Due to the COVID-19 pandemic, employers have made difficult decisions to cut back on costs, including furloughs and layoffs. Now, COVID-19-related lawsuits alleging violations of the federal Worker Adjustment and Retraining Notification Act (WARN) are being filed.
 
For example, a class action complaint against Hooters III, Inc., filed in a Florida federal court, alleges the company began layoffs on March 20 without advance written notice as required by the WARN Act. The plaintiffs allege that the company "could have but failed to evaluate the impact of COVID-19 . . . as evidenced by the fact that it gave no advance written notice whatsoever."
 
In another class action against Enterprise Rent-A-Car, also filed in a Florida federal court, the complaint alleges Enterprise "knew its business was suffering and, thus, knew a mass layoff was coming," yet failed to provide furloughed employees with any prior written WARN notice that their furlough was being converted to a layoff.
 
The nuances of the WARN Act and state "mini-WARN" laws are complex. The WARN Act requires covered employers to provide 60 days' advance written notice to employees and government entities before a plant closing or mass layoff, unless a statutory exception applies.  
 
Some general rules of thumb include:
 
  • A triggering event has occurred under federal WARN when a covered employer lays off 50 or more employees during any 90-day window.
  • The WARN Act can be triggered if temporary layoffs and furloughs that will extend 6 months or more.
  • If temporary layoffs or furloughs are extended, the WARN notice is required as soon as it becomes reasonably foreseeable that the furloughs or temporary layoffs will exceed the 6-month threshold. 
  • Even when "unforeseeable business circumstances" have occurred-i.e., the COVID-19 Pandemic-employers are still required to provide as much WARN notice as possible.
If your company fails to provide as much notice as possible, the company could be liable to affected employees for 60 days of back pay and benefits, plus their attorneys' fees and costs. 
 
And, don't forget, many states have mini-WARN laws with different notice requirements that are triggered by lower employment losses (e.g., 25+ employees laid off in NY and IL).  
  
Still have questions about the WARN Act or mini-WARN laws?  Don't worry, we are here to help!
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