What rights do North Carolina employees have in a layoff or plant closing? If you are a union member, your collective bargaining agreement with your employer might give you some contractual rights, such as the ability to "bump" less senior employees who have not been targeted for layoff, or the right to apply for open positions in the company.
Beyond any contract rights you may have through your union, the federal Worker Adjustment and Retraining Notification (WARN) Act gives employees the right to some notice before a plant closing or large-scale layoff. Although employers aren't legally prohibited from downsizing, relocating, closing a plant, or conducting a mass layoff, they do have to meet this notice requirement or pay damages to employees.
Almost half of the states have similar notice laws. Some even go farther to require that employers pay a small severance or continue employee health benefits for a short period after the layoff. North Carolina doesn't fall into either of these categories, however. North Carolina doesn't have its own layoff or plant closing law, so workers are protected only by the WARN Act.
This article explains the rights of North Carolina employees under the federal WARN Act. To learn how to continue your health benefits, when you should receive your final paycheck, and more, see the articles at our Losing or Leaving Your Job page.
The federal WARN Act applies to larger employers. Employers are covered if they have
Employers must provide notice only if a certain number or percentage of employees will lose their jobs in a mass layoff or plant closing.
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.
Employees who will lose their jobs in a plant closing or mass layoff have the right to notice 60 days in advance. Union members aren't entitled to notice individually. Instead, the employer must notify their union reps, who must pass the information along to the affected employees.
The notice must include specified information about the planned layoffs, including whether they are expected to be temporary or permanent, whether the employee will have bumping rights, the expected date when the layoffs will begin, and when the employee will receive a termination letter.
In certain situations, an employer either does not have to give notice at all or can give less than 60 days' notice.
An employer isn't legally required to give advance notice of a mass layoff or plant closing in these situations:
Employers may give less than 60 days' notice in a few situations. An employer who relies on one of these exceptions must give as much notice as possible. As part of the written notice requirement, the employer must explain why it couldn't give the full 60 days that would otherwise be required.
Many federal employment laws are enforced by agencies, such as the Equal Employment Opportunity Commission or the Department of Labor. However, WARN doesn't follow this model. Although the Labor Department is responsible for interpreting and explaining WARN through regulations, it has no authority to enforce the law, hear employee complaints, investigate potential wrongdoing, or file lawsuits representing employees. Employees must file a lawsuit in federal court to assert their WARN rights.
An employer that violates WARN can be required to compensate affected workers for all pay 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 25 days in advance of a layoff, employees would be entitled to 35 days of pay and benefits, unless the employer paid them severance for that extra time.
Employers also can be ordered to pay the attorney fees and court costs of affected workers who sue and win. (Employers who don't give proper notice to the state may also have to pay fines, but this money goes to the state, not to employees.)
If you believe your WARN rights have been violated, you should consult with an experienced North Carolina 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.