With oil prices not yet making the recovery that most Texas companies had hoped, many businesses are facing subsequent layoffs. As most companies know, the Worker Adjustment and Retraining Notification Act requires 60-days’ advance written notice of certain “plant closings” and “mass layoffs.” Frequently overlooked, however, is when a subsequent RIF may trigger WARN’s notice obligations. Companies must be careful of these rules so as not to spark litigation or incur the costly penalties associated with a WARN violation.
Calculating the Relevant Timeframe
When determining whether a covered “plant closing” or “mass layoff” has occurred, WARN considers the employment losses that occur during any 30-day period. So, if a company would otherwise trigger WARN’s obligations through a termination of 50 employees, it cannot avoid those obligations by terminating 30 employees on Day 1 while planning to layoff another 20 employees 28 days later.
90-Day Aggregation Rule
In addition to looking at the employment losses that occur over any given 30-day period, WARN also includes a 90-day aggregation rule. This rule requires the employer to look ahead 90 days and behind 90 days to determine whether multiple terminations, which separately may not have been sufficient size to trigger WARN, in the aggregate reach the minimum numbers to qualify as a “plant closing” or “mass layoff.” If the threshold numbers are met, an employer is required to provide WARN notices to all of the affected employees unless the employer can show that the individual termination events occurred as a result of separate and distinct actions.
If the 90-day aggregation rule applies, and if no notice was given, the employer would be liable to provide all of the affected employees with 60 days’ additional notice (and pay them the back pay owed plus the additional 60 days).
Single Site of Employment
When determining whether WARN has been triggered, companies must calculate the number of employees included in the RIF at the affected “single site of employment.” A “single site of employment” generally means either a single location or a group of contiguous or adjacent facilities. But, separate facilities can be considered a “single site of employment” if they are in reasonable proximity, used for the same operational purpose, and share the same staff and equipment. Also, for companies that have out-stationed employees or employees in the field, those employees’ “single site of employment” is their assigned “home base” from which their work is assigned or to which they report. For many employees in the oil and gas industry, this may be their field office.
Needless to say, these various rules can complicate the WARN analysis. Companies must be careful when assessing whether a subsequent RIF triggers WARN, as a failure to provide the appropriate notices can be costly. In addition, while Texas law generally tracks the Federal WARN requirements, companies should be aware that several states have “mini-WARN” statues, with different requirements and broader application.