Megan K. Mechak
Wed, 06/22/2022
In a first of its kind appellate ruling, the Fifth Circuit Court of Appeals has ruled that the COVID-19 pandemic is not a “natural disaster” under the WARN Act. The WARN Act is a federal law that generally requires certain employers to provide sixty days’ written notice before mass layoffs. “Natural disasters” are an exception to the written notice requirement.
In early 2020, oil prices plummeted due to a price conflict between Saudi Arabia and Russia as well as a decline in travel and decreased demand for oil and gas to the COVID-19 pandemic. The employer in Easom v. US Well Servs., Inc., was contracted to hydraulic fracturing services (known as fracking). As a result of the drop in oil prices, US Well’s customers dramatically curtailed or shut down fracking work at multiple sites in Texas. After returning to US Well’s offices after shutting down various well sites in the states, the plaintiffs were informed that they were laid off effective March 18, 2020.
The plaintiffs sued, alleging that US Well did not provide the notice required by the WARN Act before implementing their lay offs. US Well argued that COVID-19 was a natural disaster under the WARN Act, making the lay offs exempt from the WARN Act’s notice requirement pursuant to the natural-disaster exception. The plaintiffs disagreed. The trial court concluded that COVID-19 was not a natural disaster, and that the natural disaster exception only applies if the lay offs would not have occurred “but for” the disaster. The interlocutory appeal followed.
In reversing the trial court, the Fifth Circuit noted that the natural disaster exception is a defense to an employer’s liability under the WARN Act. Slip op. at 4. However, the WARN Act does not define “natural disaster,” but does supply some examples, “such as a flood, earthquake, or the drought currently ravaging the farmlands of the United States.” Slip op. at 6-7 (quoting 29 U.S.C. § 2102(b)(2)(B)). In determining that the COVID-19 global pandemic was not a “natural disaster,” the court noted that, by the time the law was enacted, Congress was familiar with pandemics and infectious diseases and could have included those types of terms in the WARN Act but did not. Slip op. at 8.
Finally, the Fifth Circuit concluded that the WARN Act did not require “but for” causation, but that an employer could assert the natural disaster exception if the lay offs were a direct result of the natural disaster, applying “proximate” causation to the exception.
This decision forecloses another way employers may seek to avoid WARN Act liability after laying off workers without notice during the COVID-19 global pandemic.
If you believe your lay off violated the WARN Act, contact MSE at info@mselaborlaw.com.
