Are WARN Act Notices Required Even When Mass Layoffs Are Unforeseeable?

Yes – the Eleventh Circuit Court of Appeals recently held that a covered employer must provide the notice required by the Workers Adjustment and Retraining Notification (WARN) Act, even if the exception for unforeseeable business circumstances is applicable.

The WARN Act requires that covered employers must provide at least 60 days notice to affected employees or their representatives before ordering a “plant closing” or “mass layoff.”  Among other information, the notice provided to affected employees must explain whether the closing or layoff is permanent or temporary, and it must provide company contact information for employees to get additional information.

One of the exceptions to the 60-day notice require is when the closing or mass layoff is caused by business circumstances that were not reasonably foreseeable at the time that the 60-day notice would have been required.  However, the law states that even when this exception applies, the employer must give “as much notice as is practicable,” and the employer must include in the notice “a brief statement of the basis for reducing the notification period.”  See  29 U.S.C. § 2102(b).

In the recent case of Sides v. Macon Cnty. Greyhound Park Inc., Case No. 12-14673 (11th Cir., Aug. 5, 2013), the Eleventh Circuit held that an employer violated the WARN Act when it failed to provide a WARN notice to affected employees, even though the exception for unforeseeable business circumstances applied.  The employer was a casino that relied heavily on electronic gaming.  The employer laid off all of its employees and closed its operations on February 4, 2010, after the Governor’s Task Force on Illegal Gambling in Alabama seized all of the employer’s electronic gaming machines.  The employer held a meeting with its employees to discuss unemployment, and the employer explained on its website and on interstate billboards that it closed due to the Task Force’s activities.  However, the employer did not provide a WARN Act notice that complied with the statutory requirements.

The Court held that the employer’s failure to provide the WARN notice violated the statute, stating that “even where the [unforeseeable business circumstance] defense is properly invoked, some notice must be given.”  The Court explained that the exception for unforeseeable business circumstances allowed an employer to reduce the 60-day notice period, but did not eliminate the requirement to provide a WARN notice to affected employees in accordance with the statutory requirements.

Takeaway:  Even if a plant closing or mass layoff is the result of sudden, unforeseeable circumstances, employers should still analyze whether they are subject to the WARN act’s notice requirements.  If so, the employer must provide the required notice to all affected employees.

About Michael Miller

Michael is a Chambers-rated attorney in Briggs and Morgan's Employment, Benefits, and Labor group and is head of the firm’s Employment Law Counseling and Compliance practice group. He has 25 years experience counseling employers to prevent unwanted litigation and advises companies of ongoing changes in federal, state and local employment law. Michael advises employers in all areas of employment law including discipline and discharge, leaves of absence, wage and hour compliance, non-compete and confidentiality agreements, affirmative action plans, background checking, and drug/alcohol testing. For Michael's full bio, click here.

Posted on September 12, 2013, in Mass Layoffs and Plant Closings and tagged . Bookmark the permalink. Leave a comment.

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