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Considering major plant closing? Determine who is entitled to WARN compensation

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in People Management

Generally, employees are entitled to fair warning before their workplace is shut down. The Worker Adjustment and Retraining Notification (WARN) Act forbids employers with 100 or more full-time employees from implementing a plant closing or mass layoff until 60 days after employees have been notified they will lose their jobs.

Employees on layoff status when the announcement is made are also entitled to receive warning. They’re also entitled to wage payments if, at the time of the notice, they reasonably expected they would be recalled to work.

But those who don’t have that expectation get no WARN notice and no pay.

Recent case: David Bledsoe sued on behalf of himself and more than 500 other Dayton-based employees of Emery World Airlines who were on layoff status while the company waited to hear if the government would allow it to resume service following a fatal crash. Another 90 employees remained actively employed.

Emery told the out-of-work employees they might get their jobs back. As time went on, that looked less likely. Finally, Emery concluded it had to shut down entirely and gave its active employees their WARN closing notice, plus their pay, for 60 days.

The employees on layoff got the WARN notice but no pay.

The court concluded the employees who sued did not have a reasonable expectation of being recalled. Therefore, they were owed neither the closure notice nor 60 days’ pay. (Bledsoe, et al., v. Emery, No. 09-4346, 6th Cir., 2011)

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