Fifth Circuit rejects aggregation argument in WARN case

WARN (the Worker Adjustment and Retraining Notification Act) is a federal law that requires covered employers to provide 60-day written notice before a covered reduction in force, in particular what it defines as either a “mass layoff” or “plant closing.”

To be applicable, WARN requires, among other things, that the layoffs occur at a “single site of employment” with 50 or more workers. In this case, the plaintiff was laid off from a rig that had fewer than 50 workers, so WARN did not apply. He argued that all the workers at all the rigs in the basin should be counted. The Fifth Circuit rejected his argument, holding that to do so, WARN required all such other locations to be within a “reasonable geographic proximity” of his rig. Although the rigs were all in the same basin, that basin was “250 miles wide by 300 miles long—that is … 75,000 square miles—and spread across two states, (which) would be inconsistent with” a finding of reasonable geographic proximity, noting that even “two plants across town will rarely be considered a single site.”

The case is a reminder to employers to carefully consider the math of anticipated reductions. WARN analysis is technical. Although in this case the employer was successful, it had to incur the costs of litigating the case all the way to the Fifth Circuit. Additionally employers should remember that state and local laws may exist that add to WARN’s requirements.

Source: Meadows v. Latshaw Drilling Company, LLC

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