Teamsters Local Union No. 355 v. Total Distribution Servs.

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TEAMSTERS LOCAL UNION NO. 355, a/w INTERNATIONAL BROTHERHOOD OF TEAMSTERS et al, Plaintiffs, v. TOTAL DISTRIBUTION SERVICES, INC., et al., Defendants.

CIVIL No. 23-2261-BAH

United States District Court, D. Maryland

August 26, 2024

MEMORANDUM OPINION

BRENDAN A. HURSON, UNITED STATES DISTRICT JUDGE

Plaintiffs Teamsters Local Union No. 355 (“Local 355”) affiliated with the International Brotherhood of Teamsters and Brian Bielawski (“Bielawski”), on behalf of himself and all others similarly situated (collectively “Plaintiffs”), bring this suit against Defendants Auto Warehousing Company (“AWC”) and Total Distribution Services, Inc. (“TDSI”) (collectively “Defendants”), alleging a violation of the Maryland Economic Stabilization Act, Maryland Code Labor & Employment §§ 11-301-11-306 (the Maryland “WARN” Act).^[1] ECF 1. Pending before the Court are motions to dismiss filed by each Defendant. ECF 13 (TDSI motion to dismiss); ECF 15 (AWC motion to dismiss). Plaintiff filed oppositions to both motions, ECF 18; ECF 19, and both Defendants filed replies, ECF 20; ECF 21. All filings include memoranda of law and exhibits.^[2]The Court has reviewed all relevant filings and finds that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2023). Accordingly, for the reasons stated below, both Defendants' motions to dismiss, ECF 13 and ECF 15, are GRANTED.

I. BACKGROUND

Plaintiff Bielawski formerly worked for Defendants at an “automobile-distribution facility” in Jessup, Maryland, known as “Annapolis Junction.” ECF 1, at 2 ¶¶ 1-3. While Bielawski worked for Defendants, he was represented by Local 355, which was party to a collective bargaining agreement governing the conditions of employment at Annapolis Junction that expired in November 2022. Id. at ¶ 3. Defendants and Local 355 engaged in negotiations to establish an updated collective bargaining agreement for more than six months, until May 2023. Id. at 2-3 ¶ 4. “On May 10, 2023, Defendants abruptly terminated approximately 60 employees working at Annapolis Junction, including all 47 unionized employees.” Id. Plaintiffs allege that Defendants did not provide any written notice before this termination and allege that the terminations were effective immediately. Id. at 3 ¶ 5.

Plaintiffs claim that Defendants violated the Maryland WARN Act by not providing 60 days' advance written notice of the terminations. Id. at ¶¶ 5-6. Defendants now each move to dismiss the complaint, claiming, among other things,^[3] that the Maryland WARN Act does not provide a private right of action. ECF 13-1, at 6-11; ECF 15-1, at 4-8. The Court agrees.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) governs dismissals for failure to “state a claim upon which relief can be granted.” In considering a motion under this rule, courts discount legal conclusions stated in the complaint and “accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A court then draws all reasonable inferences in favor of the plaintiff and considers whether the complaint states a plausible claim for relief on its face. Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 253 (4th Cir. 2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

“The complaint must offer ‘more than labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action[.]'” Swaso v. Onslow Cnty. Bd. of Educ., 698 Fed.Appx. 745, 747 (4th Cir. 2017) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). At the same time, a “complaint will not be dismissed as long as [it] provides sufficient detail about [the plaintiff's] claim to show that [the plaintiff] has a more-than-conceivable chance of success on the merits.” Owens v. Balt. City State's Att'ys Off., 767 F.3d 379, 396 (4th Cir. 2014).

III. ANALYSIS

Defendants each claim that Plaintiffs' complaint should be dismissed because the Maryland WARN Act does not provide a private right of action. ECF 13-1, at 6-11; ECF 15-1, at 4-8. Plaintiffs acknowledge that the Act offers no express private right of action but insist it contains an implied private right of action. See ECF 18-1, at 4 (arguing for an implied private right of action). Neither side of this dispute offers any case law where a court has considered this issue with respect to the Maryland WARN Act, nor is the Court aware of any such case.

