Special counsel David Van Pelt authored the Daily Journal article “Think About WARN Exceptions Before Facing Closure,” discussing the Worker Adjustment and Retraining Notification (WARN) Act, and how to navigate the exceptions that are available to businesses.
Federal WARN and its California analog require that employers of a certain size provide no less than 60 days’ written notice to employees who would be affected by a mass layoff or facility closure. However, for employers attempting to avoid the shutdown of a facility, or the company as a whole, WARN presents a profoundly unfair choice: either provide notice and face the inevitable loss of employee morale and adverse publicity that comes with it, or hold off on providing the notice as long as possible, and risk significant legal exposure if a closure becomes necessary.
Employers often do not consider the “faltering company exception” under the federal and California statute for companies facing a possible shutdown. Although a useful strategy for companies who want to exercise their efforts to save their businesses while still complying with the statute, the time to think about the exception needs to be exercised well in advance of a closure.
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