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Title Hotel Employees International Union Local 54 v. Elsinore Shore Assoc.

Date 1999

Subject Other\Concurring

Contents

Page 1

18 of 52 DOCUMENTS

HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES INTERNATIONAL UNION LOCAL 54 v. ELSINORE SHORE ASSOCIATES d/b/a ATLANTIS HOTEL AND CASINO; ELSINORE CORPORATION; ELSUB CORPORATION; ELSINORE OF ATLANTIC CITY; ELSINORE OF NEW JERSEY, INC. (D.C. Civil No. 89-02143); DANIEL L. FINKLER; DOREEN VITALO; FRANK FRANCESCHINI; JOHN M. LeGRAND; KENNETH ARTHUR; CHRISTINE BEDNARSKI; JEAN BRUNO; PAULETTE CHAPMAN; DENISE LYNNE CROWE; JERRY FISHER; AL GLENN; LINDA PASQUALE KRAUSE; CHERYL McCARTY; JOSEPH MANNO; LEON A. SARAO; BARRY R. SHAPIRO; TOM TAVENER; BABETTE WEINSTEIN; SALLIE WILLIAMSON; LANE F. YOSHIDA; DAVID OWENS; EDWARD MALESINSKI; ROSE BRENNAN; GRACE JASPER; ARTURO BARRERA; LORRIE LENNOX; RONALD J. SOHL, SR., on behalf of themselves and all others similarly situated v. ELSINORE SHORE ASSOCIATES, d/b/a ATLANTIS CASINO HOTEL; ELSUB CORPORATION; ELSINORE OF ATLANTIC CITY; ELSINORE OF NEW JERSEY, INC.; ELSINORE FINANCE COMPANY; ELSINORE CORPORATION; JEANNE HOOD (D.C. Civil No.

89-02330); Local 54, Hotel Employees and Restaurant Employees International Union, Appellant at No. 97-5789; Local 54, Hotel Employees and Restaurant Employees International Union; Daniel L. Finkler; Doreen Vitalo; Frank Franceschini; John M. LeGrand; Kenneth Arthur; Christine Bednarski; Jean Bruno; Paulette Chapman; Denise Lynne Crowe; Jerry Fisher; Al Glenn; Linda Pasquale Krause; Cheryl McCarty; Joseph Manno; Leon A. Sarao; Barry R. Shapiro; Tom Tavener; Babette Weinstein; Sallie Williamson; Lane F. Yoshida; David Owens; Edward Malesinski; Rose Brennan; Grace Jasper; Arturo Barrera; Lorrie Lennox; Ronald J. Sohl, Sr., on behalf of themselves and all others similarly situated, Appellants at No. 98-5116

Nos. 97-5789 & 98-5116

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

173 F.3d 175; 1999 U.S. App. LEXIS 5784; 14 I.E.R. Cas. (BNA) 1633

September 14, 1998, Argued

March 31, 1999, Filed

PRIOR HISTORY: **1 On Appeal from the United States District Court for the District of New Jersey. D.C. Civil Action Nos. 89-cv--02143 and 89-cv--02330.

(Honorable Jerome B. Simandle). DISPOSITION: Affirmed. CASE SUMMARY:

PROCEDURAL POSTURE: Appellant casino employ- ees challenged the judgment of the United States District Court for the District of New Jersey that determined that appellee casino owner's failure to provide notice under the Worker Adjustment and Retraining Notification Act

(Act), 29 U.S.C.S. § 2101 et seq., was excused by the un- foreseeable business circumstances exception to the Act.

OVERVIEW: On May 16, 1989, the Casino Control Commission (Commission) ordered appellee casino owner to close its casino on May 22, 1989. Immediately after that order was issued, appellee informed appel- lant casino employees of the closing and the elimina- tion of their jobs. Appellants filed suit, alleging that appellee's failure to give 60 days' notice of the casino closing violated the Worker Adjustment and Retraining Notification Act (Act), 29 U.S.C.S. § 2101 et seq. The trial court ultimately held that appellee's failure to pro- vide 60 days' notice did not violate the Act because the Commission's order was an unforeseeable business cir- cumstance. Appellants challenged that decision. On ap- peal, the court affirmed. The Commission-ordered clos- ing of the casino was subject to the notice requirements of the Act. Appellee's failure to provide the required no- tice, however, was excused because, appellee, in the exer-

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Page 2

cise of commercially reasonable business judgment, could not have foreseen the circumstances that caused the clos- ing. The commission had always renewed casino licenses, even for applicants in serious financial distress, and ap- pellee's belief that it could sell the casino was reasonable.

OUTCOME: The court affirmed the trial court's decision that appellee's failure to provide to appellants the requisite notice of the closing of the casino was excused because appellee could not have foreseen the circumstances that caused the casino's closing.

LexisNexis(R) Headnotes

Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN1 The Worker Adjustment and Retraining Notification Act 29 U.S.C.S. § 2102(a) provides that an employer shall not 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 to its employees or their representatives. That notice must specify, inter alia, the projected date of the closing or a 14-day period dur- ing which the closing is expected to occur. 20 C.F.R. §

639.7(b).

Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN2 20 C.F.R. §§ 639.7(b) & (c) (1998) provide that the notice given pursuant to the Worker Adjustment and Retraining Notification Act, 29 U.S.C.S. § 2102(a), must specify the expected date of the first separation and define date in part as a specific date or a 14-day period during which a separation or separations are expected to occur. Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN3 The 60-day notice period set forth in the Worker

Adjustment and Retraining Notification Act, 29 U.S.C.S.

§ 2102(b)(2)(A), is reduced or eliminated if the closing or mass layoff is caused by business circumstances that were not reasonably foreseeable as of the time that notice would have been required.

Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN4 20 C.F.R. § 639.9(b)(2) does not attempt to de- fine the term "unforeseeable business circumstances," but instead describes important indicators of such circum- stances: sudden, dramatic, unexpected and outside of the employer's control. Among circumstances that may be unforeseeable is the government ordered closing of an employment site that occurs without prior notice.

Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN5 20 C.F.R. § 639.9(b) provides that the unfore- seeable business circumstances exception applies to plant closings and mass layoffs caused by business circum- stances that were not reasonably foreseeable at the time that 60-day notice would have been required.

Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN6 20 C.F.R. § 639.9(b)(1) provides that an important indicator of a business circumstance that it not reasonably foreseeable is that the circumstance is caused by some sudden, dramatic, and unexpected action or condition outside the employer's control. A principal client's sudden and unexpected termination of a major contract with the employer, a strike at a major supplier of the employer, and an unanticipated and dramatic major economic downturn might each be considered a business circumstance that is not reasonably foreseeable. A government ordered clos- ing of an employment site that occurs without prior notice also may be an unforeseeable business circumstance. Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN7 20 C.F.R. § 639.9(b)(2) provides that the test for determining when business circumstances are not reason- ably foreseeable focuses on an employer's business judg- ment. The employer must exercise such commercially reasonable business judgment as would a similarly situ- ated employer in predicting the demands of its particular market. The employer is not required, however, to accu- rately predict general economic conditions that also may affect demand for its products or services.

Governments > Legislation > Interpretation

HN8 As with all questions of statutory interpretation, the court's review is plenary. When deciding the meaning of a statute, the court's task is to give effect to Congress's intent with respect to the question at issue. A court is bound by its perception of congressional intent. To dis- cern congressional intent, the court first considers the statute's plain language.

Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN9 The Worker Adjustment and Retraining Notification Act (Act), 29 U.S.C.S. § 2102(a), describes the closings subject to the Act and provides that an em- ployer shall not order a plant closing or mass layoff until the end of a 60-day period after the employer serves writ- ten notice of such an order.

Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN10 Most government-ordered closings should be subject to the Worker Adjustment and Retraining Notification Act, 29 U.S.C.S. §§ 2101 et seq.

173 F.3d 175, *; 1999 U.S. App. LEXIS 5784, **1;

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Page 3

Governments > Legislation > Interpretation

HN11 The reviewing court applies plenary review to the trial court's choice and interpretation of legal precepts and its application of those precepts to the historical facts. Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN12 20 C.F.R. § 639.7(b) states that notice provided under the Worker Adjustment and Retraining Notification Act (Act), 29 U.S.C.S. §§ 2101 et seq., must specify a 14- day period during which closing is expected; by implica- tion, it may be argued that Act's notice obligations do not accrue unless closing is foreseeable within a 14-day pe- riod. The regulations are reasonable and requires closing to be foreseeable 60 days in advance and within a 14-day window. For that reason, an employer may validly assert the unforeseeable business circumstances exception un- less closing is foreseeable 60 days in advance and within a 14-day window.

Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN13 When determining whether a closing was caused by unforeseeable business circumstances, the court eval- uates whether a similarly situated employer in the exer- cise of commercially reasonable business judgment would have foreseen closing. 20 C.F.R. § 639.9(b)(2) (1998). In making that determination, the court considers the facts and circumstances that led to the closing in light of the history of the business and of the industry in which that business operated.

Labor & Employment Law > Worker Adjustment & Retraining Notification Act

HN14 The Worker Adjustment and Retraining Notification Act, 29 U.S.C.S. §§ 2101 et seq., requires an employer to give 60 days' notice of the projected date of closing. In the event that an unforeseeable business circumstance arises, the notice period may be reduced or eliminated. The unforeseeable business circumstances exception applies if the employer, in the exercise of com- mercially reasonable business judgment, could not rea- sonably have foreseen the closing 60 days in advance and within a 14-day window.

COUNSEL: THEODORE M. LIEVERMAN, ESQUIRE

(ARGUED), Tomar, Simonoff, Adourian, O'Brien, Kaplan, Jacoby & Graziano, Cherry Hill, New Jersey, Attorney for Appellants.

WILLIAM F. MADERER, ESQUIRE (ARGUED), Saiber, Schlesinger, Satz & Goldstein, Newark, New Jersey, Attorney for Appellees.

JUDGES: Before: SLOVITER, SCIRICA and ALITO,

Circuit Judges. ALITO, Circuit Judge, concurring.

OPINIONBY: SCIRICA

OPINION:

*177 OPINION OF THE COURT

SCIRICA, Circuit Judge.

This case involving an interpretation of the Worker

Adjustment and Retraining Notification Act, 29 U.S.C.A.

§ 2101 et seq. (Supp. 1998), arises from the closing of the gambling casino at the Atlantis Hotel and Casino by the New Jersey Casino Control Commission. Plaintiffs, for- mer employees of the Atlantis, n1 sued Elsinore Shore Associates, the owner of the Atlantis, claiming that Elsinore Shore Associates' failure to provide them with 60 days' notice of the closing violated the WARN Act. The District Court concluded Elsinore Shore Associates' fail- ure to provide **2 notice was excused by the "unfore- seeable business circumstances" exception to the WARN Act. There are two issues on appeal: whether the closing of the Atlantis is subject to the WARN Act and whether the "unforeseeable business circumstances" exception ap- plies to this case. We will affirm.

n1 Plaintiffs are Hotel Employees and

Restaurant Employees International Union Local

54 and also a class of non-union employees.

I. A.

In the late 1980's Elsinore Shore Associates encoun- tered severe financial problems, suffering massive losses, laying off hundreds of employees and languishing in Chapter 11 proceedings. For these reasons, the Casino Control Commission in 1988 conditioned the renewal of Atlantis's gaming license upon (1) Elsinore Shore Associates' promise to maintain a cash position of $6 million; (2) the agreement of Elsinore Shore Associates' parent Elsinore to provide $5 million in working cap- ital; and (3) Elsinore's agreement to provide Elsinore Shore Associates with an additional $2 million in work- ing **3 capital if Elsinore Shore Associates' combined cash reserves dipped below $7 million. But these mea- sures were unable to stanch Elsinore Shore Associates' losses. Within four months Elsinore Shore Associates ex- hausted Elsinore's initial $5 million and by February 1989, it began drawing down the additional $2 million, which it exhausted by early April. Also in March, Elsinore Shore Associates' independent auditors reported that Elsinore Shore Associates' financial problems raised "substantial doubt about Elsinore Shore Associates' ability to con-

173 F.3d 175, *177; 1999 U.S. App. LEXIS 5784, **3;

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tinue as a going concern" for more than one year.

