Czyzewski v. Jevic Transportation, Inc. (In re Jevic Holding Corp.)
492 B.R. 416
Bankr. D. Del.2013Background
- This adversary proceeding involves WARN Act and New Jersey WARN Act claims arising from alleged plant closings and mass layoffs at Jevic Transportation and related Debtors, with Sun Capital Partners, Inc. (Sun Cap) as ultimate parent.
- Jevic and related entities were acquired by Sun Cap in 2006 via Sun Trans; a Management Services Agreement governed Sun Cap’s provided consulting services.
- By 2007–2008, Jevic faced severe financial distress; assets fell below the $5 million covenant, triggering forbearance discussions and Sun Cap-backed guarantees, while Jevic pursued potential buyers and financing.
- In May 2008 Jevic filed for Chapter 11 and issued WARN Act notices to its employees, soon after which the Debtors filed for bankruptcy; class action alleging WARN Act violations was certified as a class action.
- Sun Cap moved for summary judgment arguing it was not an employer or a single employer with Jevic; the Class Plaintiffs cross-moved for partial summary judgment to establish single-employer liability.
- The court applied the DOL five-factor test for single-employer liability and held that Sun Cap was not a single employer and granted Sun Cap’s MSJ while denying the Class Plaintiffs’ Partial MSJ.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sun Cap was a single employer under the WARN Act | Czyzewski asserts common ownership, common officers, and other factors show unity. | Sun Cap contends no single-employer liability; factors insufficient and no day-to-day control or decision-making by Sun Cap. | Sun Cap is not a single employer; no liability. |
Key Cases Cited
- Pearson v. Component Tech. Corp., 247 F.3d 471 (3d Cir. 2001) (five-factor test for single employer under WARN Act)
- In re Tweeter Opco, LLC, 453 B.R. 534 (Bankr. D. Del. 2011) (whether same individuals hold officer/director roles satisfies common ownership/officer factor)
- In re APA Transp. Corp. Consol. Litig., 541 F.3d 233 (3d Cir. 2008) (de facto control analysis; employment decisions by parent; use for control factor)
- In re Consol. Bedding, Inc., 432 B.R. 115 (Bankr. D. Del. 2010) (limits of unity of personnel policies where parent is an investment vehicle)
- DeRosa v. Accredited Home Lenders, Inc., 420 N.J. Super. 438 (N.J. Super. Ct. App. Div. 2011) (New Jersey WARN Act single-employer framework (state court applicability))