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Know the Law. Know your Rights.

Workers are generally protected from unfair labor practices by both federal and state laws. California workers, however, benefit from protections guaranteed under some of the country’s strongest labor laws. However, workers must know their rights in order to challenge illegal acts by employers.

What is the WARN Act?

The “WARN Act” or Worker Adjustment and Retraining Notification Act is a federal law that protects workers by requiring employers to give adequate notice to employees before a mass layoff or closing of a work site. Most states have “mini WARN Acts” which provide similar protections under state law.

The purpose of the WARN Act is to provide employees with sufficient notice of an impending job loss so that they can secure other employment or seek training to pursue a different job. Under the WARN Act, workers are entitled to 60-day notice prior to a mass layoff or closing with some exceptions.

Who is protected under the WARN Act?

In general, the WARN Act protects employees of companies with over 100 active full-time employees including private and public companies as well as non-profit organizations. The Act protects both salaried and hourly employees, but employees must be employed for at least six of the previous 12 months, and must work more than 20 hours a week.

When must an employer give a 60-day notice?

According to the WARN Act, employers must give a 60-day notice in advance of a mass layoff or closing of a work site. The layoff must also be expected to last more than six months. In other words, a temporary layoff or short furlough would not necessarily require a warning under the WARN Act. However, the WARN Act is triggered when any of the following is expected to occur:

• a reduction of at least 33 percent and of at least 50 employees during any 30-day period

• at least 500 full-time employees will be laid off

• closing of a work site will reduce employment by at least 50 employees.

The WARN Act also requires notice be given prior to the “sale of part or all of an employer’s business,” but courts have wrestled with whether this must also result in the termination of employees, and what constitutes a “sale.”

As with many legal issues, you should discuss your situation with an experienced labor attorney to determine whether your rights have been violated.

What happens if an employer fails to comply with the WARN Act?

The federal penalties for violating the WARN Act can be considerable and include paying employees back pay and benefits during the period of violation. In some circumstances, a business is also required to give advance notice to local government officials before the closing of a work site, and failure to provide notice can result in civil penalties.

How has COVID-19 affected the WARN Act?

Needless to say, COVID-19 has resulted in a significant number of layoffs and closures. When the pandemic caused many businesses to shut down in March 2020, the shutdown was largely expected to be temporary. However, as the shutdown continued, employers who failed to provide notice of a mass layoff or closure may argue that the extended layoff (beyond six months) was reasonably unforeseeable, and therefore no WARN notice was required. Under the WARN Act, there are exceptions to the notice requirement. Specifically, the exceptions include “unforeseeable business circumstances” that cause a layoff or business closure.

Whether a WARN Act violation has occurred during the pandemic is often unclear. Each case will depend on the specific facts, so it is important to consult with an experienced labor law attorney to assess your specific case.

For example, a lawsuit has been filed in Florida federal court against Enterprise Rent-a-Car alleging a violation of the WARN Act when an employee was laid off with no notice last April. The plaintiff argues that the reduction in work force was not “unforeseeable” because the company furloughed employees in mid-March when the pandemic initially forced many businesses to shut down.

Does the CA Warn Act provide more protection than the federal act?

Yes. California labor laws generally provide stronger protection to workers than federal law, and the CA Warn Act is no exception. For the most part, the state act is similar to the federal act except the CA Warn Act covers a broader range of employees. In other words, under the CA Warn Act, more workers are entitled to advance notice under the act.

The most significant difference however is the CA Warn Act does not make an exception for “unforeseeable circumstances.” In other words, unlike federal law, businesses may not argue that layoffs or closures due to COVID-19 were due to unforeseeable circumstances, and therefore, advance notice was not required.

Other important differences provide significantly more protection to workers during the pandemic. Unlike federal law, the CA WARN Act applies to temporary job loss regardless of the duration. California law, however, also has exceptions that excuse a business from giving notice. Specifically, the CA WARN Act has exceptions for layoffs due to “physical calamity” or “faltering business.” It is unclear, however, how the courts will define the exceptions, particularly in light of an executive order signed by Governor Gavin Newsom allows for a more flexible notice requirement if certain circumstances are met. This executive order is similar to a federal provision that allows some employers to give notice when “practical” when certain conditions are met and 60-day notice was not given.

FREE CONSULTATION

Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including WARN Act violations, and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.

If you or someone you know suffered employment violations due to a WARN Act violation, you may have certain employee rights under state and federal law, and may be entitled to compensation as a part of a class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.


Phone: 213.474.3800
Fax: 213.471.4160