The Sugar Law Center for Economic and Social Justice is a national, non-profit organization, advocating for working people and their communities. We work for economic and social justice by binding corporations and government to their legal and ethical responsibilities. The Sugar Law Center has been at the forefront of WARN Act litigation since 1992. Together with our cooperating attorneys, the Law Center has represented thousands of workers and in hundreds of WARN Act cases throughout the country.
The Sugar Law Center is affiliated with the National Lawyer's Guild.
For the fourth consecutive year, Rhode Island legislators have introduced a bill to adopt a state WARN Act. House bill 5508 and Senate bill 0230 would establish the Rhode Island Worker Protection and Job Loss Notification Act. Both bills were introduced in February and are pending before the House Labor Committee and Senate Labor Committee respectively.
Representatives Slater, Silva, Williams, and Diaz introduced the House bill and Senators Senators Crowley, Pichardo, Goldin, Sosnowski, and Conley introduced the Senate version. Kudos to each.
Minnesota legislators Rep. Ryan Winkler and Rep. Mike Sundin introduced a bill, HF 1266, on March 5, 2013. The bill would require employers to give at least 30 days notice before undertaking a worksite closing or mass layoff affecting 25 or more employees. The law would apply to any employer of 25 or more employees. By lowering the triggering thresholds, the bill seeks to expand worker protections by covering more employers and more displaced workers. As a trade-off for expanded coverage, the notice period is shorter than that found under federal law.
Earlier this year, Minnesota legislators introduced a bills (H.F. No. 2284 & H.F. No. 2446) that would allow the Commissioner of the Department of Labor and Industry to issue an order requiring an employer to comply with the state's Early Warning System law. The Early Warning System statute presently "encourages", but does not require, employers to provide advance notice of plant closings, substantial layoffs, or relocation of operations. The bills would permit the Commissioner to enforce the law and also permit affected workers to obtain relief, including treble damages, for violations of the Commissioner's order. The proposed laws are pending before the House Jobs and Economic Development Finance Committee.
For the third consecutive year, a state WARN Act has been introduced before the Rhode Island legislature. House bill 7565 and Senate bill 2378 would establish the Rhode Island Worker Protection and Job Loss Notification Act.
The House and Senate bills contain several important innovations. The bills would apply to employers of 75 or more workers. Notice requirements would be triggered by a transfer of operations resulting in the termination of employment for 25 or more workers and also be triggered by mass layoffs of 50 or more workers or mass layoffs of 25 or more workers representing 1/3 of the employees at the establishment.
The Senate passed the bill in June, however the House continues to consider the bill in committee.
Over the summer, defense contractors have threatened to issue blanket WARN Act notices of potential layoffs to all civilian employees on Nov. 2. The threats are the result of massive across-the-board sequestration cuts to the federal budget that are scheduled to take effect on January 2, 2013. Without a budget compromise in Congress, federal contractors anticipate significant layoffs resulting from the sequestration cuts.
In response the U.S. Department of Labor has issued a guidance letter stating that due to the contingent nature of the cuts, the unknown impact on particular federal contracts and contractors, and other contingencies, the layoffs are presently unforseeable. The Department of Labor further noted that blanket notices to all employees are not consistent with the purposes of the WARN Act, which seeks to inform those workers who are reasonably anticipated to be laid off and to provide them with an opportunity to seek other employment in advance of job loss.
Sen. Michael B. Enzi (R-Wyo.) has taken a lead in questioning the DOL and coming to the defense of existing WARN Acts requirements as applied to federal contractors. We would otherwise applaud such efforts had WARN Act reforms not stalled before the Senate H.E.L.P. Committee (upon which Sen. Enzi sits) due to opposition within his party. In light of his recent opinions however, we look forward to his strong support and leadership to strengthen existing WARN Act requirements as new bills come before his committee in the future.
The New Jersey legislators remain at the forefront of forward-thinking elected officials seeking to protect workers and communities from the devastating effects of sudden job loss. Again this year, New Jersey legislators introduced innovative legislation that would: 1) provide access to certain job training courses for employees affected by plant closings, mass layoffs, or transfer of operations (A 1799 and S 397); 2) allow persons affected by certain plant closings, transfers and mass layoffs to receive temporary suspension of payment of interest on mortgage loans (A 1802 and S 916); and provide for expedited injunction for violations of law requiring prenotification of certain plant closings, transfers and mass layoffs (A 1807 and S 398).
