In the event of a plant closing or mass layoff, Massachusetts and federal laws require an employer to provide notice to employees and government entities.
The Massachusetts Plant Closing law requires employers to provide employees and the appropriate agencies, advanced notification when there are plant closings or mass layoffs. Under the Massachusetts law, an employer of 50 or more employees that anticipates the closing or partial closing of any facility in Massachusetts should “promptly” notify the Department of Labor and Workforce Development. A plant closing will generally be certified to have occurred if at least ninety percent of the employees have been or will be permanently separated within the six-month period prior to the date of certification of closing or partial closing. If the employer provides 13-weeks’ advance notice (or any combination of 13 weeks advance notice and separation pay) of the plant closing or partial closing, the employer will not be liable for any re-employment benefits.
Additionally, federal law has instituted the Worker Adjustment and Retraining Notification Act (WARN). The purpose of WARN is to ensure that workers who are displaced by mass layoffs or plant closings receive adequate time to prepare for the loss of employment. To that end, WARN requires employers to provide at least 60 days’ written notice to employees who will lose their jobs due to a qualifying plant closing or mass layoff.
A company’s failure to comply with WARN is costly. As a penalty, an employer that fails to meet WARN’s notice requirement may have to pay full back pay and benefits to each displaced worker for each day that notice was not given during the 60-day period. In cases where large plant closings displace many employees, this liability may be significant. In addition, an employer may be liable for civil penalties, attorneys’ fees, and costs.
An employer must understand WARN’s terminology to comply with its requirements. The key terms under WARN are:
WARN states that an employer must provide written notice to affected employees at least 60 calendar days before an anticipated plant closing or mass layoff. Generally, WARN is triggered (and an employer must give 60 days’ written notice) by any of the following events:
If the closing or layoff does not meet the definition of a plant closing or mass layoff under WARN, the law is not triggered, and an employer does not need to provide WARN notice to affected employees. For instance, WARN does not apply to a temporary closing of a facility that will last no more than six months.
WARN also is not triggered when an employer closes a temporary facility or finishes a temporary project, provided the employer hired the affected employees with the clear understanding that their employment would end with the closing of the facility or at the completion of the project.
Further, WARN is not triggered when a closing or layoff results from an employer’s consolidation or relocation, provided an employer offers to transfer affected employees to another location within a reasonable commuting distance and the employees will not endure more than a six‑month employment hiatus. In addition, if an employee accepts a transfer to any other job location within 30 days of the offer or plant closing (whichever is later), then there is no employment loss and WARN is not triggered.
Finally, WARN is not triggered by the closing of a facility or operating unit because of a strike or lockout. However, the employer should note that Massachusetts law requires that an employer file a notice with the public employing office within 48 hours when there has been a stoppage of work because of a labor dispute. The notice must set forth the existence of the dispute and the approximate number of workers affected.
There are only three situations when WARN permits an employer to provide less than 60 days’ notice of a mass layoff or plant closing.
The “business circumstances” exception permits an employer to implement a plant closing or mass layoff before conclusion of the 60-day notice period if the closing or mass layoff is caused by business circumstances that were not reasonably foreseeable at the time the notice would have been required. A business circumstance that is not reasonably foreseeable is one that is caused by an unexpected action or condition outside the employer’s control. For instance, the employer may experience a strike at its business or by a major supplier, or a supplier may unexpectedly cancel a major order. Determination of whether a business circumstance is reasonably foreseeable is made by focusing on an employer’s reasonable business judgment and by considering industry standards.
The “faltering company” exception applies only to plant closings. To qualify for this exception, an employer must be actively seeking capital or other funding that would enable the employer to avoid or postpone the closing and the employer reasonably and in good faith believes that giving employees notice of the shutdown would prevent the employer from obtaining those resources. In other words, if providing WARN notice would prevent the employer from obtaining new sources of capital or business to keep the facility open, then the employer may suspend the notice for such time as is practicable for it to obtain the funding or resources.
The “natural disaster” exception applies to plant closings or mass layoffs that are the direct result of a natural disaster, such as an earthquake, tornado, or flood. In such a situation, notice may be given after the natural disaster.
None of these exceptions completely relieve an employer from WARN notice to the affected employees. Instead, they only excuse the employer from giving the notice 60 days before the closing or layoff. The employer must nonetheless give notice as soon as reasonably possible when any of these exceptions apply. In addition, the employer must provide a statement of the reason for reducing the notification period to affected employees as soon as possible and explain the circumstances that caused the employer to conclude that the exception to the 60‑day notice period applied.
Under WARN, the required number of employment losses need not occur at the same time to trigger WARN’s notice obligations. As a general rule, an employer must combine all employment losses that occur during a “rolling” 30-day period to determine whether WARN applies. This means that an employer must look ahead 30 days and behind 30 days from the date of each employment loss to determine whether the required number of employment losses have occurred. In other words, each employment loss starts a new 30-day period.
In certain circumstances the 30‑day period is enlarged to 90 days. The 90‑day rule applies if two or more groups of employees suffer employment losses at a single site of employment, each of which separately would not trigger WARN, but combined would meet the minimum number of employment losses for a plant closing or mass layoff at the single site of employment.
However, an employer is not required to give WARN notice if it can demonstrate that the separate groups of employment losses are the result of separate and distinct causes, and are not an attempt to evade WARN.
Employers are not required to provide WARN notice to temporary workers, independent contractors or other non-employees, such as business partners, consultants or contract employees assigned to the business. Nor do employers need to provide WARN notice to union employees who are striking or engaged in a lockout.
Employers may, however, be required to provide WARN notice to non-striking employees affected by the strike or lockout.
WARN notice is typically provided to affected employees through a representative chosen by the employer (such as a human resources manager or plant manager). In cases where WARN notice is required due to the sale of all or part of a business, the seller is responsible for providing WARN notice of a plant closing or mass layoff that occurs before and including the effective date of the sale. The buyer is then responsible for providing notice for all closings and layoffs that trigger WARN after the effective sale date.
The specific content of the WARN notice varies depending on who is receiving the notice (the notice to non-union employees, union representatives, the state rapid response dislocated worker unit and local chief elected government official are each different).
All WARN notices must be written in clear language that is easily understood.
The WARN notice provided to each affected non-union employee must include:
For union employees, the WARN notice provided to the union representative must include:
The WARN notice provided to the state dislocated worker unit (the Massachusetts Division of Unemployment Assistance) and the chief local government official must include:
It may not always be possible for an employer to identify the exact date a closing or layoff will occur 60 days in advance. In such circumstances, WARN permits the employer’s notice to identify a 14-day period during which the closing or employment loss will occur.
Inadvertent or minor errors in the employer’s WARN notice do not violate WARN, but notices should be as accurate as possible under the circumstances. In addition, an employer may use any reasonable method to deliver the WARN notice, if the notice is received 60 days before the covered closing or layoff. However, verbal notices and pre-printed notices provided with an employee’s pay-stub do not satisfy WARN requirements.
The 60-day period begins to run on the date the notice was received by the employee or union representative. Thus, it is prudent for employers that mail WARN notices to verify that the affected employees or union representatives actually received the notice.
Occasionally, a planned closing or layoff may occur later than originally planned and may be extended beyond the specific date or two-week period identified in the WARN notice. If the closing or layoff is postponed for less than 60 days, additional notice should be given by the employer as soon as possible. The notice should make reference to the earlier notice, state the new date when the closing or layoff will begin and provide the reason for the postponement. If the closing or layoff is delayed for more than 60 days, WARN requires an employer to provide a new notice. The additional notice should be treated as an entirely new notice and comply with the requirement.
WARN may apply when an employer sells all or part of its business, including asset sales. Generally, WARN applies when a plant closing or mass layoff results from the sale. In such a case, the seller is responsible for providing notice of a closing or layoff that will occur up to and including the effective date of the sale (the closing date). The buyer is responsible for providing notice of a closing or layoff that will occur after the effective date of the sale. For instance, if employees are terminated without notice when the sale becomes effective, the seller is the liable party under WARN.
If the buyer offers an employee a similar position with similar terms and conditions of employment and the employee declines the offer, WARN requirements do not apply to the situation. However, if the new job would encompass significant changes in the employee’s job duties, wages, benefits or working conditions, the offer may be deemed to constitute a constructive discharge and WARN will apply.
WARN does not apply to a bankruptcy trustee who is solely engaged in wrapping up the employer’s business. There are, however, two situations where WARN would apply to an employer who files a petition for bankruptcy and then implements a plant closing or layoff:
WARN is enforced through the federal court system. Affected employees, union officials and local government authorities have standing to file a civil suit against an employer for WARN violations. An employer may be sued in the federal district where the violation occurred or in a federal district where the employer conducts business.
The penalties under WARN for failing to give timely notice are:
An employer’s WARN liability may be reduced by any wages paid by the employer to the displaced worker during the violation period and by any voluntary and unconditional severance payment that is not required by an existing legal obligation. Thus, an employer is not entitled to a reduction for any payments required by a preexisting severance plan or for any severance payment provided in exchange for a release.
WARN does not recognize or authorize “payment in lieu of notice.” However, since an employer’s maximum liability under WARN is 60 days of unpaid back pay and benefits, an employer that provides its employees with full pay and benefits for the 60‑day violation period effectively precludes any relief against it under WARN.
If an employer fails to provide WARN notice to the chief elected official of the local government unit, the employer is subject to a penalty of $500 per day for each day of violation. However, the employer may avoid this penalty if it satisfies its liability to each affected employee within three weeks from the date of the covered closing or layoff. The penalty may also be reduced or eliminated at the court’s discretion if the employer acted in good faith and reasonably believed that its failure to give notice did not violate WARN.
WARN specifically prohibits courts from requiring that an employer stop or delay a plant closing, or refrain from relocating operations or laying-off employees. WARN requires only that the employer provide 60 days’ advance notice of the closing or layoff or provide full back pay and benefits to affected employees for each day the employer failed to give notice, up to 60 days.
An employer’s obligations under WARN cannot be reduced by any law or agreement. WARN supersedes state or local plant closing/mass layoff laws and collective bargaining agreements. WARN does not, however, supersede any law or agreement that requires additional notice or that grants additional rights and remedies.
For instance, if a collective bargaining agreement requires an employer to provide written notice to the union 75 days before a plant closing or layoff, the agreement complies with WARN because it satisfies WARN’s 60-day notice requirement. If, however, a collective bargaining agreement establishes a 45-day notice period, WARN will supersede this provision of the bargaining agreement; and WARN’s 60-day notice provision will apply to the situation. Further, the Massachusetts Plant Closing law, described earlier, establishes additional requirements in the event of certain plant closings and mass layoffs
The U.S. Department of Labor’s website has further information about WARN at:
General questions and requests for information on WARN may be addressed to:
For further information on how to contact the Massachusetts Rapid Response Services for Workers, visit:
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