WARNing - Don't Forget Local WARN Acts - Part One

The federal WARN Act generally requires employers with over 100 full time employees to provide 60 days notice in the event of a plant closing or mass layoff. Many states have their own versions of WARN as well and businesses implementing covered employment changes must make sure to comply with all applicable plant closing laws.

For example, New Jersey recently implemented the Millville Dallas Airmotive Plant Job Loss Notification Act. This new law requires notice to the Commissioner of Labor and Workforce Development, the chief elected official of the municipality where the establishment is located, each employee to be terminated and the collective bargaining representative. Note that federal WARN requires that each employee receive notice only if not represented by a union.

The penalties under the NJ law are more draconian than under the federal counterpart. Under WARN, liability is reduced based on the amount of notice provided by the employer. Under the NJ law, failure to give the full 60 days subjects an employer to the full penalty, which is one week of severance for each full year of employment in addition to any other employer-provided severance. While back pay received under WARN is credited against the NJ sevevrance entitlement, there is no 60 day cap.

Moreover, NJ law does not recognize the faltering business and unforeseen business circumstances exceptions recognized under WARN, which is particularly significant in the current economic climate. Even loss of a major customer will not excuse compliance with the NJ requirements.

In addition, the "State Response Team" can provide workers with information regarding their legal rights, in addition to job placement counseling, which could influence an employee to bring a claim.

Finally, under the NJ law, an employee who is offered a job in NJ and within 50 miles of the establishment does not suffer an employment loss. WARN requires the new job to be within reasonable commuting distance. Covered businesses in NJ need to comply with both.