Countering Tech Layoffs, California Bill Would Expand Mini-WARN Act

Author: David B. Weisenfeld, XpertHR Legal Editor

March 9, 2023

California lawmakers have introduced a bill that would broaden employee protections under the state's mini-WARN Act, which governs mass layoffs, relocations or terminations. Since the start of 2022, the tech industry has eliminated more than 200,000 jobs, and the legislation appears to be a direct response to those layoffs.

The proposed Protect Laid Off Workers Act would require employers that plan to lay off 50 or more employees to provide at least 90 days' advance written notice. Existing law only requires a covered employer to provide 60 days' notice, and also exempts certain types of employment, such as seasonal employment where the employer hires employees with the understanding that their employment is seasonal and temporary.

Among its provisions, this bill would mandate that the season be complete in order for the seasonal employment exemption to apply. In addition, it would expand protections for contract workers who are currently excluded from mass layoff protections under federal and state law.

The legislation would require that employees working with an employer through a labor contractor and affected by a mass layoff be paid for the remainder of the contract or 90 days, whichever is fewer, at the equivalent rate of the pay and benefits received during their last month of employment or their final pay rate, whichever is higher.

The bill also bars employers from pressuring workers to sign away their rights by having to agree to a waiver, nondisparagement or nondisclosure agreement as a condition of receiving severance pay. It would make any such agreement void as a matter of law and against public policy.

In this respect, the bill resembles a recent National Labor Relations Board decision that found that the inclusion of nondisparagement and confidentiality clauses as part of a separation agreement unlawfully restrains employees' rights.

"Innovative industries like tech are a critical part of our state's economy," said the bill's sponsor Matt Haney in a statement. "This bill is about protecting that workforce, from the engineers to the janitors, and making sure they're treated fairly during a job transition."