Federal WARN Act Overview
Recent layoffs at Dewey & LeBeouf LLP have highlighted the federal worker protection under the federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2102, et seq., or WARN Act. (Some states, including New York, have enacted respective WARN acts, which differ in some aspects from federal law.)
Enacted in 1988, the federal WARN Act protects workers by requiring covered employers (generally private employers with 100 or more employees, exclusive of certain non-full time employees) to provide employees with sixty (60) days’ advanced notice of covered plant closing or other mass layoffs. Employees entitled to WARN notice include hourly, salaried, managerial and supervisory employees; however, business partners, such as the D&L partners, are not covered.
Under the federal WARN Act, notice is triggered by: (1) the closing of an employment site resulting in the loss of fifty or more employees during a thirty-day period; and (2) mass layoff not resulting from facility closings that causes loss at an employment site during a thirty-day period of 500 or more employees, or 50-499 employees if they make up at least 33% of the workforce. “Employment loss” means: termination, other than for cause, voluntary departure or retirement; layoff exceeding six months; or 50% reduction in monthly work hours over any six month period. Several exemptions apply, including workers hired for temporary projects and certain work stoppages related to labor negotiations.
WARN notice must be timed to reach the recipient at least sixty days prior to the closing or layoff. There is no particular form required under the statute, although the notice must be specific and in writing. There are three exceptions to the sixty-day notice requirement: (1) a faltering company that would be adversely affected in seeking needed new capital or business by a WARN notice; (2) unforeseeable business circumstances in which closing or layoffs are caused by business circumstances not reasonably foreseeable at the time notice would be required; and (3) natural disaster. An employer asserting an exception must provide as much notice as is practicable, must state the reason for the reduced notice period and bears the burden of proof that it meets the exception.
As the recent D&L WARN litigation shows, WARN is enforced through civil litigation, generally brought by the worker and often in the form of a class action. An employer who fails to provide required notice, without a proper exception, is liable to the employees for the back pay and benefits for the period of violation up to sixty days (reduced by voluntary payments made during the violation period). Attorneys’ fees may also be awarded to a prevailing party.
This article is intended only as a general discussion of these issues. It is not considered to be legal advice or relied upon. We would be pleased to consider providing additional details or advice about specific situations. For additional information on this topic, please feel free to call upon any RPL attorney.