OVERVIEW
Chauffeurs, Sales Drivers, Warehousemen and Helpers Union Local 572, International Brotherhood of Teamsters, AFL-CIO (“Union”) appeals the district court’s grant of summary judgment in favor of Westinghouse Electric Corporation (‘Westinghouse”) in the Union’s action claiming violations of the Worker Adjustment аnd Retraining Notification Act (WARN”), 29 U.S.C. §§ 2101-2109, for Westinghouse’s alleged failure to provide 60 days notice of a plant closing to employees at a Weslock Corporation (Weslock”) manufacturing facility. The Union specifically claims there are disputed issues of material fact as to whether the surrender in June of 1993 of Weslock assets to Westinghouse in satisfaction of a delinquent loan made Westinghouse an “employer” within the meaning of WARN prior to the closure of the Weslock manufacturing plant. We have jurisdiction over this timely appeal pursuant tо 28 U.S.C. § 1291, and we affirm.
BACKGROUND
Under a financing and security agreement executed December 29, 1989, Westinghouse, acting as a lender, agreed to lend working capital to Weslock, American Builders Hardware Corporation (“ABHC”), and Modern Acquisition Corporation (“Modern Faucet”) (collectively “the borrowers”), in an amount determined by a formula based on the value of the borrowers’ accounts receivables and inventory. The loan was secured by the borrowers’ manufacturing plants.
The borrowers defaulted on the loan in April of 1993. Instead of taking immediate possеssion of the collateral securing the loan, Westinghouse attempted to negotiate a mutually acceptable resolution to the borrowers’ default. Specifically, Westinghouse indicated it was willing to accept satisfaction of the loan obligation at a disсount to the loan’s face value. Negotiations continued through the end of May, 1993. During this time period, and pursuant to the financing agreement, Westinghouse continued to make funds available to the borrowers on a day to day basis.
Finally, on either the 3rd or 4th of June, Christopher G. Kuran,
On June 9, 1993, Mr. Rooney called Mr. Kuran and advised him that Westinghouse would not be advancing funds to pay the Weslock plant’s employees beyond that date. Mr. Rooney also notified the Union’s president, James L. Gaultiere, that “[t]he operations will be shut down at Weslock this afternoon.” On the afternoon of the 9th, Mr. Kuran terminated the employment of all the Weslock plant’s employees.
On June 10th, Westinghouse entered into an agreement with Transworld Services Group (“Transworld”), requiring Transworld to provide employees to staff the Weslock plant. Transworld subsequently hired most of the former Weslock employees.
The previously undated ABHC and Modem Faucet letter agreements were dated June 10 by Mr. Rooney. Mr. Rooney also changed the June 1 date on the Weslock agreement to June 10.
The Union filed the present action against Weslock and Westinghouse alleging a violation of section 3, 29 U.S.C. § 2102, of the WARN statute, which requires an “employer” to provide its employees 60 days written notice in advance of a plant closing or mass layoff. The parties stipulated to the dismissal of Weslock, leaving Westinghouse as the lone defendant. Westinghouse moved for summary judgment, and the district court granted the motion without explanation. The Union timely apрeals.
DISCUSSION
1. WARN Requirements
With some exceptions, WARN forbids an employer of 100 or more employees to “order a plant closing or mass layoff until the end of a 60-day period after the employer serves written notice of such an order.” 29 U.S.C. § 2102(a). A “plant closing” is a shutdown of a single site of employment that causes an “employment loss” for fifty or more employees during a 30-day period. 29 U.S.C. § 2101(a)(2). A “mass layoff’ is any other work force reduction that results in an “employment loss” for either (1) fifty to 499 full-time employees, if the number laid off equals 33 percent of the work force, or (2) 500 full-timе employees. 29 U.S.C. § 2101(a)(3). “Thus, when fewer than fifty full-time employees suffer an ‘employment loss,’ WARN notice is not required.” International Alliance of Theatrical and Stage Employees and Moving Picture Mach. Operators, AFL-CIO v. Compact Video Serv., Inc.,
“Employment loss” is defined as
(A) an employment termination, other than a discharge for cause, voluntary departure, or retirement, (B) a layoff exceeding 6 months, or (C) a reduction in hours of work of more than 50 percent during each month of any 6-month period[.]
29 U.S.C. § 2101(a)(6). We have previously accepted the Department of Labor’s (DOL) exрlanation that the word “ ‘termination’ is ‘to have its common sense meaning’ as ‘the permanent cessation of the employment relationship.’ ” Compact Video,
An employer who violates the WARN notice provision is hable to each aggrieved employee who suffers an employment loss for “back pay for each day of violation,” 29 U.S.C. § 2104(a)(1)(A), “up to a maximum of 60 days,” 29 U.S.C. § 2104(a)(1). But before the penalty provided by the Act applies, the plaintiff must demonstrate that the defendant is an “employer” responsible for the employment loss. See 29 U.S.C. § 2102(a). This requirement is at the heart of the parties dispute.
