Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


8-29-2008

Omer Masse v. APA Transp Corp
Precedential or Non-Precedential: Precedential

Docket No. 07-1050




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                                      PRECEDENTIAL


    UNITED STATES COURT OF APPEALS
         FOR THE THIRD CIRCUIT


         Nos. 07-1050, 07-1051, 07-1052


IN RE: APA TRANSPORT CORP. CONSOLIDATED
               LITIGATION

     TEAMSTERS LOCAL UNION NO. 560,
           Appellant No. 07-1050
               __________

IN RE: APA TRANSPORT CORP. CONSOLIDATED
               LITIGATION

   BRIAN CAMPBELL; JOHN CRONIN JR.;
   ANDREW IMPERATORE; OMER MASSE;
    GARY PEGORARO; DEBORAH TETRO;
         and RICHARD YURCISIN,
           Appellants No. 07-1051


IN RE: APA TRANSPORT CORP. CONSOLIDATED
               LITIGATION

     TEAMSTERS PENSION TRUST FUND
     OF PHILADELPHIA AND VICINITY;
         TEAMSTERS HEALTH AND
     WELFARE FUND OF PHILADELPHIA
      AND VICINITY; and TEAMSTERS
             LOCAL NO. 470,
            Appellants No. 07-1052


  On Appeal from the United States District Court
          for the District of New Jersey
        Honorable Garrett E. Brown, Jr.
                 (Civ. A. No. 02-CV-3480)
                       ___________


                       ___________

                  Argued March 11, 2008


  Before: FUENTES, CHAGARES and ALDISERT, Circuit
                      Judges.

              (Opinion Filed: August 29, 2008)
                       ___________


David Grossman
Cohen, Leder, Montalbano & Grossman
1700 Galloping Hill Road
Kenilworth, NJ 07033
Counsel for Appellant
Teamsters Local Union No. 560

John C. Lankenau
Lankenau & Miller
Suite 10A
20 West 86th Street
New York, NY 10024
Counsel for Appellants
Brian Campbell; John Cronin Jr.; Andrew Imperatore; Omer
Masse; Gary Pegoraro; Deborah Tetro; and Richard Yurcisin

Paul A. Friedman                 [ARGUED]
Blank Rome
405 Lexington Avenue
The Chrysler Building
New York, NY 10174
Counsel for Appellants
Teamsters Local Union No. 470; Teamsters Pension Trust Fund
of Philadelphia and Vicinity; Teamsters Health and Welfare

                             2
Fund of Philadelphia and Vicinity

Keith R. McMurdy              [ARGUED]
Fox Rothschild
100 Park Avenue
Suite 1500
New York, NY 10017
Counsel for Appellees
APA Truck Leasing, APA Transport Corp.

Shea H. Lukacsko
Fox Rothschild
75 Eisenhower Parkway
Roseland, NJ 07068
Counsel for Appellees
APA Truck Leasing, APA Transport Corp.




                            OPINION


FUENTES, Circuit Judge.

        APA Transport Corporation (“APA Transport”) closed its
facilities and terminated all of its employees on February 20, 2002.
It had informed its employees of the impending shutdown and
layoffs only a week earlier. Following the shutdown, a number of
non-union and union employees, along with certain Employee
Retirement Income Security Act (“ERISA”) funds, filed suit
against APA Transport and affiliated entities claiming that they had
violated the notice provisions of the Worker Adjustment and
Retraining Notification Act (“WARN Act”), 29 U.S.C. § 2101, et
seq., which requires that an employer provide 60 days’ notice
before a plant shutdown unless the employer qualifies for certain
exceptions. On appeal, we address: (1) whether the ERISA funds
have standing to sue under the WARN Act; (2) whether APA
Transport and an affiliated company, APA Truck Leasing, could be
considered liable pursuant to the WARN Act as a “single
employer”; and (3) whether APA Transport qualifies for the

                                 3
“faltering company” exception to the notice provisions of the
WARN Act.

I.            Background

         A.        Facts of the Case

       APA Transport was a trucking business founded in 1947
and dissolved on February 20, 2002. APA Transport’s main
offices were located in North Bergen, New Jersey, with other
terminals and facilities throughout the Northeast. Pursuant to
collective bargaining agreements, APA Transport’s union
employees were represented by Teamsters Local 470 (“Local 470”)
and Teamsters Local 560 (“Local 560”).

        The co-owners of APA Transport – Arthur Imperatore, Sr.
and Armand Pohan – also owned more than 30 other companies at
the time APA Transport closed, many of which continue to operate
today. One of these companies is APA Truck Leasing, which is
involved in leasing motor vehicles. Imperatore and Pohan were
officers and directors of both APA Transport and APA Truck
Leasing and – along with Fred Astle and Burton Trebour – directed
the day-to-day affairs of both companies. The parties to this appeal
dispute the degree to which APA Transport and APA Truck
Leasing were connected to each other.1 Appellants 2 argue that the
two companies were closely related, highlighting the following
facts: the companies made non-formal loans to one another; APA
Transport provided non-union employees of APA Truck Leasing
with medical, pension, 401(k) and workers’ compensation benefits;
non-union employees of APA Truck Leasing received the same
benefits as APA Transport employees; and APA Transport
provided payroll, office supplies, accounting and other services for


     1
    This dispute is significant because the degree to which the two
entities were related determines whether they constitute a “single
employer” under the WARN Act. See discussion infra at Section
II.C.
     2
   Appellants are the Employee Plaintiffs and the Plaintiff Funds.
See definition infra at Section I.B.

                                 4
APA Truck Leasing. APA Transport, by contrast, contends that the
two companies operated separately, and points to the following
facts: APA Transport and APA Truck Leasing did not share
employees; the companies handled the discipline of employees
separately; the companies had separate contracts with different
unions; and the companies maintained separate financial books and
records.

       On December 19, 1996, APA Transport entered into a Loan
and Security Agreement (“Loan Agreement”) with Transamerica
Business Capital Corporation (“Transamerica”). The Loan
Agreement provided APA Transport with a revolving credit facility
that allowed it to borrow up to $40 million, secured by real
property, equipment and accounts receivable.            The Loan
Agreement required APA Transport to provide Transamerica with
regular reports as to outstanding accounts receivable and to comply
with certain financial covenants.

