General Counsel Need to Consider WARN Act for COVID-19 Layoffs
"I think right now, state governors are really focused on public health," Cheryl Sabnis, a partner at King & Spalding in San Francisco, said. "I think we're going to see a follow-up round of executive actions that focus on economic health."
March 23, 2020 at 06:59 PM
3 minute read
Whether or not the new coronavirus will exempt employers from giving a minimum layoff notice to workers under the federal Worker Adjustment and Retraining Notification Act is something general counsel should begin to think about as their companies contemplate mass layoffs in the coming months.
Under the federal WARN Act, companies must give 60 days of notice when 50 or more employees will be impacted by a layoff. An unforeseeable circumstance is one of the exemptions to the federal law, which could include COVID-19 and would allow employers to give less of a notice.
"Although we do not have Department of Labor guidance yet, many of us think these are unforeseeable circumstances," said Linda Jackson, a partner at Arent Fox in Washington, D.C., referring to the pandemic.
Jackson said in-house counsel should still make sure that companies are giving as much notice as they possibly can, even if COVID-19 is considered unforeseeable under federal law.
Cheryl Sabnis, a partner at King & Spalding in San Francisco, said the circumstances surrounding COVID-19 support an exemption to the federal WARN Act.
"We've seen stay at home orders, businesses have to shutter if they're not essential, and we've seen a massive economic downturn," Sabnis said.
She explained those orders make it difficult to give the minimum 60-day notice if they must be shut down right away.
General counsel should also keep in mind that there are different state versions of the WARN Act, which require different notices and do not have the same exemptions built into them. California, Illinois, Maryland, New Jersey, New York, Tennessee and Wisconsin have their own versions of the WARN Act.
"For any company that is considering embarking on a mass layoff, they have to look at where the federal act applies and see if the state they are in has its own WARN Act," Jackson said. "This is something where they need to look at the layer of laws."
Last week, California Gov. Gavin Newsom signed an executive order, which allows companies to give only "as much notice as is practicable" before a layoff, rather than the 60 days which was required under California law.
Sabnis said she would anticipate that other states, at a minimum, look at their mini-WARN requirements and create exemptions or loosen up the law.
"I think right now, state governors are really focused on public health," Sabnis said. "I think we're going to see a follow-up round of executive actions that focus on economic health."
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