Under California law, employers are required to provide some warning before initiating a mass layoff.
This is known as the WARN Act, or Worker Adjustment and Retraining Notification Act. It has been designed to provide protection to employees so that they aren’t caught off guard and their lives disrupted if they’re shown the door immediately when an entire division or factory goes dark. It also covers a company proposing relocating facilities to somewhere outside of the local area.
This notification gives everyone time to start looking for other jobs, enrolling in training programs, and making any financial changes to their life, without being blindsided by the announcement if they and their co-workers were suddenly shown the door.
Under the U.S. WARN Act, employers must give a 60-day warning or a reasonable amount of time, or appropriate amounts of money, before taking this sort of action. The only exceptions to this are “faltering business” or “unforeseeable business circumstances” such as natural disasters, physical calamity, or the breakout of war, which means a company isn’t able to or isn’t expected to keep things going until circumstances change.
This has been the case in California until spring 2020 when Governor Gavin Newsom issued an executive order that effectively suspends the 60-day notice requirement and gives businesses a loophole to take drastic action if needed without waiting two months.
Executive Order N3120 makes California’s WARN Act closer to the U.S. WARN Act, including the same exemptions for large-scale disasters.
What’s missing, however, is any information about the impact of COVID-19. It doesn’t specifically call COVID-19 an unforeseeable business circumstance, even though most will agree that the pandemic is responsible for a high loss of life and the closure of many businesses nationwide.
As managing attorney of Michael Burgis and Associates, Michael Burgis is familiar with state and federal law in general. He’s been following California laws closely, including the recent series of executive orders.
The COVID-19 pandemic would probably qualify as an unforeseeable circumstance, but the only other exemptions are fairly limited. However, the updates to the California WARN Act don’t automatically mean that an employer is off the hook, legally, if it suddenly launches a mass layoff and doesn’t provide a reasonable time.
If you work for a company that has recently announced a mass layoff but leaders did not give sufficient time to prepare or offer other adequate compensation, consider giving Michael Burgis and Associates a call to discuss your situation and legal options.
Our team will provide an analysis of your situation based on facts and the wording of the California and U.S. WARN Act, as well as the executive orders. We are happy to provide answers to any questions you may have.