7th Circuit Explains the WARN Act

On September 26, 2019, the 7th Circuit affirmed an order of summary judgment in favor of the defendant-employer in a class action lawsuit alleging that it violated the federal Worker Adjustment and Retraining Notification Act ("the Act") by failing to provide a group of employees with sixty days' notice of their "temporary lay-off."  Leeper v. Hamilton County Coal, LLC, No. 19-1109 (7th Cir. 9/26/2019).  The WARN Act requires employers to give affected employees sixty days' notice before imposing a "mass layoff."  The Act defines a "mass layoff" as a "reduction in force" in which at least 33% of a single worksite's full-time workforce, and at least fifty employees suffer an "employment loss."  The district court entered summary judgment for the employer coal company because the worksite did not experience a "mass layoff" as defined by the Act.

The 7th Circuit concluded that the record contained no evidence of a mass layoff.  The term "employment loss" is defined as a permanent employment termination, a layoff exceeding six months, or an extended reduction of work hours of more than 50% during each month of any 6-month period.  None of those events occurred.  Instead, the coal company initiated a temporary layoff under six months.  The question on appeal was whether the evidence established that a mass layoff occurred within the meaning of the Act.  The plaintiff argued that more than 33% of the coal mine's full-time workforce experienced an employment termination.  Alternatively, the plaintiff argued that a sufficient number of workers suffered a "reduction in hours of work of more than 50% during each month of any 6-month period.  The 7th Circuit distinguished an employment termination from a layoff under the Act.  Termination means the permanent cessation of the employment relationship, while a layoff means the temporary cessation of the employment relationship.  The record demonstrated that the coal company announced a temporary cessation of employment.  The notice referred to the employment action as a "temporary layoff" and defined a precise "layoff period."  It also instructed the workers to return--not to reapply to return--once that period ended.  Nothing in the notice suggested a "permanent cessation of the employment relationship."  The company clearly announced a temporary layoff lasting under six months, and no language in the notice showed that the subject workers were permanently fired.  Therefore, the mine workers did not experience a mass within the meaning of the WARN Act, and sixty days' notice was not required.