On September 26, 2019, the 7th Circuit affirmed an order of summary judgment in favor of the defendant-employer in a class action lawsuit alleging that it violated the federal Worker Adjustment and Retraining Notification Act (“the Act”) by failing to provide a group of employees with sixty days’ notice of their “temporary lay-off.” Leeper v. Hamilton County Coal, LLC, No. 19-1109 (7th Cir. 9/26/2019). The WARN Act requires employers to give affected employees sixty days’ notice before imposing a “mass layoff.” The Act defines a “mass layoff” as a “reduction in force” in which at least 33% of a single worksite’s full-time workforce, and at least fifty employees suffer an “employment loss.” The district court entered summary judgment for the employer coal company because the worksite did not experience a “mass layoff” as defined by the Act.
The 7th Circuit concluded that the record contained no evidence of a mass layoff. The term “employment loss” is defined as a permanent employment termination, a layoff exceeding six months, or an extended reduction of work hours of more than 50% during each month of any 6-month period. None of those events occurred. Instead, the coal company initiated a temporary layoff under six months. The question on appeal was whether the evidence established that a mass layoff occurred within the meaning of the Act. The plaintiff argued that more than 33% of the coal mine’s full-time workforce experienced an employment termination. Alternatively, the plaintiff argued that a sufficient number of workers suffered a “reduction in hours of work of more than 50% during each month of any 6-month period. The 7th Circuit distinguished an employment termination from a layoff under the Act. Termination means the permanent cessation of the employment relationship, while a layoff means the temporary cessation of the employment relationship. The record demonstrated that the coal company announced a temporary cessation of employment. The notice referred to the employment action as a “temporary layoff” and defined a precise “layoff period.” It also instructed the workers to return–not to reapply to return–once that period ended. Nothing in the notice suggested a “permanent cessation of the employment relationship.” The company clearly announced a temporary layoff lasting under six months, and no language in the notice showed that the subject workers were permanently fired. Therefore, the mine workers did not experience a mass within the meaning of the WARN Act, and sixty days’ notice was not required.