WARN Act gives closing companies 3 exceptions to 60-day notice of closures

HIGH POINT – The home furnishings industry has been hit hard over the past nine months with three significant companies shutting down almost overnight, leaving employees without jobs and scrambling to find new ones.

United/Lane Furniture closed in the week of Thanksgiving impacting 2,700 employees; Klaussner Home Furnishings closed earlier this month putting 884 employees out of work; and this week, Mitchell Gold + Bob Williams closed telling its 533 workers in three factories their jobs were gone.

The federal government’s Worker Adjustment and Retraining Notification (WARN) Act, passed in 1988, is designed to prevent shutdown surprises and give workers time to look for other jobs or find retaining opportunities ahead of closures. The act requires companies with 100 or more employees to give workers 60 days advance written notice of closures that will impact result in job losses.

The WARN Act does offer companies three exceptions to the 60-day notice. Here are the exceptions as outlined by the U.S Department of Labor’s Employment and Training Administration:

1 Faltering company. This covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the financing or business, and applies only to plant closings.

2 Unforeseeable business circumstances. This applies to closings and layoffs that are caused by business circumstances that were not foreseeable at the time a notice would otherwise have been required.

3 Natural disaster. This applies where a closing or layoff is the result of a natural disaster like a flood, earthquake, drought or storm.

The labor department said the burden of proof falls to employer to show that the conditions have been met. The act also says that companies must give notice as soon as is practical, and the notices, when given, must include a brief statement of the reason for reducing the notice period in addition to the items required in notices.

The WARN Act is only enforceable via private lawsuits. Lawsuits have been filed in federal court against each of the three companies by employees saying they were not given notice of the closures.

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