When a Massachusetts employer conducts a layoff, closes a plant, or downsizes, employees have certain rights. Unfortunately, they don’t include the right to remain employed: Employers are not prohibited from letting workers go when they need to make cuts. However, employees have the right to a certain amount of notice before a plant closing or large-scale layoff. If the employer fails to give the required notice, employees are entitled to damages.
These rights come from the federal Worker Adjustment and Retraining Notification (WARN) Act. Almost half of the states have similar laws; some go further to require that employers pay a small severance or continue employee health benefits for a short period after the layoff. Massachusetts is a special case: Although the state has a law that appears to require severance in some situations, it is preempted by federal law and not enforceable.
This article provides information on the rights of Massachusetts employees under the federal WARN Act. See the articles at our Losing or Leaving Your Job page for information on how to continue your health benefits, when you should receive your final paycheck, and more.
WARN requires larger employers to provide advance notice of mass layoffs or plant closings that will result in a certain number or percentage of employees losing their jobs. Employers are covered 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. An employee counts as full time if he or she works at least 20 hours a week and has been employed for at least six of the 12 months ending on the date when notice must be given under WARN.
WARN applies only to plant closings and mass layoffs.
WARN also applies to plant closings or mass layoffs that occur in stages over 90 days. This rule is intended to discourage employers from trying to get around WARN’s notice requirements by conducting a series of smaller layoffs over time.
In layoffs or plant closings covered by WARN, employees who will lose their jobs are entitled to notice 60 days in advance. Union members aren’t entitled to individual notice; instead, the employer must notify their union representatives, who are expected to pass the information along to the affected employees.
The notice must provide certain 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.
There are some exceptions to WARN. If one of them applies, 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 comply with WARN by giving as much notice as they can (even if they 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 state why it couldn’t give the full 60 days that would otherwise be required.
Massachusetts has what lawyers call a “tin parachute” law: a law requiring employers to pay severance in an amount that is not very grand. This law applies to employers in certain industries that lay off employees within two years of a change in control of the company. Under the law, employees who have worked at least three years are entitled to severance pay of two weeks for every year of service, if certain conditions are met. However, a federal court of appeals found that this law was preempted by ERISA, a federal law that governs employee retirement and benefit plans (including some severance plans). This means it is invalid and can’t be enforced.
The federal Department of Labor is responsible for interpreting and explaining WARN through regulations, but the agency has no power to enforce the law, hear employee complaints, investigate potential wrongdoing, or file lawsuits on behalf of employees. Employees must file a lawsuit in federal court to assert their WARN rights.
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 Massachusetts 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.