Unfortunately for employees, no law prohibits employers – including those in Texas -- from closing a plant or laying off workers. However, employees who lose their jobs 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.
In addition to any union rights employees may have, the federal Worker Adjustment and Retraining Notification (WARN) Act gives employees the right to advance notice of a plant closing or large-scale layoff. Some states have their own notice laws. A few go further, requiring employers to continue employee health insurance or pay severance for a short period after the layoff. However, Texas doesn’t offer these protections. In Texas, employees are protected only by the WARN Act.
This article explains the rights of Texas employees under the WARN Act. For more information on your rights when you lose your job, including how to continue your health benefits and when you should receive your final paycheck, see our Losing or Leaving Your Job page.
Layoffs and Plant Closings
WARN requires employers to provide notice only if a certain number or percentage of employees will lose their jobs in a mass layoff or plant closing.
A plant closing occurs when an employer shuts down a single site of employment, or at least one operating unit or facility within a site, resulting in 50 or more full-time employees losing their jobs during any 30-day period.
A mass layoff is a reduction in force resulting in job loss at a single employment site 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.
An employment site is one geographical location of an employer’s operations, such as a building, an office suite, or a campus. Separate work spaces might be considered a single employment site if they are used for the same purpose, share the same staff and equipment, and are reasonably near to each other.
Smaller employers are not subject to the requirements of the WARN Act. Employers are covered by WARN 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.
Employees are considered full time only if they work at least 20 hours a week and have been employed for at least six of the 12 months before notice is required.
Employers must notify workers 60 days in advance of a mass layoff or plant closing. Employees who will lose their jobs are entitled to notice; for employees who are union members, the employer must notify their union representative instead. The notice must explain whether the layoffs are expected to be temporary or permanent, the expected date when layoffs will begin, and the date when the employee will receive a termination letter, among other things.
In some situations, an employer doesn’t have to give the full 60-day notice WARN would otherwise require. An employer isn’t legally required to give any advance notice of a mass layoff or plant closing that is the result of an employee strike or lockout. An employer may also forego giving notice if it lets go of employees who were hired only for a temporary project that has been completed, or as a result of closing a temporary work facility. However, this exception applies only if the employees knew, when they were hired, that their jobs were temporary.
In some situations, employers may comply with WARN by giving less than 60 days’ notice. An employer who relies on one of these exceptions must give as much notice as possible, however. The employer must also explain why it couldn’t give the full 60 days that would otherwise be required.
- Faltering company. Shorter notice is allowed if the company was actively seeking business or money that would have allowed it to postpone or avoid the plant closing altogether, and 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. An employer may give less notice if the layoff or plant closing results from a natural disaster.
- Unforeseeable business circumstances. Shorter notice is allowed if the reasons for the plant closing or layoff were not reasonably foreseeable when the employer should have given 60 days’ notice.
If Your Rights Are Violated
Although the federal Department of Labor is responsible for interpreting and explaining WARN through regulations, it has no authority to investigate employee complaints or file lawsuits representing employees. Employees must file a lawsuit in federal court to assert their WARN rights.
Workers who don’t receive the notice required by WARN can be awarded damages for all compensation and benefits lost due to the WARN violation, up to the full 60 days WARN requires. This amount is reduced by any wages earned or severance payments the employer made voluntarily during that time. For example, if an employer should have given 60 days’ notice, but gave notice only 22 days in advance of a layoff, employees would be entitled to 38 days of pay and benefits, unless the employer paid them severance for that extra time.
If your WARN rights have been violated, you should consult with an experienced Texas employment lawyer. WARN includes the right to attorney fees if you win, which gives attorneys an extra incentive to take a good case. Because the damages available to any one employee are relatively low, an attorney might suggest going forward as part of a class action, on behalf of all of the employees who did not get the notice required by WARN.