GM, Amtrak Prepare for Closures and Layoffs Under WARN Act

Author: Robert S. Teachout, XpertHR Legal Editor

December 11, 2018

General Motors announced in late November that it will be closing five North American plants and laying off 15% of its salaried employees. Amtrak also recently announced layoffs, saying that it would shut down its Riverside, California call center, displacing all 500 of the employees who work there. The planned layoffs trigger requirements under the federal Worker Adjustment and Retraining Notification (WARN) Act and similar state laws.

GM Plants Being Shut Down

GM chief executive Mary T. Barra announced that the company would be closing two plants in Michigan, and as well as others in Ohio, Maryland and Ontario, Canada. The announcement also stated that three other facilities outside North America would be closed in 2019. One of those closures, in South Korea, had previously been announced.

The shutdowns also require the downsizing of GM's workforce. Actions are being taken to reduce salaried and salaried contract staff by 15 percent, which includes 25 percent fewer executives to streamline decision-making.

Following the announced closures, GM released another statement saying it remains committed to US manufacturing and that the plant closings and reductions in force are necessary to support its "ability to invest for future growth and position the company for long-term success and maintain and grow American jobs." GM also committed to providing workers impacted by the layoffs with the opportunity to shift to other GM plants to support growth in GM's more profitable truck, crossover and SUV lines.

Amtrak Call Center Closing

Amtrak notified employees in a November 14 email that the call center in Riverside would cease operations on January 18, 2019. Amtrak officials said they are working on options for employees affected by the pending closure to relocate to the rail service's Philadelphia call center. It said that employees who relocate will receive the same pay and benefits, and claims it can accommodate that cost even if all 500 affected employees relocate.

Amtrak's executive vice president and chief marketing officer Tim Griffin said Amtrak "will work with each employee individually to review their options going forward, which may include transferring to Philadelphia or pursuing open Amtrak positions, as their union contract permits."

WARN Act Requirements

The size and circumstances of the announced layoffs trigger federal WARN Act obligations for GM and Amtrak. In general, organizations with 100 or more employees are covered when closing a facility and planning to terminate at least 50 employees, not counting part-time employees. Covered employees are required to be given at least 60 days' notice of the plant closing or reduction in force.

In addition, GM and Amtrak will need to comply with state mass layoff requirements in California and Ohio. In Maryland, employers with 50 or more employees are not required, but are encouraged, to provide 90 days' voluntary notice for plant closings and relocations that involve at least 25% of the workforce, or 15 employees, over any three-month period.