An obscure federal law that most people have never heard of. The Worker Adjustment and Retraining Notification Act of 1988, or the WARN Act might provide relief for workers who suddenly lost their jobs as the spreading coronavirus prompted sudden business closures.
Two Hooters waitresses have already filed a class action suit in Florida.
Hooters failed to give sixty days’ notice and failed to give a reason for its late notice, according to court documents.
Coronavirus quarantines have hit restaurants very hard.
Many of them are battling their insurance companies over business interruption insurance policies.
The WARN Act: A Closer Look
In the early 1980s, the United States went through one of the most serious economic downturns between the Great Depression of the 1930s and the Great Recession of the late 2000s.
Unemployment was high and interest rates soared, largely due to the onset of globalization.
And, when the local factory shut down, its semi-skilled workers usually had few employment alternatives.
By the mid-1980s, it was morning again in America, and the economy had largely recovered.
A few years later,however, a rapidly-thawing Cold War and a rapidly growing digital communication technology made some people afraid of another slowdown.
So, Democrat lawmakers passed the WARN Act to reduce the likelihood of sudden workplace shutdowns which could disrupt thousands of lives overnight.
President Ronald Reagan opposed the law, but since Congressional Democrats had a veto-proof majority, he did not want to pick a fight.
So, he did not sign or veto the WARN Act, and it became the law of the land.
Key WARN Act Provisions
The Worker Adjustment and Retraining Notification Act requires employers with more than 100 full-time workers who have been there at least six months to give sixty days’ notice prior to a:
- Plant Closing: Under the WARN Act, a plant closing is a single-site shutdown, as opposed to a single-sight slowdown, which causes at least fifty layoffs during a thirty-day period.
- Mass Layoff: This provision is a bit complicated. Employers must warn employees if a reduction in force is not part of a plant closing but causes at least 500 layoffs in a thirty-day period. Alternatively, the notice provision applies if there were more than fifty layoffs, and the layoffs represented at least a third of the workforce.
There’s a difference between a furlough and a layoff. Furloughs are closed-ended.
Once they terminate, the furloughed workers must return to their old jobs, or to substantially similar jobs.
Layoffs are open-ended.
Companies can recall laid-off workers at some point, but they have no obligation to do so.
Additionally, some workers who keep their jobs might have WARN Act protection.
Its notice provisions apply if the worker’s hours were cut by at least 50 percent in a six-month period.
This law contains a private right of action. Frequently, only the government can enforce the laws.
But any worker may bring an individual or class-action suit in federal court and bring a lack-of-notice claim.
WARN Act Exceptions
Employers are not always required to give notice.
First, the requirement usually does not apply to public employers.
Government contractors are in a grey area. Second, private employers may use one of the following three exceptions:
- Natural Disaster: According to the statute, this label only applies to physical disasters. The listed examples are “flood, earthquake, drought or storm.” Coronavirus is definitely not this kind of event. Does the natural disaster moniker apply to contagious disease outbreaks? In most cases, the answer is no, but law varies in different jurisdictions.
- Unforeseeable Business Circumstances: On the surface, coronavirus appears to meet this exception. This pandemic was certainly unexpected and unlikely. But the outbreak did not start in New York in March 2020. It began halfway around the world a few months earlier. And, this is not the first coronavirus outbreak. That was the SARS (Sudden Acute Respiratory Distress) epidemic in the early 2000s. Arguably, therefore, the coronavirus outbreak was foreseeable.
- Falterning Company: This exception only applies to the aforementioned plant closings. Moreover, it only applies to some plant closings. The company must have sought an infusion of capital and it must have been necessary to keep the matter private.
If they raise these defenses, employers bear the burden of production and the burden of persuasion.
They must convince the judge that the exception applies, and then they must convince the jury of the same thing.
Moreover, these defenses are not absolute.
At best, they allow employers to avoid the sixty-day requirement.
Notice must still be given as soon as practicable.
These notices must contain the layoff or plant closing date, the nature of the layoff (i.e. temporary or permanent layoff), analysis of bumping rights, and the name and contact information of a resource person.
Bumping rights give some senior employees the right to replace junior employees in the event of a company-wide layoff.
Damages in a WARN Act claim usually include sixty days’ lost wages.
Additional compensation for noneconomic damages, such as pain and suffering, might be available as well.
Displaced coronavirus workers might have a legal remedy.
For a free consultation with an experienced New York civil litigation attorney, contact Napoli Shkolnik PLLC. We are now open and now helping people like you.