California WARN Act – Suspension of Certain Requirements

Employers who anticipate a plant closure or mass layoff[1] are required to provide a 60-day notice to affected employees and governmental agencies of the intended action.  If an employer fails to provide this notice, then it is liable for the employees’ wages and benefits for the number of days the notice was less than 60 days. 

Under federal law, there are three justifications for not providing the 60-day notice and avoiding liability.   They are: 

·       Faltering business;

·       “Business circumstances that were not reasonably foreseeable as of the time that notice would have been required”; and

·       “Any form of natural disaster, such as a flood, earthquake, or the drought currently ravaging the farmlands of the United States.” 

Obviously, COVID-19 is a business circumstance not reasonably foreseeable.  Still, notice must be given as soon as practicable. 

Under state law there are only two justifications for not providing the 60-day notice.  They are: 

·       Faltering business; and

·       Act of war or physical calamity. 

The California Legislature did not include the unforeseeable business circumstances exception because it thought the employer should bear the burdens of uncertainty.  Thus, unless an employer can show that COVID-19 is a physical calamity, then there is no excuse available for RHA or other employers facing these rapidly-emerging uncertainties. 

 

 On March 17, 2020, the Governor signed a new order relaxing the WARN Act rules.  Notice must be given as soon as practicable, as opposed to 60 days before the proposed action.  The Governor is also permitting an employer to rely upon the unforeseen business circumstances exception related to COVID-19.  Notice must be given as soon as practicable.   

Douglas M. Larsen

[email protected] 

(559) 256-5000