When it became apparent the licensing conditions could not be realized, the Casino Control Commission considered assuming an active role in the Atlantis's op- erations. On March 6, 1989, the New Jersey Division of Gaming Enforcement, the Casino Control Commission's investigative and enforcement branch, suggested the Casino Control Commission appoint a conservator to oversee the Atlantis's gaming operations and to ar-

range for the casino's sale. The Division of Gaming Enforcement also recommended the Casino Control Commission deny Elsinore Shore Associates' request for a license renewal. Nevertheless, **4 Elsinore Shore Associates resolved to sell the Atlantis before a conser- vator was appointed and stepped up ongoing negotiations with prospective buyer Donald Trump. After the Casino Control Commission denied Elsinore Shore Associates' request for a six-month license on March 28, Elsinore Shore Associates asked for a two-year license

173 F.3d 175, *178; 1999 U.S. App. LEXIS 5784, **4;

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*178 and attempted to demonstrate its financial viability for that period.

On April 7, the Casino Control Commission refused to renew Elsinore Shore Associates' license, declaring it would choose a conservator to oversee the Atlantis. Seven days later the Casino Control Commission ap- pointed attorney Joseph Nolan as conservator. Moments before Nolan's appointment became effective, Elsinore Shore Associates signed an agreement to sell the Atlantis Hotel to Donald Trump. The agreement provided for the sale to be completed within 60 to 85 days and made closing the casino a condition of the sale. The conser- vator immediately objected to the agreement and began searching for a buyer who would pay a higher price than Trump. Supporting the conservator, the Casino Control Commission prohibited Elsinore Shore Associates from completing the sale. On April 18, Elsinore **5 Shore Associates agreed to keep the Atlantis Hotel open until the sale was completed but told its employees that it could make "no firm plans" until the Trump agreement was ap- proved. From April 18 until the end of the month, events slowed as the conservator continued to look for a buyer. The uneventful second half of April gave way to a chaotic May. By May 8, it became clear that Elsinore Shore Associates' cash position would remain below the Casino Control Commission-imposed level for at least the rest of the month. Two days later, the Division of Gaming Enforcement petitioned the Casino Control Commission for a hearing to determine whether the Atlantis should be closed. On May 12, the Casino Control Commission com- menced hearings. Four days later, on May 16, the Casino Control Commission ordered the Atlantis to close effec- tive May 22, 1989. Immediately after the Casino Control Commission's order, Elsinore Shore Associates informed its employees of the closing and the elimination of their jobs. See Finkler v. Elsinore Shore Assocs., 781 F. Supp.

1060, 1062 (D.N.J. 1992).

On May 18, 1989, plaintiffs brought suit in District Court, alleging that Elsinore Shore Associates' **6 fail- ure to give 60 days' notice of the Atlantis closing violated the WARN Act. Elsinore Shore Associates responded that the Casino Control Commission's closing was not an em- ployer-ordered closing and therefore was not subject to WARN. In 1991, the late Chief Judge Gerry found WARN did not apply to government-ordered closings and granted defendants summary judgment. Hotel Employees Local

54 v. Elsinore Shore Assocs., 768 F. Supp. 1117 (D.N.J.

1991). Looking at the plain language of the statute, he held that WARN applies only when "the employer orders the closure," id. at 1123, adding that WARN's legislative history revealed that "Congress intentionally identified the employer as the entity which must order the closing .

. . in order to be held accountable under the statute." n2

n2 The court also cited a statement of Senator Metzenbaum, one of the bill's sponsors, that WARN does not apply to government-ordered closings such as where a state department of health closes a restaurant. See 768 F. Supp. at 1125.

**7

Turning to the Department of Labor regulations, the District Judge noted they subjected most government- ordered closings to WARN, but exempted closings by the Federal Savings and Loan Insurance Corporation when it "'assumes control'" over a bank. Id. at 1126 (quoting

54 Fed. Reg. 16,042). Finding "the Commission directly ordered the closing, and to this extent 'assumed control' of the enterprise," the District Judge concluded that Elsinore Shore Associates' termination fit within this exemption. Id. (quoting 54 Fed. Reg. 16,054). Moreover, the District Judge said he did "not believe purposes of WARN would be furthered by holding Elsinore Shore Associates li- able in this case." Id. Stating that WARN's purpose was to protect workers by providing them

173 F.3d 175, *179; 1999 U.S. App. LEXIS 5784, **7;

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*179 with 60 days notice of a plant closing or mass layoff, he found that although

notice to plaintiffs would have allowed them some transition time to adjust to the prospec- tive loss of employment, it would have been unreasonable in this case to require defen- dants to prematurely close its sic facilities in anticipation of the State's decision to close, in order to comply with the federal plant closing law.

**8

Id. at 1127 (footnote omitted).

On reconsideration one year later, the District Judge vacated his grant of summary judgment, holding that WARN applies to government-ordered closings unless the government ousts the employer from control. See Finkler v. Elsinore Shore Assocs., 781 F. Supp. 1060,

1063-65 (D.N.J. 1992). He retreated from his reliance on WARN's plain language, finding that "other factors, most notably the regulations promulgated by the Department of Labor . . . , compel us to conclude that government ordered closings are not entirely exempt from the Act." Id. at 1063. Determining that "the language of the regu- lations. . . clearly indicates an intent that certain govern- ment ordered closings be considered within the purview of the Act", id. at 1064, he noted that the Department of Labor had explicitly considered and rejected the ex- emption of all government-ordered closings, observing that the regulations place only one kind of government- ordered closing outside WARN: "the closing of a savings and loan institution by the FHLBB Federal Home Loan Bank Board ." Id. at 1064. He rejected the contention that the Department of Labor regulations conflicted **9 with Senator Metzenbaum's floor statement because Senator Metzenbaum only discussed FHLBB bank closings. The District Judge then advanced an interpretation he thought was consistent with both the legislative history and the regulations: "FHLBB closings are exempt, but other gov-

ernment ordered closings generally are not." Id. at 1065. But then he broadened the exemption beyond banks to exempt all "'absolute' closings . . . where 'the previous ownership is ousted from control' and the government 'as- sumes control of the enterprise' such that 'there is no em- ployer to give notice.'" Id. (quoting 54 Fed. Reg. 16,054

(1989)). Finding that the Casino Control Commission's

"control over the operation of the casino . . . was far less comprehensive and absolute than that involved when the FHLBB closes a bank" and that Elsinore Shore Associates was never ousted from control of the Atlantis, the District Judge held the closing of the Atlantis subjected Elsinore Shore Associates to the requirements of the WARN Act. Id. at 1065-67.

