NEW CASE – Reach of California WARN Act is Expanded

Under the California WARN Act, employers of 50 or more employees are required to provide employees with 60 days advance notice of a “mass layoff” (any layoff involving 50 or more employees in a 30 day period). In a recent case (Boilermakers Local 1998 v. Nassco Holdings, Inc.), the California appellate court has held that the California WARN Act’s notice requirements extend to temporary layoffs and furloughs.

The Case

In this case, a shipbuilding company had temporarily laid off about 90 employees during a workload lull. The layoff was expected to last between 3 to 5 weeks. Since the layoff was temporary, the company did not provide affected employees with notice of the impending layoff in advance, but instead notified employees on the day the layoff began. The employees (via their Union) sued the employer for violation of the California WARN Act.

The Ruling

The Court agreed that the employer had violated the California WARN Act by failing to provide the requisite advanced notice of the layoff. This ruling was based on a key difference between the language in the federal WARN Act and the California WARN Act. In the federal act, employers are only required to provide advanced notice of a mass layoff lasting more than 6 months. The California WARN Act, on the other hand, does not include a minimum duration for the layoff. As a result, California employers are required to provide employees with advanced notice of any mass layoff – regardless of the anticipated duration of the layoff.

Take Home For Employers

This ruling is very significant for California employers who temporarily layoff their employees for a set period of time (e.g. seasonal shutdowns like closing between Christmas and New Year’s, or during the summer months) because, under this case, it is clear that employers are required to provide each employee with required WARN notice relating to the shutdown. It is also important to remember that this notice must be provided to each employee individually (i.e. a posting in the workplace or mass email will not suffice) and that it must also be provided to various state and local government agencies, as well as to the employees’ union (if applicable). It is recommended that employers who engage in this practice review their California WARN Act requirements.