Home » Employee Issues » Mass Layoffs and Plant Closings Require That Employers Provide Proper WARNing

Mass Layoffs and Plant Closings Require That Employers Provide Proper WARNing

Businesses sometimes fail, requiring that they shutdown and layoff their workforce. Other times, reduced demand for products or services requires plant/office closings or the layoff of a large number of employees. Or, for example, a significant drop in oil prices may lead to widescale layoffs in the energy industry. And in an increasingly global economy with a global workforce, the outsourcing or offshoring of jobs to save money may result in layoffs of workers in the US.

The reasons may vary, but the outcome is all too similar. For varying business and economic reasons, it has become increasingly common across industries for employers to implement mass layoffs of employees. The employees in many instances care less about the reason for the layoff than its impacts. It is to moderate those impacts that Congress provided employees certain protections in the Worker Adjustment and Retraining Notification Act (WARN). See 29 U.S.C. 2101 et seq.

Generally, WARN requires employers with more than 100 full-time employees to provide 60 days written notice of a plant closing or mass layoff. This notice requirement is designed to give employees time to appreciate the impending job loss, start looking for a new job, and/or obtain new skills or retraining to compete in the job market. If the employer fails to provide the required notice, employees may be entitled to recover back pay and benefits for the period at issue (up to 60 days) and their attorneys’ fees for pursuing the issue with their former employer. Moreover, the employer may also face a civil penalty for failing to provide the required written notice.

Businesses with more than 100 full-time employees should be aware of their obligations under the WARN Act, and the statutory exceptions that exist, before they get to the point of implementing layoffs. It is important to structure the layoff – or plant closing – properly and provide, if necessary, written notice to their employees. And, of course, employees facing the prospect of being laid off or part of a plant closing are better off apprised of their rights so they can make the best of a difficult situation.

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