Allen v. Sybase, Inc.

The software company Financial Fusion, Inc. (FFI) (defendant) was acquired by Sybase, Inc. (defendant) in March of 2000. FFI suffered significant operating losses and fired nine employees in early 2001. FFI was still operating at a loss despite the firings, so FFI fired four employees on September 7 and another 41 employees on September 28. On October 31, FFI fired six employees as part of a Sybase department-restructuring effort and five employees in a further attempt to cut FFI’s operating expenses. Under the federal Worker Adjustment and Retraining Notification Act (WARN), employers who lay off at least 50 employees in a 30-day period (a so-called mass layoff) must either give employees 60 days’ advance written notice of the layoffs or give terminated employees 60 days of pay and benefits. Smaller layoffs over a 90-day period must be aggregated to constitute a mass layoff under WARN unless the employer shows that the individual layoffs were made due to separate and distinct causes. Julie Allen and 25 other FFI employees fired in September of 2001 (the former employees) (plaintiffs) sued FFI and Sybase, alleging that they had been fired in a mass layoff without notice and thus were owed 60 days of backpay and benefits under WARN. FFI conceded that it had fired 56 employees in a 90-day period but asserted that there was no mass layoff for WARN purposes because the September financial-condition-based layoffs could not be aggregated with the October Sybase-restructuring-based layoffs. The district court rejected this argument and granted summary judgment for the former employees. FFI and Sybase appealed. On appeal, FFI and Sybase argued for the first time that aggregating the layoffs was inappropriate because the 41 layoffs on September 28 were due to the financial impact of the September 11, 2001 terrorist attacks, and all the October layoffs were due to corporate reorganization.