As Weather Cools Down, WARN Act Lawsuits Likely to Heat Up

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The global COVID-19 pandemic continues to affect employers, with no clear end in sight. While the prospect of a functioning vaccine may have to wait for a while, a spike in Worker Adjustment and Retraining Notification (WARN) Act litigation may be on the horizon.

‘Hurricane Warning of Sorts’

Furloughs and workforce reductions have been prevalent since mid-March 2020, leaving millions of employees without jobs or on extended leaves while they wait (and hope) to be recalled to work. Only about a dozen WARN Act lawsuits have been filed to date, but the remainder of 2020 could become a hurricane season of sorts for litigation as:

  • Layoffs extend beyond six months;
  • New workforce reductions occur; and
  • More employees’ attorneys shift their attention to the claims.

As the days and weeks go by, your ability to assert the “unforeseeable business circumstances” defense for providing less than 60 days’ notice of a “mass layoff” or “plant closing” has diminished.

When Shortened Notice Periods Are Allowed

Employers must ordinarily give 60 days’ advance notice of a mass layoff or plant closing before laying off a certain number of employees or closing down an establishment. The WARN Act allows for a shortened notice period, however, when the mass layoff or plant closing is caused by an unforeseeable business circumstance, which would surely seem to cover the unprecedented COVID-19 pandemic.

When an unforeseeable business event happens, courts have said employers must issue notices that otherwise comply with the WARN Act requirements for when a plant closing or mass layoff becomes “probable”—i.e., when the objective facts reflect the layoff is more likely than not.

Although the WARN Act requires employers to give as much notice as possible, there are times when no notice is practicable, and the notice period may be eliminated, which a court determines on a case-by-case basis. Still, the linchpin is the unforeseeable nature of the business circumstances causing the mass layoff or plant closing.

What if Circumstances Worsen Later?

If you initially expect a layoff to last less than six months, it wouldn’t constitute an “employment loss” under the WARN Act. But, if it ultimately extends beyond six months, then a loss occurs. In that situation, even if you can successfully claim unforeseeable business circumstances existed at the beginning of the furlough—justifying less than 60 days’ notice at the outset—you must show you provided affected employees with as much notice as possible as soon as it was “reasonably foreseeable” that an extension of the layoff beyond six months, or a permanent separation from employment, was going to happen.

Therefore, if you have conducted or are contemplating furloughs or workforce reductions, you must carefully consider whether WARN Act notice may be required and whether, almost six months into the pandemic, the unforeseeable business circumstances exception to providing 60 days’ notice remains viable.

Recent WARN Act Litigation

Although only about a dozen WARN Act lawsuits have been filed since March, that’s likely to change as employees’ attorneys wait for the proverbial dust to settle. One thing is certain: The incoming lawsuits will allege that any mass layoffs and plant closings conducted several months after President Donald Trump’s declaration of a national emergency in March were foreseeable or became foreseeable, triggering the employer’s obligation to provide WARN Act-compliant notice before the employment losses occurred.

Even if it may be clear 60 days’ notice wasn’t possible, laid-off employees may allege the employer could have provided more warning, particularly when it provided little to no advance notice. Here are a few examples of the filed WARN Act lawsuits:…

Source: HR Daily Advisor

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