Is it legal for our employer to pay us severance in lieu of giving notice under WARN?

Question:

I work in a large manufacturing facility. Our manager told us today that the plant will be closing down in two weeks and that all of us will be laid off. Although the company has other facilities in the U.S., the nearest one is hundreds of miles away. So, none of us will be able to transfer within the company to work at another location. My coworker says we are entitled to 60 days' notice under the WARN Act. Our employer obviously didn't give us enough notice, but we will each be paid between two and six months of severance, depending on our tenure with the company. Is it legal for them to pay severance instead of giving notice like this?

Answer:

Most likely, it is legal. Paying severance doesn't relieve your employer of the obligation to give notice under WARN. However, it does compensate you fully for your financial loss as a result of your employer's failure to give notice. So while your employer may have technically violated the law, there's no financial damage to you, and you therefore have no grounds for filing a claim or lawsuit against your employer.

The federal Worker Adjustment and Retraining Notification (WARN) Act and similar state laws require certain larger employers (those with 100 or more employees) to give advance notice of mass layoffs and plant closings. Your coworker is correct that 60 days' notice is required, unless an exception applies.

For example, employers are not required to give notice when closing a temporary facility or laying off workers at the end of a temporary project, as long as everyone understood from the start that employment was of limited duration. Notice is also not required when a plant closing or mass layoff results from a strike or an employer lockout.

An employer may also give less than 60 days' notice in the event of a natural disaster or unforeseeable business circumstances that necessitate the layoffs or closure. And, an employer that is struggling financially can give less notice if it reasonably believes that giving the required notice will interfere with the pursuit of investments that could prevent or postpone the layoffs or closure.

Assuming that none of these exceptions apply to your case, you and your coworkers were entitled to 60 days' notice. However, even though your employer only gave you two weeks' notice, you are receiving at least 60 days worth of pay. In other words, you're receiving the same pay that you would have received had your employer given the required 60 days' notice. In this situation, you have no damages resulting from your employer's mistake, which means you stand to gain nothing from challenging the action.

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