A chunk of your workforce is let go, but to meet legal requirements, you keep them on the payroll for the next two months. Some employees find new work, but they still expect money from you and sue when you don’t hand it over. Read the facts and decide: Who won this case?

The facts:

A South Carolina manufacturer ordered the shutdown of one of its plants. The company was covered by the Worker Adjustment and Retraining Notification (WARN) Act, which required them to give employees 60 days notice of a plant closing or mass layoff. Failing that (workers weren’t told until the day of the shutdown) the company told them they no longer had to come into work, but that they’d still be paid and given health benefits for 60 days. Some employees found new jobs quickly so the company stopped paying them. They sued to get the rest of the free money.

What the employer said:

The WARN Act doesn’t cover employees who leave a company voluntarily or are fired for cause. For example, employees who quit after layoffs are announced don’t have any reason to sue under the law. In this case, by getting new jobs, the suing employees were considered to have left the company voluntarily.

Who won? The employer

Why: The law was designed to give a buffer to find new work after getting laid off. The case should be looked at as if the employees were still working for those last 60 days, the judge said. Some of them would probably have found new jobs within that time – and would have had to quit the ones the jobs they were losing. So in this case, by taking new jobs the employees could have been considered to have left the company voluntary.

For more info on the WARN act, visit http://www.doleta.gov/programs/factsht/warn.htm.

Cite: Long v. Dunlop Sports Group