Most employers which have gone via a large-scale layoff or closed a location will let you know that WARN is their most dreaded four-letter phrase. Now, with the persevering with and even rising prevalence of post-COVID distant work preparations, the query of who to WARN of mass layoffs of closures has develop into much more daunting.
The federal Employee Adjustment and Retraining Notification (WARN) Act requires employers with at the least 100 full-time staff to offer 60 days’ advance discover within the occasion of a closing or mass layoff affecting at the least 50 full-time staff at a “single website of employment.” Usually, an staff’ employment website merely is the placement the place the worker works. However the reply is much less apparent for employers with distant worker populations. In contrast to, for instance, New York’s state regulation mini-WARN Act, the federal WARN Act doesn’t explicitly deal with distant staff. (As we wrote about right here, amendments to the NY WARN Act laws, which went into impact on June 21, 2023, present that “people who work remotely however are based mostly on the employment website” are counted as staff of that employment website.)
As a substitute, WARN laws seem to solely ponder touring, outstationed, or related staff with no fastened workplace who’re required to journey from level to level. For these “cellular” staff, the only website of employment is both (i) their residence base, (ii) the place from which their work is assigned, or (iii) the place to which they report.
Thus, on its face, the WARN Act and its laws don’t seem to ponder actually distant employees who’ve a hard and fast workplace (their houses). Case regulation has not resolved the difficulty; these comparatively few courts which have regarded on the concern thus far have provided conflicting choices addressing the difficulty of WARN discover to distant staff. It’s subsequently not stunning that many employers have chosen to proceed cautiously and embody distant employees within the bucket of staff for which WARN discover is given.
Not too long ago, nevertheless, one employer took a distinct method. On December 7, 2023, all of Zulily LLC’s staff had been laid off in reference to the corporate’s liquidation. The corporate had roughly 300 Washington-based staff and roughly 550 Ohio-based staff. A few of these staff labored in places of work in Ohio or Washington, and a few labored remotely from their houses. When the layoff was introduced, solely the in-office staff had been supplied with WARN discover.
Predictably, this resulted in litigation. In Could 2024, a bunch of Ohio-based distant employees filed a category motion grievance towards their former employer in the USA District Court docket for the Southern District of Ohio. Then, in September 2024, a bunch of Washington-based distant employees filed the same class motion grievance towards Zulily in the USA District Court docket for the Western District of Washington. The plaintiffs in these instances allege that they had been entitled to WARN discover as a result of they had been “assigned” to one among Zulily’s places of work as their “residence base,” pointing to, amongst different issues, that they obtained efficiency evaluations, self-discipline, promotions and different communications from the Ohio or Washington places of work.
Zulily moved to dismiss each complaints, arguing that the “cellular employee” exception to WARN’s single website of employment is inapplicable to totally distant employees as a result of “the only website of employment for a distant worker with a hard and fast at-home workspace is the worker’s residence,” not company headquarters. As of the date of this weblog, neither courtroom has dominated on the pending motions.
Hopefully, the Ohio and Washington district courts will convey some much-needed readability for employers seeking to navigate the complexities of WARN Act compliance. As all the time, SPB’s employment regulation group will proceed to observe and replace with future developments.