WARN Act Cases to Determine Extent of Liability

May 15, 2020

As employers face pandemic-induced layoffs, closings, and furloughs, a pair of class action lawsuits preview the applicability of the WARN Act’s exceptions in advance of a possible future wave of litigation caused by COVID-19.

The two lawsuits represent different COVID-19-related WARN Act issues.  In the first lawsuit, a restaurant company is alleged to have terminated all of its Florida employees without providing them at least 60 days’ notice, as required by the WARN Act. 

In the second lawsuit, brought against a Silicon Valley radar tech company, the employees allege that the company had already started layoffs before the pandemic began, and used the pandemic to accelerate the process and avoid WARN Act compliance. 

Both cases will test the exceptions to the WARN Act and could provide a preview of how courts will apply the COVID-19 pandemic to such exceptions.  Under the WARN Act, companies are excepted from the 60 days’ notice requirement under certain circumstances, including natural disasters and unforeseeable business circumstances. 

Outlook:  Employers should take care to determine whether any layoffs or closings trigger WARN Act requirements and provide sufficient notice where applicable.  HR Policy’s compliance guide to the WARN Act can be found here.