After Chief Judge Gerry's death, the case was as- signed to Judge Simandle. Following a bench trial, the District Court refused to reconsider the prior **10 rul- ing that certain government-ordered closings fell within the scope of WARN. Pronouncing the scope issue a "close question," the District Court concluded that the law of the case doctrine prevented it from disturbing the prior deci- sion.

Nonetheless, the District Court held that Elsinore Shore Associates' failure to provide 60 days' notice of the closing did not violate WARN because the Casino Control Commission's order was an unforeseeable busi- ness circumstance. Specifically, the District Court found that as of March 23, 1989--60 days before the closing-- it was not reasonably foreseeable that the Casino Control Commission would order the closing of the Atlantis on a certain date or within a 14-day window. Instead, the court found that on March 23, a reasonable employer would have foreseen either that the Casino Control Commission would renew the Atlantis's license or that it would ap- point a conservator to oversee the Atlantis's gaming op- erations. It based this finding on several factors: Elsinore Shore Associates' renewal application, the Casino Control Commission's practice of never having refused to renew a casino license, the Division of Gaming Enforcement's

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*180 recommendation that **11 the Casino Control Commission appoint a conservator and the conservator's statutory obligation to preserve the Atlantis's assets so that it could remain open. Further, the District Court found that on March 23, 1989, it was also reasonably foreseeable that the Atlantis would be sold to a purchaser who would con- tinue its gambling operations, citing the attractiveness of the Atlantis's gaming license, its excellent facilities, its rock-bottom price and the number of interested potential purchasers.

The District Court also held that none of the events between March 23 and May 16 made the Casino Control Commission's order to close reasonably foreseeable. In reaching this conclusion, the court evaluated each event that plaintiffs claimed made the closing foreseeable. It found that the Casino Control Commission's April 7 re- fusal to renew the Atlantis's license reinforced the expec- tation that the Casino Control Commission would appoint a conservator to keep the Atlantis open until it could be sold. The April 13 appointment of Joseph Nolan as conser- vator, therefore, made it even more likely that the Atlantis would remain open until its sale. The District Court re- jected the contention that **12 the mid-April Elsinore Shore Associates/Trump sale agreement (with its condi- tion that the Atlantis casino close before the sale of the ho- tel was consummated) made closing reasonably foresee- able because Nolan and the Casino Control Commission immediately blocked the sale. Finally, the District Court found the Division of Gaming Enforcement's May 10 rec- ommendation that the Casino Control Commission close the Atlantis did not make the Casino Control Commission order foreseeable because Nolan urged the Casino Control Commission to keep the Atlantis open and because it was impossible to predict the date such an order might take effect.

In our review of the record, it is clear that the clos- ing of the Atlantis was the direct result of an order from the Casino Control Commission revoking the Atlantis's casino license. The reason for the revocation was the Atlantis's continuing financial troubles. It is also clear that Elsinore Shore Associates made every effort to keep

the Atlantis open or to make a commercially reasonable sale of the casino.

II.

HN1 The Worker Adjustment and Retraining Notification Act provides that "an employer shall not or- der a plant closing or mass layoff until the end **13 of a 60-day period after the employer serves written notice of such an order" to its employees or their representa- tives. 29 U.S.C.A. § 2102(a) (Supp. 1998). This notice must specify, inter alia, the projected date of the closing or a 14-day period during which the closing is expected to occur. 20 C.F.R. § 639.7(b) (1998). n3

n3 HN2 The regulations provide that the no- tice must specify the "expected date of the first separation" and define "date" in part as "a specific date or . . . a 14-day period during which a separa- tion or separations are expected to occur." 20 C.F.R.

§ 639.7(b) & (c) (1998).

HN3

WARN's 60-day notice period is reduced or elimi- nated if the closing or mass layoff is "caused by busi- ness circumstances that were not reasonably foreseeable as of the time that notice would have been required."

29 U.S.C.A. § 2102(b)(2)(A) (Supp. 1998). This provi- sion, known as the "unforeseeable business circumstances exception," is discussed at length in the Department of Labor regulations and commentary interpreting **14 WARN. The commentary refuses to classify certain types of circumstances as per se unforeseeable and suggests that courts examine each case on its own merits to deter- mine whether the employer in the exercise of "commer- cially reasonable business judgment" could have foreseen the particular circumstances that caused the closing. 20

C.F.R. § 639.9(b)(2) (1998). HN4 The regulations do not attempt to define the term "unforeseeable business circumstances," but instead describe "important indica- tors"

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*181 of such circumstances: "sudden, dramatic, . . . unexpected . . . and outside of the employer's control." Id. § 639.9(b)(2). Among circumstances that "may be" unforeseeable is the "government ordered closing of an employment site that occurs without prior notice." Id. §

639.9(b)(1). n4

n4 HN5 The regulations on the unforeseeable business circumstances provide:

(b) The "unforeseeable business cir- cumstances" exception . . . applies to plant closings and mass layoffs caused by business circumstances that were not reasonably foreseeable at the time that 60-day notice would have been required.

HN6

(1) An important indicator of a busi- ness circumstance that it not reason- ably foreseeable is that the circum- stance is caused by some sudden, dra- matic, and unexpected action or con- dition outside the employer's control. A principal client's sudden and unex- pected termination of a major contract with the employer, a strike at a ma- jor supplier of the employer, and an unanticipated and dramatic major eco- nomic downturn might each be consid- ered a business circumstance that is not reasonably foreseeable. A government ordered closing of an employment site that occurs without prior notice also may be an unforeseeable business cir- cumstance.

HN7

(2) The test for determining when business circumstances are not reason- ably foreseeable focuses on an em- ployer's business judgment. The em- ployer must exercise such commer- cially reasonable business judgment as would a similarly situated employer in predicting the demands of its partic- ular market. The employer is not re- quired, however, to accurately predict general economic conditions that also may affect demand for its products or services.

