914 F. Supp. 2d 198
D.P.R.2012Background
- Eurobank Puerto Rico was closed by the OCFI on April 30, 2010 and FDIC was appointed receiver.
- FDIC and Oriental entered into a Purchase and Assumption Agreement under which Oriental acquired select Eurobank assets.
- On May 3, 2010, Plaintiffs signed employment contracts with Oriental during a probationary period and were subsequently terminated.
- Plaintiffs filed suit in March 2011 alleging wrongful termination under Law 80 and seeking severance as Eurobank’s successor.
- FDIC intervened and removed the case to federal court; Oriental moved for summary judgment on multiple grounds, including non-successor-employer status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Oriental Eurobank’s successor employer under Law 80? | Plaintiff asserts Oriental is a successor and liable for severance. | Oriental is not a successor; liabilities remained with FDIC and no transfer of Eurobank employment. | Oriental is not a successor employer; severance not owed for Eurobank-era employment. |
| Are the probationary-period dismissals protected under Law 80? | Probation extensions may nullify the probation; employees may have Law 80 rights. | Probation extended with proper notice; no violation; no Law 80 protections during probation. | Probationary-period dismissals do not yield Law 80 protections; summary judgment granted on this point. |
| Did Pérez-Suarez’s temporary contracts shield him from Law 80 protections? | Temporary hires may still have continuity expectations under Law 80. | Pérez-Suarez’s contracts were clearly temporary with no expectation of continued employment. | No Law 80 protection; summary judgment granted for this issue. |
| Were Torres-Rivera and Rodriguez-Rivera constructively discharged when resigning? | Resignations constituted constructive discharge. | Record shows no hostility or constructive discharge. | Constructive discharge not shown; summary judgment for defendant. |
Key Cases Cited
- Rodríguez v. Urban Brands, 167 D.P.R. 509 (2006) (defines successor-employer continuity test under Law 80)
- Acosta-Ramírez v. Banco Popular de Puerto Rico, 2012 WL 1123602 (D.P.R. 2012) (discusses continuation of business and successor status)
- Arends v. Eurobank & Trust Co., 845 F.Supp. 60 (D.P.R. 1994) (bank acquiring assets not liable for former employees’ severance)
- Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 (U.S. Supreme Court 1987) (continuity of business as a factor in successor determinations)
- Otero-Burgos v. Inter American University, 558 F.3d 1 (1st Cir. 2009) (limits Law 80 protections to sustained employment arrangements)
- Medina v. Adecco, 561 F.Supp.2d 162 (D.P.R. 2008) (employer-employee continuity considerations under Law 80)
- Hoyos v. Telecorp Communications, Inc., 488 F.3d 1 (1st Cir. 2007) (Law 80 framework and just-cause concepts in Puerto Rico)