Each of the bills remain pending before the committees of the state Assembly and Senate.
Legislative Bill 472, which would have adopted the Nebraska Workers Adjustment and Retraining Notification Act, was indefinitely postponed at the end of the state's legislative session earlier this year. For further consideration, the bill will need to be reintroduced during the the next legislative session, scheduled to begin January 9, 2013.
Effective January 1, 2012, New Hampshire's state WARN Act is amended to cover fewer New Hampshire workers. The legislation increases the threshold size of covered employers from those with 75 or more full-time employees to those with 100 or more full-time employees. The amended law now mirrors federal legislation in that respect and will result in fewer New Hampshire employees recieving advance notice of impending job loss.
Earlier this year, a new Hawaiian law took effect which provides penalties for employers who fail to act in accordance with the state WARN Act. An employer in a covered establishment who violates the Act will be held liable to each affected employee for back pay and benefits for the period of violation, not to exceed sixty days. Employer liability may be reduced by any wages paid during the notice period and voluntary and unconditional payment not required by a legal obligation. The law further empowers the state department of labor to conduct investigations and enfore the state WARN statute.
In January of 2011, Nebraska state senator Russ Karpisek introduced the Nebraska Workers Adjustment and Retraining Notification Act (LB 472). The bill seeks to provide more worksite and worker coverage, more efficient administrative response and enforcement, and more meaningful advance notice to employees. After introduction, the bill was referred to the Business and Labor Committee where it remains pending.
The bill would require employers to provide 60 days advance written notice of a mass layoff, worksite closing, or a transfer of operations which would result in the loss of 25 jobs or more. Notice must be given to each affected employee, each representative of the affected employees, the Commissioner of Labor, the local workforce investment boards and the mayor of the city or village within which the event will occur or, if not within a city or village, the county board. The notice period is increased to 120 days for an event which would result in job losses for 250 employees or more. The bill further allows for the aggregation of individual employment losses if the losses occur at a single site for two or more groups of employees and if any of the individual employment losses involve fewer affected employees than are necessary to require notice under the act.
Enforcement provisions would attach liability to violating employers for each affected employee. The penalties include double back pay for each calendar day of the violation, the value of benefits from the employer’s employee benefit plan through the entire 60 day notice period, as well as liability for other economic and exemplary damages shown by the employee through a preponderance of evidence to have been caused by the employer’s violation of the Act.
Cornhuskers may wish to contact Sen. Karpisek to thank him for his efforts on this bill and may wish to reach out to the Business and Labor Committee to voice support for this legislation.
Legislators in New Jersey and Rhode Island have reintroduced legislation that expired at the end of last year's legisaltive sessions. The New Jersey bills (Assembly Bills 1923, 1939, and 1985 and Senate Bills 976, 977, and 992) would improve the state's existing advance notification statute while the Rhode Island bills (House Bill 5221 and Senate Bill 421) would enact a mini-WARN Act.
Folks in the Garden and Ocean States are asked to contact their state senators and representatives to register their support of the pending legislation.
In what is an all-too-familiar tactic of the national office of the U.S. Chamber of Commerce, the organization has issued a "study" falsely claiming that legislation existing in particular states has a crippling impact on economic growth and job creation within that state. The new piece is titled "The Impact of State Employment Policies on Job Growth: A 50 State Review" and claims to rank states based on a "Employment Regulation Index". The index is compiled through negative scoring based on the existence of fair employment practices laws within a state. Additionally, if the laws have meaningful enforcement procedures to deter illegal conduct, this can lead to further negative scoring.
One factor used to determine the ERI is the presence of state WARN Act statutes. The presence of these mini-WARN Acts is cited as a "key aspect" of state employment polices that harm economic growth. Beyond the false premise of the report, the data surveyed is inaccurate and, at times, blatantly false. Particularly, the report includes the following states as having "WARN-type" requirements that exceed federal law: Connecticut, Michigan, Ohio, and Pennsylvania. If it were true, this would be news to workers in each of these states, but it is not.
Michigan and Ohio have no WARN-type requirements and Connecticut and Pennsylvania's statutes do not require advance notice to workers when job losss occurs as the result of a a plant closing or mass layoff. In 2005, the Connecticut state legislature introduced WARN-type legislation, but the bill did not pass before the end of the legislative session. The state has a law that requires the continuance of group health insurance for 120 days following a plant closing, but this cannot fairly be claimed as WARN-type legislation. Michigan has a non-binding statute that asks employers to provide notice of job loss, but compliance is voluntary and the statute has no enforcement provisions. The Ohio legislature introduced a mini-WARN Act last year, but it did not pass. The state only has a law that requires an employer undertaking a large-scale layoff to notify the state unemployment insurance director three days prior, so that the agency can prepare for processing of a large number of anticipated claims. Pennsylvania also does not require advance notice of plant closings or mass layoffs beyond what is required by the federal WARN Act. The state legislature has considered mini-WARN Act legislation during several sessions, but no law has yet passed. The state does require limited notice to state regulators when a takeover bid is underway and, during "control share acquisitions", requires modest severance to long-term employees. These laws are of very limited application and neither can fairly be considered WARN-type legislation requiring advance notice to workers of impending layoffs.
These errors were found on a quick review of WARN-type legislation. One is left to wonder what additional errors would be found regarding the Chamber's claims concerning wage theft legislation, anti-discrimination laws, and other statutes that protect workers and ethical employers from the predatory practices of less humane and corrupt enterprises. The Chamber's reports appear to have been drafted to protect the latter as the expense of the former.
Too often however, the Chamber's reports contain similar embedded errors. An example is the Chamber's annnual Litigation Climate "study". States that allow severely injured persons access to the courts to recover tort damages to pay for necessary medical care, lost wages, and other losses are considered to hinder economic growth. Notably, in past years, the report has awarded varying scores regarding Michigan's punitive damages laws. However, Michigan law does not permit recovery of punitive damages in tort cases. While the Chamber's studies have been debunked by academics and pollsters, they continue to be cited by journalists and politicians who fail to check the facts underlying the opinions presented. And that may be the purpose of these "studies" after all - to shape public perception regardless of the facts. As a consequence, they should be seen for what they are - propoganda pieces to create false impressions to undermine the laws that provide economic stability and a level playing field for all.
In August, the U.S. Department of Labor, Bureau of Labor Statistics, released extended mass layoff statistics for the second quarter of 2011. In this quarter, employers initiated 1, 624 mass layoff events resulting in the separation of 261, 346 workers from their jobs. The figures reflect a decrease in events and separations over the year for seven consecutive quarters. The official national unemployment rate reported for the quarter averaged 8.9%, a decline from 2010’s average of 9.5%.
The state of California was hardest hit by worker separations for the quarter, followed by Illinois, Pennsylvania, New York and Ohio. Of the four census regions, the West region reported the largest number of separations. Of the nine census divisions, the Pacific and the East North Central reported the highest numbers of displaced workers. All four regions and eight of the nine divisions reported fewer laid-off workers compared to the last year’s second quarter.
The United States Congress and a number of state legislatures had WARN Act reform legislation pending for much of the past year. Workers rights advocates saw one notable victory and a number of initiatives that lays the groundwork for future efforts. In too many instances however, good bills were introduced but saw no meaningful action after being referred to legislative committee. Following entries provide a recap of legislative initiatives that were put forward and/or considered by federal and state legislatures during the previous year.
United States Congress: The FOREWARN Act of 2009 was introduced before the House of Representatives by Rep. George Miller (CA-7) and before the Senate by Sen. Sherrod Brown (OH). The House bill received bi-partisan support among its co-sponsors. Sen. Brown also introduced the Regional Economic Recovery Coordination Act of 2009 and Rep. Guiterriz (IL-4) introduced the Alert Laid Off Employees in Reasonable Time Act. Each of these bills were referred to committees. However, to the disappointment of workers rights advocates, none saw further action during the 111th Congress. Rep. Gutierrez, Rep. Miller and Sen. Brown will be returning to join the 112th Congress and it is hoped that WARN Act reform will be reintroduced and pushed forward in the new Congress.
California: In California, the state legislature considered legislation to improve the state’s WARN Act by extending the notice period from 60 to 90 days. The bill was introduced by Assemblymember Sandré Swanson. The bill was referred to but did not make it out of committee. Assemblymember Swanson was re-elected in November and will return to the legislature in 2011.
Massachusetts: The Commonwealth of Massachusetts has been considering two bills that would improve the state’s exising advance notice laws. In the House, an Act Relative to the Notification of Large Job Layoffs, House No. 1847 was introduced by Representative Michael Rush. In the Senate, a similar bill was introduced by Senators Anthony Petruccelli, Gloria Fox, Willie Mae Allen and Elizabeth Malia. Both bills were referred to committee, but saw no further action during this legislative session.
Minnesota: Since 2009, the Minnesota state legislature has been considering bills that would make the state’s voluntary advance notice guidelines binding law, enforceable by the state labor commissioner. The bills have been pending before state House and Senate committees for more than a year and will have to be re-introduced if they are to be considered during the next legislative session. In the state House, the bill was authored by Representatives Ryan Winkler, John Ward, and Denise Dittrich. In the state Senate, the bill was authored by Senator David Tomassoni. Each of the authors were re-elected to their offices during elections in November, 2010.
New Hampshire: New Hampshire passed state WARN Act legislation in 2009 and the law became effective on January 1, 2010.
New Jersey: Legislators in New Jersey re-introduced several bills during 2010 that would strengthen the state’s Millville Dallas Airmotive Plant Job Loss Notification Act. The bills however did not make it out of committee. If past history is any indication, the bills are likely to be re-introduced during the next legislative session.
New Mexico: In early 2010, the New Mexico legislature considered a state WARN Act bill introduced by Rep. Mimi Stewart. The bill passed the New Mexico House of Representatives and then was referred to the state Senate. Unfortunately, after intensive lobbying and rumors of a catered barbeque dinner curtesy of corporate lobbyists, the Senate Corporations and Transportation Committee tabled the bill during a late session and the bill then died in committee. The bill was supported by Governor Bill Richardson. Rep. Mimi Stewart returns to the New Mexico legislature next year; however a new governor will take office in 2011.
Ohio: State representative Kenny Yuko introduced a state WARN Act bill before the Ohio General Assembly earlier this year. The bill was referred to the House Commerce & Labor Committee. The committee however took no action on the bill before the end of the legislative session. Rep. Yuko returns to the Ohio House of Representatives and will hopefully continue to pursue the issue during the next legislative session.
Pennsylvania: In 2010, Representatives White, Belfanti, Bradford, Brennan, Daley, DePasquale, Freeman, Gibbons, Hornaman, Josephs, Kula, Murt, M. O'Brien, Quinn, Santoni, Siproth, K. Smith and Thomas introduced the Pennsylvania Workers Adjustment and Retraining Notification Act before the state House of Representatives. The bill was referred to the Labor Relations Committee but was not acted upon during this legislative session.
Rhode Island: The Rhode Island Worker Protection and Job Loss Prevention Act, (S2233 & H7462) was introduced before the state General Assembly. The bills have been pending before House and Senate committees, but have not received committee hearings or been scheduled for a vote during the current legislative session.
With record high job dislocation in recent years, the nation’s courts have been confronted with numerous related lawsuits, many of which have been filed based on violations of the WARN Act. The following summaries detail decisions entered in recent months.
Platt v. Freedom Mortg. Corp. (D.N.J. 2010). Plaintiffs alleged that the Defendant terminated their employment as part of a mass layoff in January 2010 without giving the required advance notice under the WARN Act. The Defendant moved to dismiss for failure to state a claim and asserted that only 44 of the 60 employees were laid off. The court recognized that it would be improper to consider the employer’s extraneous evidence on the pre-answer motion to dismiss. As a result, the court denied the Defendant’s motion finding that Plaintiffs alleged facts sufficient to show that the Defendant is an employer subject to the 60 day advance notice provision and alleged facts sufficient to show that the Defendant’s layoffs constituted a mass layoff.
In re Storehouse, Inc. (Bkrtcy. E.D. Va. 2010). The Plaintiff brought an action against his former employer under the WARN Act. The court found that the Plaintiff was not a mobile worker, but rather, had worked from an identifiable single site of employment. The court found further that layoffs at the Plaintiff’s site of employment affected fewer than 50 people. As a result, the court held that the Plaintiff did not qualify for WARN Act protections.
Bennett v. Roark Capital Group, Inc. (D. Me. 2010). Former employees and their labor union brought an action against their employer WSI and various other corporate parents. Among other claims, the Plaintiffs alleged violations of the WARN Act. The Defendants moved to dismiss.
To determine the whether the corporate parent companies qualified as the employer under the WARN Act, the court recognized two tests. Under the first test, the court considered whether the parent companies and WSI had: (1) common ownership; (2) common directors and/or officers; (3) de facto exercise of control; (4) unity of personnel policies emanating from a common source; and (5) the dependency of operations between the companies. Under the second test, the court considered the: (1) interrelation of operations between the companies; (2) whethere there was common management; (3) the existence of centralized control of labor relations; and (4) common ownership. The court found it improper to consider the probability that there will be such evidence prior to the completion of discovery. The court held that Plaintiffs were entitled to conduct discovery to determine if such evidence exists and denied Defendants’ motion to dismiss.
Richards v. Advanced Accessory Systems, LLC. (E.D. Mich. 2010). Plaintiffs alleged a WARN Act violation when they were informed that they were laid off without 60 days advance. The court examined the extent to which an entity with a controlling ownership interest in an employer is subject to WARN Act liability.
Looking to US DOL regulations, the court considered the following factors: (1) common ownership; (2) common directors and/or officers; (3) de facto exercise of control; (4) unity of personnel policies emanating from a common source; and (5) dependency of operations. The court found that the third, fourth and fifth factors weighed in favor of the Defendant parent corporation and granted that company’s motion for summary judgment.
In re Taylor Bean & Whitaker Mortgage Corp. (Bkrtcy. M.D. Fla. 2010). On WARN Act claims, Plaintiffs requested certification of a class. Defendant argued that the claims should be handled through the claims administration process and that an adversary proceeding was unnecessary. The court found that a class action adversary proceeding was appropriate and preferable to the claims procedure and that an adversary proceeding was necessary to protect employees’ rights given the relatively small nature of the individual claims.
In re FF Acquisition Corp. (Bkrtcy. N.D. Miss. 2010). Former employees alleged that their former employer violated the WARN Act when, on the day of filing for bankruptcy relief, the employer terminated all manufacturing activities and issued a notice that it was ceasing business operations. In order to be exempt from the 60 day advance notice requirement, the court recognized that the employer must show that the circumstances were unforeseeable and that the layoffs were caused by those circumstances. The Plaintiffs asserted that the shutdown was foreseeable due to variety of factors. The Defendant stated that the failure of the company’s three principal customers to provide written commitments for orders by August 2005 resulted in an inability to provide their primary lender with a viable business plan showing that the company could repay its debts. Without funding from their lender, business operations could not continue.
The court held that the “unforeseen business circumstances” and the “faltering company” exceptions to WARN Act liability applied to the facts of the case. The court’s decision seemingly misapprehends the unforeseen business circumstances exception. By its very terms, a faltering company that is actively seeking capital (under the second exception) not only forsees but is critically aware of the dire circumstances necessitating the capital sought. Under such conditions, the adverse business circumstances cannot be considered “unforeseeable.”
Eash v. Export Packaging Co., Inc. (C.D. Ill. 2010). Plaintiffs alleged that the Defendant employer, failed to provide adequate (60 day) notice prior to the termination of their employment. Plaintiffs brough a motion for class certification that was not opposed by the Defendant.
Despite class certification being properly and routinely granted in such cases, the court curiously found it hard to believe that Plaintiffs would “be familiar with which employees did or did not receive written notice of their terminations” and that the Plaintiffs thereby failed to establish the numerosity requirement of FRCP 23. Plaintiffs’ motion for class certification was then denied without prejudice.
Minnesota Legislature This site has listings of committee members and contact information for state Senators and Representatives.
New Jersey Legislature This site has listings of committee members and contact information for state Senators and Representatives.
New Jersey Bills, A 1802 & S 916 Bills would allow laid off workers to receive temporary suspension of payment of interest on mortgage loans. Pending before Assembly Labor Committee and Senate Commerce Committee.
New Jersey Bills, A 1807 & S 977 Bills would empower state officials to obtain injunctive relief when advance notice is not provided. Pending before Assembly Labor Committee and Senate Labor Committee.
New Jersey Bills, A 1799 & S 397 Bills would provide for free tuition to laid off workers. Reported out of Assembly Labor Committee. Senate bill introduced before Senate Labor Committee.