Back in late February and early March corporations in many industries were blindsided by the Coronavirus pandemic and its impact on their bottom line. Companies in the oil & gas sector took on dramatic losses as the demand for oil plummeted. Several Oil Giants elected to cut benefits or lay people off in an attempt to combat significant losses. ExxonMobil, for example, decided to stop matching employees’ 401(k) contributions. Chevron has already conducted layoffs in Texas, and according to Reuters they plan to cut 10-15% of their workforce in order to meet their goal of dropping operating expenses by $1 billion. According to ABC 13 ConocoPhillips plans to cut 500 workers in the Houston Area. Unlike some other oil companies, ConocoPhillips did issue a Warn Notice to its employees giving them 60 days notice before ending their employment.
But will a Warn Notice be enough to prevent employees from seeking legal recourse?
The Worker Adjustment and Retraining Notification (WARN) Act requires employers to provide 60 days notice in advance of a business closure or mass layoff. Businesses do have the ability to claim “unforeseeable business circumstances” in instances where they do not offer a Warn Notice. Obviously a global pandemic would fall under the category of unforeseeable circumstances, the only question is how long can business make that claim? Obviously in March major companies can claim unforeseen circumstances, but 8 months into a pandemic it becomes harder to claim that as a defense.
When businesses claim unforeseen circumstances they are still obligated to provide their employees with as much notice as possible. Obviously, what constitutes “as much notice as possible” will vary case by case. There have not been an overwhelming amount of Warn Act lawsuits since the pandemic began, it is becoming clear that the longer this pandemic goes on the less protected companies become.
ConocoPhillips’ decision to offer its employees a Warn Notice definitely gives them some legal cover from potential lawsuits, however it is possible terminated employees could seek alternative legal grounds to move against ConocoPhillips.
“Layoffs coming at ConocoPhillips after recent merger” ABC 13, 1 Dec. 2020, https://abc13.com/conocophillips-layoffs-houston-texas-jobs-in-energy-conoco-phillips-lay-offs-job-cuts-at/8420478/
Puerta, Andres F. “As Weather Cools Down, WARN Act Lawsuits Likely to Heat Up – HR Daily Advisor.” HR Daily Advisor, 10 Nov. 2020, https://hrdailyadvisor.blr.com/2020/11/10/as-weather-cools-down-warn-act-lawsuits-likely-to-heat-up/.
Khan, Shariq & Hiller Jennifer “Exclusive: Chevron to lay off about 25% of Noble Energy employees after merger” Reuters, 27 Oct. 2020. https://www.reuters.com/article/chevron-layoffs-exclusive/exclusive-chevron-to-lay-off-about-25-of-noble-energy-employees-after-merger-idUSKBN27C2IG