Maryland: No Private Right of Action for Maryland WARN Act
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APPLIES TO All Employers with Employees in MD |
EFFECTIVE August 26, 2024 |
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Discussion:
In Teamsters Local Union No. 355 v. Total Distribution Services, Inc., the U.S. District Court for the District of Maryland stated that Maryland’s Economic Stabilization Act (Act) did not provide for a private right of action for employees who were discharged in violation of the Act. The Act is the state’s version of the federal Worker Adjustment and Retraining Notification Act (WARN). Here, the plaintiff worked for the defendant’s automobile distribution facility in Maryland. During negotiations for an updated collective bargaining agreement, the defendant terminated 60 employees, including all 47 of the unionized employees, without providing at least 60 days’ advance written notice as required by the Act.
In reaching its ruling, the court looked to whether there was an implied private right of action in the Act. In Maryland, courts look to: (1) whether the plaintiff is part of the class for whose special benefit the statute was enacted; (2) whether there is any indication of legislative intent – explicit or implicit – to create such a remedy or deny one; and (3) whether it is consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff.
The court did confirm that the plaintiffs were the type of workers that the Act was intended to protect. However, the plaintiffs did not meet the requirements of the second and third points. There was no evidence that the Maryland legislature intended to create a private right of action. Also, the Act did not have an implied right of action since the rest of the construction of the Act contained an administrative enforcement mechanism. Therefore, only the Maryland Department of Labor can enforce the Act. Employers conducting mass layoffs and reductions should review their obligations under the Act with legal counsel since violations can constitute as much as $600,000 for a full violation of the 60-day notice period.
Action Items
- Review mass layoffs and reductions in force with legal counsel.
- Provide required advance notice of layoffs in accordance with federal and state requirements when applicable.
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