Fifth Circuit Says ‘WARN’ Act Natural Disaster Exception Does Not Include COVID-19 Pandemic | Parker Poe Adams & Bernstein LLP

The federal Worker Adjustment and Retraining Act (WARN) requires covered employers to provide employees with 60 days notice of plant closures or mass layoffs. WARN contains an exception to this notice requirement for layoffs caused by natural disasters. Last week, the Fifth Circuit Court of Appeals ruled that the COVID-19 pandemic did not fall under WARN’s definition of a natural disaster.

In Easom vs. US Well Services, Inc., a hydraulic fracturing company laid off employees following the global drop in demand for oil and the resulting collapse in oil prices at the onset of the COVID-19 pandemic. The employees sued the defendant under WARN, citing the lack of the required notice period. The employer responded by claiming that its action fell within WARN’s natural disaster exception.

The Fifth Circuit disagreed, finding that under WARN, a natural disaster is limited to hydrological, geological, or meteorological events such as floods, earthquakes, or droughts. Even though COVID-19 had natural origins, legislative language and congressional intent excluded pandemics from this definition.

The move raises concerns for employers who made layoffs during the pandemic without providing the required WARN notice. If followed by other federal appeals courts, these employers could be responsible for paying employee wages and benefits for the missing notice period.

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