Clearing Up Some Confusion Regarding Right-to-Work States and the WARN Act

April 23, 2015  |  Employment Law, WARN Act Violations

We’ve talked to a lot of oilfield workers who have lost their jobs due to the downturn in oil prices. Many of these workers were let go by their employers in violation of the Worker Adjustment and Retraining Notification, or WARN Act. However, there is still some confusion as to whether the Act applies in “right-to-work” states like Texas, North Dakota and several others.

Federal law trumps right-to-work laws. As a result, you may be able to file a lawsuit to pursue back pay and benefits against an employer that terminated you — regardless of whether or not you were working in a right-to-work state.

A Quick WARN Act Primer

Many companies violate the WARN Act by failing to provide proper written notice for loss of employment in connection with a “mass layoff” or “plant closing.” In a nutshell, the WARN Act, which became a law in 1989, was designed to provide a safety net of sorts for people who lost their job. If a company has 100 or more employees, the law mandates that it must provide a 60-day advance written notice before closing a planned mass layoff or plant closing. During this period, workers are supposed to be paid while they either get training in another field or find a different job. The goal of this law is to give hard working Americans some advance notice so that they can protect their families in addition to alleviating the strain on state and federal unemployment benefit programs. In other words, advance notice serves the purpose of enabling the worker to find new work.

While the regulations vary depending on the circumstance, a “mass layoff” under the WARN Act generally occurs when, at a single site of employment, 1/3 of the workforce totaling 50 or more employees suffer an employment loss during a 90 day window of time. A “plant closing” under the WARN Act occurs when there is a cessation of production or the work performed at a single site of employment, or operational units within that site, which results in an employment loss of 50 or more employees during a 90 day period.

As there is no “one size fits all” answer on potential WARN Act coverage, a worker with questions should consider contacting a lawyer with questions about his or her specific situation. With the thousands of recent employment losses in the oilfield, it is important to know your rights.

Also, in a growing trend, many companies, possibly in recognition that they have violated the WARN Act, are offering employees severance packages when they fail to give 60 days’ advance written notice. In typical severance agreements, the employee purportedly waives many legal rights in return for what is commonly a small amount of money relative to the amount of potential damages provided by the WARN Act – 60 days’ wages and benefits. As those severance agreements are generally enforceable once signed, it is important for a worker to know his or her rights before signing. For example, why give up the opportunity to potentially recover $20,000 in WARN Act back wages and benefits in return for only $1,000 severance? While that decision is one that reasonable minds may differ on given their particular situation, it is still important to know your options before signing away your rights.

Please get in touch with Baron & Budd if you believe you were terminated in violation of the WARN Act. Contact us online or call 866-262-1553 for a free consultation.

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