Court Bars Workers’ Suit Against DHL Over Layoffs

CHICAGO (CN) - Former DHL Express employees lost their bid for benefits from the German package delivery service, which they say failed to give adequate notice before closing six plants, the 7th Circuit ruled.

Workers had claimed that that DHL and its parent Deutsche Post violated the Worker Adjustment and Retraining Notification (WARN) Act by offering severance packages to workers in December 2008 in exchange for the workers' signatures on releases that limited their right to sue.

The court found put that DHL workers had faced an "unenviable," "wrenching" decision, but that they still made that decision voluntarily.

DHL stopped offering U.S. domestic shipping in January 2009, a decision that was fatal to five of DHL's six facilities in the Chicago metropolitan area. A union for the drivers and clerical workers at the facilities negotiated severance agreements for its members.

Multiple severance plans, which paid four or 10 weeks of pay and benefits, were created. Workers could only participate, however, if they agreed to waive their seniority status, recall rights and right to sue DHL.

Given just two days to decide whether to participate in a plan, 506 workers elected to take severance packages. Workers who did not participate in a plan did not receive any severance pay from DHL.

John Ellis and Timothy Price declined the severance pay, instead filing suit against DHL and Deustsche Post fka Deutsch Post World Net. The pair claimed that DHL had violated the WARN Act, which requires employers with 100 or more employees to provide at least 60 days notice prior to plant closings or mass layoffs.

An Illinois federal court determined that the layoffs did not count as a plant closing, since the five Chicagoland sites were not a single site of employment. In addition, the percentage of the full-time workforce that had been laid off fell short of the 33 percent required to classify the firings as a mass layoff under the act.

The plaintiffs hoped to overturn the ruling on appeal by convincing the three-judge panel to consider more workers as having been laid off by including those who opted for severance packages.

"Ellis and Price contend that the resignations, particularly those of the already-laid-off workers, cannot be considered voluntary because the employees resigned against a backdrop of extreme economic uncertainty and pressure exerted by DHL," the ruling states.

Workers had been in "unenviable positions," but they still made their decisions voluntarily, and the DHL did not violate WARN in presenting the choice, Judge Tinder wrote for the court.

"In offering its workers the olive branch of severance pay, DHL was hedging its bets against WARN Act liability," Judge John Tinder wrote for the court. "Employers are permitted to 'gamble' that enough workers accept their proffered incentive packages to absolve them from potential WARN Act liability, and DHL successfully tossed the dice here. Ellis and Price are in effect asking us to prohibit such behavior, but we cannot rewrite the WARN Act."

The 7th Circuit is reportedly the first appellate court to rule on a WARN Act claim.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit