Mon, 01/11/2021
The Worker Adjustment and Retraining Notification (“WARN”) Act is a federal law that requires employers with one hundred or more employees to provide sixty days written notice of a plant closing or the mass layoff of more than 50 workers, which includes circumstances where an employee will be furloughed for more than six months. There are notable exceptions to the WARN Act, however, including natural disasters (where no notice is required) and “unforeseeable business circumstances” (where only as much notice “as is practicable” is required).
Two workers employed by Enterprise Holdings, the parent company of car rental firms including Enterprise Rent-A-Car and Alamo Rent a Car, in Florida, sued after they were sent home with little notice as COVID-19 emerged in their home state of Florida. Their employer asserted no notice – or a shortened notice period – was required due to the COVID-19 global pandemic and moved to dismiss the case.
The Court, however, has denied defendants’ motion to dismiss and will permit the case to proceed. In Benson et al. v. Enterprise Leasing Company of Florida LLC, pending in the United States District Court for the Middle District of Florida, the Court found, that while the COVID-19 pandemic could qualify as a “natural disaster” pursuant to the WARN Act, that loophole applied only when the plant closing or mass layoff comes as a “direct result” of a natural disaster. The judge concluded that the COVID-19 pandemic only indirectly influenced the firings. According to the judge, “[w]hile COVID-19 may be a natural disaster within the meaning of the WARN Act, the complaint does not allege the layoffs resulted directly from the pandemic.” Instead, according to the Court, “[t]he complaint (and unfortunate experience) shows a more tenuous connection: COVID-19 caused global concern over the spread of the virus, leading to a global shutdown — travel stalled, as did economies.” Because of this more tenuous connection between the COVID-19 pandemic, the Court concluded that the “natural disaster” exception to the WARN Act did not apply to the workers’ case.
The Court also considered the “unforeseeable business circumstances” exception to the WARN Act, but noted that exception does not eliminate the notice requirements, just “softens” them to allow for a shorter notice period. Because one of the workers alleged she had received no notice before her termination and the other was told less than a week before of her termination, the judge concluded that the case could proceed. He stated, “[e]xactly when defendants had to give notice will doubtless be a hotly contested factual issue, but at this stage, taking the allegations in the complaint as true, plaintiff has stated a claim for a WARN Act violation,”
The decision – which is one of the first to test how the WARN Act applies to pandemic-related workforce cuts – represents a significant setback for employers who sent home large portions of their workforce on little or no notice because of the COVID-19 pandemic’s impact on the economy.
If you believe you were laid off in violation of the WARN Act, contact MSE at info@mselaborlaw.com.
