors ("the Board") signed a "Unanimous Written Consent" document ("the board resolution") relating to the winding down and liquidation of BCI. As relevant to this appeal, the board resolution stated:

WHEREAS, after further discussions and due consideration, the Board has unanimously determined that it is in the best interests of the Company and its creditors to terminate the Company's severance plan as described in Section 7.5 of the Company's employee handbook, effective as of July 27, 2018, and to delete the corresponding provisions in Section 7.5 of the Company's employee handbook effective as of July 27, 2018; and

WHEREAS, the Board has determined that it is in the best interests of the Company to authorize and empower [Dalton] Edgecomb (the "Authorized Person") to take such actions on behalf of the Company as he deems necessary or desirable in connection with . . . the termination of the Company's severance plan;

NOW, THEREFORE, BE IT RESOLVED . . . that the Board unanimously approves of and authorizes the termination of the Company's severance plan as described in Section 7.5 of the Company's employee handbook, effective as of July 27, 2018, and the deletion of the corresponding provisions in Section 7.5 of the Company's employee handbook effective as of July 27, 2018.

FURTHER RESOLVED, that the Authorized Person is hereby authorized and empowered to take such actions as may be necessary or advisable to execute, deliver, and file any documents and to take all actions and pay all fees for and on behalf of the Company that he deems necessary or appropriate in order . . . to effectuate the termination of the Company's severance plan and the corresponding revisions to the Company's employee handbook, and to comply with all applicable laws in connection therewith.

(J.A. 504-05). Although BCI's Human Resources department (HR) had previously been asked to "implement" changes to the employee handbook once those changes had been "decided and authorized by management" (J.A. 1116)-including prior modifications to the severance plan-no further action was taken to effectuate the elimination of the severance plan. Shortly thereafter, BCI began to lay off employees as it prepared to close its manufacturing facility.

At issue here is whether the board resolution was sufficient to terminate the severance plan, or whether the elimination of the plan required further action on the part of HR. The district court found that the board resolution effectively eliminated the severance plan. Relying on the Supreme Court's decision in Schoonejongen, the district court reasoned that the provisions of the handbook stating that "the Company" reserved the right to eliminate provisions of the handbook meant that the Board, as the "ultimate decision-maker for" BCI (J.A. 1259), had the power to eliminate the severance plan without any additional action from HR. And because HR lacked the power to unilaterally amend the handbook, the district court determined that "[t]he provision of the handbook regarding amendments prepared by [HR] was merely an administrative procedure designed to communicate changes to employees." (J.A. 1259).

We conclude that, on...