The COVID-19 pandemic and resulting government-mandated shutdowns of non-essential businesses have required many employers to confront difficult questions about the length of layoffs amidst an environment of unique uncertainty regarding both the duration and depth of the crisis. Although events that lead to layoffs are always fraught with some future uncertainty, the COVID-19 pandemic is unprecedented in myriad ways, including the opaqueness of a business’s ability to anticipate its near and intermediate term operations, finances, and personnel. This article highlights some of the different considerations for employers under WARN where there exists greater than normal uncertainty about the future work environment.
The federal Worker Adjustment and Retraining Notification Act (the WARN Act) requires covered employers to provide 60 days’ advanced notice to affected employees, unions, and certain governmental entities before engaging in a “mass layoff” or “plant closing.” 29 U.S.C. §2102(a); 20 C.F.R. §639.2. In order to constitute a “mass layoff,” at least 50 full-time employees equaling at least one-third of the workers at a single site of employment must experience an “employment loss.” 29 U.S.C. §2101(a)(3); 20 C.F.R. §639.3(c). Similarly, a “plant closing” requires at least 50 full-time employees at a single site of employment to experience an “employment loss” in connection with the closing of the location or a “facility or operating unit” within the location. 29 U.S.C. §2101(a)(2); 20 C.F.R. §639.3(b). The WARN Act defines an “employment loss” to include “a layoff exceeding 6 months.” 29 U.S.C. §2101(a)(6)(B); 20 C.F.R. §639.3(f)(1)(ii). See also Worker Adjustment and Retraining Notification, 54 F.R. 16042, 16047 (April 20, 1989) (“The Department notes that it interprets the statutory terms ‘termination’ and ‘layoff’ in section 3(a)(6) to be distinguishable and have their common sense meanings. Thus, for the purposes of defining ‘employment loss,’ the term ‘termination’ means the permanent cessation of the employment relationship and the term ‘layoff’ means the temporary cessation of that relationship.”). In attempting to determine the circumstances under which layoffs caused by the COVID-19 pandemic require WARN Act notice, many employers face the difficult task of projecting whether a temporary layoff will last for more than six months. Multiple governmental authorities simultaneously offering different and shifting timelines for the end of mandated shutdowns because of new health data and other factors further compounds employers’ difficulties in making such projections.
