COVID-19 and WARNings to employees about layoffs and closures

The Worker Adjustment and Retraining Notification Act (WARN) requires employers of a certain size to give 60-day notice to employees before a mass layoff or plant closing. No notice is required, however, if the mass layoff or plant closing is due to any form of natural disaster, such as a flood, earthquake, or drought. In 2020, companies nationwide argued the COVID-19 pandemic was a natural disaster, relieving them of WARN’s notice requirement before their layoffs and plant closings. They also argued the pandemic triggered WARN’s unforeseeable business circumstance exception, also relieving them of providing notice to employees about impending layoffs or closures. The unforeseeable business circumstance exception is triggered by a sudden, dramatic, and unexpected action or condition outside the employer’s control.

Federal court takes issue with exception defenses

A recent ruling by a federal district judge in Florida is the first judicial guidance for employers on whether they may escape liability for failure to provide the required WARN notices by relying on the two exceptions. Enterprise rental car company was sued by two former employees in a class action lawsuit because it didn’t give 60-day notice of job loss. One was given six days’ notice of her termination, while the other was given none.

Enterprise asked for the lawsuit to be dismissed, claiming COVID-19 was either a natural disaster or an unforeseeable business circumstance under WARN. The court disagreed and refused to dismiss the case. As a result, the company now finds itself headed toward full-blown litigation.