COVID-19 and Layoffs Under the WARN Act

Daniel Olivas

As this is a fast moving topic, please note that this article is current as of 4/15/20. For contact information, please click here.

WARN Act Generally  The Worker Adjustment and Retraining Notification (WARN) Act is a federal law that requires employers to give 60-day advance written notice of a plant closure or mass layoff. Under WARN, employers must send a written notice to the affected workers, their representatives (e.g., a labor union), the Dislocated Worker Unit (DWU) of the Tennessee Department of Labor and Workforce Development, and to the chief elected official of the unit of local government in which the employment site is located. Tennessee has its own mini-WARN Act that differs from the federal act.

Are You a Covered Employer?  If you have 100 or more employees (not counting employees who have worked less than 6 months in the last 12 months, and not counting employees who work an average of less than 20 hours a week), you are a covered employer. The Act applies to private for-profit employers, private nonprofit employers, and to public and quasi-public entities that operate in a commercial context and are separately organized from the regular government. But government entities--regular federal, state, and local--that provide public services are not covered.

Are Your Employees Covered?  The Act covers hourly and salaried workers and managerial and supervisory employees, and those employees are entitled to WARN notice. Business partners are not entitled to notice.

Do You Have to Give Notice if COVID-19 causes a Plant Closing or Mass Layoff?  Yes. WARN regulations have not been waived so all statutes still apply, but The Tennessee Department of Labor and Workforce development has clarified that "because of the language in the statute and [the] unexpectedness of this pandemic the 60 day provision would not apply." Of course, this applies only to Tennessee's mini-WARN Act, not to the federal law.

The degree to which the U.S. Department of Labor will enforce the WARN Act has yet to be seen, but the ACT imposes costs for violations, up to 60 days of back pay and benefits, and a civil penalty of up to $500 per day, for example. And it creates a private cause of action for employees and allows them to recover attorney's fees should they prevail. An aggrieved employee can sue regardless of the DOL's official position on enforcement.

Given this, the least risky course of action is to determine whether the COVID-19 outbreak has triggered your WARN duties, and if it has, give as much notice to the affected employees as is practicable. To do this, you should consult with counsel and develop the approach that is best for you and your business. For additional information, click here.