WARN ACT NEWS

A Tough Decision from the Middle District of Florida On Trial by Jury

In April 2017, the Middle District of Florida issued an order and opinion granting Defendants’ motion to strike demand for trial by jury. The point at issue arises from a larger debate in interpretation among the circuits concerning the right to trial by jury under WARN Act claims. Using a two-pronged approach, established by the Supreme Court, the Florida Court found that there is indeed no statutory or constitutional right to a trial by jury in circumstances of WARN Act violations, reasoning in summation:

The WARN Act does not specifically address the right to a jury trial, leaving it to the courts to decide whether a jury trial is constitutionally required. The Eleventh Circuit has not addressed this question. However, the weight of existing authority—including the Sixth Circuit, the only circuit court to have squarely addressed the issue—holds that there is no right to a jury trial because the WARN Act's remedies are equitable in nature.

The case is Pierluca v. Quality Res., Inc., 2017 U.S. Dist. LEXIS 60089 (M.D. FL. Apr. 20, 2017). The Court's opinion can be found here.

 

Small Business Training Considered as a Federally Mandated Rapid Response Service

H.R. 5022, the “Helping Individuals with Reemployment and Entrepreneurial Development Act”, also known as the “HIRED Act”, amends the Workforce Innovation and Opportunity Act (WIOA), “to ensure dislocated workers are provided consultation and advice for starting a small business as part (of) the rapid response activities for dislocated workers”. While traditional ‘rapid response’ services are limited in the scope of training they can provide to displaced workers, this Act would allow for a state to, “allocate up to 10% of funds reserved by the state governor for statewide rapid response activities to provide outreach about small business opportunities and consultation about starting a small business”. This Act can help provide the much needed mobility for displaced employees to become small business owners. The Act was last referred to the House Subcommittee on High Education and Workforce Training.

Nebraska Continues to Consider State WARN Act

L.B. 1134, formerly L.B. 261, the Nebraska Worker’s Adjustment and Retraining Notification Act, was again indefinitely postponed at the end of the state’s legislative session on April 18, 2018. The Act would require employers of 25 or more to provide 60 days written notice to affected employees in mass-layoff situations.  According to the legislation a “Mass layoff means a reduction in employment force that results in an employment loss at a single site of employment during any sixty-day period of twenty-five or more employees, other than part-time employees”. The legislation, freshly introduced by state Senator Matt Hansen during the 105^th unicameral legislature’s first session, and again by state Senators Tony Vargas and Sue Crawford in the second session, has existed in some form since 2011.

Federal Legislation Proposed to Oust Outsourcing

H.R. 4139 (S. 234), the “End Outsourcing Act”, introduced during the 115^th Session of Congress, amends the WARN Act, requiring employers in situations of international outsourcing to include an ‘Outsourcing Statement’ in the WARN Notice to employees. The ‘Outsourcing Statement’, “must specify whether part or all of the positions held by affected employees will be moved outside of the United States, regardless of whether the positions are moved within the business enterprise involved or to another business enterprise”. The Act would further hold employers publicly responsible for the international displacement of American jobs.

A Good Ruling from the U.S. Territory of Guam

In Carlberg v. Guam Indus. Servs., 2017 U.S. Dist. (D. Guam, Mar. 7, 2017), Chief Judge of the District of Guam, Frances M. Tydingco-Gatewood granted over 150 individuals class certification on the basis of WARN Act violations. A Guam Shipyard terminated all Plaintiffs merely four days after losing a contract to repair ships for the Military Sealift Command.

Defendants filed two motions to dismiss initially holding that “Plaintiffs (1) failed to articulate a legal duty recognized by the courts of Guam and (2) failed to allege sufficient facts that state a gross negligence claim”, citing a lack of case law. Defendants’ second motion to dismiss held that the WARN Act refers only to the 50 states, not U.S. Territories or Associate States.

The Court found that the WARN Act “is applicable to Guam”, moreover, granting Plaintiffs’ leave to amend their complaint concerning employer status, and whether Plaintiffs would proceed with gross negligence or negligence per se claims. Defendants motioned a third time to dismiss the negligence claims in the amended complaint. This motion was granted as Plaintiffs were ‘at-will’ employees. Regardless, the Court found that Plaintiffs satisfied the criteria for class certification under their WARN Act claims.

The decision and order granting class certification can be read here.

 

Legislation Proposed Allowing Affected Employees to Purchase Faltering Companies

H.R. 2357 (S. 1082), the United States Employee Ownership Bank Act, was introduced to Congress during the 115^th Session. The Act, amends the Worker’s Adjustment and Retraining Notification (WARN) Act, requiring employers to offer affected employees “the opportunity to purchase the plant or facility though an employee stock-ownership plan or an eligible worker-owned cooperative” Furthermore, the Act, “require(s) the Department of the Treasury to establish the U.S. Employee Ownership Bank, which shall be authorized to provide, in accordance with specified terms, conditions, and other requirements, financial assistance to increase employee ownership of a company”.

Delaware Legislature Enacts the Delaware Worker’s Adjustment and Retraining Notification Act

In a victory for workers, H.B. 409, the Delaware Worker’s Adjustment and Retraining Notification Act (DWARN) took effect on January 9^th, 2019.  Signed by Delaware Governor, John Carney on July 11^th, 2018 the legislation requires 60 days written notice be given by employers of 100 employees or more to affected employees in circumstances of mass layoffs, plant closings, and relocation involving 50 employees or more working a combined 2000 hours a week at a single worksite. 60 days written notice must also be given to any union representation, the local elected official, and the Delaware Department of Labor Division of Employment and Training.