Layoff Rights for North Carolina Employees

The federal WARN Act gives North Carolina employees the right to notice of layoffs and plant closings.

By , J.D.

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.

Employers Covered by WARN

The federal WARN Act applies to larger employers. Employers are covered if they have

  • at least 100 full-time employees (those who work at least 20 hours a week and have been employed for at least six of the 12 months before notice is required), or
  • at least 100 employees who work a combined 4,000 hours or more per week.

Layoffs and Plant Closings Covered by WARN

Employers must provide notice only if a certain number or percentage of employees will lose their jobs in a mass layoff or plant closing.

  • 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 for 50 to 499 full-time employees, if the number of employees laid off makes up at least 33% of the employer's active workforce.
  • A plant closing occurs when a single site of employment, or at least one operating unit or facility within such a site, is shut down, resulting in 50 or more full-time employees losing their jobs during any 30-day period. A site of employment is a 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. Work areas that are physically separate might be a single employment site if they are used for the same purpose, reasonably close together, and share the same staff and equipment.

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.

Notice Required by WARN

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.

Exceptions to WARN

In certain situations, an employer either does not have to give notice at all or can give less than 60 days' notice.

No Notice Required

An employer isn't legally required to give advance notice of a mass layoff or plant closing in these situations:

  • Temporary facilities or projects. If an employer lays off workers who were hired only for a temporary project that is finished or closes a facility that was intended to be open only temporarily, no notice is required. This exception applies only if the employees understood, when they were hired, that their jobs were temporary.
  • Strikes and lockouts. If a plant closing or mass layoff is the result of a union strike or an employee lockout, WARN doesn't apply.

Shorter Notice Allowed

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.

  • Unforeseeable business circumstances. If the reasons for the plant closing or layoff were not reasonably foreseeable when the employer should have given 60 days' notice, a shorter notice period is allowed.
  • Natural disasters. An employer may give less than 60 days' notice if the layoff or plant closing results from a natural disaster.
  • Faltering company. If a company is struggling financially, it can give less 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.

If Your WARN Rights Are Violated

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.

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