Fifth Circuit Says "WARN" Act Natural Disaster Exception Does Not Include COVID-19 Pandemic

Parker Poe Adams & Bernstein LLP

Parker Poe Adams & Bernstein LLP

The federal Worker Adjustment and Retraining Notification (WARN) Act requires covered employers to provide employees with 60 days’ advance notice of a plant closing or mass layoff. WARN contains an exception from this notice requirement for layoffs caused by natural disasters. Last week, the Fifth Circuit Court of Appeals held that the COVID-19 pandemic does not fall within the definition of a natural disaster under WARN.

In Easom v. US Well Services, Inc., a fracking company laid off employees following the worldwide drop in demand for oil and the resulting collapse in oil prices at the beginning of the COVID-19 pandemic. The employees sued the defendant under WARN, citing the lack of the required notice period. The employer responded by claiming that its action fell within WARN’s natural disaster exception.

The Fifth Circuit disagreed, finding that under WARN, a natural disaster is restricted to hydrological, geological, or meteorological events such as floods, earthquakes, or droughts. Even though COVID-19 had natural origins, statutory language and congressional intent excluded pandemics from this definition.

This decision raises concerns for employers that conducted layoffs during the pandemic without providing the required WARN notice. If followed by other federal appellate courts, those employers could be responsible for paying employees’ salaries and benefits for the missing notice period.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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