In a decision that contradicts a common interpretation of the federal Worker Adjustment and Retraining Notification (WARN) Act, the Ninth Circuit U.S. Court of Appeals recently ruled that employees who quit in response to an announcement of a plant closure are entitled to notice under the Act. Under the WARN Act, covered employers have an obligation to notify affected employees at least 60 days prior to a mass layoff or plant closure. However, if an employee voluntarily quits prior to actually suffering an employment loss, they lose their rights to advance notice and do not have a claim for damages under the WARN Act. So what is a “voluntary” quit?
In the case before the Ninth Circuit, a company announced that their business would be closing, but only gave a few weeks of notice rather than the required 60 days. After the company announced the plant closure, many employees stopped showing up for work. On the final day of business, only 30 of the 150 original employees were remaining. Under the previous interpretation of the WARN Act, the company would not have to count the employees who quit employment prior to the eventual closing when calculating the number of employees who were entitled to 60 days of notice. But the Ninth Circuit decided that those employees did not “voluntarily” quit, because their decision to stop showing up for work was directly linked to the announcement that the company would be closing. In other words, the company can’t escape WARN Act liability by excluding employees who left work because they learned about the layoff and chose to jump ship early (Collins v. Gee West Seattle, 9th Cir, Jan. 2011).
Tips: Given the technical and complex nature of applying the WARN Act to a particular layoff or plant closure, be sure to call your Vigilant staff representative anytime you are doing significant downsizing. For a quick overview of the WARN Act, see our Legal Guide, “At a Glance: WARN Act” (5793).
