COVID-19 WARN Act lawsuits continue

COVID-19 has caused a myriad of legal issues for employers. Employers that had to shut down during the pandemic often laid their employees off with less than the 60 days’ notice required by the Worker Adjustment and Retraining Notification (WARN) Act. Employers have attempted to defend against these lawsuits by claiming an exemption from the WARN Act requirements under one of its exemptions. Earlier lawsuits had attempted to use the unforeseen business circumstance exception to the 60-day-notice requirement, but those attempts have been generally unsuccessful.

In a more recent case, Jones v. Scribe Opco, Inc., No. 8:20-cv-02945 (M.D. Fla. March 17, 2022), the employer, Scribe Opco Inc., argued the downturn that led to its layoffs was directly caused by COVID-19 and the virus was a “natural disaster” under the WARN Act regulations. The court rejected its argument, saying a natural disaster is an event such as an earthquake or other natural disaster and it must directly cause a workforce reduction to fall under the exception. The same issue is currently on appeal to the U.S. 5th Circuit Court of Appeals.

Meanwhile, Flexsteel Industries Inc. agreed to pay $1.275 million to settle a WARN Act lawsuit. The deal will cover 300 employees who were laid off at facilities in Dubuque, Iowa, and Starkville, Mississippi, who alleged the company permanently closed the facilities without providing WARN Act notices or paying severance benefits under the company’s benefits plan.