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it for, among other things, the debtor's WARN Act violations. Before the court were two motions (the "Motions"): one made by the lead plaintiff (Burgio) in the Burgio Adversary; and the other made by the lead plaintiffs in the Thompson Adversary. The Motions both sought class certification under Fed. R. Civ. P. 23 (Rule 23).
Issues: The court articulated a number of issues: "(1) should a class be certified, (2) if so, in one or both adversaries, (3) if in one adversary, which one, (4) if in one adversary, which firm(s) should be counsel and (5) what should be the composition of the class."
Rules: Rule 23 provides that a class action is allowed if the following requirements are met: (1) the class is sufficiently numerous (numerosity), (2) the issues and facts are sufficiently common (commonality), (3) the claims and defenses are sufficiently typical (typicality), (4) the representative parties will fairly and adequately represent the interests of the class (adequacy). Moreover, the common questions of law or fact must predominate the litigation. The merits of the underlying complaint are not relevant in determining whether a class should be certified.
Holding: The court certified the class, limited it to those employees that had filed proofs of claim, and consolidated it in the Thompson Adversary.
Reasoning: Ultimately, the court held that the plaintiffs in the adversary proceedings met all of the requirements of Rule 23 and the court certified the class. And, because the Thompson Adversary included not only WARN Act claims but also other employee benefit claims, the class action should proceed in the Thompson Adversary and not the Burgio Adversary. The court additionally limited the class to employees who had filed timely (i.e. before the bar date) proofs of claim. The court noted that the debtors scheduled pre-petition wage claims without dispute and they will be allowed unless an objection is filed. But WARN Act, COBRA, ERISA and SC Payment of Wages claims were not scheduled and, without filing a proof of claim, are not allowed. The court reasoned that it did not "read the rules as permitting the filings of claims by one creditor for other creditors, absent a prior determination that a class claim may be filed... Further to open the class to all employees, without regard to the timely filing of a proof of claim by each employee, would render proof of claim deadlines in bankruptcy cases meaningless."
Bartock v. BAE Systems Survivability Systems, LLC, (In re Bartock), 2008 WL 5159248 (Bankr. W.D. Pa. Dec. 9, 2008)
Facts: Pre-petition, Bartock worked for BAE's predecessor pursuant to an employment agreement that included a non-compete agreement. Also pre-petition, Bartock ended his employment with BAE and went to work for Ibis Tek, a competitor of BAE. BAE sued both Ibis Tek and Bartock in state court (the "State Lawsuit"). An agreed order (the "Agreed Order") was entered in the State Lawsuit enjoining Ibis Tek from hiring Bartock and precluding Bartock from working for Ibis Tek. Ibis Tek later settled with BAE and was dismissed from the State Lawsuit; BAE was granted partial summary judgment against Bartock and a damages trial was scheduled. Prior to the trial, Bartock declared chapter 11. Bartock sued BAE in the bankruptcy and the parties eventually entered into a settlement (the "Settlement") under which BAE agreed to release Bartock from any non-competition obligation and Bartock agreed to be enjoined from disclosing any of BAE's trade secrets in the course of his work. After some procedural hiccups, the Settlement was entered by the court and was not appealed by either party. When Ibis Tek sought to re-hire Bartock after the Settlement, BAE refused to allow it based on the Agreed Order. Bartock filed an emergency motion requesting that the Court enforce the Settlement.
Issues: Whether the Settlement entered in the bankruptcy court rendered the Agreed Order that had been issued in the State Lawsuit non-enforceable.
Rules: It is clear that the bankruptcy court has the power, under the Anti-Injunction Act and § 105(a)