       Following the execution of the Loan Agreement, APA
Transport suffered consistent losses. As a result, it defaulted on
loan covenants on multiple occasions in 1999, 2000 and 2001.
After each default, Transamerica and APA Transport negotiated
agreements whereby the breaches were waived and/or the
applicable covenants were amended. APA Transport was also
negatively affected by the September 11, 2001 terrorist attacks
because it conducted a significant amount of business in the New
York City metropolitan area; following the attacks, APA Transport
reported that its revenues fell 30 percent. As a result, APA
Transport’s reduced accounts receivable limited the amount of
money it could continue to borrow from Transamerica under the
Loan Agreement.

        On October 24, 2001, Transamerica convened a meeting
with APA Transport at Transamerica’s offices to discuss how APA
Transport was “going to operate going forward, given [its] losses.”
(Joint Appendix (“J.A.”) 520a-521a.) The attendees included
Pohan and Imperatore; Transamerica’s president, Steven Fischer;
and Transamerica representatives Christopher Norrito and Michael
Burns. The Transamerica representatives expressed concern about
the state of APA Transport’s finances, communicated to Pohan and

                                5
Imperatore that Transamerica would not continue to fund APA
Transport’s operating losses and indicated that Pohan and
Imperatore would need to put additional capital into the company
before Transamerica would extend any additional financing.3 APA
Transport stated that it would seek additional financing, and
Transamerica responded by stating that its “options were open” for
extending the Loan Agreement. (J.A. 1465a.) However, APA
Transport made no formal request at the meeting to secure
additional financing or to extend the Loan Agreement.

        In November 2001, Transamerica notified APA Transport
that it was once again in default on the Loan Agreement. On
December 10, 2001, Transamerica agreed to a fifth waiver and
amendment to the Loan Agreement to cure those defaults.

        The Loan Agreement was set to expire on February 28, 2002
(the “Termination Date”), at which point the entire loan amount
was due. Under the Loan Agreement, any requests for extensions
or renewals of the Loan Agreement were required to be in writing
60 days prior to the Termination Date. However, as of the end of
2001, APA Transport had made no written or oral request for
Transamerica to extend or renew the Loan Agreement; the parties
had not begun to gather the documentation required for such an
extension or renewal; and APA Transport officials had taken no
steps to invest additional capital in the company.

       On January 2, 2002, Astle sent a letter (the “Astle Letter”)
to Norrito requesting additional financing for APA Transport, to be
secured by mortgages on two freight terminals owned by
companies related to APA Transport. The letter asserted that each
of the terminals was worth $4 to $5 million, and requested that
Transamerica extend an additional loan of $5 to $6 million to be
secured by mortgages on these properties. There is no evidence
that work was undertaken on the preparation of appraisals,



  3
    It was clear to both parties at this point that Transamerica was
the only financial institution that would provide APA Transport
with additional financing, given that APA Transport was so
encumbered by the obligations of the Loan Agreement.

                                 6
environmental reports or environmental indemnity agreements for
these properties, all which would have been necessary to obtain the
mortgages. Moreover, the Astle Letter did not specifically seek an
extension or renewal of the Loan Agreement, nor did it mention the
impending Termination Date.

        On January 15, 2002, a second meeting was held between
Transamerica and APA Transport to discuss the state of APA
Transport’s finances, with Pohan, Astle, Norrito, Burns and Fischer
in attendance. At the meeting, Transamerica made no commitment
with respect to additional financing; it also neither indicated that it
would extend its loan beyond the Termination Date nor increased
its lending to APA Transport.

        On January 24, 2002, Pohan sent a letter to Fischer (the
“Pohan Letter”). The letter stated that he was “renewing [the]
request that Transamerica provide [APA Transport] with an
additional loan to carry us through this recessionary winter and the
losses attendant thereto.” (J.A. 1042a.) It reiterated the offer made
in the Astle Letter for APA Transport to arrange to secure
additional financing with mortgages on the two terminals. The
letter concluded by stating that Transamerica’s “prompt response
to this request is most urgent, since the ability of the ownership to
fund the anticipated losses in the next few weeks has just about
been depleted.” (Id.)

       Transamerica did not respond to the Pohan Letter with a
credit memorandum or credit approval. In the first week of
February, Pohan had a phone conversation with a Transamerica
representative, during which Pohan was informed that it would be
difficult to persuade Transamerica’s credit department to approve
additional financing unless APA Transport’s owners put additional
money into the company.         Then, on February 13, 2002,
Transamerica sent APA Transport a letter formally notifying it that
the Loan Agreement would terminate pursuant to its terms on
February 28, 2002, and that Transamerica would not agree to
extend the Loan Agreement to provide additional financing.

     Unable to continue functioning without such financing,
APA Transport shut its terminals on February 20, 2002. The first

                                  7
notice to employees of the shutdown was given in a February 11,
2002 letter from APA Transport to the president of Local 470,
which was received on February 14, 2002. The letter stated that in
accordance with the WARN Act, it was providing notice that APA
Transport was permanently closing its terminal in Philadelphia,
Pennsylvania effective February 20, 2002. The letter further stated
that all employees at the location would be permanently laid off,
and that APA Transport had given a “shortened” WARN notice
because it had been

       actively seeking financial assistance to alleviate its
       severe economic problems. If APA [Transport] had
       provided an earlier shutdown notice, it would have
       precluded our ability to obtain the financing
       necessary to continue in business. APA [Transport]
       has now been notified that its request for this critical
       financing has been rejected and, accordingly, it can
       no longer afford to operate.

(J.A. 1047a). On February 14, 2002, APA Transport sent similar
letters to representatives of Local 560 and to all non-union
employees.

       As a result of the shutdown, all APA Transport employees
– those represented by Local 470, represented by Local 560 and
non-union employees – were terminated. APA Transport paid no
wages or benefits to any employee after February 22, 2002.

      Approximately six weeks after the shutdown, APA Truck
Leasing lent APA Transport between $10 and $15 million. The
loan was secured by an Open-End Mortgage and Security
Agreement dated June 5, 2002 on APA Transport’s North Bergen
terminal facility.

       B.        Procedural History

      Several complaints were filed against APA Transport, APA
Truck Leasing and certain other related entities (the “APA




                                  8
Entities”)4 beginning in 2002. These complaints alleged violations
of ERISA and/or the WARN Act and sought back wages and
benefits. One set of plaintiffs was comprised of two ERISA funds,
the Teamsters Pension Trust Fund of Philadelphia and Vicinity and
the Teamsters Health and Welfare Fund of Philadelphia and
Vicinity (Local 470) (together, the “Plaintiff Funds”), which
alleged violations of the WARN Act and ERISA. A second set of
plaintiffs was comprised of a class of non-union employees and
Local 560 (the “Employee Plaintiffs”) who alleged violations of the
WARN Act and ERISA.5

       The cases were consolidated in the United States District
Court for the District of New Jersey in May 2003,6 after which both
the Plaintiff Funds and the Employee Plaintiffs filed multiple
amended complaints that added certain parties. Thereafter, APA
Transport moved for summary judgment as to the claims asserted
by the Plaintiff Funds, alleging that the Plaintiff Funds lacked
standing. The Plaintiff Funds and the Employee Plaintiffs
simultaneously filed motions for partial summary judgment
asserting that the Plaintiff Funds had standing under the WARN
Act; that APA Transport, APA Truck Leasing and the APA
Entities should be considered a “single employer” for WARN Act


       4
      These entities are: APA International Corporation; APA
World Transport Corporation; Imperial Delivery Service, Inc.; and
Transport Flexonomics, Inc. The Plaintiff Funds and the Employee
Plaintiffs have not appealed the District Court’s decision with
respect to the APA Entities.
   5
      There was a third plaintiff, the Freight Drivers and Helpers
Local Union Number 577 (“Local 577”), which alleged violations
of the WARN Act. The District Court granted summary judgment
in favor of APA Transport, APA Truck Leasing and the APA
Entities against Local 577 because those claims were brought by
employees at facilities with fewer than 50 full-time employees and
thus were statutorily excluded. Local 577 did not appeal the
District Court’s decision.
   6
     The District Court had jurisdiction over these cases pursuant
to 28 U.S.C §§ 1337 and 1367, and 29 U.S.C. § 2104(a).

                                9
purposes; and that APA Transport did not qualify for the so-called
“faltering company” exception to the WARN Act. APA Transport
then filed a cross-motion for summary judgment as to the “faltering
company” defense. At the same time, APA Truck Leasing and the
APA Entities filed cross-motions for summary judgment regarding
the “single employer” issue.

       On December 7, 2006, without oral argument, the District
Court granted APA Transport’s summary judgment motion as to
claims asserted by the Plaintiff Funds, holding that the Plaintiff
Funds lacked standing under the WARN Act. The District Court
also granted summary judgment to APA Transport on the “faltering
company” defense. Finally, it granted APA Truck Leasing and the
APA Entities summary judgment on the “single employer” issue,
concluding that none of those companies could be considered a
“single employer” with APA Transport. On December 13, 2006,
the District Court dismissed all remaining issues as moot, and on
December 29, 2006, entered final judgment.

      A timely appeal followed. We have jurisdiction pursuant to
28 U.S.C. § 1291.

II. Discussion

       There are three issues on appeal. We first consider whether
the District Court was correct to conclude that the Plaintiff Funds
do not have standing under the WARN Act. Next, we determine
whether the District Court was correct to conclude that APA
Transport and APA Truck Leasing did not constitute a “single
employer” for WARN Act purposes. Finally, we address whether
the District Court was correct to conclude that APA Transport
qualified for the “faltering company” exception to the WARN Act
notice requirement.

       Our review of all three legal issues, which were decided at
summary judgment, is de novo. TKR Cable Co. v. Cable City
Corp., 

, 199 (3d Cir. 2001). We construe the facts in
the light most favorable to the nonmoving party. 

is appropriate if “there is no genuine issue as to any
material fact and . . . [the moving party] is entitled to judgment as

                                 10
a matter of law.” Fed. R. Civ. P. 56©.

       A.    Brief Overview of the WARN Act

        The WARN Act was enacted in 1986 in response to
extensive worker dislocation that occurred in the 1970s and 1980s
when employees lost their jobs, often without notice, as companies
were merged, acquired or closed. The purpose of the WARN Act
is to protect workers by obligating employers to give their
employees advanced notice of plant closings. This allows workers
who will be laid off time 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.” Hotel Employees & Rest. Employees
Int’l Union Local 54 v. Elsinore Shore Assocs., 

, 182
(3d Cir. 1999) (citation omitted).

       The WARN Act provides that covered employers –
generally, those that employ at least 100 full-time workers at a
single site of employment – must provide 60 days’ written notice
before a closing or mass layoff. See 29 U.S.C. § 2101 et seq. The
Act dictates that notice be given to affected employees or their
union representative, the state dislocated worker unit and the chief
elected official of a unit of local government. 

Employers that violate the WARN Act are liable to their employees
for back pay and benefits for each day notice is not provided, up to
a maximum of 60 days. 

The WARN Act contains three
exceptions to the notice requirement: the “faltering company”
exception, the “business circumstances” exception and the “natural
disaster” exception. 

20 C.F.R. § 639.9.

       B.        Standing to Sue Under the WARN Act

       The Plaintiff Funds, joined by the Employee Plaintiffs,
contend that the District Court erred when it concluded that the
Plaintiff Funds did not have standing to bring suit under the
WARN Act. For the reasons that follow, we conclude that the
District Court correctly determined that the Plaintiff Funds lack
standing.



                                11
      The WARN Act limits employer liability “to each aggrieved
employee who suffers an employment loss.” 29 U.S.C. §
2104(a)(1). It further enumerates who may bring a suit:

       A person seeking to enforce such liability, including
       a representative of employees or a unit of local
       government aggrieved under paragraph (1) or (3),
       may sue either for such person or for other persons
       similarly situated, or both, in any district court of the
       United States for any district in which the violation
       is alleged to have occurred, or in which the employer
       transacts business.

The WARN Act defines the term “representative”
with reference to labor organizations, which are the “exclusive
representative[s] of employees” under federal labor law. 

A “unit of local government” is defined as a “political
subdivision of a State.” 

