Scana Corp. can't escape from a suit alleging it shares the blame for abruptly shutting down a Westinghouse Electric nuclear reactor project without giving sufficient notice to workers, a South Carolina federal court has ruled.
U.S. District Judge J. Michelle Childs said Wednesday that a proposed class of workers on the reactor led by Harry Pennington III had plausibly alleged that Scana had become their de facto employer by the time the project fell apart last summer.
"Therefore, Scana defendants are not entitled to dismissal of this matter," Judge Childs said.
The project's collapse led to abrupt layoffs of roughly 5,000 workers, without the 60 days of notice required by the Worker Adjustment and Retraining Notification Act.
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Pennington is suing on behalf of workers who had been employed by Westinghouse and subcontractors related to Fluor Corp., who say Scana began paying Fluor's payroll and directly assigning work duties to personnel after Westinghouse's bankruptcy.
Scana hired Westinghouse to build the cutting-edge Virgil C. Summer Nuclear Generating Station in Jenkinsville, South Carolina, in 2013. The ambitious $14 billion project would have been the first new nuclear power plant on U.S. soil in decades, but delays and severe cost overruns ultimately scuttled the project and toppled Westinghouse itself.
The workers say Scana took over the project immediately after Westinghouse's collapse and tried to continue it for a few months, before eventually backing out themselves.
"Scana's input into day-to-day operations became proactive, intrusive, and decisional, in keeping with its assumption of CEO-type control and leadership," Pennington said in one brief.
Judge Childs said Wednesday that the Fourth Circuit has never laid down "specific guidance regarding what standard a district court should use" to evaluate the type of "single employer theory" put forth by Pennington. But the WARN Act itself sets out five factors to consider: common ownership, common directors and officers, de facto exercise of control, unity of personnel and the dependency of operations.
Judge Childs said there was no common ownership and no common directors or officers shared between Scana, Westinghouse and Fluor, and only a slight amount of "dependency of operations" between the four companies. That term refers to the sharing of administrative services or equipment, among other things.
But Judge Childs said Pennington had pled more than enough facts to show de facto exercise of control and unity of personnel.
"The factors of unity of personnel policies, de facto control and dependency of operations weigh in favor of allowing plaintiffs to continue this action against Scana defendants under the WARN Act, and outweigh the countervailing factors of common ownership, common directors and/or officers," Judge Childs said.
"We look forward to proceeding with the litigation against Scana, Fluor and Westinghouse," Jack Raisner of Outten & Gold LLP, which represents Pennington and his proposed WARN Act class, told Law360. "The impact of this shutdown on the employees and citizens of South Carolina has been hard."
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Pennington's suit is one of four WARN Act suits pending against Scana, Westinghouse, Fluor and others.
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A New York bankruptcy court in March directed the firms to somehow consolidate two suits filed in the Westinghouse bankruptcy with the South Carolina suits.
Pennington is represented by Jack Raisner and Rene S. Roupinian of Outten & Golden LLP and Lucy Clark Sanders of Bloodgood & Sanders LLC.
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The suit is Pennington v. Fluor Corp. et al., case number 0:17-cv-02094, in the U.S. District Court for the District of South Carolina.