To many people in the workforce, the idea of a mass layoff once seemed unfathomable. You grow so accustomed to your job and to the daily routine it enables that it essentially becomes a part of your life that feels permanently fixed. In the midst of the current pandemic, however, mass layoffs, along with resignations and terminations, have become commonplace. The idea of a mass layoff no longer seems like the boogeyman; to many in the workforce, mass layoffs now feel like a very real possibility. Mass layoffs are scary, unpredictable, and harmful, but they should not be unexpected. This article will examine mass layoffs and workers’ rights under the Worker Adjustment and Retraining Notification Act.
The Worker Adjustment and Retraining Notification Act, or “WARN Act”, as it is aptly called, was designed to protect employees in the event of a plant closing or mass layoff. The WARN Act requires employers to provide 60 calendar-day advance notice to employees subject to plant closings or mass layoffs. Employees entitled to notice under the WARN Act include managers and supervisors along with hourly wage and salaried workers. The purpose of the WARN Act’s notice requirement is to give workers and their families the opportunity to transition to new employment and to adjust to their loss and to even enter into skill training or retraining programs to improve upon one’s marketability. The only catch is that notice of a plant closing or mass layoff is required only when the company has 100 or more employees; in other words, if the company that you work for consists of 99 employees (including managers and supervisors), then the company does not have to give you notice of a mass layoff.
Anyone who knows anything about the law knows that there are legal exceptions to almost every law imaginable, and the WARN Act is no exception. There are three certain circumstances in which an employer with 100 employees does not have to give advance notice of a mass layoff. The first is the Faltering Company Exception. Under this exception, an employer does not have to give advance notice when, before a mass layoff, a company is actively seeking capital or business, and reasonably, in good faith, believes that advance notice would prevent its ability to gain said capital or business, and this capital or business would allow the employer to postpone or avoid the shutdown. Say, for example, that your employer is failing, but is on the verge of cracking a company-saving business deal. Your employer reasonably believes that if it provides advance notice to workers, the deal will fall apart. In this instance, your employer would not have to provide notice.
The second exception to the WARN Act is the Unforeseeable Business Circumstances Exception. Under this exception, an employer does not have to provide notice when the mass layoff is caused by “business circumstances” that were not reasonably foreseeable at the time that the 60-day notice would have been required. The business circumstance must be unexpected and caused by a condition beyond the employer’s control. For example, suppose your employer’s biggest client, and the anticipated primary source of your employer’s revenue, unexpectedly cancels its 15-year contract with your employer at the very beginning of the business relationship. If your employer chooses to do a mass layoff, then you are most likely not entitled to notice given that the contract cancellation was unexpected and completely out of the control of your employer.
The last exception to the WARN Act is the Natural Disaster Exception. Under this exception, an employer is not required to provide notice of a mass layoff when the layoff is due to a natural disaster. For instance, if a devasting hurricane sweeps through your city and cripples your employer, essentially forcing your employer to conduct a mass layoff, you will not be entitled to notice. Hence, this situation, along with the previous two exceptions, are the only instances in which an employer does not have to give you advance notice of a mass layoff.
So, what happens when your employer doesn’t give you 60 calendar-day advance notice and they don’t fall under one of the three exceptions? The employer is liable to each employee for an amount equal to backpay and benefits for the period of the violation, up to 60 days. If you have been recently laid off due to a mass layoff and your employer did not provide you with advance notice, you should seek representation from experienced employment lawyers to claim the damages you are owed. Mass layoffs are a frightening prospect to consider and an even worse thing to experience, and though they may be unpredictable, they should never be unexpected.