International Alliance of Theatrical & Stage Employees & Moving Picture Machine Operators v. Compact Video Services, Inc.

Opinion by Judge GOODWIN; Dissent by Judge FERGUSON.

Legislation is enlisted from time to time in the chronic tension between labor and management, to the advantage of one side and to the disadvantage of the other. In this case we decide whether the Worker Adjustment and Retraining Notification Act (‘WARN”), 29 U.S.C. § 2101 et seq., applies to this contest between a union and a selling corporation which tried to rid itself of the union.

The selling corporation sold its unionized business to a nonunion entity. The acquiring entity kept on nearly all of the old work force, though at slightly lower rates of pay and without the fringe benefits that had been called for in the collective bargaining agreement between the union and the selling corporation. A handful of workers either were not invited to remain with the new owner, or declined to do so.

Reserving its rights and remedies by instituting proceedings before the National Labor Relations Board, and judicial proceedings under relevant sections of the National Labor Relations Act, the union also commenced these WARN proceedings in the District Court to obtain for each former employee of the selling corporation sixty days salary…

dissenting:

I dissent for the reason that the majority opinion is mistaken in its major premise. The majority rely exclusively on the premise that this is a case in which there was a sale of a business. The undisputed fact that the majority completely ignore is that this case is not about a sale of the business, but merely a sale of assets of the business. That fact is conclusively established by the record. What is unknown is whether the sale was of all the assets or just a part of them. The district court refused to order the agreement to be produced. The majority, like the district court, err in the conclusion that Compact Video Services’ (“Compact’s”) employees were merely “transferred from the payroll of one company to another as the result of a sale” because their major premise, that the sale was a sale of the business, is wrong.

On July 30, 1993 Compact notified all 314 of its employees by letter that Compact was selling its assets to ATS Acquisition Corporation (“ATS”) during the week of August 2, 1993. Compact’s notice explained the impending termination of the current employer/employee relationship and imputed that future ATS hiring decisions were beyond the power or…