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Sudden Business Disruption Qualifies for WARN Act Exception

This report relates to 1 case(s)

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    Gross v. Hale-Halsell Co., 554 F.3d 870 (10th Cir. 2009) (0 other reports)

Author: James M. Moakley

In Gross v. Hale-Halsell Company, +554 F.3d 870 (10th Cir. 2009), the 10th Circuit Court of Appeals addressed whether an employer qualified for an exception to the Worker Adjustment and Retraining Notification Act (WARN Act), 29 U.S.C. 2011, when it experienced the sudden loss of its largest supplier.

The WARN Act, which applies to businesses that employ 100 or more full time employees, requires an employer to provide its employees with at least 60 days' advance notice of any plant closing or mass layoff. An employer may be excused from the 60-day period if the plant closing or mass layoff is caused by an unforeseeable business circumstance that was not reasonably foreseeable at the time proper notice would have been required. Even if a sudden business circumstance qualifies for the exception, the employer is still required to give as much notice as practicable and must provide a brief statement of the reasons for reducing the notice period. An employer that violates the 60-day notice requirement may be liable for back pay and benefits to each affected employee for each day that the required notice was not provided.

In this case, the 10th Circuit held that the employer qualified for the unforeseeable business circumstances exception to the WARN Act given the unexpected loss of one of its major customers.