Andrew M. Gordon, left, Daniel Eric Gonzalez,right, of Hinshaw & Culbertson and,

Employer Obligations During Closings and Layoffs: Don't Forget the WARN Act

The WARN Act stands for Workers Adjustment and Retraining Notification Act, and is a federal law that requires covered employers to provide employees with a 60-day advanced notice of the layoffs. The failure of an employer to provide the required notice can open it up to a federal lawsuit by employees.

March 27, 2020 at 09:30 AM

4 minute read

Daniel Eric Gonzalez

Andrew M. Gordon

When an employer is closing a plant or engaging in a mass layoff, it is important for it to keep its WARN Act obligations in mind. Lately, supermarket chains in Florida, including Lucky's Market, Earth Fare and Penn Dutch Food Centers, have learned that lesson the hard way after each has been sued in class actions for failing to comply with the WARN Act. The WARN Act stands for Workers Adjustment and Retraining Notification Act, and is a federal law that requires covered employers to provide employees with a 60-day advanced notice of the layoffs. The failure of an employer to provide the required notice can open it up to a federal lawsuit by employees.

Lucky's and Earth Fare were each sued in February under the WARN Act. In the case of Lucky's, Lucky's opened its first store in Florida in 2016 and had a store locally in Fort Lauderdale. Lucky's opened a total of eight stores in Florida. However, due to the divestment of national retailer Kroger in late 2019, Lucky's announced the closure of all of its Florida stores, as well as 32 stores across the country. The problem is that Lucky's announced the closure of the stores on Jan. 24, with an expected layoff date of Feb. 12. This was not sufficient advanced notice to employees of the store closures. As a result of Lucky's failure to comply with the notice requirements under the WARN Act, Lucky's was sued in a class action in the U.S. District Court for the Middle District of Florida. The plaintiffs in the lawsuit are seeking the wages that they would have earned had they been provided with the full 60-day notice of the layoffs.

North Carolina-based Earth Fare had opened 50 locations nationwide, with 14 locations in Florida. Earth Fare closed all of its locations in February. According to the complaint filed against Earth Fare, Earth Fare informed employees on Feb. 3 that they were laid off effective immediately. Earth Fare never provided any prior notice to its employees. This resulted in employees filing a class action lawsuit against Earth Fare in the U.S. Bankruptcy Court of Delaware.