20 C.F.R. § 639.9(b) (1998).

**15

III.

The District Court had jurisdiction under 28 U.S.C.A.

§§ 1331 and 1337 and 29 U.S.C.A. § 2104(a)(5). We have jurisdiction under 28 U.S.C.A. § 1291.

IV. A.

We first determine whether the closing of the Atlantis is within the scope of WARN. HN8 As with all questions of statutory interpretation, our review is plenary. United States ex rel. Lacorte v. SmithKline Beecham Clinical Labs., Inc., 149 F.3d 227, 232 (3d Cir. 1998). When de- ciding the meaning of a statute, our task is to "give effect to Congress's intent" with respect to the question at is- sue. Idahoan Fresh v. Advantage Produce, Inc., 157 F.3d

197, 202 (3d Cir. 1998); see also Sperling v. Hoffmann- LaRoche, Inc., 24 F.3d 463, 470 (3d Cir. 1994) (a court is bound by its perception of congressional intent). To dis- cern congressional intent, we first consider the statute's plain language. See Lacorte at 232; In re TMI, 67 F.3d

1119, 1123 (3d Cir. 1995).

With this principle in mind, we turn to the language of WARN. The relevant provision is HN9 29 U.S.C.A.

§ 2102(a), which describes the closings subject to WARN and provides "an employer shall not order a plant closing or mass layoff until the end of a 60-day **16 period after the employer serves written notice of such an order."

29 U.S.C.A. § 2102(a) (Supp. 1998). On its face, this lan- guage could suggest that only employer-ordered closings may be subject to WARN. The statute itself is silent on the subject of government-ordered closings or situations where both the government and the employer play a role in the closing.

Plaintiffs contend that WARN's legislative history demonstrates that Congress intended WARN to apply to government-ordered closings. But the legislative history is inconclusive and contains only two statements that di- rectly address the issue. One suggests that Congress in- tended WARN to apply to government-ordered closings. When asked by Senator Reid how WARN would apply to unexpected government-ordered casino closings, Senator Kennedy explained that the casino could use the unfore- seeable business circumstances exception to avoid liabil- ity. See 133 Cong. Rec. S9434 (1987). The other state- ment suggests a contrary interpretation. In opposing an amendment which

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*182 prevented banks from incurring WARN liability after an FDIC-ordered shutdown, Senators Metzenbaum and Proxmire explained that government-ordered clos- ings were **17 beyond the scope of the statute, arguing that "the bill does not cover that situation at all . . . such a closing is by the Federal Government, not by the em- ployer itself. . . . The bill on its face simply does not ap- ply." 134 Cong. Rec. S16,047 (1988). Arguably, Senator Kennedy's statement may carry more weight because it specifically addresses the casino industry. But Senator Metzenbaum's views may carry the authority normally accorded the views of a bill's sponsor. On balance, how- ever, this sparse and contradictory legislative history is not especially helpful in determining whether Congress intended government-ordered closings to be beyond the scope of the statute.

Congress's purpose in enacting WARN may provide more guidance. The WARN Act was adopted in response to the extensive worker dislocation that occurred in the

1970s and 1980s. See Richard W. McHugh, Fair Warning or Foul? An Analysis of the WARN Act In Practice, 14

Berkeley J. Emp. & Lab. L. 1, 4 (1993). As companies were merged, acquired, or closed, many employees lost their jobs, often without notice. In some circumstances, the projected closing was concealed from the employees. See Christopher P. **18 Yost, The Worker Adjustment and Retraining Notification Act of 1988: Advance Notice Required?, 38 Cath. U. L. Rev. 675, 676 (1989). Congress enacted WARN to protect workers and their families from these situations. See 20 C.F.R. § 639.1(a) (1998). WARN's notice period was designed to allow workers "to adjust to the prospective loss of employment, to seek and obtain alternative jobs and . . . to enter skill training or retraining that will allow them to successfully compete in the job market." Id. The thrust of WARN is to give fair warning in advance of prospective plant closings. It would appear, therefore, that if an employer knew of a government-

ordered closing and failed to notify its employees, the

WARN Act would apply.

Plaintiffs also contend the Department of Labor im- plementing regulations and commentary promulgated un- der 29 U.S.C.A. § 2107 (Supp. 1998) (delegating to the Department of Labor the power to "prescribe such regula- tions as may be necessary to carry out WARN ") subject government-ordered closings to WARN. As noted, the Department of Labor regulations and commentary place most government-ordered closings within the scope of the statute. Discussing **19 the suggestion that the regulations should exempt all government-ordered clos- ings from WARN, the commentary says "no language recognizing such an exemption appears in WARN and the Department is reluctant to create such an exemp- tion ." 54 Fed. Reg. 16,054 (1989). Instead, the com- mentary suggests that some government-ordered closings fall within the unforeseen business circumstances excep- tion to WARN's notice provisions. See id.; 20 C.F.R. §

639.9(b)(1) (1998). The need to find an exception for a government-ordered closing implies, of course, that such a closing is subject to WARN. Giving a specific example

(and tracking legislative history), the commentary states that the government closing of a savings and loan would be exempt from WARN. See 54 Fed. Reg. 16,054 (1989). Whether other types of government-ordered closings are exempt is unclear from the commentary, but it would seem that the exemption should not be limited to that one type. The regulations appear to contemplate two factors in determining an employer's WARN Act responsibili- ties: the amount of government involvement in the clos- ing and the amount of notice the employer had of that involvement. The regulations **20 and commentary distinguish among closings involving different levels of government action. Those closings which are the "direct result of governmental action and which occur without

notice should be counted as

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*183 government ordered closings to which after the fact notice is applicable." 54 Fed. Reg. 16,054. Government-ordered closings which are preceded by some notice "may constitute unforeseeable business circumstances to which reduced notice applies." Id. Examples of direct closings are the "closing of a restaurant by a local health department or the closing of a nuclear power plant by the Nuclear Regulatory Commission." Id. The Department of Labor observed that "other agencies do not take such direct action. . . . These agencies do not . . . directly order the closing of the plant and they usually give some notice of the violation and an opportunity to con- test the findings." Id. These closings can result from, for example, Occupational Safety and Health Administration and Environmental Protection Agency enforcement ac- tions and these agency actions may cause the employer to close a plant either to remedy the violation or because the employer "cannot continue to operate." **21 Id. The commentary provides that "depending on the length of the notice given, indirect closings may qualify for reduced notice under the unforeseeable business circum- stances exception." Id.

