In a decision interpreting the federal Worker Adjustment and Retraining Notification (WARN) Act, the U.S. Court of Appeals for the Sixth Circuit has provided guidance on the key term “employment loss” as used in the Act.
The WARN Act requires covered employers to provide a minimum of 60 days of advance notice to affected employees, labor unions, and government officials before a “plant closing” or “mass layoff.” Companies are subject to significant sanctions for failing to provide required WARN notice.
The issue of when an “employment loss” begins is critical for determining compliance with WARN’s requirements. In the recent case of Morton v. Vanderbilt University, No. 15-5417 (6th Cir. Jan. 5, 2016), the Sixth Circuit found that an employment loss did not begin when affected employees were advised that they could no longer report to work, so long as they were given the required 60-day advance notice at the time and their pay and benefits continued during the entire notice period. Instead, the court ruled that employment loss did not occur until the 60-day notice period expired and they no longer received any pay or benefits.
This case illustrates how the timing of “employment loss” can have a significant impact with respect to how separate layoffs are aggregated for purposes of determining WARN Act liability.
A copy of the Sixth Circuit’s decision in Morton v. Vanderbilt is available here.