Montana Layoff Laws

Montana employers must give employees notice of mass layoffs or plant closings, under the federal WARN Act.

Montana employees have certain rights when an employer downsizes, closes a plant, conducts a large layoff, or otherwise cuts a significant number of jobs. Unfortunately, employees are not legally entitled to keep their jobs or to be rehired if things turn around. No law prohibits employers from structuring their workforces as they see fit, including by letting workers go.

However, employees have the right to a certain amount of advance notice and, if the employer fails to give proper notice, to limited damages. These rights come from the federal Worker Adjustment and Retraining Notification (WARN) Act. Almost half of the states have similar laws requiring notice. A few states go further to require that employers pay a small severance or continue employee health benefits for a short period after the layoff. However, Montana hasn’t adopted either type of legislation. In Montana, employees are protected by the federal WARN Act only.

This article explains the rights of Montana employees under the federal WARN Act. For more information on your rights when you are laid off (including 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.

When Does WARN Apply?

WARN requires larger employers to notify employees in advance of a mass layoff or plant closing 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 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.

Not every job cutting action is covered by WARN. WARN applies only to plant closings and mass layoffs.

  • A mass layoff is a reduction in force that results in job loss at a single site of employment for 500 or more full-time employees, or for 50 to 499 full-time employees, if the laid-off employees make up at least 33% of the employer’s active workforce.
  • A plant closing occurs when an employer shuts down 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 means 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.

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.

How Much Notice Does WARN Require?

If a plant closing or layoff is covered by WARN, employees who will lose their jobs are entitled to notice 60 days in advance. Employees who are union members don’t have to be notified individually. Instead, the employer must notify their bargaining reps, who pass the information along to the affected employees.

Certain information must be included in the notice, including whether the layoffs 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.

Are There Exceptions to the Notice Requirement?

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

No Notice Required

WARN does not apply – and therefore, an employer isn’t legally required to give advance notice of a mass layoff or plant closing – in these circumstances:

  • Temporary facilities or projects. If an employer closes a facility that was intended to be open only temporarily, or lays off workers who were hired only for a specific project that is complete, no notice is required. This exception applies only if the laid-off employees understood, when they were hired, that the job was limited to the duration of the facility or project.
  • 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 comply with WARN by giving as much notice as they can (even if they give less than 60 days’ notice) in a few situations. If an employer relies on one of these exceptions, it must give as much notice as possible and must state (as part of the written notice requirement) why it couldn’t give the full 60 days that would otherwise be required.

  • Faltering company. If a company is having financial problems 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 prevented 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.
  • 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.

What If an Employer Violates WARN?

The federal Department of Labor is responsible for interpreting and explaining WARN through regulations, but doesn’t have the legal authority to enforce the law, take complaints about violations, investigate potential wrongdoing, or file lawsuits on behalf of employees. The only way employees can assert their WARN rights is by filing a lawsuit in federal court.

An employer who violates WARN may be ordered to pay all affected workers for all pay and benefits they lost for the period of 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 15 days in advance of a layoff, employees would be entitled to 45 days of pay and benefits, unless the employer paid them severance covering that extra time.

Employers may also 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 Montana employment lawyer. Because WARN allows a prevailing attorney to be awarded fees, 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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