As noted, under the commentary, only one type of government-ordered closing is exempt from the WARN Act: "the absolute closing of a savings and loan insti- tution by the Federal Home Loan Bank Board ." Id. In an "absolute closing," "the previous ownership is ousted

from control of the institution and the FSLIC assumes control of the enterprise." Id. In such a closing, WARN does not apply because there is no employer to give no- tice. But other direct government closings may be less dramatic than the example cited and we do not read the regulations as foreclosing consideration of whether other situations may also be exempt. Indeed, it is difficult to discern the difference between the government closing of a savings and loan institution and the government closing of a nuclear power plant. In both, the government action is direct and final.

Although in most respects these regulations are rea- sonable interpretations to which a court may defer, n5 see Chevron U.S.A. Inc. **22 v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 81 L. Ed. 2d 694, 104

S. Ct. 2778 (1983); Health Maintenance Org., Inc. v. Whitman, 72 F.3d 1123, 1128 (3d Cir. 1995), we find them contradictory, at least in part, with respect to gov- ernment closings. Nonetheless, the statute's purpose and at least part of its legislative history suggest that HN10 most government-ordered closings should be subject to WARN. Nor do we find the statutory language sufficiently clear or unambiguous to rule out consideration of the reg- ulations. Although it is not without doubt, we believe clos- ings like that of the Atlantis are better viewed within the framework of the regulations, which further the statute's purpose. n6 In particular, the case can be

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*184 made that the closing of the Atlantis is similar to the direct closings preceded by notice that the commen- tary suggests are subjected to the WARN Act. See 54 Fed. Reg. 16,054 (1989).

n5 We note that the final Department of Labor regulations were not promulgated until April 22,

1989 and did not become effective until May

22, 1989--the same day the Atlantis was closed. Because we decide that Elsinore Shore Associates may use the unforeseeable business circumstances exception, we need not decide how the date of these regulations affects its duty to warn its employees.

**23

n6 In arriving at our conclusion we have con- sidered the only published opinions examining whether WARN applies to government-ordered closings. In Buck v. FDIC, 75 F.3d 1285 (8th Cir.

1996), the Federal Deposit Insurance Company

(FDIC) organized a bridge bank to purchase the as- sets of two troubled banks and retained its employ- ees. It then sold the bridge bank to a healthy succes- sor bank which fired the employees of the bridge bank. See Buck at 1286-87. The employees sued the FDIC, claiming it had failed to provide them with the notice required by WARN. Stating that the FDIC would not have been subject to WARN lia- bility had it simply liquidated the troubled banks, the court concluded that the FDIC a fortiori could not be liable for taking the less drastic action of or- ganizing a bridge bank. See id. at 1290. The court also noted that subjecting the FDIC to WARN Act liability could "severely hinder the FDIC's ability to resolve bank failures efficiently and expeditiously." Id.

In reaching its conclusion, the Eighth Circuit rejected the bridge bank employees' argument that Congressional rejection of an express exemption for troubled financial institutions closed by the gov- ernment "evinces a legislative intent to subject the FDIC to the notice requirements of the WARN Act." Id. at 1290-91. The court reasoned that this failure may have been the result of Congressional understanding that such an exemption was un- necessary and quoted the statement of Senator Metzenbaum, WARN's sponsor, that WARN does not apply to FDIC-ordered bank closings. Id. at 1291. The court also quoted the Department of Labor comments interpreting WARN, which state that "'under the statutory scheme of the de- posit insurance laws, neither the Federal Home

Loan Bank Board nor the Federal Savings and Loan Insurance Corporation , which are exercis- ing strictly governmental authority in ordering the closing, are to be considered as employers'." Id.

(quoting 54 Fed. Reg. 16,042, 16,045).

In reaching its result, the Eighth Circuit reviewed Office & Professional Employees International Union Local 2 v. FDIC, 138 F.R.D.

325 (D.D.C. 1991), rev'd on other grounds, 962

F.2d 63 (D.C. Cir. 1992), in which the FDIC closed a bank and acted as receiver. The District Court concluded that the FDIC had no WARN Act obli- gations:

The FDIC's most persuasive argu- ment in favor of dismissal is that WARN does not apply to the closing of a bank by federal authorities. The Court agrees. When the federal au- thorities take over the bank and shut it down, there is no employer to give notice. The former bank owners do not own the bank; nor did they close the bank. Moreover, the federal govern- ment is precisely not an employer if it is shutting the bank down.

Id. at 327.

The court held that a government agency can- not incur WARN Act liability when it closes a bank. Furthermore, when the owners of a bank are ousted by the government, they cease to be "employers" within the meaning of the WARN Act and therefore cannot incur WARN Act liability.

These cases involving bank closings present much clearer questions for resolution and are not particularly helpful with our inquiry.

**24

We next turn to the District Court's determination that Elsinore Shore Associates' failure to provide notice of the Atlantis's closing is excused by the "unforeseeable busi- ness circumstances" exception. HN11 We apply plenary review to the District Court's "choice and interpretation of legal precepts and its application of those precepts to the historical facts." Mellon Bank v. Metro Communications, Inc., 945 F.2d 635, 642 (3d Cir. 1991).

WARN does not require an employer to provide sixty days' notice when the closing is "caused by business cir- cumstances that were not reasonably foreseeable as of the

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time that notice would have been required." 29 U.S.C.A.

§ 2102(b)(2)(A) (Supp. 1998). The District Court held that the Casino Control Commission's May 22, 1989 or- der to close the Atlantis was not reasonably foreseeable within a 14-day window on March 23, 1989 or at any other time prior to May 22, 1989. It derived the 14-day window requirement from 20 C.F.R. § 639.7(b), which states that notice must provide a 14-day window during which closing is expected to occur.

