|Erik M. Dullea||Penny Ann Lieberman|
By Erik M. Dullea and Penny Ann Lieberman
The Worker Adjustment and Retraining Notification Act (WARN) was enacted in 1988. While the law and its regulations have not changed significantly since then, there have been several court decisions interpreting WARN’s provisions. WARN was enacted to require employers to provide advance, written notice of a “plant closing” or “mass layoff” to the affected employees, their union representatives, the state dislocated worker unit and the chief elected official of the local government where the facility is located. Financial pressures in the mining industry require WARN to be considered during management discussions on labor and manpower. In recent months, coal operators provided WARN notices for upcoming layoffs (e.g., Alpha Natural Resources and Murray Energy), and mine operators that do not give notice are often involved in WARN lawsuits.
Failure to comply with WARN can expose employers to lawsuits and significant financial obligations. Employers that violate WARN can be liable for back wages and benefits accrued during the period of the violation, attorney’s fees and a $500/day civil penalty for the duration of the violation. For example, last year, a federal judge held that a Virginia coal operator violated the WARN Act because it failed to provide adequate notice of layoffs during 2013. See Sullivan v. Nine Mile Mining (Western District of Virginia, September 4, 2014). Following the decision, Nine Mile Mining agreed to pay more than $1.7 million in back wages to affected employees.
When contemplating layoffs and closings, employers must review applicable state and federal WARN laws. WARN is a law that requires advance planning as well as an understanding of its requirements. The questions and answers that follow are designed to provide a basic understanding of WARN and its requirements. These Q&As are not a substitute for legal advice, and prior to announcing any layoffs or closings, employers should consult with outside counsel to determine any state or federal WARN obligations they may have.
How much advance notice does the WARN Act require? Employers covered by the WARN Act must give 60 days of advance notice in writing to each affected employee or the affected employees’ representative, as well as the state dislocated worker unit and chief elected official of the local government where the affected facility is located.
Which employers are covered by the WARN Act? Covered employers subject to the WARN’s requirements have 100 or more full-time employees. While WARN does not define full time, it does define part time. An employee who is not a part-time employee is a full-time employee. Part-time employees, as of the date a WARN notice is due, have been employed fewer than six out of the past 12 months, or average less than a 20-hour work week.
Alternatively, a covered employer employs at least 100 full-time and part-time employees, who in the aggregate work an average workweek of at least 4,000 hours, exclusive of overtime.
Which employees are protected? WARN does not distinguish between managers and non-managers or hourly or salaried employees. If a sufficient number of full-time employees are impacted, all employees affected by the plant closing or mass layoff are entitled to WARN notices.
What types of layoffs trigger a WARN Act notice? A covered employer conducting a plant closing or a mass layoff must provide WARN notices.
WARN defines a plant closing 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. The WARN regulations may extend that 30-day period to 90 days, depending on the timing of the employment losses.
A mass layoff is a reduction in force that does not meet the definition of a plant closing, but results in the employment loss at a single employment site during any 30-day period for at least 50 full-time employees constituting 33% of the full-time workforce at that single employment site, or at least 500 full-time employees at that single employment site.