        The District Court concluded that the Plaintiff Funds did not
have standing to sue under 29 U.S.C. § 2101(a)(4) because,
although employee welfare and benefit plans are included in those
benefits to which an aggrieved employee is entitled under the
WARN Act, the Plaintiff Funds themselves “cannot be ‘aggrieved
employees’ under the WARN Act.” In re APA Transport Corp.
Consol. Litig., No. 02-CV-3840, 

, at *6 (D.N.J.
Dec. 7, 2006). In support of this position, the District Court
adopted the analysis of United Mine Workers of America, District
12 v. Midwest Coal Co., No. TH 99-C-141-T/H, 

(S.D. Ind. Aug. 31, 2001). There, plaintiffs alleging a
violation of the WARN Act sued to recover, inter alia,
contributions that their employers were required to have made to
certain benefit funds during the violation period. Midwest Coal,

, at *3. The court ruled that the plaintiffs were
not entitled to recover the amount of the contributions because the
WARN Act set forth the exclusive remedies for a violation of the
Act in 29 U.S.C. § 2104, and contributions did not qualify as one
of the remedies explicitly listed. 

In addition, the court
concluded that the plaintiffs were not entitled to recover
contributions because “[n]one of the funds for which [the]

                                  12
[p]laintiffs seek contributions by [the defendant] qualifies as an
‘aggrieved employee’ under the [WARN] Act.” 

Court reasoned that if the benefit plans in Midwest Coal could not
be considered “aggrieved employees” under the WARN Act,
neither could the plans here; and consequently, the Plaintiff Funds
did not have standing. In re APA Transport Corp., 

, at *6.

       On appeal, APA Transport argues that this reasoning is
correct, and further argues that if employees are not entitled to
ERISA contributions as part of their WARN Act damages, then the
Plaintiff Funds have no claim upon which to sue. The Plaintiff
Funds respond that the funds in Midwest Coal were not ERISA
funds and argue that the analysis there is consequently not
transferrable to this case. The Plaintiff Funds also cite United
Mine Workers of Am. Int’l Union v. Martinka Coal Co., 45 F.
Supp. 2d 521 (N.D. W.Va. 1999), aff’d, 

(4th Cir.
2000), for the proposition that contributions to ERISA plans are
benefits that fall under the WARN Act damages rubric set forth in
29 U.S.C. § 2104(1)(B).7 The Plaintiff Funds argue that because
they are charged, pursuant to ERISA, with aggressively pursuing
the funds to which they are entitled on behalf of the employees
whom they serve, and because contributions to ERISA plans are
benefits that can be recovered as damages when there has been a
WARN Act violation, the Plaintiff Funds should be entitled to sue
to recover those contributions.

        We believe the parties’ arguments are premature. The initial
issue we must resolve – a question that both the District Court and
the parties did not address – is whether the Plaintiff Funds can be
considered “person[s]” permitted to seek enforcement of the
WARN Act pursuant to 29 U.S.C. § 2104(a)(5). This is an issue of
first impression in this Circuit and it appears that no other circuit
has considered whether benefit plans should be considered



     7
       The court in Midwest Coal expressly disagreed with the
decision reached by the court in Martinka Coal. See Midwest
Coal, 

, at *10 n.7 (concluding that Martinka
Coal was “wrongly decided”).

                                 13
“person[s]” under 29 U.S.C. § 2104(a)(5).

        As noted above, the relevant provision of the WARN Act
provides that a civil suit may be brought by “[a] person seeking to
enforce such liability, including a representative of employees or
a unit of local government aggrieved under paragraph (1) or (3).”
29 U.S.C. § 2104(a)(5). The WARN Act fails to define the word
“person.” The rules of construction for federal statutes broadly
define “person” as “includ[ing] corporations, companies,
associations, firms, partnerships, societies, and joint stock
companies, as well as individuals” unless the “context [of the
statute] indicates otherwise.” 1 U.S.C. § 1.

        Here, there is nothing in the context of the statute that
indicates to us whether Congress intended to more narrowly
proscribe those “person[s]” who can enforce the WARN Act. Nor
does the language of the pertinent provision provide a clear answer.
Rather, it states that the category “includ[es] representative[s] of
employees or [] unit[s] of local government aggrieved under
paragraph (1) or (3).” 29 U.S.C. § 2104(a)(5) (emphasis added).
It is a well-established canon of statutory construction that when
the word “including” is followed by a list of examples, those
examples are generally considered illustrative rather than
exhaustive. See, e.g., Massachusetts v. E.P.A., 

,
1476 (2007) (Scalia, J., dissenting) (“The word ‘including’ . . .
indicate[s] that what follows will be an ‘illustrative’ sampling of
the general category that precedes the word.”); United States v.
Grassie, 

, 1215 (10th Cir. 2001) (“[W]e regard the
statutory use of the word ‘including’ . . . as the preface for a
representative or illustrative example, and not as a term of
restriction or exclusion for anything not expressly specified.”). But
“canons [of construction] are not mandatory rules. They are guides
that ‘need not be conclusive.’” Chickasaw Nation v. United States,

, 85 (2001) (quoting Circuit City Stores, Inc. v. Adams,

, 115 (2001)).

       However, we need not decide whether the statute should be
interpreted in a manner consistent with the canon based on the
statute alone because authoritative regulations address the very
question at issue. We have explained that when “a relevant statute

                                 14
is silent or ambiguous, we will defer to any reasonable regulations
promulgated by the [agency charged with administering the
statute].” Bd. of Tr. of Trucking Employees of N.J. Welfare Fund,
Inc.-Pension Fund v. Kero Leasing Corp., 

, 294 (3d
Cir. 2004); see also Smriko v. Ashcroft, 

, 295 (3d Cir.
2004) (“agency regulations ‘have the force of law’” (quoting
Marshall v. Lansing, 

, 943 (3d Cir. 1988))); Martinka
Coal 

n.2 (4th Cir. 2000) (WARN Act
regulations have the force of law “unless they are irreconcilable
with the clear meaning of a statute, as revealed by its language,
purpose, and history” (internal quotation marks and citation
omitted)). The Secretary of Labor is charged with “prescrib[ing]
such regulations as may be necessary to carry out” the WARN Act.
29 U.S.C. § 2107(a). Here, the regulations promulgated by the
Department of Labor (“DOL”) pertaining to “WARN Act
enforcement” state that

       [e]nforcement of WARN will be through the courts,
       as provided in section 5 of the statute. Employees,
       their representatives and units of local government
       may initiate civil actions against employers believed
       to be in violation of § 3 of the Act. The Department
       of Labor has no legal standing in any enforcement
       action and, therefore, will not be in a position to
       issue advisory opinions of specific cases. The
       Department will provide assistance in understanding
       these regulations and may revise them from time to
       time as may be necessary.

20 C.F.R. § 639.1(d) (emphasis added). This provision, unlike the
related provision in the statute itself, indicates that only employees,
union representatives and units of local government may bring suit.
 Neither party cites this regulation, much less contends that it is in
“conflict with the plain language of the statute.” K Mart Corp. v.
Cartier, Inc., 

, 292 (1988). Consequently, we will
apply the DOL regulation, which compels the conclusion that
Plaintiff Funds are not “person[s]” that may enforce the WARN
Act.

       For the foregoing reasons, we conclude that the District

                                  15
Court correctly concluded that the Plaintiff Funds do not have
standing to bring suit under the WARN Act.

       C.   “Single Employer”

      We next address the question of whether APA Truck
Leasing and APA Transport constitute a “single employer” for
WARN Act purposes. If the two entities are a “single employer”
then we need not reach the question of whether APA Transport
may avail itself of the “faltering company” defense, as APA
Transport would not be able to demonstrate that it was “faltering”
because it would have had adequate capital to operate. For the
reasons that follow, we conclude that the District Court correctly
determined that APA Transport and APA Truck Leasing cannot be
considered a “single employer.”

       The WARN Act defines the term “employer” as “any
business enterprise” that employs 100 or more full-time employees.
29 U.S.C. § 2101(a). The WARN Act does not define “business
enterprise”; however, DOL regulations issued under the WARN
Act provide that two or more affiliated companies may be
considered a single business enterprise for WARN Act purposes.
20 C.F.R. § 639.3(a)(2). The regulations state that “independent
contractors and subsidiaries which are wholly or partially owned by
a parent company are treated as . . . a part of the parent or
contracting company depending upon the degree of their
independence from the parent.” 

v. Component Technology Corp., 

(3d Cir. 2001), we adopted the five factors listed in those
regulations to create a balancing test that would determine whether
related companies are liable under the WARN Act on “single
employer” grounds. The five factors are as follows: (1) common
ownership, (2) common directors and/or officers, (3) de facto
exercise of control, (4) unity of personnel policies emanating from
a common source, and (5) dependency of operations. 

20 C.F.R. § 639.3(a)(2). We further indicated that the five-factor
test was a balancing test in which a number of facts and
circumstances may be relevant. 

.
However, the factors are not balanced equally: the first and second

                                16
factors, common ownership and common directors and/or officers,
are not sufficient to establish that two entities are a “single
employer.” 

(“ownership – and even ownership coupled
with common management – is not a sufficient basis for liability”).

        In the context of summary judgment, we held that the
“WARN Act test for intercorporate liability presents a question of
fact,” but noted that “[our] decision to characterize it as such does
not preclude an inquiry as to whether plaintiffs have put forth
enough evidence to create a genuine issue of material fact.” 

In fact, in Pearson itself, we applied the test and concluded
that the “evidence proffered by the plaintiffs simply [did] not
establish the high degree of integration required by the analysis set
forth in this opinion” to survive summary judgment. 

Here, the District Court concluded that the evidence was not
sufficient to create a genuine issue of material fact, and held that
APA Transport and APA Truck Leasing 8 could not be considered
a “single employer” for WARN Act purposes. While the Employee
Plaintiffs had demonstrated (and APA Transport and APA Truck
Leasing did not dispute) “common ownership” and “common
directors and/or owners” (the first two factors), as APA Transport
and APA Truck Leasing shared all of the same stockholders and
maintained the same presidents and vice-presidents, the District
Court then determined that the third, fourth and fifth factors
weighed against the conclusion that APA Transport and APA
Truck Leasing should be considered a “single employer.” For the



  8
    In Pearson, we noted that “[n]either the WARN Act itself, nor
the regulations, explicitly discuss the statute’s applicability to
lenders,” but rather focus on entities with parent-subsidiary

. However, we ultimately concluded
that “under some circumstances, a lender can become so entangled
with its borrower’s affairs so as to engender WARN Act liability.”

with a lendee-lender relationship – such as
APA Truck Leasing and APA Transport – may be considered a
“single employer” for WARN Act purposes. In any event, APA
Transport and APA Truck Leasing do not dispute the applicability
of the Pearson framework.

                                 17
third factor, “de facto exercise of control,” the District Court found
that lower levels of management at the two companies were
supervised on a company-by-company basis, and that as such there
was autonomy in supervision. In re APA Transport, 

, at *13. The District Court also found that despite
intercompany loans, the two companies were autonomous in terms
of finances because each company had independent wage rates, pay
scales, salaries and payrolls. 

“unity of personnel
policies emanating from a common source” factor, the District
Court found that each company possessed its own employees and
its own policies regarding compensation, vacation and sick time;
that the companies hired and fired employees on an individual
basis; and that, to a large extent, personnel files were maintained
separately. 

Finally, for the “dependency of operations”
factor, the District Court relied on its analysis for the third and
fourth factors and determined that it weighed in favor of APA
Transport and APA Truck Leasing as well. Id.9 As only the first
two factors weighed in favor of the Employee Plaintiffs, and these
two factors alone are not sufficient to demonstrate that two entities
are a “single employer,” the District Court concluded that APA
Truck Leasing and APA Transport “[could not] reasonably be
considered a ‘single employer’ for WARN Act purposes.” 

the Employee Plaintiffs do not dispute the
underlying factual findings of the District Court, but contend that
there is a genuine issue of material fact as to the ultimate question
of whether APA Transport and APA Truck Leasing constitute a
“single employer.” We disagree. As we stated earlier, that the
balancing test requires a fact-intensive analysis does not “preclude
an inquiry as to whether plaintiffs have put forth enough evidence



    9
      This approach was improper, because the analysis for the
“dependency of operations” factor, which considers the general
administrative structure of two related entities, differs from the
analysis for the “de facto exercise of control” and “unity of
personnel policy” factors, which look to decision-making and
personnel policies of the two entities, respectively. However,
despite this oversight, the District Court reached the proper
conclusion for this factor.

                                 18
to create a genuine issue of material fact.” 

. We agree with the District Court that no reasonable juror,
employing the five-factor test, could find that APA Transport and
APA Truck Leasing were a “single employer.”

       As an initial matter, we think it important to consider the
policy considerations that animate the WARN Act. The purpose of
the Act is to penalize those employers that close a plant and fail to
comply with the notice requirements of the statute. Thus, the
question of whether two entities constitute a “single employer” for
WARN Act purposes “is ultimately an inquiry into whether . . . two
nominally separate entities operated at arm’s length” or whether,
following an “assessment of the amount of control” exercised by
one entity over another, it can be determined that two entities
should be considered jointly liable for the closing and the
subsequent lack of notice. 

Accordingly, the goal of
the five-factor test here is to determine whether APA Truck
Leasing had become “so entangled with [APA Transport’s] affairs
so as to engender WARN Act liability,” or whether the two
continued to function at arm’s length as separate entities. 

       Turning to the decision of the District Court, we note it was
correct to conclude that the first two factors – “common
ownership” and “common directors and/or owners” – are not
sufficient to deem two entities a “single employer.” The Employee
Plaintiffs are thus incorrect to argue that they should survive
summary judgment on the “single employer” issue solely because
APA Truck Leasing and APA Transport were owned by the same
individuals and shared directors and officers.

        Consequently, the remaining three factors are determinative.
Factor three looks to whether there was “de facto exercise of
control” of APA Trucking by APA Transport or vice versa. The
core of this factor is whether one company “was the decision-
maker responsible for the employment practice giving rise to the
litigation.” 

Here, a review of the facts adduced by
the parties indicates that while APA Truck Leasing may have made
certain loans to APA Transport and shared certain administrative
functions, it was not “controlling” APA Transport and played no

                                 19
role in APA Transport’s decision to close its facilities. Thus, factor
three does not support a finding that APA Transport and APA
Truck Leasing constitute a “single employer.”

       Factor four looks to whether there was a “unity of personnel
policies.” The overall question is whether the companies “actually
functioned as a single entity with regard to [their] relationship[]
with employees.” 

To reach an answer, we consider
whether the two companies in question engaged in centralized
hiring and firing, payment of wages, and personnel and benefits
recordkeeping. See Vogt v. Greenmarine Holding, 

, 142-43 (S.D.N.Y. 2004). While the two companies did share
certain benefit plans and some employee monitoring functions
(specifically, APA Transport did the background security checks
for APA Truck Leasing’s new hires, and machinists at both
companies were given the opportunity to bid for positions at the
other company), there is no evidence that the two companies
“actually functioned as a single entity” with regard to their
respective employees. 

. Employees were
hired and fired independently; reported separately to supervisors at
their respective companies; were paid from separate payrolls;
reported tax obligations to the federal government under separate
ID numbers keyed to their company; and had separate labor
contracts. This factor also does not support a finding that APA
Transport and APA Truck Leasing were a “single employer.”

       The fifth and final factor is whether there was a
“dependency of operations” between the two companies. To
determine whether two companies are dependent on one another,
we look to the “existence of arrangements such as the sharing of
administrative or purchasing services, interchanges of employees
or equipment, and commingled finances.” 

(citations
omitted). Although the Employee Plaintiffs insist that the two
companies commingled finances, the record indicates that the loans
between APA Truck Leasing and APA Transport were made at
arm’s length. Moreover, APA Transport and APA Truck Leasing
were clearly not “dependent” upon one another to continue
operation, and there is no stronger evidence for this fact than that
APA Truck Leasing continued to operate without incident after
APA Transport folded. Thus, the fifth factor also cannot support

                                 20
a finding that APA Transport and APA Truck Leasing were a
“single employer.”

        Because the final three factors are clearly in favor of APA
Transport and APA Truck Leasing, and because a finding that two
companies share the same ownership and certain directors (the first
two factors) is not in and of itself sufficient to find that two entities
were a “single employer,” we conclude that no reasonable juror
could find that APA Transport and APA Truck Leasing functioned
as a “single employer” based on the facts presented. We therefore
affirm the District Court’s decision on this issue.10



   10
        In reaching its conclusion, the District Court stated that

         no genuine question of material fact has been set
         forth by [the Employee] Plaintiffs. [The Employee]
         Plaintiffs set forth facts that [APA Transport and
         APA Truck Leasing] do not refute, rather, [APA
         Transport and APA Truck Leasing] point to
         additional evidence to support their assertion that
         they are not “employers” under WARN. As such,
         the Court will apply the uncontradicted evidence
         provided to the DOL factors referenced by the Third
         Circuit Court of Appeals in determining whether
         [APA Transport and APA Truck Leasing] can be
         considered a single employer for WARN Act
         liability purposes.

In re APA Transport, 

, at *12. As we have held
that the five-factor test for intercorporate liability is a question of
fact, 

, a district court cannot reach its own
independent conclusion about how those factors should be
balanced. Instead, a district court can only grant summary
judgment for a defendant if no reasonable juror could engage in the
appropriate balancing and determine that the two entities constitute
a “single employer.” If a reasonable juror could weigh the facts
under the balancing test and come out either way – that is, if there
is sufficient evidence in the record to support either finding – then
the question of whether the two entities constitute a “single

                                   21
       D.         The “Faltering Company” Exception

       The Employee Plaintiffs’ final argument is that the District
Court erred when it granted summary judgment to APA Transport
and APA Truck Leasing on the question of whether APA Transport
qualified for the “faltering company” exception to the WARN Act
notice requirement. As noted above, if we had determined that
APA Truck Leasing and APA Transport were a “single employer”
for WARN Act purposes, then the “faltering company” defense
would not be available because APA Transport would have had
adequate capital to continue to operate. However, we have
concluded that no reasonable juror could find that the two
companies constitute a “single employer.” Therefore, we must
focus on the question of whether APA Transport has established
the elements of its affirmative defense sufficient to survive
summary judgment. For the reasons that follow, we conclude that
APA Transport cannot avail itself of the “faltering company”
defense.

       The faltering company exception is an affirmative defense
to liability, which means the employer bears the burden of
establishing its elements. 20 C.F.R. § 639.9. As a threshold
matter, a company seeking to qualify as a “faltering company”
must demonstrate that it had inadequate capital to continue
functioning and, as such, was in a “faltering” state. 

provision states that




employer” must be submitted to a jury. See, e.g., Am. Ad Mgmt.,
Inc. v. GTE Corp., 

, 791 (9th Cir. 1996) (when the “law
clearly envisions that [a] balancing test is normally reserved for the
jury . . . summary judgment is only appropriate if after viewing the
evidence in the light most favorable to the non-moving party, there
is no genuine issue of material fact”). To the extent that the
District Court did its own balancing instead of determining whether
no reasonable juror could reach a different outcome, it did so in
error.


