The WARN Act (the Worker Adjustment and Retaining Notification Act) requires certain companies, including those in South Carolina, to provide at least 60 days’ written notice to employees for plant closings or mass layoffs. A plant closing, as defined by the Act, occurs if you work at a plant that the company shuts down and lays off at least 50 employees. A mass layoff occurs when the company lays off between 50 and 499 employees, if that number of employees makes up at least 1/3 of the total number of employees at that site (a little math required on that one). A mass layoff also occurs when the company lays off 500 or more employees at a single site.
Employees are entitled to the 60 days’ notice if they are terminated, laid off for more than six months, or have their hours cut in half during that six month period.
When the Company Does NOT have to Provide Notice under the WARN Act
So what happens if a company fails to provide the adequate notice? Well, a recent company learned the hard way what happens: a federal lawsuit. Last week, a national digital news site called The Messenger learned that the company was shutting down, but they did not hear that from the owners or management. Rather, they read about it in the New York Times. The company did not offer any of the employees severance of any kind.
Within a day or two, the employees filed a class action lawsuit against the company, alleging a violation of the WARN Act. (The employees actually sued under New York’s version of the WARN Act, which requires 90 days’ notice and applies to layoffs of 25 or more employees.) The company did send out a WARN notice, but without giving the required 90 days’ notice. The employees were terminated effective immediately.
What Goes into a Proper WARN Act Notice?
For South Carolina employees who receive a WARN notice, what should you be looking for? Well, a notice that complies with the law must include the following information: (1) an explanation of whether the layoff is permanent or temporary of six months or less; (2) the date of layoff or closing and the date of separation; and (3) the name and contact information for the point person in the company who you can call with questions. Verbal notices are not sufficient.
Damages under the WARN Act
But what are the remedies available to South Carolina employees for a WARN Act violation? If an employee (or, more often, a group of employees in a class action) files a lawsuit, the employees can seek damages for back pay and benefits for up to 60 days. The company may also be liable for a civil penalty of up to $500 per day of violation.
If the employees are successful at trial, the court can order the company to pay attorney’s fees to the lawyers representing the employees. Often these fees can exceed the amount owed to the employees, which is further incentive for companies to comply with the law and provide the required notice.
Exceptions
Three main exceptions exist for the WARN Act notification requirement. For “faltering companies,” the company does not have to give notice. This means a company is struggling financially and has been actively seeking loans or new business in order to avoid the layoff. The second exception is for businesses that cannot “reasonable foresee business circumstances” that led to a layoff, such as when a major account or job gets cancelled unexpectedly. And third, if there’s a natural disaster, such as a hurricane, flood, earthquake, or tornado.
Other than those circumstances, South Carolina employees are entitled to the full 60 days’ notice of a mass layoff or plant closing. If you have not received a WARN notice for a mass layoff in South Carolina, you can reach out to a South Carolina employment lawyer for a fact-specific consultation to see whether or not you have a viable WARN Act claim.
