Fifth Circuit: WARN Act’s Advance Notice Requirement for Layoffs is Not Exempted by COVID-19 Pandemic

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June 15, 2022

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Generally, the Worker Adjustment and Retraining Notification (WARN) Act requires employers to give employees advance notice of mass layoffs and plant closures, subject to limited exceptions. In Easom v. U.S. Well Services Inc., the Fifth Circuit Court of Appeals stated that the COVID-19 pandemic did not fall under the natural disaster exception to the WARN Act. Specifically, the court indicated that Congress did not intend to include a pandemic as a “natural disaster” when they originally passed the WARN Act.

 

There, the employer laid off employees citing unforeseeable business circumstances due to historic lows in oil prices coupled with decreased demand for oil and gas because of the COVID-19 pandemic. Three employees filed a class action lawsuit alleging a WARN Act violation for failing to provide 60 days’ advance notice of the mass layoffs.

 

While this ruling is limited to employers in the Fifth Circuit, it may be modified or appealed further.  There are also similar cases pending around the country. Notably, this case does not address the “unforeseeable business circumstances” exemption to the WARN Act, which may serve as another avenue for employers to claim an exemption to the notice requirement.

 

Spring 2020 was a chaotic time for many employers forced to make quick decisions regarding their business in the face of mandatory government lockdowns and a rapidly declining economy. There was little guidance at the time on how to interpret and apply the WARN Act’s notice exceptions in the face of a pandemic. Employers should continue to monitor pending cases addressing the WARN Act’s exceptions to the notice requirement.

 

Action Items

  1. Review requirements under WARN here.
  2. Review procedures for mass layoffs and plant closures with legal counsel for compliance.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2022 ManagEase