Plaintiffs contend the District Court erred in deciding an employer has no WARN Act obligations unless the manner **25 of closing is reasonably foreseeable and

the date of closing is reasonably foreseeable within a 14- day period. They assert that the District Court's "manner and timing of closing" requirement frustrates WARN's purpose to provide employees with proper notice of plant closings. It does so, they claim, because an employer will rarely be able to predict precisely how and when a clos- ing will occur and will rarely be under a duty to warn its employees. Plaintiffs also contend the timing and manner requirement is inconsistent with the concept of "reason- able foreseeability." They maintain that "reasonable fore- seeability" refers only to the occurrence of a general type of risk and not to "'the likelihood of the occurrence of the precise chain of events leading up to the injury.'"

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*185 Plaintiffs' Brief at 25 (citing Suchomajcz v. Hummel Chemical Co., 524 F.2d 19, 28 n.8 (3d Cir.

1975)). Plaintiffs argue that WARN applies when it is reasonably foreseeable that a plant will close, even if the manner and time of its closing are not reasonably fore- seeable.

HN12 The regulations state that notice provided un- der WARN must specify a 14-day period during which closing is expected; by implication, it may **26 be ar- gued that WARN's notice obligations do not accrue unless closing is foreseeable within a 14-day period. Plaintiffs ask that we disregard the 14-day requirement, claiming it opens a loophole that makes the unforeseeable busi- ness circumstances exception routinely available. But we agree with the District Court that the regulations are rea- sonable and require closing to be foreseeable 60 days in advance and within a 14-day window. For this reason, we conclude that an employer may validly assert the unfore- seeable business circumstances exception unless closing is foreseeable 60 days in advance and within a 14-day window. n7

n7 In addition to circumventing the regulations, plaintiffs' approach would raise several potential problems. Because plaintiffs' view might require an employer to provide frequent WARN notice, it could require an economically viable employer to provide notice of a possible--but unlikely--closing. Once the employer's creditors learn of the notice, they may seek to enforce existing debts and become unwilling to extend the employer more credit. In addition, employees may overestimate the risk of closing and prematurely leave their employer, for- feiting (among other things) seniority and unvested benefits. Such behavior by creditors and employees would increase the chance that an employer will be forced to close and lay off its employees, harming precisely those persons WARN attempts to protect. Where, as here, a company is struggling to survive financially and where it may be subject to an imme- diate government shutdown, the timing of closing may be uncertain and unpredictable.

**27

We next determine whether the unforeseeable busi- ness circumstances exception is available in this case. As noted, the commentary refuses to classify certain types of circumstances as per se unforeseeable and suggests that courts examine each case on its own merits to determine whether the employer in the exercise of "commercially reasonable business judgment" could have foreseen the particular circumstances that caused the closing. 54 Fed. Reg. 16,062, 16,062-63 (1989). The regulations do not

attempt to define the term "unforeseeable business cir- cumstances," but instead describe "important indicators" of such circumstances: "sudden, dramatic, . . . unexpected

. . . and outside of the employer's control." 20 C.F.R. §

639.9(b)(1) (1998). Among circumstances that "may be" unforeseeable is the "government ordered closing of an employment site that occurs without prior notice." Id. §

639.9(b)(2). n8

n8 The regulations on the unforeseeable busi- ness circumstances provide:

20 C.F.R. § 639.9(b) (1998).

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**28 HN13

Page 14

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*186 When determining whether a closing was caused by unforeseeable business circumstances, we evaluate whether a "similarly situated employer" in the exercise of commercially reasonable business judgment would have foreseen closing. 20 C.F.R. § 639.9(b)(2) (1998). In mak- ing this determination, we consider the facts and circum- stances that led to the closing in light of the history of the business and of the industry in which that business operated. See Loehrer v. McDonnell Douglas Corp., 98

F.3d 1056, 1061 (5th Cir. 1996) (stating that court de- termines whether defendant acted "as would reasonable employers within its own market" and analyzing closing of defense contractor in light of the "unique" area of de- fense contracting); 20 C.F.R. § 639.9(b)(2) (1998) (stating that the employer must "predict the demands of its par- ticular market" but need not "accurately predict general economic conditions" in evaluating whether closing is reasonably foreseeable); id. (stating that employer must exercise the same judgment as a "similarly situated em- ployer"). We follow this approach because the importance of a particular event varies from company to company and from industry to industry. **29 What is a harbinger of disaster in one context may be an everyday occurrence in another.

In the spring of 1989, Elsinore Shore Associates was not without notice that the Casino Control Commission might revoke or fail to renew its license. But on March

23, 1989, it was not reasonably foreseeable the Atlantis would close within 60 days and within a particular 14- day window. Furthermore, it was equally foreseeable that the Atlantis might be closed earlier or considerably later in time or not at all. There was little chance that Elsinore Shore Associates would shut down the casino unilaterally: Elsinore Shore Associates appeared determined to keep the Atlantis open or to sell it to a purchaser who would be able to do so. Furthermore, Elsinore Shore Associates' belief that it could sell the Atlantis to a purchaser was

reasonable. As the District Court noted, the Atlantis was an attractive potential purchase. With a gaming license, excellent facilities and a low asking price, it attracted a number of potential purchasers.

Nor was it reasonably foreseeable if or when the Casino Control Commission would close the Atlantis. The Casino Control Commission had never failed to renew a casino **30 license, even for applicants in serious fi- nancial distress. Instead, the Casino Control Commission typically used its regulatory powers to impose condi- tions upon renewal and to supervise casino operations. In early 1989, the Casino Control Commission first con- sidered and then appointed a conservator to salvage the Atlantis operation. Although the Division of Gaming Enforcement's non-renewal recommendation expressed concern about the company's ability to survive for twelve months, it never suggested the Atlantis might be forced to close in the next 60 days and in fact encouraged the Casino Control Commission to appoint a conservator. The significance of the Division of Gaming Enforcement's non-renewal recommendation is weakened because the Casino Control Commission frequently chose not to fol- low Division of Gaming Enforcement licensure recom- mendations. The difficulty in predicting if or when the Casino Control Commission would close the Atlantis is buttressed by their past relations. Although Elsinore Shore Associates was in severe financial trouble for many years before 1989, the Casino Control Commission not only renewed its license during those years but also failed to take any action **31 to close the Atlantis.

