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Law360 (February 4, 2021, 7:47 PM EST ) The Eleventh Circuit may weigh in on how employers' obligations to alert workers to layoffs under the WARN Act apply to coronavirus-related closures after a federal judge Thursday greenlighted Enterprise's bid to appeal an order requiring the company to face a suit over pandemic layoffs.
U.S. District Judge Roy B. Dalton granted a motion by Enterprise Holdings — the parent of car rental company Enterprise Rent-A-Car and others — to certify for interlocutory review an order that rejected the company's argument that it can't be liable for unplanned layoffs as a result of the novel coronavirus.
Enterprise urged Judge Dalton on Jan. 20 to give the appeals court a chance to address the threshold issue of whether it can assert a defense that the pandemic falls under the natural disaster exception in the Worker Adjustment and Retraining Notification Act
before the litigation continues."While interlocutory review is certainly not intended to be routine, the question and circumstances presented here are precisely those for which this procedural mechanism was put in place," the company said in January, arguing that the issue is of significant importance beyond its specific case.
Judge Dalton said Thursday that the new arguments raised by Enterprise show that interlocutory appeal is "appropriate."
"The first part of defendants' question — asking the causal standard for the Warn Act's natural disaster exception — poses a controlling question of law," Judge Dalton wrote in an updated opinion. "It is a pure legal question — a discrete question of statutory interpretation — that can be answered without reference to any facts or to the record in this case."
Judge Dalton also said Enterprise raises a "novel issue" warranting further review by the appeals court.
"To date, the court is unaware of any other decision directly addressing the causal standard required for the WARN Act's natural disaster exception," the judge wrote, adding that there may be considerable disagreement in answering that question that could change the direction of the litigation.
Former Enterprise employee Elva Benson urged Judge Dalton on Tuesday not to let Enterprise appeal those questions because it provided no basis to do so.
"The law has not changed. The facts have not changed," Benson said. "Defendants present no new evidence to support their position. Defendants' motion is nothing more than a rehash of unsuccessful arguments, coupled with cherrypicked quotes from legislative history."
In the Jan. 4 ruling that dealt a significant blow to businesses hoping to stave off legal liability for pandemic-related cuts, Judge Dalton refused to derail the proposed class action accusing Enterprise of violating the WARN Act when it let go of hundreds of Florida workers this spring.
The statute makes it illegal for companies to fire 50 or more people at once without giving them two months' notice. Two fired Sunshine State workers sued Enterprise last year, asserting they were sent home with just a few days' warning or no notice at all.
Judge Dalton said the WARN Act's carveouts for employers facing extreme, unexpected situations don't completely neutralize protections for workers laid off during the pandemic.
"While COVID-19 may be a natural disaster within the meaning of the WARN Act, the complaint does not allege the layoffs resulted directly from the pandemic," the judge said in January. "The complaint (and unfortunate experience) shows a more tenuous connection: COVID-19 caused global concern over the spread of the virus, leading to a global shutdown — travel stalled, as did economies."
The case is one of the first tests of how WARN Act defenses apply to pandemic-related cuts.
Counsel and representatives for the parties did not respond to requests for comment.
Elva Benson is represented by Brandon J. Hill and Luis A. Cabassa of Wenzel Fenton Cabassa PA.
Enterprise is represented by Jason C. Schwartz and Brian Richman of Gibson Dunn & Crutcher LLP and Christina M. Kennedy and Michael D. Leffel of Foley & Lardner LLP.
The case is Elva Benson et al. v. Enterprise Leasing Company of Florida LLC et al., case number 6:20-cv-00891, in the U.S. District Court for the Middle District of Florida.
--Additional reporting by Anne Cullen, Braden Campbell and Carolina Bolado. Editing by Neil Cohen.
For a reprint of this article, please contact reprints@law360.com.
