Category Archives: Mass Layoffs and Plant Closings

A WARN Act Refresher for Potential Mass Layoffs In North Dakota

Due to the steep decline in the price of oil, there are predictions that mass layoffs may soon come to the areas of North Dakota that recently benefited from the oil boom.

In the past several years, North Dakota had one of the highest rates of job growth due to the expanding oil industry there. The oil boom resulted in fast-food jobs that reportedly paid up to $20 per hour and caused the average rent in Williston, North Dakota to exceed the cost of rent in cities like New York and Los Angeles.

But times are changing. Between June of 2014 and January of 2015, the average cost of Brent crude oil dropped by more than half, from $115 per barrel to $49 per barrel. Now, CNN is reporting that at least one CEO is predicting that there could be as many as 20,000 layoffs in North Dakota by June due to a significant decrease in oil production.

Hopefully, the prediction of 20,000 job losses will not come to pass. If it does, however, here’s what employers should know about mass layoffs in North Dakota:

  • Unlike Minnesota, North Dakota does not have a state “Mini-WARN” act that requires advance notice for mass layoffs or plant closings. But employers may still need to comply with the 60-day notice requirement of the federal Workers Adjustment and Retraining and Notification (“WARN”) Act.
  • For a general summary of what the federal WARN Act requires, when it applies, and which employers are subject to the WARN Act, click here.
  • For a summary of what information needs to be included in a WARN Act notice to employees, click here.
  • For a summary of potential exceptions to the WARN Act’s 60-day notice requirement, click here. But don’t forget that even if an exception applies, some prior notice may still be required.

Takeaway: Employers who are facing potential mass layoffs in North Dakota or elsewhere should make sure to comply with any notice requirements imposed by the federal WARN Act or similar state laws.

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.

What Information Must Be Included in a WARN Act Notice To Employees?

The Worker Adjustment and Retraining Notification (WARN) Act requires that covered employers generally must provide at least 60 days notice to affected employees or their representatives before ordering a “plant closing” or “mass layoff,” unless certain exceptions are applicable.  See 29 U.S.C. § 2102(a).  What information must be in the notice depends on whether the affected employees are represented by a union. 

If the affected employees are not represented by a union, the notice must be written in understandable language and must contain:

  1. A statement as to whether the planned action is expected to be permanent or temporary and, if the entire plant is to be closed, a statement to that effect;
  2. The expected date when the plant closing or mass layoff will commence and the expected date when the individual employee will be separated;
  3. An indication whether bumping rights exist; and
  4. The name and telephone number of a company official to contact for further information.

See 20 C.F.R. § 639.7(d).

If the affected employees are represented by a union, the notice to the union representative must contain:

  1. The name and address of the employment site where the plant closing or mass layoff will occur, and the name and telephone number of a company official to contact for further information;
  2. A statement as to whether the planned action is expected to be permanent or temporary and, if the entire plant is to be closed, a statement to that effect;
  3. The expected date of the first separation and the anticipated schedule for making separations;
  4. The job titles of positions to be affected and the names of the workers currently holding affected jobs.

See 20 C.F.R. § 639.7(c).

In either case, the notice may include additional information useful to the employees such as information on available dislocated worker assistance, or, if the layoff or closing is expected to be temporary, the estimated duration of the layoff or closing, if known.

Notice of Employer Bankruptcy under Minnesota Law

Minnesota law requires that an employer must immediately notify all of its employees in writing if the employer files a petition for bankruptcy or if an involuntary bankruptcy petition is filed against the employer.  See Minn. Stat. § 181.93.  In addition, if the employer offers a job to someone at any time after a petition for bankruptcy or involuntary bankruptcy has been initiated and before the petition is closed, the employer must provide written notification of the bankruptcy petition to the person to whom the job is offered at the time of the job offer.

Minnesota’s Mini-WARN Act

Minnesota has a law similar to the federal Worker’s Adjustment and Retraining Notification (WARN) Act.  The law encourages Minnesota businesses “considering a decision to effect a plant closing, substantial layoff, or relocation of operations . . . to give notice of that decision as early as possible to” the following:

  • The Minnesota Commissioner of Employment and Economic Development;
  • The employees of the affected establishment;
  • Any employee organization representing the employees; and
  • The local government unit in which the affected establishment is located.

See Minn. Stat. § 116L.976.  This notice is in addition to any notice required under the federal WARN Act.

In addition, the law requires that any employer who provides notice of a plant closing, substantial layoff, or relocation of operations under the federal WARN Act or under Minnesota’s mini-WARN Act must report to the Minnesota Commissioner of Employment and Economic Development “the names, addresses, and occupations of the employees who will be or have been terminated.”

For purposes of the Minnesota mini-WARN Act, the term “plant closing” is defined to mean “the announced or actual permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding employees who work less than 20 hours per week.”

Exceptions to the WARN Act’s 60-Day Notice Requirement

There are certain situations in which a covered employer may order a plant closing or mass layoff before the end of the 60-day notice period required under the Worker Adjustment and Retraining Notification (WARN ) Act.  These situations include the following:

  • If, at the time that the 60-day notice would have been required, the employer was actively seeking capital or business which, if obtained, would have enable the employer to avoid or postpone the shutdown and the employer reasonably and in good faith believed that giving the 60-day notice would have precluded the employer from obtaining the needed capital or business;
  • If the closing or mass layoff is caused by business circumstances that were not reasonably foreseeable as of the time that the 60-day notice would have been required; or
  • If the plant closing or mass layoff is due to any form of natural disaster, such as a flood, earthquake, or a severe drought.

See 29 U.S.C. § 2102(b).  If any of these exceptions apply, 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.”

In addition, the WARN Act does not apply to a plant closing or mass layoff if:

  • The closing is of a temporary facility or the closing or layoff is the result of the completion of a particular project or undertaking, and the affected employees were hired with the understanding that their employment was limited to the duration of the facility or the project or undertaking; or
  • The closing or layoff constitutes a strike or constitutes a lockout not intended to evade the requirements of the WARN Act.

See 29 U.S.C. § 2103.

The Worker Adjustment and Retraining Notification (WARN) Act

The Worker Adjustment and Retraining Notification (WARN) Act requires that covered employers generally must provide at least 60 days notice to affected employees or their representatives before ordering a “plant closing” or “mass layoff.”  See 29 U.S.C. § 2102(a).

What employers are subject to the WARN Act?  The WARN Act applies to any business enterprise that employs either:  (1) 100 or more employees, excluding part-time employees; or (2) 100 or more employees who in the aggregate work at least 4,000 hours per week (exclusive of overtime hours).  See 29 U.S.C. § 2101(a)(1).

What is a “plant closing”?  A “plant closing” is defined as “the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees.”  See 29 U.S.C. § 2101(a)(2).

What is a “mass layoff”?  A “mass layoff” is defined as a reduction in force that:  (1) is not the result of a plant closing; and (2) results in an employment loss at the single site of employment during any 30-day period for either:

  • At least 33% of the employees (excluding any part-time employees) and at least 50 employees (excluding any part-time employees); or
  • At least 500 employees (excluding any part-time employees).

See 29 U.S.C. § 2101(a)(3).