Plant Closings

Plant Closings and Mass Layoffs (The Worker Adjustment and Retraining Notification Act) (29 U.S.C. s. 2101) (20 CFR Part 639)

In the event of a plant closing or a mass layoff, all affected employees must be given at least 60 days' notice before the effective date of the closing or layoff.

This applies to employers with 100 or more employees. However, employees who have worked less than 6 months in the past 12-month period or those employees who worked on average less than 20 hours a week can be excluded from this count.

A "plant closing" occurs when an employment site will be shut down, including a temporary shutdown, and results in an employment loss for 50 or more employees during any 30-day period. Again, employees are counted as described above.

A "mass layoff" occurs when there is a reduction in force that results in an employment loss during any 30-day period at the employment site of (1) 500 or more affected employees, or (2) between 50 and 499 affected employees if the number of affected employees makes up at least 33% of the employer's active workforce. Again, employees are counted as described above.

There is a 90-day rolling period for considering whether the requisite number of employees have suffered an employment loss for purposes of a "mass layoff".

An "employment loss" occurs when an employee is being (1) terminated, other than for cause, voluntary departure or retirement, (2) laid off for more than 6 months, or (3) reduced in work hours of more than 60% in each month of any 6-mpnth period.

The employer must also give notice to the State Dislocated Worker Unit, the head of the local unit of government (the mayor or city council office), and any union representing the employees.

There are several exceptions to the notice requirement.
- A company that suffers unforeseen business loss may give notice as soon as the plant closing or mass layoff becomes reasonably foreseeable.

Layoffs and plant closings that are caused by the completion of a particular project do not require notice where the employees were hired with the understanding that their jobs were tied to that project.
A "faltering company" that is actively seeking new capital or business in order to avoid a closing or layoff need not give advance notice where the company reasonably believes that such advance notice would prevent it from obtaining the needed capital or business.
A bona fide strike or lockout does not constitute a plant closing or mass layoff.
Layoffs or plant closings caused by a natural disaster.