News of Recent Layoffs Prompts a Review of the WARN Act
WARN Act compliance is evergreen. Recent tech layoffs provide an important reminder of WARN’s importance for all employers contemplating one. The Worker Adjustment and Retraining Notification Act (“WARN”) is a federal law that requires employers to provide advance notice and planning mechanisms to their workforce and communities in the event of a qualified “plant closing” or “mass layoff.” Under the WARN Act, employers with 100 or more full time workers (total) must provide written notice at least 60 calendar days in advance of covered plant closings and mass layoffs. Certain states have analogous state laws, referred to as mini-WARN acts.
The federal WARN Act includes a number of exceptions to its 60-day notification requirement, including where “unforeseen business circumstances” exist that are caused by an “unanticipated and dramatic major economic downturn” that was not “reasonably foreseeable.” Many employers undoubtedly relied on this exception during the first year of the COVID-19 pandemic. Whether the “unforeseen business circumstances” exception applies to plant closings and mass layoffs is a fact-specific inquiry.
Employers must also consider whether any of their remote or virtual workers are entitled to WARN notice. Courts continue to grapple with this question due to the significant shift to remote work that occurred over the past few years. Remember to consult with counsel about the WARN Act and related employment laws if your business is contemplating a layoff. See our blog post here for more information on WARN.
And in a challenging economic environment, efficiency takes on greater importance. So, in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization.