Warning About WARN

Last Friday, Colorado’s oldest newspaper, the Rocky Mountain News, shut down. Already struggling before the current recession, the newspaper business continues to be hit hard.

An article in the Washington Post about this latest print casualty doesn’t discuss whether the owner of the News complied with the Worker Adjustment and Retraining Notification Act (WARN), but it caused me to think once again that with all the layoffs and business closures occurring these days, employers need to beware of WARN. (For a previous post and a New York Times article about a WARN situation that occurred in Chicago last December, click here and here.)

If you have 100 or more full-time employees, you’re covered by WARN, and you are required to give 60 days’ advance notice of a plant closing or mass layoff. A plant closing is a shutdown of a single site of employment that results in a layoff or termination of 50 or more full-time employees during a 30-day period. A mass layoff occurs when 33% of full-time employees at a single site of employment are let go — if 33% equals at least 50 employees. If you are a large employer and a layoff affects 500 or more employees during a 30 day period, that automatically qualifies as a mass layoff.

One problem, of course, with WARN is that an employer may not know 60 days in advance that a closing or layoff is going to be necessary. There are exceptions, perhaps most noticeably one that gives an employer an out if the closing or layoff is due to “unforeseeable business circumstances.”

With all the noise about layoffs and job losses right now, it seems likely that WARN will finally have its day in the sun. Before you announce a closing or layoff, get some legal advice.