To Aggregate or Not to Aggregate, Under the WARN Act, That Is the Question

By Michael D. Hornback

On January 5, 2016, the Sixth Circuit answered that question with a “No” under the facts and circumstances presented in Morton v. The Vanderbilt University, 2016 WL 52439 (6th Cir. 2016).

The Sixth Circuit began its opinion by noting the unusual circumstances presented.  The plaintiffs in the case consisted of 194 employees (the “Plaintiffs”) who were terminated by Vanderbilt and who were claiming violations of the Worker Adjustment and Retraining Notification Act (the “WARN Act”), 29 U.S.C. §2101 et seq.  However, whether these 194 terminated employees actually had a claim under the WARN Act was wholly dependent upon how Vanderbilt treated 279 other employees (the “Second Group”) who were not plaintiffs in the lawsuit and who had not protested Vanderbilt’s treatment of them.

Under the WARN Act, an employer of 100 or more employees is generally required to provide at least 60 days’ written notice to affected employees before a mass layoff may occur.  A “mass layoff” is defined as “an employment loss at the single site of employment during any 30-day period for . . . at least 500 employees.”  However, the WARN Act permits

Would the WARN Act Apply in the Event of a Federal Budget Sequestration?

By Edwin S. Hopson

On July 30, 2012, an Assistant Secretary of the U.S. Department of Labor issued an advisory and guidance to federal contractors concerning the applicability of the Worker Adjustment and Retraining Notification Act (WARN Act) to possible layoffs occasioned by federal government sequestration on January 2, 2013, under the Balanced Budget and Emergency Deficit Control Act of 1985, and the Budget Control Act of 2011, should the Congress and President not come to agreement on a federal budget.  That guidance was “no” — the WARN Act would not be triggered by such action and affected, covered federal contractors would not be in violation of the WARN Act for NOT providing 60 days’ notice of mass layoffs or a plant closing affecting at least 50 employees.

The issuance of this guidance has been criticized by the Republican House Education and Workforce Chairman, John Kline, and the Subcommittee on Workforce Protections Chairman, Tim Walberg, in a letter to Secretary of Labor Hilda Solis.  They argue that the Department of Labor’s guidance has no legal effect and may be misleading employers into not following the WARN Act’s requirements.

With the recent agreement on a short-term budget extension, this issue has now been pushed off for several months.

The Labor Department’s guidance can be found at: 

http://wdr.doleta.gov/directives/attach/TEGL/TEGL_3a_12.pdf

The Kline/Walberg letter may be found at:

http://edworkforce.house.gov/UploadedFiles/08-02-12_Letter_WARN_Act_Sequestration.pdf

No Right to Jury Trial in WARN Act Cases

By George J. Miller

On February 16, 2011, the U.S. Court of Appeals for the Sixth Circuit (which hears appeals from federal district courts in Michigan, Ohio, Kentucky, and Tennessee) held that former employees who sue for violations of the Worker Adjustment and Retraining Notification Act (WARN) do not have a right to a jury trial.  In this case, a class of former employees of Emery Worldwide Airlines sued the company, claiming that Emery violated their rights under WARN by not giving them the 60 day notice required by the law before they were permanently laid off.  After a four day trial conducted by the court without a jury, the trial court ruled against the employees, holding that they were not entitled to a 60 day notice prior to Emery permanently ceasing operations. 

The employees appealed both the decision that they were not entitled to a 60 day notice and the trial court’s earlier decision that they were not entitled to a jury trial.  The Court of Appeals affirmed the trial court on both issues.  With respect to the jury trial issue, the Court of Appeals agreed with the trial court that the Act’s remedy for violations–back pay and benefits for up to 60 days–is more like restitution for wrongfully withheld pay than it is like legal damages.  Such restitutionary or “equitable” remedies are traditionally reserved to courts, not juries.  An additional basis for the appellate court’s decision was a provision in the Act which allows the trial court to reduce the amount of liability in cases in which the trial court finds that, despite the violation, the employer had a reasonable and good faith belief that it was complying with the Act.  The Court of Appeals reasoned that this provision of the law places the entire damage award within the discretion of the trial judge. 

 The upshot of this decision is that employers in states in the Sixth Circuit need not worry about the prospect of a jury trial in WARN cases.  An added benefit of the decision is the emphasis on the trial judge’s authority to reduce damages and penalties when employers make reasonable, good faith efforts to comply with the Act.

Kentucky Chamber of Commerce Publishes Downsizing Guide

 The Kentucky Chamber of Commerce has just published The Kentucky Employer’s Guide to Downsizing, with the help of our Labor & Employment Service Team’s Chair Debra H. Dawahare, who edited the book.  The book may be purchased from the Chamber’s website, www.kychamber.com, at the tab labeled “Bookstore.” 

 Wyatt, Tarrant & Combs, LLP has written or edited a number of other publications available through the Kentucky Chamber of Commerce, including The Genetic Information Nondisclosure Act (“GINA”);  Preventing Workplace Violence—A Guide for Kentucky Employers;  The ABCs of Doing Business in Kentucky;  and The Kentucky Employer’s Guide to Hiring and Firing.