Moreover, the closing at a particular time was not made reasonably foreseeable by the auditors' early March determination that Elsinore Shore Associates' fi- nances raised "substantial doubt about Elsinore Shore Associates' ability to continue as a going concern" for more than a year. As the District Court noted, this con- clusion does not reflect an opinion as to Elsinore

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*187 Shore Associates' ability to operate for any spe- cific period less than one year. Furthermore, the auditors had made similar statements since 1985.

Plaintiffs suggest that several events between March

23 and May 16 should have made Elsinore Shore Associates aware that closing was foreseeable. We dis- agree. When the Casino Control Commission refused to renew the Atlantis's license on April 7, stating it would select a conservator to prepare the Atlantis for sale, this

"furnished no reason," said the District Court, "for fore- seeing that the Commission would order the casino closed

. . . at any particular time." Moreover, when consid- ering whether to appoint a conservator, the Chairman of the Casino Control Commission surveyed Elsinore Shore Associates' troubled situation and concluded "I, for **32 one, would like to see this operation able to continue in some fashion for some period of time .

. . so that the employees would not lose their status and their continuing employment." On April 13, when the Casino Control Commission appointed a conserva- tor with the duty to preserve the Atlantis's assets, it be- came even more likely the Atlantis would remain open. It is true that Elsinore Shore Associates' agreement to sell the Atlantis to Donald Trump raised the specter of closing--but only for a few hours. Once the agree- ment was known, the conservator and the Casino Control Commission immediately blocked the sale. Nor did the Division of Gaming Enforcement's May 10 recommenda- tion that the Atlantis be closed made closing foreseeable. The Division of Gaming Enforcement's recommendation must be balanced against the conservator's strong rec- ommendation that the Casino Control Commission keep the Atlantis open and the Casino Control Commission's historical reluctance to shut down casinos.

As noted, Elsinore Shore Associates had some notice the Casino Control Commission might revoke or fail to renew the Atlantis's license in the spring of 1989. HN14 The WARN Act requires an employer **33 to give

60 days' notice of the projected date of closing. In the event that an unforeseeable business circumstance arises, the notice period may be reduced or eliminated. The un- foreseeable business circumstances exception applies if

the employer, in the exercise of commercially reasonable business judgment, could not reasonably have foreseen the closing 60 days in advance and within a 14-day win- dow. For the reasons expressed, this exception applies here.

We will affirm the judgment of the District Court.

CONCURBY: ALITO

CONCUR:

ALITO, Circuit Judge, concurring:

I join parts I, II, and III of the opinion of the Court and agree that the judgment of the District Court should be affirmed. I write separately because I believe that the language of the WARN Act unambiguously provides that the Act does not apply at all unless the employer, rather than the government, orders the plant closing.

The WARN Act, on its face, does not apply to gov- ernment-ordered closings. Title 29 U.S.C. § 2102(a) pro- vides:

An employer shall not order a plant closing or mass layoff until the end of a 60-day pe- riod after the employer serves written notice of such an order . . . .

(emphasis added). **34 And Title 29 U.S.C. §

2104(a)(1) states:

Any employer who orders a plant closing or mass layoff in violation of section 2102 of this title shall be liable . . . .

(emphasis added). This language is straightforward and clear -- the WARN Act applies only when an "em- ployer" orders a plant closing -- and where, as here, the statutory language is unambiguous and does not demand an absurd result, the sole function of a court is to en- force the statute according to its terms. West Virginia Univ. Hosp. Inc. v. Casey, 499 U.S. 83, 99, 113 L. Ed.

2d 68, 111 S. Ct. 1138 (1991). That is what we should do in this case. It is undisputed that the Casino Control Commission, a government entity, ordered

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*188 the Atlantis to close. Because the government -- not the employer -- ordered the closing, the WARN Act does not apply.

I see no need to look beyond the statutory language to the legislative history -- and in any event I agree with the opinion of the Court that the "legislative history is not especially helpful in determining whether Congress intended government-ordered closings to be beyond the scope of the statute." Maj. Op. at 12. Nor would I de- fer to the Department of Labor's **35 interpretation of the Act on this point. The Labor Department regulations contemplate that " a government ordered closing of an employment site that occurs without prior notice . . . may be an unforeseeable business circumstance," 20 C.F.R. §

639.9(b)(1), and therefore necessarily imply that some government-ordered closings are within the WARN Act's purview. The Department's commentary accompanying its first set of regulations expands on this notion:

Several commentators . . . suggested that an exception for government ordered clos- ings be included in the regulations. No lan- guage recognizing such an exception appears in WARN and the Department is reluctant to create such an exception. However, some government-ordered closings may consti- tute unforeseeable business circumstances to which reduced notice applies . . . .

54 Fed. Reg. 16054 (1989). The Court's opinion, af- ter recognizing that these regulations are "contradictory, at least in part, with respect to government closings," Opinion at 410-11, does not defer to them under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837, 842-43, 81 L. Ed. 2d 694, 104 S. Ct. 2778

(1984). I agree that **36 the regulations are not en- titled to Chevron deference, but I reach that conclusion because, in my view, the regulations and commentary cannot be squared with the plain language of the statute, and therefore they are not entitled to any deference.

Finally, I would not rely, as the majority does, on the general purpose of the WARN Act. The pertinent pro- visions of the Act apply only to employer-ordered clos- ings, and even if I were convinced that Congress harbored some general purpose that was inconsistent with those specific provisions, I would follow the specific language that Congress duly enacted.

In sum, I would hold that the WARN Act simply does not apply to a government - ordered closing, such as the one at issue here. The closing order in this case was clear, unequivocal, and unconditional: n1 "Today, May

16, 1989, the Casino Control Commission has mandated the Atlantis Casino Hotel to cease its gaming operations no later than the close of the gaming day on Sunday, May

21, 1989." J.A. 1515 (emphasis added). I would affirm on the basis that the WARN Act, by its plain terms, does not apply to unconditional government-ordered closings like the one at issue here.

n1 This is not a case where the government or- der is equivocal or conditional, such as an order by a state liquor authority to stop serving alcohol to mi- nors or be shut down. I do not address the question of conditional government-ordered closings here.

**37

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