As originally passed, the Maryland WARN Act provided only voluntary guidelines “for employers faced with a reduction in operations.” Economic Stabilization Act, 2020 Md. Laws 2157 (codified at Md. Code Ann., Lab. & Emp. § 11-301-§ 11-306). However, subsequent revisions to the WARN Act modified that mandate to require the Maryland Secretary of Labor “to develop mandatory guidelines for employers faced with a reduction in operations.” Md. Code Ann., Lab. & Empl. § 11-304 (b)(1). Revisions also added mandatory notice requirements and potential penalties for violations, all to be assessed “by the Secretary [of Labor], or the Secretary's designee.” See Md. Code Ann., Lab. & Emp. § 11-306. More specifically, the Maryland WARN Act requires that qualifying employers provide at least 60 days' notice to qualified employees and their collective bargaining units before a reduction in operations. Lab. & Emp. § 11-305(a). The Act also requires that the Maryland Secretary of Labor develop regulations regarding the issuance of orders to employers violating the Act and the assessment of a “civil penalty” for employers found to have violated the Act. Economic Stabilization Act, 2020 Md. Laws 2157 (codified at Md. Code Ann., Lab. & Emp. § 11-301-§ 11-306).

“A private right of action allows an individual to bring an action in his or her personal capacity to enforce a legal claim.” Aleti v. Metro. Baltimore, LLC, 279 A.3d 905, 920 (Md. 2022) (citing State Ctr., LLC v. Lexington Charles Ltd. P'ship, 517, 92 A.3d 400 (Md. 2014)). “Under Maryland law, the test for an implied cause of action is an exacting one.” Clark v. Bank of Am., N.A., 561 F.Supp.3d 542, 554 (D. Md. 2021). The Court does not read an implied private right of action into a statute without clear indication that the legislature intended it to do so. See Baker v. Montgomery Cnty., 50 A.3d 1112, 1122 (Md. 2012) (“A private cause of action in favor of a particular plaintiff or class of plaintiffs does not exist simply because a claim is framed that a statute was violated and a plaintiff or class of plaintiffs was harmed by it. Rather, the issue is a matter of statutory construction.” (citing Touche Ross & Co. v. Redington, 442 U.S. 560, 568 (1979)).

In considering whether an implied private right of action exists in a given statute, Maryland courts ask three questions:

(1) Is the plaintiff one of the class for whose special benefit the statute was enacted?

(2) Is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one?

(3) Is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff?

Aleti, 279 A.3d at 920-21 (quoting Baker v. Montgomery Cnty., 50 A.3d 1112, 1122 (Md.App. 2012)). The most important of these inquiries is whether the legislature intended to create a private right of action. Id. at 921. The Court will address each of these inquiries in turn.

A. Plaintiffs are members of the class of people for whose special benefit the statute was enacted.

Defendants both argue that the Maryland WARN Act “does not inure to Plaintiffs' special benefit,” ECF 13-1, at 10 (capitalization adjusted), because “the Maryland WARN Act is not tailored to provide a benefit to a particular subgroup of the public,” See ECF 13-1, at 11; ECF 151, at 6. Plaintiffs strongly disagree. ECF 18-1, at 4; ECF 19-1, at 4.

When a statute is crafted in such a way to “inure[] only to the benefit of a discrete class,” this factor will weigh in favor of the creation of a private right of action. Clark, 561 F.Supp.3d at 555. For example, in Clark, the statute in question required that certain lenders pay to the borrower the interest earned on the related escrow account. Id. (citing Md. Code Ann., Com. Law § 12-109 (b)(1)).

Despite acknowledging that the law did “not expressly specify a class for whose benefit it was enacted,” the Court nonetheless found that the plaintiff, a borrower, was a member of a discrete class which was benefitted by the statute. Id. at 555.

Here, as in Clark, the law in question is specifically designed to offer protections for a discrete group of people. The WARN Act specifically gives protections to workers employed by qualifying employers,^[4] ensuring that they are given adequate notice prior to termination. Md. Code Ann., Lab. & Emp. § 11-305(a). This is not a provision that benefits the state as a whole, but rather one that targets protections towards a specific group. Plaintiffs - having alleged that their jobs were abruptly terminated with virtually no notice - are unquestionably part of that group. As such, this factor weighs in favor of a private right of action.

B. There is no evidence of legislative intent to create a private right of action.

“Where the legislative history does not indicate any discussion whatsoever as to whether a statute gives rise to such a right, the fact that the ordinance is silent would weigh heavily against an intent . . . to create a private cause of action.” Clark, 561 F.Supp.3d at 555 (quoting Sugarloaf Citizens Ass'n v. Gudis, 554 A.2d 434 437-38 (Md.App. 1989)). However, this Court has also...