Gross v. Hale-Halsell Co.

Hale-Halsell Company (HHC) (defendant) was a wholesale grocery warehouse and distribution center that employed over 200 employees. One of HHC’s largest customers was United Supermarkets (United). HHC and United had a 31-year relationship, and United’s orders constituted 40 percent of HHC’s business. Occasionally, HHC experienced stockouts that prevented HHC from fulfilling part of United’s orders. Around November and December of 2003, United and HHC had several discussions, during which United expressed dissatisfaction with the stockouts. However, United did not intend to terminate its relationship with HHC at the time. Around the same time, HHC was seeking a $15 million loan from LaSalle Bank (LaSalle). LaSalle indicated to HHC that there was a good chance the loan would be approved. On January 8, 2004, United wrote a letter informing HHC that United would need to place orders with alternative suppliers. United assured HHC that United hoped to continue doing business with HHC, but stated that HHC should expect a decrease in orders. On January 15, 2004, United wrote another letter to HHC, stating that United had decided to replace HHC with another primary supplier. Subsequently, LaSalle denied HHC’s request for a loan. On January 20, 2004, HHC determined that it would be unable to survive financially without United as its primary customer and decided to lay off 200 employees. Three days later, HHC notified the employees of their layoffs. Dale Gross and the other employees who were laid off (plaintiffs) sued HHC, alleging that HHC had violated the Worker Adjustment and Retraining Notification Act (WARN Act), 29 U.S.C. §§ 2101-09, by failing to give the plaintiffs at least 60 days’ notice in advance of a mass layoff. The district court granted summary judgment in favor of HHC, finding that the unforeseeable-business-circumstance exception excused HHC from the 60-day notice requirement, and that HHC had given notice as soon as practicable. The plaintiffs appealed.