Fleming v. Bayou Steel, No. 22-30260 (5th Cir. 2023)
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BD LaPlace, LLC, doing business as Bayou Steel (Bayou Steel), operated a steel mill in LaPlace, Louisiana. Without giving The Worker Adjustment and Retraining Notification Act (WARN) notice, Bayou Steel terminated Plaintiffs’ employment and closed the LaPlace mill where they worked. Seeking to recover under the WARN Act, Plaintiffs initially filed a putative class action complaint against Bayou Steel in Delaware bankruptcy court. Plaintiffs dismissed that action and filed the instant class action in federal district court. Rather than suing their employer Bayou Steel, Plaintiffs sued Bayou Steel BD Holdings II, LLC and Black Diamond Capital Management, LLC(a private equity firm that advised the fund that owned BD Holdings II). Plaintiffs demanded a jury trial, which the district court denied. Defendants sought summary judgment, which the district court granted. Plaintiffs appealed, challenging both the denial of their jury demand and the summary judgment for Defendants.
The Fifth Circuit affirmed the district court’s conclusion that there is no right to a jury trial under the WARN Act. The court also affirmed the district court’s grant of summary judgment to BD Holdings II. But the district court erred in granting summary judgment to BDCM because there is a genuine dispute of material fact as to whether BDCM exercised de facto control over Bayou Steel’s decision to close its LaPlace steel mill and order Plaintiffs’ layoffs. The court explained that if BDCM “specifically directed” the closing of the mill without proper notice, the company may be liable for Bayou Steel’s WARN Act violation even absent the other factors.
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