WARN Act lawsuits on the rise because of pandemic

COVID-19 lawsuits and claims are on the rise, especially because of the Worker Adjustment and Retraining Notification (WARN) Act. Recently, the attorneys responsible for filing a much-publicized Florida lawsuit against Enterprise Rental Car struck again. This time, the proposed WARN Act class action is targeting a Florida hotel chain.

Hospitality businesses hit hard

The new WARN Act complaint focuses on nine Rosen Hotels and Resorts, Inc., facilities in the Orlando area. On April 10, 2020, during the early weeks of the pandemic, the company “temporarily furloughed” approximately 1,000 employees. At least 50 employees and 33 percent of the workforce were furloughed at each facility.

In temporary layoff scenarios, an employee doesn’t suffer an “employment loss” under the WARN Act unless the layoff exceeds six months. The proposed class action claims the Rosen Hotels layoff has now exceeded six months, and the employees have received no notice about their employment status in the interim.

The WARN Act requires employers with 100 or more employees to provide 60 days’ advance notice of a plant closing or mass layoff. The onset of the COVID-19 pandemic left some employers, especially those in the hospitality industry, in a difficult position with the country shutting down so quickly. As a result, they had little to no time to issue WARN Act notices before either (1) laying off their employees in what they hoped would be “temporary furloughs” or (2) shuttering their businesses entirely.

2 possible exceptions to providing WARN Act notice