The Workers Adjustment and Retraining Notification Act (“WARN”) became effective on February 4, 1989. WARN requires employers to give employees notice when an employment change is advanced. The Act calls for at least sixty (60) days notice to employees who will experience employment loss either because of a plant closing or because of a scheduled mass layoff.
An employee experiences employment loss in any one of the following three scenarios:
- An employment termination, other than a discharge for cause, voluntary departure, or retirement;
- A layoff exceeding six (6) months;
- A reduction in an employee’s hours of work of more than fifty (50) percent per month for a period of six (6) months.
WARN covers employers who have more than one hundred (100) employees. Employees who work less than six (6) of the past twelve (12) months, as well as employees who work less than twenty (20) hours a week are not counted into this total. Private for profit or non-profit, as well as public and quasi-public entities who operate in the commercial context are obligated under WARN to give their employees notice pending a plant closing or mass layoff. Federal, State or local government entities are governed under WARN. Hourly, salaried, managerial and supervisory employees are all entitled to the sixty (60) day notice. Business partners however, are not entitled to the Act’s protections.
Employers of a temporary project are not required to give their employees notice prior to plant closings or mass layoffs. Additionally, if the closing of the plant or mass layoff is the result of completion of a project, those workers are also not entitled to WARN’s protection. The employees must have been hired with the understanding that their employment was conditional on the completion of the project. An employer cannot label an ongoing project as temporary to avoid the requirements under the WARN act. Additionally, striking employees are not entitled to notice when their actions lead to a lockout, which acts as an equivalent to a closing or mass layoff. Non-striking employees who are adversely affected are entitled to notice.
If fifty (50) or more employees will experience employment loss (defined above) during any thirty (30) day period, then WARN requires employers to inform their employees. Part time employees and new employees are not included in this employee total. Advanced notice is also required when an employer has a mass layoff proposed. If during any thirty (30) day period, five-hundred (500) or more employees, or forty-nine (49) to five-hundred (500) employees, which make up thirty-three (33) percent of the workforce are going to be laid off, then the employer must give notice. The employee calculation for plant closings apply to mass layoffs as well (part time and new employees are not included in the total employee calculations).
If an employer plans to sell his business or is involved in the sale of the business, employees are still entitled to receive notice if a closing or mass layoff is proposed. It is the seller of the business’ responsibility to give sixty (60) days notice to his employees up to and including the date/time of the sale if there is a risk of employment loss. The buyer is responsible to provide employees with sixty (60) day notice of any proposed plant closing or mass layoff after the date/time of the sale. Notice that the business has been sold is not required unless a closing or mass layoff is in the works.
The employer must give notice to either the chief elected officer of exclusive represented employees, the labor union, or to unrepresented workers who may reasonably be expected to experience employment loss. Even employees who do not count towards employment totals, those workers who work less than twenty (20) hours a week or who have worked less than six (6) of the last twelve (12) months are still entitled to due notice. Notice must also be given to the State dislocated worker unit, as well as the chief elected officer of the local government where the employment site is located. There are, however, three exceptions to this requirement:
- If the employer is seeking new capital to stay open and advanced notice would ruin this opportunity, then notice is not required. This exception only applies to plant closings and not mass layoffs.
- If a plant closing or mass layoff was not reasonably foreseeable at the time notice is required, then the notice requirement is excused.
- If a plant closing or mass layoff is the result of a natural disaster, such as a flood, earthquake, drought or storm; notice is not required.
If an employer does not provide sixty (60) days notice, and relies on one of the exceptions listed above, the employer must prove that one of the exceptions did in fact take place.
While notice is required sixty (60) days in advance, there is no requirement delineating what that form must be. The notice must be in writing, but any reasonable method of delivery that will ensure receipt sixty (60) days prior to closing or mass layoff will suffice. The notice must specify the reasons for a plant closing or mass layoff. If either will occur more than fourteen (14) days after the date announced in the notice, then additional notice on behalf of the employer is required.
If you have been affected by a plant closing or mass layoff and your employer has not followed the requirements under the Worker Adjustment and Retraining Notification Act, contact Valli, Kane & Vagnini to learn more about your rights and legal options.