Fleming v. Bayou Steel, 83 F.4th 278

Bayou Steel (BD LaPlace, LLC) closed its LaPlace steel mill and terminated employees on September 30, 2019 without providing the WARN Act’s 60-day notice; Bayou Steel filed Chapter 11 the next day.
Plaintiffs (laid-off employees) dismissed an earlier Delaware bankruptcy adversary proceeding and sued BD LaPlace’s holding company (Bayou Steel BD Holdings II, LLC) and Black Diamond Capital Management, LLC (BDCM) in federal court seeking WARN damages and demanding a jury trial.
The district court struck the jury demand (holding no Seventh Amendment jury right in WARN cases), then granted summary judgment for both defendants under the DOL five-factor “single employer” test; plaintiffs appealed.
The Fifth Circuit affirmed the no-jury ruling and affirmed summary judgment as to BD Holdings II (plaintiffs made no challenge on that entity), but found a genuine dispute of material fact as to whether BDCM exercised de facto control over Bayou Steel.
The case was remanded for further proceedings as to BDCM; the court emphasized that the de facto-control factor (who “specifically directed” the layoffs/closing) can alone justify single-employer liability.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Right to jury trial under Seventh Amendment for WARN claims	WARN damages (back pay and benefits) are legal money damages entitling plaintiffs to a jury	WARN remedies are equitable/restitutionary (intertwined with ERISA benefits) so no jury right	No jury right; WARN actions are equitable — claim decided by bench (affirmed)
Single-employer liability for BD Holdings II	Holding entity is part of the same enterprise and liable for Bayou Steel’s WARN violation	BD Holdings II had no employees, no direct ownership of Bayou Steel; plaintiffs did not press arguments below	Summary judgment for BD Holdings II affirmed (plaintiffs waived challenge)
Single-employer liability for BDCM (de facto control)	BDCM appointed board members, micromanaged operations, arranged loans and strategic decisions — inferred it ordered the closure without notice	BDCM lacked direct ownership and plaintiffs offered only circumstantial “smoke” not proof BDCM ordered the layoffs	Genuine dispute of material fact exists on de facto control; summary judgment for BDCM reversed and remanded

Bledsoe v. Emery Worldwide Airlines, Inc., 635 F.3d 836 (6th Cir. 2011) (analogizes WARN remedy to equitable breach-of-fiduciary-duty/restitution and denies jury right)
Administaff Companies, Inc. v. New York Joint Bd., 337 F.3d 454 (5th Cir. 2003) (adopts DOL’s five-factor single-employer test under WARN)
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (U.S. 1989) (Seventh Amendment legal-vs-equitable framework)
Tull v. United States, 481 U.S. 412 (U.S. 1987) (statutory construction may avoid constitutional questions)
Pearson v. Component Tech. Corp., 247 F.3d 471 (3d Cir. 2001) (applies DOL factors and emphasizes de facto control’s significance)
Hollowell v. Orleans Regional Hosp. LLC, 217 F.3d 379 (5th Cir. 2000) (prior WARN adjudication applying DOL factors)
Borst v. Chevron Corp., 36 F.3d 1308 (5th Cir. 1994) (treats ERISA benefit recovery as restitutionary/equitable)
United States v. ERR, LLC, 35 F.4th 405 (5th Cir. 2022) (restitution can be legal or equitable; used here to contrast WARN’s restitutionary character)