Casino’s Notice of Plant Closing Inadequate Under WARN Act, Appeals Court Holds

Some notice is better than no notice. So ruled the U.S. Court of Appeals for the Eleventh Circuit yesterday in a lawsuit against an Alabama casino that closed its operations abruptly after succumbing to a state investigation of its electronic gaming operations.

The appeals court ruled that Macon County Greyhound Park Inc. violated the Worker Adjustment and Retraining Notificatino (WARN) Act by giving employees who were to lose their job under the closing no advance notice.

Normally, WARN requires 60 days advance notice of a mass layoff or plant closing unless unforeseeable business circumstances make that impossible.

But even when such circumstances arise, the employer still has to give as much notice as is practicable under the circumstances.

That notice can consist of a “brief statement” as to why there can’t be 60 days notice.

The company argued that its publicizing of its dispute with the state was tantamount to that “brief statement,” but the appeals court ruled that it did not meet the statutory requirement.

Here’s the court’s ruling in Weekes-Walker v. Macon Cnty. Greyhound Park Inc.

Laid Off Workers Sue Defense Contractor Over Sequestration-Related WARN Notices

Employees of defense contractor L-3 Communication have sued the company for what the workers say was its failure to give them required 60 days notices under of the law that their employment would be terminated as a consequence of the federal budget sequester.

The Workers’ Adjustment and Retraining Notification Act–popularly known as the WARN Act–requires 60 days advance notice when a mass layoff is to occur.

The budget sequester–automatic across the board cuts that took effect in March–has resulted in the cancellation or delay of some federal contracts.

The L-3 workers have sued on their own behalf and that of other similarly situated employees

The plaintiffs worked for L-3 as part of a contract to provide maintenance and support to Hunter Army Airfield which serves Fort Stewart in Georgia.

No surprise that the issue has gotten caught up in politics, with some Republican members of Congress claiming that the Obama Administration played election year politics by telling contractors before the election that the government would pick up any legal costs associated with the WARN Act–as long as the layoffs were the result of sequestration

Solyndra, Ex-Workers in Settlement Over Plant Closure Claims

Employees faced with an abrupt plant closure have recourse under the federal Workers’ Adjustment and Retraining Notification Act, which requires 60 days notice prior to a mass layoff.

The law gives employees some legal leverage when their employer fails to abide by its terms. That’s why Solyndra LLC, which received loan guarantees from the Obama Administration to manufacture solar panels, agreed last week to settle former employees’ allegations that it fired them without giving the proper WARN Act notice.

The company fired most of its workforce last year, just prior to filing for bankruptcy.

According to court papers, Solyndra will set up a $3.5 million fund to be distributed to the workers two weeks after the settlement becomes effective.

“In light of the inherent risks and costs associated with litigation of the WARN actions,” the company has “determined that the proposed settlement of the WARN claims is fair and well within the range of reasonableness,” Solyndra said in settlement papers filed Aug. 10.

The company said it faced as much as $15 million in damages plus attorney’s fees if the workers succeeded in their lawsuit. It also said the agreement is fair to workers because without it they would have to “wait years for any payment” on their claims.

Large Layoffs on the Rise-Don’t Forget WARN Notifications

It’s only a one-month snapshot of the economy, but last week’s release of data on “mass layoffs” in the United States provides some further confirmation of a weakening job market.

The Department of Labor’s Bureau of Labor Statistics reported that employers took 1,579 mass layoff actions in July involving 145,000 workers, seasonally adjusted, as measured by new filings for unemployment insurance.

“The manufacturing sector accounted for 28 percent of all mass layoff events and 33
percent of initial claims filed in July. A year earlier, manufacturing made up 25
percent of events and 31 percent of initial claims. Within this sector, the number
of claimants in July 2011 was greatest in the transportation equipment subsector.”

But the industry with the largest number of mass layoff initial unemployment claims (not seasonally adjusted) was the temporary services sector.  That provides a glimmer of hope, since it may be easier for workers to find temporary employment when the economy improves just a little bit. Which may be as good as it gets for a while.

The data cover layoffs of 50 or more employees beginning in a given month, regardless of duration.

Coincidentally, 50-employee layoffs are the minimum required for triggering of the plant notification requirements under the Worker Adjustment and Retraining Notification Act.

 

My Space Braces for Layoffs

Turns out the world of social networking isn’t immune from job losses either.

The Wall St. Journal reported Tuesday that My Space, one of the world’s largest social networks, with upwards of 125 million users, is “preparing to disclose a dramatic downsizing, according to people familiar with the matter.”

The social network reduced its staff by nearly 30 percent last summer, laying off hundreds of employees, but this apparently wasn’t enough to contain costs. The new cuts are expected to be across the board.

There is also speculation that, depending on the extent of the restructuring, News Corp., My Space’s parent company, may look for buyers for My Space.

News Corp. acquired My Space in 2008 for $580 million. Since then it has struggled to keep up as Facebook’s popularity has soared. My Space had 54.8 million unique U.S. visitors in November, down 15 percent from one year ago. By contrast, Facebook had 151.7 unique U.S. visitors in November.

Like other downsizing employers, My Space must comply with the Worker Adjustment Retraining and Notification (WARN) Act if the reductions involve a mass layoff, which the U.S. Department of Labor defines as an employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33 percent of the employer’s active workforce.

Find out more on the Labor Department’s website.