                                 22
       [a]n employer may order the shutdown of a single
       site of employment before the conclusion of the
       60-day period if as of the time that notice would
       have been required the employer was actively
       seeking capital or business which, if obtained, would
       have enabled the employer to avoid or postpone the
       shutdown and the employer reasonably and in good
       faith believed that giving the notice required would
       have precluded the employer from obtaining the
       needed capital or business.

29 U.S.C. § 2102(b)(1). The DOL regulation interpreting the
“faltering company” exception of the WARN Act breaks the
provision into its component parts, so that to benefit from the
defense an employer must prove: (1) it was actively seeking capital
at the time the 60-day notice would have been required, (2) it had
a realistic opportunity to obtain the financing sought, (3) the
financing would have been sufficient, if obtained, to enable the
employer to avoid or postpone the shutdown, and (4) the employer
reasonably and in good faith believed that sending the 60-day
notice would have precluded it from obtaining the financing. 20
C.F.R. § 639.9(a).

       According to the Conference Report issued when Congress
passed the WARN Act, the key elements of the defense, which is
intended as a “narrow one,” are

       that the employer was “actively seeking capital or
       business”; second that, had the employer obtained
       this capital or business, it “would have enabled the
       employer” to prevent or forestall the shutdown; and
       third, that the employer “reasonably and in good
       faith believed” that giving the notice required would
       have precluded the employer from obtaining the
       necessary capital or business that it had a realistic
       opportunity to obtain. Thus, to avail itself of this
       defense an employer must prove the specific steps it
       had taken, at or shortly before the time notice would
       have been required, to obtain a loan, to issue bonds
       or stock, or to secure new business. This duty to

                                23
       seek capital or business falls on the employer . . . .

134 C ONG. R EC. S8686-01 (1988) (emphasis added). The central
aspects of Congress’s stated purpose have been codified in the
DOL regulations; namely, that the faltering company defense
should be construed narrowly and that, to access the defense, the
employer must demonstrate that it was taking the specific steps
required “at the time that 60-day notice would have been required.”
20 C.F.R. § 639.9(a)(1).

        Before this Court, the Employee Plaintiffs challenge only
the first two of the four elements of the defense, asserting that APA
Transport was not actively seeking capital at the time the 60-day
notice would have been required, and that it did not have a realistic
opportunity to obtain that financing. The Employee Plaintiffs have
thus conceded the final two elements (that the financing, if
obtained, would have been sufficient to prevent a shutdown; and
that APA Transport reasonably believed that giving WARN Act
notice would have hindered its ability to get that financing), and we
will not discuss them here. We note that for the two elements we
will consider, we must conclude that APA Transport has
established both elements in order to uphold the District Court’s
decision. Furthermore, we note that the parties do not argue that
there are material underlying facts in dispute. Appellants’ Br. at
48-52; Appellees’ Br. at 18-22.


        The District Court concluded that APA Transport had been
“actively seeking” financing based on APA Transport’s meeting
with Transamerica on October 24, 2001 and its request at that time
for additional financing. It stated that it was “not reasonable to
insist that APA Transport take specific, actual and literal steps on
December 20, 2001, when they had taken said steps on October 24,
2001.” In re APA Transport, 

, at *17. The
District Court explained that to require APA Transport to take such
“specific, actual and literal steps” would “effectively eliminate any
practical application of the ‘faltering business’ exception as it
would require said employer to read the minds of the financial
institution or institutions from which it seeks its financing.” 

appeal, the Employee Plaintiffs assert that the District
Court misstated the timeline of events in its opinion. The District
Court found that at the October 24, 2001 meeting, APA Transport
offered mortgages on two properties to secure additional financing
from Transamerica. Our review of the record indicates that the
Employee Plaintiffs are correct, as APA Transport did not offer
those mortgages to Transamerica until January 2, 2002. APA
Transport concedes this point.

        The Employee Plaintiffs argue that this discrepancy is
significant; although Transamerica and APA Transport discussed
in general terms APA Transport’s need for additional financing at
the October 24, 2001 meeting, there was no affirmative attempt by
APA Transport after that meeting to actually secure that financing.
The offer of the properties did not occur until January 2, after the
60-day period set forth by the WARN Act had begun. On these
facts, the Employee Plaintiffs contend that APA Transport cannot
prove that it was “actively seeking” financing when the period
began.

        APA Transport makes two arguments in response. First, it
agrees with the District Court that APA Transport was not required
to take specific steps at or near the beginning of the 60-day window
because such a requirement “ignores the reality that prediction of
the date a company will need to shut down is not an exact science”
and would mean that companies would be ineligible for the
exception because they started their financing efforts “too late to
save the company.” Appellees’ Br. at 22. Second, APA Transport
contends that it was in fact “actively seeking” financing at the
beginning of the period. It argues that it indicated that it would
seek additional financing from Transamerica at the October 24,
2001 meeting, and that once a “lender confirms that the borrower
was seeking capital, that should be the end of the inquiry” as to
whether the borrower was “actively seeking” capital. 

APA Transport further contends that the Court should take into
account that business decisions “can take some time and that the
year-end holidays . . . occurred in the interim” so that there should
have been no expectation that APA Transport would take
additional steps in December 2001 to secure the financing. 

turn first to APA Transport’s argument that the District
Court was correct to hold that it was “not reasonable to insist that
APA Transport take specific, actual and literal steps on December
20, 2001,” when the 60-day period began, In re APA Transport,

, at *17, because “prediction of the date a
company will need to shut down is not an exact science.”
Appellees’ Br. at 22. This approach essentially asks this Court to
read a “foreseeability” requirement into the faltering business
exception: in APA Transport’s view, if an employer does not
foresee that it is 60 days away from a plant closing, it should not be
held liable for failing to take specific steps at the time to secure
financing. We believe such an approach runs counter to both the
text and the purpose of the WARN Act.

