Worker Adjustment and Retaining Notification Act
WARN became effective in February 1989 and requires that covered employers provide notification 60 calendar days in advance of plant closings and mass layoffs. WARN also requires notice to State dislocated worker units so that dislocated worker assistance can be promptly provided.
WARN notices must be provided to either affected workers or their representatives (e.g., a labor union). Employees entitled to notice under WARN include hourly and salaried workers, as well as managerial and supervisory employees.
Form and Content of Notice:
No particular form of notice is required. However, all notices must be in writing. Any reasonable method of delivery designed to ensure receipt 60 days before a closing or layoff is acceptable. Notice must be specific. Notice may be given conditionally upon the occurrence or non-occurrence of an event only when the event is definite and its occurrence or nonoccurrence will result in a covered employment action less than 60 days after the event. The content of the notices to the required parties is listed in section 639.7 of the WARN final regulations. Additional notice is required when the date(s) or 14-day period(s) for a planned plant closing or mass layoff are extended beyond the date(s) or 14-day period(s) announced in the original notice.
Plant Closing/Mass Layoff:
A covered plant closing occurs when a facility or operating unit is shut down for more than 6 months, or when 50 or more employees lose their jobs during any 30-day period at the single site of employment. A covered mass layoff occurs when a layoff of 6 months or longer affects 500 or more workers, or 33 percent or more of the employer’s workforce when the layoffs affect between 50 and 499 workers. The number of affected workers is the total number laid off during a 30-day.
An employer also must give notice if the number of employment losses which occur during a 30-day period fails to meet the threshold requirements of a plant closing or mass layoff, but the number of employment losses for 2 or more groups of workers, each of which is less than the minimum number needed to trigger notice, reaches the threshold level, during any 90-day period, of either a plant closing or mass layoff. Job losses within any 90-day period will count together toward WARN threshold levels, unless the employer demonstrates that the employment losses during the 90-day period are the result of separate and distinct actions and causes.
WARN does not apply to the closing of temporary facilities, or the completion of an activity when the workers were hired only for the duration of that activity. WARN also provides for less than 60 days notice when the layoffs were the result of the closing of a faltering company, unforeseeable business circumstances, or a natural disaster.
Sale of Businesses:
In a situation involving the sale of part or all of a business, the following requirements apply. (1) In each situation, there is always an employer responsible for giving notice. (2) If the sale by a covered employer results in a covered plant closing or mass layoff, the required parties (discussed later) must receive at least 60 days notice. (3) The seller is responsible for providing notice of any covered plant closing or mass layoff which occurs up to and including the date/time of the sale. (4) The buyer is responsible for providing notice of any covered plant closing or mass layoff which occurs after the date/time of the sale. (5) No notice is required if the sale does not result in a covered plant closing or mass layoff. (6) Employees of the seller (other than employees who have worked less than 6 months in the last 12 months or employees who work an average of less than 20 hours a week) on the date/time of the sale become, for purposes of WARN, employees of the buyer immediately following the sale. This provision preserves the notice rights of the employees of a business that has been sold.
Limitations Period and Filing Requirements
The United States Supreme Court has declared that the most analogous state law statute of limitations applies to a WARN action. North Star Steel Co. v. Thomas, 515 U.S. 29 (1995). WARN does not require an administrative filing prior to commencing suit.
In general, employers are covered by WARN if they have 100 or more employees, not counting employees who have worked less than 6 months in the last 12 months and not counting employees who work an average of less than 20 hours a week. Private, for-profit employers and private, nonprofit employers are covered, as are public and quasi-public entities which operate in a commercial context and are separately organized from the regular government. Regular federal, state and local government entities which provide public services are not covered.
Remedies and Damages
An employer who violates the WARN provisions is liable to each employee for an amount equal to back pay and benefits for the period of the violation, up to 60 days. This may be reduced by the period of any notice that was given, and any voluntary payments made by the employer to the employee. The Court may also allow reasonable attorney’s fees as part of any final judgment.
An employer who fails to provide the required notice to the unit of local government is subject to a civil penalty not to exceed $500 for each day of violation. This may be avoided if the employer satisfies the liability to each employee within 3 weeks after the closing or layoff.