Court decisions interpreting the federal Worker Adjustment and Retraining Notification (WARN) Act have been relatively rare since that law was enacted in 1988. That said, within the last few weeks no fewer than three federal appeals courts have issued WARN rulings, each addressing important aspects of the law.
In short, the WARN Act requires covered employers to provide a minimum of 60 days of advance notice to affected employees before a “plant closing” or “mass layoff.” Companies are subject to significant penalties for failing to provide proper WARN notice where required.
A decision by the Third Circuit Court of Appeals addresses the important question of when circumstances are “reasonably foreseeable” in order to require advance notice to employees. A ruling by the Fifth Circuit addresses whether geographically distinct facilities — in this case, drilling rigs — may be aggregated and considered a “single site of employment” for determining application of the WARN Act’s notice provisions. And a ruling by the Sixth Circuit involves the question of whether a company brought in to help a troubled business can be jointly liable under the WARN Act.
Even though the employer prevailed in each case, the rulings serve as an important reminder that the WARN Act has broad reach, and that a covered employer should carefully consider WARN Act compliance whenever downsizing is contemplated.
Members of the Center for Workplace Compliance (CWC) can read more here.