Westinghouse argues that it was only a lender, not an employer, when the Weslock plant employees were terminated on June 9. On the other hand, the Union asserts that the evidence submitted at summary judgment raises a triable issue of fact whether Westinghouse took possession and control of the business operations of the Weslock plant prior to June 9. Before addressing the factual component of the Union’s argument, we must determine whether, as a matter of law,
2. Can a Secured, Creditor be a WARN Employer?
For purposes of WARN “the term ‘employer’ means any business enterprise that employs ... 100 or more employees.” 29 U.S.C. § 2101(a). The simplicity of the definition emphasizes its apparent breath. The plain language of the statute easily embraces any defendant who engages in a “business enterprise.” In this regard, we think the cruсial question is not the status of the defendant’s legal relationship to the business but, instead, if at the time of the plant closing or mass layoff the defendant is responsible for operating the business as a going concern.
Our interpretation of the statute’s scope is supported by the сommentary appended to the DOL’s final regulations. Although the regulations do not directly address a situation where a secured creditor takes possession of a debtor’s business assets, the comments acknowledge that the application of WARN to a “fiduciary” (i.e., a trusteе) in a bankruptcy proceeding is dependent on whether the fiduciary has in fact operated the debtor’s assets as a business enterprise:
DOL agrees that a fiduciary whose sole function in the bankruptcy process is to liquidate a failed business for the benefit of creditors does not succeed to the notice obligations of the former employer because the fiduciary is not operating a “business enterprise” in the normal commercial sense. In other situations, where the fiduciary may continue to operate the business for the benefit оf creditors, the fiduciary would succeed to the WARN obligations of the employer precisely because the fiduciary continues the business in operation.
54 Fed.Reg. 16,045 (1989). For the purpose of determining when a defendant becomes an employer under WARN, we see no reasоn for drawing a distinction between a “fiduciary” in bankruptcy who takes control of a debtor’s assets and a creditor who exercises control over collateral securing a delinquent loan. Accordingly, we rely on the statute’s definition and the agency’s commentary to cоnclude that WARN’s obligations indeed can apply to a secured creditor, but only where the creditor operates the debtor’s asset as a “business enterprise” in the “normal commercial sense.” See id. On the other hand, where the creditor does no more than exercise thаt degree of control over the debt- or’s collateral necessary to protect the security interest, and acts only to preserve the business asset for liquidation or sale, the notice requirement of WARN will not apply “precisely because the [defendant has not] continue[d] the business in operation.” See id. We note that our holding is limited to the statutory scheme governing WARN; a determination that a defendant is an employer under WARN “creates no other employment rights.” See 20 C.F.R. § 639.6; see also H.R.Conf.Rep. No. 576, 100th Cong., 2d Sess. 1054 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 2087.
We next consider whether the evidence presented at summary judgment creatеs a genuine issue of material fact as to whether Westinghouse operated the Weslock facility as a business enterprise after the execution of the surrender agreements on the 3rd or 4th of June and before the plant’s closure on June 9.
3. Was Westinghouse a WARN Employer?
The parties mainly rely on the swоrn statements of Weslock general manager Christopher G. Kuran and Westinghouse vice president Donald R. Rooney, Jr. to advance their various positions. The Union maintains that Mr. Kuran’s testimony supports a finding that Westinghouse controlled and operated the Weslock manufacturing facility prior to the June 9 termination of the plant’s employees. We disagree.
As evidence of a Westinghouse takeover, the Union points to Mr. Kuran’s statements regarding the role Mr. Rooney assumed at the Weslock facility after the agreements were signed on either the 3rd оr 4th of June. Mr. Kuran asserts that prior to June 9, Mr. Rooney exercised “complete control” over the “day-to-day operations” of the Weslock facility, called “all the shots,” and became the
Unquestionably, the record demonstrates that Mr. Rooney maintained an on-going involvement in Weslock’s financial problems. Between June 4 and June 9, Mr. Rooney often was responsible fоr approving or disapproving the additional advancement of Westinghouse funds to discharge Weslock’s monetary obligations. But Mr. Rooney’s relationship to the Weslock management was consistent with the type of control a secured creditor legitimately may exerсise over a defaulting debtor to protect collateral seeming a loan. Cf. Hill v. East Asiatic Co. Ltd. (In re Bergsoe Metal Corp.),
CONCLUSION
After reviewing the evidence in the light most fаvorable to the Union, we are convinced there is no dispute of a genuine issue of material fact upon which any rational trier of fact could find that Westinghouse operated the Weslock facility as a business enterprise for the six days prior to the closure of thе plant on June 9. The district court order granting summary judgment in favor of Westinghouse is therefore AFFIRMED.
Notes
. Mr. Kuran apparently acted as a general manager for all three corporations.
. Mr. Rooney acted as vice president and managing director for Westinghouse.
. The Union alsо contends that Westinghouse was a "joint employer.” See 20 C.F.R. § 639.3(a)(2) (explaining that under existing legal rules, independent contractors and subsidiary corporations may be treated as part of the contracting company or parent corporation for the purpose of determining who is the WARN employer); International Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers, Gen. Truck Drivers, Office, Food & Warehouse Local 952 v. American Delivery Serv. Co.,