Unfortunately for employees, no law prohibits employers – including Tennessee employers -- from relocating or closing a plant, laying off workers, or downsizing. However, employees who lose their jobs in a mass layoff or plant closing may have some rights. For example, union members might have rights through their collective bargaining agreement, such as the right to apply for open positions across the company, to be considered first for rehire, or to “bump” less senior employees who have not been targeted for layoff.
Employees also have the right to a certain amount of notice before a plant closing or large-scale layoff. Employees are entitled to damages if the employer doesn’t give sufficient notice.
These rights are guaranteed by the federal Worker Adjustment and Retraining Notification (WARN) Act. Almost half of the states have similar laws, and Tennessee is among them. Tennessee law also requires advance notice of layoffs, plant closings, and relocations.
This article provides basic information on the rights of Tennessee employees under the federal WARN Act and Tennessee’s mini-WARN law. For more information on your rights when you are laid off (including when you should receive your final paycheck and how to continue your health benefits), see the articles at our Losing or Leaving Your Job page.
Which Employers Are Covered?
The coverage rules under federal and state law differ.
Employers Covered by WARN
The WARN Act requires larger employers to give advance notice of mass layoffs or plant closings that will result in a certain number or percentage of employees losing their jobs. Employers are covered only if they have at least 100 full-time employees or at least 100 employees who work a combined 4,000 hours or more per week. (Full-time employees are defined as those who work at least 20 hours a week and have been employed for at least six of the 12 months ending on the date when notice must be given under WARN.)
Employers Covered by Tennessee Law
Under Tennessee law, employers are covered if they have at least 50 employees who work an average of 20 or more hours per week and have worked for the employer for at least six out of the last 12 months.
Which Layoffs Are Covered?
Only job actions that result in a large number of terminations are covered by the federal WARN Act and Tennessee’s mini-WARN law.
Federal WARN Act
WARN applies only to mass layoffs and plant closings.
A plant closing is the shutdown of a single site of employment, or at least one facility or operating unit within a single site of employment, which results in job loss for 50 or more full-time employees during any 30-day period. A single site of employment is simply one geographical location of an employer’s operations, such as a building, an office suite, or a group of buildings that form a campus or industrial park. Even work areas that are physically separate can be a single employment site if they are reasonably close together, used for the same purpose, and share the same staff and equipment.
A mass layoff is a reduction in force resulting in job loss at a single site of employment for:
- 500 or more full-time employees, or
- 50 to 499 full-time employees, if the number of employees laid off makes up at least 33% of the employer’s active workforce.
WARN also applies to plant closings or mass layoffs that occur in stages over 90 days. This rule is intended to prevent employers from getting around WARN’s notice requirements by conducting a series of smaller layoffs over time.
Tennessee’s mini-WARN law applies to any closure, modernization, relocation, or new management policy of a workplace or portion of operations that indefinitely or permanently lays off at least 50 employees during any three-month period.
What Notice Is Required?
Both WARN and Tennessee law include notice requirements.
If a layoff or plant closing is covered by WARN, employees who will lose their jobs are entitled to notice 60 days in advance. Tennessee’s mini-WARN law explicitly adopts the provisions of WARN (except for its coverage requirements), so employers that are subject only to Tennessee’s law must provide the same notice.
The notice must provide specified information about the planned layoffs, including whether they are expected to be temporary or permanent, the expected date when the layoffs will begin and when the employee will receive a termination letter, and whether the employee will have bumping rights.
Exceptions Under WARN
An employer may give less notice – or no notice at all – if an exception applies. WARN doesn’t require employers to give notice if they are laying off temporary or seasonal employees, or the layoffs are the result of temporary projects that are completed, as long as the employees knew when hired that the jobs were for a limited time. WARN also doesn’t apply to job losses occasioned by strikes or lockouts.
Under WARN, an employer can give less than 60 days notice if one of these exceptions applies (the employer must still give as much notice as possible and explain why it couldn’t give the full 60 days that would otherwise be required):
- Unforeseeable business circumstances. If the business circumstances leading to the plant closing or layoff were not reasonably foreseeable when the employer should have given 60 days’ notice, a shorter notice period is allowed.
- Faltering company. If a company is struggling financially when it should have given 60 days’ notice, it can give a shorter period of notice. However, the company must show that it was actively seeking business or money that would have allowed it to postpone or avoid the plant closing altogether, and that it reasonably believed, in good faith, that giving 60 days’ notice would have precluded it from obtaining the necessary business or money. This exception applies only to plant closings, not mass layoffs.
- Natural disasters. If the layoff or plant closing results from a natural disaster, the employer is allowed to give less than 60 days’ notice.
Tennessee’s mini-WARN law recognizes exceptions for job losses due to
- closure of a construction site
- labor disputes, or
- seasonal factors common to the employer’s industry.
If Your Rights Have Been Violated
If you believe your rights have been violated, you should consult with an experienced Tennessee employment lawyer. WARN includes the right to attorney fees if you win, so it provides an incentive for lawyers to take strong cases. However, the damages available to any one employee are relatively low. Therefore, a lawyer may advise either trying to negotiate a settlement or going forward on behalf of all affected employees, as part of a class action lawsuit.