As the economy hemorrhages jobs (3.6 million and counting since the start of the recession), C-level suites everywhere are abuzz with executives hashing out the details of impending rightsizings, streamlining, redundancies, or whatever obfuscation of choice.
Among the many considerations that those charged with the unenviable task of cutting jobs must take into account is the federal Worker Adjustment and Retraining Notification (WARN) Act.
WARN, one of those fortunate acronyms which hint at its underlying meaning (like MADD, or CREEP), requires businesses that have at least 100 employees to give 60 days’ advance notice of any “mass layoff” (defined as at least 50 employees losing their jobs during a 30-day period). A number of states also have their own WARN Act laws that may be stricter than the federal law and may apply to smaller employers. (For example, New York State’s version requires 90 days’ notice to employees and covers employers with 50 employees.) Failure to provide the required notice can lead to liability for up to 60 days back pay and benefits.
There is no government watchdog agency on the lookout for WARN Act violations; only a civil action by the aggrieved employees (or their unions) can enforce the rights granted by the Act.
Although, as The New York Times recently reported, there are no comprehensive statistics on employment cases, there is broad agreement among the labor and employment bar that the number of WARN Act lawsuits has risen sharply as the economic crisis has deepened. This spike in WARN suits has an obvious logic: when it’s easy to land a new job, motivation to go through the hassle of filing a lawsuit is low. And vice versa. Since the onset of the recession, former employees of Lehman Brothers, Archway Cookies, EOS Airlines, and Fortunoff have all filed class actions under the WARN Act. Other prominent companies “under investigation” by plaintiffs’ law firms for violations include Caterpillar, Harley-Davidson, Home Depot,IBM,General Motors, and Microsoft.