Gunderson v. Alta Devices, Inc.

Background

Plaintiffs Scott Gunderson, Daniel Patterson, Ben Lenail, Brendan Kayes, James Bustamante, Octavi Semonin, and Annett Suess brought claims on behalf of themselves and a certified class against Alta Devices, Inc. under the federal Worker Adjustment and Retraining Notification Act (WARN Act), 29 U.S.C. §§ 2101–2109, and California’s WARN Act, California Labor Code §§ 1400–1408.

Alta Devices operated a facility at 545 Oakmead Parkway in Sunnyvale, California. The facility closed around October 21, 2019. Immediately before the closure, Alta Devices laid off nearly all of its approximately 260 employees on October 15, 2019, without prior written notice. At an all-hands meeting, employees were told that there was no more funding for payroll and that they should go home and not return until further notice. The employees were never recalled, and Alta Devices owed them unpaid wages.

The court had certified a class consisting of former Alta Devices employees who worked at the Oakmead facility until they were laid off on or around October 21, 2019, because of the mass layoff event. Plaintiffs moved for summary judgment on both WARN Act claims. Alta Devices did not oppose the motion.

Federal WARN Act claim

The federal WARN Act generally requires an employer to provide affected employees with 60 days’ written notice before ordering a plant closing or mass layoff. The court found that Alta Devices was an employer covered by the statute because it employed at least 100 employees, excluding part-time employees. The October 15 terminations constituted a plant closing because they involved the permanent shutdown of a single employment site and the termination of more than 50 full-time employees. It was undisputed that Alta Devices did not provide 60 days’ advance written notice.

The plaintiffs addressed potential exceptions for a faltering company and unforeseeable business circumstances. The court explained that those exceptions still require as much notice as practicable and a brief explanation for any reduced notice. Because Alta Devices gave no notice and offered no evidence opposing the motion, the court found no triable dispute of material fact and held that Alta Devices violated the federal WARN Act.

California WARN Act claim

California’s WARN Act also generally requires 60 days’ written notice before a mass layoff or termination at a covered establishment. The court found that the Oakmead facility was a covered establishment because it employed at least 75 people. It also found that the October 15 firings qualified as both a termination and a mass layoff under California law, and that Alta Devices did not provide the required notice.

The court determined that the California exceptions did not apply. It noted that California law does not recognize an unforeseeable-business-circumstances exception of the type available under federal law, and that there was no evidence Alta Devices was actively seeking capital or business or had satisfied the additional requirements for reduced or no notice. The court therefore held that Alta Devices violated California’s WARN Act.

Damages

Under both statutes, the plaintiffs and class members were entitled to up to 60 days of backpay and certain other benefits, if applicable. Plaintiffs calculated damages using Alta Devices’ payroll and employee records. Their calculation produced $4,556,290.07 in backpay for 253 class members.

The court accepted the plaintiffs’ workday-based calculation method. It explained that the calculation used wages from each employee’s final 14-day pay period, divided that amount by 14 to obtain a daily rate, and multiplied the result by 60. The court concluded that this method reasonably approximated what employees would have earned during the 60-day violation period and did not improperly use a calendar-day calculation. In the absence of opposition from Alta Devices, the court accepted the damages calculations.

Motion to seal

Plaintiffs also sought to seal three exhibits containing class members’ personally identifying information, including addresses, telephone numbers, and birthdates. The court found compelling reasons to seal that information and determined that the requested sealing was narrowly tailored. It granted the administrative motion to file under seal. The sealed materials included the complete payroll declaration exhibits and the addresses in the class spreadsheet.

Disposition

The court granted plaintiffs’ motion for summary judgment and granted plaintiffs’ administrative motion to file under seal. The court stated that a separate judgment would issue.