        The plain language of the statute states that a company must
be actively seeking additional financing “as of the time that notice
would have been required.” 29 U.S.C. § 2102(b)(1); see also 20
C.F.R. § 639.9(a) (“[a]n employer must have been actively seeking
capital or business at the time that 60-day notice would have been
required” (emphasis added)). In effect, the WARN Act establishes
“strict liability”: an employer must give notice 60 days prior to a
plant closing, unless it can demonstrate that it falls within one of
three specific enumerated exceptions: (1) the “faltering company”
defense, (2) the “unforeseeable business circumstances” exception,
or the (3) “natural disaster” defense. 29 U.S.C. § 2102(b); 20
C.F.R. § 639.9. The “unforeseeable business circumstances”
exception, which provides for a reduction in the notice period for
“business circumstances that were not reasonably foreseeable” at
the 60-day mark, with circumstances “not reasonably foreseeable”
defined as “some sudden, dramatic, and unexpected action or
condition outside the employer’s control,” indicates that Congress
was not blind to the issue of foreseeability. 20 C.F.R. 639.9(b)(1).
But APA Transport does not contend that it qualifies for the
“unforeseen business circumstances” exception. Rather, APA
Transports appears to contend that a company may qualify for the
“faltering company” defense irrespective of whether it was actively
seeking capital at the time notice was required, so long as it did not
foresee the shutdown that occurred 60 days later. APA Transport
does not point to any statutory language that supports its position.
The DOL regulations, moreover, instruct that the “faltering

                                 26
company” exception is to be “narrowly construed.” 20 C.F.R. §
639.9(a). To allow employers to invoke the defense by arguing
that they did not know a shutdown was 60 days away would risk
allowing the “faltering company” exception, which is an
affirmative defense, to swallow the statute.           We are not
unsympathetic to APA Transport’s argument, but it is one that
should be directed to Congress, not this Court. Our obligation is
“limited to one of statutory interpretation.” In re Columbia Gas
Sys. Inc., 

, 302 (3d Cir. 1994) (“when a statute is clear
and unambiguous, policy arguments cannot deflect us from that
interpretation”); see also Coraggioso v. Ashcroft, 

,
734 (3d Cir. 2004) (“We are compelled . . . to interpret the statute
as written.”). Consequently, we conclude that the WARN Act does
require that steps to “actively seek financing” be taken “at the time
that 60-day notice would have been required.” 20 C.F.R. §
639.9(a)(1).

        We turn next to the question of whether APA Transport was
in any event “actively seeking” financing on December 20, 2001 to
a degree sufficient to assert the “faltering company” defense. We
must assume that Congress included the word “actively” in the
statute for a reason. See Citizens Council of Delaware County v.
Brinegar, 

, 591 (3d Cir. 1984) (“[W]e presume that
the words Congress has chosen best reflect the legislative purpose.”
(internal quotation marks and citations omitted)); see also Reiter v.
Sonotone Corp., 

, 339 (1979) (“In construing a statute
we are obliged to give effect, if possible, to every word Congress
used.”). The word “actively” is generally understood to mean
“characterized by action rather than by contemplation or
speculation.”      W EBSTER ’ S T HIRD N EW I NTERNATIONAL
D ICTIONARY 22 (1993). The DOL regulations provide that
“actively seeking” means “seeking financing or refinancing
through the arrangement of loans, the issuance of stocks, bonds, or
other methods of internally generated financing; or the employer
must have been seeking additional money, credit or business
through any other commercially reasonable method.” 20 C.F.R. §
639.9(a)(1).

      The record indicates that APA Transport and Transamerica
met on October 24, 2001 to discuss APA Transport’s future. We

                                 27
note that it was Transamerica, and not APA Transport, that
requested the meeting; and that it was Transamerica, and not APA
Transport, that affirmatively sought to discuss APA Transport’s
financial health. There is some confusion as to what exactly was
said by Transamerica and APA Transport officials at the October
24, 2001 meeting.11 However, even if we accept APA Transport’s
position that, at the end of that meeting, a representative of APA
Transport stated that it would seek additional financing from
Transamerica and that Transamerica told APA Transport that all of
its “options were open” for extending the loan, (J.A. 1465a.), this
single exchange – which did not constitute a formal request for
financing – is insufficient to demonstrate that APA Transport was
“actively seeking” financing from Transamerica as of October 24,
2001.

       Moreover, the record is clear that between the October 24,
2001 meeting and the January 2, 2002 offer of two mortgaged
properties APA Transport took no steps to secure additional
financing from Transamerica. Nor did APA Transport take any
specific steps to seek an extension of the Loan Agreement which
it knew was set to expire on February 28, 2002.12 APA Transport
knew that the terms of the Loan Agreement required that a request
for such an extension had to be made in writing; no such request
was made at any time prior to the 60-day period (or afterwards).
APA Transport’s actions can, at best, be characterized as waiting


     11
         The District Court appeared to resolve this dispute by
crediting the testimony of a Transamerica executive, stating that his
recollection of the meeting “settled that dispute” as to the definitive
version of events. In re APA Transport, 

, at *16.
To do so at summary judgment is improper. See Country Floors,
Inc. v. P’ship Composed of Gepner and Ford, 

, 1061
(3d Cir. 1991) (“credibility evaluations are inappropriate in
deciding a motion for summary judgment”).
          12
           While APA Transport did sign an agreement with
Transamerica on December 10, 2001 to cure certain defaults in the
existing loan with Transamerica, this agreement did not secure any
additional financing for APA Transport. Nor did APA Transport
seek any additional financing in conjunction with the agreement.

                                  28
for Transamerica to offer additional financing. This cannot be
squared with the requirement that APA Transport be “actively
seeking” additional financing.

       We therefore conclude that no reasonable juror could find
that APA Transport met its burden for prevailing on this element
of the defense. As APA Transport must fulfill all four
requirements of the “faltering company” affirmative defense in
order to qualify for the defense, we conclude that the District Court
erred in granting summary judgment to APA Transport on this
issue.

III.   Conclusion

       For the foregoing reasons, we affirm the District Court’s
judgment that the Plaintiff Funds do not have standing pursuant to
the WARN Act and that APA Transport and APA Truck Leasing
cannot be considered a “single employer.” We reverse the District
Court’s judgment that APA Transport presented evidence sufficient
to establish the “faltering company” affirmative defense, and
remand with instructions that the District Court grant summary
judgment to the Employee Plaintiffs on this issue, and for further
proceedings.




                                 29